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India’s Biggest Challenge: Pursuing Reforms Needed to Sustain 8% Growth for Decades

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With India expected to achieve 7.6% GDP growth this year and its global competitiveness rising, the country is at an inflection point, business, government and academic leaders told participants in the opening plenary of the World Economic Forum’s 32nd India Economic Summit. “The biggest challenge is to have sustainable growth of 8% for a couple of decades,” said Gita Gopinath, Professor of Economics at Harvard University. “Can India sustain this growth across political cycles?” To keep that pace of progress would entail further structural and institutional reforms, argued Gopinath, a Summit Co-Chair. “But if that is done, then it will be mind-blowing for India.”

“It is achievable,” declared Nirmala Sitharaman, Minister of State for Commerce and Industry of India. “Across the states, we see that urge now – to see brighter days and to find the issues where we can come together, removing obstructions [to doing business] and moving forward on using technology.” John Rice, Vice-Chairman of GE in Hong Kong SAR and another Summit Co-Chair, agreed. “It is sustainable, but you have to think what is required for the 21st century and the Fourth Industrial Revolution. With the convergence of digital and industrial, a different set of skills is required to win,” he said. The Indian government has the responsibility to ensure that people receive the necessary training. Added Rice: “You have to make sure you are investing in the right things, including basic infrastructure. You can’t do it if you have 200 million people without electricity.”

The opportunities for India and its 1.3 billion people are “tremendous”, said fellow Summit Co-Chair Anil Agarwal, Executive Chairman of Vedanta Resources in the United Kingdom. “I have never felt this buzz about India in the last two decades.” The prospects for small and medium-sized enterprises are especially good, he noted. In particular, development of India’s natural resources would contribute significantly to eradicating poverty, Agarwal explained. India’s many entrepreneurs are focusing on the domestic market, observed Summit Co-Chair Vijay Shekhar Sharma, Founder and Chief Executive Officer of Paytm, an Indian e-commerce company based in Noida, an industrial development in the National Capital Region. “For the first time, Indians are very proud of producing for India. Indian entrepreneurs are now accepting that we should build something for India, working for technology that will serve Indians.”

The impact that Indian entrepreneurs have had on Silicon Valley is proof of India’s edge in technology and innovation. “I greatly believe in it,” said Amitabh Kant, Chief Executive Officer of NITI Aayog, or the National Institute for Transforming India, a government policy think-tank. “India is used to innovating. But India needs to innovate in urbanization, sewage and for clean water. It has to innovate for people.” India’s start-ups “will disrupt the world,” predicted Kant, also a Co-Chair of the Summit. “They will disrupt health, education. They will do a lot more social innovation.”

“The promise of India has always been there,” said Johan C. Aurik, Global Managing Partner and Chairman of the Board of global consulting group A.T. Kearney in the US and a Summit Co-Chair. He remarked that India has broken into the ranks of the top 10 destinations for foreign direct investment in the world. “The government has become the facilitator of change,” he said, applauding the “Make in India” initiative launched by Prime Minister Narendra Modi in 2014 to encourage foreign and domestic companies to manufacture products in the country and create millions of jobs. “The challenges will be daunting with the Fourth Industrial Revolution and the tensions between jobs and digital developments,” Aurik reckoned. “But we have to make sure that progress is inclusive.”

In remarks earlier in the session, Ranil Wickremesinghe, Prime Minister of Sri Lanka, said that, to drive new economic growth, it is critical for his country and its neighbours to build partnerships not just within South Asia, but also across the world, particularly in South-East Asia, Japan, Korea and Europe. Asia has emerged as an economic growth engine of the world, he said. And, while the West may have written the rules of globalization so far, “Asia will bail out the world” and will move to create its own system. He told participants that he and Indian Prime Minister Modi aim to conclude the Economic and Technology Cooperation Agreement (ETCA) by the end of this year. Sri Lanka is also working with five southern Indian states on a sub-regional cooperative arrangement. “We have the potential to work together,” Wickremesinghe said. “Let’s have the whole area around the Bay of Bengal be a vibrant place of economic cooperation. The growth is here.” Colombo is also discussing a free-trade agreement with Singapore.

