from the continued weakness in labour force growth. potential growth is projected to rise in west asia in 2022 - 30 as strengthening tfp growth offsets demographic headwinds to potential growth. the secular slowdown over the last decade and expectations of another slow decade ahead warrants a renewed exploration of the linkages between physical capital investment, improvements in human capital, and exploitation of technological advancement. in an environment in which populations across the world are either ageing or declining, and investment rates are trapped in a long - term deceleration, including foreign direct investment, it is perhaps an opportune moment to focus on productivity growth as the means of arresting the downturn and charting a new trajectory of pushing outwards the growth possibility frontier. it has been observed that productivity is not everything but in the long run, it is almost everything 7. this is the theme of my address today. iii. the paradox of productivity globally, productivity growth has undergone a prolonged slowdown since 2010, after a brief recovery in the years immediately following the gfc. this deceleration in tfp is more pronounced in emdes than in their ae peers. india has also suffered a decline in tfp growth, although moderate relative to the global experience – the average tfp growth rate in india krugman, p., ( 1997 ), defining and measuring productivity in the age of diminishing expectations, the mit press, july. slowed from 1. 3 per cent during the period 2000 to 2007 to 1. 2 per cent during 2011 to 2019, as against the emde average of 0. 2 per cent and the global average of 0. 1 per cent 8. tfp growth accounted for about 20 per cent of india ’ s aggregate gdp growth during this period, coinciding with the contribution of both capital and labour declining. gdp growth in india has remained relatively resilient, averaging close to 7. 0 per cent during 2000 to 2022 with some ebbing of capital formation and employment growth in sync with the deceleration in tfp growth. for the period 2022 - 30 the world bank projects india ’ s potential growth to reflect the outlook for south asia. underlying the generalised productivity slowdown are several confounding puzzles, at least from the policy practitioner ’ s point of view. i will focus on a few important ones in the interest of time. first, the slackening of productivity is synchronised across jurisdictions, apparently impervious to differentials

can sustain in the long term at full employment and full capacity without igniting inflation ( its speed limit, if you will ) – has fallen by close to a full percentage point in 2011 - 21 relative to 2000 - 10 2. the global slowdown has pulled down advanced economies ( aes ) and emerging and developing economies ( emdes ) alike, but it has imposed a major setback on the latter, pushing back their chances of catch - up or convergence. consequently, their capacity to lift their populations out of poverty, reduce inequality and achieve the aspirational goals of development is endangered as well as their ability to harness the benefits 2 kose, m. a. and ohnsorge, f., ( eds ), ( 2023 ), falling long - term growth prospects : trends, expectations, and policies, world bank, washington, dc. i draw heavily on this comprehensive work to tease out stylised trends. of newer technologies stemming from green transition and the digital revolution. what is worrisome is that for emdes, all the drivers of growth – factor re - allocations ; human capital formation ; the share of working age population ; investment growth – are losing strength at the same time. this could stall the process of development that has been underway since the middle of the preceding century. meanwhile, policy uncertainty at the global level has surged and forces of deglobalisation and trade and finance disintegration have gained ground, vitiating the environment in which emdes sought to harness developmental opportunities and manage their challenges. the world bank estimates that for emdes, potential growth as defined earlier fell to 5. 0 per cent a year during 201121 from 6. 0 per cent a year during 2000 - 10 and will slow further to an average of 4. 0 per cent a year during 2022 - 30. in particular, investment growth is likely to be insufficient to reach pre - pandemic trends. in the view of the united nations conference on trade and development ( unctad ), greenfield foreign direct investment in industry remains fragile, especially in developing countries. there is significant risk that the momentum for recovery in international investment will stall prematurely, hampering efforts to boost finance for sustainable development 3. turning to asia, the real gdp growth surge in east asia ( which includes the pacific region ) following the 1997 - 98 asian financial crisis lost steam during the period between 2011 - 21 in a largely cyclical downturn. with the onset of the