South Asia can definitely reinvent itself as a ‘region on the move’: Chaudhary
20 Nov 2013 - {{hitsCtrl.values.hits}}
Following is a speech delivered by Chaudhary Group, Nepal Chairman Binod K. Chaudhary at Commonwealth Business Forum 2013 on ‘The Commonwealth, Indian Ocean, Pacific at SAARC: Building New Partnerships.
At the outset, allow me to thank the organisers for this kind invitation to share some of my thoughts on an issue that is so close to my heart.
The idea of building partnerships, promoting regional cooperation in South Asia and the necessity for closer interaction among other regions and regional organisations, is a long-felt need. In order to build strong partnerships and promote regional cooperation in South Asia, it is imperative that we foster closer interaction among other regions.
While the entire world, particularly Europe and South East Asia, have been marching forward towards regional integration, we, in South Asia, have been rather slow. We need to steer our ship to a new course.
Let me offer some concrete bullet points based on my practical experience in doing business in South Asia. I may not have all the answers but these remain critical questions not only for the eight countries of South Asia but also the other Observer nations.
Region of stark contrasts
It is said that this century is already proclaimed for Asia. I feel South Asia will be the centre stage of Asia’s rise, if we have the courage to cultivate spheres of cooperation rather than rivalry. It is a region of stark contrasts - whereas it is regarded as a burgeoning market, with democratic system of governance in most countries; the region is still the poorest after sub-Saharan Africa.
Despite of all these negatives, our region is cohesive, dynamic and progressive with a preponderance of young population, whose potential is huge. We have a very large young and English-speaking population, who will be our asset. Only on the basis of an effective and robust regional cooperative endeavour can we together mitigate our common problems and become a mighty economic force.
For South Asia to re-enter on the world stage, it needs to focus on trade and investment and improving connectivity rather than petty political issues. We can definitely reinvent ourselves as a ‘region on the move’ but our mind-set has to change first.
South Asia brand name
Internationally, South Asia has already become a brand name. South Asians are doing well worldwide. We are bound by our people living in America, Europe, and Australia and elsewhere, who enrich every segment of those societies as successful doctors, architects, IT specialists and businesspersons.
More and more Institutes of South Asian Studies are being opened in world-renowned universities. South Asian food and fashion, language and culture are becoming popular the world over. This beautiful country of Sri Lanka under the able and strong leadership of President Rajapakse is fast emerging as a major tourist, transit and transport hub.
Every time I come to Colombo, I see remarkable progress on development of infrastructure, which will increase the capacity to take advantage of this country’s strategic location on the major international shipping lanes.
I recall we invested in Sri Lanka at the height of the conflict soon after the major airport attack by the Liberation Tigers of Tamil Eelam (LTTE).
In our minds we knew that the Sri Lanka fundamentals were far too strong to shake up our confidence in the country and its people. It was at that time we took serious steps to invest in Sri Lanka through creation of a joint venture with the Taj group to restructure Taj Samudra.
Subsequently, we also embarked on a separate joint venture with the Jetwing group and we continue to explore opportunities in different sectors including cement. Today, Sri Lanka as an investment destination is in a different league. I have no doubts it can go to the next level if the decision-making process is made more transparent and faster.
We have invested in resorts in the Maldives and must say that not only its tourism and hospitality but also its fisheries sector has immense potential. The natural gas of Bangladesh and the hydro potential of Nepal are both untapped, which can transform the national economies of these countries in a short span of time.
Forging honest partnership
Our region’s geographic location is in the centre of the Middle East, Central Asia, the Pacific and South East Asia. We have India and China – the two emerging economic powerhouses of the contemporary world; we have to be outward looking, business-friendly, with the zeal to build our region to become a natural hub of world-class logistics and infrastructure.
The real need of the state is to forge a real and honest partnership with private sector and bureaucracy. The mindset of decision-makers has to change to support and facilitate business and enterprise creation from the income earning mentality.
