Multilateral Newsletter, January 2014


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The latter part of 2013 witnessed some of the major events crucial for the Multilateral process of cooperation and trade and investment among countries.

The major highlight for 2013 was the WTO Bali Ministerial held in Bali, Indonesia which ended with signing of a successful inclusive agreement.

Another major highlight was the 11th ASEAN-India Summit held in Brunei. The Indian side was represented by Dr.Manmohan Singh, Prime Minister of India. The major highlight for the Summit was a pact on services and investment; some key projects were also finalized during the Summit.

Promoting an awareness of the opportunities and challenges of enhancing cooperation between the Mekong Countries (Myanmar, Laos, Thailand, Cambodia and Vietnam) and India, ADB-CII jointly organized a Conference on Promoting Mekong-India Economic Cooperation. The deliberations at the Conference were on Physical connectivity, Trade Facilitation and Trade Finance, Energy Security and Power Trade, and Financing Regional Infrastructure.

This first issue of the Multilateral Newsletter in 2014 covers the major highlights and updates of the key events and initiatives that happened in November-December 2013, which may be of reference and use.

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Multilateral Newsletter, January 2014

  1. 1. Multilateral NEWSLETTER January 2014, Volume 2, Issue 1 Message from Mr Chandrajit Banerjee, Director General, CII The final month of 2013 ended on a high with two major multilateral events. The first being the historic conclusion of the Bali Ministerial and the second, Australia’s assumption of the Presidency of the G20. After four days of marathon negotiations, trade Ministers from 159 countries came to a historic agreement in Bali, Indonesia on issues such as trade facilitation, food security and development. Confederation of Indian Industry (CII) welcomes the decision by WTO member countries to safeguard the development perspective in the Doha Round by agreeing to put in an interim mechanism and to negotiate a permanent solution on the issue of public stock holding for food security. CII also welcomes the declaration on trade facilitation, which will not only boost transparency and predictability, also reducing transaction cost for businesses across the globe. The successful conclusion of the Bali Ministeral also marked an auspicious start to the Australian Presidency of the G20. With trade forming a major plank of Australia’s agenda for 2014, the breakthrough in Bali gave the G20 movement a huge boost.   CII, on its part, is looking forward to working with the Government of India as well as with its partners in the B20 coalition to promote India’s Agenda at the G20 over the course of the coming year. It is in this backdrop that we present this month’s edition of the Multilateral Newsletter. This edition covers some of the major highlights from various multilateral organizations which have a substantial bearing on the development of our nation. We have made our best efforts to make the newsletter more informative and content rich. I thank you all for your overwhelming response and suggestions on the First issue of the Multilateral Newsletter and look forward to your inputs and suggestions on this edition. Seasons greetings and with best wishes for the New Year 2014. Chandrajit Banerjee Inside this Issue Focus Story WTO Bali Ministerial Declaration........................................... 2 . ASEAN The 11th Asean-India Summit: Highlights and Key Updates..... 6 . ADB ADB CII Conference on Promoting Mekong India Economic Cooperation.......................................................................... 9 India's Petronet to Expand Liquefied Natural Gas Terminal via ABD Loan...................................................................... 11 Developing Asia Growth Outlook Steady as Industrial Economies Firm.................................................... 11 B20 B20 Coalition Congratulates Bali Conference Leaders On Willingness to Put Aside Differences And Stand Together For Global Prosperity........................................................... 13 The World Bank $175 Million To Accelerate State Highway Development in India and Improve About 625 Km Of The Core State Road Network............................................................................. 14 . M u lt i l at e r a l N e w s l e t t e r 1
  2. 2. FOCUS WTO Bali Ministerial Declaration Major Highlights The Ninth World Trade Organization (WTO) Ministerial Conference was held in Bali, Indonesia from 3 to 6 December 2013. The main issues that were on the agenda included trade facilitation, issues related to LDCs and various issues related to agriculture, including export subsidies, tariff rate quotas and food security. It concluded with agreement on a package of issues that includes trade facilitation, cotton, agriculture and issues related to LDCs under the broader Doha Development Agenda. Trade Facilitation The most significant parts of the WTO Bali Ministerial Declaration is the Decision on trade facilitation to simplify customs procedures by reducing costs and improving speed and efficiency at the border. The Ministerial Declaration on Trade Facilitation consists of two sections, containing 13 Articles and Special & Differential treatment provisions for developing and least developed countries (LDCs). The main thrust is aimed at creating transparency in measures applicable to imports, exports and transit traffic through various publication and notification requirements. Key highlights of the Trade Facilitation WTO Member states to promptly publish documentation and procedural requirements, applied import duties and taxes, government fees and charges, rules for the classification or valuation of products, appeal procedures and tariff rate quotas and administrative procedures applicable to exportation, importation and transit. • Countries are also encouraged to publish the average release times of goods at their borders and any information regarding advanced rulings that may be of interest to other parties. • Member states are required to make procedures and documentation requirements related to imports, exports and transit and the contact information of enquiry points available on the internet. Each member state is also required to establish a national enquiry point. • An advance ruling is required to be given within a reasonable time after receiving the written request by a member state. If the advance ruling is declined, written notification must be given to the applicant with the facts and basis for the decision. • Any enhanced levels of control or inspection at the border in respect of food, beverages or foodstuffs to protect human, animal or plant life or health must be notified. • The amount of government fees and charges must be limited to the cost of the services rendered for the specific import or export operation. Penalties are allowed where a breach of a customs law, regulation or procedural requirement has taken place. • Where appropriate, electronic payment of fees, charges, duties and taxes must be possible as well as filing documents electronically for pre-arrival processing. • To the extent possible, members must adopt customs control based on a risk management system that includes selectivity criteria, including HS code, country of origin and the nature of the goods. 2 M u lt i l at e r a l N e w s l e t t e r
  3. 3. FOCUS • Makes provision for additional trade facilitation measures to be provided for authorised operators that have met specific criteria, including financial solvency and appropriate record of compliance with customs and other related laws and regulations. • These authorised operators must enjoy at least three of the following trade facilitation measures: low documentary and data requirements; rapid release of goods, low rate of physical inspections; deferred payment of duties, taxes, fees and charges; use of comprehensive or reduced guarantees; a single customs declaration; and clearance of goods at the premises of the authorised operator or another place authorised by customs. • Member states are required to facilitate inter- and intra-agency cooperation at borders to improve exportation, importation and transit • The S&D provisions applicable to developing and LDCs apply to 12 of the 13 articles of the Agreement. The only article excluded from the S&D provisions is the one related to the establishment of Committees (multilateral and national level) on Trade Facilitation. • The provisions of the Agreement to which the S&D provisions apply are divided into three categories with different notification and implementation requirements for each category Agriculture The Bali Ministerial Declaration on Agriculture consists of texts on Public Stockholding for Food Security Purposes, Understanding on Tariff Rate Quota Administration Provisions of Agricultural Products, and Export Competition. Public Stockholding for Food Security Purposes • The members have agreed to put in place an interim mechanism and to negotiate a permanent solution on the issue of public stockholding for food security purposes. • During the interim period (until a permanent solution is found) subject to certain other conditions, WTO members shall not challenge measures, through the WTO Dispute Settlement Mechanism, utilised by developing countries to support traditional stable food crops to enable public stockholding programmes for food security purposes that exist as of the date of the decision. Understanding of Tariff Rate Quota Administration Provisions • According to the Ministerial decision members must evaluate the allocation of import licenses and consider the allocation of new licenses when licenses held by private operators are under-filled for reasons other than those that would be expected to be followed by a normal commercial operator. • If there is no commercial reason for under-filled licenses countries must request holders of these licenses whether they would be prepared to make them available to other potential users. Countries must provide for an effective re-allocation mechanism of import licenses when member states do not notify their quotafill rate or if the fill rate is below 65 percent. Export Competition • Members reaffirm their commitment to the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect, as set out in the 2005 Hong Kong Ministerial Declaration. • Members agree that fulfilling the objective set out in the 2005 Hong Kong Ministerial Declaration on export competition remains a priority issue for the post-Bali work programme. • To review the situation regarding export competition at the 10th Ministerial Conference. M u lt i l at e r a l N e w s l e t t e r 3
