Friday, June 22, 2012

India Advises the World, But Who will Advise India?

Dr. Manmohan Singh, India’s economist Prime Minister has recently won applause for advising economic heavyweights like Germany and France for how to go about solving the vexing European crisis. MMS’ courage is to be applauded, and so was his commitment towards his words, which he backed by a $10 billion contribution to IMF to bail out Euro Zone. Though it was enough to stir up a hornet’s nest back home, the discerning could make out the logic - preventing a Euro Zone failure was most critical for India, as it is the country’s largest trading block. It was the same logic that has made China pledge more than four times India’s contribution to Euro Zone, and needless to say, it was the same logic that encouraged USA and European nations to pledge for India, two decades back. India’s economist premier shone like a diamond among largely politician heads of state at G-20. But why is such a supposedly wise prime minister been unable to take India anywhere during the last few years? India is advising the world now, but the intriguing question is who will advise India? Here are 9 advices for India:

Create Performance Accountability:

Mention the word accountability in Indian public governance, and most of us conjure up images of corruption, scams and cover-ups. But think of accountability in an Indian corporate governance setting, and the focus instantly changes to performance. Why is this so? Don’t we expect our government to perform? Or is it enough that they just don’t scam? Our politicians (and ourselves included) have a lot to learn from India Inc in this regard. Are our best companies on the watch-out for corruption in employees? Certainly not, as such stuff are kindergarten lessons in the corporate world. Effective companies have created systems that pre-empt corruption. And by not wasting energies on such mundane stuff, they are sharply focused on positive performance from employees. Corruption there is regarded as employees and teams not performing up to the expected growth levels. It is high time we expect positive performance from governments too. Demand positive performance. Quarter on quarter. Year on year. And not just once in five years. Of course, before that we need to pre-empt corruption. But should that take 65 years?

Implement Right to Recall:

How is corrupt practices pre-empted in the best companies? No rocket-science is employed, and is effected just on the fear of being fired. Whether to fire an employee on sub-standard performance is dependent upon each company’s policies, but there won’t be many successful companies that would have hesitated to fire an employee on detection of a significant fraud. The same policy should be implemented in governance through Right to Recall. Agreed, it is no secret that recall policy and recall elections are some of the toughest policies to formulate, implement, and fine-tune. It may be open for abuse too. But still, there shouldn’t be two minds on whether India needs right to recall. Countries like USA, Canada, and Switzerland have successfully implemented recall elections after much toil. In 2011 alone, USA witnessed 150 recall elections, of which more than half were successful in recalling elected officials. Right to Recall, when implemented in India should include as grounds not only corruption but non-performance.

Use Collective Intelligence of Brilliant Indians:

When did we start having this totally erroneous idea of hero worship? Even Mahatma, one of the true heroes this nation ever had, would have squirmed at the idea of entrusting the fate of 1.2 billion people in the hands of a leader like Dr. Manmohan Singh or AB Vajpayee. Do they lack any credentials? To take Dr. Singh as an example, he has the education, exposure, track-record, integrity, and all those values. But MMS is a single human being, and not a hero. What could be more foolish than expecting that Singhji would have the magic wand to ensure prosperity for Indians, just because he is an economist and an honest man? Hero worship is applicable only during wars and catastrophes. Wars will cause heroes to emerge like Churchill or Gandhi or Indira. In fact one of the key reasons why Nehru failed during his latter years was too much hero-worship by Indians. Normal day-to-day challenges, especially challenges that fail to improve despite scientific efforts like the current economic turmoil, require teamwork. Why are the most successful companies like Google or Facebook always on the look-out for the youngest smartest guys and gals they can find? Simply because, despite already having some of the largest intelligent human resource pools with them, these companies realize that more talent is required to survive. Is India using the best Indian brains available? If we had used it, we would have been not US, but heavens. Intelligent and experienced people will contribute, even freely, if they are reassured that their opinions would be taken seriously, and they would be credited for their ideas. A social and administrative framework to achieve the same should be our most pressing agenda.

Stop Brain Drain:

This is an oft-repeated one, but its vital nature can’t be overstressed. Just a small story would suffice. Once upon a time, there was a brilliant software company called Borland. So brilliant that, despite having no operating system of their own, they created and dominated the application software development tools industry. Despite Bill Gates’ best efforts, Microsoft’s own application development tools were no match for Borland tools. So, what did Gates’ honchos do? They gave free dinners to key Borland staff during lunch-breaks. Legend has it that Microsoft would send in limousines to pick them up, give them royal feasts at the finest hotels, invite them over to see Microsoft, and drop them back at Borland. Slowly the brain drain started. Within less than a decade, hundreds of key Borland developers had joined Microsoft, and the software giant came to own the finest software development tools. That is what brain drain can do to a ‘donor’ company and the ’recipient’ company. Isn’t this what US of A has done to India during the last six decades? We created the finest educational institutions like IITs and IIMs, selected our finest maths & science students to study in them, made them world-class graduates on public money, and then gifted them to USA. This has been the mother-of-all-scams, and not 2G or Bofors.

