1. Competing Globally — Challenges and Opportunities 30th Annual Management Convention of the Kerala Management Association February 3, 2011 Vinod Thomas Director-General and Senior Vice President Independent Evaluation Group World Bank Group

2. Competing Globally… ►Global trends ►Competitiveness in India ►India and its competitors ►The future of Kerala

3. Emerging Economies and the Global Crisis Source: World Bank

4. The Resulting Spotlight on Competitiveness  Global recovery but high risks  Deficits, debt, resource constraints  Productivity gain is the goal  Competitiveness is the means

5. Productivity Rise in History Period during which output per person doubled, selected countries Number of Years

6. Five Challenges for India’s Competitiveness 1.Governance 2.Inclusiveness growth 3.Infrastructure 4.Environment and climate change 5.Innovation

7. Governance and the Cost of Doing Business ►Well-established democratic institutions, but overstretched government ►Results orientation and decentralization to state and local authorities ►Link to the private sector—ICT

8. Inclusive Growth and the Two Indias ►Reducing the gap between rich and poor, urban and rural interstate, and within-state disparities ►Generating faster improvements in the poorer states and segments (as in Brazil and Mexico) ►Supporting small-scale enterprises and microfinance to create employment

9. Quality Infrastructure ►Quality of infrastructure key to foreign investments ►Long gestation and constant maintenance gaps ►Selectivity to ensure fiscal sustainability post-crisis

10. Environment and Climate Change ►Public and private investments in green technologies ►Incentives and resources for pilots, and demonstration and technology transfer projects ►Carbon market—opportunity for reducing emission and inducing R&D for low-carbon technologies ►Forest conservation to gain from standing trees—REDD

11. Innovation: Spending on R&D Source: World Development Indicator

12. Strengths and Weaknesses across BRICK Source: World Development Indicator

13. Kerala Is Different—Or Is It? ►Economic development versus human development? ►Rich potential of human capacity and skills ►Remittances an investments ►Eco-tourism and the preservation of biodiversity ►Global lead in information and technology?

14. Common Factors in Competitiveness 1.Nations shape their own destinies BRIC weathered the crisis much better based on policies preceding the crisis 2.Proper blend of state and market is critical Support rather than supplant markets 3.Unleashing spillover effects is key Benefits of education go beyond individuals Quality infrastructure for competition and innovation Don’t follow the leader find the niche

15. Thank You!