What India’s extraordinary growth and future can teach global leaders
In early October, the World Economic Forum published a series of articles as part of their Global Competitiveness Report 2019. One of these articles was written by the president of the World Economic Forum, Børge Brende.
He wrote that ‘…if the 19th century can be characterised by the rise of industrialisation and the 20th century by the expansion of the market economy and globalisation, the defining characteristics of the 21st century are dramatic and pervasive transformations and a shift from uni-polarity towards multi-polarity’.
He went on to note that disruptive technological change has led to fundamental changes in the nature and structure of the economy.
‘With significant redistribution of the level, location and composition of output, our organisations are more global and interconnected than ever. A hastening erosion of trust in extant political frameworks and institutions is driving human societies to be more isolated and divergent. Concurrently, the ecological challenges and climate crisis have never been more existential. In a nutshell, in a fragile world order, the need for a cohesive leadership arrangement to drive positive change is conspicuous in its absence,’ he wrote.
At the same time, he wrote, geopolitical and ecological struggles, escalating trade tensions and policy uncertainty have led to a slowdown in investments and business confidence. With global GDP growth in 2019 downgraded to 3.2% with only a modest recovery projected for the next few years and credibility in the existing multilateral rules-based trade system waning, the prospects were worrying. He said that if global growth fell short by 1% from projections, the magnitude of the decline would be comparable to the global recession of the early 2000s.
By way of contrast, he noted that the economic outlook for South Asia continued to be strong. He wrote that over the past half-century, emerging and developing economies had significantly enhanced their contribution to global output from around 15% to well above 50%. Underpinned by strong domestic demand, private consumption and investment, a growth projection of 7% suggested that South Asia had the resilience and strength to both weather the global slowdown and to continue to grow the economy.
His article then focused on India, a country with a projected growth of 7.5% and a youthful age profile. He wrote the following:
- The stage has been set for India to realise its vision of becoming a $10-trillion economy in the next decade-and-a-half.
- India’s commitment to renewable energy through voluntary and ambitious renewable power capacity targets, a lead role in the Paris Climate Agreement negotiations and the International Solar Alliance showed its aspirations of becoming a leader in environment security and climate change mitigation.
- India has expanded its global stature in space exploration through widely celebrated breakthroughs such as its recent lunar mission and its distinction of becoming the fourth country worldwide to shoot down a low-orbit satellite with a missile.
- India has involved itself in global humanitarian efforts and development initiatives, including infrastructure development in Afghanistan, the International North-South Transport Corridor, the Ashgabat Agreement, the Chabahar port and the India-Myanmar-Thailand highway.
- The Indian Prime Minister has expressed support for an India-Africa cooperation and deepened participation in coalitions such as the Shanghai Cooperation Organization, the Asian Infrastructure Investment Bank, the India-Brazil-South Africa Dialogue Forum and BRICS.
- India reached the 52nd spot in the 2019 Global Innovation Index. It is one of a few countries to have consecutively improved its rank for nine years. In Brende’s opinion, India’s technical prowess and knack for innovation, fused with the leap-frogging opportunities of Fourth Industrial Revolution technologies, ‘…can consolidate its position as a dominant force in global economic, political and strategic affairs.’
- India has also undertaken structural reforms such as easing restrictive business regulations. The country’s 65-place leap in the World Bank’s Ease of Doing Business rankings demonstrated an improved business climate and expounded investor confidence.
- In the past decade, India has witnessed a mushrooming of start-ups, innovating across domains such as digital payments, online retail, education and software. The number of Indian unicorns has also risen every year. The implementation of the Goods and Services Tax has removed tax barriers across states and unified various central and state tax laws, creating a single common market.
- India has also made strides in social progress. The expansion of the biometric identification system under the Unique Identification Authority of India has streamlined the delivery of government services and made resource disbursement through welfare programmes more efficient. Devising such a database of more than a billion people was a significant feat. In addition, through the financial inclusion programme Jan Dhan Yojana, it has provided bank accounts for 300 million hitherto unbanked people, creating new opportunities for them to access credit and state subsidies and bringing them into the formal economy.
- Initiatives such as the Ayushman Bharat for universal health coverage in India, the world’s largest LED programme to improve energy efficiency, a sweeping rural electrification drive and a strong push towards broad-based energy access and security through the Ujjwala and Saubhagya schemes, among others, show India’s ability to devise and implement a reform agenda that balances global aspirations with critical development imperatives at home.
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