46

India

   

            Like China, India is on no singular track.  It has become two Indias.  One is the India of growth, wealth and prosperity, where GDP rates continue to rise at 8% a year, where 200 million members of the middle class vie to buy the latest gadget, where health care stands out atop the world and where universities provide an education second to none.  The other India is a nation of abject poverty, where 250 million survive on less than a dollar a day, where clean water is sparse, where schools are primitive, where hospitals are medieval and where plumbing is a luxury.

 

            One need not travel far to see these two Indias.  Though clearly the rural-urban divide exaggerates the differences, the mere taxi journey from airport to hotel can feel like a trip across a millennia, as much as a ride through a city.  One block, you might see towering high-rises, urban nouveau riche singles donning the latest frock from Manish Arora, neon cinemas trumpeting the latest Bollywood feature or Lamborghini Gallardos daring the city’s police.  The next block, you could just as easily pass a man defecating on the side of the road, a sacred cow stopping traffic, limbless beggars pleading for a coin or decaying shacks doubling as markets for weeks-old produce.

            But can a nation of 1.21 billion people, a nation where 30 different languages are spoken by at least a million people, a nation that can be home to the Dalai Lama and also 165 million Muslims (to say nothing of the 700+ million Hindus  Can a nation home to the Himalayan Mountains, the Thar Desert, marshy swamplands, tropical rainforests and over 3800 miles of coastline - can this nation be split in two?

            In fact, there are hundreds of Indias, and it is this diversity that separates India from the world.  China might have the most people on the planet, but 92% of China’s citizens consider themselves the same race – the Han – and they all bow to the same political party – the communists.  The United Statesmight hold legitimate claims as the most diverse nation, and critics might even like to say that the United States has the largest income disparity in the world.  But India’s diversity dwarfs that of America, with over a billion people either divided by race, religion or caste 

            It is Indiareality may be the key that allows India to progress into the future.

            But the road ahead will not be easy.  

            In recent decades, India appeared right on the cusp of securing its place among the world’s elite.  Since 1990, India’s GDP has grown at an average rate of 8% per year, becoming the 9th largest economy in the world.  But unlike China, India isn’t making a name for itself by supporting hundreds of millions of factory laborers willing to assemble, glue, connect, wire, tie and paint the trinkets that make their way onto Walmart shelves.  In the pharmaceutical industry, India doesn’t anymore just make cheap generic drugs to sell on the wholesale market (merely copying and mass producing the work of others), it’s becoming a major player in research and development, and with tens of thousands of engineers and scientists graduating every year from Indian universities, the potential for India to become a hub for prescription drugs appears quite promising.  They’ve also jumped into international car manufacturing, with Tata Motors rolling out the cheapest car in the world – the $2800 Nano.  Sure, its engine under the back seat might make passengers a bit nervous, its wheels are about the size found on a three-year-old’s tricycle and its maximum speed of 65 miles per hour won’t attract the thrill-seeking crowd, but with its ridiculously low price, India hopes to corner the market for car buyers just needing wheels that will get them from point A to point B.

            Though the pharmaceutical industry has potential and the tiny Tata might steal some business from the Koreans and Japanese, it’s in the IT sector that Indiahas truly made a name for itself.  In 2005, New York Times author Thomas Friedman came out with the book The World is Flat  Soon after, Bangalore became the symbol for American jobs heading overseas.   Companies had learned that if you want a job done quickly and cheaply, you call India.  If you’re Bank of America and need someone to answer calls from homeowners looking to refinance their mortgage, call India.  If you’re an entrepreneur starting up a company and need someone to design your website, call India.  If you’re running an accounting firm and need someone to handle all the tax paperwork during a hectic season, call India.  You can save up to 90% on labor costs, and because India is on the other side of the world, you can contract a project when you’re walking out the door at 6:00 in the evening, and when you arrive the next morning, the project will be sitting in your email box.   This wealth of talented, cheap labor has transformed how companies source their labor, but also how individuals task out their day-to-day responsibilities.