  4. 4. FOCUS LDCs Package Preferential Rules of Origin • Countries should aim to develop non-reciprocal preferential rules of origin for LDCs based on the various guidelines described in the decision, including transparency and simplicity. • Preferential rules of origin should be as transparent, simple and objective as possible. Other than wholly obtained products, origin may be conferred by substantial or sufficient transformation, which can be defined in a number of ways, including through: (a) ad valorem percentage criterion; (b) change of tariff classification; and (c) specific manufacturing or processing operation. • Given the limited production capacity of LDCs the level of value addition based on the ad valorem percentage criteria must be kept as low as possible with foreign imports being a maximum of 75 percent of the value for goods to qualify for preferential LDC rules of origin. • Regarding rules of origin based on specific manufacturing and processing operations countries must take cognisance of the limited productive capacity of LDCs. Operationalisation of the Waiver for Preferential Treatment to Services and Service Suppliers of LDCs • The Council for Trade in Services is instructed to initiate a process aimed at promoting the expeditious and effective operationalisation of the LDC services waiver. • The Council of Trade in Services to convene a High-level meeting within six months of the submission of an LDC collective request regarding the services waiver for preferential treatment for services and service suppliers of LDCs, identifying the sectors and modes of supply of interest to these countries. • Members underline the need for enhanced technical assistance and capacity building to help LDCs benefit from the operationalisation of the waiver. Special focus should be directed towards the delivery of targeted and coordinated technical assistance aimed at strengthening the domestic and export services capacity of LDCs. Duty-Free and Quota-Free Market Access • The Ministerial decision requires developed countries to ensure that a minimum of 97 percent of products originating from LDCs enjoy duty-free and quota-free access to the markets of developed countries. Developing countries, to the extent possible, should improve duty-free and quota-free market access for products originating from LDCs. Monitoring Mechanism for S&D Treatment • Member states have agreed to establish a monitoring mechanism to review all aspects of implementation regarding S&D treatment provisions in all WTO agreements and Ministerial and General Council decisions. However, the review process cannot alter or affect the rights or obligations of the member countries and can only make recommendations to the relevant WTO bodies to initiate negotiations on the various S&D provisions in the legal instruments. Cotton • The Ministerial Declaration seeks to improve market access for cotton products from LDCs and providing development assistance for cotton production in LDCs. In particular, Ministers agreed to have bi-annual discussions in the context of the Committee on Agriculture to determine the effect of trade-related developments, especially export subsidies and export measures, domestic support, tariff measures and non-tariff measures on market access and export competition of cotton products exported from LDCs to markets of interest to them. 4 M u lt i l at e r a l N e w s l e t t e r
  5. 5. FOCUS Post-Bali Work on Doha Agenda • Members demonstrate their commitment by instructing the Trade Negotiations Committee to prepare within the next 12 months a clearly defined work program on the remaining Doha Development Agenda issues. • This will build on the decisions taken at this Ministerial Conference, particularly on agriculture, development and LDC issues, as well as all other issues under the Doha mandate that are central to concluding the Round. • Issues in the Bali Package where legally binding outcomes could not be achieved will be prioritised. Work on issues in the package that have not been fully addressed at this Conference will resume in the relevant Committees or Negotiating Groups of the WTO. CII Welcomes A Balanced Bali Ministerial Declaration Confederation of Indian Industry (CII) welcomes the decision by WTO member countries to safeguard the development perspective in the Doha Round by agreeing to put in an interim mechanism and to negotiate a permanent solution on the issue of public stock holding for food security. CII also welcomes the declaration on Trade Facilitation, which will not only boost transparency and predictability but also reducing transaction cost for businesses across the globe. After four days of marathon negotiations at Indonesian island city of Bali, Trade Ministers from 159 countries agreed on the Bali Ministerial Declaration, which comprises of texts on trade facilitation, food security and development and LDC issues. "The outcome on food security is a big victory for multilateral trading system and truly a historic achievement for all member countries. It will not only restore the faith of a large number of developing countries in the multilateral trading system but bring back the credibility of WTO in delivering on its core development mandate as agreed in 2001 at Doha", said Mr. Deep Kapuria, Chairman of CII MSME Council and leader of CII business delegation to the 9th WTO Ministerial Conference. On food security issue WTO members have agreed to put in place an interim mechanism and to negotiate a permanent solution on the issue of public stock-holding for food security purposes for adoption by the 11th Ministerial Conference. It has been categorically specified that until a permanent solution is found, WTO members shall refrain from challenging through the WTO Dispute Settlement Mechanism. The permanent solution will be available to all developing countries members of the WTO. "CII has been very supportive of a balanced Trade Facilitation agreement, which takes care of legitimate developmental needs of a large number of poor countries including Least Developed Countries (LDCs)", said Mr. Kapuria. CII welcomes the decision of establishment of a preparatory committee on Trade Facilitation under the General Council to ensure the expeditious entry into force of the agreement. M u lt i l at e r a l N e w s l e t t e r 5
  6. 6. ASEAN The 11th Asean-India Summit: Highlights and Key Updates The 11th ASEAN-India Summit, chaired by His Majesty Sultan Haji Hassanal Bolkiah, the Sultan and Yang Di-Pertuan of Brunei Darussalam, was held on 10 October 2013 in Bandar Seri Begawan, Brunei Darussalam. The Summit was attended by all Heads of State/Government of ASEAN Member States and H.E. Dr. Manmohan Singh, Prime Minister of the Republic of India. Some of the key highlights from the summit include: • Unveiling a roadmap to boost economic ties, the government pledged to sign a pact with 10-member Association of South East Asian Nations (ASEAN) bloc on services and investment by 2013, at the ASEAN India Summit, attended by heads of the governments of the member states and Prime Minister Manmohan Singh. • Sultan of Brunei Haji Hassanal Bolkiah, who chaired the 11th India-ASEAN Summit, in a statement said ASEAN leaders welcomed India's policy within the framework of their strategic partnership. • The ASEAN Leaders welcomed India’s ‘Look East Policy’ within the framework of the ASEAN-India Strategic Partnership, particularly India's continued support to the ASEAN Community Building process covering the three pillars of ASEAN community, enhancing connectivity, and in strengthening ASEAN Centrality. • The ASEAN Leaders encouraged India to support the implementation of the Road map for an ASEAN Community [2009-2015] and contribute to the ASEAN Community Post-2015 Vision, as well as to the Bali Declaration on ASEAN Community in a Global Community of Nations [Bali Concord 111]. • The process of finalization of some key projects including the creation of a sustainable IT infrastructure in CLMV countries; establishment of a Tracking and Data Reception Station and Data Processing Facility for ASEAN in Ho Chi Minh City and the Up gradation of Biak II in Indonesia; and progress towards cooperation between the ASEAN Centre for Biodiversity [ACB] and the National Biodiversity Authority (NBA) of India would provide further momentum. • The Mid-Term Review of the ASEAN-India Plan of Action and the incorporation of the short-term actionable goals from the Vision Statement, particularly the establishment of the ASEAN-India Centre. In this regard, the leaders welcomed the launching of the Centre and looked forward to the finalization of the required modalities for operationalisation of the Centre. • India’s intent to set up the separate ASEAN-India Trade and Investment Centre, announced by the ASEANIndia Economic Ministers, to promote trade and investment cooperation between ASEAN and India. • The total trade between ASEAN and India reached US$ 75.6 billion in 2012, surpassing our bilateral trade target of US$7O billion. We recall the target of US$100 billion by 2015 set at the 10th ASEAN-India Summit last year and looked forward to the signing of the ASEAN-India Trade in Services and Investment Agreement by the end of 2013 and its operationalisation by July 2014. • The ASEAN Leaders welcomed India’s commitment to support the Master Plan on ASEAN Connectivity [MPAC) and connectivity in the Wider East Asia region and underscored the importance of promoting stronger linkages between ASEAN and South Asia New Biz Avenues – India is the tenth largest services exporter in the world while Asean is a met importer – Pact to open up greater job opportunities for India’s professionals in the field of IT, healthcare, designing and research – After signing the new deal the FTA will be called the Comprehensive Economic Partnership Agreement (CEPA) – Both sides aim at increasing trade to $100 billion by 2015. 6 M u lt i l at e r a l N e w s l e t t e r
  7. 7. ASEAN The Plan of Action to Implement The Asean-India Partnership for Peace, Progress and Shared Prosperity: Highlights INTRODUCTION The report highlights the progress in the implementation of the projects and activities under the Plan of Action to Implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity (2010-15). A remarkable progress in the implementation of the Plan of Action has been witnessed since the last three years. The successful conduct of a large number of activities and collaborative projects in a range of sectors covering all three pillars, i.e. political security, economic and socio-cultural, was made possible through concerted efforts by both ASEAN Member States and India, and efficient coordination by Brunei Darussalam, Cambodia, and the ASEAN Secretariat. POLITICAL AND SECURITY COOPERATION • India has been actively participating in various consultative meetings under dialogue and cooperation frameworks initiated by ASEAN • Over the past five years, Delhi Dialogue has evolved as a premier ASEAN-centric Track 1.5 platform for discussion on strategic political and economic issues facing the region. The next edition of Delhi Dialogue would be tentatively held in New Delhi in March 2014. ECONOMIC COOPERATION • With the objective of fostering business linkages both in public