Boston, Apr 17 (ANI): Finance Minister P Chidambaram has told Harvard University alumni that India and China will drive global growth in the years to come.
Participating in a talk-cum-interaction titled the "Rise of the East, Implications for the Global Economy" here yesterday, Chidambaram said, with China growing at 8 to 8.5 per cent and India at 6.1 to 6.7 per cent between 2013 and 2014, both countries will continue to be drivers of the world growth.
"Going forward, China and India will continue to be drivers of world growth, with China growing at 8-8.5 percent and India at 6.1-6.7 percent between 2013 and 2014. ASEAN-4 (Indonesia, Malaysia, Philippines and Thailand) is also projected to grow at more than 5.5 percent. China is reported to have already overtaken the United States in economic size (measured by real per capita GDP in purchasing power parity terms) by 2012-13," Chidambaram said.
"I do not wish to numb you with numbers. But let me mention one other well-known difference between a number of emerging markets and industrial countries: it is the demographics. A lot of the growth in the East is still to come as it reaps its demographic dividend," he added.
"For instance, India's share of the working age population will continue to rise. Nearly one-half the additions to the Indian labour force over the period 2011-30 will be in the age group 30-49, even while the share of this group in advanced countries will decline. This means greater production, savings and investment in India as the demographic dividend is reaped," he said.
He said, while China's investment story has been much commented upon, India's is just starting out.
Chidambaram, who is in the United States to meet investors and project India's growth story, acknowledged that there is potential for tension within the countries of the East, as they compete for resources and markets.
"Let me also acknowledge that there is the potential for tension within the countries of the East, as competition for resources and markets increases. In recent months we have seen talk of conflict over islands, underwater resources, or even water itself. We need to work collectively to reduce these tensions and to ensure that trade, investment, and mutual gain trumps narrow self interest," he said
"Finally, as the East grows in economic strength, it will need the intellectual heft to provide the solutions to the myriad problems that will arise. Speaking as an Indian, let me say our universities are growing in strength. But great institutions of learning like Harvard University can play an important role: by teaching our youth, by training our teachers, and by engaging in intellectual dialogue that will strengthen mutual understanding," he added.
Chidambaram further said that the economic slowdown in the recent years has forced the world to adjust and industrial countries would now have to save more, while emerging markets need to spend more
"Industrial countries have to save more while emerging markets have to spend more. Such an adjustment will help industrial countries pay down heavy debt loads, even while leaving global demand to be supported by the emerging markets. Of course, the nature of spending will vary across emerging markets. China probably has to consume more, while India has to invest more," he said.
"But as the world moves towards one where consumption and investment shifts towards the emerging markets, especially in Asia, and ageing industrial countries will learn to save more, what are the opportunities and challenges? That is what I want to speak on in the next fifteen minutes," he added. (ANI)
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