‘Emerging nations to lead turnaround’

THE LNM INTERVIEW

India & China will lead the global recovery, but we must cut red tape to keep investor interest alive, says the steel baron

THE global economic slump may be showing signs of picking up ,led by the growth in emerging economies such as India, but there is need to take a cautious approach as some segments like real estate and consumer credit "are still to completely flush out their toxic assets", LN Mittal, chairman and CEO of Arcelor-Mittal, said in an exclusive interview to ET.
    In an hour-long interview at Arcelor Mittal's London office, steel baron Mittal said: "...the slowdown in the decline is in itself a big comfort. But we have to continue to monitor and wait."
    The green shoots of revival have begun to appear in some parts of the world, but it will take at least three to four years for demand to come back to the "pre-recession levels."
    Commodity prices, which reached irrationally exuberant levels, have begun to show early signs of stability, and may move towards a more "rational plateau" in the near future.
    The global recession has not only forced companies to adopt new strategies on cost and customer service, but it has also changed the rules in the credit market.
    "The easy money era is gone. Now it is the selective money era, where projects will be evaluated from different angles and criteria. And that is a good thing. I think that is the right thing to do; there will be more prudent policies." Foreign investors eager to invest in India
SPEAKING on the roles of emerging economies, he said that while the government stimulus packages have already begun playing out with China projecting a 8% GDP growth, the election of the new UPA government with a strong mandate has brought in a new air of "confidence and excitement." Foreign investors are looking forward to India as a market but there is a need to expedite clearances and remove bureaucratic hurdles.
    The two steel projects being planned by the company in Jharkhand and Orissa are a case in point. "The government can speedily approve the projects. The government should start educating different states that these investments are good for them...We are keen to invest in the steel industry. We may read everyday that there is a protest or violence. We need to avoid this. We need to educate the people that it is not a land-grabbing scheme. It is a scheme for the future."
    Asked about the Bhatinda refinery which he is developing in partnership with Hindustan Petroleum, Mr Mittal said the project will be completed by May 2011 as per schedule. He added that the company was hoping for tax breaks, of the kind offered by Gujarat.