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| Book in Review: A Kind of Absence - Joao da Veiga Coutinho|
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by Charles Wheelan, Ph.D. Wednesday,
January 4, 2006 I spent
two weeks last month in India, one of the most fascinating places on the planet.
Where else can you stroll through the gleaming high-tech Bangalore campus of
Infosys only hours after getting stuck in a traffic jam on a major highway
caused by a collision between a tractor and an ox cart? So far, India has attracted mainstream
attention mostly as the place where the guy booking your airline ticket -- or
transcribing your medical records or even preparing your taxes -- happens to be
sitting. That's true enough. But India is far more than a telemarketing
curiosity, and "outsourcing" is only a tiny piece of the economic transformation
going on there. Having
grown at roughly 6 percent a year for the past decade with the potential to do
even better, India is likely to be one of the most important economic stories of
the next decade. America
has a huge stake in that success -- even as some jobs migrate across the Indian
Ocean. Indeed, here are four reasons we should hope that the next decade in
India is at least as good as the last decade has been. 1. Because it's the world's largest
democracy. If we're going to promote democracy
around the globe, particularly as a solution for what ails the Middle East, then
we ought to wish success upon the world's largest and most vibrant democracy.
India has a billion people, 22 official languages, and so many ethnicities that
everyone is a minority. If democracy can work here, it can work anywhere.
And it is working. Indians vote in far higher numbers than
Americans, even when it means trekking for hours to the closest polling place.
India's government is plodding, fractious, and permeated by corruption. But it
has also brought stability, the rule of law, and respect for individual rights
to a place that looks ungovernable on the surface. And did I mention that India
has the world's third largest Muslim population? 2. Because it's where a large
proportion of the world's poor live. If you don't
care about starving people, then skip to number three. If you do, then India
matters a lot. It's just basic math; roughly a third of
the world's poor live in India. Robust economic growth will help these people
far more than any check you might mail to one of those places that sends you
free return address labels. It's already started.
India's growth over the past several decades has lifted some 100 million people
out of dire poverty. 3.
Because a richer India will make for a richer America. How can a place that "competes" with American companies and replaces
American workers make us better off by growing wealthier? First, a growing Indian middle class will buy our products. The
guy in Bangalore who answers questions about your Dell computer probably drinks
Coke, uses Microsoft Word, and reads my column on Yahoo! Finance. (Okay, I can't
prove that last one, but you get the point.) It doesn't matter what business
you're in, having 300 million new middle class consumers in India is good for
you. Second, Indian firms will design and sell
products that make our lives better. That's what happens when you unleash new
human potential. Imagine the following scenario: Your child has just been
diagnosed with a rare form of leukemia. The doctor sits you down and says, "I
have good news and bad news. The good news is that the disease can now be
treated successfully. The bad news is that the treatment was discovered by an
Indian scientist, and the drugs are produced by a leading Indian pharmaceutical
company." Actually, that's not really bad news, is it? Third, at a minimum, Indian competition and outsourcing by
American companies will lower the cost and improve the quality of all kinds of
goods and services. Do you remember the crap that Detroit produced before Honda
and Toyota became serious players in the American market? (True, Detroit still
produces a shocking amount of crap, but now we don't have to buy it, as GM
shareholders and bondholders have learned.) Cheaper
imports from places like India or China are just like a tax cut; there is more
money left in your wallet at the end of the month. And they create American
jobs, too, which is less intuitive and therefore often overlooked. If you save
money on cheaper cotton towels, much of that extra cash is likely to be spent on
American goods and services. A Canadian trade minister made this point to me
once when he asked
