119th Graduation Graduation Day Speech of Dr.M. Veerappa Moily
Union Minister of Petroleum and Natural Gas Government of India Asian Institute of Technology -Bangkok
H.E. Noppadol, President Professor Worsak, Excellencies from Various countries, Honourable Professors, Respected Parents of graduating students and Graduants…… It is a memorable occasion for all of us to be a part of the 119th Graduation Ceremony where 731 young students will receive the degrees for the knowledge and skill they have developed. Asian Institute of Technology is an International premier institute of higher learning which is serving not only Thailand but the entire world and specially the Asian continent since its inception in 1959 through the South East Asia Treaty Organisation (SEATO). It has nurtured high quality engineers, social scientists and managers in a multicultural and multinational environment, which is unique in the world. It has alumni from more than 80 countries in the world who are taught by learned faculty picked up from many countries through global search. This institute is a laboratory not only to learn cutting edge technology and management but also the most important quality of a global citizen that is co-existence- respect other cultures, religions and values of humaneness. I am very happy to learn that AIT has received many accolades in the form of recognition and awards. I am pleased to know that it has received the prestigious Ramon Magasasay Award in 1989 for Peace and International Understanding "... for shaping a new generation of engineers and managers committed to Asia, in an atmosphere of academic excellence and regional camaraderie."
Apart from the Institute, in 2009, an alumnus of AIT, Yu Xiaogang was also awarded the Ramon Magsaysay Award. The citation credited AIT and it said "Yu fell in love with nature early on, having been raised in Yunnan, a province of amazing beauty and home to three of the largest rivers in the world: Nu, Yangtze, and Mekong. His interest in the environment was cultivated during a stint in the Yunnan Academy of Social Sciences, and was further deepened when he attended the Asian Institute of Technology, where he earned a master's degree in watershed management." Many innovative projects are being carried out by AIT in sustainable development of the region to solve the problems by reputed faculty members joining the institute through secondment or direct recruitment from all over the world. India has also been supporting AIT in terms of faculty secondment since 1980s by sending around ten faculty members every year for one semester each to teach various courses. It has also been supporting in moderate terms for books and travel grant to visit India for scientific collaborations and research
work. Indian Government is committed not only to continue its contribution but also to enhance its support for infrastructure development and providing fellowships to bring more students from various countries to study here. Ladies and gentlemen, India has an effective “Look East Policy” and I feel that AIT is a potential place where support from India can benefit the countries in the region.
John Dewey, the famous American educationist said: “Education is a social process. Education is growth. Education is, not a preparation for life; education is life itself”. The freedom to acquire knowledge through which one can pursue liberty is one of the fundamental goals of any contemporary society. A country’s global competitiveness will depend on top quality man power at all levels of human functioning. Growing up to the expectation of the world is not a mean task. It calls for delivery of quality at the right time without buckling under pressure. Excellence is to be sustained in all spheres. In the words of Plato, Education enables us to “prepare a citizen, by the light of knowledge and not by rule of custom, to perform the duties of his station,” and further that Education “seeks to tune in the feelings and imagination of youth, as one would tune a lyre with many vibrating strings.” Scientific temper must develop on the foundations of professional excellence and intellectual integrity. “… Most leaders know how to unleash energy, but few know how to systematically sustain it” Great Leaders Must Move from Intention to Impact Intention is a deeply subjective mindset arising out of a personal story, which becomes a platform for change and transformation. Impact, however, happens in the external theatre where our personal story must engage effectively with the reality of the situation. The journey to impact only happens when leaders master the feat of holding this paradox together. Transformative leaders do two things simultaneously: they see the world through their eyes, and they see their actions through the eyes of the world. India will be the youngest country in the comity of nations for another 30 years. Such an opportunity was thrown open to US 200 years ago. They took advantage of the situation and built a world class infrastructure and human resource to become the pioneers in agriculture, industry, infrastructure, management and the service sectors. The baton is now passed over to India after 200 years. We have to utilize this opportunity and transform India as a country of the youth and also to provide leadership to the world.
