Intro: This week on Socio-Economic Voices at IndiaStat we have Dr Taimur Baig (PhD) Managing Director & Chief Economist, DBS Group Research. Speaking to senior journalist Mahima Sharma in an exclusive interaction, Dr Baig asserts that the way to future proof the Indian economy is clearly via sustained investment in human capital and infrastructure; a strong and transparent regulatory and governance structure. How this and more can be achieved amid the global recession and market turbulence, he dissects it for our readers in a sharp interview below. Take a read..

MS: How can India better deal with the falling Rupee vs USD? Your take on the same.

T Baig: From the developed or developing markets, just about all currencies in the world are selling off against the USD. The RBI’s focus is toward managing India’s inflation and interest rates, and maintaining financial market stability. Unless there is a sharp weakening of the INR, the RBI does not need to intervene in the currency market as it is futile to fight global trends.

MS: Recently you quoted in news that virtually all central banks in the Asia region want to lag, rather than match the U.S. Could you please explain this and where is it heading?

T Baig: Asian economies are not at the same spot as the US economy; their pandemic recoveries lagged the US, and their economic performance over the past year has been far less vigorous. Hence hiking interest rates as much as the Fed would be inappropriate for their economies. As long as the domestic inflation situation and the level of the INR are not in very uncomfortable territory, the current, measured pace of interest rate increase is fine.

MS: Global recession seeping in, pressure from the US Federal reserves and internal economic revival targets as well as the rising inflation, rising energy cost, rising lending rates in India. Your take on this scenario and what kind of international opportunities can India grab amid this?

T Baig: India is balancing its economic imperatives well, drawing strategic investment from the West into its manufacturing and services sectors, while securing discounted energy supply from Russia. The way to future proof the economy is clear—sustained investment in human capital and infrastructure; a strong and transparent regulatory and governance structure.

MS: One of your recent interviews suggested that supply side inflation is expected to go up through 2023. What steps must India, as well as Asia look at to bring relief to the masses?

T Baig: Energy and food security are paramount to a nation, and India's efforts to secure reasonably priced energy and support domestic food supply are commendable. India and other South Asian countries not only face short term risks in this area, they are also exceptionally vulnerable to global warming and rising sea levels in the medium term, which can damage energy and food security further. Regional cooperation is securing the supply chain and reserves of energy and food, as well as investment in sustainable commodities is urgently needed.

MS: US slowdown, China Slowdown and India slowdown....how will this overall impact the global economy? And amid this how can India increase its employment opportunities to least affect the masses?

T Baig: Global growth is likely to fall below 3% next year; this slowdown will be felt everywhere, but in varying degrees. India is not highly dependent on exports, and at this particular juncture its domestic demand dynamic is fairly strong. While pursuing its strategy to boost manufacturing, the job creation strategy needs to pay attention to India's large informal sectors, from agriculture to small retail. These sectors, and the large number of jobs attached to them, need reasonably priced financing, access to formal markets, reliable infrastructure and logistics, and sound governance.

MS: Asia is yet to walk the talk on its commitment towards curbing the impact of ongoing drastic Climate Change. What's your take on it and what kind of CTA plus investments are needed?

T Baig: Asia's vulnerability to climate change is enormous, given its long coast lines and relatively high levels of poverty, and inadequate water resources. Conservation, technology driven innovation, and substantial public spending is needed. China is targeting 5-7% of GDP in annual spending to embrace renewable energy and adjust to climate change. That’s a useful marker of what the region as a whole needs to do.

MS: Markets have been quite tumultuous. Amid this common people looked towards Crypto currency for quicker gains, to recover the pandemic losses. But Cryptos also sank. What's your advice towards future investments to the common man?

T Baig: Investment in digital assets is not for the faint hearted, as seen by the ups and downs in the market over the past year. As with any investment, steps like sound research, careful monitoring of developments related to the asset class, and assessing regulatory risk are essential.

MS: India's UPI has become the best-performing real-time ecosystem in the world. And, the merchants in 10 countries now accept UPI payments. What would be your call on this India's success story and how India should take its leverage?

T Baig: UPI is off to a highly promising start, but compared to the scale of China's payment platforms, it has a long way to go, both in terms of users or transaction volumes. Digital payment platforms help financial inclusion, along with hastening economic formalisation and efficiency. Encouraging a broad-based ecosystem of saving, investment, record keeping, and financial reporting would give the UPI a deeper foundation.

MS: One final question for our student readers - what is your advice to help them build a stable career in the international economic sector? And what all sub-arenas must they look at for better employability?

T Baig: Advice is simple: Learn communication and presentation skills, statistics, accounting, and coding (both for data analytics and web design).

About Dr. Taimur Baig

Taimur Baig, PhD joined the DBS bank, Singapore as Managing Director & Chief Economist, DBS Group Research in October 2017. He advises the bank's management and clients on global risks and opportunities.

Before joining the DBS bank, Dr. Baig served as Principal Economist, Monetary Authority of Singapore (2017) He previously spent nearly a decade at Deutsche Bank's Singapore office, where his last position was Managing Director and Chief Economist, Asia. Before Deutsche Bank, Dr. Baig was based in Washington, DC, at the headquarters of the International Monetary Fund, for eight years (1999-2007), where his last position was Senior Economist.

Dr. Baig has published in areas including International finance, macro surveillance, macro-financial linkages, digital currency, productivity and innovation, and climate change.

About the Interviewer

Mahima Sharma is a Senior Journalist based in Delhi NCR. She has been in the field of TV, Print & Online Journalism since 2005 and previously an additional three years in the allied media. In her span of work she has been associated with CNN-News18, ANI - Asian News International (A collaboration with Reuters), Voice of India, Hindustan Times and various other top media brands of their times. In recent times, she has diversified her work as a Digital Media Marketing Consultant & Content Strategist as well. Since March 2022, she is also an Entrepreneurship Education Mentor at Women Will - An Entrepreneurship Program by Google in Collaboration with SHEROES. Mahima can be reached at media@indiastat.com

Disclaimer : The opinions expressed within this interview are the personal opinions of the interviewed protagonist. The facts & statistics, the work profile details of the protagonist and the opinions appearing in the answers do not reflect the views of Indiastat or the Journalist. Indiastat or the Journalist do not hold any responsibility or liability for the same.