            If you don’t believe me, try it.  Say you want someone to turn your notes into a Powerpoint presentation – just go to a website called odesk.com, type up a job description, pay $1 through Paypal, and within a couple hours, you’ll have a finished product better than anything you could have spat out.  And that’s just at the household level.  Companies are outsourcing to Indiaeverything from creating Ipad apps to providing voices for videos to manufacturing Twitter “followers” or Facebook “likes” to enhance your popularity.  If it can be done online or on a phone, it can be done cheaper (and oftentimes better) in India.  Don’t believe me still?  Next time you call a 1-800 number, ask where the phone operator is from.  They have to tell you.  And there’s a 97.4% chance it’s a city somewhere in India.

            With all this new money to be made in India’s emerging economies, the middle class has exploded to over 200 million, many of these are young twenty-somethings with budding expendable incomes they can blow on consumer goods.  And the number one consumer good they want to get their hands on is the cell phone.  India has the fastest growing telecom market in the world, boasting the cheapest rates on the planet.  As telecom companies expand, so has their reception range, meaning even the villager living in the most desolate mountain pass can now connect to the world.  Today, over 76% of the country owns a cellphone, meaning 920 million cell phones could be ringing at any one time (almost three times the number of those found in the US).  If they’re not texting or chatting, they’re “scrapping” (Facebooking) on Orkut. 

            For those willing to emerge from the digital world, India  Their movie industry alone (known to the world as Bollywood and familiar to most audiences for its smiling couples who always seem to find a way to dance around trees) surpasses Hollywood in total viewership, with some three billion annual moviegoers paying to see any one of the hundreds of films produced each year.

            India has taken their mounting economic influence and applied it to their geopolitical reach.  It is now seen as a major global player, creating free trade agreements across the region, potentially one day linking ports from the Philippines to Afghanistan (a la Canada and the US’s NAFTA).  As they steadily finalize trading partnerships with the countries of West Africaand South Asia, Indian interests oftentimes come head to head with Chinese corporations and Chinese government officials hoping to likewise expand their influence in these emerging markets.  But today, India is no longer a minor player, passively bowing to either their Chinese neighbor to the east or to the nations of the West.  India’s human capital and technological ascendancy has set it up as a nation with first world economic potential.

            Now that India has molded an economy that can compete with the big boys, it has likewise compiled a military that is not only respected, but feared.  India has become the number one arms importer in the world, and they are currently one of only nine countries with a nuclear bomb.  Though they prefer not to use these weapons and have shown time and again their willingness to compromise instead of mobilize, the sheer volume of their arsenal makes them a force to be reckoned.  India no longer wants to be seen patronizingly as a developing country emerging from European domination, but instead desires to show the world they are an economic and a military leader in their own right.  They even resolutely refused aid from other countries during their recent natural disasters (2004 tsunami, 2005 earthquake and the 2006 flooding), wanting to demonstrate that they are a creditor to the world, not a borrower.

            India looked like it was on a roll.  Their economy was expanding, their culture was flourishing, their military was proliferating and their people were prospering.  They were the vowel in the BRIC countries, joining Brazil and China as the nations that were threatening to supplant Western dominance, potentially ushering in a new model of government efficiency and economic management.

            But then the 2008 recession hit, and all the successes that the media had been championing started to fade and the realities of a nation in peril again emerged.  Like every other nation emerging from an industrial revolution, Indiaand societal flaws that (though diminished) never vanished from India’s unpleasant reality.  In the first few months after America’s descent into its own Great Recession, India hinted that it might survive relatively unscathed.  But this pipedream quickly faded, replaced with stark truths that have no easy solution. 

            Foremost on the minds of politicians and economists is what to do with the poor?  What do you do with 300 million people living below the poverty line?  300 million who can’t get to school, can’t get to the doctor and can’t put food on their table?  Do you help them or let them fend for themselves?  If you help them today, you impede your economy today.  But if you let them starve, you destroy your future (to say nothing of your karma).  So over the last decade, politicians have more often than not chosen to help them.  It’s been the right moral choice, but it’s also been the prudent choice.  In a nation of dozens of political parties (two of which are communist) where incumbents rarely win and the masses are always waiting for a hero to come in and save the day, any would-be politician would be stupid to not promise to fleece the rich and protect the poor.  If you want the vote from the countryside, you better have a plan that can inspire the poor from the countryside.  For when you live in the largest democracy in the world, every vote counts, and often the hungriest voters are the easiest to sway.

