Archive for the 'Letters from Bombay' Category

India Auto Sector Strategy More Advanced Than China’s?

March 31st, 2008 - by Chris Devonshire-Ellis

Purchasing entire companies rather than JV’s and buying used production lines signals a more mature approach

By Chris Devonshire-Ellis in Mumbai

Last weeks heralded purchase of the Land Rover and Jaguar marquees by India’s Tata Group from Ford for USD2.3 billion represents a major shift in the way Indian companies are able to obtain technological growth, in a manner that possibly outstrips the latent capabilities of China’s auto sector.

Although the deal, it has raised eyebrows internationally considering that premium global brands are being purchased by a country usually associated with cheap products, signifies different approaches to modernization between India and China, and may well prove to be a turning point when considering the future development of both nations. There are some fundamental differences in the way in which China’s auto manufacturers have chosen international partners, and have the capability to compete globally when compared to their Indian counterparts. (more…)

Billions of Entrepreneurs

February 12th, 2008 - by Nazia Vasi

Yesterday, i went to a popular bookstore to ask for Tarun Khanna’s book - Billions of entrepreneurs - How India and China are reshaping their futures and yours - it was totally sold out! The man at the counter said that there had been a massive demand for the book. I gave him a wry smile, the huge demand for the book and India’s huge interest in what lies behind the bamboo curtain meant to me that it was going to be an India and China century and not an India Vs China century. It also meant that my move from India to China 2 years ago to understand how the two economies together can complement eachother, thereby adding more to the world at large was a wise decision. The world was headed in the right direction.
Authored by the Harvard Business School professor of Indian origin, reviews of the book say that it talks of tales of how global companies have navigated their wares successfully into India and China. Through real life examples it gives impetetus to other companies in how to weave their way into these two very different markets. Khanna contrasts the two economies in the areas of technology, healthcare, movie making, oil, banking and agriculture, all the way comparing not contrasting one against the other, showing how the two actually complement one another - representing a balanced picture. He explains to the world, who have until now looked at India and China through the same lens, how different the two economies, cultures, governments and managers in each country are.

(more…)

racist remarks

February 5th, 2008 - by Nazia Vasi

Of late racism seems to be dominating a lot of space on Indian Tv channels and in newspapers. While Shilpa Shetty, a Bollywood actress was ridiculed out of the Big Brother show early last year, famed Indian cricketer Harbhajan was recently accused to calling Austrailian cricketer Andrew Symonds a monkey on the field. Racism it seems is built into the Indian way of speaking.

Though, not isolated to India only, China too faces its fair share of racism, with the population often being termed ‘Chinki’. Within China too several of my friends from Xinjiang who live in Shanghai feel like they are looked at differently. Even I, as an Indian teacher in Shanghai have faced racism when I was asked to feign British nationality in order not to perturb parents of students who only wanted their little emperors to learn English from a UK or US citizen.

So when is racism ok? when Indian’s call eachother names, or when friends say chinki in jest its ok, but used in a broader perspective, in a globalised world, in malice its definately not. Where do we draw the line? and how do we make sure we don’t hurt national, regional, caste, class or gender sentiments especially at a time when the world is shrinking?

superstition central

January 24th, 2008 - by Nazia Vasi

If you scoffed at the last time someone told you not to cut your nails at night or to beware of bad luck because a black cat had crossed your path or to hang three green chillies, a lemon and a small peice of coal on a string for good luck because you thought you were ‘modern’, and didn’t believe in superstitions, think again. 

If you thought the global recession or US sub prime rates led to the bloodbath on the Asian bourses on Monday and Tuesday, think again.   

The Bombay Stock Exchange’s big bad black bull.

While rational behaviour is generally not expected from the stock market, 300 stock brokers on Tuesday protested outside the Bombay Stock Exchange against the newly installed ‘panvati’ (disaster) bull.  At five feet high, eight feet long and weighing over a tonne, since it was installed at the begining of this year,  the black bull was blamed for causing turbulance and leading to the ultimate crash of the BSE, on Tuesday.

Superstitions still run rife in modern day India and China. While some radio, print and Tv journalists blame the black colour of the bull, others blame the day it was launched as numerically inauspicious.

Future depends on education and the Chinese know it

May 29th, 2007 - by Sumita Ghosh

First piece from our new contributor, Siddharth Soni whose blog ‘drumming’ http://profss.blogspot.com/, provides some very critical analysis on India’s education imperative.  His contribution is an observation and a selfless recognition of an important step that China has made to prioritize development (and improvement???) in education and the emphasis the government has placed on the need for training and producing more teachers.  A lesson to be learned for India perhaps but would India be willing and able to replicate such a model?

Part-1

Chinese teachers’ colleges to offer free education soon

Yes, six of the top universities of China plan to waive all the expenses for students enrolled to become teachers and who’ve agreed to serve as teachers for 10 years after graduation. It is no small measure since it involves enrolling 12000 students and taking taking care of expenses to the tune of $5120 per student at least. And if this measure succeeds in the six universities, it would be implemented in other Chinese universities too. This initiative doesn’t just include imparting education to future teachers but it also ensures suitable employment in middle and primary school once students graduate.

