Advantage India

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Advantage India

by Raywat Deonandan
Feb 2, 2010

This article was originally a blog post at Deonandan.com on Dec 23, 2009. This version was published in India Currents Magazine on Feb 2, 2010.  Three days later, it was syndicated under the title, “Why India Has An Advantage Over China”, by New America Media.

These are interesting times to be a university professor in North America, with both anecdotal and objective data suggesting a steady decline in student motivation and skills. During the first session of every class, I’ve taken to relating to my students some of my observations from giving a series of lectures at Jawarlahal Nehru University in New Delhi some time ago. I tell them about how the students at JNU take their education much more seriously than do students in Western universities, about how they don’t complain about extra work or the difficulty of classes, but rather appreciate the increasing competitiveness of a globalised economy and therefore the importance of every small iota of knowledge or skills an educator can provide.

There is a valid criticism, of course, that the Indian educational model is possibly more beset with rote learning, versus the West’s supposed focus on critical thinking. However, it is increasingly evident that students in emerging economies are demonstrably more respectful of the educational prospect and promise than are their counterparts in high income nations. My Indian teaching experience is contrasted with the complaints I get from some of my North American students, who moan about assignments with “too much math” or involving “too much writing” or even, believe it or not, about having to write two exams on the same day; or who attend lectures while listening to their iPods and chatting on Facebook.

I tell them about my impressions of JNU students in order to suggest that the West may be losing the education war, and that we North Americans need to work very hard indeed to match the work ethic of our Asian competitors. After all, I want my students to be as competitive as their Asian brethren, and to be able to work, produce and excel at a global pace.

This sentiment was touched on in Hans Rosling’s famous TEDIndia lecture, held in Bangalore last fall, in which he stated that in his experience students in India study much harder than do students in his home country, Sweden. In jest, Rosling went on to predict a date—July 2048—when India and China would economically overtake North America and Europe, in terms of both national and individual wealth.

I observed a similar trend during a recent tour of India’s major cities, where I noticed that every young person seemed willing and able to sacrifice social time and luxury, and to endure great hardship, to do his part to push himself, his family and his country to the world’s economic forefront. I’ve seem similar work ethics in other parts of the world—China, Indonesia, and Thailand come to mind—but never with the same weird mixture of optimism and desperation that I observed in India.

It’s almost a truism now that a handful of formerly impoverished nations are poised to be the superpowers of the next century. The so-called BRIC nations—Brazil, Russia, India and China—have the world’s fastest growing economies, and are posting expansive economic statistics, even during a global recession. Two in particular—India and China—are seen as the great emerging powers of the world. It should be noted that in the history of human civilization, the two strongest economies on Earth have always been India’s and China’s, with the exception of the colonial period of the past 200-300 years.

Currently, most U.S. and Canadian foreign policies with respect to these nations have focused on China being the likely rival to the United States’ throne of hegemonic dominance. This is reasonable given the overlap between American and Chinese military interests (security of the Formosa Strait and arms deals in Sudan among them), and also because of the current dominance of Chinese products in U.S. markets. Chinese GDP is 7-8 times greater than that of India’s, its per capita GDP six times greater, and its inflation substantially lower. China’s infrastructure, its road quality, civic amenities and electrical grid, for example, are comparable to those of Europe or North America, making for relatively efficient goods production and transportation. And Chinese military power is well proven and disciplined, making China the great regional superpower of Asia.

In the comparison of Chinese and Indian economies, a practice increasingly popular in the parlor rooms of academics, China seems to win according to every traditional metric. But there are qualities that hint at a dramatic shift in coming decades. I would like to respectfully suggest that it will be India, not China, which will take the world’s economy and culture by the collars and shake it till the human race takes note. Assuming that a global economy still exists, and assuming that climate change or some other apocalyptic event hasn’t ravaged humanity back to the Stone Age, I predict that the close of the 21st century will see India as the world’s leading nation.

