The Indo-Pacific economy beyond COVID: An Indian view
By Dr. S Jaishankar
The Indo-Pacific represents a return of history. A seamless and integrated space was disconnected decades ago by the strategy of the day. Today, as many Indian Ocean economies trade further east and as Pacific ones have displayed a presence south and westwards, we are quite sensibly seeing the landscape for what it really is. Indo-Pacific reflects the reality of globalization, the emergence of multipolarity, and the benefits of rebalancing. It means the overcoming of the Cold War and a rejection of bipolarity and dominance. Most of all, it is an expression of our collective interest in promoting global prosperity and securing the global commons. The Indo-Pacific Oceans Initiative advanced by India clearly validates this assertion.
The transformation of the last decade is today overshadowed, unfortunately, by the impact of the COVID-19 pandemic. It has disrupted our supply chains, negatively impacted manufacturing, made international trade unpredictable, and ruined many services sectors. Globalized production networks remain vulnerable and fragile, with global merchandise trade falling by 5.6% in 2020, compared to 2019, and the predicted trade in services declining by as much as 15.4% in the same duration. This decline in merchandise trade is the sharpest since 2009, whereas the decline in services trade is the biggest since 1990. The hit taken by travel, transport, and tourism activities is alarming and really moves us into unchartered territory.
Even as we each plan our national and collective recovery in these difficult circumstances, there are three issues that the pandemic has brought to the fore: 1) The salience of health, 2) the power of the digital, and 3) the importance of building or re-building greener.
COVID-19 had brought out many inadequacies in the global health system and resulting debates. What is relevant for us here is to recognize that in every society, the expectation of our public with regard to health has gone up. This is particularly so in developing countries, including India. Whether it is the next wave, the next pandemic, or indeed something quite different, part of the answer lies in greater international collaboration. This means working together not just of governments, but of businesses and the medical and scientific professions.
Prime Minister of India Narendra Modi has called for adopting a ‘One-Earth-One-Health’ approach at the recent G7 Summit where India was a guest. We need meaningful partnerships, sharing of advanced technologies, collaboration in vaccine and pharmaceutical production, capacity building, and transparency in health information. And in all of this, the role of our private sectors is critical.
The compulsions of the COVID era have all made us much more digital. This may be literal in terms of contact tracing and vaccination registration; facilitative in terms of home delivery and virtual calls; or just a lifestyle, in case of work from home. New opportunities and efficiencies have been discovered in that process. And accordingly, the risks, too, have magnified.
High-speed internet, cybersecurity, enhanced digital literacy, deeper technical cooperation, regional e-commerce, and efficient e-governance will have a more salient place in the conversations in the coming days. The strengthening of digital connectivity both within and between the countries of the Indo-Pacific is an essential condition for our economic prosperity and development. Like-minded countries must work together for data-driven digital development partnerships. The templates of that could draw on the framework that governs existing development partnerships.
COVID may have slowed the building of the global economy and the promotion of economic development; it has obviously not stopped it. This is, therefore, an occasion to reflect on how to build greener. Collaborating more closely is obviously to our mutual benefit. Our collective efforts can certainly redefine the quality of infrastructure and indeed the nature of urbanization. They can make agriculture more sustainable and harness the Blue Economy more seriously. Physical and digital connectivity remain important for supporting shorter, efficient, and diversified supply-chains, risk mitigation, enhanced trade facilitation, and reduction in the costs of intra-regional trade.
India is responding to these challenges of recovery and re-building. We have reformed even as we have rebuilt. On health, our programme of wider coverage has been accelerated by the rapid expansion of health infrastructure. Currently, mass vaccination and addressing the ongoing waves are the focus. But the goal is to transform the sector entirely by augmenting human resources, equipment, and capacities. On the digital side, the expansion of connectivity, a skills initiative, and a start-up culture are helping to change the game. On infrastructure, a range of initiatives is unfolding that will surely spur greater investment. On agriculture, empowering farmers and enabling freer trade has been matched by a stronger commitment to post-harvest infrastructure. And across 13 key sectors, performance-linked initiatives promise to upscale manufacturing. And all of this is encapsulated by a framework that envisages an India of deeper strengths, greater capacities, and more responsibility.
In conclusion, my message is this: India is fast emerging out of the second wave and will witness a strong economic recovery. It will be a more dynamic and friendlier business destination. We will contribute to being an engine of growth for the global economy. And we will be very much a part of more reliable and resilient supply chains that the post-COVID world requires. International cooperation, especially among businesses, will be very much a key to the better world that we all seek. The Indo-Pacific — a region in which we are so deeply invested historically — will be an arena of particular activity and energy for India.
Based on the External Affairs Minister of India Dr. S. Jaishankar’s address to the CII Indo-Pacific Business Conference on 6 July 2021
