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False Hope At Davos

Its India and China again, this time at the World Economic Forum at Davos. To India's credit, much effort has gone in hardsell. To India's misfortune, much of this will remain that. Any new investor who gets swayed by the hooplah will want to visit this promised land. What he will see and conclude on landing in Bombay airport is best not left to imagination.

Let me first quote Bruce Nussbaum, assistant managing editor at Business Week and innovation and design columnist. "What I didn't realize was the enormous presence India will have at Davos this year. Billboards, buses, parties, sessions, workshops restaurants will all have an Indian theme to them. Delegates will get Indian pop and classical music, pashmina shawls and a cd with tons of economic data on it when they sign in. The Saturday night soiree will have Bollywood dancing and music. India's 115 person delegation will dwarf China's."

And let me now quote the first response that crops up on his column.

"Every few years and decades India is hyped to really make the breakthrough to become a global economic power. Yet, despite its brillant thinkers and its knowledge economy outsourcing, fact is that this country is still dominated by poverty, terrible infrastructure, discriminating social structures, rampant corruption, an agricultural society and protectionism.

India's "thinking economy" is limited to a very small fraction of the population and has only lifted very few people out of poverty, while China's manufacturing led progress has had a strong impact. As much as I hope for India that it will rise to become a global power, it will only achieve it if it can create more jobs for the poor and tackle the most pressing of a long list of difficult issues.

Warm regards from Chiang Mai, Alex Osterwalder"


Alex has either visited India or has studied the country very closely. That is not the point here. It's that any visitor at Davos who is exposed to the razzle and dazzle of India (Bollywood, colourful shawls etc) will confuse government intention with private enterprise achievement.

Folks are now saying at Davos that India will score as a soft power. Actually it scored some time ago. But this is another illusion like the Indian rope trick. Bollywood might look attractive. So do Latino performers. Not sure people are rushing to Puerto Rico to invest because they like J Lo.

The fact is you need `hard power' and hard decision making to move from developing to developed nation status. Pick up any newspaper and count the announcements that make news. Actually, its the same announcements that have made news for decades. Its quite remarkable how we fool ourselves ! To quote an example, count the number of announcements on Bombay's attempts to build a metro, a sea-link and re-surface its (alleged) expressways. Or build a second airport. Every city in India can narrate a similar tale.

To return to Davos, even seasoned delegates will (once again) equate statements of intention for desire to execute. Because they would like to believe, as would you and I. And its unfortunate because many of them will lose heart and go back (look at the miserable Foreign Direct Investment figures).

Only the really determined stay on. The determined know the difference between intent and action. But for the rest, its tantamount to fooling them. Forget foreign investors, how many of Indian citizens truly believe that India can truly get its act together. In our lifetime ?

Which is not to say India will not grab some more outsourcing business. Or a few more firms won't become world leaders in their businesses. Of course that will happen. But don't believe the Indian CEOs either. Their confidence stems from their own successes on the global stage. That has little or nothing to do with the location of their present head quarters. Alex from Thailand has understood the Indian connundrum well. Its about time everyone else did too.

Comments

Ravi Purohit said…
Hi Govindraj,

I too share your views on how our country is painted as the world's new super economy every 5-6 years. I am yet to see the so called IT industry of India to make a useful (read: worldclass) IT product such as a word or an excel or an operating system or an 'XBOX', etcetera. God knows what are they going to do with those large reserves that they have in their books. Innovation drives the US and makes it the super power that it is today. Lest we get our act together we will end being the robots (BPO servive providers).

Neways the reason I came to this section was to tell you that the 'interesting links' (Ajay Shah and Indian Economy) are not linked properly. An extra `http://' has cropped up in your template i guess.

Adios.
aparna said…
I am glad you get it that we are riding the wave of the one sector that the government probably didn’t know enough to regulate. I am glad Alex gets it. The media and experts like Friedman from NYT do our country a great disservice by comparing it with China. What about beginning on the premise of learn from China instead of competing with China?
PR apni jageh pe hai, sachchai apni jageh pe.

