Modi defends open trade at kick off to Davos forum
Kingdom may be pressed by new EU palm oil regulations
INDIAN Prime Minister Narendra Modi acknowledged yesterday that globalisation is “losing its lustre” but warned that new trade walls are not the answer, opening a week of Davos meetings that will climax with a speech by the loudly protectionist US President Donald Trump.
After spectacular snowfall that stranded some high-flying delegates on their way to the Swiss ski resort, the World Economic Forum started in earnest basking in robust global growth but facing warnings that the world’s have-nots are missing out more than ever.
Modi told the forum that India should serve as an example as it opens up to foreign investment, in a speech that delved into Indian scripture and had strong echoes of an anti-protectionist clarion call issued in Davos a year ago by Chinese President Xi Jinping as Trump prepared to take office.
“It feels like the opposite of globalisation is happening. The negative impact of this kind of mindset and the wrong priorities cannot be considered less dangerous than climate change or terrorism,” Modi said, staging the first appearance at Davos by an Indian prime minister since 1997.
“In fact everyone is talking about an interconnected world but we will have to accept the fact that globalisation is slowly losing its lustre,” he said.
“The solution to this worrisome situation is not isolationism. Its solution is understanding and accepting change and formulating agile and flexible policies for these changing times.”
Trump came to office on a populist platform that demonised the globalist Davos elite. While some delegates are relieved that full-blown trade wars with the likes of China have yet to erupt, the president served a fresh reminder that his rhetoric has teeth.
Trump on Monday approved steep tariffs on imports of solar panels and washing machines to protect US producers, triggering an outcry in China and South Korea.
Let the winds blow
However in Davos, Modi channelled the founding father of independent India, Mohandas Gandhi, who he said had argued that “I don’t want the walls and windows of my house to be closed from all directions.
“I want that the winds of cultures of all countries enter my house with aplomb and go out also. However I will not accept my feet to be uprooted by these winds.”
That was redolent of Xi last year, who wowed the Davos crowd by warning that pursuing protectionism “is like locking oneself in a dark room”.
“Wind and rain may be kept outside, but so is light and air.”
Modi, touting India’s growing appeal to foreign investors and his Hindu-nationalist government’s campaign to promote technology, said the country took Gandhi’s thinking on board entirely.
“With complete self-confidence and fearlessness, India is welcoming this wave from all over the world,” he said.
Despite its impressive growth under the Modi government, India displays some of the world’s worst extremes of the rich-poor divide, an issue exercising the 70-odd leaders and thousands of delegates engaging in the week of debate high in the Swiss Alps.
Undermining rosy data on the world economy are warnings that elite fora such as Davos must start finding solutions for everyone else down the income ladder as the “1 percent” amass untold riches a decade since a major financial crisis erupted.
“We certainly should feel encouraged, but we should not feel satisfied,” International Monetary Fund chief Christine Lagarde said on Monday, presenting an upbeat update to the organisation’s forecasts for global growth.
“First of all, there are still too many people left out from the recovery and acceleration of growth,” she said.
In a separate report unveiled in Davos, Oxfam said the world’s richest one percent raked in 82 percent of the wealth created last year while the poorest half of the population received none.
“Our report shows that inequality is out of control globally. It shows our broken economies are rewarding wealth and not hard work,” Oxfam Executive Director Winnie Byanyima said yesterday.
In his own message to the Davos forum, Pope Francis warned that debates about technological progress and economic growth must not supplant concern for humanity at large.
“We cannot remain silent in the face of the suffering of millions of people whose dignity is wounded,” the pontiff ’s message said. NEW proposed rules from the European Union restricting the import of palm oil would likely affect Cambodia’s nascent palm oil sector, but the country’s main exporter is hoping that demand from India and China will cushion the blow.
Cambodia’s palm oil exports rose by a whopping 143 percent last year, according to Ker Monthivuth, a sanitation expert at the Ministry of Agriculture. The country exported more than 44,000 tonnes of crude palm oil in 2017, up from nearly 19,000 tonnes the year before, he said.
But the booming industry could slow down due to a decision from European lawmakers last Wednesday to reform the bloc’s regulations surrounding palm oil imports, and specifically ban the use of palm oil in biofuels by 2020. Environmental groups have long been critical of the deforestation and ecological consequences caused by many palm oil plantations globally.
The EU’s new rules could have a devastating effect on the global demand for palm oil if they are ratified by European governments, and the move has elicited protests in major palm oil exporting nations such as Malaysia.
Cambodia’s largest exporter of palm oil, a joint venture between the Mong Reththy group and Thailand’s TCC Group, exported around 37,000 tonnes of crude palm oil last year, mainly to Asian nations but with 15 percent of the exports headed to the EU as well, according to Prachak Kongtanomtham, vice president of sales and marketing at the Mong Reththy Investment Cambodia Oil Palm Co Ltd.
While the company’s exports grew by 73 percent last year, Prachak cautioned yesterday that the EU ban would likely decrease the price for palm oil and could present challenges for the industry.
“We will look to what happen in India and China, if they increase [consumption] volume,” he said. “We should find how can reduce our production cost, especially logistic cost and utility,” he added, noting that costs were “very high” in Cambodia.