Saturday, May 28, 2011

Indian and USA politics-more simillar than different?

When Obama's dream campaign catapulted him into the White House, the USA basked in the glory of electing its first Black President, and questions were raised whether this would have been possible in another country,. The 2004 Bush election fiasco in Florida was papered over, and other democracies seemed guilty of cronyism etc. But now, Indian politics do seem to resemble USA politics in more ways than one
  1. Top politicians's eligibility questioned:- The 'birther' issue in the USA(arguing that Obama is NOT a natural born USA citizen and so ineligible for President's office) resembles the debate in India about Sonia Gandhi's Indian citizenship, which peaked in May-04 when she could have become Prime Minister, but died down after that. Still, peruse any online political forum and this issue hits.
  2. Figurehead leaders:-The USA President's success story in 2009 apart, 2010 onwards has been a logjam in terms of laws, reforms, election results etc. Similar for our Indian Prime Minister who got a nominated backdoor entry into Parliament, and is not perceived as having influence. This was apparent in the recent telecom 2G scam, when corrupt coalition ministers were not sacked in the interest of keeping together the  coalition
  3. Crony Capitalism:- This has been a well honored tradition in the USA with Congressmen openly lobbying for projects for their own constituencies and encouraging unnecessary ''pork barreled' spending. They also derive personal benefits from lobbyists and the companies they represent. While the Indian side was exposed in the Radia tapes(of a lobbyist chatting with her clients of replacing ministers, altering policies etc), it has died down. 
  4. Faith driven politics in large areas:-In the Bible Belt of the USA, aspiring candidates must steer clear of the 3 landmines(Guns, God, Gays) if they desire election. Similarly, in Indian states like Kerala, North East(Christian Church advisory), Western UP, Bihar(where mullah support helps) and in UP/Maharashtra/Punjab(where certain religious sects dominate); faith issues are critical for candidates seeking election
  5. Revolving door between public/private sector:- Many Indian politicians own flourishing business empires(Navin Jindal-Steel; Reddy brothers-Steel; Vijay Mallaya-alcohol etc), and can at times as ministers shape the policies to suit them. This allows an exit option when the political fortunes change. In the USA, this happens in terms of cushy jobs post electoral defeats/return to private legal practice(true for India too). 
  6. Affirmative action angst:- This had not impaired Obama's campaign that much, but it is still used by rabble rouses to whip up fear among voters(WASPs) of being displaced. In India, post the extension of reservations(from 22.5% since independence to 49.5% in 2004-further action not taken only because the top legal court in India has capped it at 50%), the Congress did lose many 'upper caste' votes. 
 This post does not aim to rant on politics but hopes to spark off that hesitation before damming Indian politics as corrupt compared to other nations.

Saturday, May 7, 2011

Will Singapore become another Dubai?

Someone reading this title may think I am crazy-how can I compare a robust economy with one that was(and still is) quite shaky? But scratch the surface and there are more similarities than differences.
  1. Natural resources:- Both do not have significant natural resources(Dubai does NOT have oil, while Singapore needs to import most of its stuff from ASEAN countries/Australia/China). This makes them sensitive to global inflationary trends. 
  2. Politics:- Though Dubai is an autocratic state(Al Makhthum), Singapore is on the way there given that since independence, a single political party(PAP) has hogged 90%+ seats in Parliament. Though the 2011 elections( results were declared today) were the most contested in history with opposition standing in 82/87 seats, they managed to win just 6 seats(compared to 1 in the earlier 2006 elections). While this is a big step forward for the opposition-them winning a GRC(5 MP constituency) and unseating the foreign minister, the future does not augur well for dissent. To be fair though, the reason they have maintained power all this will is also because of the efficient functioning-with just 15% peak tax(till recently), Singapore public services are one of the most efficient globally. 
  3. Restrictions on citizenship/land ownership: Expats get citizenship with difficulty, and are rarely permitted to buy landed properties. The Govt owns all the land allowing just 99year leases. I agree that this is not unique to Singapore/Dubai, but then these restrictions do not encourage expats to invest in Singapore. 
  4. Heavy dependence on expats: As a perusal of the election manifestos shows, Singaporeans are feeling that expats are displacing them from their rightful place in the $100K/yr+ jobs in banking/finance. This is due to many factors(too long to list here) but then it does hit the educated youth hard when they find they are not getting the top jobs in the finance space. Even in other sectors, construction/healthcare etc, the lower rung jobs are also being taken away by Malaysians/Indians/Chinese etc. And now, citizens are asking whether this is necessary.
  5. Going away from core competencies:-Both Dubai and Singapore leveraged their maritime location well to build industries around shipping like ports, refineries, logistics etc, then inviting companies to set up their regional hubs their(Middle East/North Africa hubs from Dubai; South East Asia hub from Singapore). But now, both cities are focusing more on paper wealth created by the banking/finance/services space, and this has induced more volatility.
  6. Entitlement mentality:-As the ruling PAP pointed out often, Singaporeans are getting used to being coddled and expect the Govt to take care of them. This factor is already creating some unrest in Dubai, and may do so in Singapore too later.
 Let me clarify that I have the deepest admiration and respect for what Singapore and its Govt has achieved-creating a world class economy from a marshy swamp. But the way things are going, the parallels to Dubai seemed too close for comfort.

Wednesday, May 4, 2011

Why India's jugaad still trumps technology elsewhere

Tons of paper(and TBs online) have been spent(wasted?) on the topic of that typical Indian inventiveness called 'jugaad' so I shall not repeat the good old platitudes about how jugaad is good...but it has not produced an Apple/Amazon/Facebook. Instead, I put the case that such false comparisons of jugaad with world class infrastructure abroad, is misplaced.
  1. India's heterogeneity and size make systems design difficult:One may long for the luxury of Singapore MRT, London Metro, Tokyo trains etc but the fact remains that in a small high income place, one can ensure good connectivity(as the AC bus connectivity in Mumbai/Bangalore attest to), but those breakdown under population overload too, as the recent MRT expansion in Singapore is happening to adjust to the influx of foreign workers
  2. There is just copying/improvising for lack of resources no real invention:- Correct, but this misses the point that Indian innovation is just focussed in different field. As the high number of Indian structurers, traders, accountants and tax experts go, Indians can find loopholes in most things, because of their practice of navigating India's labyrinth like and illogical tax system. Also, building companies like Reliance, Educomp is not a joke-and those companies are built around quantum jumps while using what we have. 
  3.  More useful for the contemporary world:- When the famed high rollers of the corporate world(investment banks) mention cost cutting prominently in their annual reports/plans, you know that the world HAS changed. And in this, those used to improvising their own tools/methods in resource crunched environments would be likelier to succeed. 
  4. Technology is about how to USE a tool not really about making one:-In the field of finding new applications for existing tools, I believe Indians are up there with the rest.
This post may sound a bit(ok..very!) emotional but this hopefully adds some facets to the huge literature out there.