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2017
Asia Needs more Dialogue
Solutions to urban pollution may prove complex
Spread of ESGs could herald new global movement
Investing in quality education is imperative if India wants to reap demographic dividends
China needs to lead in new multi-stakeholder world
China’s B&R initiative leading a resurgence of Asia
Education is key - but long-term: Can we survive?
New wave of robots will be beneficial to all
China needs to continue with its ‘heavy lifting’
Time is right for Chinese firms to invest in Europe
Robots to the rescue for China?
Asian Multinationals are Going Global, But to Where?
China ratchets forward with energy efforts
China’s calm necessary for globalization push
Bridging managerial gaps involves trust-building
China well-placed to power its future through green technology advances
China's new 'springtime' is here
2016
China’s moves show it’s banking on the future
Mindset for action at the G20 summit will be determined by Chinese presidency
Chinese head-hunting intensifies for rare managers that can steer overseas firms
US talk of isolation jars with growing links in Europe and Asia
Electoral rhetoric on global trade not in sync with reality
Is it time to be prudent and consider austerity policies again?
What will we do if we have no oil?
Unlock talent by finding the right fit for a person
The benefits are real and tangible
Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust
Reasons for optimism about the long term
2015
Can big oil go green and win?
Poorer Nations Could Sway Climate Talks
Combating Idleness and Deprivation
How China can be a model of food sustainability for the developing world
Kyoto II – Is it a Done Deal?
A meeting of the two largest economic powers
Why China will experience a 'soft' landing
Beware of superstitions
The Elephant and Dragon move ahead
G-7 target on fossil fuels raises many questions
Why Battle for Net Neutrality in the US Matters Globally
China’s resurgence – the ‘normal new’
Wanted: A managerial culture that embraces cultural differences
China's early education plan a smart investment in the future
The New Normal for China and India
2014
China's infrastructure push offers a sure track to better growth
US-China climate pact a good start, but not quite enough
Rethink the human’s place in the ‘digital revolution’
China springs a carbon surprise
Infrastructure - the invisible hand in full view
Dialogue vital for survival of Iraqi nation
China must nurture a new generation of beautiful minds
Great expectations in China and India
GM Cereals – The Pros and Corns
Time to be Honest about Our Energy Prospects
Weathering the Storm of Climate Change
Making a Big Decision? Beware of Your Biases
West Deserves Better Logistics Infrastructure
Digital Currencies do Represent the Future
From 'Printed' Houses to Wooden Skyscrapers
It’s time to bail out our schools, not our firms
Solution to India’s housing shortage – print new ones!
And the most promising green technologies of 2014 are ...
Transport infrastructure key to domestic, export growth
Oil stopgaps: Not worth risking
2013
Why the US should grant Edward Snowden amnesty
May we be more optimistic!
China headed for another massive social experiment?
A dialogue that worked
Yes, politicians deserve vacations - because we benefit
NPOs, NGOs invaluable as creators of dialogue
Look closer and ask: Is America reinventing itself?
Boston bombings case underlines need for dialogue
Millennium Development Goals or own goals?
As usual it's about balance - and timing - of course
Chinese strategists make right moves for growth
2012
Preparing for tomorrow
Austerity or growth?
Japan in danger of becoming 'just a place to fly over'
Beware of the business cycle?
An inconvenient truth
Limited offer sale: Buy a country
Where did our money go?
Leading from behind - a year of elections is almost over
Driving towards a green future
Waiting for springtime
Preserve or Perish
Startlingly similar Asia policy for Obama, Romney
Globalisation remains an irresistible trend
Google has the edge in smartphone war
U.S. Braces for China's Rise
Mankind’s General Scourge
The summer holidays are over and nothing has changed!
Put the hidden trillions to work
Making sense of India’s woes and wonders
Storm in a teacup!
Let’s give bad bankers a venue to admit their sins
News is about depth, not puff or velocity
Booming India, but too few toilets
Delayed Court decisions doesn't mean one may continue to play 'Great Game'
We need media to reflect on data and offer public a balanced view
Big polluters can lead in forging common purpose
The weighty issue of choosing a leader
EU-India Relations - Facing similar challenges
Educating with a goal
The Judicial Malaise
We are growing out, but not growing up
EU´s retrenchment enigma
Urbulence in the Eurozone and the effect on SMEs
Skolkovo May Help Russia to Diversify
Make things more effective
Tapping into the Commonwealth connection
Innovative models for public finance
Facebook revolution but Indian style
The feel-good factor
Asian investors - a private equity opportunity
India needs to be taller and stronger
China´s low sales volume...
Nations playing leapfrog
Shafts of sunlight
What webs we weave
As performers go to Davos, the circus steals the show
Can we control the politicians?
 
