Coconutization

Source: TW

Outline (द्रष्टुं नोद्यम्)

Lecture to “Prasthutha”, student group at IISc on 07 March 2006

  • Is India Really Shining?
  • Country
  • 2004 GDP
  • Year
  • GDP
  • India Versus China
  • The World May Be Flat, But India Isn’t Flat
  • Internal Colonization
  • Globalization Versus Coconut-ization
  • Be Indian, not a Coconut

The World May Be Flat, but India Isn’t Flat
Or
Globalization is not the Same as Coconut-ization

M. Vidyasagar
Executive Vice President
Tata Consultancy Services

Introduction

Good evening friends. I must confess that I had not heard of your group until Mr.

Prashant Potnis sent me an email inviting me address you. I asked him what Prasthutha was, and his description was as follows:

“Prasthutha is a students forum of Indian Institute of Science, Bangalore, motivated by nationalism as construed by our venerable heritage that is time immemorial. It aims at organizing programs that help in promoting nationalistic thinking amongst the scientific community.”

OK, I said to myself, why not? I suppose I can describe myself as being “motivated by nationalism” and I myself probably appear to you young people as dating from “time immemorial.” So I am eminently qualified to talk to you.

The topic I chose is one that has been constantly on my mind for the past couple of years.

As India becomes more and more prosperous, I find that I myself have virtually nothing in common with the India that I see around me. At any rate, I have nothing in common with the “urban elite” that now infests most of the software industry and other allegedly

“successful” forms of life. Since you are all still young and thus presumably impressionable, I thought that an old man like me, with some amount of success behind him (yes, even when measured purely in monetary terms), may be able to share his prejudices with you.

Is India Really Shining?

Let me begin by addressing the question: *Is India really shining? * To their everlasting dismay, the erstwhile NDA government chose this slogan and promptly managed to lose the next election. That has, regrettably, made the *slogan * disreputable, but it should not be so. I will try to show you that, by any reasonable criterion, *India really is shining. *

I am giving below several facts and figures culled from various sources. These figures are not all internally consistent, and if I were an economist I would be trying to reconcile all of these figures. But since my only purpose here is to project *a trend, * these minor inconsistencies are not important.

India’s GDP in PPP terms in 2004 is estimated at $ 3,319 billion in PPP terms. Source:

http://www.cia.gov/cia/publications/factbook/geos/in.html

India’s per capita GDP in PPP terms in 2004 is estimated at $ 3,100. Source:

http://www.cia.gov/cia/publications/factbook/geos/in.html

India ranks fourth in the world in PPP terms in 2004. The complete table is shown in:

http://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html. The name is misleading. The ranks are for 2004, though the URL talks about 2001rank.

The first fifteen entries in the table are reproduced below.

Country 2004 GDP (PPP in $ Bn)

USA 11,650
China 7,262
Japan 3,745
India 3,319
Germany 2,362
United Kingdom 1,782
France 1,737
Italy 1,609
Brazil 1,492
Russia 1,408
Canada 1,023
Mexico 1,006
Spain 937
South Korea 925
Indonesia 827

The rate of growth of the Indian economy in PPP terms is shown below. Source:

http://www.indexmundi.com/g/g.aspx?c=in&v=65

Year GDP (PPP, $ Bn)
1999 1,805
2000 2,200
2001 ?????
2002 2,600
2003 3,022
2004 3,319

From the above table it can be seen that the Indian economy grew by 83.87% in PPP

terms in just five years. Given that the population grew by less than 8% in these same five years (1.6% per year), this represents a per capita increase of more than 70% in PPP

terms in five years. Now it can be seen why everyone is salivating at the growth of the Indian economy, especially the much vaunted growth of its middle class and the increase in purchasing power.

The CAGR (compounded annual growth rate) in India’s PPP GDP is roughly 15 – 16%.

We are accustomed to reading about the Indian economy growing at 6 – 7% per annum.

So how can we explain the difference between the two figures?

First of all, the GDP growth rate is always computed on an *inflation-adjusted * basis. So if the GDP growth rate is 7%, and inflation is 5%, then the unadjusted growth will be 12%.

