The enmity between India and Pakistan is at a new high: nice time to have a cricket match—advertising will earn lots of money and beat recession. On the other hand, the press which has had nothing to report but lay-offs has increased readership. War stories and cries sell like hot pancakes on cold Christmas days. So, this war-mongering is good. It will also cause fears of scarcity and shoot prices up. There will be collateral damages like the Bengal famine, and Hiroshima. But, we will tide over recession via cricket matches and war-on-television. Mad mullahs versus an economist will be fantastic! The latter’s daughters do plenty of weird things like history teaching in India and civil liberties in America (she dares not do the same in India—no one wants an embarrassed daddy!). They’d get first hand experience on how parts of India become archaeological curios and civil liberty disasters.
Recently, my teacher and I walked into an eatery on Lodhi road in Delhi. A sales guy couldn’t spell ‘black forest’. We were bemused. But, the nation isn’t. We mourn job losses of ‘executives’ in retails. What would they have done if they didn’t have these jobs in the first place? Or what prompted entrepreneurs to employ these people? There was a surge in demand and quality had to be compromised to meet it. This is a simple answer that does not make me happy. I feel that the idea was to open up stores and staff them with uneducated and cheap labour. The idea is to not just make lots of money but to keep the bottom line fat. So, when demands fall my revenue dips but my margins continue to remain healthy. I invest less and make less money but I’m not in the red. My marginal cost and marginal revenue continue to be equal. In other words, I am still maximizing profits. This continues till my cost cutting makes me dysfunctional or till marginal cost and revenue both become zero. On the other hand this example makes us understand that all the employees in the information industry were uneducated too. Naryanamurthy, himself acknowledges that. In an interview he says--: I have no doubt at all that free trade is extremely important for poor countries to create more and more jobs. When we talk of free trade, it is free trade not just in India, it is free trade in G7 countries, free trade in G15, free trade all over. The key question we have to ask is what does a country have to offer, and what does a country have to sell in the global market? The moment we have something that we produce better than anybody else at the most competitive price in the global market, as long as there is free trade, then that country can sell those products in the global market, obtain global currency, and then import the best product at the best prices to fulfil its other needs. So free trade is good; there is no doubt at all.
But the assumption is that every country has something to offer in the global marketplace. Unless I have something to offer in the global marketplace, then free trade is not good for me, and I will blame others who believe in free trade. So the question that every doubting country has to address on a very urgent basis is: Have we something to offer the world at the best price? Have we something of the best quality at the best price? And that is a much more difficult question to answer rather than saying that free trade is bad for the world. But free trade is not bad for the world at all.
... At different points of time in different sections of the economy, different sectors of the industry, different countries will have competition at one thing. At one point in time China had computers; Japan had computers and radios. Even today, for example, when I go home I have a General Electric fridge, I open [it] and then I see Pepsi. I see so many of these things. My computers in this company, for example, we import $50 million worth of technology from the U.S. every year. The point is simply this. Indian computer manufacturers, Indian soft drink manufacturers will say, "Why do you drink Pepsi?" or "Why do you buy computers from outside India?" India must have some strength in certain products. United States today has the best strength in terms of computer technology, and everybody will buy the U.S. technology, but that's the best technology at the best prices. The question that we have to ask is what is it that I can bring to the global market at the best price, something that is considered the best in the world? That's the only way it works.1
The point is that in India we are very good at producing cheap labour. We still do not make great computers, fridges, or even colas. We produce graduates who know enough to sell their labour cheaply but not sufficient to claim first-world wages. So, all those who face lay-offs need to remember that their education is not indispensable. What can be duplicated easily and had at lower rates is definitely not high-quality specialized stuff. Rocket scientists are made of sterner stuff.
References
1 http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/int_narayanamurthy.html#1
3 comments:
The point is, Arani, that in India we are not only perfectly happy to be insignificant and mediocre and safe, but actually proud to be so. To be good at anything at all – whether it be writing great literature or making great inventions or running excellent (meaning world class) schools or hospitals is simply too much risk and trouble. And this mindset, far from being challenged, has only been reinforced by the kind of ‘development’ and ‘modernisation’ that we have been experiencing over the last nearly two decades. If being mediocre at everything assures millions of us fairly decent jobs, financially speaking (as shop assistants, hotel clerks, airhostesses, salespersons, BPO ‘executives’, you name it), while trying to be excellent at anything at all is so uncertain and so meagre in terms of rewards, who would care to be excellent except the fanatic and the fool?... it is only when and if the overall circumstances change drastically, meaning when millions of us are challenged to aim for excellence or perish, that we might reasonably look forward to change for the better. And that sort of thing is not very likely to happen, is it?
There is much truth in what you and Mr. Suvro Chatterjee are saying, Arani, but it is also true that there are many Indians who strive for excellence, and some of them perform better than or as well as the finest in the world. Mr. Narayana Murthy is one such individual. I am sorry to say this: although you have quoted him at length, you seem to have missed this point.
I lived in Trivandrum for many years and came to know some rocket scientists personally. One of them, a Bangali who studied at Ballygunge Science College, led the team that developed the one hundred per cent indigenous on-board computers for Indian satellites after the embargo on our import of dual-use technology. Another, a Malayali from a remote village in North Kerala wrote the software for the on-board computers in the Machine language. That person was the first graduate in his family. I happened to visit his village. He showed me his first school; it consisted of three thatched huts.
I read sometime ago that the Coca Cola sells more Thums Up than Coke in India. It is simply not true that we cannot make good a good drink. (I cannot prove it, but I am sure Kingfisher is infinitely better than Fosters.) Or food, for that matter. Indian restaurants are a rage in England and the US. Kellogg's found it tough going against Mohan's cornflakes.
The fact is that the economies of scale and the technological head start that the West has over the third world is enormous. Besides, our economy has to carry the load of 100 crore people.
Despite that, and despite our corrupt politicians and administrators pulling us back with all their might, we have made tangible progress in the last 17/18 years. 20 years ago, India was a non-entity on the world stage. The situation has changed.
A correction: Please read Rajabazaar Science College instead of Ballygunge Science College in my earlier comment.
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