An Indo-Chinese curry December 31, 2006

My son lives in Shanghai and I recently spent two weeks with him. It gave me a chance to meet and talk to ordinary Chinese people. What came through in my conversations was their passionate desire for business success. They feel that even the poor are gaining from their commercial triumphs in the global economy, and are proud that China will soon become a great, middle class nation.

I also met a local communist leader and businessman, who had recently returned from India. He asked me confidentially, “Is India’s bureaucracy as bad as all that?” He said that Chinese businessmen in India only talked about India’s red tape. He admitted Chinese officials were also corrupt, but he couldn’t fathom why Indian officials put up so many hurdles. He was amused by India’s communists as well. He joked that if you mixed Chinese and Indian communists into an Indo-Chinese curry, it would improve the Indians but it might deteriorate the Chinese.

The evening after I returned to Delhi I turned on the news on television. In two separate programs, I caught prominent leaders of the Left and the Congress talking about India’s future. What came through unfailingly was their deep and fundamental hostility to business and the middle class. Our Leftists did not give two hoots about what would make Indian companies successful. Neither did they care if our entrepreneurs failed or succeeded. Unlike the Chinese, they felt no pride that India had achieved one of the strongest economies in the world. These debates, like so many in India, had a strange 1970s air, discussing issues that were settled in the world long ago with the fall of communism. One of the reasons for our confusion is that none of our leaders has really bothered to explain to the common voter how 15 years of slow but consistent economic reform has changed the lives of our people. And how they have added up to make India one of the world’s best performing economies.

Perhaps the greatest failure of our reformers is that they have not clarified how the reforms are helping the poor. Chinese leaders do not face this problem, but we are a democracy and our leaders need to remember that much of Margaret Thatcher’s energy went not into creating reforms but into educating her constituents that reforms were good for the whole of Britain. I sometimes wonder why Manmohan Singh and his dream team of reformers don’t go on television and educate us similarly night after night. Because they fail to do so, people fall hostage to the bad ideas of the populists. It is not enough to talk of “inclusive growth” or assert that we must grow at 10 percent—you must explain how this affects ordinary lives. Only thus will you create a constituency for thorough going reform. They must also admit honestly that India’s pre-1991 controls and subsidies were the chief causes of our poverty, and there is no point in bringing them back. An honest nation must come to grips with its past.

I am glad that the prime minister finally broke his silence this week about India’s notorious red tape. He realises that the inability to implement administration reforms is the other big failure of his government. As one of the best years in our economic history draws to a close, action on these two fronts would be the PM’s finest New Year resolutions.

gurcharandas@vsnl.com