||Canada: Stephen Harper Readies for All-out Trade Push with India
||Sunday, October 28, 2012
Institution and HR Management
||Oct 29, 2012
OTTAWA — Prime Minister Stephen Harper travels to India next week to meet political and business leaders in a delicate courtship that could be integral to Canada’s economic future.
This is the prime minister’s second visit to the country. When he went in 2009, he publicly praised India for its new economic and political clout.
“This south Asian tiger has awoken, and the world is standing in awe,” he said. “Facing the greatest global recession in half a century, our two countries need to work together for our common prosperity.”
When he returns to India Nov. 3 with a high-powered political and business delegation, Harper is intent on getting results.
Among the prime minister’s objectives:
· Triple annual bilateral trade with India — from $5.2 billion to $15 billion — by 2015.
· Reach a comprehensive free trade deal with India next year, part of a broader goal to liberalize trade with Europe and some Pacific Rim nations. One of Harper’s cabinet ministers has cited a Canada-India joint study which suggests a trade agreement between the two countries could boost the Canadian economy by at least $6 billion and create nearly 40,000 jobs.
· Establish Canada as a prime future supplier of energy for India, now the world’s fourth-largest energy consumer, with consumption expected by double by 2025. Canada is keen to export liquefied natural gas to India.
· Promote Canadian businesses for their reliability and their ability to compete with companies throughout the rest of world scrambling for a share of the booming Indian marketplace. In past years, Indians have questioned whether Canadian companies have the long-term resolve to adjust to the Indian business culture (personal business relationships and patience in negotiations are central).
· Seal a nuclear co-operation agreement, announced with great fanfare in 2010 after decades of distrust sparked by India’s use of Canadian nuclear technology for a weapons test in 1974. The new agreement is meant to turn a diplomatic page but was delayed in its implementation over an “administrative” dispute. Canada wants to sell its uranium and build nuclear reactors to India, but also wants details on how the nuclear materials are used for peaceful purposes. India has balked at this request for information.
· Foster a more trusting political relationship with India, a future international powerhouse which already has a diaspora of one million people in Canada. India wants to make it easier for its citizens — such as those in the bustling Indian IT sector — to come to Canada as temporary workers.
In recent months, Harper’s government has lavished attention on India, sending several key ministers on official visits — including John Baird (foreign affairs), Ed Fast (international trade), and Joe Oliver (natural resources).
Fast, Oliver and three others — Gerry Ritz (agriculture), Bal Gosal (sport) and Tim Uppal (democratic reform) — will be among a team of politicians and business leaders who join Harper on the trip.
After decades of distrust and benign neglect, experts say the time is ripe for closer ties.
“It is one of the great engines of global consumption of the 21st century,” said Rana Sarkar, president of the Canada-India Business Council.
“It will also be one of the great sources of innovation. We will start seeing it from clean energy to the manufacturing supply chain to services.”
Naval Bajaj, president of the Indo-Canada Chamber of Commerce, said the country of his youth has changed “drastically” since he came to Canada.
“The lifestyle has changed big time. Before 20 years, could I think of a cellphone in India? No. But now, a person on the street selling vegetables or in a rickshaw, — they all have them.”
India, home to 1.2 billion people, is the world’s largest democracy. It has experienced an economic boom, with GDP growth last year of 7.2 per cent.
Half its population is under the age of 25. Those are people who will get jobs, pay taxes, and become consumers.
India’s urban population is 350 million and is expected to reach 590 million by 2030.
It’s forecast that 41 per cent of the population will be part of the middle class by 2025, making it the fifth-largest consumer market in the world.
Peter Sutherland, Canada’s high commissioner to India from 2000 to 2003, said predictions about the growth of the middle class are “dazzling” and the Canadian business sector must take notice.
“All these things, you just can’t ignore,” said Sutherland.
“There’s a lot of buying power. As these people enter the middle class, their consumption habits change. Their dietary habits change, they want to start buying things like cars instead of bicycles or motorbikes. All the things we take for granted — air conditioners, for example — they start to purchase.”
Still, the nation is not without its problems — some of which, if not overcome, could stall economic progress.
India must educate the massive workforce, protect the environment, and find energy supplies.
In all those areas, say experts, Canada could export knowledge and products.
Last summer, when an energy blackout left 600 million Indians without power, questions were raised over whether India could modernize its infrastructure.
The Indian government plans to spend $1 trillion (U.S.) on infrastructure by 2017, including a new high-speed freight rail corridor that will link Delhi and Mumbai.
Douglas Goold, of the Asia Pacific Foundation of Canada, thinks India has a “bright future” and that Canadian firms should look at doing business there.
Still, he said some are reticent.
“Generally speaking, there is a problem with the ports, the railways, with motorways. It’s a well-known constantly repeated fact that 40 to 50 per cent of produce and food stuffs are spoiled before they are delivered.
“One minute you can be going along a highway at 80 kilometres an hour, and the next two hours you can be following an elephant and going six kilometres an hour.”
Prime Minister Manmohan Singh, who will meet Harper, is on shaky ground and could be defeated before the next election in 2014.
(By Mark Kennedy)