Please take your seats. The program is about to begin.
Please take your seats. The program is about to begin.
Please take your seats. The program is about to begin.
Please take your seats. The program is about to begin.
Human history is a story of power. Who held it? How it was used? What happened when it changed hands? Economic history is mostly a story of great powers. How they rose, what they ruled, why they fell. Both stories have been told for millennia. Now it's time for a new story. The story of middle powers. These are the nations too big to ignore, but too small to be feared. They've always played key roles at times of instability and volatility as bridges, buffers, and back channel negotiators. And with the world order in flux, middle powers are once again in the middle of it all.
Everybody's doing their own thing, finding their own friends, making their own groups, depicting their own issues, and creating the new reality. That is what I believe middle powers in particular must accept their responsibility to play a stronger role.
And the more we act together, the harder it becomes to be pulled apart.
Global solidarity and collective responsibility are the only answer. The preferred strategic model for all of us in Southeast Asia is to make sure that the two superpowers, the United States and China, and the middle powers including India, Australia, the Middle East have skin in the game.
Active, collective, flexible, strategic, bold, independent. That's the middle power playbook. Argue the middle powers must act together because if we're not at the table, we're on the menu. Welcome to the 2026 Bloomberg New Economy Forum.
Please welcome to the stage Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies.
Well, good morning everyone. Needless to say, we thank you for coming and hopefully you found it worthwhile and we've decided to move it here. We've had a great experience in Singapore, but it was time to move it around and next year we're going to be in Tokyo. So, start just start practicing your Japanese. I've been working on mine a lot. Anyways, we had a very productive first day, I think. And I want to thank everyone who participated and let me also thank our partners whose names you see on the screen behind me. At least I hope they are. They were the ones that made this gathering possible. We talked a bit this week about how quickly the world is changing. New technologies including AI are creating enormous opportunities while wars, public debt, extreme weather and other economic forces are creating new problems for all of us. Business leaders have to navigate all of them and often at the same time. So today I'm glad to announce a new Bloomberg New Economy initiative. We're teaming up with Marsh to launch a coalition focused on competitive resilience. The idea is really simple. Help leaders anticipate disruptions, make better decisions when it happens and keep their organizations growing through these very difficult times. We bring together leaders and experts to identify the biggest risks they face and develop practical strategies for managing them. We're grateful to Marsh for that partnership and hope we'll continue it and at the same time we're looking ahead to the future of this forum. The Bloomberg team is already putting together the program for the next great event and given the strong relationship between India and Japan, I think it's fully fitting that we say where we're gathering right here. In 2027, we're bringing the forum to another great city, Tokyo as I said before and this is an especially interesting time for the Japanese economy. From monetary policy to corporate governance, big changes are underway there, creating new opportunities for investors and for businesses. Japan continues to be a global leader in technology, manufacturing, investment, and innovation. It remains one of the most important links between markets across Asia and around the world. And that makes Tokyo a fitting place for the next chapter of the Bloomberg New Economy Forum and we hope to see you all there then. We're honored to have Japan's ambassador with us today. And one of the forum's great strengths is the community that we've built and he certainly agrees with that. Every year we bring together leaders from different countries, ministers and points of view to exchange ideas, build relationships and explore new opportunities. So I hope that you will all join us in Tokyo next year. First though we have another good day here to benefit ourselves from being in New Delhi. Before we continue, let me also thank Prime Minister Modi and his government for their partnership to bring the forum to India. I spent half an hour with him reminiscing about old times. We did some things together many years ago and have maintained the relationship and he hasn't lost a step. I think I probably have lost steps but they didn't go to him. Anyways before we continue I want to thank Modi and we're especially grateful to the members of the prime minister's cabinet who had taken such an active role in our discussions this week and that includes one of our next speakers, India's minister for electronics and information technology. Earlier this year he played a leading role in the AI summit and in New Delhi the summit was a testament to India's ambitious work to build the industries that will take us into the future. These efforts are increasingly important and not only to India in its growth but to the rest of the world. So we appropriately take the opportunity to hear from him in a minute. We have a great program ahead. Enjoy the day. Thank you all for coming. We're honored that you'd be here. What we're trying to do obviously is build relationships and let people work together. And the government here has just been spectacularly helpful and the people of the city and of the country have just given us something to take home and say, 'Hey, you know, those are nice people.' And they really are. So thank you very much for coming.
Please welcome to the stage Chuck Robbins, chair and CEO of Cisco and Shri Ashwini Vaishnaw, Union Minister of Railways, Information and Broadcasting and Electronics and Information Technology for the Republic of India for a conversation with Bloomberg's Haslinda Amin.
Good morning. With rising geopolitical tensions, more and more countries want technological sovereignty, control over the technologies that power the economies. We're talking AI, cloud, chips, the networks that connect them. But technological sovereignty does not mean self-sufficiency. That's more complex. It's also more expensive. So what capability is most important and how far can countries push for control before they start fragmenting the tech ecosystem in the world? Minister, let's start with India. You're investing $200 billion in semiconductors. How are you thinking about tech sovereignty? What's most important for you?
When we look at tech sovereignty, we have to look at it in a very mature, very complex way. We are thinking more of strategic dependencies. Strategic dependencies and resilience, which are the products, which are the segments in which we must have manufacturing, design and the complete product development capabilities within our country, which are the parts of the value chain where we can depend upon other countries. See, technology is always a global value chain. We want to be deeply embedded in this global value chain and be able to add value to those parts of the value chain where we play the best role. For example, design in semiconductors. Today 2 nanometer and 3 nanometer chips of practically every large company that you can think of, Qualcomm, Nvidia, AMD, they are all designed in India. Now moving forward in that value chain, fabrication, ATMP, getting the full product designed, that is a natural progression that we are moving towards. So when we talk of tech sovereignty we are talking of critical and strategic dependencies, talking of resilience and we are thinking of which are the parts of the global value chain where we need to be fully embedded.
And of course when we talk about tech sovereignty, Chuck, I mean not many countries are actually there, the US, China, quite a few countries want to come on board, the likes of Korea, Japan, Germany. Where are they with that? I mean how quickly can that happen?
Well, I think that depending on the country, there's different aspects of the tech stack that they can provide depending on where you are. And so I think as you look at this issue, it's really important to, there's an element of what country does it come from? But the reality is that the independent trust between a company and a country is what's ultimately going to decide how this plays out over time. And so in our case as an example, we spent a lot of time here over the last 30 years investing in the communities, investing in education, we have a huge employee base here. And I don't think that any country is going to be able to, from a standing start today, the pace at which AI is moving and everything else is moving. I don't think most countries are under the pretense that they can do it all, every bit of it. Right.
So that's an illusion. I think it's very difficult because by the time you build a piece of technology that comes from our portfolio or someone else's portfolio, it's probably obsolete at the pace things are moving today. So what the minister said about the design of silicon and the leapfrogging of capabilities, I mean he wasn't talking 15, 16 nanometers, he's talking two or three nanometers right off the bat. And that's what we design too. We design our own silicon and I think the world needs more capacity in this space too. So the world would welcome a friend like India who has that capacity.
And of course India has the India stack. You've built that. It's evolving really quickly. What have been some of the challenges and what are some of the choke points that you're beginning to see?
We'll have to again look at what is the full spectrum which is available. If I continue what Chuck said, in the entire chip space, in the semiconductor space, if you look at the entire spectrum from 2 nanometers to 90 nanometers, there are certain segments, let's say from 28 nanometers to 90 nanometers, the legacy nodes what we call, there is huge concentration building up in that particular segment. And as Chuck said, a component which is coming from any particular country, every manufacturer should look at can they trust. So trust is going to be a very important part of the global value chain. Now it's no longer just cost, trust because cyber security is becoming very important. So trust is going to be very important. Countries like India are placing ourselves as a trusted partner for global value chain in whichever segment we want to play, whichever segment we are coming up, we want to be the trusted partner. So let's say 28 nanometers to 90 nanometers, the legacy nodes, a million dollar machine can actually be, the production of a million dollar machine can stop just by a $1 chip. So can we place ourselves as a country which is trusted both in design, in manufacturing and in complete evaluation of the final product. That's how we look at it. So when Chuck says that yes we are expanding our production in India, he knows that we have design capabilities, he knows that we are moving in the manufacturing capabilities, we are developing the entire ecosystem. And to your question of choke points, what's important is that we develop the ecosystem. Without ecosystem no manufacturing effort will ever pay off. So for example when we started the production of mobile phones, we started with assembly, then we started manufacturing modules. Then last year onwards we started manufacturing components and today there are many components where 100% capacity required for our country we are able to manufacture in India. We have started exporting components to other countries. So that is the cycle that we are looking at in a very methodical way. Step by step move from the finished product to modules to the components to the materials and to the capital equipment, the machines which go for it. Same approach we are following in semiconductors. Similar approach we are following in railway systems, in defense systems. It's a very methodical way we are moving forward.
Can you build resilience without causing inefficiencies, duplication?
Yeah, I think it's really important for companies to work very closely with government. So the minister and I know each other well and we've talked a lot about this and I think that India is one of the few countries that has the scale to take on some of the things that he's describing. And I think when you talk about sovereignty in many cases we talk about software assets, cloud delivered software solutions and that's a good example to address this question. When we began initial conversations, this started primarily in Europe I'd say two to three years ago, it really began in earnest and the early conversations were we want everything that you deliver today, we want it on prem, total control, we want it operated by citizens of this country. And so then you start whittling down a little bit from there because the reality is that to deliver that technology on a country by country basis at that level of capability is going to be probably a non-starter from a cost perspective by the time you're finished. And so what we have done over the years is actually sat with the governments and said what is it you're trying to accomplish? Let's figure this out together. Instead of you giving us a feature list, let's talk about what are the things you're worried about? What are the things that you feel adamant about? And the two big things that always come up, and then there's some other things that we have to deal with, the two big things are always data. We want to maintain our data and data sovereignty. We don't want it to exit the country. We don't want it out of our control. And we want operational control of these systems, right? We want to know how they're operating. That doesn't mean you have to have every, like if it's an in-country cloud service, it doesn't necessarily mean it has to be run by local citizens. Maybe it is, maybe it isn't. But you need to understand enough to know that you have operational control. And in certain situations, you may want to tighten that system down where you limit the external communication outside the country under times of stress. And so you get into these discussions about what it is you're trying to truly accomplish. And I think we can deliver it. So we've created a portfolio of what we call sovereign critical infrastructure that we have launched in several countries in Europe over the last year. We just launched it in Canada and we haven't really announced it publicly yet but over the next few months we'll be bringing that to India as well.
