CII Multilateral Newsletter, May 2014
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CII Multilateral Newsletter, May 2014

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The BCIM (Bangladesh, China, India and Myanmar) corridor is perceived to have a potential to generate substantive economic benefits in the area of trade, investment, energy, transport and tourism. The ...

The BCIM (Bangladesh, China, India and Myanmar) corridor is perceived to have a potential to generate substantive economic benefits in the area of trade, investment, energy, transport and tourism. The corridor offers a wide range of opportunities for growth and development in the region. The BCIM forum is a long term mechanism aiming to enhance the economic cooperation in business communities and enterprises of the four BCIM regions.
It is therefore vital to build a platform to realize business exchanges and help enterprises to make closer communication exchanges. The May 2014 edition of the Multilateral Newsletter explores the opportunities and the prospective areas which can act as a catalyst leading to positive growth in terms of trade and investment in the BCIM region. In addition, the newsletter gives an update of the major highlights from the Asian Development Bank, The World Bank, International Trade Center, World Trade Organization and groupings like B20 and OECD.

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CII Multilateral Newsletter, May 2014 CII Multilateral Newsletter, May 2014 Document Transcript

  • 1Multilateral Newsletter this IssueInside Focus Story BCIM-An Emerging Opportunity............................................2 ADB Highlights: 47th Annual Meeting - Rethinking Asia's Challenges at the Crossroads of the Silk Road........................5 The World bank New World Bank Group Strategy to Help India Achieve Its Vision...................................................................................6 Time for South Asia to Focus Attention on Domestic Risks: South Asia Economic Focus Report.........................................7 India displaces Japan to become third-largest world economy in terms of PPP:World Bank..................................................8 May 2014, Volume 2, Issue 5 Message from Mr Chandrajit Banerjee, Director General, CII India has become an important partner of the Southeast and East Asian countries since the inception of India’s “Look East” Policy in early 1990s. An important component of the policy, the BCIM (Bangladesh, China, India and Myanmar) Forum has been extensively working with the main focus on facilitating connectivity and trade in and through the countries in the region. The BCIM forum while focusing on economic cooperation, promotes the social and development cause of the bordering areas. While China and India have achieved remarkable economic growth in the last two decades, Western China, North - Eastern India, Myanmar and the adjoining area of Bangladesh, have not experienced the fruits of increasingly globalized economy. The regions under the grouping have a huge potential and there lies a strong need to explore and use the opportunities to boost up the growth of the region. The May Edition of the Multilateral Newsletter explores the opportunities and the prospective areas which can act as catalysts leading to a positive growth in terms of trade and investment in the BCIM region, in addition to major highlights from Asian development Bank, World Bank, International Trade Centre, World Trade organization and groupings like the B20 and OECD. Chandrajit Banerjee Multilateral World Trade Organization The trend towards increased regionalism could be reversed, newWTO research suggests....................................................9 International Trade Center Adaptation and knowledge sharing key to SME competitiveness.............................................................9 B 20 B20 Coalition Highlights Key Business Concerns......................10 OECD Global economy strengthening but significant risks remain: OECD Economic Outlook.......................................................11 NEWSLETTER
  • 2 Multilateral Newsletter Focus Story BCIM-An Emerging Opportunity Over recent decades-the enunciation of India’s ‘Look East Policy’ from the early 1990s, positive changes in the regional geo-political environment and growing economic engagement with the ASEAN countries has put the spotlight on the BCIM (Bangladesh, China, India and Myanmar) grouping The BCIM cooperation includes the North-East India, Bangladesh, Myanmar and South West of China, the zone is perceived to have a potential to generate substantive economic benefits in the areas of trade, investment, energy, transport and tourism. The BCIM corridor covers 1.65 million square kilometers encompassing an estimated 440 million people in the regions of Yunnan, Bangladesh, Myanmar, West Bengal, Bihar and states in Northern India. The economic dynamism of India and China also offer wide range of opportunities for growth and development in the region. A long term cooperation mechanism aims to enhance the economic cooperation in business communities and enterprises of four BCIM countries, and to build a platform to realize business exchanges and help enterprises to make closer communication exchanges. Increasing Connectivity Transport