We are at a critical juncture where we must ask ourselves, what kind of world have we left behind, where we stand today, and how we wish to see our future. Once we slow down and objectively glance at the rear-view mirror, we realize how far we have come. We have made massive strides in poverty, health, education, technology, and world peace. Now a robust economic policy is required for a future ready economy and brighter future of the world. We need to redesign our economic models to address the challenges and opportunities of a post pandemic era.
Against this backdrop, CII is organizing the 2nd edition of the CII Global Economic Policy Summit, scheduled on 8-9 December 2022 in New Delhi, with the theme Economic Policy for a Future Ready Economy. The deliberations will focus on five key tracks: Growth, Resilience, Inclusion, Technology & Sustainabilitybringing together global thought leaders from Government, industry, academia & think tanks.
Global growth was beginning to pick up after the COVID 19 pandemic, just before the war in Ukraine started. The war, rising fuel food and commodity prices, soaring inflation, disruptions to trade, and tightening monetary policy stance by major central banks have all weakened the global growth prospects.
According to the IMF’s October World Economic Outlook, the global economy is projected to grow at 3.2% in 2022, down by 0.4 pp from the estimate released in April 2022. This is significantly lower than the 6.1% growth witnessed in 2021.
Global slowdown and inflation reduce consumer demand for goods and services. Additionally, geopolitical instability and rising interest rates dampen businesses sentiment on investments, taking risks, and expanding. Thus, reigning in inflation expectations and boosting business confidence remain critical for growth recovery. Global growth over the last so many years has benefited from global trade. However, it remains to be seen as to how the transformations in the global supply chains will impact global trade and thereby global growth.
India is also witnessing a slowdown in growth. Despite this, India is still expected to be the fastest growing major economy in the world. The country will be one of the significant drivers of global economy. Thus, what happens in India will be important to the global economic recovery.
Barely into its third decade, the 21st century has seen three major global crises viz. Global Financial Crisis, COVID 19 pandemic and the Russia Ukraine war. One thing common between them is their local origins but global reverberations. All these crises have tested the resilience of nations across the world, the resilience to shocks emanating outside of their respective political frontiers, but nonetheless having huge consequences.
Further the existential challenge of climate change is very real and the progress on the issue, at best, is slow.
Building resilience requires a systematic policy approach to prevent build-up of vulnerabilities, reduce exposure to shocks, absorb shocks when they do occur, and to recover rapidly and sustainably from these shocks. This requires work at the global as well as country levels.
Crises usually impact the people at the lower end of the income distribution most severely, widening inequality. Be it financial, health, environmental or political crisis, the most vulnerable sections of the society bear the greatest burden. These include the poor, tribal, women, children, elderly, disabled, migrants among others – exacerbating pre-existing inequalities in areas like health, education, income, gender, and social status.
The risks these sections face can be reduced by strengthening their ability to handle unexpected situations. This ties back to the point on building resilience – it is imperative that building resilience of the most vulnerable remains a priority. This will go a long way in reducing inequalities and building more inclusive societies.
Technology and Digitization are fast becoming the bedrock of economic activity and our lives. They are changing the way humans live, learn, move, work, transact, communicate, produce, heal, and recreate.
Digitization is driving financial inclusion, making manufacturing smart, improving governance and public services and more. However, it is also creating concerns related to cybersecurity and a whole of host of issues around data such as data storage, data privacy etc.
As technology and digitization take human progress forward, that they would do so inclusively cannot be taken for granted and well-designed interventions will have to be put in place to ensure the same.
The world has never been very good at technology sharing, especially cutting-edge technology. As economic progress becomes more technology led, the danger that technological advancement could widen inter country inequalities needs to be mitigated and will not be an easy challenge to address.
Sustainable growth encompasses building environmental resilience, reducing climate risk, preservation of natural resources, and intergenerational fairness.
As per the Intergovernmental Panel on Climate Change (IPCC) climate change is widespread, rapid, and is intensifying. Many of the changes observed in the climate are unprecedented in thousands of years, and some of the changes which have already been set in motion—for example rise in sea levels—are irreversible over hundreds to thousands of years.
India’s per capita carbon emissions at 1.87 metric tonnes are much below the global average of 4.5 metric tonnes per capita9. Despite the pressing needs of reducing poverty, hunger, malnutrition, India has chosen a renewable path to its development road ahead.
With a target of 500 gigawatts (GW) of installed renewable capacity by 2030, India has one of the largest renewable energy-expansion plans globally. It has also given its commitment to become carbon neutral by 2070.
This will involve building resilience to climate impacts, transitioning to renewables, slowing biodiversity loss, and increasing circularity of supply chains. It requires coordinated efforts across countries, governments, companies, and civil society. Crisis by forcing us to re-evaluate our current systems, can act as catalyst to this transition. We must not waste it.
To join the deliberations on finding solutions for global economic challenges, from a future readiness perspective, register here.