I keep hearing trust and I keep hearing strategic alliances. Minister, I'm wondering how do you counter dependencies? We've seen how you can be dependent on someone now and then you be in a very vulnerable position later on. How are you looking at dependencies?
That's a very interesting point of view. Yes, things change, politics change, geopolitics play a big role. So, we have to constantly calibrate our approach and we in India are thinking at least 20 years ahead. We are looking at goals which are short-term goals of 3 to 5 years, mid-term goals of 5 to 15 years and long-term goal of 20 to 25 years. That's the way we are thinking and we are moving in a very methodical way because yes you are right there are times when friends will become foes. So it's very important to figure out what's the most important thing which can make your production, make your economy vulnerable to somebody else's policies. So we think in that way and identify those things and start working on them.
How should countries look at partnerships, alliances?
Well, I think that to the minister's point, I mean that you have to figure out who you trust, but build flexibility into your capability over time. So, you...
Well, I think that again there's one aspect which is what country does this partner come from? That's maybe an important bit to start. But then it's how does the company that you're engaging with operate? I think that's equally important. How long have they been investing in my country? How well do we know them? How well have they done what they've told us they were going to do over the years. You know that because as long as companies have been operating in India, there's always been a dialogue about things that the government would like to see companies do here. Obviously lots of hiring of resources, engineering resources, silicon design resources, things of that nature. That's one piece. Manufacturing is another piece. Education is another piece. And so you can look at the track record and know who has really been here and who has, and this is not unique to India, but we're talking about India, and who has really invested and done what they've said that they're going to do. And I think that's what you have to do. But then as you work through it, if I'm sitting in the minister's shoes, I also want to make sure that I work with someone that I trust, but I always provide myself optionality because that's the issue that I'm solving for.
What are you most concerned about as you build the India stack?
Materials. That's where the biggest dependencies are. That's where the biggest concentrations are. So materials are very important. The way most of the products in which we want to develop our capabilities today, the dependence on materials is extremely important. That's why in the semiconductor program that we have, in the first version we decided to have one marquee player and let's say we have what, 12 projects out of which five are already in commercial production. In the second version of our program we decided to focus a lot on materials, the chemicals, the gases, the substrate material, the other materials which go into manufacturing of semiconductors. All that part is very very important because that ecosystem takes a lot of time and effort to build and countries which have built it, they have taken 20 years, 25 years to develop those capabilities. Do we have that luxury of time? No, we don't have. So, we have to put in that extra effort to get that capability in our country both in terms of understanding of the materials, handling of the materials, manufacturing them, processing them, storing them, using them in the chips or every other manufacturing process and making sure that we develop an ecosystem which becomes good for us, good for the world. I'll build upon one more point that Chuck was saying about the track record. Chuck, you mentioned that there are countries who have developed a very good track record. I'll talk about that a bit. For 40 years we have had tech centers of every large global company working in India designing new products, introducing new products based on designs in India. And for 40 years there hasn't been a single case of IP related dispute. We have friends here. Kiti is present. I mean we have absolutely no case of IP related disputes. That's where trust matters. That's where a country's long track record matters a lot. So the companies who are working with us, when they see that track record they feel very comfortable that politics or no politics, policy changes or no policy changes, there is a particular legal framework in a democratic country which they can trust and that's what we think is most important. When you look at India, look at us as a country which can be trusted, which has a very strong track record of being trusted.
Chuck, how is your business adapting as more countries want control over their technologies?
First of all, a comment on what the minister just said. I think we came in here talking about the trust that's required from the companies but I do want to reiterate the point that India has been an incredible trusted partner for lots of American companies in particular and global companies to his point. And I think that it really does create an environment where we're comfortable investing and I think that's super important because it allows us to do what I'm going to answer your question with. And it gives us confidence to invest to deliver those solutions that otherwise we wouldn't be building if they weren't being requested by the countries.
And you have what, $2 billion in the country, you know...
I'm not happy... our country leaders in the room. All I'll say is it's much less than what it should be. And but your question of how do we manage so many countries asking us to do this? You know in the case of Europe as an example we've been trying to encourage as have other tech companies to come together as European Union and let's have a single set of requirements and try to make this so that we can scale it. India has scale so it just naturally has scale because of the size. But I think the good news for us is that a lot of our portfolio we have maintained sort of versions of it that you can run on your on premise infrastructure or versions that you can consume from the cloud. That's not true of everything we build. We have built some technology that's just natively cloud available. But in that case perhaps you can put a cloud instance in the country that's dedicated to the country if there's enough size. But we were fortunate that we have this mixed portfolio. So it's incremental dollars that we're spending on it that we wouldn't be spending, that we would be spending somewhere else. But the reality is that's where the world's going. So you don't have to love it, but you have to just understand that if you're going to participate in these growth markets around the world, you're going to have to figure out how to work with the governments in those countries to deliver the solutions in a way that they want to consume them. And if you can't, they're going to find an alternative where they can or in India's case, they may build it themselves anyway.
I want to touch on R&D funding because that's one of the things that will dictate whether or not you succeed in your plan. And some point to the R&D funding gap for India currently stands at about 0.6% of GDP versus the US at 3.5% and you have countries like China, Korea, Israel much higher than that. Might that be a hindrance to you?
Definitely, definitely we need to amp up our R&D spending. We also need to change the structure of how R&D is done. We need to really focus on which are the application related research, applied research, let's say the areas in which we need to put more money and the areas in which we need more focus and energy and it has worked really well. I'll give you one example. We wanted to develop the 4G telecom stack which can be then upgraded to 5G telecom stack because in the world there are two from China, one from South Korea and two from Europe. There is no sixth telecom stack and end to end I'm saying complete, the core, the base and the entire thing, the radio network, entire thing. We decided to put in efforts both with the private sector as well as the government combined in a very nice partnership. We could develop the entire 4G telecom stack end to end built from scratch within three and a half years. And today it is deployed on more than 100,000 towers working fantastically well. So that's now a new entrant in the world where the world was dominated by five players. Today there's a sixth player which is much better in capabilities, significantly better in capabilities and significantly lower on cost. So that kind of capabilities are available in our countries. The question is focusing on which are the applications, which are the segments in which we need to put our efforts on and we have been very carefully putting our limited capital into areas where we can get the best results and again that draws from the strategic picture, which are the segments in which we want to be fully self-sufficient and we want to be able to give a trusted solution to the world. That's the way we look at it.
Can I comment on that? Because in this case we actually came beside the country in this building out of this 4G infrastructure that actually enabled mobile broadband out to all areas of the country and in that case the development was happening on that piece but we then integrated it with our portfolio. So you get the leverage of some of our R&D spend as well in addition to that because the total 4G 5G networks, the piece that the minister was talking about being developed plus all of this connectivity, security etc all the way out to the edge. So it's a multiplier is my point. So the lower number isn't always indicative of the value that you're getting out of some of that R&D spend.
It is a long game, right Chuck? We're talking what, 10 years on before you can see who succeeds in their effort to be sovereign.
I'm not sure it's 10 anymore. It probably was a year ago. Yeah. I think the world's moving so fast right now. I don't know the answer to that question to be honest with you. I think that...
What will decide who gets it right and who doesn't? What other factor is in play?
I think it's, and I'm not saying this just because I'm here. I think the approach India is taking which is to make those strategic decisions on areas that are super important and then figure out how to partner in other areas because you know you can't do every bit of it at the pace that it needs to be done I think is the right one. And so I think getting the strategy right in that case is obviously very important. And they have the scale to go develop. There are other countries in the world who want all of this but don't have the scale to actually build out the technology in a way that we're talking about here. And I think the pace can't be underestimated on this. You can have a great ideological desire but the pragmatic issues that are happening in the world today aren't going to align with that ideological desire in a lot of cases because I mean you think about what we're dealing with today that we didn't know existed six months ago. I mean the way our portfolio has adapted, we've adapted it in the last six months on the fly because of things like Mythos. I mean just think if you were starting from scratch trying to build this stuff and then all of a sudden oh there's Mythos and you're halfway through trying to get to a core set of capabilities. You're just not going to be able to catch up. So I think the strategy of determining what you're going to build in country because it's strategically important, national security, whatever that is, and then partnering with companies you trust to fill out the rest of that. I think that's the only way this is going to work.
So, as countries look to tech sovereignty, the risk of fragmentation becomes higher. How might that look like to you and how concerning is that as a provider?
Yeah, I think this is where we've been for 30, 40 years, you know, a part of global standards bodies to try to make sure that we have global communication capability and I think we'll figure that out. I fully believe as long as it's a computer science problem or an engineering problem, we can solve it. And I say we as an industry or as technologists around the world, it's when it becomes a geopolitical issue that it becomes more difficult. So I think the technology side of it can be dealt with. I think it'll be determined by what happens at the geopolitical level which as much time as I spend in Washington that's not my remit. So thank God.
Minister your thoughts on fragmentation. I mean at some point when countries want control it will impact the global tech system.
I think technology will continue to remain a highly globalized field, sector. The GVCs, the global value chains will definitely be multi-border, multi-country, multi-geography. That is the nature of this industry that will remain as such. As I said in the beginning, strategic dependencies, which are the countries you can trust, which are the places where you can believe that your production, your design, your dependency on a particular country or a company doesn't make you lose your resilience. Those are the decisions which will have to be taken again and again, continuously evaluate the partners, make sure that the partners and the producers think they're on the same page, they think similarly. I think that is going to be the journey ahead. In my understanding of the way the world is moving today, the turbulence is going to be much more than what it was in the past decades. And the turbulence will come both from technology as well as from the way the financial world is moving. The whole debt levels in the rich countries, that is going to unfold today or tomorrow, maybe in 3 years, 4 years, 5 years, I don't know, but when that unravels it's going to bring in a much bigger turbulence because by that time AI would have brought in many other disruptions in the employment sector, in the way people work, especially the services industries, the way they work, and the debt levels getting unraveled. All those things are going to be extremely difficult times ahead. It will certainly be, I mean countries like India, we are preparing for that eventuality. For example, our public debt to GDP ratio was reduced from 61% to 55% over the last 5 years. So we want to have a country, we want to have an economy which is resilient from a financial point of view, economic point of view as well as from the technological point of view. We want to have an economy which stands out even during the most turbulent times because we have seen the Asian financial crisis in the past. We have seen the global financial crisis of 2008. We have seen how it impacts the emerging economies like us and we are at a cusp today where around 4 trillion dollars and growing 6 to 8% consistently with 95% confidence interval. So that kind of growth can be disrupted by global factors more than our internal factors. So we are very carefully not only making sure that internally we keep becoming stronger but also how do we make ourselves immune to the global turbulence that's definitely going to happen in the coming years.
