Connect with us

Reports

Challenges and Opportunities Emerge as India Becomes Third-Largest Consumer Market by 2030

MD Staff

Published

on

In coming decades, consumption growth and the Fourth Industrial Revolution will create tremendous opportunities in the emerging Indian market. During 2018, extensive proprietary research was conducted on India, the world’s largest democracy, and among the world’s fastest growing economies. The World Economic Forum’s new report, Future of Consumption in Fast-Growth Consumer Market – INDIA identifies key forces that will shape consumption in India and is a call to action for multistakeholder collaboration to build an inclusive future for the country.

“As India continues its path as one of the world’s most dynamic consumption environments, private and public-sector leaders will have to take shared accountability to ensure such consumption is inclusive and responsible. I am confident that strategic foresight from this report will contribute to inspiring action and realizing a prosperous future for India with sustainable benefits for both business and society,” said Zara Ingilizian, Head of Consumer Industries and Member of Executive Committee, World Economic Forum.

With an annual GDP growth rate of 7.5%, India is currently the world’s sixth-largest economy. By 2030, domestic private consumption, which accounts for 60% of the country’s GDP, is expected to develop into a $6 trillion growth opportunity. If realized, this would make India’s consumer market the third-largest in the world, behind the US and China.

The future of consumption in India in 2030 is anchored in rising incomes and a broad-based pattern of growth and benefit sharing. It is anticipated that the growth of the middle class will lift nearly 25 million households out of poverty. In addition, India will have 700 million millennials and Gen Z consumers, who have grown up in a more open and confident country.

By 2030, there will be opportunities to bypass Western growth trajectories, such as those presented by more than 1 billion internet users, many of whom will only use mobile platforms, driving the need for business model innovation. Finally, future consumption growth will come from the “many Indias” – the diverse, rich and densely populated cities and the thousands of geographically dispersed, developed rural towns.

This positive vision for the future of India will only materialize if business and policy-makers pursue an inclusive approach to the country’s economic and, hence, consumption growth.

“As India rapidly transforms into a true middle class economy, not only do we see this income group finally coming into its own, we also see the inclusivity and equitable growth agendas being served much better than ever before. It’s an exciting future for firms that wish to unlock the consumption opportunity in India,” as stated by Nikhil Prasad Ojha, Partner and Leader of the Strategy practice at Bain India.

To unlock the potential of these opportunities and to ensure equitable growth, the report identified three critical societal challenges that need to be addressed:

  1. Skills development and employment for the future workforce

As nearly 10-12 million working-age people emerge in India over the next decade, the country faces a huge challenge in providing the workforce with the right skills and gainful employment to enable the income growth behind the envisioned consumption of the future. More than one-half of Indian workers will require reskilling by 2022 to meet the talent demands of the future. On average, they will each require an extra 100 days of learning. Industry, civil society, education institutions and policy-makers need to join efforts to close the current skills gap.

  1. Socio-economic inclusion of rural India

By 2030, 40% of Indians will be urban residents. There will, however, be more than 5,000 small urban towns and more than 50,000 developed rural towns with similar income profiles, where aspirations are fast converging with those of urban India. Nevertheless, physical connectivity, digital connectivity and financial inclusion income is constraining the spending and well-being of rural dwellers, and these “access-barriers” need to be addressed to ensure social and economic inclusion in India over the next decade.

  1. Healthy and sustainable future

New health concerns, such as obesity and non-communicable diseases, and urban centres grappling with high rates of congestion and air, water and waste pollution are undermining the well-being of India’s citizens. As an illustration of the magnitude of just one dimension of the air-water-waste-congestion challenge, nine of the world’s 10 most air-polluted cities are in India, including its capital, New Delhi. To sustain future growth, business and policy-makers must take the initiative on improving health and liveability for India’s citizens by providing them with access to affordable healthcare, promoting sustainable development, and seeking solutions to urban congestion.

“India is at a tipping point, both in terms of economic growth and in the human development of its billion-plus citizens. As the country enters a new era of envisioned growth, collaborative efforts, especially public-private collaborations to address key challenges can unlock the full potential of a young, progressive and dynamic nation to establish India as a model for the world’s fast-growing consumer markets” said Mayuri Ghosh, Project Lead, Future of Consumption System Initiative, World Economic Forum.

The report produced in collaboration with Bain & Company builds on in-depth consumer surveys conducted across 5,100 households in 30 cities and towns in India, and draws from more than 40 interviews with private and public-sector leaders.