Chinese premier, Wen Jiabao, sums it up in these words:

“The measure will demonstrate to the general public the importance of the teaching field, create an atmosphere of respect for teachers and education in society, increase awareness of the value of the educational profession, produce large numbers of outstanding teachers, encourage prominent educators to run schools and spur more outstanding young people to become lifelong educators.”

Another point to note is that most of the students would be from Central and Western China, which are relatively under-developed areas.

Few more lessons for India to learn.

source, People’s Daily article: http://english.people.com.cn/200705/19/eng20070519_376042.html

and an outlook onto another facet of Chinese influence in the global educational arena…

Part-2

Some time back, in one of his articles ‘Laughing and Crying’,  Thomas L. Friedman narrated his experience at Rensselaer Polytechnic Institute, one of America’s great science and engineering schools. Here’s an important part of the article:

First I had to laugh. Then I had to cry.

I took part in commencement this year at Rensselaer Polytechnic Institute, one of America’s great science and engineering schools, so I had a front-row seat as the first grads to receive their diplomas came on stage, all of them Ph.D. students. One by one the announcer read their names and each was handed their doctorate — in biotechnology, computing, physics and engineering — by the school’s president, Shirley Ann Jackson.

The reason I had to laugh was because it seemed like every one of the newly minted Ph.D.’s at Rensselaer was foreign born. For a moment, as the foreign names kept coming — “Hong Lu, Xu Xie, Tao Yuan, Fu Tang” — I thought that the entire class of doctoral students in physics were going to be Chinese, until “Paul Shane Morrow” saved the day. It was such a caricature of what President Jackson herself calls “the quiet crisis” in high-end science education in this country that you could only laugh.

There you go, the all-conquering swamping Chinese. While the description by Friedman overwhelms the reader and sounds like, “What are these Chinese doing… They are manufacturing PhDs like they manufacture goods”, it’s significant for countries like China and India to get so many countrymen to study and indulge in research at a higher level since that could result in development of indigenous technology and ways and means of doing things. And that to my mind, that would be the real development.

Thanks for sharing this Sid.  Look forward to the next one!

Will the Middle Class pay a heavy price for failing to care?

April 11th, 2007 - by Simon Lazenbatt

By Simon Lazenbatt 

The crowd of young men and women on the dance-floor of the noisy restro-bar, one of many currently opening around the city, were enjoying a mix of local dance numbers and dated western hits. The scene can be observed in any liberal society in the world, except for one detail which typifies Mumbai. Among the bobbing Trendies, in the middle of the floor on hands and knees a slender, dark figure was mopping up spilled drinks with a cloth. The fashionably dressed middle class youngsters, seemingly oblivious to this ‘peon’, danced around and over him, aware perhaps instinctively that he would flinch out of their way, for he belongs to the great masses, and is almost invisible. The scene is revealing because in this society of entrenched inequality there is little sign that the emerging generation of decision makers is any more idealistic about creating an inclusive future for their fellow citizens than their predecessors were. For most young educated Indians challenging the status quo is restricted to deciding to change their brand of denim hipsters or hair gel.

The separation of the factions of Indian society is reinforced in popular culture. A television advert selling kitchen units uses cartoon characters to portray the typical Indian family happily singing about their labour saving convenient kitchen. The fair-skinned representative family members, stand at their modern counters, chopping, juggling food, eating and drinking while their dark-skinned house servant kneels on the floor polishing the gleaming units. The stereotypes may be interpreted as being tongue-in-cheek, even refreshingly politically incorrect, compared to the phony homogenous society represented in European and American advertising, but there is no irony here; they actually express utter complacency. Post-modernism has not caught on in India.

A friend recently attended a party given by a property developer where many of the attendees gossiped politely, and approvingly, of the developer’s recent outlay of 40 crores of rupees ($9m) for his daughter’s wedding celebration. The discussion centred on cost comparisons with other high profile weddings. No one even thought to challenge such profligacy in a city filled with human misery. Certainly, in Mumbai, there will be few who question the tastelessness of such conspicuous consumption.

Even seasoned travellers, familiar with grinding poverty from other parts of the globe on first visiting India will be disconcerted by the juxtaposition of wealth next to extreme privation. It is not just the existence of so many who are clearly living in squalor, as the fact that there is a shared perception amongst the middle class that this situation is somehow acceptable, or at best unavoidable. An adroit and wily local entrepreneur forcefully suggested that it is a patronising liberal misconception to assume that slum dwellers are any less happy than the middle classes; a neat example of eliminating the criticism by redefining the terms of reference. The sophistry of this argument is revealed by a cursory examination of the specifics of basic facilities available in the slums and the human toll measured in suicides, malnutrition and domestic violence.