Chuck keeps saying that the India model is the right model. India is doing it the right way. Do you see that as a framework for the global south that can be adopted? Both Minister and Chuck, your views on that too for the global south.
I do, but again India is very unique because of the scale and the technology capabilities and the engineering capabilities that exist in this country. So just park that, I mean I'm not...
If you don't have the scale how should you do it?
Well, I think in that case then you got to get back to, I mean it's the same strategy in some cases with countries they're going to say what technology can I actually build myself that's strategically important and if they're realistic they may say it may be a very small percentage that they can actually do and they have to have 98% of it's going to come from partnering with companies they trust. In India's case it may be 40, 60 or it may be whatever it turns out to be and I think the strategy still works it's just going to be much different levels of investment and development and you know 7.8% GDP growth helps along the way and so I think that you know we always say growth solves a lot of problems and in this case it certainly helps India be able to invest in whatever percentage they need. But I think it also puts the onus on companies right now when you talk about the global south. Pick Africa as an example. I think that we have to, there's got to be an operating model in our case that actually where we partner with both governments on the ground as well as the US government to ensure that we're doing everything we can to leverage this technology to actually apply it for all the humanitarian use cases that exist with this technology. We have to make sure that particularly in the global south that those countries are able to actually experience the positive benefits of some of this technology and solving some of the biggest problems in the world because that's fundamentally where they exist.
I would take a bit nuanced view at this. Different countries are at different levels of development of the economy, of the people, of their cultural heritage, all those things have to be considered because one size doesn't fit all. I recently saw a show on Singapore and it was a very insightful program. Countries when they move up the development cycle at different points of time and different stages they will have different requirements. So I think when we talk of the global south or if we talk of the rich countries each country will be having their own challenges and own opportunities and based on their own strengths and their cultural heritage things will have to be decided. For example manufacturing comes naturally to India. For about 2,000 years we were the largest manufacturers. Just about 250 years we lost that capability when we didn't participate in the industrial revolution. We can pick it up culturally as a civilization. We believe that it's something very natural to us. So those kind of decisions, those kind of thought processes will have to be applied when we look at any country's development plan.
As we wrap up, a bold prediction. We're talking tech sovereignty. How do you see that playing out, Chuck? A bold prediction.
I don't know that I have anything bold.
You can do it. I know it's 8:30, but...
It's too early. I've only had three coffees. I think the boldest thing I can tell you is that wait six months and we're not going to know what we're going to be facing in six months. And that's, it's like I'm almost 30 years at Cisco and obviously longer than that in my career. And I had a computer science degree in the 80s and I never dreamed that we would literally be, we used to do three-year planning cycles. So, my bold prediction is you're going to do 90-day planning cycles. I mean, it's like it's insane. I mean, I was talking to the chief product officer at OpenAI. And I'll keep this brief, but he said we used to look at six months. What were we going to do in the next six months? And then two weeks later we were tearing it up and starting over because everything had changed. And I think that's the world we're going to live in.
Exactly. I echo what Chuck said. Things are changing.
Honestly, things are changing very fast and the biggest issue that we all have to be prepared for is the turbulence which is coming in the next few years.
Minister, Chuck, we thank you so much for your insights today. Thank you.
Please welcome to the stage Shri Piyush Goyal, Union Minister of Commerce and Industry for the Republic of India. The Honorable Gan Kim Yong, Deputy Prime Minister and Minister of Trade and Industry for the Republic of Singapore, Sunny Verghese, group CEO of DP World. And the honorable Mary Ng, Minister of International Trade for Canada for a conversation with Bloomberg's Stephanie Flanders.
There's an old story about a riot in the streets, Chinese people rioting against the Japanese, and they surround a Japanese car bent on destroying it. And then someone points out that it was actually built locally in a joint venture with the Japanese, which someone else says, 'Well, let's just smash half of it then.' Breaking up in this global economy is quite hard to do. We're finding out. But the world that we've described over the last day is one that seems to demand more resilience and yes sometimes self-sufficiency in these critical technologies that we're discovering are going to be vital for the next few decades. But, you know, how do you unscramble that omelette? How do you trade off self-sufficiency with efficiency which had been the goal that we put at the center of most business plans for the previous 20, 30 years. We've got a fantastic panel, individuals who, well three of them at a government level and then another at the absolute center of global trade and logistics on the private side who have to do this every day, think about how to make those choices. Let me start with you, Minister Goyal. Excellency, India was thinking about self-sufficiency, I guess, long before it was fashionable, but not always successfully. What is the goal? I mean, just define for us briefly the target. Is it self-sufficiency or diversity?
Well, I think you're absolutely spot on, Stephanie. This was a debate that India has had for decades but every time around it remained just a conversation. During COVID we really recognized the vulnerabilities that a nation like India, a large nation of 1.4 billion people had to go through when supply chains were broken. We did not get adequate material for meeting our needs during COVID. Wherever we had placed orders for personal protective equipment or COVID kits or vaccines, we were let down miserably by all countries. It's not as if I'm directing it to one or a few countries. When we needed Pfizer and Moderna vaccines, the West refused to give it to us. They even refused to make an application to get the vaccine into the Indian market even though we were willing to waive all the conditions. So it's a global phenomena. Everybody at that point of time looked after themselves except in some sense India because we provided medicines to whoever needed it. We provided food grains even free of charge to over 100 countries less privileged than us. We provided vaccines to over 100 countries. So while we continued with our effort to be a part of the globe and the global need, we found that most countries let us down very badly. And that's when Prime Minister Modi gave the clarion call for Atmanirbhar Bharat, self-sufficient India. And he didn't just give the clarion call, he followed it through the last six years. You just, many of you just heard Ashwini Vaishnaw...
My colleague, the minister from the information technology sector, we finally even realized semiconductors. We need to have some presence, otherwise, with a 130 to 150 billion dollar annual purchase on semiconductors, we cannot be totally dependent on other parts of the world. And the same story goes on in many critical sectors where countries have sought to weaponize their supply chains or whatever they have in terms of, let's say, natural resources or technology. Having said that, we do not believe in isolation. In the last four, four and a half years alone, we've entered into preferential trade agreements with 38 developed nations. And our idea is to open India's market for the world as we wish to see other markets open for us. So from 10 trillion dollars of GDP which was open to India on a preferential market basis until 2014, today as we speak, we have trade agreements covering $70 trillion of GDP. We are talking to Canada. We are talking to Mexico. We are talking to the rest of the GCC countries. Saku, Marcusaur, Uratia, many other negotiations ongoing will take this figure up to about 85 trillion out of 115 trillion. So we are basically willing to engage with our partners, but the critical and important element in all of this is trust. We are looking for trusted partnerships where we can both trust each other to be a part of supply chains. So it's a fair mix of efficiency amongst friends and self-sufficiency for critical elements where we can ensure that, for example, food security is something every country today is very conscious of, but it's not necessary that everything has to be done here. We buy lentils from Canada, for that matter. We buy some oils from the United States of India, America, or from Indonesia, IA, and Malaysia. But largely at the aggregate, India has now become quite self-sufficient in critical elements like food, energy. And the focus now is to see that our trading partners and our friends around the world and India work together for both efficiency and self-sufficiency as integrated chains.
Minister Gan, I mean, Singapore self-sufficiency is going to be tough in a wide range of things that the economy needs. But how do you, how has the challenge of resilience and at least security of supply, how do you think about that differently now post-COVID and since the geopolitical challenges of the last few years?
Thank you. This is a very interesting topic. I agree with Goyal to some extent that actually there's a different perspective on the self-sufficiency. From Singapore's point of view, we focus a lot more on resilience rather than self-sufficiency because to some extent Singapore imports almost everything that we need. Water, for example, even as basic as water, we import from our neighbor Malaysia. And therefore since our independence 60 years ago, we've already been very much aware of the need for us to be resilient in our supply chains and for our other, in order for us to achieve that, in addition to import and make sure that we have secure sources, we also develop our own capability. Say for example, we introduce new water. We recycle our water through filtration, through reverse osmosis to provide regenerated water. We call it new water and this provides us a certain amount of sufficiency. We have gone also into desalination to provide us additional supply sources. So I think we look at different ways to ensure that we have sufficiency and at the same time we want to make sure that our reservoirs are enough. We maximize our catchment area. We converted our Marina Bay into a freshwater storage facility to help us to make sure that we have supply of fresh water all the time. So I think from our point of view, self-sufficiency implies that we just need to make sure that our supplies are resilient and we do that through diversification of sources. One is through imports, even imports we maximize our possibility of import sources. We buy food from India as well. We buy rice from India and we buy chicken from Brazil, from all over the world. So we want to make sure that our supplies are diversified. At the same time, we need to ensure that we also have sufficient stock within Singapore, whether it's on food, whether it's on water, and we also look at building capacity to be able to produce locally both on food as well as water, and manufacturing is the same. We also want to make sure that our components, our critical components, we are able to ensure we have sufficient supply sources. So this will help us to be resilient and to be diversified and in that sense we are self-sufficient rather than to focus just on producing everything ourselves. That's just not possible for Singapore. As you pointed out, we are a small country and we're a small economy. We can't produce everything that we need. So we have to trade. We produce something that others need and we import something that we need. So it's a win-win outcome for all of us.
Minister, I mean, we've, we heard, you know, we've obviously heard a lot about Canada in the last day or so. We're going to have a bit more Canada later on, but we also had that reference to that sort of Jake Sullivan view about the small gardens and the tall fences. You know, how much of this is about defining critical sectors that you need to have self-sufficiency or diversity, and how much is it across a broad sway? I mean, do you consider it a sort of mapping exercise, and how does Canada think about it?
