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Mar 29 2012

C Words

India is newspaper heaven. It has the world’s biggest English speaking population so undertaking a media campaign (in this case a series of twelve interviews to mark the Indian launch requires deep reserves of stamina. There are so many newspapers, journals and magazines each with an unquenchable thirst to talk about India and its changing place in the world.

Each interview has followed a similar line of questioning: are international investors losing confidence in India as a high growth, dynamic market? Each journalist pressed us on whether India’s reform agenda has stalled through political paralysis and pandering to narrow vested interests.

It is hard to argue with these conclusions. A weak and fractious governing coalition and proposed retrospective changes to the tax regime all give investors cause for concern. But a more profound issue lurks behind the questioning like a ghostly presence in the room: has India now slipped so far behind China that it will never catch up with its BRIC neighbour?

All interviews lead to this central concern that seems to grip the Indian sense of their own global status – are we second best to the unstoppable Chinese machine? Free from the apparent chaos that typifies public life in India and without the distraction of allowing their billion plus population anything as inconvenient as a vote, the Chinese leadership can focus, laser-like, on economic domination, the argument goes.

Having spent two weeks in Shanghai, Delhi and Mumbai, I have three observations that might indicate that the gap between India and China is not so wide.

First, it would be wrong to over- estimate the efficiency of Chinese political power. The drama surrounding the fall of Bo Xilai gives us a clear indication that the Chinese political hierarchy faces many of the same fault lines as other countries undergoing profound economic and social transformation. India chooses to wash its political laundry for all to see but we should not assume that China is any less prone to similar tensions.

Second, in China regional autonomy is often seen as a threat to the integrity of a centralising state. In India, it could be the key to stimulating higher growth by giving competent local administrations the freedom to create the kind of pro-business environment investors find appealing. Rather than be a threat to central authority, it can and should be the lifeblood of a federal system that rewards competence and good governance. Achieving this should be easier for India with its greater political maturity than China.

Third, cricket. I arrived in Delhi a few days after the great Indian batsman Sachin Tendulkar had scored his hundredth test match century. For those of you who have never heard of Tendulkar, let me try and put him in context. If you can imagine a fusion of Lionel Messi, Roger Federer, Tiger Woods, Ayrton Senna and, indeed, any other sporting great, then you are still nowhere near grasping what influence this man has on life in India.
He is not a sporting hero, he is a living god. The adulation in which he is held transcends religion, caste, gender and any of the other myriad of divisions that run through Indian society.

A country that can come together with such extraordinary, noisy and egalitarian exuberance over one man’s ability to strike a ball with a piece of wood should have the confidence in their own sense of national pride and togetherness that short term concerns at being outpaced by China pale into insignificance.

I have a visceral sense of India as flexible and adaptable where China – for all its power and talent – is brittle and rigid. One plays cricket, the other does not. Both countries give us a glimpse of the future and ultimately they will need each other to be successful and would be well advised to adopt some of the other’s qualities.

Fanaticism about cricket is not yet a reliable indicator of future economic success, although it would be a much less troubled world if it were. One of the reasons perhaps why India and Pakistan have been deterred from blowing each other up over the years, is that there are already few enough countries that play test cricket.

I am sure the Chinese politburo has other things on its plate than making cricket China’s national sport. But if they do, remember where you read it first.

Written by AnnaPurna Consulting · Categorized: Country analysis, International relations

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