Here are my reasons:

The Demographic Dividend

China has an age profile comparable to that of Western nations. In other words, the Chinese are old. As a result, they are heading for the same economic precipice as is the West: in a few decades, the number of workers will be fewer than the number of retirees. This is a considerable economic strain. India, on the other hand, is a younger nation. A large part of its population is yet to enter the work force. According to the CIA World Factbook, the Chinese median age is 34.1 years, while that of India is 25.1 years. Youth is an asset never to be underestimated, when the long game is considered.

English

There’s a reason that one of the more dynamic industries in China is English language training. They recognize that English is the current global lingua franca and the prevailing language of commerce. This will not be changing anytime soon, due to centuries of British, then American, global dominance. As a result of their colonial past, the elite and mercantile classes of India are already either functional or fluent in English, affording them immediate linguistic entry into the global market. According to the 2001 census, 10.66% of Indians, or about 90 million people, speak English. It is not unusual or difficult to find fluent speakers of French, German, Portugese, Russian or any number of important world languages on the streets of India; the same cannot be said of China where, according to a 2006 article in English Today, only 0.77%, or 10 million people, speak English.

Judicial System

Another dividend of post-colonialism is the inheritance of a relatively functional, reliable, and more-or-less fair judicial system, at least to the extent that it needs to be for business purposes. China’s legal system is functional as well, but individual rulings at the local level are theoretically subject to the whims of the central ruling party. In practice, the Chinese legal system appears to be trying to find its way, with respect to the negotiation of agreements between foreign and domestic interests. The extent of freeness of trade appears to be still determined by specific zones, such as the so-called “special economic zone” that contains China’s economic engines of Hong Kong and Shenzhen. This is relevant to business because trans-border contracts need to have legal heft. An agreement with an Indian firm is guaranteed by the Indian legal system; there is recourse, at least in theory and more-or-less in practice, should a contract go awry. It should be noted, of course, that corruption persists in both countries at intolerable levels.

Politically Engaged Diaspora

Both nations enjoy large global diasporas which have sought and received commercial success. But the Indian diaspora has gone further by achieving political success. Canada, the United States, the United Kingdom, the Caribbean, Africa and beyond: all are seeing elected officials of Indian extraction who, while serving the needs of their electorate, nonetheless maintain a connection to the motherland.This is serving to accelerate commercial, philosophical, cultural, and political connections between India and the world. Canada alone has had 38 elected federal politicians of South Asian extraction, including one who even appeared in a Bollywood film prior to her political career, compared to 16 national politicians of Chinese origin.

Energy Profile

Both growing economies are emerging energy hogs. However, China’s model is a factory-based industrial one, depending on coal-fired plants to churn out cheap consumer goods that flood Western markets. India does some of the same, but is known more for its virtual products and human—information technology, call centers, medical tourism, etc—all of which have fewer industrial energy demands than does strict manufacturing. The result is that as energy production becomes increasingly prohibitively expensive, the Indian model for wealth generation will become more labile and efficient than the Chinese model. This may be the difference in sustaining Indian growth when the energy crunch really hits hard.

Democracy

It’s somewhat propagandistic to suggest, as the West did during the entirety of the Cold War, that democracy is a prerequisite for national wealth. However, history suggests that democracy remains probabilistically the best political system under which to build a thriving, stable economy. India’s functional democracy, unlike China’s one-party ruling system, is arguably more robust against major perturbations. A revolution leading to a vitiation of trade deals and dramatic shifts in economic philosophies, is less likely under India’s system than under China’s.

The current crisis between China and Google is example of how an essentially totalitarian nation may always have at its core principles and philosophies that might just be fundamentally at odds with the prevailing global business and social forces that must be harnessed to build sustained wealth and economic security.

Soft Power

Whereas hard power is military brute force and money spent by one nation to affect the behavior of another, soft power is that exercised to encourage others to become acclimatized and sympathetic —almost desirous—of one’s lifestyle and perspective. There is official, government-funded soft power and unofficial, cultural soft power that flows naturally from a nation’s character and enterprises. Both India and China have pursued the former, by sponsoring cultural exchanges and by investing in development projects and other goodwill gestures abroad. China, perhaps, has been more acutely involved in this activity, especially in regions of specific geopolitical interest, like energy-rich portions of Africa. However, the unofficial kind of soft power is arguably what is more pertinent to assuring a nation’s supremacy atop an increasingly monolithic world economic culture. After all, what has done more to promote U.S. interests abroad, America’s vaunted military supremacy or Coca Cola, Hollywood, and Britney Spears?