is a natural area for cooperation in the region and a huge catalyst for trade and investment as it has an impact on the transaction cost. Excellent connectivity is the key to establish and stimulate deeper integration among the region. The four countries will come up with an ambitious proposal that includes developing multi-modal transport, such as road, rail, waterways and airways, joint power projects and telecommunication networks. As a first step, the four countries will identify realistic and achievable infrastructure projects to boost physical connectivity. The linking of all four countries by road has further strengthened the notion that this corridor would subsequently open up the whole of the northeastern region of India to Southeast Asia and China and turn it into a significant channel of trade. The construction of industrial zones will have a twofold benefit • Firstly, it will lead to industrial transfer boosting industries such as processing, manufacturing and commerce logistics. • Secondly, as labor costs rise in China, labor-intensive industries such as textile and agro-processing will eventually be shifted out of China. These industries will need to be transferred to new regions with lower labor costs One of the major benefits of linking the four countries of Bangladesh, China, India and Myanmar (BCIM) through a land route would be to unleash the trading potential of landlocked areas. However, much of the route needs to be reconstructed and rebuilt. India has taken on the task of the developing the Kaladan transport corridor that connects its north east with ports in Myanmar. On the China side too, much progress has been made in road sector. With further connectivity, we would see a vibrant and dynamic boost to over-land trade. Presently, there are many plans to link India with this region through Myanmar, like Kaladan Multimodal Transit Transport Project, India-Myanmar-Thailand trilateral highway, Mekong-India economic corridor, Delhi-Hanoi Rail link among others.
  • 3Multilateral Newsletter The Mekong-India Economic Corridor, which will connect the industrial and freight corridors in India with the production networks in the Mekong region through the Chennai - Dawei sea link and the land connectivity to India’s Northeast, will have a beneficial effect on all economies of the region. Multiple effective cross border and national transport projects would help unlock the tremendous potential of the region by removing constraints and bottlenecks to growth. An integrated connectivity would provide substantial benefits to landlocked countries and areas of the region by giving them low-cost access to world market. Regional Tourism Tourism plays a critical role in generating substantial revenue for all the member countries. Destinations of particularly Myanmar and Yunnan with beautiful landscape, rich biological resources, age old history, and a wide range of cultural diversity attract tourists from around the world. The sub-regional grouping plays a critical role in developing ecotourism and religious tourism by fostering connectivity among the region and facilitating travel to these regions. Cooperation in Natural Resources The BCIM region is one of the richest in the world in terms of natural, mineral and other resources. Cooperation in the fields of water resources, development of hydro-electric energy and hydrocarbon resources and development of port facilities are an important instrument in expediting the pace of growth in the region. This will also ensure a higher standard of living for the people. Combing the resources of the region would help in gaining a competitive edge in attracting both domestic and foreign investment and also help in promoting export leading to mutual benefits of the regions involved. International mobility of capital coupled with low cost of labour and geographical proximity helps to make the region attractive and increases the competitiveness to the investors. India and China- the two giant regions play significant role in promoting investments in Bangladesh and Myanmar that in turn target the Indian and Chinese markets through preferential market access initiatives. While, the regions under the grouping have a huge potential there also lies a strong need to explore and use the opportunities to boost up the growth of the region. Over the years, all the four countries have supported regional economic cooperation and the industry is optimistic about the prospects that exist in the BCIM region. Recommendations • To ensure success it is vital that regions proactively engage themselves by fulfilling the basic infrastructure need necessary for the region. Improving the state of connectivity within the region, and mobilizing the required resources to build the necessary infrastructure as long term developmental strategy. In addition there is a need to promote the participation of private sector in development of road transport infrastructure project as well as formulate common guidelines and procedures for transportation of goods and services • An improved infrastructure will be insufficient to foster the regional integration until and unless it is widely complemented by appropriate policies and regulations as well as participation of the private sector. We need policies and regulations to foster an effective cross-border movement of goods, services, and people. Harmonizing and simplifying the customs procedures, information sharing, customs modernization, establishing transparent transit rules, and improving logistics in general are also critical to infrastructure expansion. Enhancing the connectivity also requires stronger regional institutions to build and manage the cross-border infrastructure. Focus Story
