|Photo: Taj Mahal. Credit: U.S. State Department.|
FROM: U.S. STATE DEPARTMENT
The New Emerging Global Economic Order: Taking the U.S.-India Example
Robert D. Hormats
Under Secretary for Economic Growth, Energy, and the Environment, Bureau of Economic, Energy and Business Affairs
January 28, 2013
As prepared for delivery
Thank you for that wonderful greeting. I am honored to accept your invitation to participate in the Partnership 2013 Summit. For me this is an excellent opportunity to learn from so many distinguished women and men from across India and from around the world. To be back in Agra, against the backdrop of one of the great works of art and love of mankind, the TajMahal, is a distinct and profound pleasure. I am always happy to be in India. On Saturday, I fulfilled a long held wish, when I was able to witness Republic Day in all of its splendor. It is a remarkable event that I will long remember.
I first came to India as a young man. I traveled the Grand Trunk Road and discovered for myself "incredible India" – long before that term became a common one. My month-long journey on buses and trains – and sometimes on top of buses and trains – was one I have never forgotten. I saw up close and in action this country’s vibrant democracy, and rich, diverse, creative society. I was left with a deep and enduring affection for both India’s people and its indomitable spirit.
It is common knowledge that we are in the midst of an historic realignment in the locus of economic growth and demographics globally. Emerging economies in South and East Asia in particular are making, and are projected to continue to make, historical gains.Some in the developed world may find this threatening. I view the growing regional linkages and rapid economic growth in Asia as an opportunity to expand the economic pie and create additional growth for all.
A New Silk Road linking Central and South Asia as well as an Indo-Pacific Economic Corridor linking the rapidly expanding economies of South and Southeast Asia would help unlock and expand markets for global goods and services.
I will speak more about regional economic integration on Wednesday, in Delhi. But today I want to focus on the role industrialized countries and emerging economies can play together in the rapidly changing global economic order.
I believe nations like mine can seize this opportunity to develop new sets of cooperative relations with emerging economies to increase trade, encourage closer cultural ties, boost energy production and reliability, address environmental challenges, and improve global stability. We seek new partnerships to address the needs of the 21st century.
The burgeoning U.S.-India economic relationship is a prime example of how this is unfolding. I am not a believer in a zero sum game. The more we, and other nations represented here, can cooperate in ensuring a fair, transparent, rules based trading and financial system, with broadly shared responsibility, the more we all will prosper. The New Global Economic Order will require both the utilization of current institutions, but also pragmatic bilateral and regional cooperation.
The depth and breadth of U.S.-India ties make this relationship a model for discussing Global Partnerships for Enduring Growth – the theme of our conference. I’d like to discuss why we take this relationship so seriously.
As President Obama told the Indian parliament last year, the relationship between India and America will be one of the defining partnerships of the 21st century, rooted in common values and interests. We not only welcome India as a strong and influential participant in the world economy, we fully support it. I would say the same about the nations of ASEAN and others in this region. Indeed, we see ASEAN and India as two of the strongest pillars of the global economies in the 21st century.
When people ask why the United States is so interested in expanding its ties with India, my response is three-fold – One, our ties make geo-strategic sense. Two, they make geo-economic sense. And three, and most importantly, our citizens will benefit from it.
In India, Prime Minister Singh has labeled this the "Decade of Innovation." He concurrently established the National Innovation Council to create policies that support medium-to-long term innovation in India. As the Government of India notes in its draft National IPR strategy, "for innovation to create any impact, it is imperative to take the idea from the mind to the laboratory to the market."But to do that, innovators in areas such as information technology, pharmaceuticals, and clean energy need assurance that their ideas will be protected throughout that process. This is not only for them. It encourages more innovation and investment in these and other sectors. That is why we strongly support working together with India and other nations of Asia to ensure a strong intellectual property rights system that will encourage high-technology innovations, providing wide-spread benefits to all of our nations.
We also encouragethe Indian government and all of our trading partners to considera range of market-based solutions that can better support jobs and growth, while creating a level playing field.Predictable and clear policies will encourage businesses to expand, and to devote the long-term capital and resources required for further growth.Working together, the United States and India can realize the kind of innovation our leaders envision.Science, technology, and the environment are areas characterized by mutual interest and expanding cooperation.
Our collaborative effort in agriculture includes efforts to stop food loss between the farmer and the consumer, increasing prosperity for both. Such losses are enormous and a great tragedy. This can be prevented by cold chain storage and other methods. Companies are willing to invest in such systems if given the right opportunities and a welcoming environment.
