Address by MoS Dr Shashi Tharoor at Abu Dhabi

Oct 07, 2009

3. This engagement between India and the Gulf has had such sustained resonance primarily because our engagements have been continuously refreshed and revitalized by meeting new needs and requirements. For several centuries, India provided the necessities, comforts and luxuries needed by the people of the Gulf and occasionally re-exported by them to other markets. Indian foodstuffs, textiles and jewellery constituted the main exports from our country, while we imported huge quantities of dates and pearls from here.

4. Later, in recent years, when this region took up the massive expansion of its infrastructure and welfare institutions, India came forward with its human resources, initially blue-collar but increasingly progressing to professionals. Today, there is no aspect of the UAE economy which has not been touched by an Indian contribution.

5. Even as the Gulf economies have expanded to meet modern-day needs, India too has gone through remarkable changes. Perhaps change in India has been less dramatic as compared to the Gulf, which is natural given our size and the number of our people. Nevertheless, India, over the last sixty years, has changed beyond recognition, so that today every aspect of our national life is different from what it was at the dawn of independence. The most remarkable change has been in the lives of the poorest of our people. We are now today able to feed all our people thanks to the three revolutions i.e the green revolution for food production, the white revolution in dairy products and the blue revolution in milk. We are striving to ensure that our peoples have access to the best possible education and the opportunity to live a life of dignity and achievement. We recognize that we still have a long way to go, but we remain confident that we are on the right path.

6. India’s success has been noted by a number of international economic commentators at least some of whom have forecast an extraordinary future for the Indian story. Thus, Goldman Sachs, in its report of October 2003, stated that:

* India’s growth will exceed 5% per year over the next 30-50 years, making India the world’s third largest economy (after USA and China) in 30 years.
* In GDP terms, India will overtake Italy in 2015, France in 2020, Germany in 2025 and Japan in 2030.
Three years later, in January 2007, it painted an even more rosy a picture when it stated:
* India can sustain output growth of about 8% per year till 2020, thus overtaking G-8 countries faster than envisaged earlier.
* India could surpass the USA before 2050, thus becoming the world’s second largest economy.

7. Of course the global economy has witnessed a course correction in the last 12 months, but the reasons for Goldman’s optimism have not been altered. [ Minister made remarks about the mobile telephone revolution in India touching the lives of the ordinary people of India].

8. I have spoken of significant changes in our national life but what has not changed are certain principles which have given an enduring resilience to our body politic. These are our democratic and secular order and our commitment to social and economic justice, which are enshrined in our Constitution. Thus, the social and economic transformation in India has taken place within the framework of our abiding commitment to these core values, which has enabled us to weather some of the most serious difficulties, political and economic, that have periodically challenged our national fibre and even tested our nationhood.

9. I would like to say a few words about how we have coped with the current global economic crisis. It is a matter of some satisfaction that India’s gross domestic product (GDP) grew around 6% in every quarter of what has been described by economists as “the most difficult 12-months in recent history”. As against this, most countries in the world suffered falls in growth rates in at least one quarter.

10. Many reasons have been attributed for this success. First, our banks and financial institutions were not tempted to buy mortgage-supported securities and credit default swaps that, in many cases became toxic and ruined several Western financial institutions. Second, though our merchandise exports did register declines of about 30 per cent, our services exports continued to do well.

11. Third, remittances from our overseas Indian community remained robust, reaching $46.4 billion in 2008-09, the bulk of which came from the Indian expatriate community in the Gulf. And, fourth, foreign direct investment has remained substantial, reaching $27.3 billion in 2008-09 in spite of the global financial crisis.

12. Besides these developments, our financial authorities have pursued policies providing for lower interest rates, expanded credit and lower excise duties, all of which have served to boost economic activity. And some 80% of our GDP does not come from the external sector but from producing goods and services for Indians in India.

13. It may be recalled that, at the commencement of the financial crisis in September 2008, foreign investors withdrew $12 billion from our stock markets; they are now flooding back to our exchanges, reaching a rate of $ one billion per week in May 2009.

14. It is in this economic scenario that I now seek a more substantial participation from the Gulf in the extraordinary adventure that is our economic and social development in what the sub-title of this Executive Dinner describes as the “Next Wave”.

15. Now, in this “Next Wave” we plan to carry our nation forward on the basis of massive investments in our infrastructure, energy and industrial sectors, along with investments in our human resources through up-gradation of our institutions of primary education and higher learning. We also propose to increase our electric power production by 700% by 2043. It is in this context that India extends to all of you here a hand of partnership, and invites you to participate with us in the new phase of development and prosperity on which we have embarked.

16. We have taken a few practical steps to improve the environment for investments: - a one stop shop; greater involvement of business associations such as CII, ASSOCHAM and FICCI; formation of the Investment Advisory Council to address the problems faced by investors. I would also advice investors to explore the Joint Venture (JV) route to achieve success in India. Further, Indian states compete with each other to attract investments. Foreign investors should be conscious of the differences between states and incentives offered by different states to attract investments.

17. The Gulf region and the UAE are rich in financial resources and in technological capabilities and expertise that have emerged over the last 40 years of extraordinary all-round development. The UAE as a country and the GCC as an economic grouping are already India’s number one trade partners. India’s trade with UAE touched US$ 44.5 bn last year and with the GCC it was US$ 87 bn. We now see the UAE and the GCC as our premier investment partners as well, so that we can, through our joint effort, build up the projects and institutions that will transform the face of India. I see this as an “extraordinary adventure” since, before our eyes, we will see the most significant transformations in our geographical landscape and in the quality of life of our people.

18. Given the long history of our fruitful interaction, this new engagement to which I have invited you is but one more step in the mutually beneficial relationship that has bonded our people over several millennia, but it promises, in its implications, to be more extraordinarily transformational and fruitful than any interaction that has gone before.

Thank you.

Abu Dhabi
October 7, 2009