It is wise for India to go for greater energy efficiency'

Q&A: Richard Lambert, director general, Confederation of British Industry
September 24, 2009

RICHARD LAMBERT, director general, Confederation of British Industry and former editor of the Financial Times worries that protectionist measures taken by leading G20 nations are not a good sign for the discussions that will continue in Pittsburgh, USA, later this week. He commends India’s recent stand on issues like climate change, in an interview with S Kalyana Ramanathan. Excerpts:


Despite the repeated commitments made at the earlier meetings, most members of the G20 continue to execute protectionist measures to safeguard their own interests. Your comments?
I agree there have been some lamentable moves by the developed economies in the recent past, which run counter to what they have said at the G20 meetings, like the US move on the tyres (against China).

Wouldn’t that raise the question of the relevance of the G20 itself, when major developed nations are reeling under the strain of the current recession?
The question is where would we be if the G20 did not exist. If the G20 was not there, would things be worse? I think the answer is yes. If you look at what has happened in the last year to 18 months, we see protectionist measures have taken place. But these add to a modest share in the global GDP, like 1 per cent. But if you look at the time of the great depression in the 1930s, at the end of the very first year, protectionist measures were adding up to 10 per cent of the global GDP. Compared to what might have happened if the G20 did not exist, its a good story.

You had earlier commented on the signs of recovery in developed countries like the US and Germany. What’s your take on the emerging economies?
I am not up to speed on the Bric countries generally. But my perception of China is that it will reach its growth target for this year. It is very heavily driven by the stimulus. China will need global and fiscal stimulus to continue to grow. For India, the numbers look promising, but we have to see what the bad weather (drought) is going to do the the economy. I haven’t seen the numbers on that.

Is it fair on the part of developed nations to press India to reduce carbon emission if it needs financial support from the west, when India is not a major polluter, relatively speaking?
I don’t think it is a fair summary of the position. If you look at the European Union, it has committed to make massive cuts in greenhouse gas emission in 30 years. The US is debating its approach to cut emission. We hope it will arrive at a position in time for the Copenhagen meet (in December). The greenhouse gas emission per head in India is very low,a quarter of what they are in UK. But there are a billion Indians (laughs). I think Prime Minister Manmohan Singh is making wise comments on the need for greater energy efficiency and for India to find ways of cutting emission in a efficient way when the demand for energy is going to grow.

India emerges as second biggest investor in UK

S KALYANA RAMANATHAN
London, 17 June

The UK Trade & Investment (UKTI) today said that India had emerged as the second largest investor in the UK in 2008-09, moving from the sixth position it had held in 2007-08 with a total of 108 successful projects being commissioned here from India. The first position however remained unchanged with the 621 successful projects from the US.

The UKTI, which is the UK government’s international business development organisation, though not a regulatory body like India’s FIPB, acts as a via-media for foreign investors in the UK and assists the government to frame investor friendly policies.

The ranking is done purely based on the number of unique investors in the UK and not by the value of such investments. This method, according to UKTI, reflects the number of investors that have committed their money in the UK and is not influenced by the value of these investments.

In 2008-09 India beat Germany, which held the second position in 2007-08. Germany moved to the forth position while France moved to third position from the fifth position it had held in 2007-08.

The number of investors from India increased by 44 per cent over the previous year, taking the total to 108 foreign direct investments projects in the UK. For this compilation the investments are broadly divided into three types – new projects, expansion of existing projects and mergers & acquisition. While the break up for investments from India was not readily available, UKTI’s managing director Brain Shaw said that on an overall basis 47 per cent of the FDI’s into UK in 2008-09 were new projects, while 27 and 26 per cent were expansions and M&As respectively.

India and China were the only two BRIC economies to be among the top 10 investing nations in UK. China improved its ranking from ninth position to eight in 2008-09. Brazil held the 28th position with 7 projects commissioned in the UK and Russia had no new investments into the UK in 2008-09.

Business Secretary Peter Mandelson said, “…these results are testament to the fundamental strengths of the UK’ s economy and will prove our ability to come through this downturn stronger, and ready for success.”

Ironically, Mandelson’s optimism was voiced on the same day the UK government also announced that the unemployment numbers in the UK increased to 2.26 million, the highest in 12 years.

Commenting on this, John Cridland, CBI Deputy Director-General said, “The numbers of jobless are continuing to rise and we’re clearly not through the worst yet. Sadly, the CBI expects these figures to continue to rise and peak at 3 million in the spring of 2010.

“Making job cuts is the last thing that businesses want to do, and the government must do everything it can to help firms keep people in their jobs, as well as giving advice, training and support to those who have become unemployed,” Cridland said.

The CBI (Confederation of British Industry) is the UK's leading business organisation, that speaks for for some 240,000 businesses that together employ around a third of the private sector workforce.

The UKTI further said that in 2008-09, FDI had created 35,000 new jobs. In the past six years over 2.15 lakh new jobs were created due to inward investment projects, said UKTI.