Friday, December 29, 2006

India's Growth Model: China or America?

In the previous post, we discussed about whether India and China were ever equal. Now we will go further and discuss the right model for comparison: United States of America.

As the analysts are finding the last couple of years, India and United States are much more common than what most people think (did I just say that the world's poorest & richest country have some commonality). Superficially, India's english, democratic tradition & British colonial legacy are visible. But, we have just got started. There are much more deeper. We will randomly see them and then put them in place.

1. Hollywood Vs. Bollywood - You must be thinking that I'm just kidding, as movies are not a factor for world economy. It is. At one point, not long ago, Russia overtook US as a super power and Japan overtook US as an economic power. But, how many kids dreamed of Russia & Japan, tried to imitate their culture, flock to their universities or even learn traces of Russian & Japanese? But they did all that to US, because of a very powerful influence - Hollywood. It shaped the world cinema, and gave a way for imagination and thought. In all that imagination and dream world, only America was there and its perspective on the rest of the world. Interestingly, whereever they lived most kids saw world from the prism of United States. Thus, US got the best of world relationships, best of students & scientists & entrepreneurs and easily outsmarted its competitors. I'm not saying that Hollywood was solely responsible for America's growth, but without hollywood, a lot of American succcesses would have never happened. For a long time, US benefited from the export of Hollywoodism, McDonaldism & CocaColaism. Culture shapes billions of bucks and US companies & brands (from Ford, GE to Pepsi, Coca-Cola to Microsoft) became a marque for the world.

Coming to India: India's long lasting legacy in Asia it is its export of culture. Everwhere from Thailand, Malaysia to China, Japan, Middle East, coastal Africa... you could see great influence of indian culture. Thus, even without magnificent war & army India had conquered a huge territory, just by being a powerful holder of cultural exports. People from Columbus, Vasco Da Gama to English sailors to Chinese buddists flocked to India and dreamed on a trade with India. In a way, it is similiar to American export of culture, only a good form of culture :). And as Bollywood emerges, people from as far as Africa to East Asia will see world from an Indian prism and will bring both development and international relationships with that, and Indian companies will get the visibility and brand promotion it requires. Probably we might even convince Pakistan and China to have better friendhship with India.

This is also extendible to other media. Washington Post, Time magazine & CNN has so much effect on world media. Now India has many of the strengths and can take a part of the strength just how US took from UK (with BBC, Times etc.).

2. Enthusiasm & Entrepreneurism: If a Rip Van Winkle from 19th century America suddenly woke up in current India, he could find the comfort of home in it. 19th Century America didnt have infrastructure, had shabby roads and dusty towns, quarelling federal government, but its people had an unique power: An optimism for the future, a sense of pride and vision & an overbearing urge to succeed. They quickly moved from the heterogeneous group of colonies to bring powerful economic houses that dreamed of growing big and conquering the world. This fiery capitalism and energetic entrepreneuship is what we see in India - from slums to high raises. We are poor in infrastructure and shabby in our cities, and our heterogeneous is quarallesome, but our energetic young men & women are going to overcome all of that with the same sense of purpose our godfathers (19th century Americans) had.

3. Stress on Unity in Diversity: America has a great power, it quickly assimilates its immigrants much faster than any other country. The irish, jews, Italians, Germans who came during the last 100 years are now fully integrated as Americans. Though, there is great diversity in terms of immigrants (we have huge African-Americans, Hispanic-Americans, Asian-Americans and of course European Americans) representing every continent in the world. But, they all are almost united on a concept: American (albeit diversity and fractionsim are growing).
Historically, only one other country had such a track record: India. It had such a power that whoever came to the land became Indians (or Hindus). We definitely have an exceptions like Islamics who will never be assimiliated anywhere. The Greeks, Afgans, Aryans, East Asians, Mongols, Arabs are all fully assimilated and the art & culture as an example for it. Thus, it has such a diversity (in language, religion, art forms) but a soft thread runs among all, conscious or sub-conscious. A sense of Indianism. A lot of Indians will oppose when I say it, till they feel their subconscious emotion of it at different times.


Edward 'the bonobo' is a said...

Hi again Balaji. Just to say that I have read your various comments (for which thanks). I will reply a bit more some way or another, but just to say for now that I think you have a very clear insight on the social and cultural level, that I like this emphasis, and that I agree with a lot (though not all) of what you say.

Take the case of the US ability to integrate immigrants. I absolutely agree, and this is Europe's big weakness (the US is at the end of the day not an ethnically grounded state, whereas Europe (and almost every one else) is.

OTOH I'm not sure about India. Let's leave aside the muslim/hindu issue, and think at state level. I have been following a bit the question of the Kanadas in Karnataka. There already sems to be quite a resentment towards cosmopolitan Bangalore.

I think (note I only say think) we might see more of these identity issues as India develops. Certainly this is a topic to watch, especially if there are significant internal growth disparities.

Modernisation is never an easy process, and nationalism doies often rear its head at some point or other. We will have to wait and see.

On the broader level I am approaching all this with a set of macro economic ideas which I think you could do well to think about. I will try and find the time to say more about this soon.



Edward Hugh said...

Hi Balaji,

I am trying to get in touch with you, since there are some points I would like to put to you. I can't seem to find an e-mail for you. Can you mail me, and I will get back to you.

Best wishes,