Monday, September 27, 2010

Commonwealth Games 2010: Choices after the circus is over

The road forward?

There is no easy path forward, no prescriptive panacea to rid the nation's of its deficiencies; uneven development is not simply the fault of the ruling class --undoubtedly, individual responsibility plays a role-- but they must be retrospective in what has worked and what has not in proposing a feasible future so that reality can match hyperbole in terms of the country's future.


When Jawarharlal Nehru, India's first Prime Minister, evoked the nation's "tryst with destiny" he subsequently embarked on creating world class tertiary education at the expense of sound primary and secondary systems. The result was a never ending brain drain since 1947 and to date, 35% of the population remain illiterate while some 15% of Indian students reach high school, and 7% graduate.

There are those who criticize the great unwashed and complain of the indigence and indolence of India's teeming masses, but surely, this is short-sighted? Is it not the ignorance of the underclass who have received either poor or non-existent schooling in the vital formative years that is of greater concern? Ignorance begets ignorance for when a proper education is not received, it is not valued.

The collapsed pedestrian bridge provides the visual metaphor: it looked good when it was completed but it did not have the foundation to sustain the stream of people who would cross it --akin to the skilled citizenry required to move a post-industrial society forward?-- and, as such, it broke apart when under stress and must be re-built properly anew with the proper foundation and care.


Using China's mercantilist template as a development model is not the answer for India. One cannot argue with the leaders in Beijing and their ability to manage top-down for their form of mercantilism works at the macro level: China's massive foreign exchange reserve growth is a reflection of an undervalued exchange rate, loan subsidies to its export champions and import restrictions to protect its nascent industries. But if it cannot continue without serious American political backlash in the aftermath of the Great Recession of 2008-09.

The liquidity resulting from China's reserves has been funneled into in a real assets-- we see this in the real estate bubble which will implode one day; unarguably, China is infrastructure ready and has built a world class project management culture --by evidence of the Beijing Olympics, the Shanghai skyline and the myriad "special economic zones" and open coastal cities-- but the continuing sterilization of its monetary reserves cannot go on without ensuing intervention from other countries. In a zero-sum framework of global economic growth, China is screwing its biggest customer by not permitting it to adjust to the disequilibrium in its economy.

In addition, the People's Party Manadarins will face the task of providing a safety net for the citizens. China's economic miracle has been made possible by the tireless toil and sacrifice of its migrant worker; these struggles have been skillfully shown in Fan Xiling's documentary Last Train Home. How long can they be expected to keep going, especially if the target markets fully de-leverage, consumption recedes and the production from the world's factory is no longer required?


Whether one subscribes to the classical liberal view of Peter Bauer or is an adherent to the welfare analysis of Amartya Sen; whether one prefers Paul Collier's top down approach or William Easterly's bottom up focus to economic development, one would have to be in complete denial that economic liberalization has been beneficial to many, specifically the aforementioned middle class in urban centres.

However, most in the country remain desperately poor and are in a worse state of affairs despite liberalization; they have been left off the growth track and in the zeal to placate a corporatist model of development, there has been (in the words of David Harvey) an accumulation by dispossession template followed in rural India which has not benefited society's underclass. The Maoist rebellions in India will not magically go away. Current Indian Prime Minister, Manmohan Singh belatedly admitted:

"We cannot overlook the fact that many areas in which such extremism flourishesare under-developed and many of the people, mainly poor tribals, who live in theseareas have not shared equitably the fruits of development. It isincumbent upon us to ensure that no area of our country is denied the benefitsof our ambitious developmental programmes ."

This is a positive step yet the fear is that the focus will continue to be on the terrorist activities of the Maoist rebels rather than on the narrative, which Sudeep Chakravarti, author of Red Sun: Travels in Naxalite Country, argues should be focused on the failings of the nation, where the disconnect between urban and rural India on matters political, economic and social has given rise to the manifestation of extreme-Left wing movements amongst the rural poor.

The reaction from India's media has centered on shame and excuses but some good can come out of the Commonwealth Games fiasco: here are two thoughts that are worth noting from two different worlds: business and humanities.
The first, again from Harvard Business School’s Michael Porter, on the behaviour required of its political and business elites:
“India needs to learn to be more self-critical, more open, and much more honest about what needs to be done.”

The second from Quentin Skinner, Professor of the Humanities at Queen Mary, University of London, citing Cicero in describing the values that potential leaders require is aimed squarely at the country's political class:
“a willingness to subordinate our private interests to the public good; a desire to fight against corruption and tyranny; and an ambition to reach out for the noblest goals of all, those of honour and glory for our country as well as for ourselves”

Wednesday, September 22, 2010

Commonwealth Games 2010: India is not ready for prime time

Misquote of the week

“These rooms are clean to both you and us. However, it may not appear so to
some others. They want certain standards in hygiene and cleanliness which may
differ from our perception,”

Lalit Bhanot, Official spokesperson and Secretary General for Delhi 2010 Commonwealth Games.

