“We need skills development as a major initiative,” said Sunil Bharti Mittal, Chairman and Group Chief Executive Officer of Bharti Enterprises, who is also President of the Confederation of Indian Industry (CII), the Forum’s Partner in the three-day Summit. “Young people in India want to learn and become skilled,” added Ambika Soni, Minister of Tourism and Culture of India. She supported the establishment of training institutions in such fields as tourism, hotel management and nursing. “Anybody who puts up a nursing college will do very well – and you will have the satisfaction of training young people to stand on their feet.”

After identifying the priorities for India, Summit Co-Chair Orit Gadiesh, Chairman, Bain & Company, USA, and a Member of the Foundation Board of the World Economic Forum, warned it is crucial for the business sector, the state and national governments and civil society to act. “What I would love to see next year is that action has followed the talk.” Her fellow Co-Chair, Ben J. Verwaayen, Chief Executive Officer, BT, United Kingdom, agreed: “We should not just care, but commit.”

Minister Soni encouraged investors to focus on tourism development in India. The Indian government, she reported, has launched a number of initiatives designed to boost the sector, including the upgrading of airports and railways and the integration of 15 selected destinations across the country for both domestic and inbound tourists. Rural tourism is also a priority, she noted. “People have to come forward. There is a Midas touch here. For those who come and earnestly put their minds to it, everything turns to gold.”

Earlier Minister Soni presented the Schwab Foundation for Social Entrepreneurship’s Social Entrepreneur of the Year 2007 award to Harish Hande, Managing Director of SELCO Solar Light, which provides poor families with access to rural solar electrification.

The report explores the long-term effects of a range of risks and opportunities facing the UAE, as well as the interaction of external and internal factors in shaping the country's future. The three scenarios are entitled: Oasis, Sandstorm and The Fertile Gulf. Oasis is a future in which the UAE leverages regional integration to minimize the volatility caused by regional instability while upgrading its human resources to involve its national populations in a robust, (yet primarily government-driven) economy. Sandstorm is a scenario whereby a confluence of dramatic regional events places the UAE in a difficult situation which leaders are only able to manage reactively. Reforms are compromised in an attempt to stabilize local conditions, and increased government spending does not result in long-term solutions to local demographic and economic problems. Finally, The Fertile Gulf is a world where the UAE consolidates its role as a global economic player by becoming an innovation hub and a centre for industry, with investment and prosperity spreading across the seven emirates.

“In the scenario where leadership and governance were exercised at every level and entrepreneurial spirit is well-rewarded – as depicted in The Fertile Gulf –,the UAE’s momentum and economic leverage proves to be significant. Our work indicates that critical and creative thinking are central to upgrading human capital and fostering innovation,” states Chiemi Hayashi, the Scenarios Project Manager at the World Economic Forum and co-author of the report with Nicholas Davis. (Cick on the picture to watch the full 3 minute interview)

"The three scenarios are designed to challenge, elicit new ideas and spur debate and action," said Sherif El Diwany, Director of the Middle East Team at the World Economic Forum. "It is our hope that leaders from business, government, academia and civil society in the UAE find this work useful in their efforts to realize their diversification and economic growth aspirations."

In partnership with the Executive Affairs Authority of Abu Dhabi and with input from the federal ministries of labour and education, as well as other federal and emirate-level bodies, The United Arab Emirates and the World: Scenarios to 2025 engaged over 300 senior government representatives, CEOs, leading academics and members of civil society from around the Gulf region and the world. These scenarios build on The Gulf Cooperation Council (GCC) Countries and the World: Scenarios to 2025, which was launched at the World Economic Forum Annual Meeting 2007. To explore the deeper issues and implications of the region’s development, the World Economic Forum will take the key outputs of the United Arab Emirates scenarios to the World Economic Forum Annual Meeting 2008 in January in Davos.

The Report is a product of the World Economic Forum’s multistakeholder engagement. The scenarios are designed to help decision-makers to enhance the robustness of strategies in the UAE and abroad, to raise awareness of both the internal and external environments, to provide momentum for action, and to increase response speed to unexpected events. The World Economic Forum hopes that the UAE scenarios will engage stakeholders in the future of the country in constructive debates about the critical issues influencing the UAE’s direction, and help to develop creative and forward-looking solutions for current and impending challenges.

Session participants agreed that India would continue to thrive in the IT sector. But concerns were raised about a number of issues: slow growth in hardware production, the lack of an integrated taxation system, the growing strength of the rupee, rising wages and the lack of adequate infrastructure. The president and chief executive officer of one of the world’s leading personal computing companies warned that it is much easier to do business in China than in India, where each state has different business rules and regulations. India would be more efficient if it operated as a single country instead of many different states, William J. Amelio of Lenovo Group USA, said.

