Conference Bulletin – New Delhi November 01-02, 2018
DAY 1: 1st November, 2018
The U.S. Department of State, in partnership with CUTS International, East West Center in Washington, and the Federation of Indian Chambers of Commerce & Industry, organised the ‘Regional Connectivity Conference: South Asia in the Indo-Pacific Context’ at the Taj Palace Hotel in New Delhi, India on November 1-2, 2018. The first day of the conference saw the Opening Plenary and three more plenaries on various topics related to connectivity among Bangladesh, Bhutan, India, Nepal and Sri Lanka.
Opening Plenary: The Indo-Pacific Picture
Inaugurating the South Asia Regional Connectivity Conference in New Delhi, Vijay Gokhale, India’s top diplomat, said that ‘free, open and inclusive’ should be the driving force behind regional integration.
He appealed to more than 300 regional stakeholders present during the conference to think of out of the box ideas that can supplement the tools already at the disposal of the Indian government.
Joining Foreign Secretary Gokhale at the inaugural were also U.S. Ambassador Kenneth Juster and Kenji Hiramatsu, Ambassador of Japan to India. Ambassador Juster highlighted the need for private sector led infrastructure development in South Asia while Ambassador Hiramatsu enunciated specific regional connectivity projects being jointly executed by India and Japan and stressed upon ‘quality’ infrastructure as a prerequisite to sustainable regional connectivity.
The conference was organised by CUTS International with the support of US Government, East West Centre, Washington DC and FICCI, New Delhi. Representing East West Centre was its Director Satu Limaye, who said that economic integration of South Asia can lead to better political integration while Vikramjit Sahney, Senior National Executive Member of FICCI said poor transport connectivity, non-tariff barriers, onerous logistics and regulatory impediments need to be sorted with speed and scale for regional connectivity.
The inaugural session was moderated by Pradeep Mehta, Secretary General of CUTS International who said a multi-discipline, multi-country platform for regional connectivity is the need of the hour.
Plenary 1: South Asia’s Infrastructure and Development Needs for Connectivity in the Indo-Pacific
Subsequent to the inaugural, three plenary sessions followed. The first focussed on South Asia’s infrastructure and development needs where Duncan Overfield of the UK government expressed the need to have a long term overarching regional plan. Joining him on the panel was Zaidi Sattar, Chairman, Policy Research Institute, Bangladesh who remarked that intra-region trade costs 20 per cent more than that of ASEAN despite many commonalities across the region. Speaking specifically in the context of BIMSTEC, a region attracting renewed interest, Pankaj Hazarika, Director of Connectivity & Security Division BIMSTEC, said Motor Vehicles Act and Coastal shipping agreement for BIMSTEC nations should become a reality soon. These agreements are currently in the draft stage along with transport connectivity master plan which will be crucial for linkage between South and Southeast Asia.
The importance of water connectivity was also highlighted by Madhav Belbase, Joint Secretary, Water & Energy Commission Secretariat, Government of Nepal. Belbase pointed out that hidden costs consume inordinate time and increase connectivity costs unnecessarily in the region.
Plenary 2: Best Value Principles for Procurement and Investment: High Standards, Transparency and Sustainable Debt
The next panel was on ‘Best Value Principles for Procurement and Investment’. This panel was moderated by Arvind Mayaram, Chairman, CUTS Institute for Regulation & Competition and noted that amidst intensifying discussions around the Indo-Pacific two best value principals remain crucial namely ‘transparent and fair procurement standards’ and ‘availability and accessibility of sustainable resources’.
Tomohiro Tanaka of Bureau of International Cooperation, Ministry of Foreign Affairs of Japan underlined simply building roads and highways, among others would not suffice. The governments should adhere to international quality standards. He referred the way Japan does it by offering low interest rates and long repayment cycle and undertaking debt sustainability analysis.
Todd Abrajano of U. S. Trade and Development Agency (USTDA) stated that USTDA has committed US$ 14.5 billion supporting around 800 American companies in the region. He said that to consider a project, the USTDA consider two aspects: local economic impact and the regional dimension under global procurement initiative.
Timothy Kendall of High Commission of Australia, stated that funding and supply of capital for infrastructure development will be the greatest challenge in the Indo-pacific. Extent of this challenge through 2030, is around US$ 26 trillion, including in power sector, transport, telecommunication, renewable energy, among others.
B.N.I.F.A Wickramasuriya of National Procurement Commission of Sri Lanka, said that it is necessary to improve the confidence of stakeholders in the procurement systems of a country as procurement plays a very important role in bringing investments.