This report is part of a multi-year project “Future of Consumption in Fast-Growth Consumer Markets”, which focuses on the evolution of consumption in emerging markets, such as China and India. The report provides foresight on drivers of growth and levers of inclusivity in such markets, and establishes priorities for private and public-sector stakeholders, with the ultimate objective of shaping consumption-led inclusive growth in emerging markets.

Continue Reading
Comments

Reports

Reforms Building Momentum for Growth in Myanmar

MD Staff

Published

on

Myanmar’s economy is slowly regaining stability and picking up speed after a volatile 2018, according to a new World Bank report.

The Myanmar Economic Monitor projects Myanmar’s economy to grow at 6.5 percent in 2018/19. Growth continues to be broad-based, supported by the industrial and service sectors. Industrial activities revived, supported by strong performance in the garment sector and construction activities. Services remain the key driver of growth with momentum building in the wholesale and retail sector supported by reforms. However, large disparities in welfare persist across the country.

Acceleration of the reform agenda as envisioned in the Myanmar Sustainable Development Plan, along with targeted public investments and private sector participation, will lead to a consolidation of macroeconomic stability and help Myanmar maintain its momentum and meet its long-term growth targets,” said Gevorg Sargsyan, Head of Office, World Bank Myanmar.

The report includes an analysis drawing on the Multidimensional Welfare Indicator (MDI), prepared with the government, which indicates that most of the population in Myanmar faces overlapping disadvantages, with large disparities in welfare apparent at the state, region and township level.  Eighty-four percent of people faced disadvantages in one or more of the 14 indicators under the MDI, including education, employment, health, water and sanitation, housing, and assets. The MDI is being used to help target public resources and aid flows toward those who need it the most.

With growth expected to rise to 6.7 percent in 2020/21, the World Bank report projects a positive outlook for Myanmar’s economy despite a deteriorating global environment, due to accelerated implementation of reforms, infrastructure spending and investment in sectors such as wholesale and retail, insurance and banking that are undergoing liberalization. The external risks to the economic outlook include slowing global and regional growth and escalation of trade tensions and possible revocation of preferential EU market access.

Inflation is expected to stabilize at 6.6 percent in the medium term. The report notes that inflationary pressures could increase due to volatile global energy prices and the possibility that the government may increases electricity tariffs to bring them in line with the cost of power production.

“There are signs that market sentiment is rising due to the new laws being passed and starting to be implemented,” said Hans Anand Beck, Lead Economist, World Bank Myanmar. “Keeping these reforms going will be critical to continued economic momentum, for example through insurance liberalization, tax reform, and transparent investments in the power sector.” 

In the power sector, the report argues that Myanmar needs to invest twice as much and implement projects three times faster to meet growing demand.

The Myanmar Economic Monitor is a biannual analysis of economic developments, economic prospects and policy priorities in Myanmar. The publication draws on available data reported by the Government of Myanmar and additional information collected as part of the World Bank Group’s regular economic monitoring and policy dialogue.

The World Bank’s engagement on Myanmar focuses on social inclusion, particularly in conflict-affected areas, in support of the country’s historic political and economic transition.  With an emphasis on the importance of achieving peace and security as a foundation for inclusive and sustainable development for all communities in Myanmar, the Bank continues to provide technical and financial support, especially through high-impact projects. These focus on education, health services, access to electricity and other essential services, response to natural disasters, and inclusion of all ethnic groups and religions.

Continue Reading

Reports

International action can scale up hydrogen to make it a key part of a clean and secure energy future

Newsroom

Published

on

The world has an important opportunity to tap into hydrogen’s vast potential to become a critical part of a more sustainable and secure energy future, the International Energy Agency said in a major new report today.

The in-depth study, which analyses hydrogen’s current state of play and offers guidance on its future development, is being launched by Dr Fatih Birol, the IEA’s Executive Director, alongside Mr Hiroshige Seko, Japan’s Minister of Economy, Trade and Industry, on the occasion of the meeting of G20 energy and environment ministers in Karuizawa, Japan. The report – The Future of Hydrogen: Seizing Today’s Opportunities – finds that clean hydrogen is currently receiving strong support from governments and businesses around the world, with the number of policies and projects expanding rapidly.

Hydrogen can help to tackle various critical energy challenges, including helping to store the variable output from renewables like solar PV and wind to better match demand. It offers ways to decarbonise a range of sectors – including long-haul transport, chemicals, and iron and steel – where it is proving difficult to meaningfully reduce emissions. It can also help to improve air quality and strengthen energy security.