Nevertheless in a less extreme form many of the middle class seem to believe that the situation is tolerable and one hears numerous explanations for the scenes of human wreckage subsisting by the roadside, ranging from the ravages of alcoholism to the ruse of renting out their apartments in order to take to a life of begging. Most, however, don’t even rationalise in this way – they just don’t notice any more.

India’s current growth is taken as a harbinger of a future as a superpower. Some even see India as providing a model for how democracy can work in a developing country and thus provide a lesson for the world. It is widely assumed that an increase in general prosperity will be achieved due to the economic growth that India currently enjoys. Surely if money is being made at the top of the economic pyramid a significant part will trickle down and alleviate the poverty at the bottom, goes the argument. But does India have the infrastructure to facilitate this assumed wealth dispersal? A comparison with China may be instructive here. According to Forbes magazine India currently can count 36 dollar billionaires compared to just 20 such individuals in China, despite the fact that the Indian economy is a third the size of China’s. Yet, at the other end of the spectrum, the Word Bank estimates 80% of Indians live on less than $2 per day, compared to 46% of Chinese.

Much of the hinterland of India’s cities is in dire straits. There are environmental issues amongst the worst in the world, not only associated with global warming, although that is certainly a factor, but also wholly locally produced (including pollution, water exhaustion and land degradation due to erosion). There is an agrarian crisis (manifested in a spate of suicides by farmers locked into intractable debt) currently leading to real food shortages. There is a health crisis not addressed by an under-funded healthcare system (notably the much overlooked Aids epidemic but also evidenced by a sharp increase in TB and malaria cases and the surge in the number of leprosy cases – India can now boast that it is home to 60% of the world’s lepers). There is widespread illiteracy.

Against this backdrop it is no surprise that there is an unending stream of migrant cheap labour available to the cities. Life in the urban slums may be grim but for many it is a step up from the deprivation of life in the rural areas. A glance at any construction site in Mumbai reveals how little plant and machinery is involved in construction of the new high-rise developments. Often it is more economical for the contractors to use human muscle-power to move all the construction materials rather than cranes and lifts. Child labour, despite regulations, is common.

The migrants also serve the domestic needs of the middle class. The bitter truth is that it suits many to keep the poor in their place. The average urban householder uses cheap labour for almost all day-to-day chores - I know a clean-shaven, middle-aged company driver who has never in his life shaved himself. He has somebody come to his house every morning to perform this basic task. In a myriad of ways the Indian middle class depend on others to perform tasks that in other countries (including much of China) are done by devices, or by the consumer himself. The nature of these tasks means that education of the masses is not a priority. It has been said that in the USA only the truly poor do not own a car. In India only the truly poor do not have a servant.

Current projections anticipate that the Indian population will increase by 60% over the next 40 years to around 1.7 billion. Unless there is the political will to address the root causes of poverty and to develop a workable financial plan to invest in developing the infrastructure there is no sign that this burgeoning population will be equipped to participate in the added value activities that will fuel real economic growth or to significantly improve their own prospects.

One reads frequently of the tensions in Chinese society caused by the unequal nature of the economic growth pattern and wealth distribution but, interestingly, perhaps because India has lived with this massive disparity for so long that it is considered the norm, there are few rumblings about a potential explosion in Indian society provoked by the Have-nots. Mumbai alone has some 10 million people living in slums (perhaps more, who knows?). I have often wondered how London, for example, would cope with that situation. Even if London had only 1% of Mumbai’s slum dwellers I suspect the city would be unworkable. The army would probably have to be mobilised to keep order. So, it is true that the Indian poor have been remarkably docile for a long time. The political landscape is composed of parties representing special interest groups that emphasis the religious and caste differences of their electoral blocks. Perhaps for this reason, and the failure of reaching a consensus, the social balance has not been upset but can it be imputed that this situation will persist?

In the 1960’s there were a rash of doom-laden predictions published as sober analysis in the West that India would disintegrate under the pressures of economic failure, religious divisions and corruption. Those predictions proved to be incorrect. The new paradigm is that India is an unstoppable superpower in the making. This belief has been eagerly and uncritically adopted in India. I would suggest that unless the middle class begins to care and make sacrifices in the interest of a common society these current predictions may also prove to be unfounded.

 

Letters from Bombay: A regular series by an experienced India China-hand

March 6th, 2007 - by Simon Lazenbatt

By Simon Lazenbatt

While China and India are often cited together in breathless appraisals of international business opportunities the realities of doing business in these two Asian giants are, and will long remain, distinct. Perhaps the only comparable fundamental is that the new entrant had better beware.

Still, the launch of this website is timely as international business with China and India has expanded massively in recent years. It is worth considering the background issues that will shape the development of both nations in the coming decades. The social structures, political processes, and national aspirations in each country may well produce different and complementary futures, but other factors – energy requirements, population dynamics, environmental concerns and relations with the wider world (notably with the USA) – will inevitably create a complex future. (more…)