Responding to a question about sustainable debt in the context of public procurement, Arvind Mayaram said that there exist such supporting instruments as investment trust, infrastructure debt fund, among others. He also said that training in debt analysis, debt management, sustainable public debt etc. need to be developed and practised.
Plenary 3: Women’s Economic Empowerment in a Regional Context
The last plenary panel for Day 1 was on ‘Women’s Economic Empowerment in a Regional Context’. The session was moderated by Ambika Sharma, Managing Director of India Operations, US-India Business Council. Sanjita Koijam, Founder, Manipur Creation Society reiterated the need to empower people on the ground to take the advantage of the various connectivity initiatives taken by India to connect North Eastern Region.
Jahnavi Phookan, Founder, Jungle Travels India stressed on the need of a women body within the organisations such as BIMSTEC and SAARC for better trade facilitation for women.
Selima Ahmed, President, Bangladesh Women Chamber of Commerce specifically pointed out the importance of making the customs and other border organisations more women friendly and gender sensitized to encourage participation among women in international trade.
Finally, it was agreed upon that capacity building and awareness generation of women entrepreneurs is very important and leading industry bodies in the BBIN countries including FICCI should take initiatives in this aspect.
Cheryl Williams, Director, Programme Office, USAID mentioned that free movement among countries should also imply women getting opportunities equal to men in terms of education and professional development.
DAY 2: 2nd November, 2018
South Asia Connectivity Conference was stacked up with discussions focussing on Connectivity, Security and Energy. Each topic dealt with three dimensions, namely land, water and air; cyber, border and intellectual; cross border energy trade, LNG and renewable energy respectively.
Plenary 4: Financing and Public-Private Partnerships
The first plenary on Day 2 of the #RCC2018 was moderated by Deepak Bagla, Managing Director & Chief Executive Officer, Invest India. The various speakers in this plenary were Kezang, Country Manager, MultiRational Private Limited, Thimphu Tech Park Limited, Bhutan; Amber Dubey, Partner, KPMG India; William Pegues, Director, Structured Finance & Insurance, Overseas Private Investment Corporation, United States of America; and Thilan Wijesinghe, Chairman & Acting Chief Executive Officer, National Agency for Public Private Partnership, Government of Sri Lanka.
The key points that the panel deliberated upon included the role public-private partnerships can play towards contributing to achieving sustainable development in South Asia, measures and mechanisms required to promote financing of PPPs in the region from innovative sources and measures and mechanisms required to manage risks unique to South Asia.
To close the physical infrastructure gaps, countries in South Asia requires an estimated $4-5 trillion by 2030. Environmental sustainability will also require substantial resource injections. Filling these gaps will require the mobilization of countries’ domestic resources as well as international development cooperation, including through public-private partnerships (PPPs).
Investments in infrastructure assets, with theoretically stable cash yields over time, can often be attractive even to investors with long-term liabilities. However, successful PPPs will require clarity in distribution of risks, rights and responsibilities between government and private–sector stakeholders. A sophisticated enabling ecosystem along with innovative PPP models will be required to attract sustainable investment.
Panel on Land Transportation Corridorsincluded Rajeev Mehrotra, from RITES Limited; Joseph George, UNESCAP; Paras Kharel , SAWTEE; Ibohal Meitei, Manipur University; Thet Zaw Win, Government of Myanmar; Amit Kapoor, Institute for Competitiveness and Tapan Kumar Chakravorty from Bangladesh Land Port Authority.
The panel stressed upon the need for governments in South Asia to be mindful of changes in trade structures, production and supply chain networks in the ASEAN region in order to deliver compatible transport infrastructure initiatives. It was further emphasized that multi-modal and technology driven transport solutions need to be provided to boost economic growth and productivity.
Panel on Maritime and Inland Waterways Connectivity was moderated by Bipul Chatterjee, Executive Director, CUTS International and included Sugeeswara Senadhira, Director (Research & International Media), Presidential Secretariat, Sri Lanka; Ellen L. Frost, Senior Advisor, East-West Center, Washington D. C.; Julian Michael Bevis, Senior Director-Group Relations-South Asia, Maersk Line India Private Limited ;Tapas Paul, Lead Environment Specialist, The World Bank Group, India Office and Vishal Dashora, Associate Director, PwC India.
In recognition of the fact that maritime initiatives need to be better aligned across countries to attract investments in the region and reduce cost of doing trade, the key question for the panel was on how to achieve the multi-alignment.
