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The Rediff Business Special/ William Daley

'It's easy to imagine an Indian businessman in a remote town selling his products over the Internet to customers in Tokyo or New York'

Fifty years ago, on the eve of India's independence from British rule, the new prime minister challenged the Indian people with this question: 'Are we brave enough and wise enough to grasp this opportunity and accept the challenge of the future?'

It is a question we can all ask ourselves today -- a time of dramatic change throughout the world. Political and economic headlines tell the story of change in India. New reports from East Asia remind us that the path to prosperity will present many challenges and also difficult choices.

But we should not lose sight of the big picture. As we sometimes say back home, we must keep our eyes on the ball. The most important economic story of our time remains the same: the global economy in which the United States and India are key participants will continue to be characterised by expanded trade and rapid technological innovation. It will also present challenges that are best met by co-operative and coordinated responses.

United States President Bill Clinton has said to the American people, 'We have no choice but to embrace change and make it work for us.' I believe the US and India are two countries well positioned to take advantage of the current forces of change at work in the global economy.

That is why I've come to India with a large American business and government delegation at this time of transition. President Clinton has asked me to help him strengthen America's important relationship with India. Our business development mission is a statement of the president's commitment as well as a recognition of the ties that bind our two great countries. Those ties are political and cultural -- after all, we both understand the challenge of being a vibrant democracy with a diverse and lively society -- but, of course, our ties are commercial as well. We are proud that the US is India's number one source of foreign investment and its number one trading partner. Our ties will deepen further as India continues on its path of economic reform, and I firmly believe the result will be beneficial to the people of both countries.
India was the last of the world's giant markets to adopt policies that opened its doors to international commerce. The strong performance of India's economy these past few years demonstrates the positive effects of this approach. It is no surprise that the United States has deemed India a 'big emerging market' and devoted extra energy to our commercial relationship.

At the beginning of his first term in office, Clinton launched his Big Emerging Market initiative, directing his administration to focus special attention on markets he believes will have extraordinary influence on global affairs in years to come. We estimate that nearly three fourths of the growth in world trade in the next two decades could take place in developing countries. Most of this expansion will occur in the ten markets identified as Big Emerging Markets by the US.

We believe that India and other emerging markets offer enormous, mutually beneficial opportunities for engagement and expanded commercial ties. For example, India's economic reforms and modernisation are creating a need for the kinds of advanced technologies and services that are represented by my mission delegation. This clearly is good for US firms seeking business in India. But this economic exchange is also important for India's development and for the welfare of the Indian people. As trite as it sounds, America's gain is not inconsistent with India's gain. Indeed, mutual benefit is the very nature of trade.

US companies can provide a wide range of technologies that can contribute to India's infrastructure development and industrial modernisation. Power generation is a key new sector where US-India commercial co-operation can help India to meet needs that are expected to double in the next decade -- and to help reduce the climate impact to greenhouse emissions. US firms also are working to provide telecommunications products and services that India needs to expand and modernise its network.

Between 1991 and 1996 bilateral trade rose 83 per cent. In this first eight months of this year, it has risen another 18 per cent -- making it likely that bilateral trade will pass the $ 10 billion level for the first time ever this year. Our bilateral commerce take place in a new and growing global economy that challenges all of us to participate -- and waits for no one.

This rapid expansion of an international market that moves and integrates products, services, information, and even people is an economic dynamic never seen before. It may seem to have been thrust upon us. In fact, it has grown steadily during the past 50 years of trade liberalisation under GATT and, now, the World Trade Organisation. Thanks to this open world trading system, the United States, India, and most other countries enjoy more jobs and greater economic growth.

Our new world trade system brings with it opportunities -- and responsibilities. It requires us to adapt so we can achieve the competitiveness a global marketplace rewards, but it can sometimes subject our industries and workers to tumultuous change.

This often fosters anxiety and cynicism about trade and its benefits -- with the fear of lost jobs overbalancing the benefits of the creation of new ones.

