INTEGRATING CORE-COMPETENCIES FOR ECONOMIC GROWTH OF NATIONS
Agriculture, Manufacturing and Service sector, have to work together in symphony.
I am indeed delighted to address and interact with the Netherlands India Chamber of Commerce and Trade.
It gives me immense pleasure to be here in this beautiful country. India and The Netherlands with their history, long-standing and special relationship has great opportunities for bilateral cooperation in the modern world enhanced by technology and communication with its remarkable presence.
I am happy to know that NICCT formed in 2003 merging both the Indian and The Netherlands trade organizations to serve a unified goal of strengthening the trade ties between the countries has today grown into a strong organization which serves as a focal point for contacts and an active platform for networking to build economic relations. I am also glad to know that it is creating a favourable climate for further development of trade by increasing the sharing of knowledge and understanding of the businesses in both the countries.
Netherlands occupies a special place in India?s growing economy in a democratic environment with tolerance. The Netherlands is the 5th largest investor in India and it is also the largest recipient of Indian investments abroad (1996-2010 period). Moreover, we share a belief of democracy and a spirit of tolerance and freedom for all. In this ambience, I would like to share with you some aspects of our current ambience and indicate possible areas for potential engagement.
Friends, as you know, India is now in the process of transforming itself into an economically developed nation powered by competitiveness. In this Meet, I would like to discuss on the topic ¨Integrating core competencies for economic growth of nations¨. In view of the long standing relations between our two nations, the presence of a large number of Indian diaspora in Netherlands, the potential of Indian and Netherlands ventures to participate in mutual projects of the nation and together for other countries, I would urge the business community to come with some long term vision in collaboration with Indian business forums.
Netherlands has the 2nd largest people of Indian origin in Europe (second only to UK) with about 220,000 Indian diaspora. They are the human connect which the two nations share and cherish.
Economic & Commercial Relations: The traditionally close and friendly India-Netherlands bilateral relationship has evolved into a significant partnership in the economic and commercial sphere. Indians have emerged as important investors within the Netherlands and India as an important export destination.
Indo-Netherlands two way trade is valued at Euro 5 billion (2010). Netherlands is also one of the largest investor in terms of foreign direct investment into India during the period April to 2000 to February 2011, amounting to US $ 5.618 billion. Indian investments into Netherlands during 2008-09 amounted to $ 2788 million, which was 17.2% of total investments abroad from India.
Many Dutch multinational companies from consumer electronics, banking, aviation, consumer goods, FMCGs are finding strong presence and brand value in India. Similarly, Indian corporate are finding their place in the Netherlands with investments in steel and manufacturing industries.
Certainly there is a good ambience existing between Netherlands and India, which will propel our economic growth in both the nations.
Evolution of India Vision 2020
Let me share with you my unique experience in mid 1990?s on formulation of Indian vision 2020 strategies. I was given the task of chairing the Technology Information Forecasting and Assessment Council (TIFAC). I recollect, that in the first meeting of the Council itself, we took a decision that TIFAC must evolve a plan how India can be transformed into an economically developed nation by the year 2020. When the suggestion was mooted everybody was wondering how we can evolve such a long term mission under the then prevailing economic and social conditions of the country. That was the time (1991); the then Prime Minister had just announced the economic liberalization and growth measures for the Indian economy and its impact had just started being felt.
In spite of this, the council with many young members jumped into the idea and we discussed for one full day on how we can translate the thought into action. At a time when the economy was growing at around 5 to 6% per annum in GDP we had to envisage a growth rate of at least 10% per annum consistently for over 10 years for realizing the development vision of billion democratic people of multi lingual, multi religious and multi cultural characteristics. This really ignited the minds of all of us in the council. We debated and arrived at 17 task teams with over 500 members who had consultations with over 5000 people in various sectors of the economy. Committees worked for over two years resulting in 25 reports which we presented to the then Prime Minister of India on 2 Aug 1996. Transforming India into a developed nation implies that every citizen of the country lives well above the poverty line, their education and health is of a high standard, national security assured and core-competence in certain major areas enabled production of quality goods competitively including for exports, bringing all-round prosperity for the countrymen. This event led to the birth of the book "India 2020: a Vision for the New Millennium". Based on various inputs, the government announced the vision statement that India will become a developed nation by 2020. Such a statement is very rare, since every government is elected only for a period of five years and thinking of over 20 years time frame by the Parliament and the government is a fresh breeze. Now let me present the current ambience of the nation.