and private sectors, which is crucial to the expansion of trade and investment relations, ASEAN Member States and India have been working closely to broad-base participation of the business community • Small and Medium Enterprises (SME) remain a key engine of economic growth both in ASEAN and India. FUNCTIONAL AND DEVELOPMENT COOPERATION ±± HUMAN RESOURCE DEVELOPMENT • Telecommunications Consultant India Ltd (TCIL) is preparing a project for linking through Internet-based Virtual Private Network (VPN) the various CELTs, EDCs, Educational Institutions and Health Centers to four content providers on the Indian side, namely, Indira Gandhi National Open University (IGNOU); English & Foreign Languages University (EFLU), Hyderabad; Entrepreneurship Development Institute of India (EDII), Ahmedabad; and Sanjay Gandhi Post Graduate Institute of Medicine (SGPGIM), Lucknow, to provide tele-education and telemedicine services. • India has also been extending financial assistance to the Economic Research Institute for ASEAN and East Asia (ERIA) in Jakarta, which is involved in undertaking policy research on topics of interest to the ASEAN Member States that can contribute to bridging the development gap within ASEAN. • Under the Indian Technical and Economic Cooperation (ITEC) programme, India has been offering 1102 scholarships annually to the ASEAN Member States for a large number of short-term training programmes in various sectors. Additionally, India also provides around 200 scholarships to ASEAN students every year for bachelors, masters and doctoral programmes in premier Indian Institutes every year under the Indian Council for Cultural Relations (ICCR)’s scholarship scheme. M u lt i l at e r a l N e w s l e t t e r 7
  8. 8. ASEAN ±± AGRICULTURE • The ASEAN India Cooperation on Agriculture and Forestry has been progressing well through the implementation of Medium-Term Plan of Action (PoA) for ASEAN-India Cooperation on Agriculture and Forestry (2011-2015). • Meeting of the ASEAN-India Working Group on Agriculture proposed 7 projects for implementation: ɶɶ Exchange of Scientists from Agricultural Research Institutions in ASEAN Member Countries and India including Central Universities; ɶɶ ASEAN-India Fellowships for Higher Education in India and ASEAN Countries; ɶɶ Training on IT Application for Agricultural Extension (e-Extension); ɶɶ Training on Organic Certification for Fruit and Vegetables; ɶɶ Training on Organizing and Implementing Effective National Seed Quality Control System; ɶɶ Training on Conventional and Molecular Techniques for Diagnosis of Transboundary Animal Diseases; and Managing Food Security and Price Volatility. ±± SCIENCE AND TECHNOLOGY • ASEAN-India Science & Technology Digital Library project, spearheaded by Department of Science & Technology (DST), Government of India and the Indian Institute for Information Technology (IIIT), Allahabad, has achieved significant progress. The basic hardware, developed and tested in IIIT-Allahabad, for Content Digitization Centers have been installed at ASEAN Secretariat Headquarters and sites selected by 8 ASEAN Member States (except Singapore and Brunei Darussalam). This is meant for complete digitization of printed knowledge resources into an electronic, shareable form in English and translated forms in local languages. • The ASEAN-India Technology Information & Commercialization Portal (TICP) is being developed by CII and Tamil Nadu Technology & Development Promotion Centre (TNTDPC). The portal would act as a dynamic platform for linking existing technology transfer/licensing organizations, R&D institutions, and laboratories in ASEAN and India for sharing of information and expertise, training, posting technology, contracting research offers, promoting collaborative technology development and facilitating transfer of technologies between ASEAN and India ±± INFORMATION & COMMUNICATION TECHNOLOGY • A consolidated project proposal from the Center for Development of Advanced Computing (C-DAC), Noida entitled 'One Comprehensive Proposal of India to Create a Sustainable IT Infrastructure for Advanced IT Training Using Conventional, Virtual Classroom and e-Learning Technologies' to set up four IT centers in CLMV countries has been approved in the early 2013. Subsequently, a composite delegation from India comprising representatives from Department of Electronics and Information Technology and C-DAC had detailed discussions on modalities of setting up of the IT centers in CLMV countries and the resource Centre in Noida, India. Subsequently, consultations and discussions on detailed arrangement and management, including identification of host institute by CLMV countries, have been undergone to pave the way for the implementation of the project ±± TOURISM • MoU on Strengthening Tourism Cooperation with ASEAN intends to serve as the key instrument for more action-oriented cooperation in the tourism sector, envisages exchange visits of travel writers, tour operators, teachers/faculty of hospitality institutes; participation in each other’s tourism exhibitions; and sharing of best practices in accreditation and standard development in the tourism and hospitality sector. Source: 8 M u lt i l at e r a l N e w s l e t t e r
