How Will India Shape Future Global Cooperation?

India has a unique combination of membership in the G20, non-NPT status and a tradition of non-alignment. As it seeks to increase its voice in global cooperation, what will be India’s future role and responsibility?

The recommended actions from this session will be discussed in the Closing Plenary session.

Key Points
• In the multipolar world of “multi-alignments”, India will need to balance its national interests with regional and global responsibilities.
• While it has always possessed a sense of global citizenship, India cannot be altruistic at the expense of its citizens.
• As a major emerging economy, India has an increasing responsibility to promote regional integration and cooperation in its neighbourhood.

Synopsis
The global economic crisis has focused the international community’s attention on how international institutions and mechanisms of governance should be redesigned. This would include the rebalancing of global responsibility, with major developing economies such as India taking on greater roles. This is important in a multipolar world racked by contending pressures of globalization – the increasing sense of mutual dependence simultaneous with the intensification of forces of disruption and intolerance. The problems the world faces have no passports and cannot be solved by any single country.

The designation of the G20 as the premier forum for international economic cooperation is a significant reform measure. It gives developing economies a greater voice over the reshaping of the international financial architecture. But this is only a first step. The challenge will be to find ways to further redesign the global system to reflect current geopolitical and international economic relations.

Future systems may in fact be somewhat chaotic. After the dichotomous Cold War era of alignment or non-alignment, pragmatic “multi-alignment” is the norm. Countries align according to issue or interests, sometimes partnering, sometimes contending. For India, the challenge is to figure out what to do now that it has a seat at the global table. Like any country with greatness thrust upon it, India has to figure out how to balance national interests with its regional and global responsibilities. This is a difficult task for a nation that does not typically wield its hard power but relies more on its soft power.

What does this mean for emerging India? First, it must have its own domestic house in order to preserve its moral authority as a democracy and as a progressive country that has been pursuing tough reforms for two decades. Second, India must be able to assert itself on the international stage, defending its interests even if it means opposing majority pressure to accept agreements or terms that would negatively impact Indians. Yet, India cannot be an argumentative spoiler, an accusation often lodged by critics of its approach to trade talks. Third, India needs to develop its leadership in South Asia to boost cooperation in the region and promote stability and peace in the neighbourhood.

As India takes in hand more levers of global power, it must examine and come to terms with what it actually means to wield significant influence in the world. Like any other emergent nation, can India perform on the world stage without thinking only along the paradigm of its own national interests? If countries at the negotiating table use nationalist instincts as their default position, the only outcome is deadlock. The impasses over the Doha Round and climate change are cases in point.

India nonetheless has a track record of global collaboration that is often overlooked or under-appreciated. Its soldiers consistently participate in international peacekeeping operations, for example. This is evidence of India’s long-held sense of global citizenship. India wants to be a responsible global player. But it must always keep at the forefront the fact that it is still a developing economy, with more than half a billion people without access to electricity. At this stage of its development, India cannot afford to be altruistic at the expense of its own population.

On the regional front, India has in fact made efforts to promote regional integration and collaboration, with positive results. Bhutan’s use of Indian assistance to develop its electricity sector, now the top contributor to its GDP, is a good example. But geopolitical circumstances have meant that South Asia is decidedly less connected than other regions. India needs to explore ways to deepen and broaden relationships with its neighbours, both in South Asia and to the East.

While relations with China are marked by disagreements on a range of issues including territory, it is important not to exaggerate the differences, which are not unusual in any complex relationship. India’s interaction with China will be a critical dynamic to watch in the future. The emergence of India is proving that democracy need not have a high growth penalty, an implicit challenge to the Chinese model of directed growth under an authoritarian system. On these two fast-growing countries lies the responsibility for bolstering Asia’s position in the world in what is supposed to be the Asian Century.

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A Roadmap for India’s Next Generation of Growth..!!

India has the potential to emerge as one of the world’s four largest economies by 2020, but it will require coordinated efforts by current and future leaders from government, industry and civil society to address pressing challenges.

In this closing session, Co-Chairs of the India Economic Summit will outline the enablers and challenges for India’s next generation of growth and suggest the actions required by industry and government leaders.

Key Points
• India’s security is under control. The country is no more vulnerable to a terrorist attack than any other, according to its government.
• To succeed in generating the growth it needs to sustain progress over the long term, India must address significant potential bottlenecks such as its infrastructure gap and skills deficit.
• To be more effective in turning words into action, India’s leaders must be held accountable for their performance. If they do not deliver, they should be replaced.
• Business to government: Just do it!

