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The India-SA Investment Network recently hosted the chief economic adviser to India’s government, V Anantha Nageswaran, to discuss the role of infrastructure investment in emerging markets. This engagement held some important information for SA if it is serious about achieving real economic growth of about 3% and prosperity for all citizens.
As somebody who has followed the Indian economic success story for the last decade it is still humbling to listen to one of the most astute economic advisers in the world and have them quantify how much has been achieved in the last decade.
This is an economy that has grown from $2-trillion in 2014 to $3.75-trillion in 2024 — going from the 10th-largest economy to the fifth largest over that period. In terms of financial services, its banking and fintech sectors have gone from antiquated to processing more than 208-billion digital transactions.
At the same time, it has adopted digital infrastructure, and a standout figure from the presentation was that the number of airports had doubled to 148 in the last decade. Over that period more than 250-million people have been moved out of poverty.
This has truly been one of the economic miracles of the modern emerging market era.
While India cannot be directly compared to SA there are certain parallels and similarities that can be drawn between the two emerging economies. This became particularly apparent during the panel discussion, which incorporated insights from Nageswaran; the high commissioner in Pretoria, Prabhat Kumar; Nedbank head of energy finance Amith Singh; Pinsent Masons risk advisory services partner Junaid Banoobhai; and Investec Bank corporate payments head Kuben Naidoo.
Both countries are democratic, Global South countries and face similar challenges around infrastructure deficits. This includes energy, water, affordable housing, healthcare, education and logistics infrastructure. At the same time, they enjoy pockets of excellence in their economies and are seen as access points to their respective continents. Lastly, they are viewed as high-potential investment destinations in the emerging market Global South cluster — assuming a few things are done right.
Litmus test
One of the powerful quotes that came through from the panel was: “Does your policy attract money? This is the ultimate litmus test.” This is where SA and India tend to diverge, and this was a point that came through quite strongly on the evening.
Where SA policymakers are trying to centralise and regulate, the Indian economy opted to move in the opposite direction over a decade ago with a focus on policy and regulations that would attract investment capital from the private sector. The outcomes have been materially different in terms of growth, economic activity and job creation.
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