Imagining India

Photo credit: Christof Sonderegger / World Economic Forum

As I make my way this week to Davos via Riyadh and Zurich, it becomes clear that the chill in the global economy has reached the deserts of Saudi Arabia. I attend a panel at the Saudi Global Competitiveness Forum where each speaker outdoes the next in headlining the many risks of the current downturn and predicting the gravest of consequences. ‘Godzilla’ seems to have replaced ‘Goldilocks’ as the defining metaphor for our world markets.

At first, it seems to me that the town of Davos itself is cocooned from the panic. I am staying in the same room at the same hotel, and the same cheery concierge rushes forward to lug up my bag. It is only when I see the glum faces and conspiratorial whispers of the CEO execs  milling around that I realize that this year at least, the celebration  and paeans to the ‘animal spirit’ will be missing.

But even as we deplore the office refurbishments, the private jets and the lavish  parties of what seems to already be a long past, gilded age, it is instructive to note that businesses were not alone in taking a deep and heady drink from the punchbowl. Nations were also afflicted by the same malaise of overconfidence and a relentless focus on the short-term.

The global bubble was an era when the American spent too much and saved too little, while the Chinese saved too much and spent too little. Resource-rich countries invested the windfall profits from high commodity prices into sovereign wealth funds rather than investing in human capital and social development.

The Europeans were secure in their belief that they had a better form of capitalism even as the bottom fell out of their banks. And in India, years of bubble- induced growth allowed the country to take the eye off the ball when it came to desperately needed reforms and social investment.

We were all in it together - businessman and politicians, corporations and nations. So I do hope the Davos Annual Meeting 2009 becomes a place where we focus on what to do for the future rather than finger pointing for the past. One thing has become quickly apparent in my many conversations here - the bursting of the global bubble is forcing countries to address hard questions and realities. Countries will have to tend to basic ‘housekeeping’ concerns, from the health of their domestic markets and rising income inequalities, to the state of their social security nets and the size of their deficits. And to do any of this successfully, our discussions will have to be more about finding solutions than scapegoats.

Photo credit: Dushyanthini K.

With the capture of LTTE’s makeshift capital Killinocchi, and the group in retreat in Sri Lanka, the sectarian war in Sri Lanka seems to be coming to a head. 

The conflict between the majority Sinhalese and minority Tamils is a complex, worrying one, and looking back, language has played a substantial part in it. Its always been difficult to build peace when a country has multiple ethnic populations who speak different tongues. There were many former British colonies that faced this challenge after independence -  Sri Lanka, Singapore and of course, India.

Language is a pretty natural fracture for communities. India had come face to face with this reality early on, when the post-independence government proposed making Hindi the official language. The Delhi government only retreated and accepted both English and Hindi as official languages when massive protests erupted in the South (especially in Tamil Nadu, where riots broke out and students burnt effigies of the ‘Hindi demonness’). Singapore also chose English, a neutral tongue, as the official language over the local Malay, Chinese, and Tamil tongues.

Sri Lanka however, took a very different tack. The government replaced English with the majority language Sinhalese as the official tongue, and marginalised Tamil. Of course, this wasn’t the sole reason for the conflict, but it only intensified it. Language after all, seems to be a core part of our identity - we only need to look to Ireland’s attempts to revive the Irish tongue, the resurrection of Hebrew in Israel, and in India, the early (and successful) fights to have our state borders drawn according to language.  

Photo credit: beagleskin

Today, the day Barack Obama becomes the President of the United States, is an inspiring moment, no matter where in the world we are. For many in the US, this is a landmark for the country’s African-American citizens. For India, there is another connection. The Black Civil Rights Movement and India’s Independence struggle had a common spirit to them, even if they were decades apart - both Martin Luther King and Mahatma Gandhi had adopted the ideas of non-violence and civil disobedience from Henry Thoreau’s 1849 essay, Resistance to Civil Government.