The panel felt that there is a need to develop formal and informal processes so that traction on domestic and multi-country agreements such a coastal shipment agreement between India and Bangladesh, sea port developments taking place in Sri Lanka and inland waterway in India and Bangladesh, amongst others can be optimised along with other regional initiatives.
The panel underlined that economic statecraft is influenced by strategic environment, climate change, technology and personal engagements of top level leadership. The panel also felt that a regional developmental plan is needed to be articulated within defined deadline and should have a feedback mechanism. Importance of integrated logistics plan was also highlighted along with India’s example which is already developing national logistics action plan.
Panel on Civil Aviationwas moderated by Sandeep Bahl, Program Director U.S.-India Aviation Cooperation Program. Amongst other things he highlighted that ASEAN will be one of the most significant regions for civil aviation prospects.
In the session on air connectivity the key points for deliberations included addressing major hurdles for implementing seamless civil aviation connectivity in the region, identifying relevant stake holders and investment opportunities that can promote a sound air transport infrastructure throughout the region.
The other panellists were Birendra Bahadur Basnet, Managing Director Buddha Air, Nepal; Joyeeta Bhattacharjee, Senior Fellow Observer Research Foundation, Delhi; A. K. M. Manzur Ahmed, Deputy Director (Planning) Civil Aviation Authority of Bangladesh; and Usha Padhee, Joint Secretary Ministry of Civil Aviation Government of India.
India’s role in the growth of regional civil aviation industry was underscored by the panel. It was also highlighted that the export of labour overseas from many countries in the region can be a catalyst to spur the industry.>
In conclusion, the panel hailed ‘Udan scheme’ of the Government of India as a replicable model to promote domestic and affordable air travel. However, the lack of regulation for scheduled helicopter services was identified as a factor that limits people to people connectivity, particularly in remote hilly areas.
The session on cyber security essentially focussed on opportunities for improving optical fibre cable and digital connectivity within the region; ideas to attract investments in the mobile telecommunication sector for faster and better deployment of 4G and future 5G technology; emerging cyber security threats and ways to counter them.
Nehal Sanghavi, Senior Advisor, Innovation & Partnership U. S. Agency for International Development, India moderated the session. The other panellists were Vivek Srivastava, Regional Manager Sales – Cyber Security Cisco India & SAARC; Gitanjali Chaturvedi, Senior Social Development Specialist, The World Bank Group, India office; and Syed Almas Kabir, President Bangladesh Association of Software & Information Services.
In the course of deliberations, the panel emphasised the importance of optical fibre cable network to digitally connect the South Asian region. However, it was pointed out that there needs to be more coherence in optical fibre connectivity. For instance, India’s total usage of internet through optical fibre out of its total internet usage is less than Bangladesh. Therefore, today Bangladesh is in a better position to export internet services to North East India. A complementary progress on this count can better connect the two countries. The panel felt that such complementarities need to be further explored. The gender divide in terms of digital adoption is another area which needs immediate attention, the panel observed. With regards, to data localisation, the panel articulated a greater need for standardisation for regional rules and regulation.
The panel on Border Security and Trade Facilitation included Anil Bamba, Chairman, Government of India; Pritam Banerjee, India Resident Mission, Asian Development Bank; Nisha Taneja, Indian Council for Research on International Economic Relations, New Delhi; Duncan Hemajith Hettiarachchi, Sri Lanka Customs, Government of Sri Lanka; Sandeep Kumar, Directorate of Analytics & Risk Management (Customs & Goods & Services Tax), Department of Revenue, Government of India.
The panel noted that it is necessary to strike a right balance between security processes and trade facilitation. To that resolve, technology driven solutions including employing paper less trading along with full body vehicle scanners at borders can help provide solutions for fast tracking consignment clearance. On domestic front, the countries in South Asia need to develop border customs clearance frameworks and mechanisms.
The panel on Intellectual Security: Intellectual Property Rights and technology Transfer was moderated by Sujeev Shakya, Chair, Nepal Economic Forum. Other panelists included Santanu Mukherjee, Founder & Head, Ex Lege Chambers, New Delhi, Shilpi Jha, Senior Legal Counsel for Intellectual Property-South Asia, Embassy of the United States of America to the Republic of India, Parag Kar, Vice President, Government Affairs – India & South Asia, Qualcomm Inc.
The panel opined that developing countries would prefer tech transfer to happen from the developed countries and thus, this will be helped by having a single integrated policy. The panel also observed that there are significant divergences in the IPR policy in South Asia region and not much protection is provided which makes it less attractive for the companies to invest in countries like Nepal and Bangladesh. Further, awareness on IPR is very low among start-ups in the region. Therefore, there is a need for their capacity building along with authorities IP authorities.