India will soon have a fifth of the world’s working age population. It urgently needs to provide them with better jobs India has a relatively higher proportion of youthful population than the developed economies such as Korea, Japan and Europe. Experts estimate the size of India's workforce population will swell from 775 million in 2008 to 950 million in 2026. Additionally, by 2020, the average Indian will be only 29 years old, compared to 37 years in China and US; 45 years in West Europe; and 48 years in Japan. In effect, in eight years, workers elsewhere would have crossed the prime of their working lives, inching towards retirement with claims on a working and youthful shrinking population — a demographic handicap. In India, on the other hand, their counterparts would be at the peak of their productivity and earning potential, supporting a smaller non-working population, and thereby saving enough to provide investments for further growth. According to economists the “working population” in India is set to rise considerably over the next decade or more. India's “dependency ratio,” that is the number of dependents to working people is low at 0.6, compared with the developed countries. India has a large population in the 0-15 years that would continue to enter the work force just when fertility rates are falling. By the same logic the dependency ratio will fall further with lesser children being born in the current period of falling fertility rates. This suggests India's demographic graph has a “bulge” in the centre, a concentration of people in the age group that constitutes a nation's potential work force, its storehouse of talent, energy and scalable achievement. That is India's “Demographic Dividend.” I would also like to quote some interesting analysis done by an Article recently published in the Forbes Magazine, while comparing economic prospects of India and China. “While China is all about exports, India is an economy that thrives on domestic consumption. With fears of European contagion and anemic worldwide growth affecting ¬exporters like China and Brazil, fund managers have been looking more seriously at India. There are now two dozen Indian equity mutual funds and ETFs available to capitalize on the country’s long-term growth. After a dismal 2011 Indian equity mutual funds have gotten off to a strong start this year.
I would like to mention another interesting fact that emerged in the run up to the Rio Summit -- India now ranks sixth in Inclusive Wealth Index (IWI) from the top
20 selected countries assessed on the basis of their economic performance during 1990 to 2008. This new measure of “inclusive wealth” stretched beyond GDP and Human Development Index (HDI).
India’s rise of 4.3 % per year in GDP per capita in this period came second only to China. The IWI is a more holistic measure which looks at a full range of assets such as manufactured, human and natural capital which indicates a country’s true wealth and sustainability.
Inclusive growth has been at the forefront of the development policy of India and is accorded topmost priority.
The Indian corporate sector has seen the current decade as a period of high growth and the emergence of a strong India Inc that has a significant global footprint. The decade also saw the financial crisis that shook the global markets. While the corporate sector is recovering from the jolt of the global financial crisis, the future is looking bright. We have seen the business sector generating wealth and value for the shareholders in the last sixty years, we still continue to face major challenges on the human side of development in India.
The Indian entrepreneurs and business enterprises have a long tradition of working within the values that have defined our nation’s character for millennia. India’s ancient wisdom, which is still relevant today, inspires people to work for the larger objective of the well-being of all stakeholders. These sound and all- encompassing values are even more relevant in current times, as organizations grapple with the challenges of modern-day enterprise, the aspirations of stakeholders and of citizens eager to be active participants in economic growth and development. As per Ernst & Young Report on ‘Doing business in India’ 2012, Overseas investment in Asia's third-largest economy rose for the first time in three years in 2011 as global investors put their faith in rising salaries, an expanding middle- class and a large and cheap labour force. According to data released by auditing and consultancy firm KPMG, India Inc witnessed a 31 per cent increment in PE investment to US$ 7.89 billion during the first three quarters of 2011. Foreign Institutional Investors (FIIs) in India Overseas entities are among the important drivers for Indian stock markets. FII flows account for about 45 per cent of the market free-float. According to the data released by SEBI, FIIs purchased stocks worth Rs 600,000 crore (US$ 116 billion) during 2011. FIIs were also seen attracted to the debt market in 2011 wherein they infused Rs 42, 067 crore (US$ 8.12 billion). This intense interest in debt markets helped India get a net FII inflow of Rs 39,353 crore (US$ 7.6 billion) (taking both- debt and stocks- into account) for the year.
India’s target is to increase GER in Higher Education to 30% by the year 2020 which would mean a threefold increase in our enrolment in higher education from nearly 14 million to 40 million by 2020. India's greatest strength as a home for management education is our spirit of “we-can-do” and our ability to deal with any situation. We have demonstrated this ability in the recent Global Financial Crisis.
Around 2500 years ago Greek philosopher Heraclitus of Ephesus had pronounced: “The only constant in life is change.” Think of change as a never ending game- ‘The Change Game’, if you like. Quest for learning and a questioning mind, push the frontiers of knowledge, will result in delving deep into subjects, researching and innovating. As the youth, it should be your aim to become intellectually competent and technically skilled.
In the past 35 years, hundreds of millions of Chinese have found productive, if often exhausting, work in the country’s growing cities. This extraordinary mobilisation of labour is the biggest economic event of the past half-century. The world has seen nothing on such scale before. Will it see anything like it again? The answer lies across the Himalayas in India. India is an ancient civilisation but a youthful country. Its working-age population is rising by about 12m people a year, even as China’s shrank last year by 3m. Within a decade India will have the biggest potential workforce in the world. Optimists look forward to a bumper “demographic dividend”, the result of more workers per dependant and more saving out of income. This combination accounted for perhaps a third of the East Asian miracle.
Turn your eyes away from the capital, and you will notice that Bihar, a state with a population larger than Germany’s has been growing at an average rate of 11.3% since 2005. Indeed, half a dozen of India’s largest states- each with as many or more people than Spain- are growing at a pace near double digits.
That’s India! A country so diverse, it can always be cast in bright or dark hues, depending on where you look. India is no more a single economy than Europe is- and its states are as linguistically and culturally diverse as the nations of the European continent. For India to decisively break out of its current malaise, it needs to embrace its history as a nation of dynamic states, very much like Europe- not the debt strangled continent of the past two years but the peaceful, prosperous federation of the previous decades. Any re-emergence of India is likely to be led by a group of states. Given that India is by nature more of a continent than a country, what it needs is more dynamic regional leaders, not fewer. India should welcome the rise of strong state leaders who understand economic reform, and have a mass base to sell it to the public.
Diplomatic relations between India and Thailand were established in 1947, soon after India gained independence. The end of the Cold War led to a significant
enhancement in the substance and pace of bilateral interactions. The past few years since 2001 have witnessed growing warmth, increasing economic and commercial links, exchange of high-level visits on both sides, and the signing of a large number of Agreements leading to a further intensification of relations. India and Thailand, located in each other’s extended neighbourhood, share unique civilizational links going back several millennia. The shared link of Buddhism is reflected in regular pilgrimages to places of Buddhist interest in India by a large number of Thai people. Hindu elements can be found amongst those reflected in Thai architecture, arts, sculpture, dance, drama and literature. The Thai language incorporates Pali and Sanskrit influence. A large Indian diaspora living and working in Thailand is another important bond. Over the past two decades India’s ‘Look East policy’ had been complimented by Thailand’s ‘Look West’ policy in bringing the two countries closer. In recent years, political contacts have intensified as reflected in a series of high level visits by leaders of the two countries. Trade and economic linkages and tourist traffic continues to grow steadily. Both countries are important regional partners linking South and Southeast Asia. They cooperate closely in the ASEAN, East Asia Summit (EAS) and BIMSTEC as also in Mekong Ganga Cooperation and Asia Cooperation Dialogue. The implementation of the India-ASEAN Agreement on Trade in Goods from January, 2010 is an important milestone of this partnership. The Thai economy has weathered internal and external economic shocks in recent years. The global economy glut severely affected Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. However, in 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded. In late 2011, growth was interrupted by historic flooding in the industrial areas north of Bangkok, crippling the manufacturing sector. Industry recovered from the second quarter of 2012 onwards and GDP expanded 5.8% in 2012. The government has invested in flood mitigation projects to prevent similar economic damage.
Economic and commercial linkage forms an important aspect of India’s partnership with Thailand. The past few years have seen a rapid growth in this area. Investment by Indian and Thai companies into each others’ country is growing. Indian FDI into Thailand is estimated to be around US $ 2.00 billion since 1970s. (Approved Indian investment from Jan-Nov, 2011 is around US $56 million). Thailand has invested US $ 90.55 million in Inaid (April 2000- Sept 2011) according to Department of Investment Policy Promotion of Government of India. The major Indian groups doing business in Thailand include: Tata group (automobiles, steel, software), Aditya Birla group (chemicals and textiles). Indo Rama group (Chemicals), Ranbaxy, Dabur, Bharti Airtel, Kirloskar, Mahindra Satyam, etc. reflecting the diverse sectors of interest. Among public sector, Indian Overseas Bank, Bank of Baroda, Air India, New India Assurance etc. are present.
India has a long history of very close association in culture, traditions, trade and commerce with Thailand and many other ASEAN Countries. It is exciting to see the great linkages of India with this region even when there were no fast means of transport. To me, it seems that all of us are embedded together in a common fabric and I am sure you might have explored this mystery with your friends of different countries here. It is exciting to know that ASEAN + Economic Community will come into effect from 2016. India will be part of that community and surely it will transform the region into a more cohesive region and grow together by providing equal and vast opportunities. His Majesty, the King of Thailand RAMA IX has been supporting AIT to serve the region better. His vision has taken a concrete shape as AIT will be playing a leading role in ASEAN Plus and its integration into global economy as per the basic mission of AIT. It is estimated that there are between 100,000 to 150,000 people of Indian origin in Thailand. Many of them have lived here for several generations over the past century. Majority of them hold Thai nationality. The Indian community comes from different parts of India and mainly comprises of Sikhs, Punjabis, Gorakhpuris, Tamils and Sindhis. Energy Security India is currently world’s fourth largest consumer of energy and accounts for nearly 4.1% of world energy consumption. With its sustained economic growth, the demand of energy is on the rise. The demand for gas is expected to increase by a CAGR of 14% during 2011-12 to 2016-17 & from 11% to 20% by 2025 from 194 MMSCMD to 373 MMSCMD. India imports crude oil for more than Rs Sixty lakh crore ($160 billion). In effect, we have transferred significant amount of our nation’s wealth to oil exporting countries. According to the Twelfth Five Year Plan, even though domestic production of energy resources is projected to increase during the plan period, import dependence will continue at a high level. The main area of import will be crude oil, where nearly 80 per cent of the demand will have to be met through imports by the end of the Twelfth Plan period. Our government will make every effort to reduce our nation’s dependence on imported oil and work towards securing Energy Independence for India. Let me now briefly reflect how, in the current context, our government is trying to enhance domestic hydrocarbon production. Recently, Ministry of Petroleum & Natural Gas allowed exploration in mining lease areas, even after the completion of exploration period. This clarity & policy direction will attract significant investments in the Indian E&P sector and result in higher domestic production of hydrocarbons. I have rolled out a New Vision and set ambitious targets that aim to reduce our crude oil imports by 50 per cent by 2020; 75 per cent by 2025 and eventually achieve self-sufficiency and Energy Independence for India by 2030.
China has seen a doubling of gas production in the last six years (2005-2011). The US has seen a ten-fold increase in shale gas production over the last six years. Thus, like China and US, we too can change our energy landscape in a short span. Is this achievable? Yes it is - so far only 73 billion barrels of oil and oil equivalent gas could be established through exploration, out of the 205 billion barrels of prognosticated hydrocarbon resources. Thus, about 133 billion barrels of prognosticated resources remain to be unlocked through exploration. As you will appreciate, this will be possible only by speedy implementation of new exploration programmes across the country.
Even as we are trying to enhance domestic production through numerous policy measures, we are working to create enabling and conducive environment to promote investments, by making fiscal terms that are simpler to administer. Way back in 1999, GOI introduced the New Exploration Licensing Policy (NELP) and we have successfully held 9 bid rounds. The NELP regime has increased the E&P activities in the nation. Prior to adoption of the NELP, only 11 per cent of Indian sedimentary basins were under exploration. Since the operationalization of the NELP in 1999, the government has awarded 47.3 per cent of Indian sedimentary basin area for exploration. Similarly, 100% Foreign Direct Investment (FDI) has been permitted in exploration and production of oil and gas. All these policy measures have resulted in significant investments in the E&P sector. As an example, the investment made by Indian and foreign companies in the NELP regime until April 2012 was about Rs 1,00,000 crore, of which Rs 60,000 crores was on hydrocarbon exploration and Rs 40,000 crores on development of discoveries. It is well accepted globally that natural gas is cheaper, cleaner and in abundance. Thus, Government of India will make all efforts to develop our nation as a gas- based economy. This will help to reduce our overall import bill and also help to reduce oil marketing companies’ financial burden given the substitution effect.
