Welcome Address By Mr. Y K Modi, President-Elect FICCI

• Dr Francis Fukuyama,
• Dr Sunil Khilnani
• Dr Walter Anderson
• Dr. C Rajamohan
• Dr Rollie Lal
• Dr Amit Mitra

Your Excellencies & very distinguished participants from different walks of life

We stand at a juncture of history when the pangs of an emerging global order are permeating the air. There are new threats, new strains and undoubtedly, new opportunities, knocking at the door of nations today. The question before us is 'How do we combat these threats through internal and external strategic initiatives and through fresh alliances and new vistas of collaboration - be they military, internal security or business? How do we absorb and digest the strains created by the global tectonic shifts under way? And most importantly, how do we take fullest advantage from the windows of opportunities that are surfacing, particularly in the domain of business and diplomacy, as the great paradigm shifts unfold?

This symposium at FICCI will address these fundamental concerns and come to some broad conclusions and I am hoping that we will build on them in the years ahead. FICCI's 125 economists and social scientists under this single roof at Federation House, will collaborate with SAIS's vast scholarly pool located in the heart of Washington D.C. I am hoping that this is the beginning of a deepening partnership between the thought leaders of India and USA, nurtured by SAIS and FICCI. I welcome you all to this momentous event this morning.

The most stunning paradigm shift began when the Berlin wall came tumbling down faster than any body had imagined. From a conflictual bi-polar world defined by the Cold War, we moved unwittingly to a unipolar world with one super power, the USA. The differences to how to run the world affairs - with new dimensions, but the debate over political economy had been settled - market driven economy, bolstered by electoral democracy had won out - thus came the young Fukuyama's provocative essay - 'the end of history'.

However, little did we know that a new kind of threat would engulf the world, till the twin towers of Manhattan came tumbling down on 9-11. Was it the final manifestation of Huntington's Clash of Civilizations or was it just a limited movement, involving the extremists within Islam who were a set of outliers, an aberration of a great tradition?

Ladies and gentleman, India had been a victim of over 50,000 deaths in the hands of terrorists over decades, yet with little global concern or consciousness, let alone sympathy - 9-11 may have changed that a bit for us, I hope. We will have to fight our own battle. The positive vibrations between India and Pakistan over the last few weeks is encouraging and FICCI strongly supports the Prime Minister's challenging statement at the HT meeting on the 12th - why not move towards open borders and a common currency. Over a billion dollars of unofficial, read smuggled or third country trade with Pakistan, as per a FICCI study, can become official in moments. The incremental approach could give way to giant steps in history.

This is already unfolding between India and China. Our trade has jumped to 7 billion US dollars from one billion in mere 3 to 4 years and FICCI is looking at doubling this in 3 to 4 years - I was there with in Beijing accompanying our Prime Minister some months ago with a large FICCI delegation and I can you tell you that the vibrations on the ground were remarkable, indeed. As we look back, not too long ago we were worried that Chinese goods would simply swamp India and lead to closure of our manufacturing industries. Today we are exporting steel, specialty chemicals, yarn and fabric and what not to China - building trust and partnerships. While threats still remain, strains still hover over us, India and China are learning to take advantage of the window of opportunity opened by the new paradigm of global intercourse.

A part of this churning and global re-alignment surfaced in Cancun. 20 powerful developing nations came together to assert their rights on a fair trading regime in agriculture and when China, India, Brazil, Indonesia, Egypt, Malaysia, South Africa and others stand up together, the world in WTO listens. 16 developing nations came together on 'Singapore Issues' and once again the developed nations responded. These alliances were not possible in Doha, but became a reality in Cancun and India played a pivotal role, indeed. When more than half the world population speaks, it has to be heard.

In the economic domain, there was a threat to India in 1991, arising out of our own doings when we were left with 10 days of foreign exchange for imports - a mere reserve of a billion dollars. Rising like a phoenix, driven by liberalization and what FICCI calls as calibrated globalization, we today have foreign exchange reserves of nearly US$ 100 billion, currently at over US$ 96 billion. The debate ironically has thus shifted to "is it too much for the health of the economy and what do we do with these reserves".

Similar threat was faced by India during the East-Asian financial meltdown, where we had to stop the contagion. But, the threat was handled deftly, because we had judiciously avoided going into a total Capital Account Convertibility. We had carefully introduced Current Account Convertibility, allowed repatriation of all profits and had included a dynamic foreign institutional investment structure, but that extra bit of total convertibility we held back and that kept the contagion out.

Today, we are on the threshold of an outsourcing revolution, not just in IT and BPO, but most importantly - in manufacturing as well. But a new threat has emerged, the threat of 'new protectionism' from nations that have been the votaries of free enterprise and free trade. Yes, the US has an election round the corner. But our friends in the US must understand that we too have political compulsions within our equally vibrant democracy, of a billion diverse people. And time and again, we have faced these compulsions with determination to liberalise and globalise our economy. I am happy that the saner elements of American and European nations have begun to counter the threat of 'new protectionism' based on our common fundamental values of freer trade. Either allow movement of naturalized persons or jobs will move to India.

We must not forget India still has major divides within its own polity and economy, which we will need to bridged - the literacy divide, the digital divide, growing divide between income groups, rural and urban divide and so many other challenges. These divides are the real threats today, to the sustainability of our reforms and perhaps even democracy. But FICCI is convinced, we shall over come, we have a dream, and a dream larger than the BRIC of the Goldman Sachs study.

We now have a resurgent and vibrant India, it is beginning to realize and adapt itself to the fact that it has to play a role of serious global player - a part of so-called big boys club. As it has,

- one billion people
- fourth largest economy
- nuclear power
- favourably demographics of youth

This Symposium will, I am sure, bring out different elements of the emerging global order, its contradictions, its inner strengths and its vast opportunities. It will discuss India's role in this new global matrix. Our distinguished scholars will provoke us to think and reassess our perspective as we re-examine the landscape of the unfolding 21st Century.

Thank you.