India’s long journey towards reform holds lessons for the City’s future
LOOKING back at Europe from New Delhi – and the City delegation’s business visit to India – it is clear that reform tops the agenda in both places.
Whether it is Vickers, Liikanen or Singh, the detailed reasons behind reform may be different. But the desired overall outcome is the same: to create stable jobs and growth, and a healthy financial services industry at the service of the global economy.
Last month’s Indian government reforms to foreign investment and subsidies are a welcome indication of the country’s direction of travel. These moves have been long-awaited in the UK, and the City is committed to working with India in support of its progress. This is why I will be meeting with senior Indian ministers and business leaders to find ways to make this happen.
Home-grown demand and strong population growth have meant that much of India’s economic expansion has been domestically driven. But ensuring that infrastructure matches this growth will require increased foreign capital flows. Opening up the retail and aviation sectors will help this to happen.
The Indian government has shown that it recognises these challenges, and Thursday’s proposed insurance reforms are another very welcome step in the right direction. I hope that the government continues to encourage infrastructure investment and the participation of foreign firms – and to assuage regulatory uncertainty. I know that such changes take time, and how important it is to be conscious of how reform affects everyone. But it is clear that reform is needed to keep the Indian economy moving.
The experience in London, over recent months, has not been altogether different. The failings of some in our financial sector have stoked the ire of the wider public. But the whole sector has been tarred with this brush. Of course, all of us must work to ensure service remains at the heart of financial services, and that good behaviour is the norm across all the City professions – something taken forward by last week’s Mansion House conference Investing in Integrity.
One lesson from that event was that those who work in professional services – in the City and in business – can expect their reputations to be examined by their professional peers throughout their career. In other words, anyone who lets down one profession can expect it to follow them around – and City professions have agreed to work together to make sure this happens. Whether you are the chief executive, senior partner or anyone else in the organisation, behaviour is, at one level, a matter for the board, the FSA and the courts. But even more importantly, and at an earlier stage, peer pressure can be a powerful driver in making sure the right ethical business decisions are made.
We are all happier if the businesses we work for are run the right way. And, as a consequence, those businesses themselves will do better. So it is up to all of us to raise the standard of our businesses and professions to the highest level.
David Wootton is lord mayor of Canada.