            So, India officials experiment.  They add new programs, take over private businesses and pass out billions of dollars.  Some of these programs work, some of the businesses excel and some of the money reaches the hands of those in need.  There are success stories.  In the state of Bihar, government reps realized only a third of all girls actually went to school past the 8th grade, and their literacy rates hovered around 50%.  The solution?  Give the girls bikes - over 800,000 bikes and counting since 2006.  And it’s working.  Dropout rates plummeted, literacy rates soared and Bihar had a success story.  Other regions clamored to follow the lead, and steadily millions across the nation are overcoming the hardest hurdle of their education – getting to school. 

            A far more ambitious plan is the Mahatma Gandhi National Rural Employment Guarantee Act, a program that guarantees 100 days of work for anyone willing to apply.  You sign up, you have a job.   Like the Civilian Conservation Corps used by Roosevelt during the Great Depression, men and women build roads, dig canals, construct bridges, repair dams and plant trees - any odd job that might help their community.   Started in 2006, over 47 million households benefit from the plan, at a cost of some $9 billion to the federal government.

            Cost is just one reason this program, and hundreds of others, have come under heightened scrutiny in recent years.  Some wonder how sustainable it is to earmark close to $10 billion a year on a program that feels like it was created more for good PR than for actually improving a community.  Because the laborers are almost all unskilled, many of the projects are completed pretty shabbily, meaning the government has to hire other engineers to go back in and fix their initial mistakes. 

            But the biggest issue with all these federal and local programs is corruption.  The allocated money rarely reaches the hands of those in need.  Instead, officials line their own pockets, and the wealthy and middle class claim benefits they don’t even deserve.  You don’t have to turn too many pages in the newspaper to uncover yet another case of a politician taking a kickback or an entrepreneur stealing from the impoverished.  Programs that start off with the grandest of good intentions inevitably fall when the immorality of man steps in.  For example, some farmers are given electricity for free, and diesel and petroleum are delivered at discounted rates.  Gas that would cost $1 a gallon on the open market costs a farmer only twelve cents.  This seemed like a good idea, but the problem was, the poorest farmers don’t use electricity.  They don’t own tractors that use gas.  They dig irrigation ditches with their hands.  So the people who need the financial help don’t get it, and ironically, the corporate farms with their electrical sprinklers and army of tractors see their profits soar.  And every year, the power industry loses another $8 billion in revenue, all for a scheme that was doomed from the start.

            If it wasn’t for the fact that the corruption takes food from the mouths that most need it, the corruption could seem almost comical.  In one instance in 2012, Chief Minister Mayawati of the state of Uttar Pradesh wanted to pay tribute to the untouchables (the lowest caste in India) by building a series of national parks in their honor.  But Mayawti must have misunderstood the meaning of the words “honor” and “tribute,” instead filching millions of dollars from the program.  She had trees planted, uprooted and then planted again.  She charged millions of dollars for palm trees that her workers merely threw in a ditch and let rot.  She billed $15 million for elephant statues, yet the sculptors only got $1.5 million for their efforts (only her purse knows where the missing $13.5 million went).

            Not all the corruption occurs on such a grand scale.  Sometimes it could just mean lying about your identity and falsely collecting meals from one of the food banks.  Nearly half of all food aid money ends up in the hands of the upper class. The government has tried to curb this habit of fleecing the poor by assigning everyone a special identity card that designates their level of poverty.  This card, or even in some states a fingerprint scan, then becomes your ticket to collecting government-funded rations. 

            But even though officials know their allocated moneys have a good chance of not reaching the intended hands, they keep crafting programs that might temporarily please the poor, but almost always hinder entrepreneurs.  In 2012, the Indian parliament approved a series of retroactive taxes that hoped to punish businesses for transactions dating back to 1962.  Indiahopes this scheme will recoup over $7 billion in taxes on any merger that transpired over the last four decades.  So if back in 1997, a British cell phone company bought an Indian battery company, the government could sue them based on a new tax code created in 2012.  The US Constitution outlaws this type of ex post facto law, but the Indian representatives feel it’s a totally fair method of recovering lost revenue.  But the international community is a bit scared.  If India is allowed to tax mergers from the past, what other profits from years ago can be taxed?  This doesn’t exactly give foreigners a great deal of confidence in starting a company or making deals in India. 