Second, there will always be minor adjustments in the PPP factor itself. In 1998, the World Bank’s PPP factor for India was about 4.7. See

http://www.worldbank.org/depweb/english/modules/economic/gnp/datanot.html

The World Bank’s definition of PPP is now challenged by many economists, and probably the most widely accepted definition is work done by economists at the University of Pennsylvania. See

http://pwt.econ.upenn.edu/php_site/pwt61_form.php

We can get a quick estimate of the current PPP factor for India. India’s unadjusted GDP

was estimated at $ 650 Billion in 2004. Source:

http://www.thehindubusinessline.com/2004/01/24/stories/2004012400690400.htm

Since the PPP figure is $ 3,319, this suggests that the PPP factor is now about 5.1.

Assuming that the factor has gone up from 4.7 to 5.1 during the past five years, this will contribute an additional 2% per year. Finally, the appreciation of the Rupee against the dollar will also contribute another 1 or 2% per year.

Just one last point. If the Indian economy keeps growing at 7 – 8% and Japan’s grows at 1.2% (which is the current rate), then within two years India will overtake Japan as the world’s third largest economy in PPP terms.

The rise of the Indian economy has *finally * grabbed the attention of the world’s industry.

To cite just one example, India will add *fifty million cell phones * this year. India is now the fastest growing market for telecom in the world. Simultaneously, we have also managed to achieve *the lowest telecom rates in the world. * We can all remember the bad old days when making even an STD call (never mind an ISD call) was something to think about twice. Just a few days ago we finally ushered in the “India One” scheme whereby we can call *anywhere in India * for just one Rupee per minute.

India Versus China

We Indians always seem to have an inferiority complex vis-à-vis just about everyone in this world. The “white man complex” is quite familiar at least to people of my generation. Nowadays we seek masochistic pleasure in comparing ourselves against China (always unfavourably, of course). While there is no disputing the tremendous progress made by China, a few points may be worth mentioning. First of all, many people are now beginning to ask whether China makes the best use of capital. If indeed China attracts $ 50 billion of FDI (Foreign Direct Investment) per year and shows 10% growth, while India shows an 8% growth with an FDI of just $ 5 billion, isn’t India making better use of its money? People are also now beginning to ask about return on *investment. * What have all those billions fetched in return?

There is a wonderful article that I recommend to all of you. It is entitled: “FDI May Be Harmful to Growth” and it is by R. Vaidyanathan. Source:

http://www.thehindubusinessline.com/2006/02/09/stories/2006020900161000.htm

Vaidyanathan says that the top-down, government-led growth of China has virtually stifled what little entrepreneurism the Chinese people may have had. He says “Made in China is not the same as Made by China.” All the manufacturing know-how had to be imported into China, along with the capital to make it happen. In contrast, there is a very strong entrepreneurial spirit among Indians that allows them to grow *in spite * of their government. In short, practically everything that impresses us about China is actually attributable to the Chinese government. Similarly all that dismays us about India, be it the slum-like airports, the poor to non-existent roads, crumbling education system, etc., are all attributable to Indian governments at various levels. But if one were to examine the *people * and *their * contribution to growth, the picture is entirely different.

A look at the stock market indices, which are a reflection of *return on investment, * bear this out. The BSE Sensex just went through 10,000 apparently for good. The Sensex was at 4,500 just after the UPA government was elected. So the Sensex has more than doubled in 24 months. In contrast, the Shanghai stock exchange index has lost 50% of its *value * during the past five years. As Vaidhyanathan says “This sharp decline occurred when the GDP was growing at 9 per cent a year. It is difficult to find another country that displays this strange combination of excellent macroeconomic performance and dismal microeconomic performance.”

Even the reduction in poverty claimed by China is subject to doubt. The United Nations defines the poverty line as $ 1 per day per person. According to this measure, about 23% of Indians are poor. In contrast, China claims that only 10% of its people are poor, *but * its definition of a poor person is someone who earns $ 70 per year, not $ 365 per year.

