Mumbai & Shanghai to be boomtowns of post-recession world

By Dipankar De Sarkar, IANS,

London : Confidence levels among senior business executives in Mumbai and Shanghai are so high that they are leaving their counterparts in New York and London far behind, with significant implications for the post-recession global economy.

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With India having emerged relatively unscathed from the recession, more than 90 percent of senior business figures in Mumbai are more confident now than at the beginning of the year, according to a study published Monday.

Ever more remarkably, 92 percent of Mumbai’s business bosses are confident in the economic outlook for the next 12 months, says the study by the London-based international law firm Eversheds.

The findings of the research, conducted among 600 senior executives in London, Mumbai, New York, Shanghai and the United Arab Emirates (UAE), show that “the world order for financial centres is changing”.

“This is potentially very significant. When you have 90 percent of respondents in Mumbai and Shanghai saying they are very confident about the future, and only 22 percent saying so in London, it feeds into the plans people will make,” said Eversheds chairman Alan Jenkins.

“Indian business are confident and are looking to the future, making plans for both within India and globally. I don’t get the same sense in London,” he told IANS.

Jenkins said there will be “considerable pressure” on London’s place as the pre-eminent centre for global financial services in 10 years’ time.

“There are real question marks about how financial services are going to grow in London. Executives in London complained of levels of regulation and volume of litigation, whereas those in Mumbai spoke about high levels of business taxation as the main barrier to growth.”

According to the Eversheds research, 87 percent of business leaders across the globe said that the recession has significantly changed the structure of the world economy and that established financial centres face a growing challenge from the emerging economies of the East.

The ‘Boom or Gloom’ research reveals that the majority of business leaders are more confident than at the start of 2009. But when it comes to confidence in the economy over the next twelve months, there is a clear East-West divide.

More than 90 percent of business leaders in Shanghai and Mumbai are confident in their economic outlook over the next year, while only 22 percent in London and 35 percent in New York were able to say the same.

The �confidence gap’ is even more significant in how the respondents perceive their own economic performance: in Mumbai and Shanghai more than half the respondents feel their national economy is performing considerably better when compared to the global economy, whereas in London and New York this was only around a third.

The Eversheds chairman said a high-level government report in India has singled out all-round infrastructure development as the key challenge in efforts to develop the city as “even more of a leading financial centre”.