A President pitches for stronger economic ties

Two Indian women recently made news back home on their doings in Mongolia. One of them was 33-year-old Sucheta Kadethankar who was part of a team to traverse the Gobi on foot along a 1,623-km stretch, achieving the goal nine days before the 60-day deadline. Only seven of the 13 in the multi-national expedition lasted the course. As far as recorded accounts go, Sucheta is the first Indian woman to have achieved the feat. Another Indian woman in the team called it quits, but only after she had come more than half the way.

These two can be said to represent the much-talked-about emerging India. This ‘emergence’ is being noticed because of the country’s economic growth, and the other woman in the news was there because she was exploring how this growth can benefit and also benefit from Mongolia’s mineral-based economy. She was no less than Mrs Pratibha Devisingh Patil, the 77-year-old first woman President of India, and the first in that office to visit a democratic Mongolia. The Indian President is a figurehead, but she does symbolise the state and that Mrs Patil extensively talked economics here, whether to Indians or to Mongolians, shows how keen India is to strengthen economic ties.

Ancient cultural links and India’s bold diplomatic support of Mongolia in the 1950s and 1960s notwithstanding, these ties are  pretty tenuous at present. Even after a fourfold rise since 2006, bilateral trade stands at a paltry $17.6 million. Geographical distance is an important reason for this, but only part of the totality. With information scant on what Mongolian leaders might be ‘thinking’, one has to depend on bald statements on agreements signed or deals made. In neither does India grab headlines. Mr Elbegdorj did go to India  as his first trip abroad as President, but the Government Press agency, Montsame, was careful (and churlish, if one may say so) to clarify that it was not his choice, he was doing so as the trip had been planned and finalised before his assumption of office. The Indian Government gave Mongolia $25 million during the economic crisis – most Mongolians have no idea what dire straits the country often was in those days – as a grant with no visible strings attached, but the Indian company that wanted a piece of Tavan Tolgoi canot be faulted if it expected the generosity to benefit it. In the event, no Indian company got even a toehold in either west or east Tsankhi.

Not that nohing is happening. Sticking to only economic/mining matters, India is helping with satellite geomapping to help in exploration and I believe an institutional mechanism has beern installed to cooperate and coordinate with the Ministry of Mineral Resource and Energy. Several Indian entrepreneurs are actively interested in setting up plants. Placed against what surrounds the two Tolgois, these might not be eye catching, but their value lies in their help in diversifying the economy.

To come back to the Indian President’s visit, the media team in tow sent daily reports that were published prominently in Indian newspapers. Many of these reports focused on the economic aspects and components of her talks and speeches. A Mongolia-India Business Forum was held during the visit, where 30 members of the Confederation of Indian Industry (CII), arguably the most important Indian business chamber, interacted  with their Mongolian counterparts. President Patil, who was present for some time at the forum, expressed confidence that bilateral economic ties would grow rapidly and exponentially.

It was reported that the heads of some Indian industrial firms identified potential areas of interest. Mining was certainly what was most eyed, and one member of the Indian business delegation was quoted as saying, “Indian entities are capable of operating mines, apart from their transportation and processing. Making steel and ancillary products is a strength for a number of companies.”

In her address to the gathering, Mrs Patil said a “new silk route” needed to be developed to establish old trade ties and “weave together a new destiny”. She said she had broached the suggestion at her talks with Mongolian leaders and had found them “quite positive and responsive” to the idea of a strengthened business partnership between the two countries.

Veterinary services and dairy development also attracted Indian investors whose processing and marketing skills acquired at home could come in handy in Mongolia. Indian firms showed interest in development of infrastructure, particularly in building roads and highways, but I do not know how well they realised the peculiar and particular conditions here. There was also talk among some Indian companies that they could form a consortium to own and operate a private airline in the country. Here, also, I think ground realities will be a deterrent to ambition. However, many at the forum, including the Indian President, were clear it was essential to have  direct flights between India and Mongolia if robust relations are to be built and sustained.

The leader of the Indian delegation, Ravi Bhoothalingam, noted that difficult logistics was a obstacle to expanding trade and commerce, but while the two countries “cannot change geography”, they certainly could ty to find “creative solutions”. He felt  Indian businessmen had been  “rather slow to seize the opportunities” in Mongolia, ceding space to countries “with the advantage of proximity”.

One newspaper noted how the visit was an expression of “Delhi’s pro-active diplomacy in China’s periphery”. Getting Indian business to join the economic boom under way in Mongolia was part of India’s evolving Look East policy, which involves building stronger ties with China’s neighbours. The initial and publicly avowed focus of the policy remains on economic cooperation, but its strategic content has steadily, if somewhat surreptitiously, expanded to include the cultivation of security partnerships in the Asia and the Pacific. Many Indian planners are sure that the Mongolian Government would second the Indian Government’s encouragement to Indian business to have a ger presence in Mongolia, as both countries would like some kind of check on the relentless Chinese reach. Minister Yo. Otgonbayar, who is also head of the Mongolia-India Parliamentary Committee, had said at the forum that his Government would “try to create a favourable climate for these [Indian] companies”.

President Patil’s address at the forum, after making allowances for the inevitable cliches and the de rigueur expressions of optimism such speeches have, was quite forthright in setting out a task before Indian entrepreneurs. She said the predictions on the growth of the Mongolian economy “are staggering and Indian business must take due notice”. Implementation of mineral projects “will generate significant demand for construction and mining equipment, as well as in such areas as power generation, water supply and rail transport. I would recommend the Indian business delegation to look closely at these opportunities.”     

Mrs Patil said these projects “are becoming important drivers of foreign direct investment into Mongolia” and “the Indian business delegation present here should, along with Mongolian industry, explore business opportunities and seek to establish contacts with commercial and industrial houses. I encourage greater and more frequent exchange of ideas and interaction between chambers and business leaders of the two countries,” she said.    “India will focus on the ways and means to impart more economic content to our relationship and to see how India can play a more dynamic role in the core strengths of the Mongolian economy, for example in coal and steel.”     

Dispelling any fears of any predatory designs, the Indian President said, “We have in place an ambitious programme for the expansion of our social and infrastructure sectors. All this offers many opportunities for other countries. I am convinced that there exist many opportunities for cooperation in the economic and commercial fields and with enterprise and innovation, we can construct a new Silk Route to weave together our economic destinies... so that the close relationship between our countries is translated into economic opportunity and prosperity for our peoples.”

Summing up the visit, an Indian official said the “building blocks” of a firm and very cordial relationship already exists and “we have to construct a new edifice” on it. It was reported that President Elbegdorj remarked at their farewell meeting that he felt “our sister from our spiritual home [India] came to meet us”. The challenge for both countries, their governments, and their entrepreneurs is to complement that elusive spiritualty with some concrete material structures.