Ashwani Kumar, Minister of State, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, India, conceded that India continues to have some problems with red tape. But he robustly defended his country’s democratic system, saying it is not reasonable to compare India with China. Democracy in India, he said, is a fundamental principle and will guarantee its continued economic development during the 21st century. He stressed, however, that India needs to scale up manufacturing in the electronic and IT hardware sectors.

Deepak Puri, Chairman and Managing Director, Moser Baer India, echoed Kumar’s concerns about India’s performance in the hardware sector, but added that “solutions are available … India is an amazing country.”

This plenary took place on the last day of the World Economic Forum’s 23rd India Economic Summit, held in partnership with the Confederation of Indian Industry (CII), in New Delhi. The Summit brings together approximately 800 business, political and civil society leaders from 40 countries. It is designed to generate insight and guide action to improve the alignment of India’s development, industry and global agendas in the context of this year's theme, Building Centres of Excellence.

Television personality Prannoy Roy, Chairman, New Delhi Television (NDTV), India, asked if India should rely solely on the government to provide the lead in improving infrastructure. Stephen J. Rohleder, Chief Operating Officer, Accenture, USA, and Nandan M. Nilekani, Executive Co-Chairman, Infosys Technologies, India, said the private sector can and must play a role in improving the country’s infrastructure. Nilekani added that centres of excellence serve as visible signs of progress and important role models for a country. Kent remarked that attitudes at the government level are shifting and that central government in India is now taking a positive stance on the development of infrastructure. Rohleder said India needs to look closely at how public policy is impacting foreign investment.

Hector de J. Ruiz, Chairman of the Board and Chief Executive Officer, AMD (Advanced Micro Devices), USA, and a Co-Chair of this year’s India Economic Summit, said India’s workforce is “up there with the best”. He gave the example of Hyderabad, where stem-cell research and nanotechnology projects are being developed. In his opinion this is an excellent idea for a centre of excellence and demonstrates India’s great potential. But he commented that the government needs to provide the infrastructure that will enable centres of excellence to flourish.

Daniel J. Brutto, President, UPS International, UPS, USA, said his company is looking forward to working in India but realizes there are many challenges. He said that, for his business, the greatest of these is improving roads and ensuring freer movement of goods between India’s states.

Enumerating the scale of the problem, he said that while India’s economy has “kissed” 10% growth, on the Human Development index, it has sunk from 126th position to 128th. Some 836 million Indians live on less than 20 rupees per day. A huge number live on less than nine per day. “India is becoming prosperous, but not Indians,” he warned. “And that prosperity is affecting only a small number of Indians.”

At the same time, the minister said, “India is not just the world’s largest democracy, but the most represented democracy.” There are 250,000 institutes of elected government in the country – in the form of local government institutions – comprising 2.2 million representatives of which half are women. Yet these people are not being involved in national economic and social policies. Aiyar remarked that, “Elected self governments should be a source of delivery to people. We need to use them to secure entitlements for the poor. But they are still not within the policy perspective. Rural and urban are not separate. Both are connected. Until we see that, India will become prosperous and Indians will remain poor.”

Aiyar added that a key solution is to “buckle the rural hinterland to its immediate urban environment and create opportunities off the farm.” He advocated creating urban centres close to the centres of production and investment in non-agricultural rural activities such as biodiesel, handicrafts and food processing. He also urged businesses to locate their centres of operation in non-urban areas.

Examining ways in which this could be done, Anand G. Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra, India, and a Co-Chair of the India Economic Summit, pointed out that, “Human beings like to live in cities. They have done so for thousands of years.” He suggested that special economic zones could meet that need by forming what he called an “accidental” way of spreading urbanization – and opportunities – to rural India.

Private equity and Hedge Funds – Friend or Foe?
USA – What Next after the Elections?
What Are Russia’s Geopolitical Ambitions?
Do We Need Economic Growth to Get More Sustainability?
Climate Change Divide
Virtual Worlds – Fiction or Reality?

As in past years, the sessions will take place in the main hall of the Swiss Alpine Middle School on Guggerbachstrasse 3, in Davos. The debates will be in German and English with simultaneous interpretation in both languages.

All sessions will be filmed and streamed on the World Economic Forum’s webpage: http://www.weforum.org/annualmeeting and the World Economic Forum’s YouTube page http://www.youtube.com/WorldEconomicForum allowing anyone to watch it and leave their comments and suggestions.