No, it's a great question, Stephanie. I think, you know, none of us operate in silos. We've figured out, as Piyush said, since the pandemic that we're all globally connected. And so the Prime Minister Carney's vision is to work with middle powers, like-minded countries all around the world to build up economic resiliency. I think that's the key, key word we're looking at here about resiliency. See, India is growing quite fast. They need 70% more energy by 2035. Canada has that energy. We're an energy superpower. Again, you know this, when we were with the Prime Minister in Singapore, we had a lot of good conversations around food security, around AI, and how Canada can help Singapore. And so, you know, just sitting here on the stage, we've got you from DP World. DP World has invested heavily in our ports in Canada along with PSA from Singapore. And so we can't do it alone. We need to rely on each other to really build a world that works for our businesses and our workers. And that's where our focus is. And so since the very beginning, you mentioned diversification. Our focus is to diversify our trading partners quickly, as fast as possible, and we're moving at speeds never seen before. Last year alone, we signed a handful of trade agreements with Indonesia, with Ecuador, with the UAE in 47 days, a record for our country's history, with the European Union, and we're negotiating, of course, now with India, with ASEAN, with the Philippines, with Saudi, with Mercosur, and others. And so you need to continue to diversify your trading partners. And look, some of us have been in business. We know that when you have one customer buying your product, they set the price. And so for Canada, diversification is key for economic resiliency. And we're attracting those investments to build those big projects. But we're not doing it alone. We just hosted the investment summit last month in Toronto, our largest investment summit ever. And I know the chief architects in this room, Ambassador Mark Weisman, where we had 300 of the largest asset managers in the world come to Canada, come to Toronto, that collectively manage about 120 trillion dollars of assets to come look, come to look at our investment deal book. That's investments in energy, in mining, in digital technology like AI, in data centers, in agriculture. And we're not doing it alone. Last year we attracted about $90 billion, over $90 billion of foreign direct investment into our country, the highest it's been in 20 years. And on top of that, we are removing red tape and ensuring that there's efficiencies. So, working with the provinces, the territories, Indigenous communities to build big projects to get them permitted within one year. And now you're seeing Prime Minister Carney, he introduced the mega productivity deduction just a few weeks ago. That lowers our marginal effective tax rate from 13 to roughly 6.5%, which makes Canada the most competitive business investment environment in any developed economy. And so, that's important and that's driving even more investments. And many of those projects are oriented towards exports to Asia to help our friends grow. India needs that energy. They need that potash. Singapore is looking for food security. We can help. And with Canada, the word trust was mentioned on the stage. With Canada, there's trust. We have, we're a reliable partner and there's certainty there with us. And that's what businesses need in this environment, especially as you're seeing global trade headwinds, certain policies that are impacting our global supply chains.
But just on that, because you're talking about building up alternative sources of supply domestically, at least in some of the, some of the cases you talked about, but it isn't just about supply, right? It's also about demand. There needs to be a market. And I think Eric Schmidt pointed out yesterday, the market is not necessarily rewarding companies for diversifying, for spending more money on stockpiling. So, how do you ensure that you're creating demand for those companies and investments that you're attracting to Canada without just having the sort of most unsuccessful forms of industrial policy?
Well, if you look at what we're doing in energy alone, we've got Prime Minister Carney just announced the largest, second largest LNG facility in the world a few weeks ago, LNG Canada 2. We're not doing that alone. That's with Malaysia's Petronas, KOS from South Korea, we've got Japan with their Mitsubishi investment, China and others. We're doing it with partners around the world because there's a need for energy. There's a need for a stable supply of energy, especially what's happening in the Strait of Hormuz. Of course, there's a premium built into this, but it seems that countries have realized they need to diversify their supply chains, and it's going to come at a cost. And that cost is really to secure those supply chains. And if you talk about critical minerals here in India, we've sat down with many of the industry experts in Mumbai and they're asking for another supply of critical minerals, you know, to diversify their supply chains. That's very important where Canada stands. As you know, we're very blessed with lots of natural resources. And so what Prime Minister Carney had started at the G7 last year was the critical minerals partnership alliance, working with like-minded countries to start up and support projects, stockpiling, offtake agreements to make sure it works. And one example I'll quickly give you is we've roughly done about $20 billion of deals in over 50 partnership projects in Canada. Largest graphite mine in the G7 in Quebec. That's done in partnership with Japan and Italy. And we're looking for more of those partnerships.
Okay. I want to, we'll get back to this demand point, but I think there's, we're also talking about more and more this year about diversity of trading routes and ways to get things. Even if you're try, even if you have a diverse supply chain, if you only have one way of getting that material, you can face issues like we have obviously this year in the Strait of Hormuz. So how, how are your customers thinking about that?
I think there's a common theme. We've heard the respected ministers talk about basically three things: trust, diversity, resilience. So the first thing that happens is somewhere along the line, we're all talking about change and how we deal with change. Trust was broken. That's driving change. There's no point running away from it. This is reality. Trust was broken. And we're all talking alternatives. So we are moved away from an era where barriers dropped, free flow of money, free flow of goods, to an area which has suffered and been inflicted by weaponization of everything possible, and everybody is therefore now looking for how do you deal with this situation. So if you, if you accept what has actually happened, the natural solutions will follow. So we are all talking, we're all looking for new partnerships. We are looking for new trade routes. So the days of zero cost of money and just-in-time are over. There is going to be redundancy plans everywhere. So where I could have invested a billion dollars in supply chains in the era which has just ended, I'm now going to look at investing almost double. That's the cost of redundancy. If everybody decides to weaponize what they can, this is the likely scenario. So if I'm sitting on the Strait of Hormuz, I close it. If I'm in the Malacca Straits, I close those. So canal, Panama Canal, these were all things that we took for granted and none of us here can take it for granted tomorrow. So I remember the first time 20 years ago when we did risk register for DP World and we had a very large concentration of our business in Jebel Ali. At the far right corner of that chart, which is high impact rate, was written Strait of Hormuz, and the low left-hand side of the chart was probability, which was the probability line was low. And this could, this would happen to all of us who are in the age of 50 to 60. This is the era we have all lived in. That game's over. And, and today we are talking about, as you said, trust is gone, a resilient supply chain, diversity, alternates. Now all this means that you're going to factor in inefficiency. So we all have to get used to the fact that everything is going to cost more in terms of size. Everything is going to cost more in terms of what it costs to do business, in terms of what is going to be the cost of money. We have already seen that happen and somewhere along the line, so this is next five years situation. I don't believe that should last longer because I think this makes the world pay for more. Pay more for everything and very soon people will realize that they're not going to get love for doing that. So hopefully something will change.
They might be realizing that in a few weeks actually. We'll see.
Maybe can I just make one point in addition to his comments? I think if you put it in perspective, the cost of disruption may be higher than the cost you're paying for resilience and for redundancy. I think we saw that in Strait of Hormuz. We saw that even during COVID-19. So it may not be a man-made disaster. It could be a pandemic and it could be a climate change impact that you're going to see supply chains being disrupted more regularly from now on. So therefore we have to think very seriously about investing in resilience by building in redundancy, by making sure that you have a more wider selection of sources of your supplies, making sure you invest in your own capability or capacity so as to prepare for the unforeseen circumstances like disruptions. So I think in time to come, it may not be Strait of Hormuz, it may not be geopolitics, it may not be pandemic, it could be climate change that could impact your supplies. So I think we just have to prepare for the new future.
I mean, in some ways this discussion is impossible because what you would say about food security is very different from what you would say about critical minerals, and we are, we're running a lot of different things together. But one of the tensions is that you have the, the conflict between, we've talked about the sort of difficulty of, of paying more versus having more security, but the other conflict that we've had tension in the last, I would say particularly the last year or so, is as we've had this conversation, the technological imperative to have the latest AI technology, to be building out the data centers, has actually kind of trumped all of these things. And the people are in many ways more bound up with the old supply chains that they had for those things because there is no short-term alternative and they don't have time to wait five years for the domestic alternative. So I mean, Minister Goyal, we've sort of, we haven't been able to build up a lot of diversity in that space, and you can see it in China's trade statistics.
Well, I think we have to give it time. Other countries also recognize the importance of technology. Everybody in their own way, overtly or covertly, is working to develop their own technologies, working to develop equipment supply chains, and that is where friendly countries will have to collaborate and cooperate with each other. It may not be possible that we can replicate what one or two countries have been able to do at really big scale unless we join hands, unless we work together. And I for one am not as worried that we cannot do it as much as we'll have to look at the intervening period of how we overcome this intervening period. It will happen. I don't think technology will remain the preserve of only one or a few countries. Just like every other supply chain, this has its own elements. So there will be an element of talent. For example, you need a lot of people to build technology or these equipments. So some countries may provide the people or the talent. Another country may provide the market. Another country may have a certain element of that equipment. If you take for example ASML, ASML has some equipment which you just can't do without. The whole world needs it. So I think this is where trusted partnerships will have a huge impact and my own sense is a lot of people are being called out in the current situation. A lot of countries are also demonstrating their true position on working as friends or working in isolation. So this will, this will be a very defining period where the world will prepare itself for the future. Everybody has recognized the importance of friends and that's going to be the most important and critical element in the years to come.
Is this a, is this a challenge for critical sectors or is it something that you would consider to be just across the economy? I mean, you've sort of, you highlighted, Minister, LNG, certain sectors that obviously Canada can develop quite quickly and attract more direct investment, but is it, are you only thinking of it in terms of isolated cases or is it something that really has to apply across the board?
Well, I think when you're building up resiliency, it has to be across the board, right? Whether that's in food, whether that's in energy, whether that's in security. And if you look at just the steel industry and the overcapacity in that sector, you need steel industry for national security, and so many of us on the stage are taking our own provisions to protect our industries against dumping.
Of course there's a cost to that, but I think, you know, what price do you put on national security? I think it's very important to, to really step up and work together, and so that's where Canada comes in. And, you know, you've heard, many of us heard the Davos speech from Prime Minister Carney about people coming together, middle powers coming together, but working with the world pragmatically is very, very important. You know, Canada's approach to the world is approach it as it is, not as we wish it to be. And we know we need to continue growing our partnerships around the world, and that's what we're focused on. But the world is also coming to Canada because of that trust. We don't use a stick to attract investments. We use conversations, we use initiatives, we use tax provisions to attract those investments, and we create an environment to attract those investments. And so we want to grow with the world, and this is why you're seeing the investments being made in Canada. This is why you're seeing us sign record trade agreements with countries around the world, because that's what our businesses want us to do. 13 years ago, if you ask me, I spent 13 years in the private sector facilitating international trade. Canadian businesses were not there. It was easier to go to the US, frankly. But now the business environment has quite changed drastically where businesses have joined us on trade missions. Here in India, I've got 300 Canadian delegates join me here from different sectors, not just in energy, but in clean technology, ICTs, agri-food. And so this shows the partnership. Piyush had come to Canada in May and he brought the largest delegation from India to Canada. And so there's a real appetite from the business community. We can sign all the free trade agreements we want on the stage, but we need the businesses to utilize them. And now that environment for businesses has changed quite drastically where they want to use those FTAs to really do more trade with the rest of the world, not just one trading partner.