Attract Foreign Brains that Love Indian Culture:

Why did our best graduates migrate to USA? It was not just the money or opportunities, but something more - a free, open culture. Thankfully for us, that culture has gone into excesses during the last two decades, and Indian values of family, thrift, and savings are now more appreciated than ever. It is no secret that India and its culture have their fair share of admirers, the world over. Why don’t we formally invite them to live here? If 1200 million of us can live here amicably, no much strain should be expected from a couple of million brilliant foreign persons migrating here. There is some magic in bloods of different ethnicities mixing, as seen from the prosperity of USA ever since it opened its gates for foreigners. Foreign migrants who find value in India would be invaluable for us too, as they would contribute to Indian society being more pluralistic and cosmopolitan. The brilliant among them would also passionately contribute to nation building, as, to begin with they came here because they love this nation more than their motherland. No one would dispute that India could do better with more India-fans like Dr. Jean Dreze, father of NREGA.

Attract Brilliant Students from Anywhere:

This should be our tit-for-tat. Our reply to being wronged for the last six decades. We should proactively attract the finest students from the world over. Create even tougher exams than SAT or GRE, that would work like magnets for brilliant students. If they are from the developed nations, Indian expenses wouldn’t be a problem for them. Even if they are from developing nations, and in need of assistance, let us not be stingy and provide all the assistance to make them study here. Chances are that a good percentage of them would stay on here, some falling in love with India, some falling in love with Indian girls or boys, and make this country their home, and work for the betterment of their new homeland. Attracting brilliance has never failed a nation ever, and it is highly unlikely that it would ever fail India too. But then, to effect it, we should think beyond smaller considerations like caste-based reservations. Small compromises by all would ensure that our students would benefit by studying with the best students in this globe.

Tax Non Performing Assets:

As Gandhi once said, there is enough resources in this world for every man, but not enough resources for the greed of any man. Thankfully, due to the last six decades of progress - however meagre it has been - we can easily substitute the word ‘world’ with the word ‘India’ in that famous quote by Mahatma. Today, India has enough for every Indian’s needs. But only if the super-wealthy companies, religious trusts, and individuals of this nation would stop hoarding assets, wealth. It looks like the super-rich wouldn’t voluntarily stop hoarding wealth. The nation should see to it that they don’t. Anymore. Any asset that is not performing for the nation, but only for the company or individual holder, should be taxed appropriately. It can be real estate, it can be gold, it can be cash, it can be brand, it can be corporate assets, but if it is not being contributed to improve this nation’s GDP, should be taxed. Let the capital gains tax accrue on a small yearly basis, and not just on the final sale basis. Only and only then would the super-rich think of ending this hoarding culture and agree to put their assets for productive use for the nation as well as for themselves.

Discourage Petroleum, Encourage Mass Transit, Cycling:

Will a family, or even a company spend beyond its means? Agreed, a company may go for loans a couple of times its equity, but there are limits to spending beyond revenue. But nations including India has found it convenient to do just the same, solely guided by populist policies. How good it would have been if our industrial clusters and residential clusters are such that cycling would be a healthy alternative to using cars? How good it would have been if India had spent its greatest focus on improving the mass transit like metros and luxury buses, before going in for de-regulating petrol. People wouldn’t have cared, as they could switch over to luxurious mass transit, or cycles as the case may be, if they hadn’t done it already due to lower headaches. Make no mistake, this is no regressive measures. Scandinavian and Western European nations known for their most innovative policies, have gained much ground in promoting bicycling to work, as well as mass-transit for travelling around their countries. After all, how can we rely on fossil fuel that we don’t produce in enough, and the most ironic fact is that uncontrolled consumption of petroleum in India and China have been the principal factor behind the global oil boom. Without taking this step, India would never ever address our fiscal deficit.

Develop the Most Attractive FDI Policy:

USA leads the FDI charts in most countries including China. And China attracts a third of this globe’s FDI. But has these developments ever changed which nation attracts the most FDI still? It is USA. If USA still relies on incoming FDI to develop, then who are we to sit on judgement seat on FDI? Allow FDI in that, block FDI in this, and so on? Even worse, we change the rules often. No wonder then, that even the tiny island-nation of Singapore is attracting more FDI than this massive nation of ours. If we closely inspect the incoming FDI policy of USA, China, or Singapore, there is only one question basically - how much jobs will that FDI create? Only the same should be our criterion too. The model is right before us - China, which uses one-third of global FDI to consume 50% of global steel and concrete to build game-changing infrastructure.

No comments:

Post a Comment


Recent Posts Widget