Certainly, these concerns were reflected in the debate that led to the postponement of fast-track trade negotiation legislation in the United States and to the ongoing debate in India about the pace of reform and market-opening measures.

All nations must address and overcome these anxieties if the full benefits of open markets are to be achieved. As government and business leaders, we must accept the responsibility of preparing our working men and women for the future -- if we truly believe that future will be improved by an open world trading system.

Here we face a critical choice: Will we stick our heads in the sand and hope the concerns and anxieties of many of our people will go away? Or will we squarely meet the challenge of economic dynamism? To do this, we must actively craft pragmatic solutions that will pave the way for greater prosperity.

Because of his firm commitment to US competitiveness in a vibrant global marketplace, President Clinton is pressing in the United States for strengthening our educational system, worker retraining and community assistance where industries are in transition. These efforts will ease the adjustment process that accompanies greater trade.

Recent developments in some Asian financial and currency markets prompt a similar call to action. These problems have no doubt made many in the region wonder whether they is not the solution. Corrective measures should produce a stronger structure for long-term growth. And, as a report in the New York Times last week suggested, much of Asia is still expected to grow by rates that are faster than the pace of the American economy.

The international community has moved aggressively to respond to the financial difficulties. It is supporting an action plan under the leadership of the International Monetary Fund.

In addition to trade, technological innovation is another critical factor driving the global economy, and India is in a strong position to reap the benefits of this phenomenon. As the Financial Times reported just the other day, India's software industry has become a 'beacon of success', proving that 'given the right framework, India can compete globally.' India's entrepreneurial zeal also has much to do with his achievement.

Today, more people around the world have access to advanced technologies than any other time in history. Take the Internet, for example. As many as 50 million people in 150 countries now are on the net. Internet hosts in Asian countries have grown 550 per cent in the last two years, the fastest growth in any world region.

Expectations are that there will be five times as many Internet users by the turn of the century. In fact, the Internet promises to be the most potent commercial vehicle of the 21^st century. Trade on the Internet is doubling or tripling every single year. It only makes sense that this new medium will revolutionise the way we do business. This year, in the US alone, the value of goods and services traded between companies will grow to $ 8 billion, up 1,000 per cent from 1996. By 2002, it is estimated that more than $ 300 billion will be spent on these business-to-business transactions.

Rapidly developing nations with strong high-tech sectors, such as India, are well positioned to take advantage of this revolution in electronic commerce. And smaller, isolated firms with little capital may gain the most from the 'anytime, anywhere' nature of electronic networks. The Internet can place even the smallest, newest firms before customers all over the world and within arms' reach of potential business partners. This fact should hold special appeal to India, with its strong entrepreneurial spirit.

In fact, it's easy to imagine an Indian businessman, located in a remote town, selling his products or services over the Internet to distant customers. They may be located in Bombay or Tokyo or New York -- markets he could not reach through traditional means. Indeed, this probably is happening already.

Technology also will play an important role as governments seek ways to deal with the threat that climate change presents. As we speak, over 170 nations are gathered in Kyoto, Japan, to negotiate a treaty to address this very issue. The Clinton administration is, in the president's words, deeply committed to giving our children a world worth living in.

We also believe it is important for all countries to participate in a 'global solution' to a 'global problem.' Without meaningful participation, the United States cannot itself assume binding obligations.

The challenges lie before us: the new global economy, rapid technological change, and common threats to future generations. If we work together, with courage and perseverance, to meet these challenges, we will have met our responsibility to leave the world better than we found it.

Fifty years ago, Nehru said: 'It is the future that beckons us now. That future is not one of ease or resting, but of incessant striving so that we may fulfill the pledges we have so often taken.'

As emissaries of the new global economy, let us pledge to make that future a prosperous, peaceful and healthy one for our children -- and continue to strive to make it so. I look forward to working with you toward this important goal.

US Commerce Secretary William M Daley was in India last week. This is an edited version of his speech to the World Economic Forum in New Delhi.

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