How much is engagement with China part of this? Because often, I mean, a lot, some of, certainly many of the sectors we're talking about, it's not a general wish to be self-sufficient or diversify, it's a specific wish to not be dependent on China. So how much is this, if it's a China policy, how much does engagement with China, what's the role that that should play? I mean, we've seen recently in a different context, Europe has achieved the voluntary export quotas from China, just as the US had achieved with Japan in the 1980s. Is that kind of engagement with China part of that to provide space for domestic industry?
I think it is important for countries in the world to continue to engage with one another. Even as the world has become increasingly fragmented, all the more important for countries to find ways to work with one another, maybe perhaps in very specific areas, whether it's Singapore, whether it's ASEAN, whether it's China, EU, or US. I think very few of us can be totally independent of the others, so there must be ways for us to look towards working together, and that trust is a very important element. We work with like-minded countries that we can trust, that we can work together. They're dependable, they're reliable, and that's why we form free trade agreements. We form groupings among ourselves to work with one another, like Singapore and Canada. We also have a free trade agreement. We are also looking at how we can strengthen our collaboration through our economic collaboration partnership. So I think many of these are what I would say we work together to focus on areas that we need, and it must be mutually beneficial. I think this is one way, I think it's going to be very hard to sustain. So between Singapore and China, we continue to have very good working relationship. We continue to have a very strong economic cooperation in all aspects of the economy, and similarly we also have a collaboration with India. We are talking about how we can strengthen the semiconductor industry in India. We're also working on the training and skilling for the Indian workforce so that they can support the growth of semiconductors. So I think we look for ways to work together even under today's condition of fragmentation. I think if you're able to do that, you'll have a better future for all of us.
I should mention, I think there's a key, there's the QR code which you have for, you could submit questions, which I'll see on the iPad. I think it is in your, should be online. It should, should be online, and I think we might be able to also get it on the, on the stage. I guess the same question on, on China, Minister Goyal, that here we are, there's the, the questions QR code. We see, I mean, that's how much is China part of this in terms of, maybe, I mean, I mentioned that joint ventures, I mean, as far as you're concerned, joint ventures with China can be a core part of this?
Well, we are open to all countries around the world as long as we get a fair deal, as long as we are ensured continuity in the engagement, and as long as the geopolitical situation does not deteriorate. I think we had some concerns in the past. We are working to develop the relation with China once again, but the last word has not yet been scripted on this journey.
That's one way of putting it.
Maybe I can add from Canada's perspective, they're our second largest trading partner. There's a lot of complementarities, but if you look at what China has in terms of energy storage technologies, that's where Canada's very interested in. And so there are key areas where we have partnerships with China that we'll continue to build on. Our agriculture sector supplies a great deal of canola, of beef, of pulses and others to China. And so it's important that we engage with our second largest partner. But again, finding those complementarities instead of the competition is key to those partnerships.
I mean, you've said something that was very optimistic, that we're going to have this period where everything is way more expensive. We're having to stockpile. We're having to find ways to avoid these choke points, assume that they all could be weaponized at any point, but then people will realize that that's just not a good thing and we'll somewhat go back to where we were. Do we think that's, I mean, I'm slightly, I'm slightly exaggerating, but the implication was we would all step back from the brink, even though betting on rational behavior in the last year or so has been challenged, has been challenged extensively.
I believe ultimately it will prevail. See, when you say trust is lost, who lost it? More importantly, is nobody has won it. Somebody has lost it for sure. That's why we are in the situation that we are in. Nobody has won. It is obvious. So there is no smooth, easy succession plan here. And what we are working around is in a vacuum, and this is across everything. And if you look at globalization, globalization was not a failure. The amount of wealth that was generated in the last three decades is massive, but it was not inclusive. So if you look anywhere in the world, look at developed economies, look at developing economies, look at undeveloped economies, there is a political angst against liberal politics everywhere. And only kind of answer to that is exclusion. And that is what all the numbers tell you also, whether it is in the US, whether it's in Western Europe, Northern Europe, or even in the poorest countries. So that's the challenge, and one can, one should hope that the new solutions therefore will be driven from the excluded world. So their inclusion in the overall process. So the post-World War II rule-based system does not exist anymore. It's not effective. Sad but true. The sooner we accept it, the better progress and quicker progress we'll make.
Did you have a spy camera in the last WTO ministerial?
But I, I just roam the world.
I mean, the rules-based system doesn't work even with the policies that, some of the policies that we're talking about here.
No, but the sort of, what was it based on? It was based on the UN Security Council. It was based on the five members who had veto powers, and they were never meant to disagree. The day they disagree, progress stops.
That party has to disagree quite a lot.
That part is over. They disagreed.
I wouldn't say we must give up on rules-based trade. I mean, we're negotiating free trade agreements.
There'll be a new rule-based trade, which the whole, the core of the system has to be more inclusive. So what percentage of the world, global population is represented in, in the five permanent members of the UN Security Council? It's simple, the answer is right there in front of us. We're just not willing to accept it.
Stephanie, what he's saying basically is that countries will have to map out their future based on their levels of development on the one hand, the size of their population on the other hand, and finally, we will also have to consider that in this fragmented world, end of the day, if people let down each other, you spoke about disagreement, it's not about disagreement, it's about the willingness to listen to each other's point of view. The moment we start listening to each other, we find solutions.
Funnily enough, I'm going to, there's a, there's a bunch of questions and several of them touch on basically the same point. So I will leave it with the last question to you, following up on that point. Do you think India's relationship with the US will improve after this president?
After this president? Of course, it is already very good. I don't see any problem as we speak also, and to my mind, the relationship with the US that India enjoys is very substantive, very consequential for the world, being two large democracies. One must bear in mind that we have, it's not only about trade, which of course they are our largest trading partner, and I think will continue to be in the years to come. And by and large, I don't see any problem in any agreements also with the United States. But it's about trade. It's about defense partnership. It's our technology partnership. It's our critical minerals partnership. It's our people-to-people engagement.
You talked about willingness to listen, though.
You talked about willingness to listen. Do you think maybe there'll be more willingness to listen with another president?
I think whatever may be reported at the Bloomberg New Economy Forum or in the Bloomberg small intimate forum, or even in your wire services, the fact that the United States and India continue to have a very close relationship and we continue to engage with them on so many tracks, whether it's our defense exercises together, whether it's our work towards ensuring open supply chains on technology, on goods, on services, I think the US and India have a very, very consequential relationship and it's only going to get better irrespective of changes in political thinking, whether in India or in the US. The relationship draws its strength from our economic imperatives, from our political imperatives, from our security imperatives. So it's a very safe relationship. I don't think the rest of the world needs to worry about it.
Well, consequential is definitely one word for it. Thank you very much to all of you.
Please welcome to the stage the Honorable Anita Anand, Minister of Foreign Affairs for Canada, Dr. S. Jaishankar, Union Minister of External Affairs for the Republic of India, the Honorable Kevin Rudd, Global President and CEO of Asia Society and former Prime Minister of the Commonwealth of Australia, and the Right Honorable Rishi Sunak, former Prime Minister and Member of Parliament of the United Kingdom, for a conversation with Bloomberg's Eric Schatzker.
Good morning, everyone. As you can see, we're here to talk about middle powers. Now, the idea of middle powers actually has been around since the 16th century. The definition has been refined multiple times over the centuries. Today, it has been updated to reflect the world's new reality. We talk of middle powers as a counterweight to the superpowers, United States and China. And in some respects, we have Canadian Prime Minister Mark Carney to thank for that. As all of you know, in his speech at Davos in January, Prime Minister Carney said, quote, 'The middle powers must act together because if we're not alone, we are at the table. It's not alone at the ta, not at the table. Pardon me. Forgive me, Minister Anand, for misquoting our prime minister.' 'My prime minister, too.' 'If we're not at the table, we're on the menu.' That was a call to action. What we want to know is what that appeal has delivered so far. Minister Anand, we haven't seen the UK, we haven't seen Japan, we haven't seen Australia, we haven't seen Saudi Arabia, we haven't seen Brazil rush to that table. Is there a real middle power moment or for now just a bunch of bilateral deals that don't add up to anything collective?
Well, it's multilateral and bilateral, but let's just call a spade a spade and start with the most important point, which is the rupture in the international order, the erasure of rules and principles upon which the world order has been operating since the end of the Second World War. And the question really is for middle powers and others: Do we want to be passive observers or do we want to step up and lead, take a leadership role and craft the new international order that is being developed as we speak? And Canada is taking that latter role, making sure that we execute both bilateral and multilateral deals. Since Prime Minister Carney has come to office, that is 15 trade agreements that serve Canadians across the board. And I will say that the idea is, it's to work with other countries for the benefit not only of our strategic autonomy but for shared values. And so the idea is coordinated leverage, making sure that we have that ability to work together for our domestic economic resilience and to uphold international rules. And I'll just look at the G7 alliance coming out with the buyers club for critical minerals, stabilizing supply chains for critical minerals. So the idea is, it's very positive in the sense that there's work we can do together internationally to further strategic autonomy. And the final point I'll just make, it's for us, for Canada, it's not just about working with middle powers. It's also about furthering our domestic economic resilience. It's also about diversifying trade relationships. And so working with middle powers is part of a broader foreign policy package.
So you would argue, I don't want to put words in your mouth, but let me say then, are you making the case that it is delivering results beyond Canada's own interests?
Yes. And the work we will continue to do to double non-US trade over the next 10 years is founded on those agreements that I mentioned. In fact, if you add in security and defense agreements, that's over 20 in the last year alone. So that's tangible evidence. But this is a long-term strategy also. And again, bring it back to the vacating of the premises by global hegemons, the increased protectionism of the United States, and the question being posed to middle powers and countries alike, regardless of how you choose your nomenclature, is do we want to be passive observers or are we going to shape the international order? And Canada wants to lead with other powers.
Kevin and Rishi, as representatives, if you will, of two other middle powers, let's call them, do you agree? Is it delivering tangible results? And as the minister says, it is a binary choice between being passive or active. Kevin, you're the senior middle power.
