"Advantage India"
Opening Remarks by
Haruhiko Kuroda
President
Asian Development Bank
India Day Seminar
At the India Day Seminar
4 May 2006
Hyderabad, India
I. Introduction
Honorable P. Chidambaram, Finance Minister of India; distinguished guests; ladies and gentlemen:
I am delighted to be here in Hyderabad - or, as some are now calling it, "Cyberabad" - a city that symbolizes India's growing prowess in the frontier areas of information technology and IT-enabled services.
On behalf of the ADB Board of Directors, Management and staff, I would like to convey our sincere appreciation to the Government and the people of India for welcoming us all so warmly for our 39th Annual General Meeting. The selection of India as the venue for this year's meeting underscores the long-standing, close relationship between ADB and India. India is a founding member of ADB, its fourth largest shareholder, and one of its largest clients.
II. India's Progress in Development
The last time ADB held its annual meeting in India was in 1990, when the Board of Governors convened in New Delhi. Since that time, the face of India has changed dramatically. Today, a remarkable sense of optimism pervades the country - and for good reason.
India's economic performance in recent years has been among the best in the world. The many reforms undertaken since the early 1990s have unshackled the economy. As a result, the long-term trend rate of growth has steadily increased from an average of 3.5% a year during the 1950s through the 1970s, to more than 8% annually over the last 3 years. And robust growth is projected to continue in the coming years.
India's large number of scientists, engineers, doctors, lawyers and financial managers gives it a real comparative advantage, and has helped the country emerge as a global hub for services. One of the key factors behind India's success is the widespread and rapid development of telecommunications and information technology. This rapidly growing industry has triggered a cycle of higher investment in education and training, leading to more and better jobs, leading in turn to more domestic demand for automobiles, modern fashion, retail banking and other consumer goods and services.
The dynamism shown by India's private sector is remarkable. And many of you are making forays into overseas markets as well. Your experience and expertise will be highly relevant to other developing economies in the Asia and Pacific region.
Importantly, high growth has led to a steady decline in poverty. The latest official estimates tell us that the number of people living in poverty in 1999-2000 was around 260 million - a notable reduction from the 320 million poor in 1993-94. The number has very likely declined further since the last official estimates became available.
A great deal remains to be done but I believe that India is headed in the right direction. I would like to complement the Government of India on its prudent and effective management of the economy, and for continuing on its path of reforms.
The Government's efforts to increase infrastructure investment, improve the fiscal situation, and make the process of growth inclusive through a renewed focus on agriculture, rural development, and employment generation are strong steps in the right direction.
Another way growth can be made more inclusive is through strengthened regional cooperation and economic integration, which can reduce income disparities both within and among countries. Regional cooperation and integration is also an important step towards full integration with the global economy, and a vital avenue for financial, economic and political stability.
India has taken several major steps in this regard in recent years, by strengthening its dialogue with other nations and signing framework agreements to enhance regional economic and technical cooperation. As a strong believer in a strong and economically integrated Asia, I do hope that India will continue to champion and forward the vision so eloquently expressed by the Indian Prime Minister at the SAARC Dhaka Summit earlier this year when he called for collective action and greater integration in the region to overcome the multiple economic and social challenges.
III. ADB a Partner in Development
As a partner in India's development, ADB is committed to supporting the Government's efforts to promote sustainable, inclusive economic growth. In line with the Government's priorities, we recently strengthened our operations in agriculture and rural development, and shifted the focus to less developed states and regions to help in developing their capacities, reducing disparities and achieving the Millennium Development Goals.
One of India's greatest development challenges - shared by many countries in the region - is meeting the demand for infrastructure. Infrastructure to support the country's rapid growth, and to extend basic services to the poor. To help address this challenge, both ADB's ongoing operations in India and the proposed program for 2006-2008 focus primarily on infrastructure in the three core areas of transportation, urban development, and energy.
In transport, for example, ADB has assisted India with the first two phases of the National Highway Development Program, and we are now exploring how best we can help with the subsequent phases while attracting private participation and investment. We are also working with India to upgrade a number of rural road networks.
In the energy sector, we are working with the Power Grid Corporation to improve the national transmission grid, and with central power utilities to help increase hydropower capacity. Our state power sector loans focus on upgrading transmission, distribution, rural electrification, and capacity building of power sector institutions.
In urban areas, our ongoing infrastructure development program focuses primarily on water, sanitation and waste management, with targeted poverty reduction components and a strong focus on municipal reforms and capacity building. More such projects are programmed for the years ahead.
We also recently committed to increasing our support for the Government's efforts to reinvigorate the agriculture sector - particularly through assistance with improved management of water resources, rehabilitation of rural finance institutions and development of the agribusiness sector and commodity markets.
By focusing operations in these sectors, we believe we can complement the Government's efforts in reducing income disparities and creating conditions for broad-based, inclusive growth.
IV. Concluding Remarks
Ladies and gentlemen: India is very much an unfolding story of development success. Its continued economic and social progress would give a tremendous boost to the achievement of the millennium development goals in the Asia and Pacific region - and for the world as a whole.
Let me conclude today by wishing all of you continued success in your endeavors. We thank you for participating in today's seminar, and look forward to your valuable views and feedback.
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