Why India? #1

Call me an optimist, but I am betting I am right about India.

I am making a bet on India prospering disproportionately in the future compared to its past and I am inviting visitors to this website to engage with and object to my theory (‘theory’ because it could turn out wrong). After all, why should I believe that I am correct? There appears to be far more evidence from history that India will inevitably sink back into its old habits of futility, corruption and wishful thinking about an idealised past.

A friend of mine, a businessman from Mumbai, says to me, ‘India can make things 90% of the way but there’s no finish! Where is the last 10%?’ He thinks that Indians always run out of application and interest towards the end of a task. There is no polish to what they do and that everything – products and services – remains frustratingly second-rate, droopy and half-hearted. This has obvious implications for any Indian future.

Another Indian friend, just returned from Delhi, bobs her head in polite disagreement when over coffee I suggest that India has the potential to be one of the finest and most attractive countries in the world.

Yet another friend, half-Indian, working in high-level finance, is averse to most things Indian, and his hair almost stands on end at the mention of optimistic prospects for his father’s former country.

Granted this is a small sample, but it is drawn from a much wider (though still subjectively experienced) one. Indians frequently appear to have little faith in their nation; in fact seem to have as their motivating belief that there is nothing to be done about its poverty, shoddiness and cluelessness – that inefficient, infuriating aspect of India foreign visitors so often retain as almost their primary recollection.

Here is VS Naipaul’s ringingly evocative example (from 1977) about how and why a plumber can’t even fix up a straight faucet. Note how Naipaul’s description also includes a sensitivity to the underlying problem:

‘Water is the plumber’s business; but water is to him a luxury, something for which his wife has to stand in line every morning; he cannot understand why it is then necessary for a tap to be placed straight, in the centre of a tile.’

The straightness, the Western idea that it is aesthetically essential for the faucet to be true and symmetrical, is a frivolous one to the plumber – ‘a man from a simple background called upon to exercise a high skill, and exercising it blindly’. To him, the miracle and luxury of clean running water is cornucopia.

This is India – but in its desperate, destitute, ahistorical phase of Gandhian nihilism, fresh out of political ideas or plans for the future. That situation began to change back in the 1990s under the Congress-led administration of PV Narasimha Rao. The Gandhi dynasty royals (please remember they are not genetically connected to Mohandas ‘Mahatma’ Gandhi) have airbrushed Rao out of history for his treason, but they could not prevent an earlier BJP administration under Atal Bihari Vajpayee further adding to the heresy of progress before it was ousted following a fit of hubris in 2004.

Despite their best efforts to bring India back to a starving utopian standstill, Her Serene Majesty Sonia Gandhi and Prince Charming Rahul gracelessly yielded to the BJP again in 2014, after which – I believe – our notional plumber at last began to look at the askance faucet and thoughtfully stroke his chin.

This post is the first in a series on the subject of me ‘going long India’, but I will briefly set out here what I will go through in detail later, namely what has changed there, and what India has in its backpack that is going to be useful in the future.

First of all, what’s changed is what I have just described. India is no longer the country it was at the time of Indira Gandhi’s murderous dictatorship in the mid-1970s. The plumber’s apparent ‘shoddiness’, which has its origin in a form of cognitive dissonance, will lessen as Indians become accustomed to rising standards of living and to luxuries that the rest of us take as necessities. There is nothing wrong with Indian skill, technics or craftsmanship; the fault is in self-perception, aspiration and belief.

Progress over the past quarter century might have been halting and cautious, but the country is in large part unrecognisable from the old socialist days of the ‘Licence Raj’, when a political elite and its courtiers held every bit of power that counted. It is not perfect now by any means (where is?), but in India it is better and accellerating where other places, even the USA and UK, are stalling or shifting into reverse.

Most of the mature voices in India, the good writers, lived through the old days, have been traumatised and disillusioned by them, and cannot always clearly see the rate of change: there is a built-in pessimism.

Quite aside from any subjective assessment of Indian prospects there is the simple fact of demographics: almost alone among the major economies, India’s population is young. It has at least twenty years of vibrant animal spirits from a growing and youthful workforce to look forward to, just as the mature populations of the previously rich nations of Europe, the USA and Japan, are moving inorexably (and more or less childlessly) into their expensive but shabby dotage. Not only is India’s growing population young but it is, importantly, growing, and growing richer all the time, too. India’s as-yet undeveloped internal markets will be unimaginably fecund for investors over the coming decades.

But as more and more economists, such as Deirdre McCloskey and Michael Pettis, are recognising, it’s the quality of a country’s institutions that can be predictive of future prosperity. What makes India a better long-term bet than China is its institutions both physical and mental – its cultural weather and climate.

Below is what Muslim writer and publisher MJ Akbar, in pointed contrast to Pakistan, calls the four conditions for a modern society:

  • Democracy
  • Freedom of religion
  • Sex equality
  • Economic equality (of opportunity)

– India satisfies all of them to some extent, even scores highly on some, and is travelling in the right direction on all of them. All these requirements are becoming ‘healthier’ in India, at the same time that they are starting to suffer elsewhere, even in the mature democracies, never mind the dictatorships and third-world hell-holes, some of which fulminate close to India’s borders. By developing as a modern society as it is, India not only helps itself but can become a cultural paragon and a benefit to the benighted states of its region.

In the next post of this series, I will talk about the sheer geographic and economic advantages and potential that India possesses, and which can and will be unleashed in the years to come.

Call me an optimist, but I am betting I am right about India.

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