Chinese cultural soft power has flowed slowly but consistently over the years, bringing kung fu, acupuncture, and Chinese cuisine to all parts of the globe. But in recent years we’ve seen the explosion of Indian soft power. The ancient art of yoga is now a fast growing multimillion dollar global industry. With it has come Indian styles of meditation and Ayurvedic medicine, all the rage in trendier parts of the West.

India is now the centre of the English-language book publishing world, surpassing both the United States and United Kingsom in this category, and regularly producing Booker, Commonwealth, and Pulitzer Prize-winners from its sprawling diaspora.

An increasing global acceptance of vegetarianism as a lifestyle, championed by celebrities and medical authorities alike, is being fueled both by rising food prices and by realizations that meat production is not an environmentally sustainable practice at current global levels. With the increased popularity of vegetarianism has come gravitation toward the world’s most recognizable vegetarian culture in India. This, too, is a kind of soft power.

Bollywood is, of course, the dreadnought of Indian cultural soft power. Bollywood images of beauty, athleticism, wealth, talent and vivacity are replacing extant world views of Indians as mystics, fakirs, and impoverished indigents. The Oscar win of Slumdog Millionaire has permanently cemented the Bollywood ethic into the global mainstream, and with it a growing comfort with doing business with Indians, in all the ways that that phrase suggests. To paraphrase Shashi Tharoor, in today’s world it’s not the country with the biggest guns that wins, but the country who tells the better story; and India is quite adept at telling stories.

The import of cultural soft power is being seen in the rise of Indian educational centres; a few of whom, such as the Indian Institute of Technology, are rivaling the top schools of the United States in quality and name recognition, and are attracting foreign students in increasing numbers. China has some excellent schools as well, but the global branding of Indian schools is allowing their graduates to leverage those brands in trans-national commerce, by force of name recognition alone, a feat that was once the sole domain of top U.S. and U.K. colleges.

Both India and China suffer from that great worrisome blight of the Global South: the gaping chasm between rich and poor, both within city centres and between rural and urban poles. In the Chinese case, this has been managed centrally, by establishing specific zones of economic activity. But within those zones, tragedy abounds in the form of child workers and conditions rumoured to be occasionally medieval in their brutality, such as the Shanxi scandal of 2007, in which it was found that tens of thousands of rural villagers were being kidnapped and forced to work as slaves in a brick kiln .

India employs their version of slaves as well, employing most children under 14 to create cheap consumer goods in unsafe conditions. The U.K. Observer estimated in 2007 that 20% of India’s economy is dependent on such children.

Indeed, in India, the oceans of working poor underwrite the middle class’s rapid accumulation of wealth. In the streets of Mumbai, roadside sellers, sweepers and construction workers sleep in the streets or in temporary slums so that the important work of erecting skyscrapers and servicing the business class will not be slowed by the inconvenience of worker health or happiness.

Neither the Chinese or Indian case is a sustainable model for labor rights or popular stability.

Both nations must solve their worker rights issues before economic stability is achieved. Frankly, the nation who can do so first may, quite literally, inherit the world . When we discuss the astounding economic trajectories of both nations, we must remember who pays the price for such growth.

There seems little doubt that the BRIC nations are poised to ascend to global economic and cultural dominance sometime in this century, and that both China and India appear to be pulling away from the pack, ready to re-occupy their traditional spots atop humanity’s hierarchy of wealth. China’s disciplined, conservative experimentation with capitalism has allowed the Asian giant to take the current lead in this two nation race. But India, with her youth and optimism, democracy, English fluency, engaged diaspora and sprawling soft power, possesses the right tools to build a grander, more sustainable prosperity, and to drag herself—within a single lifetime, perhaps—from abject poverty to global dominance.

Raywat Deonandan is a professor of Global Health and Development in the Faculty of Health Sciences at the University of Ottawa, Canada.

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