Sumit Mazumder, President, Confederation of Indian Industry (CII), outlined a 3-pronged agenda to boost global growth at the G20 and B20 Leader's Session of the recently concluded B20 Turkey
Summit. This has brought global business leaders in one platform with G20 leaders to discuss and deliberate global challenges and development agendas.
According to Mazumder, growth in emerging world is projected to slightly fall to 4.2% in 2015 from 4.6% in 2014. He apprehended that in the current situation, the slowdown in emerging markets
such as China and Brazil has pushed the world to the brink of another recession.
However, CII President was particularly bullish about India’s growth story. He said, “India has surpassed China in economic growth with an estimated GDP growth of 7.5% in 2015 vis-à-vis China’s 7.1%. Moreover, it is projected to touch 8.0% in 2017. In short, India as an economy, consumer market and investment destination is too big to ignore now.”
According to Sumit Mazumder G20 countries needed to undertake the following steps to boost global growth.
First, there is a need to step up public and private investment in the infrastructure sector. According to B20 Infrastructure and Investment task force report, every year the world spends
approximately $9 trillion on infrastructure, $2.6 trillion of which goes into economic infrastructure – transportation, power and water, and telecommunications. Over the next 15 years, the
gap in economic infrastructure is forecast to reach $15 trillion to $20 trillion. This needs to be made available through more public and private investment.
In order to facilitate this process, G20 leaders have agreed to establish a Global Infrastructure Hub with a four-year mandate. They have also endorsed the launch of the World Bank Group’s Global Infrastructure Facility, which would attract more private sector investment in developing countries.
While both these measures are welcome, there is a need to push ahead with this agenda at a rapid pace.
Second, a further challenge for the world today is sluggish growth of trade. Slower expansion of Global Value Chains (GVCs), rising protectionism, and the decline in trade-intensive investment are some of the main structural restraints which different countries suffer. It is these issues that the G20 needs to address to accelerate global trade expansion.
Third, there is a need for the G20 to devise an action plan to help integrate larger numbers of developing countries and LDC's into the GVC's. In fact, in 2011, nearly 49% of world trade took place within GVCs, up from 36% in 1995.
Since the G20 Russian Presidency, Indian industry through Confederation of Indian Industry (CII) has been actively engaged in all the important deliberations, which are taking place in subject-specific task forces. The B20 Turkey organized itself around six task forces: five of them – Trade, Infrastructure and Investment, Financing Growth, Employment, and Anti-Corruption – built on the work of the previous cycles’ task forces, and given the G20’s priority of implementation, focused on advocacy and refinement of the existing set of B20 recommendations.