Doesn't make sense to constantly correlate PR with reality. When you watch a tourism promo on NYC, what do you see ? Shivering homeless huddling on the streetcorners in Harlem, carjackings in the Bronx, stick-ups in Brooklyn ? No! I lived in NYC for 5 years and that's the reality. But the media paints a picture of Statue of Liberty, hip Times Square, millions of upscale consumers thronging Park Av, so on...Both realities coexist, they prefer to show the photogenic one.

Let India strut its Bollywood & IT & whatnot, despite the reality. PR has value.
vivekanandan said…
Hi Govindaraj-

An excellent piece very well written.

The real problem we have is convincing the potential investor to ignore obvious signs of inadequacy by asking them to look deeper into "alleged" hidden strengths. These strengths are so well hidden that you cant even be sure they indeed exist. A great example is our so called free press (really?) and independent judiciary. Have you ever walked into a district magistrate courtroom ? We have decades of backlogs for both civil and criminal cases.

I really like your term "hard power" vs "soft power". Write more about it.

What we really need is recognize that we need to create atleast an island (or an oasis) of 1st world infrastructure. Most foreigners are really polite and dont mind the usual just-close-your-eyes-until-we-get-to-the-hotel routine. You know what they are thinking inside. We need to change that. The current system isnt working at all. A great example of massive failure is the proposed move to "upgrade" the delhi and mumbai airports. How ? The ceilings are only 30-40feet high. What kind of facilities can you retrofit into this structure ?

To Krishnan Sunderrajan - you see what you want to see. I too lived in the tristate area for 11 years. The poverty levels are nowhere as visible as you describe. The worst I have seen in the USA is northern Philly, but even that is heaven compared to our slums and shantytowns.
Venkat Ramanan said…
Hi Govind!!
Very thought provoking!! yes, I completely agree with you, but as an individual citizen, how could I contribute to nation building, apart from doing my routine work at my workplace? I definitely need better airports, roads, ports etc, but when people whom we elect behave so unruly, we can only blame ourselves!!
So, what do you think about the whole Airports modernisation hype? Will we see better airports ahead? Write a column on that Govind!!
Cheers,
Venkat
Nitin said…
Govindraj,

I think the state of India's airports and roads destroy the mental model they have of India as an emerging economic power. There are umpteen stories I can recall where people changed their perception of Bangalore (and other cities) after their first trip there.

But I disagree with your contention that there is a gap between government announcement and private enterprise achievement. If any, it is a gap between private enterprise capability and government achievement. Step into any corporate HQ or campus, and you are transported into the first world. Step into any government run (public) building, including airports, and you are plunged into the worst of the third world.
chitgo said…
govindraj,
straight from the horses mouth- I was at davos as part of the CII onsite India branding team that brought the India everywhere campaign to Davos.
What your sources have failed to mention are the enormous levels of involvement that 'India' had at Davos over and above what you call hype and unecessary PR.
Mukesh ambani- co chair at Davos.
India dream team convention and Q&A hosted by CII had global CEOs attending at a 7am meeting (the likes of Michael Dell and CEOs of Mckinsey global and Goldman Sachs)
- 70 Indians on diverse panels and cultural appreciation with Shabana Azmi being bestowed with the crystal award for utilizing art as a modus operandi for spreading awareness.
Coming closer to the point, the India everywhere campaign was not meant for hooplah but to help divert attention and interest in the global economy, global players towards the opportunity that is India. At no point was it termed as the quintissential dream land. It is the land of opportunity, the land of investment and the area for unprecedented growth. Areas of focus of chidambaram/kamalnath/montek singh ahluwahlia - Infrastructure and the further support towards the agricultural market economy.
how do i know this?? I was there:)...
go into further details, you might be pleasantly surprised.
Anonymous said…
Govind, can you spread your gyan in the Indian media? Today the HT headlines scream the airline union is set to strike while the op-ed page has a laughable piece on Davos where the author raves about Kingfisher happy hours and the Godrej Diva and how Mallya has jet set into Davos. Woo hoo, let’s all rejoice while my dad worries about his Chinese competitors and my bai can’t afford to send her children to school after her back-breaking job. Why do the newspapers give their precious space to people who use the word “fun” so many times in their writing??! Why does Pg 3 mentality have to seep into the news pages!!
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