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Showcasing the 'emerging South'

EXIM bank's annual day lecture presented a platform to discuss the changing structure of world economy and what role does the emerging South plays in it. Suja Nair reports

The EXIM bank's, 23rd annual day commencement lecture was held at Y B Chavan Centre on 18 March 2008. Prominent members of the business world attended the annual lecture with jest and enthusiasm. T C Venkat Subramanian, Chairman and Managing Director, EXIM bank, gave the welcome speech. He spoke on how over the years the lecture series has been successful and has earned recognition as an important milestone in contributing to debate and discussions on contemporary trade and development issues impacting global economy. The lecture was presided over by eminent speaker Kemal Dervis, Administrator, United Nations Development Programme (UNDP), who spoke on 'Perspective on the new structure of the world economy'. The lecture highlighted the significant structural changes that have taken place in the global economy in the recent years, characterised by the increasing share of emerging south driven primarily by India and China, in the global GDP.

Dervis focused on two major dimensions of world economy in his lecture. He initiated the session by speaking on global growth acceleration and the financial sector. Here he shared his thoughts on the role the financial sector has played in the recent world economic events in a long-term perspective. He pinpointed that the significant growth in the percapita income is a relatively modern phenomenon in a long-term historical perspective, triggered by the techno-logical progress of industrial revolution and associated with increased integration of the world economy. He spoke on how from last two decades the economic growth have been rapid and accelerating which saw only three interruptions i.e. around 1997, then in 2001 and the current one in 2008, though he did admit that it is very difficult to estimate the implication of the latest interruption. Elaborating on the reasons of these interruptions he said, "These recent interruptions are not associated with wars or periods of trade disintegration. Instead, all three of them have been caused by financial sector difficulties of a more or less global nature."

He stressed on how financial affair can never be purely a private affair. Its failure affects the whole economy and its citizens. So it is necessary to be regulated in a way that encourages responsibility, a longer term horizon and an evaluation of risk by its managers that is not truncated by the unavoidable need for the socialisation of large losses.

In the second part he spoke on the changing structure of the world economy, where he pointed out, in the current century how globalisation and the growth of emerging south has been seen as a powerful force of convergence gradually equalising income in the world and over the hope that the weight of south may now protect the world economy from a major recession. Dervis opined that it is time for the emerging south to assume increased role in the international community. He stressed the imperative of having in place financial sector regulations that focus on the nature of such structural problems in the financial sector, rather than using short-term macroeconomic instruments to reap to enjoy the benefits of technical progress and global opportunities in a more steady fashion.

After Dervis's lecture the function was presided over by Dr Arvind Virmani, Chief Economic Advisor, Government of India, Ministry of Finance, who shared his expertise on the subject. Later on the event witnessed question and answers session. Dervis also released a special publication of EXIM bank titled 'EXIM bank presents a retrospective' which depicts on the evolution of EXIM bank in a dynamic trade environment and its catalytic role in promoting, facilitating and financing the international trade of India. The function was attended by distinguished audiences like diplomats, senior bankers, corporate executives, academicians, research students and representatives from industry associations and chambers of commerce.

suja.nair@expressindia.com