The whole idea of middle powers in the world is not new. If you look at the San Francisco conference when we shaped the order in '45, most of the powers back then, including India, including Canada, including Australia, were there in the active drafting of the provisions of the UN Charter and the subsequent arrangements. So this wasn't just an Atlantic Charter US-UK deal. It was much wider than that. Secondly, there have been various efforts of what have been called over the years middle power diplomacy. And now we are, opposed to Carney's speech at Davos this year, looking at what it means in the current geopolitical context. I think just two or three quick facts. One is nothing happens in the world unless you have critical mass. We can have wonderful ideas. Jay, you and I have had wonderful ideas over the years.
And we had critical mass too.
And we added critical mass. You had both the mass and the criticality, by the way. We Australians were just there to provide the drinks. But the bottom line is this. You can have a concept of order which is supplemented through the agency of other powers on the condition that it is not just a good idea, but that between us we actually have leverage and heft to bring to the table. So you do the maths across the democracies of Europe, the major ones, take the United Kingdom, France, Germany, Italy, take the major democracies of Asia, leading with Japan, leading with India, leading with Korea, ourselves, take Canada. You aggregate that, you're quite rapidly at a point where the combined GDP is much larger than that of the United States. And frankly, the combined GDP is much larger than that of China. So if you have that as your organizing principle, which is there is a critical entity here among the other democracies, and the question is, do you have the political will through which to deploy that leverage in trade, in investment flows, and in capital markets, and across the usual list of other levers of power. On the trade question, if we do face an increasingly protectionist America, and we're being pragmatist about what happens in '28, even under Democrats, does it remain protectionist? Let's just put that on the table. Then how do the rest of the world, how does the rest of the world organize itself for the future? And so therefore one of the ideas which we should explore with each other, and has already been happening at one level, Britain becoming a member of the TPP, for example, Trans-Pacific Partnership. How is that broadened out to the European Union joining with the Trans-Pacific Partnership? How is it further broadened out again, maybe with India? Now then you're starting to talk about a combined economic entity which would cause both Beijing and Washington to say, hold the phone, something real is happening here at scale. Last point is just the institutions of the multilateral order which Anita spoke of before. These are of critical importance and are being debilitated by US withdrawal, World Trade Organization, despite the fact that 90% of the world's trade is still done under WTO rules. UNFCCC, climate change. Guess what? The work continues to grind on, not at the pace at which we need. How do the rest of us as middle powers, frankly, provide the critical heft both in terms of financial and policy support to ensure that the existing machinery of the UN multilateral system continues to function as well until America resolves what sort of country it wishes to be in the world in the future? Because this is ultimately an exercise in US domestic politics. What future does America want for itself?
You know, I think, look, we're in this world. It's obviously, you know, multipolar. We've seen breakdown of some things that we took for granted. As a result, people are trying to diversify their relationships. In one way, in one sense, the world is, you know, converging on Jay's foreign policy of strategic autonomy, which some of us are waking up to in a way that, you know, he's been talking about and India has been practicing for many years now. Having said that, you know, I'm less confident or persuaded that what we will have is one overarching middle power architectural institution. And I think what is more likely is that you get a set of overlapping, right, where are they going to, groups of countries that come together,
Middle powers maybe every so often with some of the bigger ones on a particular cause or overlapping set of interests. And I think part of the reason for that is if you just look at this stage right we're on here on a middle powers panel, we've got actually an enormous diversity. We've got one country that shares a very large land border with the United States. We've got two middle powers over here, both of whom have a deep and abiding security relationship with the United States, which is always going to be the foundation of everything else that Australia and the UK do, even as they look to hedge and diversify a bit. And even between us, one's a Pacific power, one's a European power. And then in India, we're talking about middle powers panel. I think, I mean I'm sure Jay would say this, that's probably not the right description for India, right? I don't know what you'd describe it, Jay.
I'm here for courtesy purposes.
Whether it's upper middle or emerging, leading, and which obviously has a very different perspective. So I think that diversity illustrates why it's tough that on every issue you're going to have exactly the same set of overlapping things.
This idea that there would be a replacement of the current architecture with a middle power architecture. In essence, the current institutions are serving a purpose, but they need reform perhaps, think of the UN, but there are issues like Ukraine, like Arctic security, like information technology where middle powers coalescing.
And that's exactly what I'm saying. So these are the examples that you get. So look at Ukraine, right? Whether it's the coalition of the willing or the other institutions that have formed to help with that issue. Coalition of the Willing is interesting because it's the first time there's been a real European security issue which doesn't have the US involved in the command architecture for that. So that is actually quite a significant change. And then Kevin mentioned CPTPP, which I would echo as well, right? Like that is the UK joining a very significant trade alliance significantly after the US decided not to participate, and now conversations with the EU. And if that comes off, you will have created something quite significant, I think, there. But that's exactly my point. You will have these issues, and Jay will have the various coalitions that India is part of, and that is where I think we are heading. It's this kind of mini-lateralism where there will be different issues where different groups of middle power countries come together in a way to support their interests and indeed work together in a way which we haven't seen before, and often without the involvement of the quote unquote G2, if you want to call it that way. So that's my sense of where we're heading.
Dr. Jaishankar, you are here for more than just courtesy. And I do want to note for those in the audience that I will be doing something that appears to be rude, which is to say checking my watch every so often. There's a reason for that. Dr. Jaishankar has to be at a cabinet meeting and has a hard stop. And I want to be respectful of that. And so if you see him leave the stage at my cue, it won't be because it's a mic drop. I've had enough of this moment. It'll be because it's not wise to be late for Prime Minister Modi.
Yes, that option is there.
I suppose that option is still on the table. Dr. Jaishankar made a very good point. India does not like to be called or described as a middle power. Why is that?
Okay, let me before I come to that, I would say more than middle power, in a way we are powers in the middle. I mean, it's partly what we are today confronting when we look at the global landscape. So what really would define a middle power? I think countries who have the ability to, or to use the prime minister's words, who have the power to empower.
He used that yesterday very effectively, more in a domestic sense. I'm using it more in an international relations sense.
Who have the ability to make a difference. So let's use a very loose terminology for middle power. Would India be a middle power? You know, it's not a comfortable description. Because if you are the most populous country in the world, you have a GDP of 4 trillion give or take, and you have a lot of growth ahead of you staring you in the face, then a middle class somehow seems to be limiting yourself by that definition. But that's not what I would really quibble about. I think the issue, and in a way what Prime Minister Carney did at Davos was he was expressing the predicament of really countries who are part of an alliance and who now find that situation far more complicated than it has ever been before, and that they would now have to often take decisions of their own or go on paths which are divergent from that of the United States or only partly overlapping. So let's not take it literally, let's take it conceptually. Conceptually what I hear him is really arguing for the fact that the powers in the middle now need to be more active, need to deal more with each other, and figure out a way of moving the needle on issues of interest to them. Now I would say well some of that we already knew because in our case we were not members of an alliance. So we've always sort of learned to be in the rain without an umbrella. But there are examples.
Well, not we have our own Teflon, but look, I would cite to you already examples. Now, some of them would involve honorary middle powers. So, Quad is an example. IMEC is an example where countries come together for a purpose. Of course, those two also have the US in them. But you could have groups of countries who have, and that was Rishi's point, that you're not going to get, it's not like the middle powers are going to be round a table. Exactly. You know, the middle powers would now each apply their own mind, stake out their own interests, figure out their own policies, and then reach arrangements with each other.
How much influence can middle powers wield under that structure you've just described? What the prime minister, Prime Minister Carney called different coalitions for different issues. They're not all acting as one at the same time. Can they wield real influence? Maybe if I may, I'm going to do something really dangerous, particularly with my company on stage, which is I'm going to try to invoke Dr. Kissinger.
But Dr. Kissinger, Kevin's going to rehire me later for this, but Dr. Kissinger described, if I'm not mistaken, Kevin, you know, order as requiring two preconditions: one is a generally accepted set of rules among participants, and the second is an enforcement mechanism. So let's say these countries that we're talking about, the middle powers, can agree on a set of rules, even if it's the old set of rules, we like the old set of rules, we want to keep the old set of rules. What's the enforcement mechanism? That I suppose cuts to my question about influence.
No, I mean Dr. Kissinger isn't here so we can't second guess him on that one. But I would say that he was speaking for a certain era which has passed us by. Today a lot of enforcement is going to come out of consensus and understandings and self-interest. You're not going to have somebody standing out there saying do it or else. So that era is behind us. We've got to understand that.
I might just add on this very point. Enforcement in the international arena is a very ambiguous if not vulnerable concept. International law has long suffered from the fact that there is not an enforcement mechanism. And that's why it is so important to support the international adjudicatory institutions like the ICC, like the ICJ, because they give to the extent that is possible some enforcement mechanism to the principles of territorial integrity, human rights, state sovereignty, etc. So that's in response to your question. And I just want to go back to what we're all talking about. We are all pragmatic in the sense that we're speaking about how do we enhance our strategic autonomy? How do we ensure that we are resilient economically in these times? But we cannot forget the role that values play in this conversation. Values-based realism, principled pragmatism, whatever nomenclature you want to use. The idea is that there are fundamental principles or values that will motivate us as well. Canada opened a consulate in Greenland in February and stood with the Greenlandic people in Denmark to support the argument they were making about state sovereignty and their territorial integrity. That's principles. It's not just a pragmatic look at middle power groupings. And so let's not forget there is a role that principles and values play in this conversation.
Eric poses a very good fundamental question though for us all, invoking Henry, the architect of all wisdom in international relations, as Henry would say in his more modest moments. He was a great guy to talk to, and that is why order, essentially what's the alternative to order? It is international chaos. And if we look at the history of international relations even in the modern era, let's say since 1500, the bulk of that period has been disorder. A very thin slice of it has had various levels of order. People talk about the Concert of Europe to some extent until the Franco-Prussian War. You talk about the League, well we know what happened there, the United Nations multilateral system. Henry's thought about there being ultimately an underpinning power to give effect to the rules of the security order is a very realist view and can't be dispensed with given he was speaking within a Cold War context. The question on this is, is it better for us as constructive powers, as creative powers, as middle powers, let's use whatever the label we choose, to rally behind the proposition that order with rules either enforced or frankly consensually agreed is better than the alternative? I think we'd all say yes, yay, and amen to that. Because frankly, we can drift in completely the reverse direction where there are no longer any rules at all. And it's simply the law of the jungle. So what are we left with? Security domain up there which since the beginning we all solemnly proclaimed that the UN Security Council would be the arbital mechanism for all questions of international peace and security. Well yeah, if we did the history since '45, not always the case. And that wasn't just in the post-Trumpian period. Alliances have stepped into the midst of that and those in the non-aligned world will exercise their own autonomy to achieve other ends. In the non-security order which is fundamentally relevant to trade, investment, capital flows, currency markets and now the future governance of artificial intelligence. There is an imperative for those of us who are constructive, creative, middle powers around the world, or great powers on the edge, to use our leverage as systems who have phenomenal diplomatic networks between us, phenomenal creativity between us, and then to agree on mechanisms which can enforce a global set of normative arrangements to govern these areas of activity. Otherwise the drift towards nothingness is real. So therefore what we do has an imperative attached to it.
