Indian Infrastructure

I had the pleasure of attending an event with President Patil of India last week. The President was in the UK to promote UK India relations and strengthen business ties between the 2 countries. Last week was very much an ‘India week’ in London, demonstrating the importance of the relationship to the 2 countries the President’s trip coincided with the return of the Lord Mayor of London from India where he was leading a business delegation from the City.

I feel, that while there have been successful experiences for UK Infrastructure companies in India, CBC members Arup and Mott MacDonald to name a couple, the experience has not always been as rewarding. Due in part to the Strength of the Home Grown construction sector that is better connected than International companies can hope to be. The lesson for UK construction companies in India is to find the right local partner, one who shares the same business goals and has the capacity to deliver. While there are challenges to finding the right partner in India the arguments in favour of entering the market allied with an Indian company are overwhelming.

Not to Award Africa Governance Prize – A Mistake

Not to award the Africa Governance Prize is a mistake and the wrong decision. The Prize is awarded by the Mo Ibrahim Foundation to leaders that have ‘ruled wisely’ and ‘handed over power to elected successors’. All 3 Presidents, Thabo Mbeki, Olusegun Obasanjo and John Kufuor, with some blips, have brought their countries forward and have been succeed by democratic means. I have known all 3 Presidents personally and worked with them over the years, they have worked in difficult times and circumstances to the benefits of their respective countries. Even recognising their faults and flaws, if Leaders such as these 3 aren’t eligible, President Mugabe must be having a good laugh!

I wonder at the Jury’s intentions by not awarding, are they trying to raise the bar for African leaders in the future? If so, it seems unlikely that the Foundation will award a prize in the next few years. If these criteria were used globally, would the jury be able to pick a winner?

Perhaps, if the prize was awarded to the Presidents who are still serving their first term; it could have a more direct impact and improve the performance of an incumbent government, providing an incentive to govern well and a democratic transfer of power.

Solar Technology and the Commonwealth

Solar Technology has the potential to supply all the worlds energy requirements, 6000times the worlds electrical needs constantly shines on the earth. Many Commonwealth countries are well placed to make use of solar technology for energy production; high levels of Sunlight and wide opened space make them ideal locations for the technology.

Proven projects across the world show the impact the technology can have. Germany, surprisingly given its relatively low levels of sunlight, is leading the way with Spain not far behind and the new administration in the US has placed a greater emphasis on increasing their solar output and combating climate change.

There is still work to be done on the technology, issues surrounding night time storage and efficiency, but work continues to make the technology more economical viable. I was in Kenya last week to look at a potential solar project site and meet with partners, one of CBC’s aims is to use and share technologies that can help with development and improve the lives of people across the commonwealth, and solar is a technology that could have a huge impact.

Health Tourism and Infrastructure

Last week while travelling in the Caribbean the potential importance of healthcare to some of the island economies became more and more apparent. The global financial crisis has driven down the number of tourists travelling for traditional Caribbean holidays, so the governments and tourist promotion agencies are looking for new ways of attracting visitors to their shores.

Aside from the more mainstream efforts to promote business tourism and the like, there is a good opportunity to become a destination of choice for medical tourism. A similar desire was espoused by the Prime Minister of Grenada while at a Lunch I hosted in the UK a couple of months back, however he made it clear that there is a large infrastructure gap to filled in this sector.

This is a good example of where government and the private sector can work together to create an affordable, highly advanced and comfortable medical environment that is suitable for more elderly patients. The Caribbean is an ideal location for this industry, with its experience in delivering a 5 star tourist experiences and its proximity to the Large US market.

Ugandan Infrastructure and FDI

I was very pleased to have the opportunity to meet with HE Yoweri Museveni the President of Uganda last weekend while he was passing though the UK on the way to New York. President Museveni hosted CHOGM and Commonwealth Business Forum in 2007, it was good to catch up and talk.

A couple of Points he raised were of particular interest;

1)
Firstly, Uganda is re-prioritising reducing the Infrastructure gap as quickly as possible. A renewed focus on building and renovating, roads, rail, ports and especially power generation and delivery will remove one of the largest hurdles to development and growth.

2)
The Second point was perhaps the more pertinent; President Museveni made it clear that while he will more than welcome Foreign Direct Investment, the Ugandan Government was prepared to pursue large Infrastructure projects alone. The Financial crisis has made accessing traditional sources of funding harder than ever before, and with the discovery of oil in the Lake Alberta region earlier this year; Uganda now has a greater confidence that it can find its own solutions to its infrastructure issues.

The government is continuously increasing its allocation for infrastructure projects in annual budgets, this is good news. Uganda and other African countries are becoming more confident in shaping their future, similar sentiments were expressed by the Presidents of Ghana and Rwanda when I met them recently.

The G20 and Global Trade

The G20’s agenda has radically changed over the last year; discussion now centres on the financial crisis and the future management of the global banking system. I am saddened to see Global trade had slipped off the G20s radar, with the Doha Round looking increasing unlikely to be revived this year further talks on this important topic are needed.

Despite the current economic turmoil the Global Trade is growing and increasing, particularly Intra-Asian Trade, the Asian Development Bank recently stated that “the region would grow more strongly than expected this year and in 2010…Despite [difficult] conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown”.

Asia’s continued growth is despite the decline in Trade with the traditional western markets, growth has benefited from strong Intra-Asian trade. Intra-Asian trade has helped maintain growth while the largest export markets have dramatically reduced their spending. CBC feels that Intra Africa trade can follow the same model; we have been working with governments and the private sector over the last 10 years to enhance this. We have seen impressive increases and look forward to working with partners to push this even further.

We hope that global trade will soon be back on the agenda for G20 meetings.

A socially relevant banking system

It is clear that the G20 meetings of Heads of Government and Finance Ministers are becoming a useful forum for tackling the banking crisis. Sharing ideas and experience is essential for the development of a new legal framework for the banking industry. The framework must walk a narrow line of preventing the kind of extreme risk taking that caused the financial crisis, without stifling the banking sectors ability to innovate.

What is clear is that banks can no longer be seen as an offset part of society, answerable to no one. If banks are so important to a Country that they cannot be allowed to fail, it is essential that they are not seen to be performing ‘Socially useless activities’ as Lord Turner, Head of the FSA put it.

It is a good sign for the Banking Industry and for all of us, that those who work in the Sector have been soul searching and are beginning to see the need for a socially relevant industry. Speaking in the FT over the weekend the Chief Executive of Mitsubishi UFJ Financial Group, japans largest bank, said “if we blindly pursue profits to an excessive degree, it results in many things going wrong”. He argues, quite rightly I think, that a banks role should be “as a lubricant for economic activity” and that financial innovation is fine “as long as it leads to greater social welfare”.