Synopsis
The first part of the session focused on the question of India’s security challenges, which are no different from those faced by other countries, it was argued. The country is no more vulnerable than others and has the capacity to thwart any terrorist attack. Should there be one, India possesses the capacity to contain it and respond in a swift and decisive manner, it was further contended. Disruptions of law and order and the threat of terrorism are affecting India’s ability to promote investment and promote growth.

During the session, the six Summit co-chairs reviewed the discussions of the past three days and how to move forward on an agenda to drive new growth to sustain India’s long-term progress. On the need to address the country’s poor infrastructure, government simply needs to execute its ambitious plans, including the objective of building 20 kilometres of roads a day. India will not generate the millions of new jobs it needs in the coming decades if it does not resolve its infrastructure gap.

This got to the heart of a major challenge for the country – to get from words to action. Plans and ambitions are one thing; execution is what yields real results. Indeed, there has been talk for years about India’s need to empower women and educate girls. Yet, its performance in the recent World Economic Forum Global Gender Gap Report was poor, prompting calls for an urgent meeting of relevant government ministers with business and civil society leaders to make the issue a top priority – an economic imperative and not just a good thing to do.

India also has to be more effective in addressing its demographic challenges, especially addressing its “youth bulge” and mobilizing its abundant human resources to ensure that growth is inclusive. If the large numbers of young people are not educated, their lack of skills could lead to dislocation and instability. In general, India must address its severe skills deficit, especially at the middle-income level.

Even so, India must still pay attention to the bottom of the pyramid and the half a billion of its citizens without access to electricity. They must be given power in an environmentally responsible way, through clean energy sources. To do this, India will have to harness its considerable potential for innovation, especially its capacity to find creative low-cost solutions. India could find a lucrative global niche by developing new business models based on low-cost innovations, particularly in green technology and manufacturing.

To move forward, however, this agenda for new growth will require laser-point determination that even many of those familiar with India and Indians themselves doubt the country has. Few doubt that India has the capacity to find solutions to its problems and contribute what it can to address global priorities. The missing factor has been accountability. Leaders in positions of power have to be held accountable for executing projects and development plans – or they should be replaced. The stakes are high. If any one of the major challenges India faces, such as infrastructure or the skills deficit, is not properly addressed, they are more than likely to become serious bottlenecks to sustainable growth.

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The Next Global Crisis..!!

The G20 is focused on preventing a repeat of the financial crisis, but the next global crisis to threaten the global economy is likely to be off the radar screen of policy-makers, as have previous ones.

What warning signals need our urgent attention?

In partnership with the World Economic Forum, CNBC hosts this debate focusing on the challenges and choices to be made to prevent the next great global crisis.

Key Points
• Three flash points are seen as sparking the next global crisis: 1) out of control sovereign debt; 2) over regulation of the financial system; and 3) protectionism leading to the demise of free trade and globalization
• Government debt in the US and Europe has risen by more than 75%. In their zeal to avert a Great Depression, policy-makers might have mortgaged the future for short-term gain
• Sarbanes Oxley in the US is said to have caused financial institutions to flee New York for London. With internationally coordinated regulation, companies have nowhere to go and would be crushed by excessive global rules
• The benefits of free trade and globalization have not been distributed equally, causing disenchantment among voters that could pressure governments to raise trade and other barriers, which could spark the next global crisis
• The audience voted sovereign debt as most likely to cause the next global crisis (50.7%), followed by protectionism (37.3%). Over regulation is regarded as a distant crisis (12%)

Synopsis
The next global crisis is likely to be sparked by the excessive amounts of sovereign debt that government piled on in their zeal to avert a Great Depression. Governments have done everything to shield the public from pain, but the relief is only temporary. Belt tightening and other painful measures could cause social tensions in the US and the United Kingdom, and emerging Europe could face outright defaults.

The US might not default, but its towering debts could reduce quality of life programmes such as healthcare. The solution is substantial cuts in military expenditures, agricultural subsidies, a manned space flight to Mars and other such programmes to help balance the budget. Higher taxes will also be needed.

Timing the withdrawal of stimulus spending and paring of sovereign debt is crucial. International coordination will be needed. The public should also be prepared for inevitable pain from higher taxes, spending cutbacks and other measures.

Those who see over regulation as the next global crisis point to the Sarbanes Oxley Act, which they say has made the US regulatory environment overly complex. The result was to drive financiers away from New York to London. But this will not be possible if over regulation becomes a global trend.

One solution is to let the financial industry regulate itself, including remuneration. Goldman Sachs and other banks are proving they can exercise self-restraint on perceived excessive bonuses. The mantra should be to let industry players stop, look, listen – and learn.