Led by domestic demand, growth in emerging East Asia, which excludes Japan, is expected to exceed 8 percent this year for a second year in a row, and to moderate slightly next year, the Bank said in its [East Asia & Pacific Update -Will Resilience Overcome Risk?] ... Japan is likely to grow about 2 percent this year and 1.8 percent in 2008, it said. ..." [The Associated Press/Factiva]

AFP notes that "East Asian poverty has dropped dramatically but rural areas risk being left behind threatening a widening income gap to urban regions, the World Bank said Thursday.

The number of people living on less than two dollars per day had fallen below 500 million, with the proportion of the East Asian population in that category down from 69 percent in 1990 to 27 percent today, the Bank said. ...

But new problems are emerging because different sections of East Asian society are becoming richer at uneven rates, leading to growing income disparities, the Bank warned. ..." [Agence France Presse/Factiva]

Dow Jones writes that "... The new forecasts are higher than those it issued in April at 7.3 percent and 7.0 percent, respectively, due to 'unexpected and large domestic demand-led acceleration of growth in China,' it said. Strong domestic demand in the region should continue into next year as high capacity utilization levels and healthy corporate balance sheets provide a favorable footing for investment.

Nevertheless, the World Bank warned that the difficulty of managing high balance of payments inflows raises concerns about central banks losing control of monetary policy, which could lead to overheating of markets and economies and vulnerabilities in the financial sector. ...

Soaring oil prices are also a risk. The organization calculates that an average oil price of $90 in 2008 would result in an income loss in the region equivalent to about 1.1 percent of GDP. ..." [Dow Jones/Factiva]

AFX adds that "...Even a more substantial downturn in the US would brake growth, but is unlikely to trigger a severe or protracted downturn 'given the region's strong macroeconomic fundamentals and in the absence of a major downturn in global high tech demand such as what occurred in 2001,' the World Bank said. ..." [AFX/Factiva]

Reuters reports that "...The World Bank cited buoyant investment and consumption as prime drivers of growth in the larger economies of Asia. It lifted China's growth projection to 11.3 percent in 2007, up from an April forecast of 9.6 percent, and predicted 10.8 percent growth in 2008.

Though there were economic and financial risks to China's rapid growth, the World Bank said 'none appears serious enough at present to derail the current momentum of growth, or to cause the authorities to make major policy changes that would lead to a marked slowing in the near term.' ..." [Reuters/Factiva]

Oped Special to the Economic Times India
by Praful Patel, Vice President, South Asia Region, The World Bank

Canada's merchandise exports to China in the first seven months of 2007 have grown at more than twice the pace of its imports on the strength of the Asian giant's demand for Canada's natural resources, according to an article published today in the Canadian Economic Observer.

Between January and July 2007, Canada's exports to China surged 43% from the same period in 2006, while its imports from China rose only 17%.

This rate of growth in exports in 2007 surpassed that of any other G7 country, and put China neck-and-neck with Japan as Canada's third largest export market.

Canada's exports to China rose sharply between 2002 and 2006, from $4 billion to nearly $8 billion. In 2005 and 2006, gains were subdued after a surge in 2004.

The sharp rise in exports during the first seven months of 2007 was the result of several factors. Accelerating Chinese demand, combined with higher world prices for metals, potash and canola, boosted industrial goods and agricultural exports. China also became Canada's number two export market for crude oil.

Canada is clearly benefiting from the magnitude of China's demand for natural resources. The nation of more than 1.3 billion people is expanding its manufacturing base and building massive infrastructure projects, from ports and bridges to facilities for the 2008 Olympic Games.

This demand has propelled world commodity prices to unprecedented levels. In 2007, metals prices were over three times higher than in 2002, and crude oil prices quadrupled to over $90 US per barrel. By pushing prices higher, China has boosted Canada's natural resource exports to other countries.

Increasing exports to Europe and Asia, combined with relatively little growth in exports to the United States, resulted in a sharp increase in the share of Canada's exports held by countries other than the United States.

Nearly one-quarter (24%) of Canada's exports headed to non-US destinations in 2007, compared with 16% just five years earlier.

Export surge concentrated in industrial goods

Canada's exports of industrial goods to China, which include metals, fertilizers (potash), and chemicals (ethylene glycol), are set to triple their 2002 values in 2007. These exports make up just over half of Canada's shipments to China.

Forestry and agricultural exports, notably wood pulp and grains, comprise 16% and 14% of Canada's exports respectively, with machinery (12%), energy (3%) and consumer goods (1%) rounding out the total.

Canada's metal exports to China between 2002 and 2006 registered faster growth than those to any other major market. During that period, exports surged from $300 million to $2 billion. So far in 2007, metal exports to China have been running 70% higher than in 2006, a much faster pace than in previous years.

