B. Muthuraman, Confederation of Indian Industry (CII) president, has warned of “huge volatility” in the global economic scenario.
Delivering the keynote address at a conference on ‘Thriving in an imbalanced world', organised by the southern region of the CII here on Saturday, he observed: “Imbalance has been there for centuries, now, it is much more accentuated.”
Throughout 20 century, resources and commodity prices had declined in real terms which gave tremendous boost to growth. The global gross domestic product (GDP) grew 20 times.
During the past 10 years, things had changed “unpredictably” unlike the past several centuries. The era of resource-based growth, which was the result of the declining commodity prices, was now over. “Huge volatility is the new phenomenon.”
Higher prices and scarcity of commodities had started haunting the globe. “It is going to be a different kind of world from what we have seen. It would witness not only imbalance but also much more volatility.”
Mr. Muthuraman said that political power, which could dictate and influence global policies, still lay with the West despite its economic clout shrinking considerably. “India is now in a position to grab it (political power).” But the West was unlikely to give it up which would lead to friction.
Currency and exchange rate would have a major impact as they would be used as an instrument by the dominant powers. The emerging world was likely to see much more regional co-operation. Instead of going global, people might go national or regional and hence there would be “greater protectionism”. World was likely to witness serious resource constraints, he cautioned.
Inaugurating the conference, Union Minister for Shipping G.K. Vasan said, “If we adapt ourselves to the changing global environment, we can definitely sustain our place among the front runners in achieving economic development, the fruits of which should reach all sections of society.” The Minister pointed out that new avenues had opened up, thanks to globalisation in the 1990s. While carefully responding to the immediate economic challenges emanating from domestic and global sources, he counselled entrepreneurs to “craft and calibrate our policies keeping both outcomes in view”.
A press release issued by the CII stated that V. Sanjay Reddy and B. Santhanam have been elected chairman and deputy chairman of the southern region of the Confederation for 2012-2013.