  9. 9. ADB ADB CII Conference on Promoting Mekong India Economic Cooperation (L-R): Mr Pan Sorasak, Secretary of State, Ministry of Commerce, Cambodia; Mr Nguyen Cam Tu, Deputy Minister, Ministry of Industry and Trade, Vietnam; Mr Rajat M Nag, Managing Director General, Asian Development Bank; Mr Salman Khurshid, Minister of External Affairs, India; Mr S Gopalakrishnan, President, Confederation of Indian Industry; Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry The Asian Development Bank (ADB) and CII jointly organized a conference on Promoting Mekong India Economic Cooperation on the 19th of November 2013 at the Leela Palace Hotel in New Delhi. The conference was addressed by Mr Salman Khurshid, Minister for External Affairs, India, Mr. Pan Sorasak, Secretary of State, Ministry of Commerce, Cambodia, Mr. Nguyen Cam Tu, Deputy Minister, Ministry of Industry and Trade, Vietnam, Mr Vijay Chhiber, Secretary Road Transport & highways, Ms Sharmila Chavaly, Joint Secretary, Ministry of Finance and many other dignitaries. The conference addressed key issues of Physical Connectivity, Trade Facilitation and Trade Finance, Energy Security & Power Trade and Financing Regional Infrastructure between India and the Mekong Region. Speaking at the Inaugural Session Mr. Salman Khurshid, Minister of External Affairs highlighted the need to improve connectivity between India and the Mekong region. The Minister stressed on the importance of stepping up the level of infrastructure financing in all the countries of the region to promote connectivity in terms of land, maritime and air. He requested ADB and other multilateral institutions to step up their engagement with the region in this regard. He pointed out that the trade between India and the Mekong region grew from USD 2 billion to USD 17.4 billion over the past decade thereby recording a compound annual growth rate (CAGR) of nearly 25%. It is with this in mind, he termed the Mekong – India Economic Cooperation as a win-win proposition. He felt that the Delhi – Mumbai Industrial Corridor (DMIC) could be a good model to follow whereby industrial development is being promoted all along the entire stretch of the corridor. M u lt i l at e r a l N e w s l e t t e r 9
  10. 10. ADB He was of the view that to promote business ties between the India and the Mekong region countries, there is a need for all countries to ease the process of issuance of visas as well as to grant longer validity for business purposes. He also requested that all the countries concerned need to ensure that there is mutual recognition of professional qualification to promote further growth of services trade. He also pointed out that India and ASEAN would conclude the FTA in Services shortly and this would pave the way for the negotiations on the Regional Comprehensive Economic Partnership (RCEP). In his address, Mr. Pan Sorasak, Secretary of State, Ministry of Commerce, Cambodia stated that Cambodia is looking forward to cooperation with India. He stressed on the complementarities between India and Cambodia. Cambodia has water, land and other resources while India has the capital, technology and management expertise. He felt that this combination could result in greater bilateral cooperation. He also highlighted the large pool of skilled manpower in India which Cambodia can take advantage of L-R: Mr Chris Sutcliffe, Global Head of Project Finance Syndication Standard Chartered Bank, Dubai; Mr Shailesh Pathak, President, Srei  Infrastructure Finance Ltd, India; Mr Sharmila Chavaly, Joint Secretary (Infrastructure), Department of Economic Affairs, Ministry of Finance, India and   Mr Juan Miranda, Director General, South Asia Department,Asian Development Bank Mr. Nguyen Cam Tu, Deputy Minister, Ministry of Industry and Trade, Vietnam in his address stressed the importance of multimodal transport systems in connecting India and the other countries in the region. He felt that to improve the management of the Mekong India Economic Corridor, there is a need to adopt ICT and GPS based logistics systems. In addition to improving physical connectivity, he was of the view that trade facilitation measures like customs integration, simplification of procedures etc. needed to be carried out in all the countries. While addressing the conference, Mr. S Gopalakrishnan, President, CII stated that in order to take advantage of the enormous opportunity presented by the Mekong countries, India needed to strengthen its manufacturing base. He also suggested that India and Mekong countries could cooperate in areas such as healthcare, IT and education among others. Earlier in his welcome address, Mr. Chandrajit Banerjee, Director General, CII stated that India and the Mekong region have had long historical linkages. He pointed out that the Mekong region is critical for India in light of its Look East Policy initiated in 1992. In this context, he felt that the trade target of US$ 100 billion by 2015 was indeed significant and achievable. The conference was attended by over 175 delegates with around 50 delegates from the Mekong countries. 10 M u lt i l at e r a l N e w s l e t t e r