There is a dire need for policy reforms, improvement in the investment climate and increase integration towards South East Asia, with whom we have age-old relations. Continued integration of these economies will benefit our workers and businesses in all our nations.
Tardy intra-regional trade
We are already the second largest market in the world but our intra-regional trade is still hovering around 5 percent and there are reasons for this tardy progress. Let me talk about the biggest player in South Asia - India. It is both the engine and the steam to pull the rest of us in the train in this long journey of a supra-national integration project.
India cannot become a rising economic and political giant of the 21st century when the rest of the immediate neighbourhood remains islands of poverty and centre of political instability. This somehow has to dawn in the Indian strategic intellect.
India has the historic opportunity and responsibility to lead the region by opening up borders, easing visa restrictions, progressing towards a common market and a common currency – which have been the hallmark of Europe. Minor irritants and reflections seen in this context should not blur the larger picture.
We should not allow the regional cooperation to continue to suffer with what we did during a decade with South Asian Free Trade Area (SAFTA) and South Asian Preferential Trade Arrangement (SAPTA). I personally think, by making South Asian Association for Regional Cooperation (SAARC) a success, India has a lot to gain. But for that it requires the foresight to play the role that Germany is currently playing in Europe.
Lagging enabling environment
SAARC is a common platform for which we have made huge investments. After 28 years, it has been a non-starter, particularly on the economic front, whether we blame it on Indo-Pak tensions or the unstable politics of some of the member countries.
The fact is that everything revolves around India. Therefore, India has to ensure that it leads the region into economically vibrant and prosperous South Asia. We need to take lessons from the European experience that with small but successful steps from the establishment of the European Coal and Steel Community in 1952 erected a mammoth community that exists today.
The Association of Southeast Asian Nations (ASEAN) similarly has cleared many internal and regional hurdles and hindrances to fast-tracking projects for facilitating intra-regional connectivity and accelerating economic growth, social progress and cultural development in South East Asia, which was also in no shortage of bilateral political problems.
The Commonwealth is a political community founded for the common good. Member states have no legal obligation one to another but they are united by language, history, culture, and their shared values of democracy, human rights and the rule of law.
These values are shared and respected. And although Nepal is not a member, I very much admire the manner with which the Commonwealth grouping has helped member states. All these rich experiences are relevant to us in South Asia, as we strive to develop a dynamic regional organisation by building synergies across borders and to the Indian Ocean and Pacific regions.
Our group has the experience of operating several businesses and industries in several South Asian and South East Asian countries over the last three decades and cannot overemphasize how difficult it is to start and run a business in our region.
Likewise, we are also now active in Africa and the Middle East. I have to confess that South Asia still lags way behind in providing the much needed enabling environment and accelerated decision-making process.
The motto of some governments is to tax the industries to make the nation prosperous. This is fine but it has to be linked with expansion and greater competitiveness. All the problems, labour woes, red-tapism, corruption and systemic delays, which many of the South Asians have to deal with in our business environment, does not help growth.
The passion of the private sector of South Asia is not inferior to those of any other continent around the world. It is not possible to restrict investments, flow of capital or entrepreneurship within the confines of the geographical boundary, in a world where the deals are transacted with a click-of-a-mouse instantly.
Governments mending ways
It is only the enabling environment - I again stress, competitive and attractive business proposition and respect and recognition for your entrepreneurs and investors, which is going to help a country draw more investment and also retain entrepreneurs.
I therefore have a strong feeling that if our governments don’t mend their ways, they will soon follow rather than lead us. We have to sort out ways and means to create an atmosphere of trust and mutual confidence in multiple areas and chalk out the problems and opportunities that confront us in an ever changing world.
The world is watching us. We have excellent partners in other regions. I am sure this conference will also provide ample opportunities and avenues to establish mutually beneficial programmes and projects for the common benefit of all our regions.
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