However, others argue that government still has to provide traffic lights and policemen. One possible approach is to strike a balance so regulation does not stifle innovation and the entrepreneurial spirit. Transparency in corporate operations can also regulate corporate behaviour as investors and other stakeholders pressure companies to act responsibly.

Those who view protectionism as causing the next global crisis fear that the high unemployment and other economic pain in the US and elsewhere will be blamed on free trade and globalization. That will be a mistake because they think free trade is a win-win proposition.

However, others say free trade is win-win only if the metric is countries. There are losers on the individual level, from companies that have to fold, to workers who lose their jobs and livelihoods. Some of the losers must be compensated, and the fruits of free trade more equitably distributed.

In the end, the majority of the audience (50.7%) were swayed by the proposition that the next global problem is a sovereign debt crisis. A bit more than one-third (37.3%) voted for protectionism, while only 12% thought over regulation would be the next crisis.

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Chronic Diseases: A Global Challenge..!!

Sixty percent of all deaths are caused by chronic diseases such as heart disease, strokes and diabetes. And it is not just a rich-country phenomenon. Some 80% of cases of chronic disease are occurring in developing countries. So, the question is: how can public and private sectors work together more effectively to manage chronic diseases?

Key Points
• Chronic disease is treatable, but new strategies are needed; the reasons behind the surge in chronic disease levels must also be understood
• Any new strategy requires far greater coordination of patient care; a new delivery model is needed with more emphasis on preventive measures
• For many developing countries, the rising challenge of chronic disease comes on top of an unfinished fight against acute diseases; but funding is often more easily available for the latter
• The economic cost to countries and companies of chronic disease and mental illness is enormous
• Public-private partnerships must be forged to implement new strategies
• New technologies, such as mobile phones, can play a role in implementing new strategies

Synopsis
The world is in the midst of a major health transformation, with chronic diseases, both communicable and non-communicable, posing a greater challenge to public health systems than the more traditional acute diseases. Every year sees 13 million new cases of cancer and 7 million deaths. Heart disease and diabetes are major killers, while over 1.6 million people suffer from some sort of mental disorder, such as depression. Even in some African countries, such as Tanzania, cancer is killing more people each year than AIDS and tuberculosis. With the world’s population ageing, dementia will come to be an increasing health burden. The economic cost of this is huge. In the European Union alone, the direct cost of depression to the economy in terms of lost output is some 41 billion euros a year. So, good health strategies make good business sense. But, health systems are still too often more oriented towards tackling acute diseases.

One major deficiency in the treatment of chronic disease is care coordination. Large numbers of people suffer from more than one chronic ailment, but there is often little coordination between caregivers. The answer is greater connectivity in healthcare. There should be a core team and a core plan for each patient. More emphasis also needs to be put on prevention. In the European Union, 97% of health spending goes towards dealing with disease, with only 3% on prevention. Spending on prevention within the EU should currently be closer to 10%.

Inactivity and obesity are clearly linked to chronic diseases such as diabetes and heart problems. Tactically, it is probably better to put more emphasis on increasing the amount of exercise a person takes than on getting them to change diet. A better diet will often follow naturally once a person has adopted a more active lifestyle. But health is not just a matter for health authorities; other areas of government must also be involved. Tax increases on tobacco, for example, have been shown to be effective in cutting smoking, which is a major cause of preventable death. Countries need to develop a national culture of health. For example, buildings could be designed in such a way that people are obliged to walk more rather than always taking the lift.

Nearly 5 billion people are using cell phones, offering tremendous opportunities for improving health services. In developing countries, for example, doctors can be consulted over long distances or remote clinics can be connected. Telecommunications devices can be developed to monitor disease indicators, such as glucose levels. But, so far, research and development into the medical use of telecommunications is under-funded. Telecommunications – mobile phones, the Internet – can also be used to form communities of people who encourage each other to live healthier lives and promote social change.

But, tackling the diseases is not enough. Part of the rising incidence of chronic disease is directly related to our way of working. Studies show that disorders such as stress and depression have a strong correlation with working hours, the setting of unreasonable demands and tasks, and a lack of autonomy. Managers can, in other words, be a danger to health. Solutions include more flexible working practices and better training of managers. Where such approaches have been adopted, productivity has risen and insurance claims have fallen.

Management Innovations from the Fringe..!!!!

Most companies rely on management practices dating from the Industrial Revolution, but there are vanguards that have developed new models.

What are the new practices that companies are using to take management beyond the Industrial Age?

