IndiaJapanTaiwan Trialogue Economic and Trade Cooperation Shyam Sunder

India-Japan-Taiwan Trialogue: Economic and Trade Cooperation Shyam Sunder, Yale University Taiwan Thinktank, Taipei, Taiwan November 11 -13, 2004

Overview • Importance of economic and trade cooperation • Why there has been so little economic exchange so far? • What can be done to remedy this situation • What could the future be?

Importance of Economic Cooperation • Economists may not agree with one another on much • They do agree on one thing: trade and cooperation benefits everyone • Taiwan has made huge advances to become a world leader in high technology manufacturing, and needs markets for its products and places to invest in • India has made rapid advances in software and service outsourcing, but needs markets for its services and injection of capital for manufacturing technologies and infrastructure development • It is obvious that the India and Taiwan as well as Japan could benefit greatly through intensifying their economic cooperation and trade • Yet trade and investment between India and Taiwan is trivially, embarrassingly small—a couple of billion dollars • Why

Understanding Before Action • There have been many meetings and conferences on promoting India-Taiwan trade • Many agreements have been signed and steps taken to promote trade and investment • Yet the scale is small, and growth rate low • To get India-Taiwan trade on the world map, we need not 10 or 20 percent growth but 100 or 200 percent growth per year • What will it take to achieve this? • We must appreciate the nature of the obstacles before we can remove them • Historical precedent is quite favorable – Regions of India, China and Japan had vibrant trade during sixth to fourteenth century AD (Tansen Sen’s book)

Some Basic Considerations • Over the past decade, a beginning has been made to open an India-Taiwan dialog • However, this dialog seems to have been focused directly on trade and investment • But trade and investment takes place when people feel they know each other and are comfortable with each other • In order to make a significant dent, this dialog must be conceived in broader terms than it has been in the past • I shall mention a few such areas and they will require us to go beyond meetings focused directly on promotion of trade and economic cooperation among business people and government officials

When Do People Do Business with One Another? • When they feel comfortable with one another: Shared trust • Shared trust arises from – – – Shared language Shared experiences Shared history Shared interests Shared system Shared values • What can India, Japan and Taiwan do to promote such trust among their people

Language • Chinese, Japanese and Korean share many elements of language • Few Indians know, or have opportunity to learn Chinese or Japanese in schools or colleges • Few Taiwanese and Japanese know any Indian languages, and many need a translator to do business in English – Are you speaking “Indian”? • Need to create language programs in schools and colleges

Shared Experiences • • • There little tourism among these countries Few personal friendships Few family or marital relationships Only a small number of business contacts Hindi and Kung Fu movies, and karaoke help, but not enough • Little knowledge of likes and dislikes • Little knowledge of the protocol even though there are many similarities

Shared History • Fortunately, India, China and Japan share a great deal in history • Buddhism permeates the culture of all three countries • Ironically, it is not always recognized in India • In my travels through Japan, Taiwan and Mainland China, I am constantly amazed at how much these societies share in their philosophy, values, religion, social norms, and history • Yet, few people in any of these countries are aware of these deep links • Most people from these countries see one another as cultural strangers and cannot penetrate through the barriers of language (West as intermediary in the East) • Racial stereotypes, even prejudiced views of one another

Shared Interests • Few people know about the literature of the other countries • Few translations of famous literary work into local languages • All such activity is focused on relationships with the west • Few people know of classical or popular music, dance or theater • Few people know or appreciate the food of the others

Shared System • Few people understand the political structure of the other country • Few people understand the legal system of the other country • Few people understand the business practices of the other country • Few people understand the family structure of the other country in spite of so much that is common

Share Values • Fortunately, in spite of so much that we need to do to increase what these three countries share • India, Japan and Taiwan do share important common values – Freedom of choice for their people – Democracy – Increasingly open markets • Belief that freedom, democracy and markets are important in themselves • They also help improve the lives of their people • With these values as a guiding light, a great deal can be accomplished to advance the lives of the people of these societies

The Path Ahead • • • What can India and Taiwan (and Japan) do at a fundamental level to overcome these obstacles School education: languages, history College and professional education: law, business management, engineering, medicine Cultural exchanges: film, music, dance Educational exchanges: students, faculty, visits of foreign executives Specialized management programs about the business and economics of the other country Make it easier for citizens of one country to reside and work in the other for a long period of time Create conditions in which friendships and personal relationships can develop, and economic relationships tend to follow Basically, get to know each other better and become comfortable, and develop personal friendships Governments can help create these conditions so people can take over from there

The Future • It is often said that the world is shrinking in distances: 22 hours from New York to Taipei • More important, the SYSTEM is shrinking • More and more countries find prosperity and happiness for their people in the same system of freedom and democracy • The critical part of the future lies in choosing this right system shared by India, Japan and Taiwan • When we are interested in the welfare of the people system is important, country is not • Country is fast being relegated to a secondary role—look at Europe

Thank You www. som. yale. edu/faculty/sunder Shyam. sunder@yale. edu