If the 19th century can be characterized by the rise of industrialization and the 20th century by the expansion of the market economy and globalization, the defining characteristics of the 21st century are dramatic and pervasive transformations and a shift from unipolarity towards multipolarity.
Triggered by disruptive technological change, the onset of the Fourth Industrial Revolution 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 organizations 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.
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At the same time as these grave 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 are worrisome. In fact, with the increasingly strong probability of global growth falling short by at least 1 percentage point from projections, the magnitude of the decline is comparable to the agonizing global recession of the early 2000s.
By contrast, the economic outlook for South Asia continues to be strong. In the past half-century, emerging and developing economies have 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% suggests South Asia’s resilience and strength to not only weather the global slowdown but also to contribute to propelling global growth forward.
Especially noteworthy is the economic outlook of the region’s largest economy, India. With its GDP growth projected to again increase by 7.5% in the next few years, India continues to be one of the world’s fastest-growing major economies. India’s has been a dramatic rise, deserving of the global attention that it has commanded. The stage is set for India to realize its vision of becoming a $10-trillion economy in the next decade-and-a-half and to assist in appeasing the woes besetting the world economy.
Steered by decisive leadership, India is rising to the occasion through a significantly enlarged global profile. 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 shows its aspirations of becoming a leader in environment security and climate change mitigation.
India has also 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, too, is more involved 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 articulated his strong vision for an India-Africa cooperative interest and India’s deepened participation in coalitions such as the Shanghai Cooperation Organization, the Asian Infrastructure Investment Bank, the India-Brazil-South Africa Dialogue Forum and the BRICS group demonstrate its growing global influence and appetite for enhanced visibility on a range of global initiatives and multilateral fora.
With half of its population of working age, India has a unique demographic advantage. Climbing to 52nd spot in this year’s Global Innovation Index, India is one of the few countries to have consecutively improved its rank for nine years. Its distinctive demographic advantage, 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.
Simultaneously aware that the quest for becoming a great power must begin at home, India has undertaken groundbreaking structural reforms mirroring its growth ambitions and development priorities. Initiatives aimed at revamping India’s restrictive business regulations have already borne fruit. India’s 65-place leap in the World Bank’s Ease of Doing Business rankings demonstrates 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. Furthermore, in the biggest liberalization to occur in single-brand retail in the past decade, the government has recently permitted retailers to sell goods online to Indian consumers before opening brick-and-mortar stores, significantly expanding the domestic market for global players. In addition, 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.
Committed to ensuring that its economic achievements correspond with inclusive development, India has also made big 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 is no mean 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.
What is the World Economic Forum's India Economic Summit 2019?
Under the theme, Innovating for India: Strengthening South Asia, Impacting the World, the World Economic Forum's India Economic Summit 2019 will convene key leaders from government, the private sector, academia and civil society on 3-4 October to accelerate the adoption of Fourth Industrial Revolution technologies and boost the region’s dynamism.
Hosted in collaboration with the Confederation of Indian Industry (CII), the aim of the Summit is to enhance global growth by promoting collaboration among South Asian countries and the ASEAN economic bloc.
The meeting will address strategic issues of regional significance under four thematic pillars:
• The New Geopolitical Reality – Geopolitical shifts and the complexity of our global system
• The New Social System – Inequality, inclusive growth, health and nutrition
• The New Ecological System – Environment, pollution and climate change
• The New Technological System – The Fourth Industrial Revolution, science, innovation and entrepreneurship
Discover a few ways the Forum is creating impact across India.
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Looking ahead, India must continue on its journey toward holistic structural reforms that are conducive to boosting the sustainability and resilience of its economy, while also ensuring that the progress reaches a broad base. It is important that India arms itself with modern infrastructure, social services and the connectivity becoming of a developed economy. It must simultaneously create jobs, wealth and value to accommodate the aspirations of a young and upwardly mobile population and to help it eradicate poverty. Policy solutions inspired by a vision of a regenerative, inclusive and sustainable economy will ensure that the milestone of a $10-trillion economy coincides with a stronger India at the global, national and grassroots level, with ameliorated living outcomes for all.
Achieving that scale of change in a country with more than 1.3 billion people who speak dozens of different languages and dialects and have different customs and cultural practices is monumental. But with its geographic and demographic size and extensive diversity, India has a unique opportunity to shape global agendas. It can establish itself as a role model and inspiration for the world through its response to these opportunities, with a resounding impact on our collective future. India can tap its own sphere of influence and emerge as a global leader by providing the world with replicable and scalable models for solutions to critical global challenges.
A version of this article was first published on https://www.narendramodi.in.