India Shining?

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Show-cased as an annual event, the “India Economic Summit” of the “World Economic Forum” offers a tremendous networking opportunity for both foreign and Indian businesses, providing a rare encapsulated insight into new products and developments for participants. India’s high growth rate is sustained and force-multiplied by foreign direct investment (FDI), a combination of western entrepreneurs, non-resident Indians (NRIs) and dynamic local industrialists and businessmen taking good advantage of the vastness of India and its teeming population. While the talent and expertise exhibited by both the public and private sector are impressive, the major components of the booming economy include “Information Technology” (IT), and “Outsourcing”. The opening of the aviation sector has initiated another surge, new private airlines adding more and more aircraft as passengers turn for long hauls from trains and buses to the air. With public-private sector investment in roads and highways, multiple number of high-rises are being constructed in many cities and towns, force-multiplying the economic boom.

More and more vehicles are on the roads (in New Delhi almost 400000 vehicles, one for every 30 or so inhabitants of the city), mushrooming ads on billboards, the surging stock markets, the media, both print, and electronic, going gung-ho, etc, a supremely confident (to the point of being arrogant) rich class and seemingly and a very confident middle class. Karachi boasts of four hotels in the 4-5 star class, in New Delhi alone there are over 25, maybe a 100 (or even more) in Mumbai filled to the brim with foreign visitors, more businessmen than tourists. They may charge you an arm and a leg for the privilege of breathing their air, you get quality service and it is this way all the year around.

Unlike “automobiles sales” and “housing starts” as sound economic indicators, mobiles in the hands of nearly everyone is not an accurate measure of economic prosperity. With two million or so mobile sets activated in India every month, over 24 million this year alone, a total of about 80 million mobile sets in the country represents 8% of the population. By the same token over 16 million mobile telephones make 10% of the population in Pakistan. By the same token what about Bangladesh, Sri Lanka and Nepal? Mobiles give a false dawn of economic dynamism. All this hoopla cannot hide the tell-tale signs of poverty that drove BJP from power despite the perception of affluence. More than double the population at the time of independence in 1947 live under the poverty line and the numbers are growing. About 300 million are considered middle class but the real figure of upper middle class is probably about 150 million, about 15% of the population). The very rich (i.e. of all classes, industrialists, businessmen, landowners, etc) comprise only about 10 million (about 1% of the population of 1 billion) add to this about 5-6 million rich Non-Resident Indians (NRIs). About 150 million make up the lower middle class who live on the poverty fail-safe line (hand to mouth) while 700 million or so live well below the poverty line, eking out a daily existence sometimes an impossibility. On a percentage basis, Pakistanis who live below the poverty line are far less than Indians.

Riding a bus and taking time to walk around the streets by yourself gives one the real feel of the country. The affluent areas are in drastic comparison to the squalor evident off the beaten track for most foreigners. A two-bedroom flat in a passable locality costs not less than Indian Rs 3.5 million (i.e. Pakistani Rs 4.5 million). Even the upper middle class earning Indian new Rs 45000 (about US $1000) a month cannot afford this without supplementing their income. Most housing units coming onto the market are taken by NRIs. The average upper middle class income can hardly afford anything beyond Rs 2 million (with a down payment of Rs 0.5 million) even if he or she were to put away a third of his/her monthly salary in the face of booming real-estate prices. The Indians create a very realistic illusion while we in Pakistan love to run down ourselves to the lowest rung of the economic ladder. The way to keep land prices down is to have a non-utilisation fee on price of land, this will contain speculation. The Pakistan middle class is probably better off than the Indian upper-middle class, even though the Indian rich are far richer (and getting rich) than the Pakistani rich and are far more in number. An Indian friend of mine did an IPO of his company of Rs 700 million recently, it is now worth Rs 16000 million. The downside of “trickle-down” economics is common to India and Pakistan, indeed all the developing countries of the world, the lot of the masses cannot be tackled without first creating manufacturing and services dynamism through private entrepreneurship, thus making the rich richer and putting additional burden on the lower middle class and poor. The name of the game is not to beggar the vast majority during the process. On a pro-rata basis the number of insurrections and incidents of armed violence in India is more then double the rate in the rest of the South Asian countries combined. But compare the international image of Pakistan, Sri Lanka, Nepal or Bangladesh as regards “law and order” to that of India.

The “secular” state notwithstanding, the minorities. The 16% Muslim population and the 8-9% Christian community are virtually not represented in the rich class. The Buddhists do not fare any better, the minorities are nowhere, if not due to discrimination it is certainly because of lack of opportunities available to them. The signs of economic dynamism in India instills a bad case of economic inferiority among non-Indian South Asians. Individual Indians are extremely nice and hospitable, as a group they tend to be condescending towards other South Asians. The Indian “attitude” does create a doubt in the minds of those from smaller countries, they fear becoming “second class citizens” in an Indian-dominated South Asia. South Asians therefore tend to be ambivalent towards Indians, tending to be resentful of them as a country. The prosperity and development in India of today is very real, when thrust down your throat “ad nauseam” from every pulpit, it does get suffocating.

India is certainly on the go, Indians have reason to consider the country “shining” but the shine is like the gloss on a new cricket ball. After a few overs have been bowled the rough edges do creep through. And one’s inferiority complex straightens itself out when passing through the antiquated and cumbersome procedures at India’s international airports. The personnel are surly and unfriendly, or is this only reserved for Pakistanis? The Sri Lankans and Bangladeshis say that they get “the treatment” more than us. In such an environment an “Indian Economic Summit” is certainly good for Indians. One can understand why economically dynamic India is reluctant to sacrifice the name change to “South Asian Economic Summit” but an economically integrated South Asia will require an fundamental “attitude” changeover, the others should not feel like “extras” in a movie set. The Indians are the center of the South Asian world but they will have to be more large-hearted towards their neighbours to get genuine cooperation going in the region.

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