The Post-American World - Fareed Zakaria [66]
To many visitors, India does not look pretty. Western businessmen go to India expecting it to be the next China. It never will be that. China’s growth is overseen by a powerful government. Beijing decides that the country needs new airports, eight-lane highways, gleaming industrial parks—and they are built within months. It courts multinationals and provides them with permits and facilities within days. One American CEO recalled how Chinese officials took him to a site they proposed for his new (and very large) facility. It was central, well located, and met almost all his criteria—except that it was filled with existing buildings and people, making up a small township. The CEO pointed that out to his host. The official smiled and said, “Oh, don’t worry, they won’t be here in eighteen months.” And they weren’t.
India does not have a government that can or will move people for the sake of foreign investors. New Delhi and Mumbai do not have the gleaming infrastructure of Beijing and Shanghai, nor do any of India’s cities have the controlled urbanization of China’s cities. When I asked Vilasrao Deshmukh, the chief minister of India’s most industrialized state, Maharashtra, whether India could learn something from the Chinese planned model of city development, he replied, “Yes, but with limits. China has often required that people have proof of a job before they can move to a city. This ensures that they don’t get millions of job-seekers who crowd into slums ringing around the city. I can’t do that. The Constitution of India guarantees freedom of movement. If someone wants to come and look for a job in Mumbai, he’s free to do so.”
India’s growth is taking place not because of the government but despite it. It is not top-down but bottom-up—messy, chaotic, and largely unplanned. The country’s key advantages are a genuine private sector, established rights of property and contract, independent courts, and the rule of law (even if it is often abused). India’s private sector is the backbone of its growth. In China, private companies did not exist twenty years ago; in India, many date back a hundred years. And somehow they overcome obstacles, cut through red tape, bypass bad infrastructure—and make a buck. If they cannot export large goods because of bad highways and ports, they export software and services, things you can send over wires rather than roads. Gurcharan Das, former CEO of Procter & Gamble in India, quips, “The government sleeps at night and the economy grows.”
The most striking characteristic of India today is its human capital—a vast and growing population of entrepreneurs, managers, and business-savvy individuals. They are increasing in number, faster than anyone might have imaged, in part because they have easy access to the language of modernity, English. Unwittingly, Britain’s bequest of the English language might prove to be its most consequential legacy. Because of it, India’s managerial and entrepreneurial class is intimately familiar with Western business trends, with no need for translators or cultural guides. They read about computers, management theory, marketing strategy, and the latest innovations in science and technology. They speak globalization fluently.
The result is a country that looks like no other developing nation. India’s GDP is 50 percent services, 25 percent industry, and 25 percent agriculture. The only other countries that fit this profile are Portugal and Greece—middle-income countries that have passed through the first phases of mass industrialization and are entering the postindustrial economy. India is behind such economies in manufacturing and agriculture but ahead of them in services—a combination that no