Tang Goucal on the Global Value Chain

“Asia should take its traditional position as thought leader of the world” – Dr. Rajiv Kumar, Vice-Chairman, NITI Aayog

Asia and the Emerging International Trading System or perhaps Asia AS the Emerging International Trading System, with more than 1/3 of the world’s population and more than 50% stakeholders in the global value chain, our (Asia’s) positioning in a post-colonial narrative has seen the global flexing of muscles with the US-China trade war causing flurried dialogues of geo-economic influences. Dutch Ambassador to India, Nepal and Bhutan, Martin Van Den Berg avers that “nationalist trade interests have turned to protectionism” and “negotiations are no longer about trade concerns but power politics.” According to Valentina Romei and John Reed who examined purchasing power parity (PPP) adjusted GDP data from the International Monetary Fund (IMF), “Asian economies, as defined by the UN trade and development body UNCTAD, will be larger than the rest of the world combined in 2020.” While External Affairs Minister, Dr. S Jaishankar asserts, “Trade and other forms of economic growth are critical elements of creating more effective multipolarity”, Consul General of the People’s Republic of China, Tang Guocai suggests that “the spirit of global village comes before the global value chain.”

Even as the rising fear of Coronavirus has caused stock markets to dip and affected the free movement of persons, sovereign powers entangled in an increasingly interdependent financial network cannot ignore Asia’s presence as a growing skilled workforce and a mammoth market. For Pearl Group CFO, Sanjay Gandhi, the question is “how do you bring the continuation of business?” Dr. S Jaishankar suggests that, “Competing against those with structural advantages cannot be a casual decision justified by political correctness. There is interest in the world to create additional drivers of growth while ensuring a global strategic balance.”

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Held at the J.W. Marriot Hotel in Pune between 28th February to 1st March 2020, the three-day inaugural session organized by the Indian Ministry of External Affairs (MEA) and the Pune International Centre (PIC) considered the push-pull of the periphery towards the centre as represented by existing flaws in the international trading system and its multinational bureaucracy of the World Trade Organisation (WTO), the World Bank, and the United Nations. Former Asst. Secretary General and Deputy Executive Director of UN Women, Lakshmi Puri asserts it is imperative to “change the unequal exchange as represented by the centre-periphery model of trade” for an “equitable multilateral system”

 

Aaditya Thackeray
Aaditya Thackeray

 

Featuring speakers ranging from government officials from India, Maldives, and Sri Lanka; industry leaders, international dignitaries, and diplomatic experts, the geo-economic conference offered a mélange of perspectives. While the Indian central government was ably represented by Dr. Hardeep Singh Puri (NITI Aayog), Dr. R.S. Sharma (Chairman, TRAI), Dr. Bibek Debroy (Chairman, Prime Minister Economic Advisory Council); Prof. Samir Brahmachari, founder Director of CSIR- Institute of Genomics & Integrative Biology, provided the representative frontier of scientific innovation in India. Aaditya Thackeray, Minister for Tourism, Environment & Protocol, Govt. of Maharashtra, exemplified the next generation of politicians already at the helm of state affairs. International dignitaries included the Amb. Zhang Xiangchen (Chinese Ambassador to WTO) and ministers from Maldives (Uz. Fayyaz Usmail) and Sri Lanka (Shehan Semasinghe).

As talks veered towards WTO reforms, Dr. Harsha Vardhana Singh, former Deputy Director-General at World Trade Organization, stated, “Given the fact that the US is unwilling to move ahead with the solutions suggested by the panel led by David Walker, plurilateral consensus is essential.” Even as the multi-faceted economic perspectives of developing countries (DCs) work towards gaining a strategic balance between nationalist trade interests and regional cooperation, technological innovations are breaking barriers to trade and sovereign borders. According to Dr. Kishore Mahbubani, Founding Dean of Lee Kuan Yew School of Public Relations and Singapore’s former permanent representative to the United Nations, “Balkans of Asia have succeeded due to the open regionalism approach such as ASEAN”. Dr. Mahbubani also suggested that the balancing factors in geopolitical dynamics will be cultural confidence, the historical legacy of Indians succeeding and very strong domestic government.

 

Prof. Samir Brahmachari
Prof. Samir Brahmachari

 

While the Indian polity has restored its electoral faith in the Narendra Modi government, former Lead Economist, World Bank, Dr. Jayanta Roy contended that “India has been a hesitant globalizer” and “comprehensive trade and logistics facilitation” is essential for the country’s growth as a leader in the global value chain. Dr. Shailesh Kumar, Chief Data Scientist, Reliance Jio, who wants to “democratize AI” suggested that “We need to Olafy or Uberify these (technological) solutions” and enhance “integration between producers of technology and the farmer or patient.”

 

Amb. Gautam Bambawale, Hon. Hardeep Singh Puri, Aaditya Thackeray, Bhavish Aggarwal with Dr. Vijay Kelkar and Dr. Raghunath Mashelkar of Pune International Centre
Amb. Gautam Bambawale, Hon. Hardeep Singh Puri, Aaditya Thackeray, Bhavish Aggarwal with Dr. Vijay Kelkar and Dr. Raghunath Mashelkar of Pune International Centre

As the world battles with the ramifications of Coronavirus and its implications on the global value chain, the Asia Economic Dialogue has just begun towards a multilateral system that considers geo-specific factors in trade negotiations including differential treatment for least developed countries, fair international arbitration processes and dispute settlements, and the considered accountability of the expansive digital economy. Dr. Rajiv Kumar, Vice-Chairman, NITI Aayog, is certain that “Asia should take its traditional position as thought leader of the world… and it is unarguable that Asia’s economic status should reverse to before colonial times. The question is if the global economy is ready for it?”

