‘Despite demonetization, India to grow faster than China’

SINGAPORE: Indian economy will grow faster than China despite the temporary slowdown created by demonetization, an Indian-origin academic and former Singapore diplomat said at a conference of leading world universities here.

“Even if the demonetization created a slowdown, it is not going to change the long-term momentum of where India is going with its economic growth,” said Dean Kishore Mahbubani of the Lee Kuan Yew School of Public Policy at the National University of Singapore.

Concluding a three-day conference attended by educators from leading universities from across the world that make up the Association of Professional Schools of International Affairs, Mahbubani said demonetization is good for Indian economy in the long-term.

“I think demonetization is a good thing for a lot of (black) money has come back into the economy. That, I think, is good for the economy,” he said.

The Reserve Bank of India will need to borrow less after the cash returns to banks following demonetization, he said.

“India will grow faster than China even after this (demonetization) slow down. There is a lot of momentum in the Indian economy,” said Mahbubani.

The conference also discussed changing global trends.
“We are moving from a unipolar world to a multi-polar world which is good for small states because they will have more options,” he said.

“The fact that we are moving towards multi-polar world will create new opportunities for Singapore. We can have good relations with China, United States, India and Europe,” he told reporters on the sidelines of the conference.

Panelists at the conference addressed geopolitical tensions wrought by the rise of the Islamic State, cyber-attacks and North Korea missile launches as well as mounting economic challenges such as the fate of global markets in the wake of Brexit and expectations for the continued development of free trade.

“The world has changed and has become multi-polar, less dominated by the US, to a point where reaching decisions at the global level is increasingly complex and difficult to achieve,” said Merit E. Janow, Dean of the School of International and Public Affairs at Columbia University.

“It becomes more challenging given that a number of countries around the world and specifically in the Asia Pacific region are seeking greater influence within international bodies, such as the World Bank, International Monetary Fund, World Trade Organization, United Nations and G20,” said Janow.

“These countries, particularly in Asia, are taking steps to create their own regional institutions because they feel they are unable to have the degree of voice and influence in the established bodies that they perceive is appropriate.

“International organizations and bodies need to adjust to this new reality and ensure that important developing nations have a greater voice,” he added.

The conference heard that China, Japan and India formed three of the four leading global economies, along with the US as the fourth. -PTI