India, Singapore & the Mekong Basin

By V. Jayanth

THE SINGAPORE Prime Minister, Mr. Goh Chok Tong's offer to make the city-state a catalyst for India's economic reforms comes at an opportune time. Those who have not fully comprehended its capacity might even wonder how such a small country with just three million people dares to make the offer. But that is exactly what Singapore can do best - market. Way back in 1993-94, Mr. Goh realised the importance of India and decided to focus Singapore's attention on the `caged tiger' as this country was first described.

Now that the Indian economy is all set to grow at a sustained level of around 7 per cent and perhaps accelerate the pace in a couple of years, the opportunities for trade and investment can only increase. It is not as though Singapore will emerge as the main investor, but it can certainly undertake a joint marketing of the potential. For such a small state, it can boast of the largest presence of multinationals which have shaped the emergence of its new economy. This, in addition to its presence in and understanding of East Asia or the Asia Pacific region, makes Singapore an ideal partner to venture into that region or funnel investments in India.

For Indian industry, it is important to expand and attract more investment inflows. It has to become a regional and then global player. Some time ago, Mr. Goh made an offer to a visiting CII delegation for joining a combined trade and investment mission to a third country - Vietnam, for instance. Instead of risking it alone in a virgin territory, joint ventures are a worthy option. What is being thought of is to marry India's enterprise or appropriate (affordable) technology with the investible surplus in Singapore and its marketing expertise. That combination can provide a cutting edge in not just Southeast Asian countries but the entire East Asia.

Singapore took the initiative to focus attention on emerging India. In 1997, it hosted the first Global Indian Entrepreneurs Conference to begin networking not just non-resident Indians but the ethnic Indian community around the world. The objective was to emerge as a catalytic force to channel investments in India and offer a wide range of consultancy as well as financial services for those who want to set up shop in the country. A follow-up conference was held in India but that became an NRI show. Mauritius is planning to host the next conference later this year, since a lot of foreign investment in India is being routed through that country.

There was a setback to the emerging Indian economy following the collapse of successive coalitions from 1996 to 1998. Now that the Vajpayee regime appears holding and the economy is on the road to a 7 per cent growth in the GDP this year, there is a renewed interest in India. If the Finance Minister, Mr. Yashwant Sinha, pushes through the second generation reforms, besides completing the earlier round of liberalisation, red tape and bureaucracy may be kept out of the way of foreign investors. These have been the major impediment to realising the economic potential, besides the dithering by politicians in power over policy.

India has a good focus now on Southeast Asia and may be strengthening its equations with Thailand, Indonesia and Myanmar. But it cannot afford to lose interest in Indochina, which is now being marketed as the Mekong Basin, with southern China as an additional element and the ADB deeply involved. Because of the East Asian economic crisis, a whole lot of Mekong development programmes were put into cold storage. With economic recovery, it is quite likely that some of these will be revived before long. It is in that context that Mr. Goh's offer and Singapore's expertise should be considered. Together, India and Singapore can do a lot in that region. Both countries have a keen commitment to the region and have already taken an interest in Vietnam, which is also gearing for some much-delayed economic reforms. India invested politically in Indochina a good three decades ago and still remains an `old friend' of Vietnam, Cambodia and Laos. The stage has come to convert that political capital into economic opportunities and cooperative ventures.

There are signs of political stability in troubled Cambodia and its strongman, Mr. Hun Sen, visited New Delhi recently. India has kept in close touch with the Indochina leaders and it is now time for the private sector to venture into that region and tap the opportunities. With the ASEAN Free Trade Area coming into full operation by 2003, it will be useful for the Indian companies eying exports to Southeast Asia to get a foothold in the region and become eligible for free trade benefits as well as special schemes for investments.

Similarly, Singapore has invested heavily in Vietnam without being able to reap the full dividends. Hoping that the reforms would be completed in the 1990s, it went into industrial parks in two areas of Vietnam. Though some developments have taken place, the regional economic downturn has slowed down both the reforms and the flow of investments. The city-state will want to complete and market these facilities and Indian companies could think of tie-ups with Singapore's investors to tap the potential in Vietnam.

More than getting involved in individual countries, India's public and private sectors must look for opportunities in the whole region - the Mekong Basin. Transport, communications and infrastructure are the key sectors that will receive first attention, followed by the service sector. At least for the next decade, the region will not be able to afford Western technology and that is why most of it is looking to India for relevant, appropriate and affordable technology. Agriculture will be an area of prime focus and here too, India and its scientists can provide vital inputs to the region.

But the real life-line of the region will be the Trans-Asian Railway. With the Bangkok-based ESCAP also getting involved in the studies, experts are planning to link up South Asia with southern China, to start with, and ultimately with Russia and Central Asia, where there is already a network. India must not only be concerned about establishing the South Asian link or tail to connect with Myanmar, Thailand and Indochina but also get a slice of the project consultancy/construction. The public sector railway companies such as IRCON and RITES must be able to get involved in the evolution and construction of this dream project. Besides energising Indochina, such a railway network which connects parts of South Asia, Southeast Asia, China and Central Asia (perhaps into Europe) can change the face of the region and revolutionise trade.

An equally fascinating sector for India to take the lead is information technology. With Singapore's partnership, it will be easier to enter not just the less developed areas of Southeast Asia but also Indochina. Beginning with computer education, the effort should be to gradually enhance training and exposure to core areas of IT in due course. But when it comes to reaching out to Indochina, Thailand will be a useful partner, and it also hopes to become the gateway to Mekong Basin states. A joint strategy to develop and tap the potential of that region could form the basis of the next phase of the India-ASEAN partnership.

Send this article to Friends by E-Mail

Section  : Opinion
Previous : Preserving the sense of nationhood
Next     : Concorde crash