The Tiger

India is redefining what an Asian Tiger can be

Growing up when we'd make our family trips to India it was like living a nightmare. Why did I have to get in a plane, fly for 30 hours to go into a time warp to a country whose economy and thinking were very 19th century. I hated visiting India and resented that India with countless natural resources and unlimited potential had allowed the Asian Tigers of South Korea, Taiwan, Hong Kong, Singapore and Malaysia to modernize their economies while India remained backwards even by the low standards of the third world. In 1990, India's relatively small neighbors, Sri Lanka and Pakistan had more foreign export $ than did India.

India was behind the time largely because of the cumulative effect of official British policy which prior to 1947 was designed to keep India's home grown economy down and Nehruism which from 1948 to 1991 mixed the worst forms of socialism, nativism, personal psychopathy, sympathy for the Soviet Union, and paranoia into one. Nehru's family developed an unhealthy resentment of the west, an economy that was almost entirely centrally controlled, a bureaucratic mess that encouraged India's best and brightest to leave for the west, and a system of free enterprise which discouraged any sort of foreign innovation and investment. India was at the time of Rajiv Gandhi's assassination and the collapse of the Soviet Union in 1991, a nation without a rudder and without a direction to compete in the new world economy. India was a nation that had abused Democracy by allowing a corrupt family without a realistic vision for India's global role and obligation to dominate the national politics for over 40 years.

Enter Mahmohan Singh, the current Prime Minister who became Finance Minister in 1991. Singh is unique among Indian leadership. For starters he's not a Hindu or Muslim, but a Sikh and secondly and most importantly he is a believer in free markets and India's ability to compete globally. While the Nerhuists believed that India could develop anything that the west produced (for example a nuclear bomb, or innovative compact cars such as the Maruti which was a pet project of Nehru's grandson Sanjay Gandhi) they didn't trust India's ability to market these products outside of the protected and restrictive market at home. Moreover, Indian products were much like those of the Soviet Union......defined and altered more by the whims of bureacrats and politicians than the engineers or experts who had initially developed them. Even if India had wanted to compete abroad with such products, chances are they would have fallen flat on their face.

Beginning in 1991, Singh took some important steps to open up the Indian market, while positioning India to be a global leader. Within three years, consumer products and goods flowed into India from the west, the Indian economy recorded 6% growth and the perennially icy relations with the west improved. India's aviation sector was liberalized to allow private carriers (one of which, Jet Airways is now considered one of the world's finest airlines), to compete with the two state run airlines that had poor safety records and a worldwide reputation for inefficiency. The auto industry was liberalized to allow Ford, GM, Toyota, Honda, and Mitsubishi to set up plants in India, and export cars to neighboring countries. Indian companies such as Tata and Reliance were allowed to diversify as well as expand overseas. Also, innovation was encouraged by official government policy and spending on R&D, innovation that brought us the likes of Infosys and Wipro.

India not only became a replica of South Korea and Taiwan's economic miracles after 1991, it redefined the sort of economic relationship an Asian country (other than Japan) can have with the west. India's advantages of climate, English language proficiency, and a large educated population allowed Western companies to make India the world's back office. India's engineers became the fuel for the IT sector worldwide and kept companies like Google, Microsoft, Yahoo and Intel on top of the global earnings pyramid. While demagogic politicians in the United States throw red meat to their constituents about outsourcing and call centers in Bangalore, the bottom line is that Indians have proven they can do the sort of work call centers and software companies need more efficiently, competently, and cheaper than their counterparts in the U.S.

While India's infrastructure continues to need improvement, some shining examples of modernization stand out. The IT corridor in Bangalore is dominated by Hosur Road, a highway with limited access that is top of the line even by European standards. A superhighway on par with the U.K.'s motorway system (which is superior to the U.S. interstate system) is now open between Mumbai and Pune as well as between Delhi and Jaipur. In Kolkota, the government of West Bengal built an expressway bypass reminiscent of the London Orbital. In Chennai, the state government is planning an innovative monorail system to link the IT corridor with downtown. Now the Government has partially privatized the two busiest airports in the nation, Mumbai and Delhi to foster modernization, with the third busiest airport Chennai, and seventh busiest Kolkota next in line for privatization. The nation's fifth busiest airport, Cochin is already run by a private company, and the fourth busiest airport Bangalore is going to be rebuilt and expanded by 2008.

India is leading the global economy into the 21st Century after spending very little time in the 20th. From my childhood, when India was an awful place to visit, to today when it is among the most desirable places on the planet, one thing has remained consistent. India has its way or doing things and even though it may change with the times, business and culture remains distinctly and uniquely Indian. That's more than can be said for Europe or East Asia.