Thursday, 30 October 2014

Stewart Beck India is changing, and faster than we think

Stewart Beck is president and CEO of the Asia Pacific Foundation of Canada.
Two months after leaving India as Canada’s High Commissioner, I returned two weeks ago as part of British Columbia Premier Christy Clark’s official delegation to the country.
Stepping out into the hot and humid Delhi night, everything looked the same but there was certainly a sense of change in the air: everyone from taxi drivers, to business people and politicians seem to feel a new confidence that India can now move forward. In his first 100 days in office, new Indian Prime Minister Narendra Modi seems to have changed the attitude and outlook of the world’s second-most populous nation.
Coinciding with the Premier’s visit was a delegation of federal representatives, including Foreign Affairs and International Trade Ministers John Baird and Ed Fast, who were there to reinforce Canada’s commitment to strengthening ties with India’s new government. The success of the concurrent delegations was an excellent example of how Canada can capitalize on some of its constitutional similarities with India – in this case, the devolution of power over issues such as education and national-resource management to the provinces – in order to improve relations for Canada as a whole.
Our ministers had the opportunity to sit down with the prime minister: Mr. Baird extended an official invitation for Mr. Modi to visit Canada, and Mr. Fast raised the pending Canada-India Comprehensive Economic Partnership Agreement (CEPA), the negotiations for which have been continuing since 2010. For his part, Mr. Modi noted that he was looking forward to meeting Prime Minister Stephen Harper at the G20 Summit in Brisbane, scheduled to begin Dec. 1.
With the CEPA negotiations now having gone through eight rounds, and an unsigned FIPA, India-watchers in Canada have had little reason to anticipate any formalized deepening of ties. But India is changing, and it is happening faster than we think.
Over the last four years in India, I saw little, if any, change. The second UPA government under Manmohan Singh was sclerotic, bumping from one scandal to another starting with the Commonwealth Games in 2010. This left the country, its people and its businesses with little hope and enormously frustrated by a corrupt environment, lagging job growth and a government incapable of providing services for its citizens.
Mr. Modi was elected as prime minister with a mandate to make things happen. From my own experience in dealing with Mr. Modi, he is prepared, direct and looking for results and accountability, rare attributes in an Indian politician. His past record as chief minister of Gujarat demonstrates what he is capable of: his policies and approach attracted the most foreign investment of all Indian States, including major Canadian investments by Bombardier and McCain’s.
In the past 100 days, Mr. Modi has made some dramatic international maneuvers, including securing sizeable infrastructure funding commitments from Japan and China and building new security arrangements with the United States. Domestically, he moved forward on introducing land and labour reforms, and with the drop in crude oil prices, he has been able to reduce fuel subsidies. This will further improve India’s investment environment, and with a declining current account deficit he will have more room to take bolder reform measures.
This change in attitude and level of confidence was clearly evident in the meetings Ms. Clark had with her counterparts. There was a strong commitment to securing long-term gas supplies based on current and future investments in British Columbia and meetings with steel industry executives opened many Canadian eyes to the staggering growth planned in the economy. Steel manufacturing capacity will grow to 300 million tons by 2025, which, alone will mean that India will need to import at least 150 million tons of coking coal to meet the demand.
Mr. Modi’s most significant challenge will be providing the necessary skills to employ the one million people entering the work force every month for the next 15 years (more than 50 per cent of India’s population is under the age of 25). The Premier was able to present solutions to this challenge, including how the proper Canadian accreditations delivered through joint programming in India can solve some of the skill shortages facing the province.
Opportunities abound in India and even more so now that there is a newfound optimism and energy. Canada is uniquely placed to become a priority country for India. We engaged early with Mr. Modi when other western countries were reticent; we are colonial cousins and share a similar constitutional framework; and we have a vibrant diaspora that cares about India’s future place in world. As Mr. Harper meets with Mr. Modi for the first time later this year in Australia, and we look ahead to a possible official visit next year, the time is ripe for Canada and India to grow in closer partnership together.
Stewart Beck was Canada’s High Commissioner to the Republic of India with concurrent accreditation to the Kingdom of Bhutan and Nepal.