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Mumbai can make itself happen
But to become a major financial centre, city has to follow its own recommendations says Lord Mayor of City of London ....Sudeshna Sen LONDON
THE Lord Mayor of the City of London, when he’s not presiding over elaborate pageants in rich historical costumes, governs the one square mile that accounts for 34% of the global foreign exchange turnover, 90% of world trade in metals and 14.5% of UK’s GDP. David Lewis, who traces his office back to the likes of Dick Whittington, points out that the City, at 800-odd years old, is the world’s oldest functioning municipal democracy, and “we have no politics, or affiliations with any party.” Mr Lewis spoke to ET on a range of issues just prior to a fourcity India visit.
How will the global financial crisis affect the City of London? There are two issues — one is the subprime crisis. It’s worrying and will affect countries like India and China as well. The issue is that the length, depth and range of the crisis is still not known; we don’t know how long it’s going to last — we’ll have a better idea with the June quarter results. Though the Big Four accountancy firms are writing down everything they can, in the hope that banks will be able to write them back. The other is a recession — the UK and Continental Europe are not in recession. You may argue whether growth will be 1.8% or 1.6%, but we’re not negative. This market has a lot of substance, and there’s still a lot of money being made. And though financial services is important, the UK is the world’s sixth-largest manufacturing nation. What areas do you plan to engage with India, and what is your take on the proposal to make Mumbai a global financial centre? I’ve seen the report for Mumbai that has been prepared by the expert panel. It is excellent work, as could be expected. That is just what the city needs. Right now, Mumbai is 48 in the ranking of global financial centres — if Mumbai wants to move up that list, please will you follow your own recommendations? We are planning to work with organisations on the areas of education, training, and qualifications. Another area is Islamic finance. I understand India is the world’s second-largest Islamic country, and there are very few Shariah compliant products. Foreign banks would be happy to work with partners to develop this market. And I understand the political considerations, but it is still easier for an Indian company to do business here than it is for a foreign company to do business in India; we’d like more reciprocity. What about layoff reports in the City? I think a lot of the reaction has been extreme and doesn’t reflect reality. We’ve got 1.3 million workers in the City; if some few thousand jobs are cut, it has to be put in perspective. And mostly, it is American headquartered banks which tend to lay off people in large numbers, and then re-hire. I’ve been a lawyer, the last thing we’d do is let go of trained people — we would have moved them to other areas. But the situation is not as bad as it’s made out to be. There’s another sense that London will lose talent because of recent moves to tax non-domiciles, and tightening up of non-EU immigration procedures. Again, the immigration issue does not always reflect reality. It’s not as if UK does not want to attract talent; it’s just to ensure that the kind of people who come here to take advantage of our welfare system are weeded out. We encourage skills from all nationalities to move here. We have 200,000 non-British passport holders, aged around 31, working in the City. As for the non-domicile tax, the entire City protested against the initial proposal. We’ve had discussions with the Treasury, and many of our recommendations have been accepted. In its current form, a lot of proposals — like asking everyone to file global tax returns — have been removed. What about London’s stature as the world’s leading financial centre, given a recent spate of crises? The problem we had with Northern Rock was not about the fundamentals of the system itself; our regulatory system is still far better than in the US. The problem was with the business model, and the Financial Services Authority has taken responsibility. We’ve learnt from our mistakes. As you may imagine, there are regulators all over scrutinising everything now; there’s a huge amount of direct supervision. |
| Also see : Administrative Wards of Mumbai, Government Acts(By Topic), Government Schemes |
