“A year and a half ago, as the enormity of the Covid-19 pandemic dawned on the world, we were truly confronted by a black swan event,” said External Affairs Minister Dr S Jaishankar on Thursday while addressing the 26th ‘Future of Asia’ Conference organized by Nikkei.
The conference, as suggested by its name, was focused upon deliberating ways to shape the post-Covid era with specific relevance to Asia’s role.
As the COVID-19 pandemic continues to reshape the world, the External Affairs Minister states that the crisis is a black swan event wherein its impact on global order and the future of Asia is yet to be comprehended.
*Decentralized Globalisation to establish Resilient Supply Chains*
The current crisis revealed how crucial international cooperation is wherein a lesson has been learned that no national capacity, however large, can be adequate to solemnly brace a catastrophe like COVID-19.
The pandemic has brought out the value of trust, transparency and the immediate need for reliable supply chains.
The focus now must be shifted to a.) Heightening risk aversion when the world is already so now insecure and encouraging strategic autonomy to address over-dependence;
b.) Addressing the need to create greater global capacities so that pandemic-scale challenges are more effectively met;
c.) Promoting decentralized globalization and establishing resilient supply chains to de-risk the world economy.
*Re-engineering the way the world works*
The COVID-19 pandemic has made all countries realise that the world, in fact, is a Global Village.
EAM Dr. Jaishankar stressed there is a need to build greater global capacities by promoting decentralised globalisation as a durable solution.
Nations have come to accept the concept of strategic autonomy, where the value of multiplicity and redundancy is realized now more than ever before.
Simultaneously, the world of services, be it tourism or travel, mobility or off-shoring, has dawned the understanding of over-reliance on limited sources and the consequence it can impose.
India is already working its part to strengthen and de-risk the global economy by building effective partnerships.
India has commenced a Supply Chain Resilience Initiative (SCRI) with Japan and Australia. The prime objective of SCRI is to develop a supply chain by attracting foreign direct investment and turn the Indo-Pacific into an “economic powerhouse”.
In fact, the Quad arrangement that also involves the United States, covers vaccine collaboration, critical and emerging technologies, semi-conductors, supply chains, critical materials and of course connectivity, amongst others.
Recent Indian summits with the European Union and the United Kingdom saw an advancement on Free Trade Agreements which are targetted towards building a decentralised global economy of sorts.
*Better international cooperation facilitated by improved national capacities*
EAM Dr Jaishankar said that “if India is to make a real contribution to Asian and global economic recovery, it can start by helping itself.”
Manufacturing in India is built to be globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. By creating a level-playing field and encouraging a component eco-system, India intends to integrate deeper into the global supply chain.
One of the best examples of building this capacity is “the Production-Linked Incentive (PLI) schemes that intend to attract and encourage manufacturing in 13 sectors, from Automobiles to pharmaceuticals, and food products to high-efficiency solar PV models.
*Indo-Japan relations ensure Asian economic recovery and beyond*
“India-Japan partnership, as seen today, is among the most natural in the region,” says EAM Dr. S Jaishankar noting how both nations are consistently supportive of each other, especially when it comes to infrastructure development.
Japanese-supported projects are among the most successful infrastructure examples, such as the Delhi-Mumbai Industrial Corridor and the Dedicated Western Freight Corridor.
In fact, Japan’s long-standing FDI footprint in India is steadily expanding, covering 1455 companies as of 2021, and more than half of them are in manufacturing. Currently, Japan’s contribution in skills enhancements is visible in 16 Japan-India Institutes for Manufacturing and 5 Japan Endowed Courses.
“Our cooperation reflects the needs of the time, whether it is through a fund to support start-ups or an agreement to receive skilled workers from India,” stated EAM Dr. Jaishankar.
In order to make a real difference, the global communities need to address the concerns and issues that the pandemic has thrown up while simultaneously building a resilient, decentralised global economy.
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Indo-Japan relations ensure Asian economic recovery and beyond.