Lord Karan Bilimoria at Asian Business Association Annual Dinner

18 years ago, a young man from India came to Washington with his Father – his Father had just won a presidential award for helping to get water supplies into 10 African villages. That young man went on to study engineering at the University of Illinois and received an MBA from one of the top business schools in the world: Wharton. That young Asian, Neel Kashkari today, only 35 years old is in charge of the $700bn dollar US Government bailout.

And yet just over 25 years ago I came as a 19 year old student from India and then at what is now Ernst and Young there was only one Asian partner and they said that that this was apparently because his wife was English.

How things have changed.

Today the top accountancy firms have several Asian partners.

Today the Asian community in this country is reaching the top in every field.

When I decided to start a beer brand from scratch, I remember visiting my Father who by this time was General Commanding Officer in charge of the Central Indian Army in Lucknow. I knew my Father couldn’t support me financially – Indian Army Officers did not get paid very well, in fact he used to say that he didn’t have to persuade his sons to join the army, all he had to do was show us his pay cheque.

I thought at least he would be able to give me some moral and emotional support when I was starting my own business. He said to me: “what are you doing with all this education, and you are becoming an import-export wallah! Get a proper job! Become a banker!

Today there is no glass ceiling – it has been shattered forever. I believe that there are opportunities for all in this country.

President Clinton said a few years ago here in London – although countries have always been interdependent on one another, today we live in a far more integrated world, and as we’ve seen – things spread like wildfire across the world – both good and bad

Enterprise Week, started here in the UK in 2004 with 1000 events, and last year there were 5000 events.

Last year I was proud to launch Global Entrepreneurship Week with the Prime Minister, Global Entrepreneurship Week is set to take place next month – with 50,000 events in more than 60 countries around the world.

On the other hand the sub-prime crisis which started in the United States of America has affected the whole world in such a short time. In fact we’re all in a state of shock at the moment.

One of the leading Chief Executives in Britain said to me yesterday that it appeared governments have not had courses in crisis management. One of the first lessons in crisis management is “never use the word panic”. And how many leaders have used the word panic recently?

It was the famous American President Franklin D Roosevelt, facing the Great Depression at his inauguration in 1932 said “We have nothing to fear but fear itself.” This is the time for government to show leadership – strong and decisive leadership in order to help business turn a corner.

To me, leadership is about having a vision and a very clear idea of where you want to get to as a leader and then taking your people whether your team or your country with you to that destination. And yet yesterday I spoke in Westminster on a question relating to the banking crisis and in the debate on the government’s statement titled “financial stability” – a misprint surely? More like Financial instability!!

With Northern Rock the government took nearly 6 months of indecision, and then we had the nationalisation rushed through parliament in just 3 days – I had the unpleasant experience in participating in that bill in February and here we are 8 months later and there is still no major reform of the Bank of England – reform which is desperately needed to give it more power to deal with crises such as this.

What caused Northern Rock to be nationalised? There are many reasons but certainly one cause was the change in regulatory and supervisory arrangements which created the tripartite system consisting of the Bank of England, the FSA and the Treasury was not thought through particularly.
How would this arrangement act in a crisis?

The tripartite arrangement has ended up being a happy merry go round in what the Governor of the bank of England referred to as the “nice decade” and became a woeful blame go round in the bad times.

There is no question that the Federal Reserve in the US has been able to act swiftly because it has the ability to set interest rates, is the lender of last resort and has regulatory powers far in excess of the Bank of England which unfortunately has been left with its hands tied behinds its back.

The indecisiveness shown by the government over the past few days and weeks has cost us dearly, and even the gigantic £500bn rescue package – laudable though it is in quantum and in effort, - I am not sure whether it will be enough.

When there are countries like Ireland offering 100% guarantees on all deposits – retail or corporate. I have heard of stories of £100m being removed from one branch of one bank in London in one morning this week alone.

In fact, if you think about it, the $700bn American bailout seemed a huge amount and converted into dollars the UK bailout actually exceeds it - £500bn is $866bn –given that the American economy is over 6 times bigger than the UK economy perhaps a vastly increased American bailout would greatly help to stabilise the global financial situation. I always thought that the $700bn American bailout was a drop in the ocean – perhaps they will take a lead from the UK especially as the sub-prime crisis has affected the American economy far worse than anywhere else in the world.

I’ve found in life – in any relationship, between individuals, between husband and wife, or in business, if you have mutual trust and mutual respect you have the basis for a solid lasting relationship. Today that trust has broken down - between banks themselves, and the trust and respect from the public towards the banks has shattered completely.

Why wasn’t all this predicted?

What were the global institutions like the IMF doing? Even when I spoke in a debate in the House of Lords in July on the world food crisis it seemed as if this crisis came upon the world overnight and no one was prepared for it.

We are suffering from an unprecedented combination of events – rocketing oil prices, rocketing food and commodities all of which are now adjusting combined with the credit crunch, the sub-prime crisis, the banking crisis, unemployment rising, house prices falling – sadly, without doubt, we are in for a recession

The priority has to be to stabilise the financial markets and the banking industry. But the real problems lie ahead supporting individuals, families, businesses, and in particular, SMEs.