 

Image Source: Pune International Centre

mumbai-urban-transport-project

Urban India’s Public Transport is Yet To Arrive!

Consider the state of public transport in your city – How accessible is the network of public buses or trains…How cost-effective in terms of your intended destination? If you live in an Indian metropolitan city which has begun metro operations, is the situation better or has it become worse? Then consider India’s financial centre, Mumbai, with a population of 13.9 million and a governmental budget sufficient for an additional INR 36 billion for the construction of the Shivaji Memorial in Arabian Sea. Compare to Tokyo, Japan’s financial powerhouse, with a population of 12 million residents. Despite recent upgradation of Mumbai’s BEST buses, the stark contrast of public transport systems in both cities is testimony to poor planning in urban development, rather than access to resources. While Mumbai has the second highest migrant influx per year after Hyderabad, India’s annual rate of urbanization of 2.37% has burdened the public infrastructure in nearly 500 cities comprising more than 70% of the India’s urban population.

 

Although capacity building has become a developmental norm since decades, instead of adequate development that envisions future needs, governmental projects for urban transportation have been playing catch up. Despite initiatives for city-specific Unified Metropolitan Transport Authority(UMTA) and the Sustainable Urban Transport Project (SUTP) including capacity building projects being implemented under various schemes such as Jawaharlal Nehru National Urban Renewal Mission and Atal Mission for Rejuvenation & Urban Transformation (AMRUT), India’s public transport system (Fig. 1) remains fragmented and lacking in meeting the requisite demand. 

Fig. 2: Mode Share in Various Indian Cities (2013) Source: Ministry of Housing and Urban Affairs
Fig. 2: Mode Share in Various Indian Cities (2013) Source: Ministry of Housing and Urban Affairs

 

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Rupa Nandy, Regional Head, UITP India (International Association of Public Transport)

According to Rupa Nandy, Regional Head, UITP India (International Association of Public Transport), the biggest challenge is that “there are no adequate public transportation systems that exist in India.” Combined with multiple authorities instead of a centralised authority, “seamless journey experience to the user” has been difficult to achieve. Although Kolkata (57%), Hyderabad (49%), and Mumbai (44%) utilize public transport than any other mode of transport, public transportation facilities in major Indian metropolitan cities are inadequate on varying parameters such as availability, frequency, capacity and fleet condition. Compare India’s population of nearly 1.37 billion to Singapore’s 5.70 million. Perhaps the hybrid challenges of developing urban transport can be addressed with best practices from Singapore’s development planning which has resulted in nearly 80 per cent of trips (4.24 million) in the country performed on Public Transport comprising of bus, MRT, LRT, Taxis.

 

To mitigate the burden of urbanization on infrastructure, the central and state governments have initiated multiple initiatives such as developing metro rail systems (Fig. 2) and technological integration through data sharing such as General Transit Feed Specification (GTFS). However, inadequate support from the public transportation available in many urban agglomerations in India has resulted in the expansion of private vehicle ownership and shared mobility services, which has caused traffic congestions across multiple cities. According to NITI Aayog’s Transforming India’s Mobility Report, “Citizens spend almost 1.3-1.6x additional time in peak traffic for our top four metros, compared to 0.6x for Singapore and Hong Kong.” 

 

Metro Rail in India (February 2019) - Operational (642 KM) and Under Construction (691 KM) | Source: Ministry of Housing and Urban Affairs and Maps of India
Fig. 2: Metro Rail in India (February 2019) – Operational (642 KM) and Under Construction (691 KM) Source: Ministry of Housing and Urban Affairs and Maps of India

 

Adoption of technological solutions have been similarly fragmented. While Kochi was the first city to integrate GTFS data with the Chalo app for commuters, Delhi is rapidly integrating its public transportation system through initiatives such as the Delhi Integrated Multi-Modal Transit System, mobile applications such as PoochhO and the Common Mobility Card (ONE). NITI Aayog’s Transforming India’s Mobility Report suggests that economic loss of congestion has been estimated “at over USD 22 billion annually for India’s top four metros.” In addition, challenges in India’s urban transport development include safety issues such as adequate installation of CCTV cameras, and enhancing accessibility for persons with disabilities through the Accessible India campaign. 

 

Despite multifarious transport development schemes being implemented, including the Pradhan Mantri Jal Marg Yojana (PMJMY)’s mission envisages creation of 110 new waterways across the country, the diversity of India’s urban agglomerations present hybrid challenges for transit-oriented urban planning. Even as Nirmala Sitharaman recently announced a INR 102 lakh crore national infrastructure pipeline, the Indian Government has already begun multi-administrative integration, beginning with Indian Railways’ restructuring through the Indian Railway Management Service (IRMS). While effective utilisation of technological solutions can enhance seamless integration in multi-modal connectivity, customising city mobility plans for mode appropriateness are essential to developing the transport infrastructure and ensure productive deployment of resources. Even as public transport agencies in various small towns and metropolitan cities of India compete with ride-sharing services such as Uber and Ola expanding across the country, the hybrid challenges of developing urban India’s existing public transport systems will require faster adoption of technological solutions and strengthening integrations between multiple operators and agencies around the country.

 

Cover Image Source: World Bank

Stigmatizing Capitalism is a problem in India

In the preface to the Economic Survey of India, 2017-2018, Chief Economic Adviser to the Government of India, Arvind Subramanian writes, “The Survey strives to combine rigour with readability, a challenge that increases in the same proportion as attention spans shrink (from absorbing op-eds to scrolling down tweets). The Survey’s aim is always to build a portfolio of contributions, combining description, new data creation, deep-dive research, and provocative policy ideation.”

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