Both MLK and Gandhi inspired millions of people to unite towards demanding fundamental rights that were denied them, and emboldened thousands of ordinary individuals to perform acts of resistance that required remarkable courage. 

I admit, I was moved while watching Barack Obama’s inaugural speech on TV. Obama sees himself as a post-partisan figure, whose election united blacks and whites. His victory certainly does not mean the end of racism in the US, but it is a sign that people can at least occasionally, and at critical moments, overcome tribalism when it comes to race and identity.

In India as well, we struggle against the politics of identity, and we’ve seen pretty intractable vote banks around caste, religion, region and class. Obama’s win is a moment of optimism for people everywhere who hope to move past such politics. It’s why his ‘campaign of hope’ resonated so much across the world.  

In recent days, I read several pieces about the dying newspaper industry in the US, including one regarding the impending demise of the iconic New York Times. Other news articles like this one paint a bleak picture of the book publishing industry in the developed world.

The Indian market is on the other hand, very far from mourning the death of the printed word (a fact that I personally, am grateful for) - we are the fastest growing English language market for book publishers, and we are also the world’s most vibrant newspaper industry. While newspaper circulation numbers are falling in large parts of the developed world, it is growing rapidly here in all our languages, and thriving in all kinds of formats - dailies, magazines, tabloids.

What’s especially interesting is the increasing number of square inches our newspapers now devote to columnists and opinion pieces. More and more, we are more concerned with debating the ideas and issues underlying the news feed. Our television channels show the same trend. And as audience input and feedback has grown - with We the People, online commentary and so on - we are reflecting the spirit of a public square in our media more than ever before. I find this heartening, but I also wonder - is this entirely a good thing? I believe that debate thrives on participation. But is there a point where it descends to chaos, with authority and expertise being lost, and every idea being as good as every other?

I believe that a big way to identify the zeitgeist of a generation is through film. The post-reform generation doesn’t automatically understand the hold that 1970s and 1980s Hindi film had on those of us who were in their twenties when these movies came out. More than anything else - plot, actors, cinematography - films like Zanjeer, Agneepath and Tezaab were angry. Their heroes - Amitabh Bachchan, Anil Kapoor, Mithun Chakraborty - were constantly getting into fights with corrupt and powerful figures, from crooked politicians to white-suited mafiosi. These movies were a cultural response to the helplessness many Indians felt in the face of incompetent governments, a stagnant economy mired in massive red tape, and a surging black market.

The tone of films made in and about India today is very different. It probably comes across most clearly in the plot of Slumdog Millionaire, Danny Boyle’s paean to Bombay, our vibrant, hellish, colourful and eternally entrepreneurial city. The movie follows Jamal Malik, as he goes from a young boy in the slums to a contestant on a game show on the verge of winning twenty million rupees.

The movie is at its heart, about aspiration, and about dreams coming true. This ‘common man’ Jamal, is not angry, like the Indian men of the 1970s. He is both hopeful and relentless, defiant and proud of his origins even as the people around him call him a ’slumdog’. He knows better - that it doesn’t matter where you come from, only where you are headed.

This dream of making it big is now writ large in our films. I had met Jaideep Sahni, the scriptwriter of Chak De, Bunty Aur Babli and Company, last year and during our conversation - I am a great fan of his movies - he pointed out how these films were merely following Indian sentiment today. In real life, as in movies like Chak De and Slumdog, young people who come from small towns or desperate poverty are searching for a better life, and truly believe they have a real chance of success. They have examples to look up to - Mahendra Dhoni, Sunil Mittal, Dhirubhai Ambani. The market beckons, with its possibilities.

This story however, is still incomplete. What we have to do now is ensure that the opportunities in the Indian economy match the aspirations of the people - that this young, entrepreneurial generation get the chances they need.

Less than two weeks into the year, and we are already immersed in the drama and debate around the massive fraud at Satyam.  I found the Satyam news utterly dismaying - when it comes to the brand that the Indian IT industry has built over nearly three decades, this is a setback, a black eye. India’s software firms have after all,  prided ourselves on our standards in corporate governance and disclosure.

