On Day 2 at Davos, I attended the high-powered discussion on Asia Growth Markets. It was a panel which included Rahul Bajaj (Chairman, Bajaj Auto India), Takehiko Nakao (President, Asian Development Bank, Manila), Cesar Purisima (Secretary of Finance, Philippines), Budi Gunadi Sadikin (CEO, Bank Mandiri, Indonesia) and moderated by WEF Board Member Victor L. Chu, Chairman & CEO, First Eastern Investment Group, Hong Kong.
The session highlighted that the Asian economy is expected to grow at a rate of 6.2%, and that the ongoing oil price reductions will definitely provide it a boost, given that our region is a major oil importer. The savings thus generated can channelled into developing infrastructure and enhancing social protection. (India, are you listening?)
The China segment of the debate had many interesting highlights. The country has moved from an investment-based to a consumption-based economy, and has been successful in tackling corruption (as we have learned in India, corruption is always a serious impediment to growth.)
China’s current growth has moderated markedly from the previously exuberant 10-12% to a more sedate 7.5%. In fact, this will be its ‘new normal’ for some time to come. Nevertheless, economists and the business community remain very bullish on China.
The discussion then reverted to the larger canvas of the Asian economy, which hinges on six major linchpins to achieve unfettered growth:
- Good governance and continued democracy
- Leveraging the region’s demographic dividend, with a sharp focus on vocational skill-based growth (this calls to mind Germany’s very efficient leverage of its skilled workers in the earlier part of the century)
- Substantial reduction of corruption
- Encouraging entrepreneurship (since we Asians tend to be extremely hard workers, and have an in-built desire to work for ourselves)
- Efficient usage of technology to enhance productivity
- Reformation of labour laws to help us pull ahead of Europe
This action-packed session did wonders to my appetite. I thoroughly enjoyed lunch with Thailand’s deputy Prime Minister M.R. Pridiyathorn Devakula, who was clearly keen on connecting business between Thailand and the rest of the world. His single-minded focus was really impressive, and I’m sure it will help achieve the goals he’s set for Thailand!
At such events, I always keep my ear to the ground for interesting conversations, and overheard a lively discussion on Indian REITs – a subject close to my heart. It does seem that much-awaited clarifications on REITs in India will come in much before the next Union Budget.
I have pinned considerable hopes on this, myself. With so much happening on the larger Asian front, India cannot afford to be left behind. REITs will be a booster rocket for investments into the country, and I will be holding my breath for this much-anticipated announcement during Finance Minister Arun Jaitley’s speech next month.