Source: http://www.guardian.co.uk/china/story/0,7369,1225686,00.html

See right at the end of this article. As with so many statistics about China, the devil is in the fine print which usually reveals that the definitions don’t conform to accepted world norms. (This is true of FDI figures also, by the way.)

Talking about poverty in India, I am also baffled how a family of four that lives on Rs.

5,400 per month, especially in a village, can be considered “poor.” But I guess “One dollar per day” has a nice ring to it, and no one is willing to think in terms of changing the definition.

So in summary, let us by all means admire and emulate the Chinese. But we need not go around with a misplaced inferiority complex.

The World May Be Flat, But India Isn’t Flat

To balance all this good news, let us look at *per capita * figures. Then the picture is decidedly not rosy.

India’s per capita GDP in PPP terms in 2004 was $ 3,080, which ranks No. 128 in the world. Source:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

For comparison purposes, China’s figure of $ 5,642 ranks No. 97, and Pakistan’s figure of $ 2,388 ranks No. 135. (The source is the same as above.) If we take out the PPP factor and look at the “raw” rank, the picture is not much different.

India’s per capita GDP of $ 620 in 2004 places it at No. 129 in the world. (But curiously, the same source shows India’s 2004 per capita GDP at $ 540, which means that between 2003 and 2004 the per capita GDP went up by nearly 15% in inflated currency!) Source:

http://www.finfacts.com/biz10/globalworldincomepercapita.htm

Thomas Friedman coined the title “The World is Flat” to describe why outsourcing is inevitable, and why work will get done where it can be done most efficiently and economically. Unfortunately, I say *“The world may be flat, but India isn’t flat.” *

Why are the Internet revolution, the boom in call centers and BPO, and all the attendant prosperity, all limited to the top ten cities in India? Why aren’t Mangalore and Mysore taking away at least the call center jobs from Bangalore, just as Bangalore took away jobs from the USA? The answer is not far to seek: Because the broadband revolution never *went beyond the metros. *

Internal Colonization

I have coined a name for all this. I call it “internal colonization.” In earlier years we were colonized by the British, who made no bones about the fact that their main aim was to plunder India and to transfer the wealth to Britain. (As an aside, when old-timers talk about how Britain built up India’s infrastructure, I like to point out that there was nothing altruistic about it. Railways were built to transport raw material more efficiently to Britain. Anyway, had we been masters of our own fate, wouldn’t we have built our own railways?) Now the external colonizers have been replaced by internal colonizers, namely the “Indian elite.” These are the people who advocate the promotion of schooling in vernacular languages for the masses, while sending their own children to English medium schools. These are the people who decide that someone who speaks with a convent-educated accent is “polished,” whereas someone with a down home accent like myself is “unpolished.”

I grew up in the small town of Tirupati, not far from Bangalore. In 1993 I went back to my old school, the Sri Venkateswara High School run by the TTD, as the Chief Guest of their Annual Day. What I found shocked me. In my section of 40 kids, eleven of us became doctors, and of course at least one Ph.D., namely me. Today those kids attending *S. V. High School have no chance! * We have ensured that, while we mouth all manner of platitudes like “aam aadmi ko kya mila?” all the choice jobs remain open only to the urban elite. In fact the situation is getting worse, not better.

“Internal colonization” is much more difficult both to spot and to fight, because the colonizers look just like us. It is like a science fiction movie where the earth is taken over by aliens who look and talk exactly like earthlings. But if we are to have any kind of future, we *must * restore the opportunities to dwellers of small towns and villages. It is a myth that small town boys and girls had no chance in earlier years, whereas now they do, thanks to the spread of the Internet. The reality is that in earlier years many persons from villages (not even towns) made it big. Some examples are Mr. K. J. Rao, the Advisor to the Election Commission, Mr. Srini Raju of Satyam and now I-Labs, and my own father who passed away just a couple of weeks ago (which is why I look the way I do). But now they have no chance, and that is a pity.

Globalization Versus Coconut-ization

This brings me to my next topic, namely: What does globalization mean? What is a globalized Indian?