2011
Europe’s reminiscence
China firms should go for win-win in overseas ventures
Of procrastination...
Making sense of profiteering
Truth about financial mess must be laid bare
Small is also beautiful
China can help Europe with debt crisis
Excising the cancer of global corruption
Education, a critical asset
Arab uprisings set in motion forces of creative destruction
A new era of change
We must ensure better education for all
Beijing wary of bankrolling a lost cause
Asean's re-emergence as a local and global leader
Why India's Role in the Global Economy is Still Work in Progress
Its the leadership, stupid!
Reverse globalisation: The new buzzword
EU-India Relations - Facing similar challenges
By Frank-Jürgen Richter
BIZ@INDIA OECD Forum May - June 2012
 

EU and India share history and historical links and today they also face similar sets of challenges. The leaderships in both regions need to take some hard decisions to set their house in order, writes Frank-Jürgen Richter

Curiously India and the EU have suffered a similar history over the last 2000 years. Their kingdoms have been ransacked by armies of occupation, even the Romans captured the north India regions so supporting easier trading from distant UK through to India; religious strife was common place in both regions; and while around the coasts in the many ports local people met and mingled with a myriad of others the people in land hardly saw a foreign person during their lives. The more and more insular village people travelled little, with only a few herding their livestock to a local market bringing back news of the 'wide world'. It is only in the recent past that the nations of Europe and the many regions of India have achieved peace.

Peace is important to maintain trade, prosperity and growth. As noted above, the Roman armies conquered 'the world' and, having conquered, they imposed a common set of rules and laws sub duing local customs and often mini-wars. The main effect of this control was the opening up of trade. Stability and consistency of rules and knowledge of trading partners and their needs are the bedrock of trade. Modern trade is dependent on standards applied through common software packages run by ports, shippers, and by the freight forwarders to ensure door-to-door tracing and tracking both for the physical product and for the payment of dues and taxes on the products with all transcripts being digitised and with the goods' protection guaranteed by insurance clauses. Trade increases in line with national wealth, and there is a 'chicken and egg' situation for traders as ports and hinterland services have to be developed to allow largerships to berth and beloaded in a timely fashion. The services have to be considered, planned and implemented as part of a 'trade agreement' which take some time to beagreed.

Not with standing any private trade arrangements between parties in Europe and India their governments have held formal meetings to forge 'relations' from in the mid-1960s. Then in 1994 there was a Cooperation Agreement; in 2004 was the 'Strategic Partners' plan, which was upgraded by the 'Acti on Plan' of 2008. Now there is the EU's Country Strategic Paper for India 2007 - 2013 having a focus on mutual aid on education, health, energy, environment and trade assistance as well as on joint anti-terrorism planning. But this succession of accords does not imply good progress. On the contrary, formal agreements have been slow to beagreed as India seemed quite reluctant to acknowledge the 'EU' preferring instead to forge bi-lateral deals with individual nations rather than a wide FTA (free trade agreement) as desired generally by the World Trade Organisation, and as hoped for in the Doha round of meetings, but which stalled. During the early months of 2012 the EU and India have failed to agree on their duty and tax levels - for instance, the Indian tariff on European car imports is about 10 times greater than the reverse EU barrier, and the EU views Indian software houses as potentially overwhelming the software workers of the EU.

Of course it was recognised that this agreement would create the world's largest FTA with a population over 1.8 billion, more than a quarter of the world's people. Even so, India has kept the EU at arm'slength over some five years of negotiation while trade mounts. In 2010 the EU goods exports to India were EUR34.7 billion, in reverse was EUR33.2 billion; services trade EU to India were EUR9.8 billion, in reverse EUR8.1 billion; and Foreign Direct Investment (FDI) from EU to India was EUR3.0 billion, and in reverse EUR0.6 billion. There are many political agenda behind the accords. In Europe we know that its internal accord rests on the people's agreement within each of the 27 nations, and that many do not like the impression of rules from Brussels over their own national parliaments. The situation, in practice, maybe similar in India, as the enforcement of Indian laws set by the parliament in Delhi is not enjoyed by leaders in the regions, nor by the mass of people in these regions, but there are far more people in India swaying local as well as national opinion.

