India's embrace of globalisation
Updated
India has become the poster child of globalisation. The enthusiasm for new shining India was summed up by Gurcharan Dass, author of the international best-selling book, India Unbound. But he also says the process is not without its dangers.
Presenter: Sen Lam
Speaker: Gurcharan Dass, author, columnist and consultant, and a former CEO of Proctor and Gamble, India.
DAS: Well in fact India has outdone my expectations. I mean I did not really think that we could grow, a democracy could ever go beyond eight per cent growth, but for the last five years, it seems to have grown almost at nine per cent. And so yes, I mean, if I was one of those kind of persons, I would say I told you so.
LAM: And how do you account for this success story?
DAS: Well, I think it is a success story of the private individual, the entrepreneur really is at the heart. For 30 years, entrepreneurship was suppressed in India, as we had a very socialist economy and then we started dismantling the socialist institutions from 1991, when the reforms began. So it's for the last 15 years, it's really just the unleashing of the human potential and it's a change in the mindset of young people of India. The minds of the young people are finally got de-colonised. And I think that's really at the heart of the rise of India.
LAM: And Gurcharan, there're many business folk and MBA graduates, they look to your book "India Unbound" as a vital insider road map to India if you like. What has changed since the book came out seven years ago?
DAS: Well, I would just say that the economy has just flowered as I had predicted. If I had to write the book again, I would have devoted more time to our failures of governance. I think the private spaces very vibrant, but the public space in India is a problem. The delivery of simple services that you take for granted in Australia, such as public schools, hospitals, health clinics, things that, delivery of water, electricity. These are serious problems in India.
LAM: What about the growing divide between rich and poor? How destabilising is that for a growing India?
DAS: No, I think that's not a big issue.
LAM: It isn't?
DAS: I know people talk about it. But you see one should not think in terms of inequalities alone. One has to think in terms of absolute levels of poverty. Now one per cent of the poor have been crossing the poverty line for the last 25 years. And this has added up to 200 million people. Now admittedly this is not as much as China. China 300 million people have crossed the poverty line. But and it's also admittedly it's a very low poverty line. It's the World Bank dollar a day poverty line.
So but nevertheless, it's a sign that the poor are rising, but of course the middle class is the fastest growing part of the economy. Now today, the middle class is about 28 per cent, but it won't be long before it's 50 per cent.
LAM: So are you saying it's a matter of time before poverty is, if not eradicated, at least the issue addressed effectively?
DAS: Oh yes, yes. I think the best way actually to address poverty is through good primary schools and good primary health centres. If people can have access to education and health, at that level, then you don't need to worry.
LAM: But lots of aid groups are saying it's happening too slowly, that people are still dying on the streets, there is still grinding poverty in many parts of India.
DAS: Oh absolutely there is grinding poverty.
LAM: And that's surely unacceptable for an emerging economy like India?
DAS: Yes, but you know that's how the world has done it. The world did not overnight, the rich countries did not overnight wipe out poverty.
LAM: So you're saying it takes time?
DAS: Yes, it does take time and this is where I think the government's very unsuccessful efforts of creating jobs etc is so counter-productive, because only ten per cent of the money reaches the beneficiaries, so the rest is wasted.
LAM: While, much has been made about the rise of India and China as Asia's answer to America if you like. But do you think the current woeful economic state in the United States, do you think that poses grave dangers nonetheless?
DAS: Yes, well of course. The United States' economy influences everybody. But India is still the driving force of the Indian economy is the domestic economy, unlike the Far East, are countries in Asia. The fact of the matter is that the domestic economy, India's economy is less volatile as a result, to global downturns and trade is still only 45 per cent of GDP. Now it's risen in recent years. So these are the benefits of not being so completely dependent on the United States as a customer, which most of the world is.
LAM: And Gurcharan Das, you're staying at a hotel in the city, in Melbourne. Now, I don't know whether you have noticed, but you only have to walk downtown in Melbourne to see vast numbers of South Asian students, many of whom want to stay permanently here in Australia. Do you think India needs to take note of this draining of young talent from the country?
DAS: Oh yes, I think we've been concerned about it for a long time. But unless we get our act together, I think prosperity is going to reduce the numbers going abroad.
LAM: Why do you think the young people wish to live overseas, away from India?
DAS: Well, I think governance is one issue. I mean they'll get jobs in India now. In fact, there are far more jobs available in India than in Australia. But the reason they would still drive a cab in Australia, is I think our own failings and our failings related to governance. If you cannot deliver basic education and health to your people, you know...
LAM: So, they're basically not thinking of themselves, but also their children?
DAS: Yes, exactly.