To put it very bluntly and unmistakably, I am simply appalled by what passes for a

“global culture” in today’s urban India. All of the “globalized” role models that our popular media puts up are what I like to call coconuts – brown on the outside but white on the inside. These persons *cannot be our role models. * If they are, we are definitely on the road to ruin.

To many in the mass media, a “globalized Indian” seems to mean someone who is barely identifiable as an Indian, either in dress, or speech, or most important, *in attitude. * Well, my own definition is that a “globalized Indian” is someone who can function effectively in any part of the globe. It is *not * necessary to stop “being Indian” to “be global.”

Do you see the Chinese, or the Japanese stop being true to their own traditions or culture just to curry favour with Westerners? Why on earth do we Indians feel the need to so?

I have a working hypothesis for why today’s urbanized youngsters, rather paradoxically, are *far more ashamed * to be seen as “Indian” compared to people of my own generation.

My theory is that the shame stems from *their not knowing any language besides English. *

We Indians often like to boast that our knowledge of English gives us an edge in the information age. And indeed, I really do believe that everyone in India should learn English. But think of how India appears to *someone who knows only English. * We like to boast about our five thousand year-old history and culture. How does a person who knows *only English * tap into this five thousand year-old culture? By reading Amar Chitra *Katha? * A person who knows only English is bombarded, day in and day out, with material that portrays India very negatively (and this is true even today, by the way, notwithstanding a few articles here and there). So they build up a defence mechanism whereby they disown everything about their country, or go around constantly apologizing for every shortcoming of India, real or imagined.

Can we imagine a Chinese person not knowing the Chinese language, or a Japanese, or a German, or a Frenchman? But here in India our *entire ruling class, * meaning the decision-makers and the opinion-makers, consists of persons who are cut off from the masses. Is it any wonder that self-flagellation becomes the order of the day for our so-called “intellectuals”?

When I was growing up in Tirupati, we had a wonderful system of education. All the cultural subjects were taught in Telugu, while all the science subjects were taught in

English. Somewhere along the way we lost this formula. Nowadays in a Telugu medium school, even science is taught in Telugu, using fantastic translations and atrociously written textbooks, and finally producing persons who cannot be employed as teachers beyond the borders of the state. In short they are confined to a linguistic ghetto. But I *don’t * believe this is an accident, but is a carefully planned part of the “internal colonization” that I spoke of earlier.

The Harmful Effects of American Pop Culture – On America!

Too many people seem to think that “being global” means emulating the American pop culture. I cannot think of anything that has caused more harm around the world than American pop culture. But do you know what? Which country do you think has suffered the most from the infusion of American pop culture? In my view, the answer is –

America!

When I first went to the United States as a high school student back in 1960, the Americans were almost exactly like us Indians. Divorce was practically unheard of, parents put the welfare of the family ahead of their own career advancement, husbands and wives *didn’t * have separate bank accounts, and so on. The hippie culture that started in San Francisco in the 1960’s made selfishness acceptable as a way of life. Today you hear Americans mouthing platitudes such as “You gotta to do what’s best for *you. *” I like to describe it as “selfishness without guilt.” And believe me, the Americans have paid a steep price for adopting it.

How do you think that a country that was so far ahead of the rest of the world fifty years ago has allowed the rest of the world to close the gap? If American teenagers are more worried about how well they score with the opposite sex than with how well they score on exams, do you think such a society has any kind of a future?

But we Indians should be careful before we start gloating. *Are we any better? * Today I see the same shallowness and naked self-indulgence in places like Bangalore. When America started its fall, it was the number one country in the world. It is *still * the number one country in the world, though the gap between number two is shrinking. But as I pointed out earlier, India is today number 125 in the world. Where will we wind up if we start falling from here?

Be Indian, not a Coconut

You have to remember one thing. You will always be viewed as an Indian no matter how much gum you chew or how many girls/boys you sleep with or how much skin you manage to expose. Remember also that if you don’t respect yourself, no one else will either. If we Indians have been able to safeguard our culture for five thousand years in spite of innumerable invasions, it is because we held on fast to some values. Those values are just as relevant today as they were earlier. If Khusboo says that there is no need to retain one’s virginity until marriage, I ask, then what is marriage all about?

