Thursday, October 18, 2007

Interview published by Business Line on 10 October

‘Great potential to leverage synergies between India and Latin America’
We have two areas of serious interest with Latin America — energy security and food security. We have started investing in the oil and gas sector in the region. There is also a lot of potential in non-conventional fuels.

M. Ramesh
‘Passionate about Latin America’ is how his calling card describes him. After five years as Consul-General in Sao Paulo, Brazil, three years as India’s Ambassador in Venezuela, and three more as Joint Secretary, Latin American Countries, in the Ministry of External Affairs,
Mr R. Viswanathan, is perhaps the country’s best resource-person for anything relating to the landmass south of Texas and down to the South pole.
Mr Viswanathan, once an ambitious village lad who had to scrounge for school textbooks as his family could not afford to buy them, and who could not understand a word of English until he was in college, today knows Latin America like the back of his hand. He combines this knowledge with his fluency in Portuguese and Spanish that he expects will help him in his mission to bridge the distance between India and Latin America. Before he left to take up his new assignment as India’s Ambassador in Argentina on October 10, Mr Viswanathan spoke to Business Line about his first love — Latin America.
Excerpts from the interview:
You were Joint Secretary-Latin American Countries in the last three years. What changed during these three years?
I was probably the only Joint Secretary in the Ministry who was desperate to become JS-LAC. Normally, people seek high-profile jobs….
Is JS-LAC not high-profile?
It was not. I made it one. I was desperate for the job and, at the end of three years, I find it has been rewarding and fulfilling. There has been a tremendous surge of interest within India in Latin America, and vice-versa. In the last three years, the number of visits of foreign ministers from Latin America to India was more than in the previous 20 years.
From India we have taken delegations to countries never visited before, like Guatemala, Bolivia and Ecuador. We have established a strategic partnership with Brazil, with which country we have many common interests, both at bilateral and multilateral levels. These include co-operation for permanent membership on the UN Security Council, the WTO and the G-20. Brazil is regional leader, it has a voice. It also finds alliance with India useful. So, the partnership has flourished.
Today, there is a realisation across the spectrum — from political parties to business leaders, and think-tanks to chambers of commerce — that Brazil is important. Similarly, with Mexico, which we count among the ‘privileged partners’. We may not see eye to eye with it on all issues, as we do with Brazil, but trade is booming and it is the second most important country.
Argentina is the third largest. It has received less attention from both sides, because the country has gone through a nerve-wracking financial crisis in 2002. Now it has stabilised. Also, as the Argentine government was preoccupied with domestic affairs rather than foreign policy, it did not reach out to us.
Now there are going to be Presidential elections, the next President is expected to be more reaching-out, paying more attention to foreign policy. We are looking forward to that change. We can expect a lot to happen with Argentina in the next three years.
In the last few years, we have seen Left-of-Centre leaders elected to head governments in the region — like President Lula of Brazil, Hugo Chavez of Venezuela and Eva Morales of Bolivia. What does this trend mean for India?
I look at the election of Left-of-Centre Presidents as empowerment of the masses, who were excluded, neglected and marginalised by the military dictatorships and the transitional powers (that prevailed until about a decade ago.) Now people have the power to elect the person they want. They obviously go for the candidates with a clear agenda for the poor, for inclusive growth. The majority of voters are middle-class or lower-middle-class people.
Yes, but can you give examples of where this ‘empowerment of masses’ has helped Indian businesses?
There are many examples. But, first, let’s see what is happening. In the olden days, Argentina would import only from Europe and the US — it was just not interested in looking at a country like India, because the importer did not care for the masses. Now the economic agenda of Argentina is driven by the lower-middle-class people. And what do they want? They want a $10 shirt, not a $50 shirt. Where do they get it from? Not from the US or Europe, but India.
Perhaps the best example of the way empowerment of masses has opened up markets to India is in pharmaceuticals. In the past, Latin America had not heard of generic medicines.
Prices were very high, five to 50 times costlier than in India. That is why they invited Indian pharmaceutical companies to introduce generic medicines and to put pressure on MNCs and reduce the cost of medicines. Today, we do about $ 500 million of pharma exports to the region. Everyone has realised the benefits of buying from India.
What are the relative complementarities between India and Latin America?
As I said, in healthcare, Indian pharma companies are providing good value. Our IT companies add value to their human resource development.
When TCS employs 3,500 people in Latin America — the number of Indians may not be more than 35 — it provides jobs for people, but something more fundamental than that. It stimulates the imagination of the younger generation and introduces them to the age of information and the knowledge society. That is why TCS’ IT centre in Guadalajara was inaugurated personally by the President of Mexico.
What do we expect from the region?
We have two areas of serious interest with Latin America — energy security and food security. We have started investing in the oil and gas sector in the region — ONGC Videsh has already invested a billion dollars in Brazil and Colombia; it will invest another billion dollars in Venezuela and Cuba. Reliance, Videocon and Essar are also looking for opportunities there.
There is also a lot of potential in non-conventional fuels. The region has a lot of arable land, where one can grow sugarcane, jatropha and other plants. We can make bio-fuels and bring them here.
The second area is food security. In India we have a growing population and not enough land for agriculture.
So Latin America is attractive for us because it has large land area, less population and there is no restriction on foreign investments. Indian companies can invest in Latin America in agriculture and commercial forestry and bring the products back home.
Are Indian companies interested?
Many have expressed interest, have earmarked funds — like Bajaj Hindusthan, which has earmarked $500 million to buy land and sugar mills and ethanol plants in Brazil. It has already established a subsidiary there. Other companies are looking at Brazil, Argentina and even Surinam. A company from Pondicherry is looking at the possibility of acquiring 100,000 acres in Surinam to grow jatropha to make bio-diesel there.
I mentioned two areas of interest — energy security and food security. Energy and food imports are India’s two largest imports. Last year, our biggest import bill was crude oil — $55 billion — and our second largest import bill was of edible oils — $12 billion. We are already importing edible oils from Brazil, Argentina and Paraguay.
More of our companies can go there, buy farms and bring oil-seeds into India. This is likely to be done by the Solvent Extractors Association of India, whose delegation went to Brazil, Paraguay and Argentina recently. Now the Association is sending a special team to do a due diligence exercise for the purchase of 12,000 hectares of soya farm in Paraguay. The deal is likely to be concluded by the end of the year. There is plenty of scope for similar ventures.
In the race to engage with Latin America, who’s winning — India or China?
Well, China is ahead of us; it has invested far more than us, but gone mostly into extractive industries — crude oil and mining, and a bit of manufacturing. It is also a market for Latin American countries, for primary commodities. So, that is a definitely valuable partnership for both the sides.
But although we are not as big as China, the Latin Americans have a cultural empathy for India. They don’t look at India with suspicion, whereas they are worried about the competition of Chinese goods. They feel more comfortable with India.
What is your agenda for Argentina?
Economic diplomacy is my priority. Our exports last year were $290 million, I want to see that it goes up to $600 million in the next three years. Our imports are about $940 million.
I want to see that trade between two countries goes to $3 billion in the next three years.
The embassy is organising an exclusive Indian trade fair in Buenos Aires between March 26 and 29 next year. This will be the largest exclusive Indian trade fair to be organised in Argentina.
We expect over 200 Indian companies to participate. We want to send the message to the Argentines that we are not just interested in selling to you, we are keen on imports, acquisitions, joint ventures, etc., to synergise our complementarities.

No comments: