China, Europe and the Netherlands: Opportunity Is Knocking at Our Doors

member banks will concentrate on bringing the Silk 
Road Economic Belt to fruition, and address existing or 
future plans in accordance with the development needs 
of each country, with a focus on projects relating to the 
interconnectivity of infrastructure, energy resources, 
cross-border industrial parks, the green economy and 
increasing peoples’ livelihoods. On this basis, a selec-
tion and priority rating should be conducted for key 
Silk Road Economic Belt projects which the Interbank 
Consortium will plan to support and thus include in the 
Consortium project portfolio.
Third, we must increase financial support for key 
projects and provide sustained momentum to them. 
Guided by the principle of ‘planning ahead, local reali-
zation of projects, and financing support’, the CDB has 
in recent years taken a pragmatic approach to develop-
ing co-operation with member banks and enterprises 
throughout the region, by providing loans, bank credit, 
sub-loans, guarantees and local currency loans. Last 
November we contributed towards the establishment of 
a USD 40 billion Silk Road Fund, which is intended to 
establish an open multilateral investment and financ-
ing platform for the construction of the Silk Road Eco-
nomic Belt. Looking forward, member banks will need 
to focus on financial innovation, combining bilateral 
with multilateral co-operation, loans with investment, 
and large-scale projects aiming to improve personal 
livelihood. To do so, a rich array of financial products 
and co-operation methods need to be used to meet the 
financial needs of each project and become the main 
driving force behind investment and financing for the 
construction of the Silk Road Economic Belt.
Fourth, the exchange of personnel and sharing of 
experience must be improved, and communication 
and mutual understanding enhanced. In recent years, 
the Consortium has achieved significant progress in 
co-operation over the exchange and training of person-
nel. By the end of 2014, the CDB had enabled a total of 
1,600 people from national government departments 
and co-operating organizations from SCO countries 
to participate in discussions and exchange activities. 
The Development Bank Fund has also financed 46 out-
standing students from SCO countries in their pursuit 
of further studies in China. Next, we shall continue to 
improve exchanges and training co-operation within 
the Consortium, share experiences and respective 
advantages, and enhance mutual understanding and 
create better conditions for policy discussion, business 
co-operation, personnel training and exchange of infor-
mation between member banks. 
The Silk Road of old was a symbol of long-standing 
friendship and cultural exchange, and the Silk Road 
Economic Belt will sustain this ideal and carry it for-
ward into the future. The CDB is ready to work with all 
parties to open up innovative and pragmatic co-oper-
ation, to actively participate in the construction of the 
historic Silk Road Economic Belt, and to make ever 
greater contributions to the long-term prosperity and 
development of the SCO region.
This article has been adapted from the author’s speech at the 6
th
 Symposium of 
the SCO Interbank Consortium on 31 January, 2015.
CDB-supported Moinak hydropower project in Kazakhstan
CDB-supported Sino-Russian oil cooperation project
Macro Economy
024 
  Apr. 2015
WWW.BOAOREVIEW.COM
Jan. 2015
 
 
019 
Can you imagine… 
the Savannah 
without elephants?
Every piece of ivory comes from a dead elephant.
Go to www.ifaw.org to learn more.
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Apr. 2015 
  025 
WWW.BOAOREVIEW.COM
OECD Forum 2015 will take place on 2-3 June in Paris 
alongside the main OECD Ministerial meeting  
on 3-4 June.
Key themes will include:
•
  inclusive growth & access to opportunity
•
  investment to restore dynamism to our economies  
   & create jobs
•
  innovation & entrepreneurship
•
  transitioning to the new climate economy
Save the date! Come and join us.
www.oecd.org/forum
2/3 JUNE
2015
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Macro Economy 
026 
  Apr. 2015
0410
By  Ajit Ranade
Economic 
Prospects for 
India in 2015
When most parts of the world are experiencing a 
slowdown, India and China’s share in the global 
economy will increasingly mirror their population 
share. In particular for India, its growth will provide 
much of the growth impetus in Asia due to falling 
crude oil prices, government reforms and demographic 
dividends.
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Apr. 2015 
  027 
WWW.BOAOREVIEW.COM
I
t has become conventional wisdom to assert that 
the economic centre of gravity of the world is shift-
ing east. During the latter quarter of the twentieth 
century, and continuing well into the next, the share of 
global GDP of “Western” nations went down by more 
than 10 percent, when measured in US dollars. When 
adjusted for differences in purchasing power, and 
measured in PPP dollars, the contribution of Emerging 
Market (EM) economies is much larger. Taken togeth-
er, the EM group, mostly from the east, crossed the 
important threshold of 50 percent in 2008. EM econo-
mies currently make up 58 percent of global GDP. 
More recently, as if to reinforce the symbolism of 
this West to East phenomenon, the airport of Dubai 
edged out London’s Heathrow to become the busiest 
airport in the world for international travelers. EM 
economies consistently clock higher growth rates than 
major developed economies, with an average lead of 
about 4 percentage points. Not surprisingly, 70 percent 
of the incremental global growth has come from EM 
economies in recent years. China alone contributed 35 
to 40 percent of global growth during 2010-12.
Yet the view in 2015 for EMs is very different. Most 
parts of the world are experiencing a slowdown. The 
International Monetary Fund (IMF) has revised down-
wards the growth prospects of most major economies, 
except for the U.S. and India. Three of the four econ-
omies from the original BRIC acronym are facing a 
slowdown. Both Brazil and Russia face prospects of a 
recession, as does Japan. The Eurozone will likely grow 
at barely 1 percent during 2015, with unresolved large 
sovereign debt issues. China’s most recent quarterly 
growth rate was the lowest recorded in more than two 
decades. Since China’s size today is six times larger 
than two decades ago, some of this slowdown was 
inevitable, simply due to a base effect. The additional 
slowdown is a consequence of the sputtering of the 
export engine, as a primary driver of growth, and the 
challenge of rebalancing the economy from investment 
to consumption. In China there is talk of low-cost la-
bor-intensive manufacturing activity migrating to new-
er destinations in Asia.
Unanticipated bonanza of steep fall in global 
crude oil prices 
In such a world with a cloudy and uncertain outlook, 
India’s current perch is almost envious. The steep fall 
in global crude oil prices is an unanticipated bonanza 
to the country as it imports almost 70 percent of its oil 
requirement. This fall provides a triple bonus to the 
economy. Firstly, it reduces the fiscal burden of subsi-
dies on oil. This could translate as anywhere between 
0.5 to 1 percent of GDP. This magnitude of savings is 
hugely welcome to the fiscally strapped government, 
which can deploy these savings into domestic infra-
structure. Secondly, cheaper oil reduces the import bill 
by around US$70 to 90 billion, taking some pressure 
off the currency and the current account. 
India is one of the few large EM economies that has 
had a persistent current account deficit (CAD), which 
has to be financed by capital inflows. Those inflows 
that fill the gap themselves represent a vote of confi-
dence of foreign investors (or lenders) into India. But 
the CAD cannot be allowed to become excessive, and 
hence the fall in oil prices helps. It may also turn into 
a surplus during 2015. The third bonus aspect is that 
lower oil prices will lead to lower domestic inflation, 
since they feed into almost all aspects of the economy, 
from energy and transportation to food inflation. The 
fall in oil embellishes the recent success of India’s cen-
tral bank in its protracted battle to tame double-digit 
inflation. The Reserve Bank of India, in all probability, 
is now ready to ease interest rates throughout the year 
to support industrial growth and sectors like housing 
and construction.
Ajit Ranade
Senior President and Chief Economist, Aditya Birla Group; 
Member of the Capital Convertibility Committee of India’s 
Reserve Bank, the Governing Council of the Banking Codes 
and Supervisory Board of India, the Economic Policy 
Council of CII, and the National Executive Committee of 
FICCI
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