Saturday, February 04, 2006

Developmental Policy-Indian States

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policy prescription/approach to development in north east indian states
In thinking through how one can bring development to the north east part of india or any other place I believe, more today than ever before, that the private sector,NGO's and educational institutions need to work hand in hand with public uthority toshape policy making and develop appropriate norms for the economic development of the north east part of the region.
While State Government is still responsible for creating the right frameworks in regulation, tax policy and market based initiatives to support business's efforts, people in business, can in turn contribute crucial financial, technical and managerial resources to meet the region's challenges. Given the enormity of challenges our country faces and the paucity of resources and talent in Sate Government these days, I am beginning to see an expansive view of what Business and Government can together achieve. In doing so, I advocate a broader and more proactive social economic political role for business leadership.
My broad observations:
• Building strong regional economies takes decades normally and North East India will be no different.
• Key influencing factors which need to be assessed separately for each state that will be a first step for any cohesive analysis will include assessing:
– Natural endowments
– Entrepreneurship
– Specialized assets
– Civic leadership
– State Government policy and actions and role of NEC
- Role of Multilateral agencies such as OFAD etc
• Development involves some inheritance and serendipity, but can also be strongly influenced by strategic choices
• Successful states will need to leverage their unique mix of assets to build specialized clusters
-Economic development is a collaborative process involving government at multiple levels, companies, teaching and research institutions,and institutions for collaboration .
Creating and Implementing a Regional Economic Strategy will require:
• A shared economic vision helps elicit broad support and coordinate activities
• Strong leadership is a necessary part of any successful economic development strategy
• An overarching organization for economic development helps coordinate and sustain the process
• Broad-based collaboration across actors is needed for development strategies to succeed
• Rigorous analysis to develop a fact base is a crucial early step in implementing a regional strategy
• An explicit process is needed to translate ideas into action
• Regions need to overcome transition points in the development of their economies, as past strategies run their course and the next stage of productivity growth is necessary
The region's economic growth and prosperity can be greatly enhanced
by a healthy regional economy. Why?
. Larger, inter state accessible markets for local firms
. Individual states become more attractive as places to invest if they create regional competitive clusters
. State's should try to grow only in those areas where they have unique strengths ( its more difficult than it sounds)
The states in the nort east will inevitably suffer if they are isolated or islands . Competitiveness can be greatly enhanced by regional coordination versus unilateral action. A sound macroeconomic, political, legal, and social context creates the potential for competitiveness, but is not sufficient . At the end of the day competitiveness ultimately depends on improving the microeconomic capability of the economy and the sophistication of local companies and local competition. So my feeling is that most of the responsibility for development should ultimately rest with local firms in North East India with government providing enabling environments. NGO's and groups and individuals such as us will be ultimately peripheral.


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