Key Points

• Creative innovation across a company at all levels is vital, and can best be achieved by ensuring collaboration among all employees, enabling them to stand on each other’s shoulders
• Employees are the greatest asset a company has and their concerns must come first, even ahead of those of customers and shareholders
• Management has to be turned upside down, and chief executives can no longer be the great deciders, but have to become stage managers or facilitators
• Companies must reverse accountability and break the traditional hierarchical system by making managers responsible to employees
• Peer review, rather than money, is the greatest driver of motivation; employees made responsible to each other are more productive and successful
• Use of social networking techniques within an organization produces wider understanding among managers and employees

Synopsis
Achieving collaboration across the range of employees and product teams – sometimes not just across local or national units but also across continents – is one of the toughest challenges a company faces, but is essential for innovation in terms of product creation that any organization needs in an age of intense business competition. This can be achieved by establishing means – like internal electronic networking – that enable employees to exchange ideas and seek out others with whom they wish to cooperate on product development.

Employees are the greatest asset any company has, and they have to be motivated to keep coming to work and create day after day. This can be achieved by shaping an environment that helps employees balance work and private life. One company – whose local units are widely recognized in many countries as the best employer – provides comprehensive social insurance schemes, daycare facilities for children, gyms and similar amenities, seminars on subjects like taxation and parenting, and offers help in finding retirement homes for ageing parents.

Employees’ interests have to come before the interests of customers and shareholders, but if employees are happy, they will keep customers happy and that, in turn, will convert into the results that keep shareholders happy. However, product innovation is also encouraged by listening to customers, who should be encouraged to come to companies and talk to employees in production teams rather than just to management.

Management has to abandon the hierarchical system that has predominated since the Industrial Revolution; it is no longer relevant in the age of the knowledge economy. Around the world, surveys have shown that even people happy with the job they do leave because of problems with management or managers. Micromanaging from the top is self-defeating. A CEO cannot only be the great decider, but should also be a stage manager or facilitator, making sure that everything possible is done to ensure that employees make the best use of their skills and brainpower.

Management should be responsible to employees, and employees responsible to each other. Reviews of manager performance, including that of CEOs, should be open and available to all. Peer review among employees, rather than money, is the greatest driver of motivation. People have to justify themselves to their peers rather than to the bosses, and fellow workers can be tougher judges of performance than management, and are quicker to spot where a colleague is not up to the job.

Social networking techniques within a company help produce wider understanding of both purpose and methods among and between management and employees. Successful firms with high levels of success have created systems of open blogs, interactive sites on company issues, and special “ticketing” where employees can make known their problems with non-production arms of the company – human resources, finance departments and general management – which the latter have to answer.

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Who Is the New Consumer ????????

Two billion new consumers from the developing world will enter the global economy by 2030.

Who is the “new consumer” who will drive future global growth?

Key Points
• Armed with information technology, consumers become impatient and omnipotent; they drive costs down and quality up, whether in education or food or text-messaging services
• The new consumer is predominantly female – women make 85% of all purchases; they are savvy, demanding, value hassle-free shopping and are multi-loyal among brands and stores
• As the global economy expands, the need for cows will grow sustainably, as consumer demand for meat and milk rise with increasingly affluent populations
• The new consumer demands sustainability, and will punish or reward companies based on their market behaviour, well beyond what the law or political regulations require
• There is no single, broad-based “new consumer”, but rather many diverse segments in differentiated markets
• The “what” and “where” of consumer goods is increasingly giving way to the “how” those products and services have been produced, packaged and delivered
• Not all new consumers want more – in recession-struck economies of Europe and North America, consumers are more frugal, and baby boomers value leisure more than material things

Synopsis
The sheer numbers are sobering, as the Earth’s population will surge to 8.3 billion people in 2030. By then, each individual will eat 45 kilograms of meat per year, twice as much as the 1965 average, and the world will collectively burn 105 billion tons of oil. The expanding economy and burgeoning demographics offer new opportunities for businesses, but impose heavy burdens from savvy consumers who demand sustainable products and services.

Even without all the newborn babies coming into the world each day, the demands of consumers are being unleashed in ways that are transforming the global marketplace from the bottom up. Company executives and even government officials who fail to listen, re-engineer and deliver on these demands will soon find themselves driven out of the marketplace.

Human aspirations have always been high, but technology is now rewriting the rules and the pace of the game. What used to take 50 years to achieve is now expected to be accomplished in five; an item that formerly cost US$ 100 must now be sold for US$ 5. Not long ago, one dollar would buy delivery of eight text messages; now companies are being asked to send 8,000 for the same price.