  • 4 Multilateral Newsletter Focus Story • Beyond building the physical infrastructure, cross-border movement of both cargo and people is also a major challenge for the region. For easing up cross border movement and establishing greater connectivity the existing trans-border formalities, vehicular movement and custom procedures need to be simplified. Presently, there are many plans to link India with this region through Myanmar, like Kaladan Multimodal Transit Transport Project, India-Myanmar-Thailand trilateral highway, Mekong-India economic corridor, Delhi-Hanoi Rail link among others. The Mekong-India Economic Corridor, which will connect the industrial and freight corridors in India with the production networks in the Mekong region through the Chennai - Dawei sea link and the land connectivity to India’s Northeast, will have a beneficial effect on all economies of the region. Multiple effective cross border and national transport projects would help unlock the tremendous potential of the region by removing constraints and bottlenecks to growth. An integrated connectivity would provide substantial benefits to landlocked countries and areas of the region by giving them low-cost access to world market. With greater connectivity, North Eastern Region of India will be better integrated with the markets of neighboring countries. Cross-border trade and investment flow and cross-border development cooperation will open up new avenues for growth and development. Bangladesh and India are already members of SAFTA, Bangladesh and Myanmar and India are members of BIMSTEC and Bangladesh, India and China are members of APTA. India is promoting regional connectivity for balanced economic and infrastructure development within our country and accelerated integration with our neighborhood, including with Southeast Asia. India believes that the BCIM Economic Corridor can potentially reinforce India’s existing connectivity initiatives INITIATIVES TO PROMOTE BCIM COOPERATION BCIM Car Rally CII with support from the government of India was the organizer from Indian side of the first historic 3000 km Kolkata-Kunming BCIM (Bangladesh, China, India and Bangladesh) Car Rally. The Car Rally was flagged off in Kolkata on 22 February 2013 and reached Kunming on 5 March 2013. BCIM car rally was aimed at retracing the lost trails and reviving commercial trade in this trade route. It demonstrated symbolically the ancient connection between China and South Asia. BCIM Business Council To strengthen friendly relationship and cooperation in economic trade and investment based on the principles of friendliness, equality and mutual benefit the BCIM countries established a BCIM Business Council as a cooperation mechanism to promote the cooperation among the regions and CII (Eastern Region) is the secretariat from the Indian side. The objective of the business forum is to jointly build cooperation mechanism to provide business related information services, create and develop commercial opportunities for better cooperation and interaction between business circles among the four regions. Stakeholders’ Consultative Workshops A collaborative initiative of CII (Eastern), MAKAIAS, and ICS, this workshop acts as a critical input into the production of BCIM-EC Joint Study Group Report, is conceived as a dialogue with stakeholders and experts in the Eastern and North East Region to assess the backward linkages of the BCIM-EC Project from the stakeholder perspective. The emphasis is laid on the ways and means to translate the BCIM-EC vision into an instrument of inclusive economic, social and human development of the region.
  • 5Multilateral Newsletter Highlights: 47th Annual Meeting - Rethinking Asia's Challenges at the Crossroads of the Silk Road The 47th Annual Meeting held in Astana from 2 to 5 May, saw much discussion on connectivity, innovation and the need to keep up with demands of a changing Asia and Pacific. The Annual Meeting saw participation of almost 3000 participants from ADB’s 67 member countries and beyond, from government ministries and central banks, from business and finance, media, civil society, academia, and youth, cutting across professional, national, regional, and generational boundaries. The overall theme: “The Silk Road-Connecting Asia and the Changing World.” The theme was apt as the host location; Kazakhstan indeed stands at a crossroads connecting the manufacturers in the People’s Republic of China and Southeast Asia with potential markets in the West, and vice-versa. Looking beyond the host and the Central Asian region, the Annual Meeting was about rethinking the poverty challenge facing the region, rethinking how best to increase ADB’s resources, and clarifying ADB’s strategy in response to the region’s challenges. With 700 million people below the poverty line, Asia is still home to more than 60%of the world’s poor. Using this measure $1.25 a day, the region