India-ASEAN: Investing among ourselves

Atal Bihari Vajpayee, Prime Minister of India, New Delhi

The past year has woven a number of important new strands into the fabric of the India-ASEAN partnership: We have launched new cooperation programs in science & technology, transport and infrastructure, information technology, biotechnology and human resources development. Cooperative projects for the Cambodia, Laos, Myanmar, Vietnam (CLMV) countries are under preparation or implementation under the India-ASEAN fund.

We have also made remarkable progress towards a Framework Agreement on Comprehensive Economic Cooperation between India and ASEAN. India has offered to negotiate an Early Harvest Program, identifying fast track measures for economic cooperation and trade promotion. We have also offered unilateral tariff concessions to the CLMV countries.

To corporate India, such efforts are a major vote of confidence in the new strength, resilience and global competitiveness of Indian industry. India's sub-regional and bilateral cooperation with ASEAN countries are also reinforcing strands.The Bangladesh-India-Myanmar-Srilanka-Thailand Economic Cooperation (BIMST-EC) provides a valuable link between South Asia and our two close neighbors in Southeast Asia.

The Mekong-Ganga Cooperation provides a framework for closer cultural links between the people of the ancient lands bound by these two great Asian rivers. There have been new initiatives in trade and investment linkages with Singapore and Thailand; and new bilateral programs with Cambodia, Laos and Vietnam.

Your meetings here offer a unique opportunity for Indian and ASEAN business leaders to expand relationships and identify new areas of collaboration. The vast natural resources, vibrant markets, diverse technologies and human talents of India and ASEAN can be mobilized for greater mutual benefit.

Trade and investment are the basic building blocks of the India-ASEAN relationship. India-ASEAN trade now exceeds US$10 billion, but it has barely scratched the surface of its potential. We must aim high, and target a turnover of $15 billion over the next two years, and $30 billion by 2007.

Companies from ASEAN countries are participating in India's infrastructure development program. India has committed $12.5 billion in this fiscal year for national highways, airports, ports and convention centers. India's telecom sector is rapidly expanding. We are carrying out major reforms in the power sector. Some ASEAN businesses have already availed of these opportunities.

India can share with ASEAN its expertise in space technology for developmental applications, like natural resources mapping and flood forecasting. India has built and launched a number of satellites ... We can offer this service to ASEAN countries, at considerably less cost than what they incur at present.

The strength of the India-ASEAN investment linkages is in their two-way flows. Indian companies have invested in textiles, chemicals, pharmaceuticals and agro-industries in Southeast Asian countries. More recently, we have invested in Vietnam and Myanmar in oil and gas equity. We are now promoting greater Indian investment in ASEAN to benefit from AFTA and to access other Asia-Pacific markets. Indian companies are also looking for more opportunities in the energy sector.

We should invest more among ourselves, without compromising on international standards of safety and efficiency. We also need to find new sources of financing both to reduce costs of our investments and to supplement our savings and foreign exchange reserves. The "Asian Bonds" initiative of the Prime Minister of Thailand is therefore a timely initiative, which India has supported. We have pledged a contribution of $1 billion to the Fund. This scheme can provide long term security and stability to our financial instruments, ensure better returns on our investments and fuel faster economic growth.

Today's Asia owes its economic resurgence largely to its strength in the knowledge-based industries. Asian scientists and experts have proved their worth. With a comparatively younger population base, Asia will have to take on an increasing proportion of future global research and development activity. We must prepare for it by developing the necessary infrastructure.

We have to convert more of our institutions into international centers of excellence. India's information technology have received recognition throughout the world. Singapore has created such centers for biotechnology ... Education, training and human resources development are the pillars for Asia's future economic growth. It is in the commercial interest of business and industry to strengthen these pillars.

We need more effective partnership between governments and businesses in scientific research and commercialization of new technologies. We recognize the successes of ASEAN countries in innovative lab-to-farm techniques. Joint India-ASEAN efforts can multiply such examples of increasing profitability of commercial applications for specific market requirements. Our centers of academic and research excellence can form a network of collaborative effort to benefit our economies.

Globalization and communications technologies have shrunk distances, but they have not made geography irrelevant. India and ASEAN are neighbors. We have not yet exploited this favorable geographical fact to full economic advantage. To do this, we must upgrade our transport linkages.

Work has started on a trilateral highway project linking Thailand, Myanmar and India. This highway could further link up with the existing road networks in ASEAN. Under the Mekong-Ganga Cooperation, we are also looking at a New Delhi to Hanoi rail link. We have to improve air connectivity with all major ASEAN cities. These projects, when realized, would provide affordable transport links for large-scale India-ASEAN interaction.

Business is not only about exchanges of goods or investments. It is as much about services; we should focus much more on tourism, entertainment, media and culture. We need to promote an intermingling of the rich cultural traditions of Southeast Asia and India. This would not only enrich our interaction, but also enable us to jointly project our cultural and civilizational achievements to the rest of the world.

This Business Summit is being held on the eve of the Cancun Ministerial Review meeting on the WTO negotiations. The development dimension of the Doha Round is not receiving sufficient attention. The Doha Agenda negotiations are a two- track process, with our concerns always on the slower track.

It is in the hands of ASEAN, India and other developing countries to arrest this trend. We have to insist that the multilateral trading regime takes into account the genuine concerns of the not-so-rich countries for the welfare and livelihood of billions of their citizens.

Agriculture is one such issue that affects not just the economics, but also the society and politics of all our countries. India and some ASEAN countries, with a number of other countries, have taken some important initiatives, which should gain further momentum as we approach Cancun.

India and ASEAN also have common concerns on Singapore issues and on non-agricultural market access. We have recently put behind us the contentious issues of Trade-Related Intellectual Property Rights and public health.

In the above mentioned sectors there can be tremendous value- addition from the proactive participation of business and industry. Public-private partnerships are engines of growth and development in today's globalizing world. The India-ASEAN engagement can also profit from dynamic government-industry linkages.

The above is abridged from the Prime Minister's address to the Second India-ASEAN Business Summit on Sept. 4