Look, I think this dichotomy of order and disorder is a false dichotomy. We are talking of order as we know it currently with all its limitations and flaws and a different kind of order. Does order evolve? There are other forces which maintain order. Now what we saw after 1945 was a certain kind of maintenance of order in which one or two countries had a disproportionate capability and responsibility and benefits. Now what we are moving towards, because we have seen in the last few years also limits of power, we've seen conflicts initiated with very different expectation of outcomes and they have demonstrated the limits of power. So what we are now heading towards is a different kind of order, an order where many, let's put it this way, the shareholding is changing, the board of directors is expanding, there is a much more active shareholders discussion about where the company called planet Earth is going, and there is a new understanding or a different understanding. It may not be very neat, may not be everybody on the table, a bit messy, but at the end of the day a combination of what you inherit, self-interest, some degree of what happens if it goes off the rails, that concern, and that's how you evolve the order. You're still in the order zone. You're not in the disorder zone.
Yeah, I mean just to take this I think slightly out of the abstract sense and bring it to something real which is the economics, right? Because we're moving to a world where the foreign policy and your economic policy as a country, particularly as a middle power but I think more generally, they have converged. We used to keep these files separately and now the world that we're in means that these things have to be treated together and we're seeing geoeconomics come up as a term. So then the question is for a power, and you asked this, how do you have agency in this world of very large scale powers who are willing to weaponize all sorts of things, but particularly in the economic sphere, what's the answer? And partly the answer is as Jay and others were saying, we will form these coalitions, these networks. Trade is an obvious one where you can recreate a lot of the rules of an old multilateral architecture inside these blocks, right? Whether it's the UK and CPTPP, hopefully the Europeans becoming more involved with that, whether it's the network of trade agreements that India has signed which is prolific, right? In the last four years, whatever Jay will correct me, nine deals, dozens of countries, 60 trillion dollars worth of global GDP covered. So that's one way to do it is you create those rules and influence that way. I think the other way though is to remember a little bit what Lee Kuan Yew said about Singapore when he talked about the big fish eating the small fish and the small fish eating the shrimps. And he was thinking about what was Singapore's path going to be in that world and it was, well we have to make ourselves a poisonous shrimp. And what does that mean in today's world economically? Whilst these middle powers, they can't be independent, they can't operate at the scale of the big ones, what they can do is make themselves indispensable, right? And the Dutch are a great example, right? This critical infrastructure that we're building in AI, on semiconductors. The Dutch have the machine and only the Dutch have the machine that makes those things. Germany, the only country that has the optics and the lasers that go into that supply chain. Korea provides the bulk of the memory chips. Japan has all the chemicals that go into these filaments. And you can go on. So for if you're a middle power, finding those ways that you can make yourself indispensable,
Become a choke point. And again, it can be in technology, it can be in other areas, I think provides a kind of strategy for protection in this world. An insurance policy, leverage, because look, you have to make your way, right? That is the world that we are in. We might wish it away, we can't. So then the question is how do you protect yourselves and ensure your place at the table? You started with Mark's phrase, right? That is how you make sure you have a seat at the table, that you can't be eaten like the little shrimp is, because you bring something to the table that everyone else needs and wants, and you don't have to provide the whole buffet, you just need the one dish that is the best competitive advantage available.
That's competitive advantage and leveraging your competitive advantage to, as you say, make yourself indispensable. We call this building our strategic stacks, in essence looking at AI and tech, looking at energy, looking at food supply, looking at financial market systems and transactions and making sure that we are leveraging our capabilities, our capacity in these areas. The one thing I think is important, at least from a Canadian perspective, and I would like other middle powers to grab on to this idea as well, is that we will never utilize our competitive advantages as a weapon. We will never weaponize agriculture and food. We will not weaponize our competitive advantage in energy. We will use that for the good. We will ensure that we are cooperating with other middle powers in order to ensure that that international system is built on top of existing multilateral.
Dr. Jaishankar, before you have to leave, any last thoughts you'd like to share with us?
No, I think actually we're pretty much agreed. So which is that at the end of the day.
I'm still struggling with the concept of poisonous shrimp.
Or I'm struggling with the board of directors being agreed on that and none of us want to be poisoned. I'm just still terrified by what we should say.
Yeah. Here's the point. I'm glad you used that word, that phrase choke point, because it's not just a world of middle powers. It's also today a world of choke points. And the tendency to weaponize. We tend to think of rare earths as an example. But the fact is even finance is a choke point. Sanctions is a choke point. People are weaponizing their grip on finance or on the US dollar.
So the point I think is we are moving to a world where the competition is going to be to some degree who has what to bring to the table and then deals among them saying, you know, you do this, I do this, let's develop this together, let's trade this for each other. So as I said, it will be at the end, you know, what's an order finally? It's a table. So the table will exist, that's the order. People will come to sit in different ways with different things to bring to the table. The behavior around the table will change. Who will talk how loudly and who will sit next to whom will also change. But I still think we should not have a pessimistic view about this process of change. This process of change was happening.
You know, it's just taken turns which we may not have anticipated. If I could bolt on just one idea though to what both Jay and colleagues have said, both Anita and Rishi, and that is each have spoke in their own different ways about lifting our national stocks based on our own comparative advantage. In Australia's case, you know, we are the periodic table on critical minerals, rare earths. It would never cross our mind to block the supply of that or refine to any partner in the world. But here is the difference. We can leverage our national stocks, we've all got them in one way or another. The question at stake here vis-a-vis order, taking Jay's concept, it's not an ultimate binary between order and disorder, that there are grades of new emerging order, is whether we constructive powers, creative powers, middle powers can construct orders which are then accessible to others beyond our national interest and in fact involving smaller powers as well.
This is where I violently disagree and leave. Thank you. Sorry.
We are going to continue here. Dr. Jaishankar, thank you so much.
Kevin, continue.
So I'm still wrestling with the poison shrimp. So the whole question is, we can do this nationally. Canada can do it. The United Kingdom can do it. We can do it in different ways because we've all got different equities you bring to the table. But the question about orders or orders within the order, and they can be compatible with global rules as someone suggested before, for example on trade, is are we therefore mindful of how we construct these arrangements which are accessible to a much wider group of nation states? In other words, not just the rest of the so-called middle power confraternity or concert, but smaller states. And that is in part Lee Kuan Yew's point as well. And given the predisposition currently which exists in the United States on the economic agenda, then I think there's also a responsibility to head in this direction because we do not know the future destination point of the American body politic. Someone raised the G2 question before. I think this is grossly overblown in reality. I've just come back from Beijing last night. I've been there for four or five days. I now live in the United States. Frankly, the reality of a G2 agenda emerging between China and the United States is close to zero. If you look at the fundamental strategic differences, the ongoing strategic competition between them. The question is while all that unfolds, how do the rest of us sustain our interest and his point our values in various plurilateral arrangements which also have a wider table around the order and not just ourselves.
To that point, Kevin, ladies and gentlemen, I'd love it if you pulled out your phones and participated in a poll. So we're going to show you the polling question on the screen in a moment. Here it comes. What should middle powers prioritize in a more fragmented world? As you can see, strengthening their own domestic security, reducing external economic dependencies, acting as a block to shape global decisions, or preserving the freedom to align issue by issue. We have heard varieties of all four of these in the course of this conversation. So we would love your perspective. Rishi, I'm going to come back to you for a moment because you said a few moments ago that it was important to get real, and I think this offers us an opportunity to get real on an important issue to your country, which is this. Last month, Ursula von der Leyen floated a novel idea, associate membership in the European Union, and she proposed Canada as the first candidate. Now, we all know that associate membership may never become a thing. You know as well as anybody sitting here how difficult it is to get 27 member states to agree on anything. But if it were to become a thing, should it become a thing for the United Kingdom?
Well, it's hard to answer that without knowing what it means. And I think straight away actually, I think the Canadians dismissed the idea. So I'm not sure how much legs it has. But what I would say is look, we may have left the EU but we're obviously still a European nation with a huge amount of overlapping interests and you can see that most clearly in Ukraine, right? You don't have to be an associate member of the EU or a full member of the EU in order to work closely with our European partners on this issue which is dominating every single capital in Europe. And the coalition of the willing that we talked about with an enormous amount of UK leadership in that is an example of that. But I also don't think you have to be part of the EU in order to thrive in this world that we've been discussing. And again, just to look at the UK and how it's used that flexibility to grapple with the issues that we've been talking about on this panel. Well, it's building a next generation fighter jet with Japan and Italy. We've talked about the coalition of the willing and need to mention the high north. That's something the UK has an interest in. So we're a lead nation in something called JEF which puts all those nations together and I remember leading that summit up in Sweden on the issues that we were confronting there some years ago. CPTPP, we've talked about India trade deal, we've talked about AUKUS, another good example, right? Australia and the US and the UK coming together, not just on submarines, but actually to share technology in an advanced way amongst these three countries. And Kevin did sterling work, you know, supporting and arguing for this deal in DC during his time there. So I've just listed half a dozen different things that the UK has been able to do to strengthen its set of economic and security partnerships. None of which rely on EU membership, some of which involve members of the EU. But I think that demonstrates a way for a middle power to operate in this new world. And I think that is ultimately as we've been discussing, which is a mix of all of these things. But I think there's no reason that you have to be part of a big block to thrive, right? I think that ultimately, Canada, Australia, the UK, all of us are able to provide security and prosperity for our citizens without being a formal member of a big block as long as we are being agile about the relationships and partnerships that we form.
Before we wrap up with a final question, the poll results are in. Shall we see what they show us? Here they come.
They're still coming. I'll take this opportunity to ask one last question of our panelists. We've spent... Oh, there we go. Okay. You should be able to see it on some of these screens. Oh, here we are. You're good. Yeah, acting as a block to shape global decisions comes out first and then preserving the freedom optionality effectively.
It shows our audience are actually deeply realist about the whole overriding question of realism.