is likely to see an end to poverty in the region within the next decade. But more than 1.6 billion people living on less than $2 a day remain highly vulnerable to job loss, health problems, prolonged recession, inflation, crop failure and environmental dangers. Acknowledging these challenges, ADB has undertaken a midterm review of its long-term program-Strategy 2020. The report reconfirms that ADB will continue to focus on infrastructure development, but will also double its investments in health and education, given the wide benefits that can accrue from all these sectors. Away from the official business of the Annual Meeting, participants deliberated on the weighty issues faced by the region through a variety of knowledgeable and partnership events. These included a Governors’ seminar exploring lessons from past financial crisis; seminars on the Millennium Development Goals, development effectiveness, and fiscal policy. President Nakao stressed that it is crucial to pursue prudent macroeconomic management and bold structural reforms. With the conclusion of 47th Annual Meeting in Astana, ADB now turns its attention to implementing its mid-term strategy and looks forward to reporting progress next year at the 48th Annual Meeting in Baku, Azerbaijan. For more information, visit: http://www.adb.org/features/47th-annual-meeting-rethinking-asias-challenges- crossroads-silk-road The challenge for ADB is to help developing member countries eradicate remaining poverty, and support greater inclusiveness to address inequalities. There are other challenges: a huge infrastructure gap, environmental degradation and climate change. There is also the question of how to tap the full potential of regional cooperation and integration. Takehiko Nakao, ADB President ADB
  • 6 Multilateral Newsletter THE WORLD BANK New World Bank Group Strategy to Help India Achieve Its Vision India stands at an unprecedented moment in its history. In the six and half decades since independence, the country has brought about a landmark agricultural revolution that has transformed the nation from chronic dependence on food imports into a global agricultural powerhouse that is not only a net exporter of food but also the world’s largest producer of milk, legumes, and spices. Life expectancy has more than doubled, literacy rates have quadrupled, health conditions have improved, and a sizeable middle class has emerged. India is now home to globally recognized companies in pharmaceuticals and steel, as well as in information and space technologies. The country is in the midst of an enormous wave of urbanization. Urban centers are growing exponentially as legions of people flock to towns and cities in search of a better life. This unparalleled movement of the population calls for massive investments in the creation of jobs, housing, and infrastructure to meet the people’s soaring aspirations. Strategy reflects India’s historic changes In keeping with recent changes, the World Bank Group’s new Country Partnership Strategy will guide its support to India over the next five years (2013-2017). The strategy aims to help the country lay the foundations for achieving its longer-term vision of “faster, more inclusive growth.” The new strategy proposes a lending program of $3 billion to $5 billion each year over the next five years. Sixty percent of the financing will go to state government-backed projects. Half of this, or 30% of total lending, will go to low-income or special category states, up from 18% of lending under the previous strategy. The Bank’s India strategy outlines a scenario in which India improves the inclusiveness of the economic growth to that achieved by its best-performing states. This would cut poverty to 5.5% of the population by 2030 from 29.8% in 2010 and increase the share of people living above the threshold where they are at risk of falling back into poverty to 41.3% from 19.1%. If India were to grow as it did from 2005 to 2010 without making that growth more inclusive, poverty would fall to only 12.3% while 33.6% would remain above the vulnerability threshold by 2030. Key focus areas In the next five years the CPS will focus on three key areas: integration, transformation, and inclusion. A common theme across these areas will be improved governance, environmental sustainability, and gender equality. Integration: Clearly, India’s massive infrastructure needs cannot be addressed through public investments alone. The strategy will accordingly focus on improving both public and private investments in infrastructure. Better integration would result in more-balanced growth among Indian states, helping low-income states converge more quickly with their faster-growing neighbors. STORY HIGHLIGHTS India has a historic opportunity to lift its remaining 400 million poor people out of poverty and ensure that the sizeable numbers who have recently escaped poverty are not vulnerable to falling back. The World Bank Group’s new Country Partnership Strategy will guide its support to India from 2013 through 2017. The strategy aims to help the country lay the foundations for achieving its longer-term vision of “faster, more inclusive growth.” A key feature of the new strategy is the significant shift in support toward low-income states, where many of India’s poor and disadvantaged live.