Current Ambience in India
Indian economy was growing at an average of 9% per annum till the 2008. In 2009-10 year, Indian economy has got affected due to global economic turbulence, but nevertheless it grew at over 7% in the year of global recession. Even this, with two economic zones of US and Eurozone still looking bleak, India still grew at about 6.9% in the last quarter of 2011. I was asking myself, what type of innovation is needed to enrich the Indian economy and other world economies in the present circumstances. I had discussions, on this subject, with many experts including those from IIM (Indian Institutes of Management). It came to light that the Indian economy will be less affected due to the world financial crisis. This is due to
(i) The liberalization process in India has its checks and balances consistent with the unique social requirements of the country.
(ii) The Indian banking system has always been conservative which has prevented the crisis
(iii) The Indian psyche is generally savings oriented and living within means is part of the mind set.
(iv) The 400 million strong middle class structure is indeed, with its purchasing power, is providing the stability in the economic structure of the nation. It is a unique economic environment of India.
These four causes have reduced the effect of global turbulence in the Indian economy and given it inherent strength. Sectors like automobile, cement, Pharma, ICT and financial services are all posting significant gains.
Innovations needed
This is the time, innovation has to be encouraged in our thinking to rejuvenate the agricultural sector particularly through value addition and the small and medium scale industries and enterprises for making higher levels of contribution to the GDP through integrated rural development and imaginative products. I foresee possibilities of creating new markets through rural potential and employment, giving rise to interesting possibilities of Public-Private-citizen partnerships and international partnerships.
India?s performance in IT sector, Pharma, small scale industries and the infrastructure has brought a new dimension to the Indian economy. With its credible legal framework in place, robust banking system, dynamic financial system, its skilled manpower and dynamic 600 million youth force, India has become an attractive proposition for economic revival of the nation.
At the domestic level, India is focusing on bringing sustainable development through rural and urban infrastructure, quality education, healthcare, environmental up-gradation, bringing vibrancy in the public institutions for better and enhanced delivery of essential public services on time, reforming the financial system for better global integration and a proactive regulatory system. It is critical to the success of India becoming a Global player. 64 years of democratic vibrancy in providing leadership to the nation gives confidence to manage the socio-economic turbulences and providing the leadership to the one and a quarter billion people in a democratic, multicultural, multi-linguistic and multi-religious environment.
With this ambience, let me give my visualization of India during the year 2020.
Distinctive competitive profile of the nation
1. A Nation where the rural and urban divide has reduced to a thin line.
2. A Nation where there is an equitable distribution and adequate access to energy and quality water.
3. A Nation where agriculture, industry and service sector work together in symphony.
4. A Nation where education with value system is not denied to any meritorious candidates because of societal or economic discrimination.
5. A Nation which is the best destination for the most talented scholars, scientists, and investors.
6. A Nation where the best of health care is available to all.
7. A Nation where the governance is responsive and transparent.
8. A Nation that is prosperous, healthy, secure, devoid of terrorism, peaceful and happy and continues with a sustainable growth path.
9. A Nation that is one of the best places to live in and is proud of its leadership.
Integrated Action for developed India
For the mission of transforming India into a developed nation. We have identified five areas where India has a core competence for integrated action: (1) Agriculture and food processing (2) Education and Healthcare (3) Information and Communication Technology (4) Infrastructure: Reliable and Quality Electric power, Surface transport and Infrastructure for all parts of the country and (5) Self-reliance in critical technologies. These five areas are closely inter-related and if progressed in a coordinated way, will lead to food, economic and national security.
Dear friends, now I will focus on typical important missions that will bring societal transformation through competitiveness and propel the vision 2020 of India. We could find common ground between us for new challenges and opportunities for investments. They are the following:
Indias future missions and areas of collaboration
During the next decade, India will have the following missions where there can be a sharing of core competence between the two nations:
1. Agriculture and Food processing: Increasing the productivity into 3-4 times and concentrate on Food processing and marketing. Annual investment is around $20 billion.
The Netherlands has a core competence in agro-processing, floriculture and horticulture, all of which are areas of focus for the Indian agriculture in this decade. Can we select a few specific locations for such a joint effort on an international scale, where the two nations and their agriculture competencies can be converged as a model case?
2. Education: India is spending on education as proportion of GDP is increased to 6% from the current 3.8%. The 11th Plan places high priority on education, for achieving rapid and inclusive growth. Allocation of $55 billion, is a fourfold increase over the 10th Five year plan. The share of education in the total plan therefore increases from 7.7% to 20%. In order to achieve 15% higher education through by 2015 as per the 11th plan of India, we need 1500 universities. Hence this sector has a major role for the public-private partnership.