In a video message to welcome participants, Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said that India has to continue its efforts to promote inclusion and master the challenges posed by the rapid technological changes of the Fourth Industrial Revolution. “Inclusiveness in India and in the world will be one of the most decisive objectives the world community and Indian society have to achieve,” he said.

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ADB Provides $360 Million for Rolling Stock to Boost Bangladesh Railway

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The Board of Directors of the Asian Development Bank (ADB) has approved loans totaling $360 million to buy modern rolling stock and support reform in Bangladesh Railway to help promote a shift from roads to rail.

“Railways in Bangladesh potentially offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads, but have been held back by lack of investment and aging and unreliable rolling stock,” said Tsuneyuki Sakai, an ADB Senior Transport Specialist. “The ADB Railway Rolling Stock Operations Improvement Project will boost the operational performance of Bangladesh Railway by introducing new technology, equipment, and processes that will be cleaner and more efficient, cutting carbon dioxide emissions.”

Historically, railways enjoyed a monopoly as a carrier and transported most commodities. However, its market share has dropped because of inadequate investment in railway infrastructure and rolling stock over an extended period. This has resulted in unreliable freight operations and uncomfortable experiences for passengers. Most rolling stock is more than 30 years old, and much is past the end of its economic life. Maintenance facilities have also not improved over time and are not adequately equipped.

Under its Seventh Five-Year Plan for fiscal years 2016-2020, the government has placed special emphasis on railway development, setting targets to increase the market share to 15% in freight transport and 10% in passenger movements by 2020.

Bangladesh Railway has also been operating at a loss, its operating costs about double what it makes from revenue. Under the railway reform supported by ADB, the government has taken steps to boost revenue by raising the level of passenger and freight tariffs that have remained unchanged for decades. An increase in the operational capacity through new rolling stock is needed to generate more revenue.

Starting with a Railway Sector Improvement Program in 2006, ADB has provided four loans to the government for railway development totaling $2.81 billion. Three loans invested in network improvement in key sections of the railway, with two targeting enhanced South Asian subregional connectivity. The Railway Reform Project under the 2006 program introduced financial reforms and an enterprise resource planning information technology (IT) system. A loan approved in 2015 is also procuring rolling stock and maintenance equipment, for which work is ongoing to 2020.

This latest project seeks to address the investment and modernization needs of Bangladesh Railway. It will procure 40 broad gauge locomotives, 125 luggage vans, and 1,000 wagons for freight trains for use on major lines of the rail network. The rolling stock will introduce auxiliary power units (APU) to Bangladesh Railway, to significantly reduce diesel consumption when the locomotives are idling. The project will also draw up investment plans for urgently required maintenance facilities, establish training programs for the drivers, and run the enterprise-wide IT system.

The total cost of the project is $453.37 million, of which $93.37 will be met by the government. It is due for completion around the end of June 2022.

Accompanying the loans is a technical assistance grant of $500,000 to devise a training scheme for drivers in the use of the APU and recommend potential approaches to achieving overall energy efficiency. ADB will administer the grant, to be provided by the Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility, established by the Government of Japan.

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Helping Armenia Thrive

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Despite being a landlocked country with few natural resources, Armenia has come a long way since independence in 1991, with all major socio-economic indicators drastically improved.

The Asian Development Bank now is supporting Armenia in its effort to expand its private sector, diversify its economy, cut red tape, and gain access to new markets, says Shane Rosenthal, Country Director for Armenia at the Asian Development Bank.

What is Armenia’s current state of the economy?

Since independence in 1991, Armenia has come a long way. Gross domestic product per capita has increased ten-fold in the country, in large part because of smart decisions about investment and because of good connections with its main trading partner, Russia.

We now have a country where the electricity is reliable, where most of the population has access to clean water, where business is beginning to thrive, not least because it is possible to register a business in a short amount of time. It’s possible to go to a bank and get a loan.