  • 7Multilateral Newsletter THE WORLD BANK Time for South Asia to Focus Attention on Domestic Risks: South Asia Economic Focus Report The World Bank is cautiously optimistic about economic prospects in South Asia in 2014 because of growing exports and investment as it emphasized that the risks to growth were becoming more domestic, including an increasingly vulnerable banking sector. In its twice-a-year “South Asia Economic Focus”, the World Bank forecast that economic growth would rise to 5.8% in 2015 from 5.2% this year and 4.8% last year. South Asian countries – which include Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka – appeared to have largely recovered from last year’s financial turmoil caused by changes in US Federal Reserve monetary policy. Over this year, the report saw a strengthening of economic growth for most South Asian countries. The region’s largest economy, India, would see growth rise to 5.7% in fiscal year (FY) 2014 from 4.8% last fiscal year with activity receiving a boost from a more competitive exchange rate and many large investment projects going ahead. Pakistan’s economic growth could increase to 4% this fiscal year from 3.6% in FY2013 as its economy benefitted from a reduction in electricity blackouts, resilient remittance flows from Pakistani workers abroad, rebounding manufacturing exports and a more buoyant services sector. Nepal was recovering from a difficult year affected by setbacks in the agricultural sector and with its government budget. Helped by strong remittance flows boosting consumption and the services sector, the economy should grow by 4.5% in FY2014 after 3.6% in FY2013. Sri Lanka would continue to grow at 7.3% this year as the economy was sustained by new capacity from infrastructure investments and rebuilding after the country’s recent conflict. Economic activities recovered in the second half of FY14 in Bangladesh, driven by resilient exports and domestic demand, following setbacks suffered in the first half due to political uncertainty and turmoil. A recovery in Transformation: By 2031, it is projected that 600 million people will live in India’s cities. Well-managed urbanization can bring innumerable benefits; the strategy will focus on supporting the efforts of national, state, and city governments to improve the livability of urban areas, especially secondary cities, while at the same time working toward higher agricultural productivity. Inclusion: Economic integration and rural-urban transformation can benefit a large share of India’s population only if there is a stronger focus on human development and on policies that help make growth inclusive. The World Bank Group will support the central and state governments in strengthening the nutrition policy as well as systems and capacities to improve nutrition. It will support government efforts to improve education mainly at the secondary and tertiary levels, with a more pronounced focus on quality across all levels of education. Special focus will be placed on ensuring access to education for underprivileged children, retaining girls in secondary education, and opening opportunities in higher education. It will also work to improve access to finance and to enhance social protection coverage for the more than 90% of the labor force that works in the informal sector. For more information, visit: http://www.worldbank.org/en/news/feature/2013/04/12/new-world-bank-group-strategy-to-help-india-achieve- its-vision
  • 8 Multilateral Newsletter India displaces Japan to become third-largest world economy in terms of PPP: World Bank India has displaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report released recently The 2011 round of the bank's International Comparison Program (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place. PPP is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison. India's share in World GDP in terms of PPP was 6.4% in 2011 compared with China's 14.9% and the US' 17.1%, the latest ICP showed. The survey covered 199 economies. "The United States remained the world's largest economy, but it was closely followed by China when measured using PPPs. India was now the world's third largest economy, moving ahead of Japan," the report said. Despite high inflation in India in recent years, prices in the country are still well below those in advanced economies, explaining the higher raking for India on the PPP measure. But according to the International Monetary Fund (IMF), India's economy is 12th largest and only about a third of Japan's in terms of absolute unadjusted dollars. "The economies with the lowest prices are either in Africa or Asia and the Pacific and include India, which has the third-largest economy," the report noted. "Because economies estimate their GDP at national price levels and in national currencies, those GDPs are not comparable. To be compared, they must be valued at a common price level and expressed in a common currency," the report said, giving out the rationale for the PPP adjustments. For more information, visit: http://economictimes.indiatimes.com/news/economy/indicators/india-displaces-japan-to-become-third-largest- world-economy-in-terms-of-ppp-world-bank/articleshow/34392694.cms THE WORLD BANK export growth and increases in public expenditure are likely to help achieve 5.4% GDP growth in FY14, slightly lower than last year’s 