Myths about India's Resurgence
By Riaz Haq
CA
Hardly a day goes by without headlines about India's success. The headlines proclaim the newly-minted millionaires and billionaires in India, major international acquisitions by Indian companies, the phenomenal growth of Indian economy, India's entry into satellite launch business, the special invited presence of Prime Minister Manmohan Singh at the G8 summit, etc. etc. Indian democracy also gets an honorable mention, along with its economy, particularly when comparisons are made with the other Asian giant China. However, there are many myths associated with India's recent economic resurgence on the world stage and its democracy. Here are a few that I have looked into:
India's Success in Information Technology:
There is a common misperception in Pakistan and other countries that India's information technology (IT) success is the result of the Indian government's grand vision and smart policies in recent years. Based on my knowledge of the situation, nothing could be further from the truth. The Indian entrepreneurs in Silicon Valley have succeeded in promoting IT in India, in spite of the Indian government, not because of it. It was their own desire to improve profits by taking advantage of India's lower costs and availability of skilled engineers and programmers. The essential role the Indian government played started back in the 1950s with the establishment of Indian Institutes of Technology (IITs) that have produced a lot of very good engineers and technologists. In fact, Silicon Valley owes much of its success to the availability of IIT engineers.
Indian Institutes of Technology:
The credit for the IITs goes mainly to Maulana Abulkalam Azad, India's first education minister, who conceived the IIT system and won Prime Minister Jawahar Lal Nehru's backing to implement it. If other governments are inspired to help the IT sector or any other sector, they must focus on improving access to quality education. But the results are not instantaneous. IITs are like a tree that was planted in the 1950s and it had to be nurtured and cared for to begin to bear fruit beginning in 1970s and 1980s. But the real impact of it started to be felt around the world in the 1990s. Economic reform in India also played an important role in 1990s. Successive Indian governments deserve a lot of credit for the dramatic success and international recognition of the IIT system.
For those interested in learning about the role of India's governments in promoting business and industry, I recommend watching the Bollywood movie "Guru" that shows the travails of Dhirubhai Ambani, the great but illiterate entrepreneur and industrialist who created the Reliance Group behemoth. Two of his billionaire sons, Mukesh and Anil, are now among the top five richest people in the world. The movie might not be totally accurate, but it does capture the essence of India's socialist government's fundamentally anti-business attitudes in the 1950s, 60s and the 70s.
India's Democracy:
India continues to be the home of the largest number of poor people in the world. It has the highest population of malnourished children. Its farmers are committing suicides at an alarming rate. It has the dubious distinction of being the murder capital of the world, with the largest number of homicides in the world recorded last year. Some Muslim holy places have been destroyed and a large number of Muslims massacred in Gujarat, UP and Maharashtra riots. In short, the Indian democracy has failed to serve the vast majority of its citizens. For those who sing the praises of India's democracy, I would suggest viewing Bollywood hit "Sarkar Raj" that portrays the Godfather-like corrupt, criminal and murderous behavior of India's powerful politicians. Again, I am certain India is blessed with many honest leaders and this must be a caricature of the reality of Indian democracy, but it does bring out the fact of criminals' presence in Indian politics. According to Professor Pradeep Chibber of UC Berkeley, as many as 30% of India's legislators have criminal records. However, the good professor contends that democracy is a messy process that must be allowed to work its bugs out. It should not be interrupted or abandoned because the alternatives are far worse. India has a functioning democracy with an independent judiciary and other institutions that are respected. I agree with the professor's assessment.
India as a Model:
It is very tempting to try and copy India's success, particularly among other South Asian nations such as Pakistan. I think it is good to be inspired by your neighbor's success but it's also important to do so smartly. Pakistanis need to think about what they need to accept from India's successful experience. For example, the Pakistani diaspora, particularly the entrepreneurs in the developed world, must play their role to spur development and economic growth in their country of origin. But they should reject what does not make sense for them. In fact, Pakistanis should choose the best ideas to adopt from the experiences of India and China as well as other successful emerging economies. For example, there should be an exploration to see if the Chinese efficiency can be combined with India's democracy.
There should be an attempt to learn from the Chinese experience of lifting over 30% of their population from poverty and building world-class infrastructure at the same time. It is not unusual to see the rich-poor disparities grow in periods of rapid economic growth but there must be constant efforts made to minimize such disparities. And an effort to avoid the scourge of very large number of farmers' suicides that afflicts India's rural population.
Pakistanis and others should learn how to embrace diversity and pluralism from the Indian experience that encompasses a large number of ethnicities and religions, while shunning the evils of the caste system and discrimination against women and female infanticide that still plague India.