One of the key requirement of the Indian education system is the focus on granting a vocational skill along with the basic education. The Dutch model of Vmbo (voorbereidend middelbaar beroepsonderwijs) which helps student earn a vocational degree along with middle level school education can be a successful case of replication in the Indian education system.
Similarly, we need to find avenues of stronger collaboration in higher education along the lines of engineering, energy and management domains.
3. Healthcare: In India, Public Health Expenditure is around 1.5% of the GDP. Union government of India?s contribution is 15%: States contribution is 85% for healthcare services. Over 80% spending on health is out-of-pocket directly to private players. Total healthcare spending estimated at Rs 1500 billion. Bed-patient ratio is 1.5 per thousand against world average of 4, despite 1.6 million beds in the country. To raise this ratio to 2.5 by 2025 will entail additional expenditure of Rs 550,000 Crores ($ 125 billion). India presently has 600,000 doctors and 1.6 million nurses. Need another 1.5 million doctors and 3 million nurses to reach half the world average level of doctor-patient ratio.
4. Information and Communication Technology: We have to keep pace with the growth inspite of global recession by applying ICT for India. We are expecting to reach business volume of $200 billion per year by 2016.
India and The Netherlands are already on a growth trajectory in this domain and it is important to find how the collaboration can be increased by ICT application products and systems across sectors like financial products and consumer electronics.
5. Water Management and Rural Development: Networking of rivers and PURA are the two major national programmes taking shape that will bring huge investment and international cooperation is required.
Many states in India are regularly affected floods either from rivers or sea. The Dutch experience of ¨Delta Works¨, post 1953 floods would be of immense importance in the Indian context. We need to find engineering collaboration along the lines of Sea, Canal and River Dykes which were formed as a result of the ¨Delta Project¨.
6. Ship Building: High Dead weight ships have to be built in the country. This will have a business volume of over $50 billion.
The Netherlands and India can share business in this sector especially in the domain of deep sea fishing and deep sea fish-processing industries.
7. Aerospace: 100 seater passenger jet aircraft has to be designed and developed involving 20 billion dollars of market for the next 10 to 15 years.
Such products and systems can be an area for mutual cooperation in the aviation industry.
8. Rail-vision: Railway length has to be increased, metros have to come for faster transportation and multi-level station systems have to become operational to reduce city crowding, average speed of the train has to be doubled. Average annual investment will be over $25 billion.
Such expansion will open opportunities for collaboration in manufacturing and steel/iron industry, where the two nations already share mutual synergies.
9. Energy Independence: By 2030, we should attain energy independence through renewable energy sources such as solar and wind; nuclear and bio-fuels for transportation. Average annual investment will be over $30 billion.
India is focusing tremendously on making its energy clean by investing in solar, wind, nuclear and bio-fuel energy sources. Today, India has over 22,000 MW of power from Renewable Sources (14000 of which is wind) and about 4800 MW of power from Nuclear Sources. India aspires to generate 20,000 MW of Solar Power by 2020 and 50,000 MW of Nuclear Power by 2030. India also has an experience in developing bio-fuels and energy from municipal waste products.
I understand the Netherlands is one of the largest producers of wind energy with over 2,200 MW of wind power with advanced experience in offshore wind farms. India and The Netherlands can come together on this aspect of developing and deploying alternate energy sources for the world. This can be done as a joint platform with multiple Indian and Dutch institutions and companies which can jointly research and develop customized products which give the world energy without damaging the environment.
All these programmes which I have mentioned above have social, research and technological content with substantial amount of opportunities for business leaders and economists leading to win-win situation for partnering countries.
Conclusion
When I am in the midst of business leaders, I would like to discuss the most important ingredient that will enable us to realize Global Innovation. My study indicates that the creative leadership is the most important component for attaining success in all missions. Here, let me recall a profound saintly message to all of us by Maharishi Patanjali 2200 years ago.
¨When you are inspired by some great purpose, some extraordinary project, all your thoughts break their bounds. Your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great and wonderful world. Dormant forces, faculties and talents come alive, and you discover yourself to be a greater person by far than you ever dreamt yourself to be.¨
My greetings and best wishes to all the members participating in this meet. I invite all of you to be a partner in accelerating the economic and people tie between the two nations.
May God Bless you.
By, Dr. APJ Abdulkalam
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