Friday, June 3, 2011

Nine hours out of India and in a world of bliss......see how smart the Europeans are

I can’t handle the muck and dirt of India any more! Once in a while, it’s good to behave like a “gora” and crib about life in India like they do. In reality, it’s not the muck and dirt of India that I seek escape from. It’s the muck and dirt of the media, the politics, the ignorance of the people, the uncouthness of our society that I seek escape from as I head for a two week holiday to Europe....

All the economic action is of course in India. The fact that there is so much muck and dirt on our streets actually makes India a highly attractive destination for investments and for foreigners to make a beeline to the country. In their own nations, growth rates have stagnated to 1-2%; in India, the growth rates, in spite of all our problems, is still 8-9% per annum. And the high rates are not because of a low base effect....The GDP of India is about half of Germany’s, 60% of France’s and the UK’s, nearly the sa’sme size as Italy and Russia’s and higher than the Netherlands’ and all other countries in Europe. Our GDP growth is today on a base comparable with the richest nations in Europe. No wonder, the airport was bustling with goras crisscrossing into and out of India!

But this post is not about the economic miracle that is India. It’s about the kind of struggle and misery that we go through almost daily. In contrast, the developed world lives life king size. In spite of all their problems, Europeans live like they are still the rulers of the world. And there is a reason for this. People here have always been smart. The first smart thing they did was to ship almost all low-level manufacturing to countries like China, Vietnam and India. By doing so, they also shipped away most of their pollution. Much better quality of air, water and soil is now available to Europeans than otherwise would have been possible. They eat healthy, drink healthy and live healthy. With lesser manufacturing facilities, their requirement of power is also less. So a China will add another 3-500,000 MWs of power in the next 10 years and India even more than contrast, the Germans are announcing a freeze on nuclear power. How nice. The more we manufacture for them....the more we suffer. The more they live in bliss. The world order hasn’t changed one bit....this is how it was back in the 18th century!

What’s fascinating is that the developing world doesn’t understand what’s going on here. China thinks it’s going to be the next superpower because of it is the factory of the world.....but it will soon realize that that won’t happen. The goras have been smart. They’ve kept all technologies, brands and Intellectual Properties with themselves. So the goras still take away most of the profits. All that the Chinese get is the labor cost and a little bit more that the goras throw at them. For eg., out of an Apple i-phone that retails for $600 or so, China’s value add is only some $10-15 dollars or so. It reports the full $600 as its topline; so it’s GDP bloats artificially. The real value-add is negligible. Most of the technologies that go into the making of an iphone either come from Apple itself or from its gora technology partners strewn all over Europe and Japan. Between them, they take away the rest of the $600. This exact same pattern is repeated line by line. China (and India) have practically nothing to call their own....they are just poor laborers in this global caste system.

What we don’t realize is that we have to invest heavily in Research and Development (R&D) that we can start owning IPs in the future. How many times have we heard of great R&D happening in India? Unfortunatley, very rarely. This is the sad part. In many ways, we are mesmerized by our GDP growth number....and have forgotten that we own very little of all this. We almost never ask how many technologies we have developed that we can exploit in the future. The investment we make in pure sciences is miniscule. When Jairam Ramesh complained that the quality of research in the IITs and IIMs is poor, we complained, but he was speaking the truth. If we want to be serious players in the future, we have to spend a lot more on R&D. But here is the rub. To spend more on R&D, corporates need to make more profits that they can plough back; to make more profits, they need to price their products more and improve margins; to do that, they need to have pioneering technologies; and for that, they should have put more into R&D in the past. It’s a almost everything is.....that protects the developed countries and that breaks our backs. Breaking this cycle will need perseverance and a single minded focus.

I am sorry but there is no single minded focus on R&D in India. Instead, our people are happier with political drama. Our media sucks. With the uncontrolled growth of news TV, the quality of journalism has plummeted. In the days when newspapers were the main source of news, journalism was a proud profession run by mature, well informed editors. TV channel anchors in contrast are ill informed....and worse are politically aligned with one political ideology or another. TV journalists enjoy wielding the power to screw up anyone’s reputation; to pronounce anyone guilty without a shard of evidence; to make a soap opera out of everything. Media – for its own private reasons – is taking the country’s attention away from what it should be focusing on. A free democracy needs an independent media....but not the kind that we have in our country.

I would like to see a media that maintains a certain decorum. That lifts our society out of its historical orthodoxy. That cleans up the corruption, but doesn’t build an environment of negativity. That strengthens the hands of the government on issues of national importance. Instead, our media chooses to focus on Baba Ramdev’s hunger fast. For god’s sake, let him go. One sadhu more or less in our country won’t make a difference to the millions of Indians mired in poverty. Staying focused on our core issues will.

The real truth is that again today, I feel like leaving the shores of my country and escaping. Like people from my previous generation did. This time, it’s not for reasons of economic gain. This time, it’s to escape the depressing air of self-doubt and negativity prevailing in our country. The imbecility and uncouthness of our society. The grasp of our irresponsible media. The stench of corruption. The threats of the taliban-like religious leaders. I want to escape not from the muck and dirt of our streets....but the muck and dirt of our society......

(Written on the flight. Uploaded at the airport!).


  1. Now you know the source of the 'emigration' bug that's bitten me eh?

    BTW please read JA Hobson's 'Imperialism' written in 1902 and another work on Gentlemanly Capitalists (An elite of aristocrats, bankers, financiers, politicians, civil servants and the military) in England who were the main force of the second surge of British Imperialsm from 1860-1914. They give in depth insights into what you've expressed.

  2. Excellent stuff.Amidst the hullabaloo over 8-9% GDP growth and LPG we forget the stark reality behind it. I agree with everything u have written. The iPhone example was very interesting and enlightening.