In addition, potash exports from Saskatchewan so far in 2007 have already surpassed 2006 values, and are on track to match the record set in 2005. The province supplies more than 40% of the world's exports of potash. After spiking in 2005, potash shipments to China fell in 2006 during protracted contract negotiations.

Total canola exports to China advanced in 2007, making it the third largest market for these products behind the United States and Japan. China now accounts for 20% of Canada's canola exports.

Energy exports have never been a large component of Canada's shipments to China. However, in the first seven months of 2007, the value of crude oil exports to China surpassed $150 million, as China and Canada tested out the logistics of shipping Alberta oil through the Port of Vancouver.

While still not a significant share of all of Canada's oil exports, China opened up a potentially large market for Canadian crude oil.

China leads Canada's trade diversification

In recent years, exports to countries other than the United States have outpaced those to the United States. Given higher commodity prices pushed up by Chinese demand, exports of industrial goods to several European countries and China accounted for the major part of the shift in exports. Aircraft and other machinery, which are in high demand overseas, also had an impact.

As a result of this sharp gain in exports overseas, Canada's exports have become increasingly diversified. Between 2002 and 2006, the United States' share of Canadian exports fell from its peak of 84% to 79%. During the first seven months of 2007, this share declined to 76%.

Conversely, between 2002 and 2007, the share of Canada's exports to countries other than the United States rose sharply from 16% to 24%.

The recent shift to increased trade with the rest of the world was well-timed, given the onset of the housing-induced slowdown south of the border. All regions of Canada have benefited from this shift in exports toward non-US countries.

Since 2002, all provinces have shown strong export growth to non-US destinations. In the cases of Ontario, Quebec, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, the growth was more than sufficient to offset declining exports to the United States.

For British Columbia, Manitoba, Saskatchewan and New Brunswick, exports to non-US countries boosted overall exports beyond the more moderate growth in shipments to the United States.

Alberta was the only province not to show an increased share of its exports shipped to countries other than the United States. This is because Alberta's exports south of the border are growing as fast as those to non-US countries, thanks to crude oil, Alberta's main export to the United States.

Ontario's exports to countries other than the United States posted the largest gain of any province, rising nearly $20 billion since 2002. Ontario's auto sector may have slowed, but the overseas demand for its nickel, gold, and uranium resources, as well as aircraft, high-tech and other machinery, is on the rise.

In 2002, 7% of Ontario's exports went to non-US destinations; by 2007, this share more than doubled to 17%.

Import growth from China in 2007 more restrained than exports

Canada's sources of imports have also diversified. So far in 2007, a record-high 35% of imports have come from countries other than the United States, compared with about 25% in 2002. Over half of the increase in the market share from non-US countries is attributable to China.

Since 2002, China's share of Canada's imports has tripled to nearly 10% of total imports. Canadian imports from China more than doubled between 2002 and 2006 to $35 billion, a slightly faster pace than Canada's exports to China. Imports from China were more than Canada's combined imports from Japan and Mexico.

Canada's imports from China grew only 17% over the first seven months of 2007 compared to the same period in 2006.

Canadian import values have been dampened by the stronger Canadian loonie vis-à-vis the Chinese currency, lowering Canada's import bill with China.

Essentially, this means that Canadian companies can import the same quantity for less. The increase of 17%, which occurred in spite of lower prices, suggests a large increase in imported volumes.

During a recent visit to India, Vinod Thomas, Director General of the Independent Evaluation Group (IEG) at the World Bank Group Thomas spoke to Indian daily newspaper, Mint. An excerpt follows:

"Question: Because of growing inequalities as well as other factors, there is growing social unrest in India. What do you make of it, in the light of your experience in watching other economies undertake a similar transition?

Answer: If you were to compare the Bric countries (Brazil, Russia, India and China) along with Mexico, Indonesia and South Africa, then you would find that inequality in India and Indonesia is lower than that of China, lower by a large margin when compared to Brazil, as well as to South Africa and Mexico. But the trend is going the wrong way. But it is not yet a huge publicly demonstrated issue as it has been in Brazil, where President Lula began to reverse course.

But the sheer size of the population involved, and the difference among states - the fact that you have half a dozen growing well above the national average and several large states growing well below the national average - raises a special issue in India, that others don't have in quite the same way. It is a point of discomfort. Unless this is dealt with, both through rural and urban programs, India may have a bigger concern regarding poverty and income differences in the face of 9 percent growth. So while inequality per se is less, its visible part and some of the related socio-regional issues can be quite pronounced in India." [Mint (India)/Factiva]

New book by CIGI Distinguished Fellow explores role of new actors in international affairs

Waterloo – The Centre for International Governance Innovation (CIGI) and Paradigm Publishers/UBC Press announced today the release of Celebrity Diplomacy, the first in-depth study examining this new phenomenon in international relations as a serious global trend with important implications.