            Entrepreneurs’ hands are also tied when it comes to hiring cheap labor.  When most countries go through an industrial revolution, they can count on cheap, plentiful labor to keep costs low and profits high, allowing for companies to grow and expand.  India has created a system that punishes entrepreneurs.  New business owners can’t afford to hire cheap labor, because the government is already guaranteeing jobs above market value to anyone who wants to work.  How can a guy start a company making T-shirts when nobody wants to work for him because they make more money digging ditches for the government?  India’s huge supply of labor is its biggest advantage, but India’s trying to push its economy through an industrial revolution while protecting its people.  But that’s not how countries industrialize.  Sure, when companies are getting rich, poor people suffer, but that’s what every England had to go through.  If India continues to interfere with the invisible hand of capitalism, all they’re assuring is many more decades of stalled growth and pre-industrial living conditions.

            Not only is the government obstructing growth in the private sector, it’s not exactly doing a great job in their own public sphere.  The most visible organizations operated by the Indian government are Indian Railwaysand Indian Air– both of which are dangerous, inept and constantly teetering on bankruptcy.  Air India ran out of money years ago, but the government deemed the firm too big to fail and constantly bailed it out, even giving it another $3.4 billion in 2011.  Pilots still go on strike, fuel prices still spiral out of control and airplanes still sit grounded on runways. 

            Indian Railways is an even bigger mess.  The trains are overcrowded, poorly maintained and questionably hygienic.  Six billion passengers travel the rail annually, with tens of thousands dying from one of the hundreds of accidents.  Almost 15,000 die a year just crossing the railroad tracks (since footbridges are rarely installed).  One of the crowning symbols of Indian Railways ineptitude is the dozens of bonfires that light up on the tracks whenever a train pulls out of a station.  You see, as a cost-cutting measure, Indian toilets come without plumbing; there’s merely a hole in the floor.  So, for all those that do their business while the train is stopped in station, a lovely little mound of fecal joy starts to build on the tracks.  Once the trains depart, the designated crapmen (chosen from the 1.4 million railway employees) have the fun job of walking amongst the tracks, lighting all the mounds with their torches.  Lovely.  The trains could be fixed, the footbridges could be installed and the toilets could be piped if only the rail line would raise ticket prices, but of course, in the land where no politician wants to be disliked by the masses, no one would ever willingly attach their name to a bill that would punish any struggling commuter.  So the trains will continue to crash and the poo will continue to burn.

            For awhile, prognosticators believed India’s changing demographics might prove to be the key to the “economic miracle” that jumpstarted Southeast Asia in the 1980s and 1990s.  In those countries, families stopped having children and started living longer.  When this happened, governments and families spent less money on clothes, housing and education, and started putting their money into research, infrastructure and savings accounts.  When governments didn’t have to worry about building schools and paying teachers, they could fix roads and finance engineers.  With its improved sanitation, drinking water and health care, India’s mortality rates started to drop in the 1990s, and fewer and fewer families had three-plus kids (due in part because Indian women started entering the workforce and didn’t want to have as many kids).  These smaller families could then put all of their resources into educating these fewer children, and when they reached adulthood, this next generation would have higher skills, better health, and because less of them would be graduating, they would receive higher salaries.  This worked for awhile, but it was inconsistent.  Some regions saw a drop in birth rates and an increase in life expectancy, but many of the rural regions continued to see birth rates hover in the 5-7 children range for many farming families.  This unequal demographic shift meant that the whole country didn’t move forward, just a few of the urban regions.

            And now, this demographic shift towards fewer children scares Indian planners for the same reason China and Japan are a bit nervous about their future prospects.  By 2050, 316 million Indians will be 60 years or older, and because old people and their diseases (like diabetes, cancer, heart disease and dementia) are expensive, this will be a huge drain on government resources.  Who will be paying taxes to support these elderly drains on the economy?  Will it be the 650 million people living below the poverty line?  This creates a pretty huge burden for the middle class – all they’ll have to do is come up with enough taxable income to support a billion people in need.  That’ll be interesting to see unfold.

