NEWS FROM CUTS-2010

British Regime Change Has Boosted India-UK Relations: Lamont
August 23, 2010, Jaipur

“The new coalition regime in the UK represents one of the most radical changes in governance in recent times. Not only has it tightened its belt in regard to spending and gone on an austerity drive to cut out unproductive expenditures, it has wasted no time in conveying its positive attitude towards India with the youthful David Cameron making it here in the first 10 weeks of his office”.

This was how James Lamont, South Asia Bureau Chief of the Financial Times, succinctly summarised the recent events in the UK from an Indian perspective, while speaking at an interactive session organised by CUTS International at Jaipur last week with leading intellectuals and representatives of civil society, media and business.

The event was part of the regular programme of CUTS to organise thoughtful political economic events in Jaipur. In particular, the event debated the possibility of raising the relationship between UK and India to a strategic level.

CUTS International is a leading economic policy think tank, headquartered in Jaipur but with offices in London, Geneva, Hanoi, Lusaka and Nairobi, which is doing pioneering work in the areas of trade and development, economic regulation and governance. The interaction was moderated by the CUTS Secretary General, Pradeep S. Mehta.

Well conversant with South Asia

While Lamont has been stationed in Delhi for the last 2 years, which by modern standards is a fairly long stint for a journalist, like many other Britons he is no stranger to South Asian people, culture and affairs – both his grandparents had spent considerable time in India during the British Raj. Even during his schooldays in UK, he recalls, he had always been exposed to South Asian culture, people and cuisine and therefore, naturally, South Asian affairs.

During the interactive session he commented on both developments in the UK and India and the potential for cooperation between the two countries, with remarkable insight tempered by humility.

He paid tribute to the rapid economic development that had taken place in India over the last couple of decades and the ability of the Indian government, people and regulators to sustain such development when much of the global economy was contracting. “The Indian experience had stood out as a remarkable outlier and thus, many countries including the UK were looking to enhance their economic relations with India to break free of recessionary tendencies”, he added.

UK needs to strike a transformative deal with India

In this context, he pointed towards the need for the UK to strike a transformative deal with India, on lines similar to the India-US nuclear deal which has been extremely successful in deepening relations between the two economies, by drawing on the unique strengths of India and UK.

“The UK, because of its historical linkages, has advantages in this regard”, noted Lamont. “But the current (Conservative-Liberal Democrat) coalition government, unlike the previous regime, had taken clear and significant steps to harness these advantages through the mentioned recent visit to India by a big British delegation headed by David Cameron, the new UK PM, and consisting of several of his ministerial colleagues, leaders of business, and heads of Britain’s leading educational and cultural institutions”.

Lamont then went onto elaborate on the many avenues for cooperation between India and UK – financial services, with relevant British institutions regaining their health after the recent economic recession; manufacturing with potential gains for the business community in both countries through access to each other’s markets and technological collaboration which could help them enhance their competitiveness in global markets; and education and culture because of several historical factors – the extremely large and powerful South Asian community in the United Kingdom, and the bond developed over the last two centuries which the common use of the English language has helped to sustain.

While acknowledging the enormous economic presence of the Chinese, Lamont was quite categorical in saying that Britain should look towards India, and not China, for future economic advancement precisely because of the mentioned bonds.

UK Aid to India more strategic with scope of trilateral development cooperation

“UK’s aid to India should be looked at more strategically, with emphasis on the value generated from DFID’s work on poverty alleviation through the generation of expertise as well as experience from its targeted work in India”, Lamont said while referring to a controversial article in FT by Jo Johnson, a former colleague and a first time Conservative MP. Lamont added that aid to India could also be harnessed for transfer of skills from India to other poor countries in Asia and Africa through a trilateral development cooperation mode.

Lamont’s crisp elucidation of recent events in UK and related potential for India-UK cooperation was followed by a lively interaction which spanned a large range of topics relating to India-UK and even North-South relations.