A wide variety of fuels are able to produce hydrogen, including renewables, nuclear, natural gas, coal and oil. Hydrogen can be transported as a gas by pipelines or in liquid form by ships, much like liquefied natural gas (LNG). It can also be transformed into electricity and methane to power homes and feed industry, and into fuels for cars, trucks, ships and planes.

“Hydrogen is today enjoying unprecedented momentum, driven by governments that both import and export energy, as well as the renewables industry, electricity and gas utilities, automakers, oil and gas companies, major technology firms and big cities,” Dr Birol said. “The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future.”

To build on this momentum, the IEA report offers seven key recommendations to help governments, companies and other stakeholders to scale up hydrogen projects around the world. These include four areas where actions today can help to lay the foundations for the growth of a global clean hydrogen industry in the years ahead:

  1. Making industrial ports the nerve centres for scaling up the use of clean hydrogen;
  2. Building on existing infrastructure, such as natural gas pipelines;
  3. Expanding the use of hydrogen in transport by using it to power cars, trucks and buses that run on key routes;
  4. Launching the hydrogen trade’s first international shipping routes.

The report notes that hydrogen still faces significant challenges. Producing hydrogen from low-carbon energy is costly at the moment, the development of hydrogen infrastructure is slow and holding back widespread adoption, and some regulations currently limit the development of a clean hydrogen industry.

Today, hydrogen is already being used on an industrial scale, but it is almost entirely supplied from natural gas and coal. Its production, mainly for the chemicals and refining industries, is responsible for 830 million tonnes of CO2 emissions per year. That’s the equivalent of the annual carbon emissions of the United Kingdom and Indonesia combined.

Reducing emissions from existing hydrogen production is a challenge but also represents an opportunity to increase the scale of clean hydrogen worldwide. One approach is to capture and store or utilise the CO2 from hydrogen production from fossil fuels. There are currently several industrial facilities around the world that use this process, and more are in the pipeline, but a much greater number is required to make a significant impact.

Another approach is for industries to secure greater supplies of hydrogen from clean electricity. In the past two decades, more than 200 projects have started operation to convert electricity and water into hydrogen to reduce emissions – from transport, natural gas use and industrial sectors – or to support the integration of renewables into the energy system.

Expanding the use of clean hydrogen in other sectors – such as cars, trucks, steel and heating buildings – is another important challenge. There are currently around 11,200 hydrogen-powered cars on the road worldwide. Existing government targets call for that number to increase dramatically to 2.5 million by 2030.

Policy makers need to make sure market conditions are well adapted for reaching such ambitious goals. The recent successes of solar PV, wind, batteries and electric vehicles have shown that policy and technology innovation have the power to build global clean energy industries.

As the world’s leading energy authority covering all fuels and all technologies, the IEA is ideally placed to help to shape global policy on hydrogen.

“We are very proud to have been able to use the breadth and depth of the IEA’s energy expertise to carry out the rigorous analysis for this study in collaboration with governments, industry and academic researchers,” said Dr Birol. “We are grateful to Japan, through its presidency of the G20, for requesting that we carry out this report, which recommends immediate, pragmatic steps to foster hydrogen’s development.”

Beyond this report, the IEA will remain focused on hydrogen, further expanding our expertise in order to monitor progress and provide guidance on technologies, policies and market design. The IEA will continue to work closely with governments and all other stakeholders to support efforts to make the most out of hydrogen’s great potential.

IEA

Continue Reading

Reports

Oil Market Report: 2020 vision

MD Staff

Published

on

In this Report, we publish our first outlook for 2020. As we do so, volatility has returned to oil markets with a dramatic sell-off in late May seeing Brent prices fall from $70/bbl to $60/bbl. Until recently, the focus has been on the supply side with the familiar list of uncertainties – Iran, Venezuela, Libya, and the Vienna Agreement – lifting Brent prices above $70/bbl in early April and keeping them there until late May. Not that supply concerns have gone away: yesterday oil prices initially increased by 4% on news of the attacks on two tankers in the Gulf of Oman, before easing back slightly.

Now, the main focus is on oil demand as economic sentiment weakens. In May, the OECD published an outlook for global GDP growth for 2019 of 3.2%, lower than our previous assumption. World trade growth has fallen back to its slowest pace since the financial crisis ten years ago, according to data from the Netherlands Bureau of Economic Policy Analysis and various purchasing managers’ indices.