All of us who run companies must really put ethics, corporate governance and running a transparent company at the forefront. If results are bad we should declare that, if profits are low we should declare that - and there is no such thing as too much data being open to the public. We should not be doing anything which imperils the trust the public and our stakeholders have in our companies.

I also interviewed with CNN-IBN on this.

So far, the word for 2009 is “stimulus”. The government has come into the spotlight in the business pages, as different sectors put in appeals for interest breaks and sops. Some of these are likely necessary. But this is also probably a good time to consider the elephant in the room, which has fundamentally held back our growth - the lack of access to India’s economy for many of its citizens, a theme I revisited in my book and in this blog . A piece written by Arjun Swarup in the Indian Economy blog in October, titled  - ‘The Indian Political Business Complex‘ is worth rereading - he discusses the same issue: 
 

I travel on average, for two weeks a month, and I have to often go abroad. The major form my homesickness takes when I’m abroad is my longing for Indian food. I have a soft corner for street food, and Mumbai’s street fare has always been my favourite, probably because my college years were spent there. You can’t beat it for variety - you can go to a hole in the wall and find Parsi, Goan, Tamilian and even Lebanese fare, besides the good old dahi puri and vada pav. But so much of this reminiscence - its been a couple of years since I’ve last had a chance to visit the stalls at Chowpatty.

I sat down for an interview with Nitin Pai, the young, dynamic editor of Pragati, who also blogs at The Acorn. The talk we had was fun, long and involved, thanks in large part to a very thoughtful questioner.

Nitin: How would you define India’s national interest? When we posed this question to Jaswant Singh, he said it was the preservation of the resilient core of Indian society that is the heart of India’s national interest, because it is Indian society that keeps the wheels turning whatever is the political structure of the state. According to K Subrahmanyam, India’s national interest is to ensure high rates of growth, alleviate poverty and ensure good governance.

Me: Anything that we can do to make the country stronger, more equitable, more secure, more fair and which can truly leverage the extraordinary opportunity—that would be the national interest. The definition of Indian society is amorphous and is prone to multiple interpretations. My view is that it is very rare that nations get an opportunity to lift a billion people out of poverty. And due to a confluence of events that I have described in my book, we have a truly extraordinary opportunity that comes once in a millennium. It is in our national interest to make the most out of that opportunity and achieve economic independence and fulfilment for all our citizens—doing that would automatically address the other challenges that we have.

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With new numbers that show a steeper slowdown for India than expected, the state has sprung into action, with the RBI infusing money into the economy, cutting key interest rates by 1%, and the government planning on easing FDI further. 

And with Moody’s predicting that export growth will continue to slow alongside domestic demand, the government and the RBI are going to pay close attention to our numbers.

But amidst all the doom and gloom, there are predictions that the Indian economy will recover by 2009. I am no pessimist, but I wonder if a year will be enough to brighten up the Indian economy, linked as we are, whether we like it or not, to the health of the global markets. Within our borders, we are faced with additional concerns around generating enough jobs and investment for our growing workforce, and addressing issues of inequality and access. If we do build a recovery in 2009, it won’t be just from our relentless entrepreneurial spirit. We will also need courageous reforms towards ensuring a healthy domestic market.

The biggest steps in 2009 I would hope to be see are ‘back to basics reforms’. The high growth of the last few years was boosted by a huge liquidity bubble. As the global economic crisis spreads, it is clear that India will have to go back to fundamentals - expand primary education, liberalize higher education, build our infrastructure and cities, fully implement the single market and reform our labor laws. The path to recovery in 2009 will be expanding access of opportunity to our young people through these reforms. Else both growth and the reaping of our ‘demographic dividend’ will remain a mirage.

Putting all that aside, I do enjoy articles like this one in the Sunday Economic Times, which quoted ‘ace fortune tellers’ predicting a movie-like ‘happy ending’ for 2009. At least the stars are bright!  

My best wishes to you for the year ahead.