18 October 2019

Editor's Space

Constructive engagement

 

India’s $1.5 trillion burden of requirement for development of its infrastructure over the next decade – a key area of concern as the country’s minders seek to fast track ‘must do’ projects long delayed for want of funds – will get substantially reduced with two new funding agencies coming into existence.

 

The first is the $100 billion China led Asian Infrastructure Investment Bank (AIIB) which began operations a few days ago offering hope of availability of cheaper finance. The other institution, the India led BRICS Development Bank (now called New Development Bank) with a view to enlist a larger membership and to allow for the group’s eventual expansion with the venerable former ICICI Bank Chairman KV Kamath at the helm, is to begin operations sometime next year.

 

Their presence will lead to a major departure from the traditional practice of seeking aid from the World Bank and the Asian Development Bank, which thus far ruled the development finance universe. With infrastructure investment needs far exceeding the amount of finance currently available, the new institutions have veritably come as a godsend. They certainly increase money sourcing options for New Delhi strapped for want of funds. In Asia whose collective economic needs total $8 trillion both the new entrants will become significant players because the ADB, the nearest stop for finance, has only under $80 billion in its kitty for projects that are crucial for progress.  

 

Ergo, a deepening of international engagement is expected, and more countries like the US expected to collaborate, as the two banks look to build project pipelines which they can fund. What is heartening for India is that the NDB has claimed that it will be more flexible in its operations unlike the older institutions. India, which is looking to make a case for funding its various projects, will assuredly stand to benefit. Also the very fact that Kamath has said that his bank will co-operate rather than compete with the AIIB on big ticket projects, is a welcome augury in an age when institutions often work at cross purposes due to huge international egos at play. Another positive sign in an increasingly globalised world is the indication by the Obama administration that it would constructively engage with the two new entities.

 

That spirit of cooperation and engagement is also seen in US-India relations as firms from both countries look to associate in various areas related to development: infrastructure, construction, energy, technology, sustainability and more. This finds reflection in Trade Zone this month in the form of a special interview with
Thomas L Vajda, Consul General for the United States in Mumbai, who offers hope of an increasingly collaborative future between the two great democracies.

 

The cover story meanwhile celebrates the people and institutions who have contributed to the making of the city of Pune into the dynamic industrial goliath, and in some respects a challenger to Mumbai, it is now.

 

Assuredly the future looks positive – for the world, for the Asian region, India and indeed for Pune.

 

Have a wonderful read.




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