This economy needs to diversify into new products, into new markets. That may mean Europe, it may mean other Eurasian economic union members, and increasingly, it may mean looking eastward, toward Asia.

What role does ADB play in Armenia’s development?

ADB has focused on what it does best vis-a-vis other development partners in Armenia. And that, for us, means infrastructure.

Infrastructure in terms of connectivity, helping upgrade the national highway system so that cargo and people can reach neighboring countries more quickly, more reliably.

It means making the cities more livable with improved water supply.

How can the private sector support Armenia’s development?

Going forward it’s important to understand that Armenia’s growth can no longer depend on the public sector to play the leading role. The private sector needs to be the one that takes this country forward. And that means diversification. It means ease of doing business, and it means access to new markets.

ADB is going to focus increasingly on a balanced portfolio, between the public and private sectors. It’s clear that Armenia’s future will depend on the role that the private sector plays. And there, Armenia has many advantages: a strong financial system, a strong diaspora, with very good connections around the world, and a very strong educational base.

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Three steps to end discrimination of migrant workers and improve their health

Afsar Syed Mohammad

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Authors: Afsar Syed Mohammad and Margherita Licata

When migrant workers leave their home, many encounter abuse and violence on their journey and discrimination once they arrive. This can be because of their status as migrants but also because of their ethnicity, sex, religion, and HIV status.

They often struggle to find decent work, which means they can end up in poor living and working conditions, which in turn affects their health. Female migrants are more likely to be vulnerable to exploitation and violence, which exposes them to the risk of HIV and other health issues.

Research has shown that migrant workers – particularly those who are in an irregular situation – often fail to access health services because of poverty, language and cultural barriers, lack of health insurance, as well as fear of job loss and deportation. It means that by the time they see a doctor, their illness has become all too serious.

Against this background, a newly launched ILO publication looks at the interplay between migration policies and those relating to broader health goals in countries of origin, transit and destination. Its key recommendation is that HIV and health policies should be integrated into the entire labour migration process.

So what can be done to ensure that migrant workers have better access to decent work, health and HIV services? The report recommends a three-pronged approach.

1) End discriminatory practices

Migrants face obstacles in accessing decent work, health as well as social protection. Whenever migrants are denied their rights, they tend to live and work in the shadows.  They become vulnerable to discrimination, exploitation and marginalization.

Discriminatory practices such as mandatory HIV testing of migrants for employment have proved to be ineffective. On the contrary, it is a violation of their rights. It disrupts access to health care and increases migrants’ vulnerability to HIV infection.

2) Set up an integrated response

It is essential to develop a response that does not just pile up ad-hoc policies one after another. Instead there needs to be an integrated and coordinated response that leads to decent work and health outcomes for migrants, including more effective HIV responses.

Right to entry does not mean the right to work for women in many countries. In such cases, women are left with no option but irregular migration which further exposes them to various forms of abuse, exploitation and risks such as HIV.

Gender-responsive migration policies would help address existing inequalities between men and women migrants, while at the same time improve their health.

3) Focus on migrant workers’ rights

There are no quick-fix solutions but discrimination and inequalities relating to HIV and health can be reduced if we focus on migrants’ rights and if we take a global approach. The report especially insists on the following priorities:

  • There is a need to target different groups of migrant workers for HIV prevention, care and treatment, depending on the specific risks that they face. For example, risks are different depending on whether they are low skilled or high skilled workers.
  • Effective responses to HIV for migrant workers should be integrated into fair recruitment initiatives, encouraging fair business practices to reduce HIV-related stigma and discrimination, and equal access to health services.
  • Health programmes and HIV prevention for migrants must be disassociated from immigration enforcement.
  • Inclusion, participation and freedom of association among migrant workers are essential pillars for effective actions on migration, health and HIV.
  • Migration and health policies and practices, in particular those relating to HIV and AIDS, should address inequalities between women and men. A gender analysis is needed from the start for all policies and practices relevant to migration and health.

*Margherita Licata, Technical Specialist Gender, Equality and Diversity and ILOAIDS Branch

Source: ILO

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