Politics, Public Issues

India – China : The Asian Divide

India and China, the 2 most populous countries in the world, the 2 fast growing economies in the world, the 2 Asian countries bordering so close – yet with so many ideological differences!

There are so many differences as well – India is more services centric and China ia manufacturing centric. India has freedom of internet, China doesn’t. India’s growth rate is x, China is y and so on. But the main difference which everyone talks about is Democracy!

Democracy is supposed to give power to the people and make people elect its leaders. We have had democracy in India for the past 64 years now and it has been successful. China does not have democracy and it has also been successful. What people are trying to understand is which system is better. I heard an interesting thought a few days ago and this post is about that thought.

A person claimed to me that a newspaper took the interview of the Chinese Premier and he said that he actually favours democracy! But he thinks China might be ready for it only in a about 50 years or so. He also said that they have already given the first freedom to their people, Capitalism. I searched a lot on the internet but could not find this interview.

However the thought process behind this needs to be given thought specially with the currency situation in Indian democracy. Democracy empowers people but when people themselves don’t know whats best for them then is democracy functional? When voting % falls below 50% and votes are openly sold for money then is democracy functional? When regionalism becomes so prevalent that majority governments become impossible and coalitions are unable to pass any laws then is democracy functional?

A lot of questions, not many answers. Time will tell whether democracy in India will be successful or not? Something tells me that on this success / failure the whole future of Democracy in the world will be re-defined.

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US-India-relationship
Business, Finance, Politics, Public Issues

US and India Relations – A tale of two democracies

(One more guest article by Ankur Singh . You can read his previous article here. Ankur will soon start writing on Strat.in as a regular author. Do you want to write on Strat.in too? Read this for details )

US and India Relations – A tale of two democracies –

Democracy, as its meaning suggests, is all focused for the welfare of people. And its two most celebrated practitioners are India and the US. Both are the world’s largest democracies with plural societies tolerant of diversity. However, both of them are now bound on a journey that may twist the very fabric of this system.

The social and political conditions in both countries have never been amazingly similar as they are now. Both countries have witnessed a nation-wide public movement (Lokpal and Occupy Wall Street). Both the governments are struggling with economic and financial problems. Important elections are due next year in both countries. And finally, governments of both countries are entrapped in a mire of allegations and stalemates.

Let’s start with US. The government formed a super-committee that had representatives from both republican and democratic party who were expected to suggest a solution to the debt crisis of the country. It was also decided that the suggestions made would bypass the conventional rigmarole and would be implemented expeditiously. However, the committee tossed up its hands on 21st November and left millions of Americans disgusted.

Now let’s see the Indian scenario. A few days before, key industrialists like Mukesh Ambani & Ratan Tata emphasized on fast decision-making on the part of government. This statement was made in front of representatives from both Congress and BJP. However, our parliament seems unperturbed. The 1st two days of winter session of Parliament have been disrupted by opposition  with no significant output. Plethora of reforms (some good and some adequate) are lying in the pipeline. But neither our responsible government nor the constructive opposition have accomplished anything.

The reason for stalemate in both countries is the lack of social responsibility on the part of politicians. As the elections are close, the opposition parties could not let the government get their policies right. That could mean severe damage to the vote-banks. I am sure that similar thing will happen if the parties’ positions are swapped (ruling party becomes opposition and vice-versa). This vicious cycle may go on leading to delay in a number of welfare schemes over the decades. However, none of the parties are violating any rule of democracy. So, we can’t complain.

So did our constitution-framers made a mistake? Should we resort to system like that of China which is undemocratic and partially capitalist but has yielded much better growth results than both US and India? Perhaps not. Perhaps, the current events may just be once in a while scenarios. But the current situation definitely calls for some changes in the decision making. “What those changes could be” is an open question. Please express yourselves on this issue. Notes from the Editor: This is an article contributed by Ankur Singh – A guest strater. Ankur works as aStrategy and Operations Analyst with Deloitte Consulting and studied at Indian Institute of Technology, Delhi earlier. The article serves as an eye opener about the value added by Engineering Entrance Exam coaching centers in the Indian Education Ecosystem. We look forward to more insights from Ankur in the coming months. Also, the views expressed are author’s own and Strat.in neither supports or opposes them. Strat.in is a forum for thought provoking discussions and will continue to remain so.

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Public Issues

Is Democracy good for economic growth?