6%. The economy in Afghanistan will be weighed down by the persistent uncertainty caused by the withdrawal this year of international forces and the subsequent reduction in foreign aid for the economy. In addition, the country’s agricultural sector’s output has declined. Economic growth was therefore projected to fall to 3.2% this year after 3.6% in 2013. Depending on security and whether agriculture rebounds and mining output increases, Afghanistan could see growth recover in 2015 and 2016 to around five percent. The report made a point of focusing on the banking sector because of its centrality for South Asia’s economic stability and growth. In India, the problem is the banking sector’s growing exposure to company debt. The fear here is that this could ultimately affect the government’s finances through its ownership of state banks and the need to prop up distressed but systemically important banks. Pakistan’s vulnerability is related to government debt, not corporate debt. Its banks are big owners of short term government debt without inherent risks being correctly reflected. In Nepal, banks are not lending and therefore not supporting productive investment in the economy. For more information, visit: http://www.worldbank.org/content/dam/Worldbank/document/SAR/wb-south-asia-economic-focus-spring-2014.pdf
  • 9Multilateral Newsletter The trend towards increased regionalism could be reversed, new WTO research suggests Adaptation and knowledge sharing key to SME competitiveness A new attempt to paint a picture of the world economy in 2035 shows that the share of trade within major regional trade agreements might decline. Under various scenarios, including the possibility that countries will form large blocs (“mega-regionals”), trade among and outside these areas would be dominant, according to a WTO working paper. The paper also finds that a dynamic economic and open trade environment will be needed for new players to continue to emerge in the world economy, for South-South trade to intensify and for countries to diversify into skill-intensive activities. Technological progress is likely to have the biggest impact, it says. Population changes will also play a part in future economic trends. For some countries, improving workers’ skills will be crucial; for others labour shortages may be addressed through migration, the paper says. And it adds that several developing countries would benefit from increased capital mobility; others will only diversify into more dynamic sectors when the costs of trade are further reduced. The paper, “Simulating world trade in the decades ahead: driving forces and policy Implications”, uses the analytical techniques of linking a macroeconomic growth model and a sectoral computable general equilibrium (CGE) framework in order to project the world economy forward to 2035. It assesses to what extent current trends in trade are expected to continue and to what extent individual policy areas may matter for specific countries and regions. For more information, visit: http://www.wto.org/english/res_e/reser_e/ersd201405_e.htm For small and medium-sized enterprises (SMEs) in developing countries to become globally competitive, they must adopt and adapt new knowledge to create innovative products and services, said panelists at a discussion organized by the International Trade Centre (ITC) at its headquarters in Geneva on 2 May 2014. Speaking on the topic of ‘SMEs innovate to trade and compete’ were representatives from multinational companies, international organizations and academia. ‘The nature and quality of the linkages of SME suppliers with their multinational buyers, as well as linkages among clusters of SMEs and other support institutions, are decisive factors for SME innovation,’ said Mr. Anders Aeroe, Director of ITC’s Market Development Division, who moderated the event. The focus of the discussion was on ways to foster innovation through different linkages and relationships among enterprises, buyers and suppliers, institutions and value chains. For more information, visit: http://www.intracen.org/news/Adaptation-and-knowledge-sharing-key-to-SMEcompetitiveness/#sthash.ocL5fbiK.dpuf WORLD TRADE ORGANIZATION International Trade Center
  • 10 Multilateral Newsletter B20 Coalition Highlights Key Business Concerns B20 Coalition Urges G20 Leaders to Address Key Concerns of Business Community Six months ahead of the G20 Summit in Brisbane, the B20 Coalition is actively mobilizing its network across five key priorities for the business community. The B20 Coalition, a group of leading independent business associations from G20 countries, has a shared mission to address G20 policymakers on behalf of more than 6.5 million businesses of all sizes and from all sectors. Perrin Beatty, President of the B20 Coalition, said, “As the world slowly emerges from recession, Coalition members have identified five key areas where action is urgently required to bolster the recovery and create an enabling business environment. “Our members, across the globe, have identified the following priorities for coordinated policy action: trade and investment, fiscal responsibility, energy, infrastructure and investment, and the digital economy. We also acknowledge the importance of investing in human capital, which runs as a thread through all these issues.” The B20 Coalition’s five priorities will be the subject of a series of activities from May up to the G20 Summit in November.  