On the investment side, the U.S. and Indian governments have engaged in Bilateral Investment Treaty (BIT) negotiations. We’re aiming for a BIT that gives a high level of openness to investment across the economy, provides strong rules on investor protection and transparency, and offers effective means for resolving investment disputes.Our S&T cooperation includes cutting edge work in space science, where we work together on Earth observation satellite projects that help us predict monsoon patterns and respond to natural disasters.
The Clean Energy Finance Center in New Delhi represents U.S. agencies that have mobilized more than $1.7 billion for clean energy projects in India, working in tandem with Indian government and industry partners. We both benefit from our comprehensive strategic dialogue on energy, in light of dramatic changes in technology and in the global energy market . This dialogue takes on even more importancewith the growing role of the Indian Ocean in global energy shipments, regional energy and maritime security, growing power needs, and sustainable clean energy objectives. We seek a broader and deeper dialogue on energy, for similar reasons, with countries in south and east Asia. We do not see the American energy boom as a reason to pull back from engagement, but as an opportunity to expand mutually beneficial engagement.
In addition to business connections, people to people connections are one of our strongest links.
More than 12,000 American alumni of Indian institutions are part of our efforts to strengthen and broaden relations with India.So are the more than three million Indian-Americans living in the United States. And last year, over 100,000 Indian students came to the U.S. to study.
With the increasing connectivity of our universities, our businesses, and our civil societies, we are seeing more engagement than ever. And I think thatincreasingly,state-level and city-level leadersin both countries, see great opportunities for their citizens from new city-to-city and state-to-state partnerships. Theseare creating the next generation, and a deeper level, of economic diplomacy. More and more international economic diplomacy will be the work of mayors, governors, chief ministers and their teams.
• Madhya Pradesh Chief Minister Chauhan recently visited the U.S. to describe his state’s ambitious agriculture reforms, including loan guarantees to farmers, improving irrigation, and "a single window system" for expeditious foreign investment approvals;
• CII—our hosts today—recently brought a delegation of business leaders from the state of Jammu & Kashmir to visit several U.S. cities. J&K has developed cold chain infrastructure with the help of U.S. partners that preserves apples as they go from farm to market, much as Tamil Nadu has done for bananas. Both are very positive examples;
• Kentucky Governor Steve Beshear just announced a 25-year coal deal between American companies and India;
• Washington state’s Governor Christine Gregoire has established partnerships in energy, life sciences, and film; and
• City mayors like San Antonio’s dynamicJulian Castro—who will also be participating at this summit tomorrow—are building ties with new and existing India partners.
• Our Maryland Governor Martin O’Malley led a trade mission to Andhra Pradesh, Maharashtra, and New Delhi. Thisrepresented the largest ever state trade mission to India. Because Maryland is my home state I am especially proud of this.
In the Third U.S.-India Strategic Dialogue, Secretary Clinton welcomed Minister Krishna’s proposal for a "Conversation Between Cities" to take place in 2013 to address "urban challenges and solutions in the 21st Century."
Our states and our cities are the real laboratory test tubes of democracy and creative economic policy —where our citizens are in close and direct contact with their local governments, where our entrepreneurs establish and develop new business that drive employment, and where our institutions of higher education help us all enhance our skills and retrain for new opportunities.
So the robust connections between Indian and American states and cities are a welcome commercial development, and offer both countries more ways to take the strategic partnership to an even more ambitious level. We seek to do the same with others in this region.
While we have come far, we still have more work to do to ensure this relationship achieves its potential. The United States is enormously optimistic about India’s future –
(1) that India’s greater role on the world stage will enhance peace and security;
(2) thatfurther opening India’s markets will pave the way to greater regional and global prosperity;
(3) that Indian advances in science and technology will improve lives and advance human knowledge everywhere; and
(4) that India’s vibrant, pluralistic democracy – where the rights of men and women are equally represented and both have an equal opportunity to succeed and contribute – will produce measurable results and improvements for its citizens.
But our governments cannot assume the relationship will be self-sustaining without mutual effort. This is the challenge we all face today. We have the opportunity to establish a framework for enduring growth for our two countries. And all of our countries together need to establish a series of bilateral and regional partnership for Central Asia, for East Asia, and for connections between them. Now each of us individually and – all of us– need to take the next steps to ensure that this process continues and strengthens.