Democracy as a concept and economic growth that we perceive are very well correlated. But the major question that arises is whether the implementation of democracy is rightly executed ? The kind of democratic system which we have, can it lead to a sustainable economic growth? The political system in place is itself a big hindrance for growth at the first place .Corruption, regionalism and profit motive just lead to malfunctioning of the economic system. Apart from political democracy, industrial democracy is also very important. The employee power can never be neglected however powerful the management of a firm be. The existing pure capitalistic model doesn’t serve the purpose of an overall economic growth. Along with power in hands of all, regulation of responsibilities has to be there. Hence Democracy can be good for economic growth if we can implement it well.

Many of us might correlate democracy with “Equal Rights for All “and economic growth with “profit making firms “. But the reality is a tad different. To start with, let us take the intricacies of democracy and economic growth and weave them in one common thread. Democracy is a principle that the control of authority comes from public, and ruler and non-ruler are the same. Theoretically speaking, democracy is where citizens, who are not invested with power to govern, have equal access to power. And to take economic growth, it means an increase in activity in an economy. It says about the number of goods and services produced in an economy. But the question is “Is Democracy really the democracy written in books?” and is economic growth only about “increasing the number of goods and services?”. To dwell upon it , we need facts and general emotions that bolster those facts.

Suppose you are going to your office and in broad daylight you are robbed. You go to a police station and asks the concerned person to file a complaint. Is your request registered smoothly , as it should happen in a democracy ? Most of the times “NO”. Rather he would be saying you that this does not come under their jurisdiction with a big grin on his face.

Suppose you are a government employee having an income of ’15,000’ per month and three daughters. Will you be interested in buying the branded shirts or the premium class cars or bikes that are said to reflect the growing prosperity of the country?

The above two cases are just a small drop in the ocean. So is the society to blame or our customs? Maybe not any of them. These aspects of our society have been gradually building and we have come to accept them as a part and parcel of our life. Now considering them, can we say that free and fair competition in our democracy can exist? And even if it does, then can we assure that it leads to economic growth?

If we trace the progress of our Democracy, then we can see that the major boost for economic growth was the opening up of the economy in 1990’s. Apart from that, there hasn’t been any major change that could magnify the growth. The IT revolution was initially subject to a lot of criticism by our Democracy which later on proved to be a major hand in economic growth. If we take the case of Tata plant setup (for Nano) in Singur, we can see that the system of our democracy, that is having distorted relationship between state and central governments, actually led to an unnecessary chaos. Everybody lost , be it the farmers whose lands were left barren and left unemployed, or Tata who lost huge time and profit margins due to it. On papers, there is no license required to open less capital intensive industries but when it comes to implementation, the entrepreneurs cannot get through the uncountable doors of the ‘ Babus’ and get going . Corruption is also widescale . A PWD engineer is killed because he refuses to pay money as so called ‘Gift’ for a politician’s birthday. Considering all these as flaws in the system , we cannot assume that economic growth is possible in the contemporary times. If every state keeps fighting for its best irrespective of others well being, then it’s logical to say that the nation’s economic growth is in danger. According to John Nash’s theory, every individual has to fight for its best and the best of the group. That is what is required in the times of recession. We have to create a political democratic system where the well being of nation comes first , then state , and at the end for individual benefits. That doesn’t mean that we have to move to socialism. Free markets, competition can thrive well in a democracy but the change required is the regulation. SEBI, RBI has done well to protect our internal investors interests and the same should be copied to other fronts of business. Then only feasible economic growth can be achieved.

Now coming to another aspect of democracy – Industrial Democracy. The idea of transferring power to employees in a business enterprise can seem a drastic notion. But it isn’t. The abolition of petty office and shop floor autocrats, management dictators and meaningless work rules can be of immense help to our economic growth. It leads to a transformation of work from a kind of punishment into a source of genuine human satisfaction. It can turn industrial capitalism – which too often has been a fountain of boredom and restriction- into an instrument of liberation and human development.

There is a widespread assumption made in our industries ( goods and services both ) that “managers” and “employees” are fundamentally different, the former endowed with vastly superior thinking powers , the latter totally incapable of formulating decisions of their own, able only to follow instructions, and at that only under the threat of punishment (Job Power Revised, David Jenkins ,2007) .It means the intelligence and knowledge of employees is most of the times under or un- utilized. This current scenario of industrial democracy is a road block for our growth. There has to be a new element. The brutalizing effects of work under capitalism and the democratization of work organizations – are shown to be firmly, clearly and intimately connected, and that the latter can be remarkably powerful in alleviating or eliminating the former. We have had lots of examples where this system has changed for good like codetermination in West Germany, participative management in the United States, democratization of enterprises in Norway ( CRISIL database) .