  11. 11. ADB India's Petronet to Expand Liquefied Natural Gas Terminal via ABD Loan The Asian Development Bank (ADB) will provide a $150 million loan to Petronet LNG Ltd to increase the capacity of Petronet’s LNG terminal in Gujarat state in India to help reduce the unmet energy demand in the country, which has been one of the major constraints for efficient economic growth. “The expanded terminal will help India move toward its target of greater natural gas use, thereby enhancing its energy security and shifting to cleaner forms of energy,” said Siddhartha Shah, Principal Investment Specialist at ADB’s Private Sector Operations Department. The project, which will increase the supply of natural gas to 15 million metric tons per annum (mmtpa) from the current 10 mmtpa, will help meet demand for compressed natural gas for transportation, piped gas to households, fuel for gas power plants, and feedstock for fertilizer plants, mostly in north and west India. The additional supply will translate to a reduction in the emission of around 3.15 million tons of carbon dioxide every year. ADB helped finance Petronet LNG’s first terminal through an equity investment in January 2004. It also financed the first expansion by providing a loan syndicated through a partial credit guarantee from a German development agency. Source: Developing Asia Growth Outlook Steady as Industrial Economies Firm An improving growth outlook in Japan and the United States paired with stronger-than-expected performance in the People’s Republic of China (PRC) support a steady growth outlook for developing Asia, says a new Asian Development Bank (ADB) report. The Asian Development Outlook Supplement, forecasts growth of 6.0% in 2013 for ADB’s 45 developing member countries, improving to 6.2% in 2014. The forecasts are unchanged from the Asian Development Outlook Update issued in October. “Despite uncertainties in the global economic environment, developing Asian economies remain resilient. The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies,” said ADB Chief Economist Changyong Rhee. Advanced economies of the US, euro area and Japan are on track to meet the October forecast of 0.9% growth in 2013. ADB expects 1.9% growth in these economies in 2014, up 0.1 percentage points from the October forecast. M u lt i l at e r a l N e w s l e t t e r 11
  12. 12. ADB The outlook for PRC growth is increased by 0.1 percentage points to 7.7% in 2013 and 7.5% in 2014 on the back of rising infrastructure investment. This boosts the average East Asian forecast by the same magnitude to 6.7% for both 2013 and 2014 as indicators in other economies in the sub region are generally in line with October assumptions. South Asia is on track to meet growth expectations of 4.7% in 2013 and 5.5% in 2014. After bottoming out in the first fiscal quarter, India’s economy appears to have recovered on the back of a rebound in exports and higher industrial and agricultural outputs. India is anticipated to grow at 4.7% in fiscal year 2013 (ending 31 March 2014) and 5.7% in fiscal year 2014, unchanged from the October forecast. A slight moderation is forecast in Southeast Asia. The sub region is expected to post growth of 4.8% in 2013 and 5.2% in 2014; both forecasts are revised down 0.1 percentage points from October. The moderation stems from the impact of tensions in Thailand on consumption and tourism. The devastating impact of Typhoon Haiyan is tempering the Philippines’ 2013 growth, but reconstruction is expected to boost growth as it ramps up in 2014. Growth in Central Asia is gradually recovering, with aggregate projections for the sub region revised up from October forecasts: to 5.7% from 5.4% for 2013 and to 6.1% from 6.0% for 2014. The revisions reflect stronger performance in Kazakhstan and Turkmenistan. Pacific economies are expected to slow from 7.1% growth in 2012 to 5.0% in 2013 before bouncing back to 5.4% in 2014. The projections are 0.2 percentage points lower than in October for 2013 and 0.1 percentage points lower for 2014 as weak international commodity prices are adversely affecting agriculture, mineral, and forestry export earnings of some of the larger Pacific economies such as Papua New Guinea and Solomon Islands. Expected average inflation in developing Asia remains as forecast in October: 3.6% in 2013 and 3.7% in 2014. The Asian Development Outlook is ADB’s main economic forecasting product. It is published each April with an Update published in October and brief Supplements published in July and December. All materials are available at Source: 12 M u lt i l at e r a l N e w s l e t t e r
  13. 13. B20 B20 Coalition Congratulates Bali Conference Leaders On Willingness to Put Aside Differences And Stand Together For Global Prosperity After a week of intense negotiations in Bali, WTO member states approved a final deal on trade facilitation, which is expected to cut trade costs globally by up to 10% and create 21 million net jobs, according to the Peterson Institute for International Economics. Perrin Beatty, President and Spokesperson of the B20 Coalition, declared on behalf of the Coalition members: “The B20 Coalition welcomes the break-through in the Bali Ministerial Conference. The negotiators have been able to remove the last blockages for a package of measures to the benefit not only of the global community, but also each single WTO member country. This is a positive signal for world trade and confirms the WTO’s importance in the system of global trade.” Perrin Beatty also emphasized that “this agreement couldn’t come at a better time. Despite a modest recovery from the crisis, global growth and job creation continues to underwhelm. An outcome in Bali not only brings tangible benefits to businesses by reducing frictions in their supply chains, it signals the willingness of world leaders to overcome differences and stand together in pursuit of a more prosperous world”. The Bali Ministerial, the ninth of the Doha Round of trade negotiations launched back in 2001, was seen as a final test for the future of the WTO. Failure to announce even a modest outcome – the package covers trade facilitation, agriculture and development issues, but leaves out a