Progress in Europe in comparison to India seems to more effective. Let us consider transport again (as itis the carrier of trade, growth, and thus wealth). The European road and rail system once was mess - national systems had grown incrementally over many years with individual nations deciding not to provide interlinks to the next country to protect their own nation in times of war. That idea did not work in practice. The EU gradually formed the opinion that if it wished to proceed to the 'EU Single Market' (for the free exchange of goods, services and people) it needed to have an integrated road and rail system across the whole Union. It decided by the end of the 1980s on the construction of the multi-modal Trans-European Network for Transport (TEN-T). This plan also encompassed the ports of Europe as they was seen as multi-modal points of exchange to both short-sea shipping (so reducing load on the in land freight networks) and to oceanic shipping (increasing external trade). While TEN-T was beginning in Europe the same integration concept was being pressed by the EU in Central Asia, and with the help of the Asian Development Bank the concept was extended into eastern Asia. The TEN-T development was materially aided by EU structural fund supporting, in fact, transport, energy and telecoms and by the European Investment Bank (EIB). There was an integration of national as well as pan-Europe progress which allowed the Schengen Accord for the free passage of goods and people across national borders without hindrance and the inconvenience of halting for passport or other paper checks. One TEN-T report say the EU 27 comprises 5.0 million km of paved roads which is slightly more than the of Indian's 4.42 million km total (which only comprises about 250,000 km of highways and paved roads). The Indian government was a slow to redevelop its roads (and railways), onlypressing ahead in the late 1990's. In fact the Indian system still has too many unpaved roads supporting too much heavy traffic - thus the density of paved roads in India, while increasing, may be some 10 - 15 times lower than in the EU. The flow of vehicles on all roads is hampered by overcrowding, by too large a mix of users (from bullock carts to huge trucks) with most engaged in poor road manners like driving contra to the correct flow on dual carriageways that causes many avoidable deaths of man and beast.

Surely this hampers its economy? A 2009 report by Goldman Sachs suggests that India will need to invest US$1.7 trillion on its infrastructure projects by 2020 to meet its economic needs. This is a lot of cash in a country that has just suffered a downgrade by Standard & Poor's to BBB- (negative outlook) that also implies a 1 in 3 chance of a further downgrade. However other rating agencies maintain their BBB- (stable) rating - but this is only one grade above junk bond rating (ie not advisable as an investment). While Europe carries grave concerns about its financial cohesion it still maintains a high rating overall. However S&P look gravely upon Europe saying it carries too many stresses and it is not moving fast enough to remove these difficulties - legislating for austerity is not a route to growth - but the banks and governments face many and conflicting demands. For instance, banks need to increase their lending to stimulate growth, but they are told also to increase their margin of cover by new Banking rules: it is a global problem affecting India as well. Recent agitation in several countries does not reduce the stresses according to the ratings agencies, though they may make the people happier in the short term by their voting away of reformist policies. But the people conflate their woes with the effects of globalization as well as the need for freer movement of goods, services and people - they fight against 'everything' while also wishing to benefit from the social welfare that has reached quite high levels over the past decades. One can't enjoy 'free' gifts without working and returning taxes to the governments.

In India, over the first 50 years of its independence little drastic has occurred except perhaps for its explosion of population due to reducing mortality without a decrease in the birth rate. It chose early to be an independent nation so did not benefit from much inwards investment after the last world war as the big economic blocs sought economic colonialism. Therefore India funded its own growth from savings rejecting inwards investors. It invested well, but forgot to police its fund flows. As a result too little cash flows to the project targets - as little as 17 percent of funds according to some government spokespersons. And while local investors deplore its high and steady corruption there is a lack of government will to pursue anti-graft laws. Therefore inwards investment has been restricted by policy inactions-the desire to be independent and letting corruption run rife to the highest levels of government: its governance needs to become clear and transparent. If it could introduce these social reforms it would free cash and by enabling structural support for investors would increase growth through breaking its government paralysis. As it is, many point disparagingly to recent policy setbacks, such as a failed plan to open the retail market to foreign investment, as well reneging on proposed changes to India's tax laws and to cleaning-up corruption scandals. In this globalized world we must be pluralistic and open to competition, but Indian negotiators fail to address these issues - as noted by the EU in its pursuit of wide accords and FTAs with India.

In Europe one cannot fail to notice the very different stances of member states - there is a strong north/south divide that affects social, public and management life and there is an east/west divide as each adjusts their historical norms to the needs of the whole: always the management of the EU looms over us. Yet the EU must also learn - it is late in coming to a firm stance on foreign policy for instance that India knew from its early days was to be one, not of isolation, but of independence. India has the benefit of being a single democratic country - yet it often behaves as though its regional governors were in fact independent presidents not beholden to the national government, and the latter seem unwilling at times to exert due control. Soon the EU, India and other nations must relinquish their soft ideals of "see the world in all its magnificent variation" and instead accept the hard facts of finance, that "... money does not grow on trees". Each of us must nurture our specialties, growing our 'trees and seeds' for our mutual benefits - that means with good governance, transparency and ecologically correct.

 

Dr Frank-Jürgen Richter is founder and chairman of Horasis, a global business community. Horasis hosts the annual Global India Business Meeting, the 2012 edition will he held in Antwerp, Belgium, 24-25 June.


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