I asked yesterday in Parliament with £500bn of support what is being done by the government for the business community? A business community in which I hear horror stories of banks calling in overdraft facilities, where I hear horror stories of banks hiking up interest rates, it is getting to be impossible for business to raise finance. If businesses are suffering today – how much more will they suffer when the recession really kicks in?

The government has taken on more and more borrowing already through huge public spending in the last 10 years – and over the past 18 months has introduced so many un-thought through policies, mostly without consultation, which has surprised the whole business community.
• Withdrawing Capital Gains Tax Taper Relief
• Reducing corporation tax for large businesses and increasing corporation tax on small business
• Removing the 10p tax
• Taxing non-doms – who have contributed so much to Britain’s success.

One of the reasons for all this – The government has had no room to manoeuvre and has needed to raise more taxes –how much more tax is the government going to have to raise to pay for the current crisis in the future when people will be unable to afford it?

Groucho Marx said “Politics is the art of looking for trouble, finding it, misdiagnosing it and then misapplying the wrong remedies.”

This is not government bashing – I haven’t seen many solutions from the opposition either.

In fact I have the greatest respect for the Prime Minister – a thoroughly decent individual who has genuinely tried to help business. An individual who as Chancellor launched the National Council of Graduate Entrepreneurship encouraging students in every University to think of starting a business as a career choice, I am proud to be national champion of the NCGE, and look at Enterprise Week of which I spoke earlier, once again supported by him.

There is government help through UKTI, supporting the UK India Business Council which I am proud to chair – giving £1m a year helping to promote trade, business and investment between India and the UK both ways

At times like this organisations like the Asian Business Association the ABA – THE voice of Asian business not just in London but throughout the country, need to rise to the occasion.
It’s time to stand up for Asian business
Its time to stand up for SMEs
Its time to stand up for Business.

I am proud to have been a member on the Board of the ABA for 8 years – the past 5 as Vice President, and I want to thank the Board members for all their time and all their efforts. It has been a privilege to serve with 2 outstanding chairmen: Subash Thakrar and Tony Sarin. Thank you to Sandeep, and most importantly all the team at the London Chamber of Commerce of which the ABA is an integral part. I am looking forward to serving as Deputy President of the London Chambers of Commerce and Industry, and to working with Stephen Green, our Chairman Colin Standbridge, and our Chief Executive Peter Bishop.

I’m often asked what advice I would give to businesses, entrepreneurs and SMEs in these difficult times, and I often advise people to look back before they look forward - I remember when I was back in Cambridge in 1987 –coinciding with a storm that no one had predicted – an omen if ever there was one! a stock market crash in October, followed by a property crash 88-89, recession 90, 19993 before we were truly recovered – a 6 year period. This time the credit crunch started last year followed by the global financial criss this year given past records it could be another 4 and a half or 5 years before we’ve recovered from the current crisis and the forthcoming recession – I do hope that this will not happen but it looks like we are in for the long run.

It took 6 years for this recession to end - But looking East – today India and China are now giant economic superpowers

I would also give 2 recommendations: the first, based on what I heard the Dali Lama speak here in London a few years ago – it was an amazing experience.

And he had 2 very clear messages: one was that you always hear about the bad things going on in the world, but you never hear about the hundreds of thousands of good things that ordinary people do every single day towards one another. We need to take heart from all the fantastic performance of the thousands of businesses which are continuing despite all the doom and gloom.

The other message was that when you are confronted with a problem, take a wider perspective and keep an open mind. This is one of my key recommendations.

We need to think globally and remember India – achieving between 7% and 9% growth – there is no recession in India. Since Cobra started manufacturing in India 3 years ago for the Indian market we have seen amazing growth and India is now responsible for a quarter of our sales.

Yet when I speak to business audiences around the country and ask how many people are doing business in India, only a few hands go up.

There’s a wonderful quote from one of the great Second World War generals – General Patton: “success is how high you bounce when you hit bottom.”

I have great faith in our country – we are a tiny nation of just 60mn people making up 1% of the worlds population and yet Britain is still one of the 6 largest economies in the world. We have 4 out of the top 10 Universities in the world the London Business School was this year ranked number 2 in the world, 6 weeks ago, I was privileged to spend a day touring around Land Rover’s factory in Birmingham I witnessed state fo the art best of the best world beating automotive manufacturing. Who says British manufacturing is dead?

And what is more, everyone I spoke to there was proud to be owned by Tata – an Indian company – I wasn’t just happy because Tata is an India company , I wasn’t just happy with Tata as a Parsi company but most of all I was happy because Tata is a company that is now renowned the world over as a company that has lived, believed and practiced CSR for over a century now.

I am privileged to know the Nobel Laureate Amartya Sen who talks about identity and one of his messages is that we do not have one identity. I am so proud of my Indian roots I am so proud to be a Zoroastrian Parsi, I am so proud to be an Asian in Britain, and most of all, I am so incredibly proud of being British.

And that’s what the Asian Business Association is about – it is about Asians excelling in Britain. When I see young Asians today I feel so proud – they are articulate, they are educated, they are confident, they are capable of taking on the world.

I started this evening by telling you about a young Asian in the United States in charge of the US Governments $700bn dollar bailout. I am confident that in my lifetime I will see an Asian as Prime Minister of this country.

Thank you.