After political and industrial democracy, we look at the economic growth that we are looking forward to. It is very well possible that we have a positive and growing per capita GDP but at the same time , increasing number of people below poverty line (Economic Growth, Robert J. Barro ). Is this the economic growth that we desire? Or are we looking at an integrated growth of all? The downfall of US economy suggests that the individualistic approach of economic growth, profit motive can be deleterious for the whole economy. We cannot neglect the major part of our society when it comes to economic growth as a whole.

In a nutshell, we can say that if we have to grow economically as one whole entity, not just as individuals, and we need Democracy implemented in its true form or rather any inferior alternative to the idealistic form. Only then our growth will be sustainable.

(The post is written by Indrajoy Bhattacharya. An N.I.T Bhopal grad, he worked with CSC, Noida for 2 years before  joining SPJIMR, Mumbai (marketing). He has keen interest in e-businesses and global marketing,  blogging, adventure sports and painting.)

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Politics, Public Issues

Democracy and demography

India and US are the two most prominent democracies of the world. In this post, I attempt to dissect that inextricable linkages between democracy and demography taking examples relevant in this context.

A recent statement by the leader of BNP( an openly nationalist party in UK) about sinking refugee laden boats from North Africa in the Mediterranean Sea let loose a media frenzy. But many nations in Europe have already been tacitly expelling refugees from Asia and Africa. Todays tough economic conditions and protectionism makes it easy to justify such deportations. Is the media right in blaming these governments for their actions and what has happened with countries who have welcomed refugees and invaders in the past ?

When refugees and naturalised citizens are given equal voting rights, they are very likely to put someone from their own community into power or split the very nation that they came to as refugees into different parts. It is basic human instinct to feel secure with someone like yourself in power. India is a good example and an even better upcoming example is the USA. This “bloodless coup” takes place over one or a couple of generations. Diversity can only be the icing on the cake. It cannot be the cake itself. Nowhere in the history of human civilization have we seen a country maintain its integrity without a strong majority (and so will it be the case with India). Outpopulating other religions and sects seems to have become a global weapon of choice of  “legally” taking over scarce resources.

Democracy and demography are intricately linked.  Practically speaking, democracy is all about numbers and not so much about rights & freedoms. How many citizens of India actually feel safe in everyday life or exercise their freedoms as indicated in the constitution of India ?

democracy in IndiaDemocracy is also about social equality.The politicians today are trying to bring about social justice and equality by increasing reservations.The healthcare sector is already is chaos and we realise that only when we or our relatives are hospitalised. Its the middle class and the poor who will continue to bear the burden and many of these will also belong to the backward castes and minorities. A very recent example of this is the current Swine flu scare in Pune and Mumbai.

If anyone still recalls what happened on Nov 26 in Mumbai last year, it was a total intelligence failure on all parts. I recently read in one of the surveys that the average IQ amongst the national defence academy recruits has fallen by 30 points in the past 20 years and it can only be worse in RAW, Police forces, etc. I spoke with a retired army colonel who encourages students with good scores in their state board /CBSE exams to try for NDA. He said that he often receives replies such as “Why should I sacrifice my life for these politicians ?” or  “Smart people serving the nation will only prolong the rule of the politicians” or “Why don’t the people enjoying reservations do this ?” Surprisingly ,we do not have reservation in the armed forces. Given the sad state of the armed and police forces, is it really surprising that the police often end up apprehending and harassing the innocent or the fact that a few terrorists kept the NSG at bay for 3 days in a five star hotel and some more of them held the financial capital of India in a grip of terror for a week ? Or the
fact that the Mumbai police thought for a long time that they were dealing with some small-time underworld thugs and lost a couple of their best officers ?

The Indian media is free at least on paper and it has a big role to play in changing the status quo.But it has its own subscription,viewership and sponsorship issues to handle. What sells more in India is a politician or a movie star having an affair, some minor corruption scandal(the major ones obviously are kept secret),cricket (since it unites the country),an IIM grad becoming a crorepati, etc. It just highlights the desperate situation where we need “heroes” everyday for a glimmer of hope. It reminds me of the Soviet Union where they literally had an honour called “Hero of the Soviet Union” which the soldiers could aspire to win and get inspiration from in their dark days.

But life goes on and the low poll turnout in Mumbai also indicates that many Mumbaikars who spent hours in candle light vigils and watching the show unfold on televisions most likely did not bother to vote in elections 6 months later. But lets not blame the Mumbaikars. It would have been the same situation anywhere else in India. So let us continue praying….

(The views expressed above are author’s own and do not reflect views of strat.in per se . Strat. In is acting solely as a platform. For more, read our disclaimer. )

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