As they highlight their concerns, the B20 Coalition will be calling on G20 Leaders for action in each area so as to create an environment in which the private sector can contribute to the fullest extent to boosting fragile economic recovery. Addressing the G20 policymakers, Perrin Beatty, on behalf of members of the B20 Coalition said: “We represent today’s job creators and it is important that the issues our members have identified as key priorities be tackled head-on by our leaders. The private sector is part of the solution and we need to be involved in the discussions right from the beginning”. B 20 Highlights from upcoming B20 Coalition Position Papers Trade and Investment: To realize the potential of global value chains (GVCs) governments must streamline administrative and customs procedures, which would benefit not only importers of intermediate goods but also exporters. The G20 should commit to trade barrier reduction along the whole value chain. Regulatory convergence and mutual recognition agreements should be stimulated between G20 countries. Energy: Governments must find ways to ensure that actions to address environmental challenges, particularly climate change, enhance economic growth and do not threaten security of supply. This can only be achieved by a transparent and thorough assessment of the effectiveness, costs and benefits, and energy security impacts of energy and environmental policies for the economy and society at large.  Fiscal Responsibility: Governments should design frameworks to allow both tax and expenditure policies to be comprehensively and jointly assessed against broad strategic priorities and stated fiscal objectives. This is essential to tackle fiscal pressure from trends such as ageing populations, rising health costs, and expansion of social security and health coverage. Solutions to these problems must preserve the private sector’s capacity to be a source of growth and one of the indirect mechanisms to address these challenges. For more information, visit: http://www.b20coalition.org/news-detail.php?nid=58
  • 11Multilateral Newsletter Global economy strengthening but significant risks remain: OECD Economic Outlook The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD’s latest Economic Outlook. “Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again,” OECD Secretary-General Angel Gurría said while launching the Outlook during the Organisation’s annual Ministerial Council Meeting and Forum in Paris. GDP growth across the 34-member OECD is projected to accelerate to a 2.2% rate in 2014 and 2.8% in 2015, according to the Outlook. The world economy will grow at a 3.4% rate in 2014 and 3.9% in 2015. Among the major advanced economies, recovery is best established in the United States, which is projected to grow by 2.6% in 2014 and 3.5% in 2015. The euro area will see a return of positive growth after three years of contraction: 1.2% in 2014 and 1.7% in 2015. In Japan, growth will be dented by the launch of much-needed fiscal consolidation measures, and is expected to hover at 1.2% in 2014 and 2015. The BRIICS (Brazil, China, India, Indonesia, Russia and South Africa) are projected to see GDP growth of 5.3% this year on average and 5.7% in 2015. China will again have the fastest growth among these countries, with rates just below 7.5% in 2014 and 2015. The OECD highlights a series of policy requirements for further strengthening the recovery. Monetary policy needs to remain accommodative, especially in the euro area, where a further interest rate reduction is merited, given low and falling inflation, and in Japan, where asset purchases should continue as planned. In the US, where the recovery is more firmly based, asset purchases by the Federal Reserve should be gradually phased out during 2014 and policy rates should start to be raised during 2015. The planned slower pace of fiscal consolidation in the US and some euro area countries is seen as warranted, given past efforts, but strong consolidation should proceed steadily in Japan, where the burden of public debt is very heavy and still growing. More ambitious structural reform programmes are needed to create jobs and boost growth in advanced and emerging countries alike. For more information, visit: http://www.oecd.org/newsroom/global-economy-strengthening-but-significant-risks-remain.htm OECD Copyright © 2014 by Confederation of Indian Industry (CII), All rights reserved. No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, me- chanical, photocopying, recording or otherwise), without the prior written permission of the copyright owner. CII has made every effort to ensure the accuracy of information presented in this document. However, neither CII nor any of its office bearers or analysts or employees can be held responsible for any financial consequences arising out of the use of information provided herein. However, in case of any discrepancy, error, etc., same may please be brought to the notice of CII for appropriate corrections. Published by Confederation of Indian Industry (CII), The Mantosh Sondhi Centre; 23, Institutional Area, Lodi Road, New Delhi-110003 (INDIA) Tel: +91-11-24629994-7, Fax: +91-11-24626149; Email: info@cii.in; Web: www.cii.in For suggestions please write to us at: multilateralforums@cii.in