It would be a mistake to broad-brush the new consumer as any one type or category. Depending on the goods or services and market, there are millions of differentiated new consumers. For example, many do not check or care if a label says “Made in China”. Some value “made locally” for everyday products, but even they likely prefer “Made in France” for luxury items such as perfume. What’s more, in some countries the new consumer does not want any additional stuff, but may even be trading down, saving money for retirement, and shrinking his or her economic footprint.

One potent segment of a global new clientele that is not trading down, however, appears to be women. Their purchasing power has grown alongside technological and political empowerment. They have growing aspirations – for themselves, their children and their spouses – that range from education and mobility to tools for becoming self-employed. Their loyalty to family does not extend to the marketplace, however; unless they find goods and services that are fact-based, emotional and fun, they will turn elsewhere. Fast moving retailers must show what is safe, available, sustainable and affordable.

Some argued that because of widespread risks, regulations on behalf of consumers would be inevitable. Panellists generally agreed, with two caveats. First, even regulations must involve society and be responsive to consumer demands, not unilaterally imposed by a few experts. Second, legal protections merely form the baseline for consumers; success goes well beyond what the law requires.

A broad survey of consumer demands focused on where products come from, how they are made, the size of their footprint and the nature of their labour practices. All of these related to various definitions of sustainability, but that loaded word was open to interpretation. “Green” goods and services remained a niche market for only 5% of elite consumers, while “sustainable” products found broad appeal among 30%. Why? Progress in communication drives research and development to innovate towards reduced impacts. The resulting efficiency may appear in eco-labelling, cradle-to-grave awareness or other marketing efforts, but the progress owes less to visionary leadership or political mandates than to the rising influence of the relentlessly demanding new consumer.

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Rethinking Energy Security...!!

Shifts in supply and demand, as well as challenges posed by climate change, will exert ever greater pressure on both corporate and national energy planning over the next decades.

What is needed to tackle the interlinked issues of energy security, economic growth and climate change?

Key Points
• Energy security is a question of affordability, acceptability and accessibility
• Energy security needs to be linked to climate change as well as water and food security
• Natural gas can serve as a bridge fuel from a high-carbon world to one based on renewables
• Alternative fuels and advanced car technologies that rely on electricity and hybrids can help reduce oil demand and ease market volatility

Synopsis
Rethinking energy security is a complicated business that needs to harmonize and optimize the linkages between economic growth and climate. Energy security is a function of diverse suppliers, types of fuels and modes of transportation. With greater diversification comes a greater chance to ensure energy security. Cooperation and governance are important elements in finding solutions to energy security problems.

At a consumption rate of about 86 million barrels a day, oil is responsible for 40% of the world’s CO2 emissions. The transportation sector, in particular, needs to reduce its reliance on oil. To reduce demand, there needs to be a bigger push towards alternative fuels and advanced car technologies, including electric and hybrid. The transformational development of natural gas production in many countries can serve as a bridge fuel from a high-carbon world to one based on renewables.

A large part of US President Barack Obama’s US$ 80 billion economic recovery plan is being spent on developing alternative and renewable energy. China is also putting a lot of resources into similar kinds of technologies. This is not a zero sum game; more countries should strive to include such investments in their energy plans.

Energy security is a question of affordability, acceptability and accessibility, and has to be taken in a national as well as an international context. There is a huge gap between developing and developed countries, with some 1.5 billion people lacking access to basic energy resources, especially in India and sub-Saharan Africa. And, with energy requirements set to increase, especially in developing countries, it will be increasingly important to share technologies and expand global partnerships. Universal access to energy to sustain a nation’s aspirations has to be addressed.

Currently, the global economy is not sustainable; it will take nothing less than a rebuild of the entire system to ensure sustainability. This will require massive investments from private capital funds. If policy-makers get the equation right, these investments will be forthcoming. Unfortunately, the conditions were not set at the climate change conference in Copenhagen at the end of 2009.

Energy security needs to be linked to climate change. While the Copenhagen meeting did not produce a new deal, many countries did commit to emission reduction targets, indicating that it is possible to follow a low-carbon development path. Energy security solutions can be met through efficiency and renewables.

Other Key Takeaways
Most new energy technologies are water intensive. Therefore, water will become an increasingly important issue on the international agenda. The energy issue is also linked to food security and development.

Nuclear energy is being considered as a clean and renewable source of energy. In many cases, nuclear energy may help countries meet goals set at the Copenhagen meeting. But there are risks with the nuclear, including waste disposal, proliferation and a huge diversion of capital.