The consequences for oil demand are becoming apparent. In 1Q19, growth was only 0.3 mb/d versus a very strong 1Q18, the lowest for any quarter since 4Q11. The main weakness was in OECD countries where demand fell by a significant 0.6 mb/d, spread across all regions. There were various factors: a warm winter in Japan, a slowdown in the petrochemicals industry in Europe, and tepid gasoline and diesel demand in the United States, with the worsening trade outlook a common theme across all regions. In contrast, the non-OECD world saw demand rise by 0.9 mb/d, although recent data for China suggest that growth in April was a lacklustre 0.2 mb/d. In 2Q19, we see global demand growth 0.1 mb/d lower than in last month’s Report. For now though, there is optimism that the latter part of this year and next year will see an improved economic picture. The OECD sees global GDP growth rebounding to 3.4% in 2020, assuming that trade disputes are resolved and confidence rebuilds. This suggests that global oil demand growth will have scope to recover from 1.2 mb/d in 2019 to 1.4 mb/d in 2020.

Meeting the expected demand growth is unlikely to be a problem. Plentiful supply will be available from non-OPEC countries. The US will contribute 90% of this year’s 1.9 mb/d increase in supply and in 2020 non-OPEC growth will be significantly higher at 2.3 mb/d with US gains supported by important contributions from Brazil, Canada, and Norway. Later this month, Vienna Agreement oil ministers, faced with short-term uncertainty over the strength of demand and relentless supply growth from their competitors, are due to discuss the fate of their output deal.

Ministers will note that OECD oil stocks remain at comfortable levels 16 mb above the five-year average. However, they will also note that although in 1Q19 weak demand helped create a surplus of 1.1 mb/d, in 2Q19 the market is in deficit by an estimated 0.4 mb/d, with the backwardated price structure reflecting tighter markets. This deficit is partly due to the fact that in May the Vienna Agreement countries cut output by 0.5 mb/d in excess of their committed 1.2 mb/d. In 3Q19, the market could receive further support from an expected pick-up in refining activity.

Recently, high levels of maintenance in the US and Europe, low runs in Japan and Korea, and fallout from the Druzhba pipeline contamination contributed to weak growth in global refining throughput. This could be about to change: according to our estimates, crude runs in August could be about 4 mb/d higher than in May. This might cause greater tightness in crude markets, particularly for sour barrels if the Vienna Agreement is extended and there is no change in the situations in Iran and Venezuela. Of course, much depends on the strength of oil demand later in the year.

A clear message from our first look at 2020 is that there is plenty of non-OPEC supply growth available to meet any likely level of demand, assuming no major geopolitical shock, and the OPEC countries are sitting on 3.2 mb/d of spare capacity. This is welcome news for consumers and the wider health of the currently vulnerable global economy, as it will limit significant upward pressure on oil prices. However, this must be viewed against the needs of producers particularly with regard to investment in the new capacity that will be needed in the medium term.

IEA

Continue Reading

Latest

Middle East2 hours ago

Caught in geopolitical crossfire: Al-Azhar struggles to balance politics and tradition

When Pope Francis I visited Egypt in 2017 to stimulate inter-faith dialogue he walked into a religious and geopolitical minefield...

Reports4 hours ago

Reforms Building Momentum for Growth in Myanmar

Myanmar’s economy is slowly regaining stability and picking up speed after a volatile 2018, according to a new World Bank...

Tourism5 hours ago

United States moves closer to re-joining UNWTO

The United States of America has highlighted its support of tourism as a driver of sustainable development. A high-level delegation...

Energy News7 hours ago

Clean Energy at Forefront of Fight Against Climate Change in Asia and Pacific

The advancement of affordable and reliable clean energy is not only at the forefront of Asia and the Pacific’s development...

Green Planet11 hours ago

As voices for the planet grow louder, we must get the job done

There is something in the air. I am not talking about pollution or greenhouse gas emissions. I am talking about...

Defense13 hours ago

Effectiveness of Nuclear Deterrence of India and Pakistan in Pulwama incident

The recent ‘Pulwama crisis were triggered by a suicide attack byAdil Ahmed Dar a 19 years old young Kashmiri from...

Newsdesk15 hours ago

Micro and Small Rural Entrepreneurs’ Access to Credit Enhanced by ADB

The Asian Development Bank (ADB), the Government of Sri Lanka, and the Regional Development Bank (RDB) today signed Loan and...

Trending

Copyright © 2019 Modern Diplomacy