“A part of our own solution”

“A part of our own solution”
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First Published: Fri, Mar 28 2008. 06 19 PM IST
Updated: Fri, Mar 28 2008. 06 19 PM IST
Apart from its surprisingly cheery projected growth rate of between 8.5 and 9.5% for India, the United Nations’ Economic and Social Commission for Asia and the Pacific (ESCAP) also deplored the state of agriculture and urged climate change reforms.
On the release of the Economic and Social Survey of Asia and the Pacific 2008, United Nations Under-Secretary-General and ESCAP Executive Secretary Dr. Noeleen Heyzer spoke to MINT about the environment, agriculture, and India’s prospects:
Your report specifically mentions how agriculture has lagged behind growth in the Asia-Pacific region, and how it has been ignored in policy. What is behind that?
Yes, it has. Agriculture has been neglected. Growth has been concentrated largely in manufacturing, service and knowledge sectors, and as a result, agriculture has been ignored. This in a time of rising food prices and food insecurity. There are 641 million living in largely rural poverty in the region. Governments, however, have tended to look at urban centres as hubs of development. Cities did pull countries forward, but it is now time for the next phase, a more inclusive growth phase.
In that context, what is your opinion on the recent loan waiver announced by the Indian Finance Minister? Is it regarded as an ad-hoc, one-off move?
Oh no, I think it’s an extremely good initiative. It has recognised that agricultural indebtedness is a problem. But of course, it has to be a part of a bigger solution. I have spoken with Prime Minister Manmohan Singh and Commerce Minister Kamal Nath, and they are both aware of the importance of food and water security. So I don’t think it seems like a one-off, more like a first step in the right direction.
In an atmosphere where countries like India and China feel compelled to maintain high growth rates, how feasible will it be to do what your report suggests - sacrifice some growth to cut emissions and adopt clean technology?
I think promoting what we call “green growth” should be feasible. If oil taxes, ecological taxes, and carbon taxes all go up, the industry will begin to change. I was in Australia two weeks ago, where industries wanted to change of their own accord, and they were demanding to find out the framework of climate taxes. There is also the carbon market, which can potentially be worth as much as $1 trillion.
The first discussion on climate change, after Bali, is taking place at ESCAP in Bangkok on March 31. In fact, I’m returning just to attend that. So these are all new conversations. We shouldn't wait for the West to tell us what to do, I think. We should be a part of our own solution.
Your report also says that India and China will both remain largely insulated from the American downturn and the credit crisis. How confident are you of that claim?
Well, we say that India and China are insulated at the moment. There are not many exports going from India to the United States, so the exposure is limited in that sense.
But there are significant linkages in equity markets, FII...
Yes, that’s true, there are. But our optimism is based on macroeconomic fundamentals, which we believe are strong in both countries. What happens further down the line will depend, I think, a lot on regional coordination, on whether we can pull together mechanisms to look at regional economies and markets.
Such as the Chiang Mai Initiative by ASEAN+3, a network of bilateral agreements among members?
Like that, yes. The Chiang Mai Initiative has to be spread. We hope to convene governments to look at new mechanisms -- look at currency appreciation for example, or at capital inflows to avoid bubbles. They are long-term initiatives, but we have to act quickly, and set them up hopefully to counteract any effects of the downturn.
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First Published: Fri, Mar 28 2008. 06 19 PM IST