I’ve long been fascinated by South Korea, especially since the 1997 Asian Financial Crisis, when I learned that it was the first OECD country to bounce back stronger than ever. And one of the reasons why it did so was, of course, its people. Korean people, women in particular, voluntarily donated their gold and jewelry to help get the nation back on its feet. I’d never even imagined seeing such a thing. We Indians are one of the largest importers of gold in the world. Some 1000 tons are imported each year. Indians love gold. In India we have a joke – a wife will say, “Please, take away my husband but don’t take away my gold.” I’d already realized that there was something special about this country of Korea. But in the aftermath of the IMF crisis, that’s when my fascination with and admiration for it increased further. Since I’ve arrived here, I’ve learned that the mantra for everything is ‘bbali bballi’, or hurry-hurry. It clearly has something to do with the speed at which this country has transformed itself.
We are in a period of unprecedented change in all the regions of Asia. The global standing of both Korea and India has been steadily rising in the political, economic, and cultural spheres. We are both ancient civilizations. As I read Korean history, I often note that there are quite a few parallels between us, cultural, political and economic. Both Korea and India have similarities of outlook and have seen significant changes. Korea’s per capita income in 1962 was half of ours but now is about 10 times more. Korea as a nation has done remarkably well, and I can say, as an Indian person, that as your friends, we are happy for you.
The Prime Minister of India paid an official visit to South Korea last month. Before coming here, he gave an interview to the managing editor of the JoongAng Ilbo, who had travelled to New Delhi for the purpose. The PM likened India, a large country of 1.2 billion people, to an elephant, which may be slow to move, but when it starts it cannot be stopped.
But even though India is an elephant to Korea’s tiger, there are many similarities between us. The two countries have both overcome great challenges in similar ways. Back in the 50s, India had a ‘ship-to-mouth’ existence. If a food shipment didn’t come in time there would inevitably be a food crisis. Now we are a net exporter of food, but we have certainly seen hardship. We, I think, can look back with satisfaction at what we managed to achieve, especially in empowering the masses.
India is still a developing country. We have about 300 million poor people, but the percentage of poverty is coming down. The quality of life of the average Indian is improving. We have a very young population. More than 50 percent are below 25 years old, and 70 percent are below 35. Every year, 10 million people join the workforce. So it is a huge challenge just to create enough employment opportunities in our nation.
India is one of the oldest civilizations, and one of the greatest democracies today. It has a great hunger, but not for food. It is a hunger for opportunity, says Tom Friedman. The center of economic gravity is shifting towards Asia. The BRICS countries together have 23 percent of the world’s GDP. When we look ahead, by 2035 China, the USA, India, Japan, Korea, and Germany are going to be among the largest economies in the world. There is a Goldman-Sachs report to back this up. Korea and India are vibrant and robust democracies. India will soon be a 2 trillion dollar economy. Since 1991 when we started reforms, we had 6-8 percent growth per annum. And even though the global economic slowdown has impacted our GDP growth somewhat, our economic fundamentals continue to be strong. On the other hand, Korea is still the fastest-growing OECD country in the world. Our national challenge and objective is to put India on the path of an equitable and sustainable economic growth.
Some aspects of the Korean model are worth emulating. The country spends 9 percent of its GDP on education. Like in Korea a primacy is given to education in India. India’s first Prime Minister said that educational institutions need to be the new temples of India. Following his ideals, we have set up many institutions of excellence throughout the nation. Our schools have good reputation in providing quality education in management, information technology, engineering, and science.
India and Korea have complimentary economies. We have strengths in the sunrise industries, especially IT software. But we are a huge importer of IT hardware, where Korean manufactures have an edge. The hardware demand in 2012 is estimated at over US$13 billion. We are deficient in infrastructure, but have now begun investing 8 percent of GDP in it per year. During 2102-17 we propose to invest US$1 trillion in infrastructure development, including highways, airports, metros, power plants, etc. We have the money, and we are collaborating with other countries in executing these projects. We would like to see Korean construction companies, which have an excellent track record, play a more active role in executing infrastructure projects in India. Chinese companies have already executed or secured US$70 billion worth infrastructure projects in India.
Korean companies have been very successful in India’s huge market, comprising a 300 million strong middle class alone, which has excellent buying power. Around 20 percent of the Indian small car market share is with Hyundai for example, which has in two plants in Chennai, producing more than 600,000 cars per year. Over 50 percent of market share for consumer durables like air conditioners, TV, washing machines, refrigerators is also with Korean companies like Samsung, LG and Hyundai. India exports a number of products like chemicals, yarn, jewelry and raw materials to Korea, including bauxite and iron ore. There is as yet so much more we can do together.
Indian multinational corporations now have a global presence. India is seeking and making investments. India received FDI (foreign direct investment) of US$158 billion in the last ten years while US$129 billion was invested abroad by Indian companies over the same period. As such, the economic fundamentals are strong and the economy is well regulated. Already we have some of the big names like Tata that bought out Daewoo trucks in 2004, and Mahindra & Mahindra, which bought Ssangyong Motors in 2010. Top IT companies from India are present in Korea as well.
Then there is the power sector. We have a sizable power shortage in India, but we are adding 12,000 megawatts of power generation capacity per year now. Last year we added 19 gigawatts of generation capacity. India is also enhancing its civil nuclear power generation capacity. We are the only country currently doing that. India plans to scale up its capacity from 5,000 megawatts of nuclear energy at present, to 20000 MW by 2020 and 60,000 by 2035. Korea has the technology, India has the desire. India would like to absorb this expertise, and we can collaborate closely.
Now let me take stock of India-Korea ties. India and Korea are strategic partners who enjoy a close and multifaceted relationship. The state visit of President Lee Myung-bak to India in January 2010, was a landmark event in our ties. Our bilateral engagement received a further fillip with the visits of the President of India to the ROK (Korea) in July 2011 and that of the Prime Minister of India to Seoul between March 24th and 26th, 2012. The relationship is firmly anchored in a commonality of mutual interests and outlook. Ours is a problem-free and friendly relationship. We do not have any strategic differences. That can be said about very few countries. We have similar outlooks, similar interests and similar challenges.
That both countries are flourishing democracies makes our relationship peopledriven. There is complete consensus across the political spectrum in India to have the closest of relations with Korea, which is being built on the foundation of a strategic partnership. The Comprehensive Economic Partnership Agreement (CEPA) was operationalized on January 1st, 2010, and this has become a template for many more CEPAs that India has signed since, including with Japan and Malaysia. In two years only, there has been nearly a 70 percent increase in trade between Korea and India. It crossed US$20 billion in 2011. We have established a new trade target of $40 billion by 2015 which is very achievable. Our two nations would be witnessing a rapid growth in investments in both directions. We are also working on deepening cooperation in areas like defense, security, energy, civil aviation, space and science and technology.
There is a challenge of a trade deficit that we are facing, and we are looking for better access for our IT, pharmaceutical and agricultural products. For instance, India produces the best mangoes in the world. We export them to the US, Japan, Europe, and nearly everywhere else. But Koreans are not getting Indian mangoes. Recently I told this to the trade minister and he said that the matter would be looked into on priority (you should try an Indian mango when they are available, and if you don’t like them I will personally give you a refund!).
With IT products as well we are seeking better access. But these are negotiations between friends. Our commerce and trade ministers meet every year, to review the implementation of CEPA and examine the need for upgrading. It is a process. Indian pharmaceuticals are among the best in the world today. We have the largest number of pharmaceutical products registered with the US FDA by any foreign country.
Indeed, ties are becoming truly multifaceted between India and Korea. We are now expanding these ties into security, defense, and even education. Some 2,500 Korean children are studying English in India right now. About half of them are in Indian schools. About 900 Indian scholars are studying science subjects and Korean in this country. We also want to enhance S&T cooperation, including in the sphere of space technology. We have offered to launch Korean satellites. We also have a cultural center here in Korea now where we teach yoga, classical Indian dance, Hindi language, and so on.
Our two countries also cooperate very well in international forums such as the G20. India received excellent support from Korea for its membership of the East Asian Summit. Korea is an observer in SAARC. Korea is also a key pillar of India’s Look East policy. Such ties rest on a good foundation and are poised to grow rapidly. There is an information gap, though, which we still need to plug. As someone who has had a close relationship with the media, I know that they have an important role to play in informing and shaping public opinion. When I presented my credentials to President Lee Myung-bak, I said that both sides have generated great expectations and that we have to live up to them.
Let me close with a quotation from Newsweek about India. “What is happening today is the birth of India as an independent society – boisterous, colourful, open, vibrant and, above all, ready for change ... it is a noisy democracy that has finally empowered its people economically ... democracy makes for populism, pandering and delays. But it also makes for long-term stability.”
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