And that is leverage. Collectively we have a voice. The democracies of Asia, the democracies of Europe have a voice and collectively they have muscle. The question which I think this reflects is how do we deploy it in a series of orders with others around the table as well which is still compatible with the principles inherent in the multilateral rule-based system.
So here's our last question to all three of our panelists. We've spent the better part of an hour talking about middle powers. Does this talk of middle powers go away once Donald Trump has left the White House? Minister.
If you look at US foreign policy pre-Trump 2.0, you will notice that under Biden as well, there was increased protectionism. So the answer to your question is no, this is the direction. It does not go away and we should see our trade diversification, our middle power strategy, our work on strategic autonomy as a long-term plan to ensure domestic economic and security resilience. I will just say since we're in India, we as a country, Canada had work to do to ensure we had stable elevated relationships with countries around the world including India, the sixth largest economy in the world at $4 trillion. And to see this bilateral relationship beginning to flourish is part of the work that we're doing to ensure that we're working with countries around the world with whom we have not at least in the recent past been working with.
All I can give you Kevin and Rishi is a yes or no to that answer because we have run out of time.
Up to you.
Yes, we will no longer be talking about.
No, we will be talking about it. So yeah, I think you talk about President Trump. I think it's more a symptom than a cause of the change in the geopolitical environment and all these issues will be relevant. The COVID shock, supply chains, the war in Ukraine, energy impact, all of these things have nothing to do with where we are today.
And all of those things have nothing to do with President Trump. All of those things are also indicative of this new environment we're in and why we're all reacting in the way that Anita described.
Yeah. And I would add a yes to the remaining three musketeers on this question. And that's because we are looking at 2,000 pound gorillas out there, China and the United States whose view of the future order is not necessarily always aligned with what animates I think these countries that we've been describing, which is a set of democratic principles, open politics, open societies, open economies. These are quite precious values that we've evolved over quite a long period of time and therefore giving that effect through let's call it a democratic economic union, three in the poll actually I think has some merit for us collectively to explore, exercise leverage and then do.
Distinguished guests, please join me in thanking Minister Anand, Kevin Rudd, Rishi, and of course in his absence Dr. Jaishankar.
Please welcome to the stage His Excellency Sheikh Faisal bin Qassim Al Thani, Minister of Commerce and Industry for the State of Qatar and vice chairman and managing director of Al Faisal Investment, and Sunil Mittal, founder and chairman of Bharti Enterprises, for a conversation with Bloomberg's Francine Lacqua.
Hello everyone. We have such a good panel because we get to rethink how governments and companies are doing revenue in the future. Now I just want to remind everyone that there is a QR code that will come up on the screen and you can also send questions. So I have my trusted new economy forum iPad for anything that you want to ask. So gentlemen, thank you so much for joining us. Look, in a world of growing geopolitical uncertainty, what are some of the key factors determining where businesses choose to invest? Mr. Mittal?
Well, I think we are really passing through very interesting times if I may say and in some sense difficult times. And as yesterday my friend Chandra from Tata pointed out, a lot of things are playing at the same time which is a unique situation that we have. Geopolitics in real turbulent times. Oil prices are shooting through the roof, supply chains are broken, most of the investments are suddenly going into one direction of AI and AI ecosystem. To manage all this, where does the capital sort of start looking for opportunities becomes a real difficult question. And I think it is times like this when countries which are large scale, big population, large consuming population like India becomes a natural choice. Growing at over 7% a year which is a rarity which our prime minister mentioned yesterday and then having the capability to harness all the technologies at scale I think puts India at a very strong position.
Your Excellency, I mean from a Qatar point of view and again just the region, how do you look at attracting capital?
I think ultimately the investors look at the fundamentals. You have a strong economic foundation. You have the right business-friendly regulatory environment, continuous investments into infrastructure, prudent fiscal policies, these are what lasts. Conflicts and the like are temporary. And as long as you have those, the investors will ultimately find you.
Maybe I disagree a little bit and everyone sells their book. I guess smaller countries with smaller populations are actually more attractive now with the bigger push into AI, energy intensity and a small population. It's actually a very attractive story now.
I mean the good thing is that there's capital for both because there's a lot of capital chasing investment. So you're right, what makes a country or a city differentiate itself when you look at so much capital trying to go to different places? Like what's the differentiating factor?
I think as I said it's making sure that you have the right fundamentals first and foremost. I think once you have that, you make sure that you do offer top-of-the-line infrastructure whether it's what we offer in Doha, we would say the airport, the ports, digital infrastructure, access within the region, access to MENA, access to GCC that the investors do find attractive. Stability is a big thing. Maybe we can address the elephant in the room. Obviously, conflict in the region is a thing. It's not the first time we've had conflict. It won't be the last time. We tend to come out stronger every time.
Does the conflict really hurt your business model?
Not really. I think yes it has affected Hormuz. When it comes to oil and gas I think that sector has been affected the most. Sorry. We have found ways around it when it comes to food security, when it comes to getting things in and out of the country. I think a good example we like to use is our strategic food stock has actually gone up 40% since the beginning of the war versus today. So we're able to find ways around it.
Mr. Mittal, I was going to ask you what governments can do to help businesses. But first, what's your number one concern right now? And you know, businesses need to grow. Is it supply chains? Is it geopolitics? Is it access to capital?
I think if I take into account the countries that I operate in, the most important part is policy stability. Investors local or international look for policy stability and I think that's what you have been seeing in this country for the last 10 years now. There's predictability, there's policy stability. Some can quibble that the pace of reforms can be faster and I think we heard our prime minister say yesterday that reforms, the process never ends, you just keep on moving through the reforms. But policy predictability, stability, foreign direct investment regime are in a very good place. I think that's very important and I would say I operate in a number of African countries where Sheikh Faisal is also having a keen interest from his vantage position, also has reasonable stability in policy. Of course the growth vectors are very different between India and Africa. So I would say policy stability. The other part is currency. I think that's where India in the last year and a half has had some blips. The rupee has depreciated and principally on account of supply chain disruption and oil prices. That is something which I mean countries like Qatar or UAE or Saudi are blessed to have a lot of reserves of oil and gas. India has to import a lot of that. So I think if you put that aside as a temporary phenomena I would say longer term policy stability and growth is here.
I mean political stability is not always up to the head of state, right? If they get ousted or we've seen especially this in a number of European countries. So how do you balance market opportunity, growth opportunity and political stability that may or may not be there in a couple of years?
Well having now the benefit of operating in Europe, I have a company in France and I'm a biggest investor in British Telecom. I can tell you while there is more predictability, there's no growth there. So just having predictability or rule of law or just solid policies don't help if there is no growth or rather many of these companies are actually degrowing, so that doesn't work as well. So therefore I would say again at the cost of reputation that India does become a place which can draw a lot of investment. And the good news is smaller countries whether it's Singapore or it's Qatar or UAE, they have so much capital to deploy which they need to deploy outside and that's where I think there's become a very strong symbiotic relationship between Qatar and India, India and UAE, India and Saudi, India and Singapore. And more importantly I would say the new wave of bilateral trade agreements. India has done its trade agreements with New Zealand, with Australia recently, with UK which has come into action a few days back, Europe is about to be signed, Canada is in advanced stage, US is a question mark. I think that is helping India also go up on the trade vector.
Why the question mark is very clearly because US being the largest partner with India is still a work in progress. And I think that when you have over a hundred billion dollars of trade going out of India to the US and there are higher tariffs or questions around what next does cause a problem.
Your Excellency, you were talking about some of the right conditions of course that governments getting put in place to grow businesses. What do you think will happen in the next six to 12 months? Like what are some of the conversations that you're having with private investors wanting to come to your country?
Maybe I'll echo what Sunil just said. Fundamentally you have the right policies. You have the right foundation in country. That's ultimately what the investors look at. I think investors are smart enough to differentiate between temporary disturbances versus structural issues within the economy. I think a good example that we're now seeing, over the last three months we've had 5,000 foreign-owned companies register in Doha. We've seen capital inflow of foreign investments into our capital markets over the same period. So people are understanding that what is happening is not structural. It's not permanent. The IMF prediction is minus 14 this year but almost a positive 19 next year. So everything we lose today we will gain back and then some hopefully.
I mean what's the most frequent question that you get asked if things go back to normal?
So again everyone knows that things will get back to normal. I don't think anyone can answer you when. That's the very difficult question that we try and figure out every day.
Mr. Mittal, from your experience in building and expanding some of these businesses across markets, what do you think is the most important factors of government support? Like concretely can you give me an idea of you went into a market and actually I don't know if it's the regulator or actually government support that really changed the way that you wanted to invest money because you've always taken very big bets.
Yeah, I would say you know from the government point of view, I am in a regulated industry. The entire telecom chain becomes regulated whether it's on terrestrial levels or in space and the government policies are very important. Spectrum allocations, spectrum pricing becomes a fundamental ingredient for the success of any digital play. I think that India has now over the last I would say decade put out very good policies. There's a spectrum auction every year or two years so there's enough spectrum available. You can plan ahead of time. The bands which are available in coordination with ITU are clearly listed out. Space is a work in progress in India. I think India is at a very advanced stage where some final approvals of security clearances are awaited and once that happens we'll be able to connect every square inch of the country. In Africa we already started to launch satellite services in partnership with OneWeb, with Starlink. And in the end finally if digital is a multiplier for the economy then the tax regime for digital goods, digital services, telecom needs to be as low as possible.
Where I mean out of those three that you mentioned, where do you see what are you most excited about?
In terms of opportunities? Outside India or within India? Both.
Well, within India, our main focus now is turning towards data centers. We are now moving from about 300 megawatts to a gigawatt within the shortest possible time frame, and a number of data centers are being built in South India and near Mumbai and around Delhi. So that is one area. I think sovereign cloud is becoming the next area of focus for us. Every country is becoming very concerned about sovereignty, digital sovereignty, and more importantly, ensuring that your data is protected and within the country. So Airtel and our company is now working very feverishly towards setting up our own sovereign data cloud on which we can serve Indian enterprises, government, defense forces, and that's becoming another area. So I would say AI stack through data centers and cloud can...
I mean, this goes to the heart of digital transformation, artificial intelligence. So how should governments think about some of these big sectors so that they don't feel left out in five years?
Ultimately, data sovereignty is probably the key. You will require a lot of data storage in-country in every country. So development of data centers is something that will happen all over the world. I think we are definitely doing something around that within Orido, which is our national telecom company, with Kai, which is our new national champion which we announced in October last year. We're doing quite a lot around this, and this is where, as I said, being energy-rich actually is a boon for that sector.
