Give Priority to Financial Services

Financial Times, July 22, 2008

From Sir Stephen Wright and Mr John Cooke.

Sir, Ministers from some 40 countries are meeting in Geneva to decide the fate of the Doha round of multilateral trade talks. It is vital that they achieve a breakthrough, and lay the foundation for a lasting agreement. The Doha round offers a unique opportunity to address the barriers to global trade that continue to hold back the world economy. This would bring benefits to developed and developing countries alike, and would offer some palliative to the bleak prospects facing the global economy. The focus of the negotiations so far has been on agriculture and the tariff barriers to trade in…

The recent decision by Norway’s Government Pension Fund–Global (GPF) to invest $2 billion in Indian markets has come at a time when most foreign institutional investors are fleeing the markets. This is a very significant development as there are very few institutional investors in the global markets who can provide liquidity when it is most needed. However, the true significance of GPF lies in its role as an ethical and socially responsible investor. The GPF was in the news last year when it sold stake in the UK-listed Vedanta Resources for alleged environmental damage and labour rights violations in its four Indian subsidiaries. The GPF is the second…

On 19 November, the Norwegian Embassy in New Delhi received some unusual visitors. Even the police and security personnel stationed in the heavily-guarded Chanakyapuri area of Delhi where the Norwegian and other embassies are located could not figure out the purpose of these visitors. Though they were Indian citizens, ethnically they belong to a distinct tribal minority group called Dongria Kondh. Dressed in their traditional attire, these tribal representatives came all the way from the remote Niyamgiri hills of Orissa to express gratitude to the Norwegian government for removing UK based Vedanta Resources Plc from its investment portfolio. What was even more perplexing was…

On Nov. 19, the Norwegian Embassy in New Delhi received some unusual visitors. The visitors were Indian citizens, but ethnically they belonged to a distinct tribal minority group called Dongria Kondh. Dressed in their traditional attire, the tribal representatives came all the way from the remote Niyamgiri hills of Orissa to express gratitude to the Norwegian authorities for selling the country’s equity stake in the British-based metal company, Vedanta Resources, on ethical grounds. Norway’s sovereign wealth fund, the Government Pension Fund-Global, had an investment of about $14 million (an equity ownership of 0.16 percent) in this company. The Dongria Kondhs have been opposing a proposed $850 million aluminum refinery and bauxite mining project belonging to Vedanta. Representatives of…

Prime Minister Manmohan Singh’s sermon on inclusive growth at an annual summit of the Confederation of Indian Industry (CII) evoked sharp reactions from the corporate world and media. Most comments were aimed at resisting the enforcement of a Ten-Point Social Charter spelt out by the Prime Minister through regulatory and legislative measures. “The government cannot legislate CEO salaries,” was industry’s common refrain. This is nothing but a complete misreading of the Social Charter because it nowhere hints at curbing excessive remuneration or eschewing conspicuous consumption through regulatory and legislative measures. And, to my mind, that is a big problem with the Social Charter. In fact,…