Currently, natural gas share in our nation’s primary energy basket is significantly below the world average. We shall make all efforts to augment our domestic natural gas supplies. There are examples to show that through extensive development of pipeline infrastructure, LNG regasification terminals, a state can have a gas-based development model and as a result increase the share of natural gas in the primary energy basket. Much like the United States of America, Shale Gas can emerge as an important new source of energy for our nation. India has several shale formations which seem to hold shale gas. The shale gas formations are spread over several sedimentary basins such as Cambay, Gondwana, Krishna-Godawari on-land, and Cauvery in India. To explore and exploit the shale formations, the DGH has initiated steps. It will identify prospective areas for shale gas exploration. Very soon, we will finalize the Shale Gas policy, which will provide necessary impetus to the exploration activities and eventually pave the way for increased domestic
supplies of natural gas. We are also pursuing gas production from the CBM Blocks. Under the CBM policy, 33 exploration blocks have been awarded. The estimated CBM resources in the country are about 92 trillion cubic feet (TCF), out of which less than 10 percent has so far been established. The demand for natural gas has been increasing exponentially and estimated to cross 400 MMSCMD by the end of the 12th Five year plan. In order to cater to the country’s growing gas demand, a provision has been made to increase LNG import facilities. Even as we are trying to augment domestic supplies of natural gas, we are at the same time encouraging investments in LNG terminals so that sufficient quantities of natural gas can be imported.
Recently, the Ministry of Petroleum & Natural Gas notified rules on Eligibility conditions for Registration of Liquefied Natural Gas Terminals. This would promote setting up of LNG Terminals in an environment of equitable access and commercial transparency, which in turn, will foster higher availability of imported LNG for the nation. An MoU has been signed on 18th March, 2013 between ONGC, BPCL and Japan based Mitsui & Company Limited to examine the feasibility of setting up a LNG terminal at New Mangalore port. The work of the consortium is significant in context of the expected availability of Mozambique gas to the country. Simultaneously, we are working to increase the penetration of natural gas through building pipeline infrastructure across the country. For transporting natural gas across the length and breadth of the country, a cross- country pipeline network is being laid throughout the country. Presently, there are around 11,500 km of natural gas pipelines across the country and another 12,650 km of pipeline infrastructure is under various stages of implementation. The Union Cabinet gave its approval for the formation of a Special Purpose Vehicle (SPV) for the trans-national Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project and permitted GAIL India Ltd. to join the SPV.
India is engaged in bilateral and multi lateral cooperation with various countries for oil & gas security. The government is encouraging national oil companies to aggressively pursue equity oil and gas opportunities overseas. Oil & Natural Gas Corporation Videsh Limited (OVL) has produced about 8.753 Million Metric Tonnes (MMT) of oil and equivalent gas during the year 2011-12 from its assets abroad with estimated 6.865 MMTOE in 2012-13. Recently, the GOI has authorized OVL to acquire Participating Interest (PI) owned by Hess Corporation’s wholly owned subsidiaries in the upstream and midstream oil and gas assets in Azerbaijan with an investment of US $ 1001 Million. Indian upstream companies, led by our Premier Company, ONGC, have made overseas investment of over US $ 15 billion, with our share of oil & gas production from these overseas assets reaching 9 MMTOE last year.
Crude will remain soft Leading world agencies seem to agree that in 2013, crude prices will remain soft. No one expects crude prices to surge, and this is good news for India. According to the IMF, average crude oil prices in 2013 will be at $102.60 per barrel, and at around $ 97.58 per barrel for 2014. The average price per barrel in 2012 was $ 105.01
Ït is very likely that India will attract FII inflows of Rs. 25-30 billion in the current year. India is one of the few countries in the world that has seen this scale of FII investment. India has the most eminent market among the emerging markets. India’s growth story puts it back on the radar for investors. Despite the lack of big bang reforms by the Government, things are moving in the right direction. Emerging markets FIIs inflow ($ millions)
India 34,919 Brazil 4,721 Indonesia 3,235
Philippines 3,367 Taiwan 4,860 Thailand 2,386 Korea 12,271
Before I end, I would like to once again congratulate the graduating students. Dear Students, you are most competent and qualified to lead a great mission as you have been nurtured in a global community created by this unique institution of AIT. Dear graduants, you must have been proud to study at the AIT, whose prominent alumni include Her Highness Crown Princess Maha Chakri Siridhorn and Ministers from Thailand, Vietnam, Nepal, and many other countries. Dr. Subin Pinyakan, an AIT Alumnus, who is former foreign minister of Thailand, is also with us today. Now the time has come for you to contribute to the world and make it a better place to live in. Mahatma Gandhi, the great philosopher and leader of masses from India, said that the aim of education should be to alleviate the hardship of poorest of the poor who could not get the opportunity to study and get educated. Man becomes great exactly in the degree in which he works for the welfare of his fellow-men. I am sure that all of you will have an exciting career. Please think on the lines of Mahatma Gandhi and bring smiles to the faces of millions who are under- privileged. Thank You