In his latest book, CIGI Distinguished Fellow and Associate Director Dr. Andrew F. Cooper explores the shift from traditional diplomacy by professionally trained civil servants to a new form of advocacy by famous entertainers and entrepreneurs – such as Bono and Bill Gates – with no formal background in global affairs.

Cooper suggests that these new actors have a significant and increasingly important role in the world of diplomacy. “Bono and Bob Geldof have made African debt relief a staple feature of the G8’s agenda, the Bill and Melinda Gates Foundation operates on a much larger budget than the World Health Organization,” notes Cooper, “and Mia Farrow has influenced China’s policy towards intervention in Sudan.” Citing these examples, the author concludes that this new type of activity is changing the way diplomacy is conducted.

In her foreword to the book, CIGI Distinguished Fellow and former UN Deputy Secretary-General Louise Fréchette comments, “Neither the demands nor the actions of celebrities are going to save the world, but their engagement and often their generosity can help convince many in the younger generations that solutions to problems come in unpredictable but robust guises. Their activities also serve as a valuable signaling device that the status quo in terms of global health/poverty/debt agenda remains contested by some who could easily enjoy rich, private, and even frivolous lives.”

Celebrity Diplomacy is published in both the United States and Canada. The Canadian launch will take place on November 27 at the Munk Centre for International Studies at the University of Toronto.

Andrew F. Cooper is a distinguished fellow and associate director of CIGI as well as a professor of political science at the University of Waterloo. In 2000 he was a Canada-U.S. Fulbright Scholar at the School of Advanced International Studies, Johns Hopkins University, Washington, D.C. He is a member of the International Advisory Board of the GARNET Network of Excellence and holds a D.Phil. from Oxford University. Celebrity Diplomacy is his eighteenth book.

For more information, please visit: http://www.cigionline.org/celebritydiplomacy

"The United Nations joined hands with information technology giants Google and Cisco to launch an innovative online site to track progress toward the goal of halving global poverty by 2015.

UN chief Ban Ki-moon, flanked by UN Development Program (UNDP) Administrator Kemal Dervis, Michael Jones, chief technologist at Google Earth and Cisco Senior Vice President Carlos Dominguez, launched the MDG (Millenium Development Goal) Monitor at UN headquarters. The site, available at www.mdgmonitor.org, enables UN agencies, governments, policymakers, development experts and non-governmental organizations to track progress toward the poverty-reduction MDGs in a number of categories in nearly every country of the world. ..." [Agence France Presse/Factiva]

Reuters writes that "... The site gathers statistics from around the world to give a snapshot of how each country is doing in meeting the eight goals, from cutting infant mortality to reducing hunger. UN Ban said the site would for the first time present all the information on the goals in one place, allowing closer monitoring and helping identify places in need of greater attention. ..." [Reuters/Factiva]

AP notes that "... The budget for the project is $200,000 and it received $150,000 from corporate donors, according to the UN Development Program, which is facilitating the new Web site for the UN. UNDP's Dervis said data on the MDG Monitor comes from a variety of UN agencies, the World Bank and governments, but he noted that statistics are sometimes difficult to obtain, and can differ. ..." [The Associated Press/Factiva]

Warren Allmand, President, World Federalist Movement Canada notes "We have given the UN responsibility for a great many tasks, but we also need to give it the requisite tools to do its job. We must strengthen the UN and international law now. We all know the consequences of failure. Will we be destined, as in 1919 and 1945, to start all over again from the ashes of another global catastrophe?"

Faced with “daunting challenges” to peace, development and human rights and an organization stretched to its limits, Secretary-General of the United Nations Ban Ki-moon remains optimistic, noting that a recent poll found large majorities (74 percent) believe the United Nations should play a stronger role in the world, whether in preventing genocide and defending nations under attack or aggressively investigating human-rights abuses. Recent polls also demonstrate strong popular support for the democratization of the UN system and the end of tight control of the UN by a few countries.

While the UN makes slow progress in its transformation to meet the challenges of the twenty-first century, the creation of a Parliamentary Assembly (UNPA) as an advisory body would immediately provide a layer of democratic oversight and would accelerate the process of making the UN more accountable and more transparent. Dr. Michael Byers, Canada Research Chair in Global Politics and International Law at UBC states “The Canadian Government should make realization of a UNPA a key element in our contribution to promoting world-wide peace and democracy.”