            Initially, this demographic shift appeared to benefit the plight of women.  Indiahas long been a patriarchal society.  India was once the nation that forced its wives to jump into funeral fires if their husbands passed away.  Females were always seen as a burden; families would have to come up with crippling dowries just to get another family to take their daughters off their hands.  India’s recent economic growth hinted at a potential end to this treatment.  But alas, in the world of the two Indias, gains have been inconsistent.  Sure, millions of women graduate with a collegeeducation, move into high paying service professions, and even choose their spouses based on romantic interest and other personal preferences.  But there’s still the other India - the India where families still practice fetacide, aborting their females at a rate that bares only 933 girls for every 1000 boys born.  For the girls that survive, dowries still exist, and in recent years the tragedy of dowry deaths is becoming more common.  One girl every hour dies due to some dispute about the value of the dowry.  Some girls commit suicide under the strain of the families fighting; others are killed by the husband’s family once the money has changed hands.  Many families even look at dowries as an easy way to get rich quick – pledge to have your son marry the unattractive daughter of a wealthy family, then find a way to have the daughter reach a premature end. 

            Even women who have escaped the plight of the deadly dowries can still find themselves victims of violence and persecution.  Indiais now the second leading purchaser of guns in the world (of course the US is #1), many of which are bought by women fearing for their safety.  The number of reported sex crimes increases every year, and women who engage in any sort of public displays of affection can be targeted by the more conservative members of society.  One group known as the Shiv Shena even go as far as to destroy flowers, cards and attack any woman who appears too modern. 

            These archaic gender behaviors gained international attention in December 2012 when a young urban couple was kidnapped and assaulted after hopping on a bus.  After the male student was knocked unconscious, the 23-year-old female student was gang raped by five men, one of whom sodomized her with a lead pipe before ripping open her intestines.  These gruesome details first circulated through social media channels, stirring thousands to march in protest to the horrific incident.  The young woman died thirteen days after the incident, and the resulting firestorm of demonstrations only escalated.  Marchers not only demanded stricter penalties for rape (some even clamoring for the death penalty), but also a complete overhaul of an apathetic judicial system.  Across India, police readily dismiss any claims of female abuse and the courts can indefinitely delay cases involving sexual predators.  Local politicians only exacerbated the situation by ordering the police to open fire on the protestors, attacking them with water cannons and tear gas.  Federal politicians then added fuel to the fire by going as far as to blame the woman by saying she deserved it by being out too late, and that she could have avoided the whole messy affair had she just apologized to her assailants and called them “brother.” 

            Three months later, the rape incident clearly was not going to be forgotten.  The driver of the bus allegedly killed himself while in prison (though his family claimed he was raped and killed), a Swiss tourist was gang-raped by seven men after cycling through the forest and a three-year-old girl died after being raped in a public bathroom.  Though sexual violence against women has been an appalling reality for women for generations in IndiaHowever, all signs point to these cases of violence only increasing in the coming years as affluent, educated young adults live side-by-side with those lacking any hope for a brighter future.

            One moment India can appear one of the more advanced civilizations; the next it looks like a medieval slum existing at the lowest level of human interaction.  While India struggles to create a more equitable society where not only a select few benefit from the trappings of wealth, the nation also must contend with an increasing number of regional threats.

            Foremost among these threats is their neighbor to the north – Pakistan  Since 1947, when Britain removed itself from South Asia, creating the independent nations of Pakistan and Indiaregion.  Kashmir is the Yosemite National Park of the Asia – crystal clear lakes, flowered forests and majestic Himalayan peaks.  In 1947, the region was majority Muslim with a Hindu leader.  Because the British mandated popular sovereignty (each state could choose which nation they joined), both Pakistan and India felt they had the best shot for retaining Kashmir.  Eventually, the Hindu leader chose to join India, and ever since, the Muslim majority has fought to reverse this decision both diplomatically and militarily. 

