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16th Annual WEF 2011 World Electronics Conference LV, USA 2011 Domestic and International Issues in relation to Open Market and Global Trade Presentation By N K GOYAL President, CMAI Association of India, CMAI Chairman Emeritus, TEMA Vice Chairman, ITU APT India Director, National Fertilizers Ltd. ( Government of India Undertaking) [email protected] +91 98 111 29879 www.cmai.asia 1oth January, 2011 Growing India Economy India’s return to high levels of growth is helping the global economy recover from the crisis India is a player on the global stage. The Country’s status as a rising economic power is closely connected with how it manages this next phase of growth, balancing rapid development with the environment and most importantly, the need to ensure all people have opportunity. 9th January, 2011 by World Bank Group President Mr. Robert B. Zoellick India’s high growth factors GDP 9-10% even during economic global crisis. Comparatively Stable Financial Sector Younger and middle class society Mobile penetration 750 Mn…second largest. Monthly mobile additions 18-20 Mn..highest in world Emerging economies Emerging economies are now key variables in the global growth equation. The developing world is becoming a driver of the global economy. Much of the recovery in world trade has been due to strong demand for imports among developing countries. Led by the emerging markets, developing countries now account for half of global growth and are leading the recovery in world trade. Rising economies bring new approaches and solutions. We see that as India advises Africa on dairy farming; as China learns from Africa about effective community-driven development approaches in Ghana and Nigeria; as the United States learns from China about high-speed railways Innovations are beyond boundaries India’s open trade experience Signed WTO and duty free imports for 217 electronics and telecom items. Free Trade, Comprehensive agreement with several countries. Permitted highest in world 74% FDI in telecom service sector and 100% for telecom manufacturing. Large scale imports..foreign exchange requirements in next few years to be more than oil. Manufacturing almost Nil. Now struggling to regain manufacturing. Related security Issues. Global Trade Global trade is increasing, multinational Corporations are spreading into markets in the developing world and technological advancements continue to multiply. Good progress has been made over the last several decades in health, education, and poverty. The share of people living in extreme poverty in developing countries has more than halved in the quarter century since 1980; global child mortality rates have almost halved But not everyone is benefiting. The success has been uneven. The benefits of globalization, free trade and reform have yet to reach many of the poor's. Global Trade…cont. Ninety-four percent of world income goes to 40 percent of the people, while the other 60 percent must live on only 6 percent of world income. Half of the world lives on two dollars a day or less, while almost a billion people live on less than one dollar a day. Poverty is not distributed evenly around the world. In subSaharan Africa, South Asia, and Latin America hundreds of millions of poor people struggle for survival. The divide between the global North and South — between the world’s richest and the rest — has widened. Periodic disasters like tsunami, earthquake, hurricane plays havoc in particular regions Global Trade…cont. There are inequal subsidies all over globe for agriculture, manufacturing, Environmental management. The emergence of China in the world market as most economical manufacturers due to various reasons has affected most of the Countries. In case of India too, the ceramic industry, toys, telecom, electric bulbs, textile all have been seriously affected. Globalization is need of time, yet there is need to realize that globalisation is not the answer to all the problems of any Country and it will have to think its own way for poverty alleviation, manufacturing, economic development and regional development. So need for each Country to think globally and act locally. Globalisation..the other side World witnessed a pleasant other side of Globalisation. The credit market difficulties that had simmered throughout 2007 erupted into a full-blown financial crisis in mid-September 2008. What initially started as a niche problem in the United States mortgage market had triggered a global economic slowdown. Unprecedented events happened in the banking sector, finance and credit markets, including the disappearance of several global financial icons. Thankfully it has been brought under control by sincere efforts of Governments committing billions of dollars in the system. So need for countries to have safeguards from things beyond their control. Telecom’s role in Global Trade CES is great experience for convergence. In CES we talk of telecom, spectrum, broadband, automobile, broadcasting and consumer electronics also. Role of telecommunications is essential to the facilitation of international trade, economic development, and the enrichment of citizens' lives . Modern means of telecommunications, enhanced by competition, will enable all Countries to participate more fully in international trade, particularly if complemented by increased liberalization of crossborder supply of many electronically deliverable services. Telecom…cont. Innovation in telecommunications will be essential to ensuring that the anticipated growth of electronic commerce can be fully realized. Many emerging economy Governments had come to view inadequate telecommunications networks and services as an impediment to achieving their full economic potential. Increased accessibility and added variety of telecommunications services will be the foundation of successful national and global information society initiatives and the social benefits. Telecom…the other side The Patents Battle across the world Different regulations and FDI limits Technology hypes, Great confusion over speed, conflicting interests YET Seamless Connectivity across all networks Excellent coordination for satellites Excellent coordination for frequencies, spectrum Protectionism by Countries Most Countries facing difficult time for job creation, poverty alleviation, balanced growth. Climate management. Countries promote industry by somehow directly or through tax policy, subsidies, incentives, protections, cheap finance, infrastructure. These efforts disturb global level playing field and raises contentious debates. Protectionism cont…. World leaders pledged to resist protectionism and support free trade in order to speed the economic recovery and avoid the mistakes of the 1930s as the centre piece of the London G20 summit in April, 2009 Governments around the world have continued to push up trade barriers in spite of above World Trade Organization Report in July, 2009 There is surge in anti-dumping complaints as crisisstricken companies take action against foreign competitors they might have tolerated in better times. Anti-dumping investigations increasing. Protectionism….cont. As per WTO, most affected have been agricultural products – particularly dairy – iron and steel, autos, chemicals and plastics, and textiles and clothing. Various Governments introduced programmes to support automakers, pulp and paper producers and others. A total of 19 governments reported moves to support financial institutions. Way forward Promote Innovation, provide appropriate policy and facilities Promote and ease open free trade Promote Broadband and make available sufficient spectrum Carefully weigh international trade policies. Cautious approach for protectionism About CMAI CMAI is an apex business and trade promotion organization, based in India with MOU partners and representatives spread across over 54 Countries with branch offices in Japan, Korea, Singapore, Taiwan and Malaysia. CMAI is integrated telecom and IT association covering all verticals. CMAI is involved in policy formulations with Government and other stake holders for Technology Innovations, Indigenous manufacturing CMAI is developing scientific knowledge and practical means for protecting human ecology and environment from the harmful effects of environmental hazards like e waste, radiation etc. CMAI assists manufacturers to maximize competitiveness in the domestic and international markets. www.cmai.asia Mobile and Tablet Expo CMAI marches ahead Looking into highest mobile demand the Indian Brands has acquired more than 30% market share within last two years. On Government advice CMAI organizing International Mobile and Tablet focused Expo in Shenzhen on 20-23 May, 2011 and in New Delhi in August, 2011. National Telecom Awards on 17th May, 2011. A BIG THANK YOU CEA AND WEF MEMBERS www.cmai.asia www.nkgoyals.com