number of others – would have damaged beyond repair the body’s credibility as a platform for further trade liberalization. About the B20 Coalition The B20 Coalition brings together the most representative independent business organizations from G20 countries with a shared mission to advocate on behalf of more than 6.5 million businesses of all sectors and sizes. Through this broad base, it provides an invaluable link between governments and the businesses communities in the world’s most important economies. This statement is issued in Berlin, Brasilia, Brussels, Buenos Aires, Istanbul, Johannesburg, Madrid, Mexico-City, New Delhi, Ottawa, Paris, Rome, Seoul, Sydney, and Washington DC by the B20 Coalition members. In face of such threats to the global trading system, the B20 Coalition congratulates the trade ministers and negotiating teams on the political will demonstrated at Bali and during the preceding months. The WTO should build on the momentum generated by this important occasion and develop a clear action plan to resolve remaining issues in the Doha Round, which would return the body to its pre-eminent role in the global trading system. Source: M u lt i l at e r a l N e w s l e t t e r 13
  14. 14. THE WORLD BANK $175 Million To Accelerate State Highway Development in India and Improve About 625 Km Of The Core State Road Network Roads will help improve connectivity in 16 districts with a population of 38 million, including the underdeveloped eastern tribal region The World Bank approved a $175 million loan for the Second Gujarat State Highway Project to support the government of Gujarat improve the quality of the state’s core road network, enhance road safety and strengthen the road sector management capacity of the state. Over the last 15 years Gujarat has made considerable progress in developing and expanding its road network. During this period its share of paved roads increased from about 66% to 92%, which is significantly higher than the national average of 58%. The First Gujarat State Highway Project, supported by the World Bank, helped the state build an improved network, reduce the maintenance backlog and develop a robust IT based asset management system for the core road network in the state. However, despite these positive developments, the road sector in Gujarat continues to face challenges related to its transport carrying capacity, access to finance and serious safety concerns. According to a report,[1] over 7,500 people were reported to have died in road crashes in 2010 and many more were seriously injured; this represents an increase of more than 60% between 2000 and 2010. The Second Gujarat State Highway Project, passing through 16 districts of Gujarat with a population of 38 million people, will improve about 625 km of the core state road network. The key components of the project include improving connectivity to the underdeveloped eastern tribal region of the state through construction of roads; modernizing highway financing; helping the government in creating a conducive investment climate for raising market resources; and strengthening road safety management systems. “This project will build on our long engagement in the road sector in India by connecting small and remote habitations in the lagging tribal regions of east Gujarat to the mainstream. Keeping in mind the state’s development agenda, developing a long-term financing strategy for the road sector in Gujarat will also be a priority for the project,” said Onno Ruhl, World Bank country director for India. 14 M u lt i l at e r a l N e w s l e t t e r
  15. 15. THE WORLD BANK “Rapid growth in the state has led to substantial increase in vehicle ownership, taking the state’s motor vehicle density to about 44% above the national average. An important aspect of the project will be to strengthen road safety in order to bring down the number of fatalities and serious injuries from traffic accidents in the state,” Ruhl added. The project will also set up a 30 km safe corridor which will demonstrate measures to improve the safety of pedestrians, bicyclists, drivers, passengers and motorized two-wheelers. The safe corridor will promote energy efficient construction techniques, use of renewable energy for street and junction lighting and benefit from a multi-sectoral approach with better engineering, enforcement, health care and community awareness. “Financing of civil works is a relatively small component of this project. The project will focus on developing new contracting approaches aimed at improving investment and operational efficiencies; pilot transactions which will leverage innovative private sector investments; and also help increase the road sector’s institutional and financial capacity to fulfill the needs of the road users for better and safer roads”, said Arnab Bandyopadhyay, senior transport engineer and the project’s task team leader. The project will also build in a 3-year maintenance liability period into all its civil works contracts. “This will help ensure that maintenance is an integral part of the contractor’s responsibilities under the awarded contract,” Bandyopadhyay added. The loan, from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 18 years. [1] Gujarat Road Safety Capacity Management Review, Global Road Safety Facility, February 2012 Source: For suggestions please contact: 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, mechanical, 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:; Web: M u lt i l at e r a l N e w s l e t t e r 15