“Mutual economic benefits for India and UK can be attained not just through trade and investment, but also through collaboration in education and research” said Dr Vijay S. Vyas, Member of the Prime Minister’s Economic Advisory Council in the Q&A session, adding a new dimension to the discussion. In the past, Dr Vyas has headed the IIM, Ahmedabad and has also been a fellow at IDS, Sussex.

D.R Mehta, former chairman SEBI, elaborated on the regulatory follies that had led to the financial meltdown in the United States, which had later evolved into a global economic recession. He pointed to how the Indian regulatory system, through its indigenously developed strengths and innate conservatism, had prevented India from being a victim to the spread of this recession.

Competition with the USA

“The depth of the Indo-UK bond was now being matched by that of the Indo-US bond, with US educational institutions setting up their branches in India and people of Indian origin in the US ascending to important official positions” observed Pradeep S. Mehta, the moderator, in respond to an interjection noted that UK Parliamentarians of South Asian origin could be important facilitators in deepening of bonds between India and UK.

There were many other interjections as well, ranging from the need for Britain to eschew protectionism for its own good and to deepen economic relations with India; the case for freer movement of human capital between the India and UK to maximise the gains from economic cooperation; the return of priceless Indian jewels such as the Kohinoor as a gesture of goodwill; and the common aesthetic appreciation shared by the Indian and British people which could be converted into gainful economic collaboration.

The event not only highlighted the enormous complementarities that could characterise the economic association between India and the UK, it was also a remarkable demonstration of the ease with which the citizens of both countries communicate with and relate to each other.

For more information contact:
Siddhartha Mitra, sm2@cuts.org; +91 97833 98920

Need to Track Implementation of Historic Indo-Bangla Agreements: Sub-regional Independent Task Force
August 23, 2010, New Delhi

“The recent Indo-Bangla accord has increased the likelihood of significant breakthroughs in economic relations between the two countries – if constituent agreements are implemented it is likely that Indo-Bangla trade will not only double in the next 5 years but India and Bangladesh, through reciprocal provision of connectivity, would become major facilitators of each other’s trade with the rest of the world. There is a need, however, to closely track and monitor such implementation.”

This is how Siddhartha Mitra, Director, CUTS International and Convenor of the Indian Chapter of the Sub-Regional Independent Task Force on Connectivity and Cooperation summarised the recommendations made by the task force to the Indian Prime Minister in a memorandum submitted earlier today (see http://www.cuts-international.org/Letter_to_PM_Memorandum_on_Indo-Bangla_Trade.pdf for letter to PM with enclosed memorandum). The memorandum has been endorsed by leading representatives of civil society, business, and media from both countries including Pradeep S. Mehta, Secretary General, CUTS International; Matlub Ahmad, President, Indo-Bangla Chamber of Commerce; Anil Saraf, Director, Federation of Industries & Commerce of North Eastern Region; M.L Debnath, President, Tripura Chamber of Commerce and Industries; and Sanjib Deb, Chief of Bureau, NE Bangla, Agartala.

The mentioned taskforce was formed at a CUTS organised stakeholder consultation at Agartala in August last year and submitted a memorandum to the Indian Prime Minister later that year. Subsequent meetings, involving the foreign ministers and Prime Ministers of both countries, saw agreements incorporating many of the recommendations in that memorandum being reached.

“The task force is extremely happy with the conclusion of the mentioned agreements but realises the need for their speedy implementation through measures such as the construction of the Akhaura-Agartala rail link which would connect India and Bangladesh by rail; provision of transhipment facilities through the river port of Ashuganj and the sea port of Chittagong on a permanent basis by the Government of Bangladesh for Indian goods; and power export from India to Bangladesh. Recommendations for meeting this need were made at a stakeholder consultation organised by CUTS in Agartala on June 20 this year and have been submitted in the form of a new memorandum to the Indian PM”, Mitra added.

In conclusion, Mitra urged the governments of the two countries to provide greater information in the public domain about progress in the implementation of the mentioned measures and install a tracking mechanism involving civil society and media representatives from both countries.

For more information contact:
Anutosh Biswas, CUTS International; ab2@cuts.org, +91 98290 41854