            Sometimes these struggles are merely played out through rhetoric in the local media or in public demonstrations, but since the late 1990s, local freedom fighters have begun targeting Hindu officials and communities, and some even claim the Kashmir region became a training ground for Al Qaeda, the militant terrorist group responsible for the September 11th bombings of the United States.  India has considered using military force to squash the insurgency and punish the Pakistanis for sending moral and material support to the Kashmir insurgents, but war has always been averted.  One of the benefits of both sides holding nuclear bombs is that both sides are hesitant to pull the trigger and use their full military capability, knowing any war could end in nuclear annihilation.  So what ends up happening is a lot of back and forth name-calling and posturing, but both sides are wary of crossing the military line.  In 2002, weeks after a group of Pakistani-supported terrorists bombed the Indian Parliament, both nations mobilized their troops to the disputed border area – 500,000 Indian troops moved to within miles of 300,000 Pakistani troops.  But after the men had been lined up and the artillery had been set up within striking distance, both sides agreed to stand down.  The risks were just not worth intervention. 

            Since that conflict, militant groups have survived in KashmirIn early 2013, when the Indian government carried out the execution of a man tied to the 2003 planned attack on IndiaOne of the militant organizations, the Hizbul Mujahedeen, then attacked an Indian camp, killing five soldiers.  The Indian government responded with restrictive curfews, keeping the Kashmiri people off the streets for their own safety.  Just when it appeared tensions had cooled, it became quite obvious that the conflict over control of Kashmir has been anything but settled.

            Though India has proven willing and able to intervene with force, they have tried to increasingly employ “soft power” – a geopolitical strategy where India will continue to invest heavily in the latest in weaponry and military training, but will never actually use their force unless attacked.  They want to look big and intimidating, but they don’t want to have to actually use their forces.  Ever since the embarrassing 1962 border conflict war with China, India has been rightfully gun shy, almost always blinking first when faced with regional threats.  They don’t see their path to regional prominence needing a pre-emptive military ideology, instead relying on trade agreements that will link all the regions. The nation founded by the pacifist Gandhi continues to seek to resolve its conflicts without bloodshed.  And it seems to be working.  Even with precarious Pakistan, trade seems to be the key to peace.  In recent years, borders have been opened and daily Indian truckloads of almonds, oranges and sandals are offloaded in Pakistan, and their cargo trailers are replaced with shipments of onions, chiles and potatoes.  No money changes hands – just one trailer is replaced with another trailer.  This isn’t exactly free trade, but it’s a start.  For two nations struggling to recover from the economic downturn following the 2008 recession, this 21st century version of bartering is a step in the right direction.

            Unfortunately, creating trade partnerships and stockpiling weapons won’t deter all of India’s regional threats.  India must also deal with an upswing in terrorist activity and insurgent movements, many of which are led by a Muslim population believing it has been marginalized by a Hindu-dominated government.  Though Muslims represent 13% of India’s population, they fill less than 3% of all security, bureaucratic and upper echelon civil jobs.  Muslims have become almost a fifth caste – one that is the least educated, the least supported and the least employed.  This perception of inequality, as well as India’s growing acceptance of Western notions of beauty, behavior and entertainment, has inspired a younger generation of militants to demand change through overt action.  The 2008 Mumbai hotel attacks that led to the deaths of 164 people could become more commonplace if the federal government doesn’t create a more effective method of combating home-grown and foreign-sponsored terrorism.  Following these 2008 attacks, the federal government failed to immediately react, due in large part to the autonomy it grants every state.  Without a coordinated effort to combat terrorism across the entire nation, the states will be ill-prepared to mount a comprehensive campaign to monitor and diffuse radical forces.

            But as much as India has so much to fear, it also has so much to hope for, because its potential is limitless.  It’s located in the center of Asia, the perfect conduit for all trade going from Asia to Africa and Europe.  It has top-notch universities that annually graduate tens of thousands of scientists and engineers.  It has a huge middle class that will only continue to grow (and continue to buy).  It has the largest democracy in the world with 714 million citizens casting votes every election.  It has an economy that might be slowing, but it’s still growing faster than most of industrialized nations and could, in a few decades, become the world’s fourth largest economy.

            India has a ton of potential, but what its people do with this potential has yet to be seen.  Will it find a way to move forward, delicately balancing the needs of the masses with the needs of the entrepreneurs?  Or will it remain “two Indias” – one of affluence, one of abject poverty.  Over 1.2 billion people are waiting to find out.

            But that is for another chapter.