(Important note: This applies equally to both boys and girls.) When a low-ranked tennis player like Sania Mirza starts pontificating about societal matters and values, I feel like telling her, please improve your tennis ranking before telling the rest of us how to run our

lives. She reminds me of Anna Kournikova – someone who is better known for being a model than a tennis player. At least Kournikova made it to the semifinals of Wimbledon once or twice before fading away. What is Sania’s achievement – a rank of No. 32 in the world?

We are surrounded by mediocrity in India, and we are bombarded by tabloids that try to portray mediocrity as achievement. *This * is the principal contribution of the information revolution to India, not distance education or equalizing opportunities between cities and villages. There was a time when we used to treat poor people with compassion and dignity. I very much fear that those days are behind us. Today all of us seem to think that, just because we make a few extra Rupees, we are somehow far superior to our fellow human beings. I am not at all fooled by all the “pro poor” programs constantly trotted out by various political parties, especially those in power at present. All of these

“poverty alleviation” programs are meant only to alleviate the poverty of the politicians, and not of the people. There was a time when we used to respect scholars for their scholarship. I see that also reducing.

Is There Any Hope?

First of all let me say that I am *deeply suspicious * of “celebrities.” I find that, with so many news channels and so many hours of dead air time to be filled up, just about anybody can become a celebrity, especially if he/she is sufficiently good-looking and is willing to stick to a sufficiently simple-minded script. To me the real heroes are people who are simply going about doing their jobs as best as they can, and thus become role *models for excellence, * something that is in grave short supply in our society, which as I said above, is too easily contented with mediocrity.

I can of course mention some great persons like our beloved President Dr. Abdul Kalam.

It was my privilege to observe him at very close quarters for eleven years, and to have him as my direct boss for eight years. You may like to read my personal reminiscences about him at

http://www.atc.tcs.co.in/~sagar/kalam1.html

There are other persons like my current super boss, Mr. Ratan Tata, who always manages to project a quiet pride in being Indian. But it is a sad reflection of the current state of affairs that both of these role models are seventy years old. In order to inspire you young persons, I was trying to find some younger role models, and I could think of a few.

So who are the heroes that I can suggest? Since I am engineer, so are my examples. I can think of Prof. Ashok Jhunjhunwala of IIT Madras, who has doggedly pursued the idea of making telephony affordable for everyone, especially in rural areas. There was a time when Ashok used to go around talking about 100 million telephones for India.

Nowadays he talks about 250 million phone connections, since we will cross 100 million next year. God for him! Another example is Prof. Manindra Agrawal of IIT Kanpur, who became instantly famous for proving that primality can be tested in polynomial time.

(The pitfalls of the celebrity culture – he was an outstanding researcher ever before that!) Manindra was a topper from IIT Kanpur who could have emigrated like so many of his classmates. But he chose to stay and work in India. People often overlook the fact that the “famous” paper written by Manindra had two other co-authors: both Ph.D. students at

IIT Kanpur. So Manindra not only did excellent work himself, but also inspired those around him.

I struggled to find some *youngster * whom I can hold up as a role model, and I can think of only V. V. S. Laxman. He is a man of great accomplishment – in fact he is “very very special” as the saying goes. I know him personally because he is distantly related to my wife. But don’t you find it curious that while all manner of third-rate cricketers are already raking in the big bucks through endorsements, a person like Laxman who lets his bat do the talking is conspicuous by his absence? I also have the impression, based on what I see on TV, that Anil Kumble and Rahul Dravid are also ideal role models, combining modesty with excellence. But I don’t know them personally.

I am not saying by any means that there *aren’t * idealistic youngsters today. But I am saying that they get drowned out by the cacophony of mediocrities.

Conclusion

So the bottom line is this: You people claim to be “motivated by nationalism.” If so, then *please reclaim the nation from those trying to destroy it. * This consists of not just the politicians but also, and even especially, the “intellectuals” who have nothing good to say about India. Be proudly Indian. That is my advice to all of you.

God bless you all.