A wake-up call

Before a bridge collapsed near the Delhi’s Commonwealth Games venue and the Commonwealth Games Federation (CGF) gave the Delhi 2010 organizers a day to clean the athlete’s village due to its accommodations being “absolutely filthy”, few outside India and even fewer outside of the Commonwealth –a last remaining shard of the shattered British Empire – had heard of Lalit Bhanot.

Hopefully, they will have to neither hear of nor hear from him again. But that misses the point, for Mr. Bhanot is an archetype all too familiar to those hailing from South Asia: the argumentative, cocksure, dismissive bureaucrat who is wholly incapable of instilling a modicum of confidence in his ability to keep his word and execute in an efficient, effective, transparent and incorruptible manner.

Moreover, the collapsed bridge and unsanitary conditions in the Athlete’s village juxtaposed against the outward veneer of exclusive residential real estate and gated communities – Emaar Properties has used the tag line “A historic address for those shaping India’s future” to sell these properties after the games– are metaphors for the two India’s.

India shining or slumming?

One comprises a 300 million strong middle class – ostensibly well educated, often with marketable technical skills – which grows affluent and fat (due to a stressful, sedentary lifestyle) in the urban core, the other comprises a rapidly growing underclass that is uneducated, illiterate and malnourished and in the extreme cases – when abetted by foreign agencies – taking up arms in a class struggle as Maoist (also referred to as Naxalite) insurgents in the rural peripheries.

Scratching beyond the surface:

Why should you care about Bhanot’s verbal incontinence?

You should care because his comments, as defensive and narrow minded as they were hide some tough truths of reality that bolster the argument that the 2010 Commonwealth Games made no sense for Delhi.

Public health: you should know that in addition to its teeming masses, India has an incomprehensible public sanitation problem – 700 million Indians have no toilets in their homes – which translates to breeding ground for illness during the monsoon season thanks to an absent civic infrastructure. Jason Gale reported on India's sanitation crisis in the March 2009 edition of Bloomberg Magazine.
Hype vs. reality: you should know that despite Nandan Nilekani and Thomas Friedman’s belletrist tomes, India is clearly not shining for those teeming masses. Perhaps if you have “Imagining India: Ideas for the New Century” and “The World is Flat: A brief History of the Twenty-First Century” in your library collection, you may want to replace them with Aravind Adiga’s “The White Tiger”, that offers and insightful glance into the world of the “Half-Baked Indian” who must claw and scratch, just like the chickens in wire coups waiting to be slaughtered in Old Delhi’s open air market, in order to navigate the dog eat dog world that is modern India.

India or China: you should know that despite (the 19 August 2010 edition of) The Economist newspaper’s provocative “Contest of the Century” profiling India and China, and their strained relationship, this is not a true contest; were it a race, China would have lapped India. Some say that India's leadership undertook the task of hosting the Commonwealth Games in order to show that the country 'had arrived' but given the country's populace cares more about cricket than the Commonwealth, and engineers get paid more for writing computer software code over pouring concrete in large infrastructure projects, it was not the right time for this undertaking.

Economic development: it must be evident to a policy maker that China is at least 20 years ahead in terms of economic development as the neoliberal ethos took hold in the corridors of power of the People’s Party despite the politburo’s putative commitment to communism. Under Deng Xiaoping’s economic reforms, China’s coastal regions became tomorrow’s global centers of industry and commerce that are ready to lead the world today while in India, according to Michael Porter, the strategist every MBA student knows, “Indian firms face a really compelling logistical disadvantage over companies in China in terms of getting goods and services to market.”

Political reality: you should finally understand the inherent frustration of the Indian populace when it comes to their performance of their leaders in the Indian political class; they don't trust them but in keeping with their identities, they vote in a block fashion come election time.

The Commonwealth Games has provided a mirror to the corruption endemic in the country and the incompetence in undertaking infrastructure projects when the right individuals are clearly not in place until crisis mode takes hold. Furthermore, it has shed light on the excrement (literally and figuratively) that people become desensitized to as they go about their daily lives looking out for themselves.

The nation's promise

Ironically, the bureaucratic elites in India are populated with talented individuals, skilled at the highest levels and the nation's most selective institutions produce polished professionals able to make meaningful contributions to all sectors of society. However, within the government machinery framework, it is the lack of governance that permits an unremarkable legion of middling and lower level bureaucrats who simply cannot deliver the goods; these Commonwealth games have shown that despite India’s incomparable promise --in terms of opportunities in all manner of infrastructure, education at the primary, secondary and tertiary levels, and a demographic dividend that is the envy of many nations facing increasing dependency ratios-- it is very clearly not ready for prime time and will not be until a cultural shift takes hold.