Regional Energy Trade
Panel on facilitating Cross-border Electricity Tradewas moderated by Michael Satin, Director, Clean Energy & Environment Office, U.S. Agency for International Development, India and included Tilak Siyambalapitiya, Energy Consultant, Sri Lanka; Anil Rajbhandary, Deputy Managing Director, Nepal Electricity Authority; Sanjay Poudyal, Deputy Resident Country Director, Nepal, Millennium Challenge Corporation; Deepesh Nanda, Chief Executive Officer, Gas Power Systems, South Asia, General Electric Power; Mohammad Hossain, Director General, Power Cell, Power Division, Ministry of Power, Energy & Mineral Resources, Government of Bangladesh.
The panel noted that despite huge potential in building regional power trading networks, intra-regional electricity trade is less than one percent in South Asia of the total installed capacity. Given that, the panel outlined the following actions points.
First, there exist several technical, regulatory and commercial considerations of power trade in South Asia. Therefore, it is essential for relevant players to have continued dialogue by forming working groups around such considerations. Second, a common regulatory platform may be developed by South Asian countries to undertake regulatory harmonisation. To start with, BBIN countries could join hands for such an initiative. Third, there is enough economic merit in connecting the electricity grids of countries in the region and, fourth, it was suggested that challenges of electricity trade in South Asia can be met by collective and strong political resolve.
Panel on creating LNG market in the Indo Pacificwas moderated by Kirit Parikh, Chairman, Integrated Research & Action for Development, New Delhi. Other panelists included Taro Yanagidate, Vice President, Diamond Gas International Pvt. Ltd. Mitsubishi Corporation; Anindya Chowdhury, Shell Energy India and Muhammed Aziz Khan, Chairman, Summit Group, Bangladesh.
The panel suggested that having an LNG market for South Asia is not feasible. It is ideal to integrate the grids between the South Asian countries and have collective regional demand as building LNG terminals is capital intensive and individually the countries may not be able to have high utilization. It was highlighted that the biggest barrier in expanding gas market is government policies. The market has to be liberalized to remove distortions as this is also gets in the way of bankable LNG projects.
Panel on Renewable Energy was moderated by Kerry Reeves, Deputy Director, Office of Environment & Economic Growth, U. S. Agency for International Development, Bangladesh and included Nirjan Rai, Executive Director, Policy Entrepreneurs Inc.; Harsha Wickramasinghe, Deputy Director General, Demand Side Management, Sri Lanka Sustainable Energy Authority; Sharmila Barathan. Senior Vice President-Corporate Affairs & Policy, General Electric and Mudassir Moin, Managing Director, Rahimafrooz, Bangladesh.
The panel felt that it is important to capitalize the opportunities and leverage the economies of scale thereby leading to cost effective electricity generation. Availability of land for large scale projects and availability of finance for smaller projects are crucial, added the panel. Overall, the panel remained optimistic about the renewable energy opportunities and called for greater inter-region cooperation.
Concluding Remarks: Looking to the Future
The two day Regional Connectivity Conference concluded with a closing plenary which looked at the future of connectivity. The session was chaired by Sudipto Mundle, President, CUTS International with concluding remarks by Satish Kumar Reddy, Consultant, Regional Cooperation & Trade Facilitation, Asian Development Bank; Damchae Dem, Founder & Chief Executive Officer, Bhutan Association of Women Entrepreneurs and David Ranz, Acting Deputy Assistant Secretary, Bureau of South & Central Asian Affairs, U. S. Department of State. The final vote of thanks was delivered by Bipul Chatterjee, Executive Director, CUTS International
The session highlighted that regional cooperation in infrastructure and related software is embedded in the larger framework of free trade cooperation; it also includes cooperation in climate change and financial cooperation, particularly risk pooling at the time of crisis. We should aim to make borders as less visible as possible so that borders must act as efficient gateways rather than impediments. Using technology to reduce intrusive regulatory hurdles is an innovative step in this direction. In addition to this, donor coordination needs to be strengthened in the area of regional connectivity. In the context of gender and trade, digitalisation is the key equaliser for furthering women empowerment. Digitalisation empowers women who prefer to work from home or within a safe environment. In conclusion, the Indian ocean region is the most dynamic with regards to global trade. The US strategy values strong economic growth in the region and has been an active supporter for prosperity of this region.