The Hindu Business Line : India cannot go back on reforms: Goh

THE former Prime Minister of Singapore, Mr Goh Chok Tong, now a senior minister, said here on Friday that India cannot turn its back on reforms, "no matter which party comes to power at the Centre."

Delivering the valedictory address on the concluding day of the CII Partnership Summit 2006, on the subject of `Constructing our common home: The Asean-India connect,' he said the pace of reform may fluctuate, but the process is irreversible, because the government of the day will have to deliver the economic goods that the people have come to expect.

Going by China's experience, the flood of investments will come only if India stays on the reform path, he pointed out.

"The intricacies of coalition politics means that time and patience will be needed to forge a national consensus on reforms, and this where businessmen like you can help," he said. According to Mr Goh, one important area for immediate improvement was India's infrastructure, "as many international business rating agencies and businessmen highlight weak infrastructure as the key impediment for India's growth."

The Global Competitiveness Report 2005-06, the former Singapore Prime Minister said, places inadequate infrastructure as the biggest hurdle for doing business in India. He quoted a Singapore businessman who runs a healthcare group, as saying recently that while he was convinced about India's long-term potential, he was still wary of committing more investments now because of lack of good roads, clean water and reliable power in India.

Apart from maintaining the momentum on reform and liberalisation and improving "hardware" such as infrastructure, an equally important dimension, according to Mr Goh, was a mindset change, or "software" transformation.

"For Asean and India to be players in a globalised integrated economy, a globalised concept is needed."

Suggesting that we need to shift away from the old concept that competition is undesirable because it leads to economic colonisation, he said in reality, protectionism produces stagnation, and "breeds complacency and inefficiency, which in turn begets more protectionism."

He said, competition, besides driving economic growth, spurs innovation and compels businesses to become stronger and more efficient, better able to tap the global opportunities.

"You lose some, but you win more, and governments must therefore work to remove impediments to healthy competition."

Mr Goh pointed out that though Asean countries have now recovered from the 1997 financial crisis, the world has not stayed still, and competitive pressures have been building up. China and India are on the rise, Japan's economy is back on track and Korea is remaking itself, he added.

"Last year, China drew in two and half times more FDI than what Asean received, and Asean countries must constantly seek ways to compete, restructure their economies or risk falling behind in the global race." He felt the same logic applied to India.

`Economic pact must be fully implemented'

MR Goh Chok Tong said in Kolkata on Friday that if India's Comprehensive Economic Cooperation Agreement (CECA) with Singapore, in force now for about six months, has to realise its full potential, "it is critical that the agreement be fully implemented".

According to him, CECA can act as a building block for India's comprehensive economic integration with Asean.

He said the agreement has facilitated deepening of trade and investment links between the two countries. He said even while negotiations were going on, CECA has helped heighten awareness between the two countries, pushing bilateral trade in 2004 to $7 billion.

Pointing out that between 2003 and 2005, both bilateral trade and Indian exports to Singapore have more than doubled, Mr Goh said in the first nine months of 2005, FDI from Singapore was about four times that for the whole of 2004.