PM’s
ADDRESS AT THE 3RD INDIA-EU BUSINESS SUMMIT
The
following is the text of Prime Minister, Shri Atal Bihari Vajpayee’s
address at the India-EU Business Summit at Copenhagen today:
"I thank you for
your warm welcome.
It is a great pleasure
to be here in this beautiful capital of Denmark to carry forward
the India-EU Summit level dialogue, which we commenced in Lisbon
two years ago. I am delighted that this business summit has also
become an integral part of this dialogue, providing a high-level
forum for networking and in-depth exchange of business experiences.
Friends,
A basic symmetry
in our circumstances and some core values underpin the India-European
Union partnership. We are both global actors in a multi-polar
world. We are large multicultural and multilingual federal entities
with strong regional identities. We value democracy. We recognize
the virtues of consultations and consensus in a multilateral approach.
These are the political values that drive our economic progress
and social development.
Our dialogue touches
upon major issues of the world. We are partners in promoting global
peace and security. We agree that the pre-eminent challenges before
the international community are poverty alleviation and sustainable
development.
The European Union
is of great importance to us as India’s largest trading partner,
accounting for about a quarter of our external trade. It is the
largest overseas investor in India. Much of its investment is
in high technology areas.
Conversely, we believe
Europe’s governments and businesses see the immense potential
in India, given the synergies for business collaboration and economic
interaction.
The Indian economy
has been living up to this expectation, it is today the world’s
fourth largest economy. Our annual average growth has been over
5% since 1980. It is the highest ever achieved over a comparable
period by any democracy in the world. In the first quarter of
this fiscal year, our economic growth has been over 6%.
This is not a mean
achievement in an uncertain post-September 11 environment marked
by nervous global markets, rising oil prices and falling commodity
prices. It has been achieved also in the face of a relentless
and sustained terrorism in parts of our country – masterminded
from across our borders and designed to create political turbulence,
economic disruption and social disharmony.
Our economic fundamentals
remain strong. Inflation is in the low single digit range. Our
foreign exchange reserves of over 13 months of import cover are
among the world’s highest. There are encouraging signs of an industrial
recovery. Exports are picking up. Our food reserves of over 60
million tonnes have easily offset the shortfall in agricultural
production due to the deficient rainfall this year.
India has one of
the fastest growing telecom, insurance, and financial services
markets in the world. Our strengths in IT and biotechnology are
well known. Our laws are transparent, our judicial system is impartial
and experienced in the ways of a market economy. Our markets and
our skilled work force continue to grow. Our goal is to achieve
an average annual growth rate of 8% over the next five years.
The continued investor
confidence in the country is reflected in the highest ever inflows
of foreign direct investment last year. Unlike those in other
countries, our official foreign investment figures do not include
reinvested earnings and overseas commercial borrowings. The International
Finance Corporation has recently pointed out that if these are
included, India attracts about 8 billion dollars of FDI annually
– or about 1.7% of its GDP – which compares favourably with other
developing countries.
We often hear critical
comments about the pace of our reforms. But remember that the
same sub-continental size and population, which makes India an
attractive market, also accommodates a diversity of perspectives,
interests and needs. There are vast disparities in incomes and
living conditions.
A democratically
elected government has to be sensitive to these realities. Public
accountability and a social conscience have to govern its actions.
It cannot adopt a shock therapy approach to economic reform. To
borrow a metaphor from an earlier era and a different political
context, what we are trying to implement is economic liberalization
with a human face.
Our approach is vindicated
by the fact that among the countries which liberalized their economies
in the early 1990’s, India alone moved to a higher growth trajectory
without an interim period of recession.
Europe also confronted
the reality of its diversity during its debates on integration,
enlargement, single currency, and common foreign and security
policy. You discovered that only a process of consensus with participation
of all the principal stakeholders can generate sustainable policies.
You can therefore understand our perspectives.
It has become the
fashion these days to liken economies to real and mythical creatures
like elephants, tigers and dragons. The Indian economy is often
identified with the elephant. I have no problem with this analogy.
Elephants may take time to get all parts of their vast bodies
moving forward in unison. But once they actually start moving,
the momentum is very difficult to divert, slow down, stop or reverse.
And when they move, the forest shakes.
Of course, some shortcomings
still disappoint the expectations of our overseas business partners.
We are moving to rectify them. We are building a national consensus
on labour reforms, heeding the needs of both business and labour.
High priority infrastructure projects are being given special
attention. We know that foreign investors are often vexed by an
excess of procedure, paperwork and bureaucracy. This is not a
malaise unique to India. We are trying to tackle it with a national
programme involving e-governance.
India’s growing markets
in a liberlizing regime and the European Union’s thrust for expansion
and diversification provide rapidly growing prospects for India-EU
cooperation.
India can benefit
from the modern manufacturing technologies developed in Europe
to rejuvenate traditional industries like steel and textiles.
Similarly, there are synergies between our respective small and
medium enterprises. Your technologies can link with our cost effective
human and other resources. We are enacting a new Intellectual
Property Rights regime in India, which would afford protection
to the foreign technology exporter, fully in line with WTO commitments.
In the social sector,
India and EU have cooperated in tackling poverty and backwardness.
We appreciate the EU programmes in India for universalization
of elementary education and improvement of health services among
disadvantaged population groups.
In the knowledge-based
industries of the new economy, the EU can leverage the opportunities,
which India can offer. There are also objective factors encouraging
cooperation in services. But for an optimum exploitation of these
opportunities, the EU would have to show the same commitment to
free mobility of skills as it does to free movement of capital
and services.
Friends,
We cannot view cooperation
between India and the European Union without reference to our
shared commitment to building a world free of disparities and
equal opportunities for all nations.
The global economy
is facing a prolonged slowdown. This is not merely because of
the cyclical nature of business. Its roots run deeper into the
structural imbalances of the global economy. It is widely accepted
that the most reliable stimulus for sustainable growth of the
developed economies is their constructive engagement with the
preservation of their environmental resources, social values and
cultural identities.
The underlying philosophy
of this form of engagement is not charity. It is simply enlightened
self-interest. Today, the development deficit from the uneven
spread of the benefits of globalization threatens the sustainable
prosperity of the developed countries.
The best minds of
India and Europe have proclaimed this vision, but its realization
has eluded us. In the 21st century, we cannot afford
the consequences of failure in this endeavour.
We hope the EU would
address the concerns of the developing world on these matters.
A starting point could be the dismantling of the high agricultural
subsidies, which greatly harm the growth prospects of developing
countries. We also have a serious problem with non-tariff barriers
against developing country products on ostensible environmental
or social concerns. Other developmental linkages can follow.
Friends,
Europe has taken
an epoch-making step this year by adopting a single currency.
It soon goes in for enlargement. We hope these steps will act
as a stimulus for Europe’s economic growth. We also hope that
the consequent spurt in intra-Europe economic activity will synergize
opportunities for its non-European partners.
I thank the Danish
Confederation of Industries and the other organizers of this summit
meeting for giving me this opportunity to speak to you. The globalizing
world demands a new thrust to the India-EU economic and commercial
partnership. Our governments and businesses should come together
to generate this thrust. India is willing to make this effort.
Thank you".