NY Times
Op-Ed Contributor
The Myth of the New India
By PANKAJ MISHRA
Published: July 6, 2006
London
INDIA is a roaring capitalist success story." So says the latest issue
of Foreign Affairs; and last week many leading business executives and
politicians in India celebrated as Lakshmi Mittal, the fifth richest
man in the world, finally succeeded in his hostile takeover of the
Luxembourgian steel company Arcelor. India’s leading business
newspaper, The Economic Times, summed up the general euphoria over the
event in its regular feature, ** “The Global Indian Takeover”: ** 
“For India,
it is a harbinger of things to come - economic superstardom.”
This sounds persuasive as long as you don’t know that Mr. Mittal, who
lives in Britain, announced his first investment in India only last
year. ** He is as much an Indian success story as Sergey Brin, the
Russian-born co-founder of Google, ** is proof of Russia’s imminent
economic superstardom.
In recent weeks, India seemed an unlikely capitalist success story as
communist parties decisively won elections to state legislatures, and
the stock market, which had enjoyed record growth in the last two
years, fell nearly 20 percent in two weeks, wiping out some $2.4
billion in investor wealth in just four days. ** This week India’s prime
minister, Manmohan Singh, made it clear that only a small minority of
Indians will enjoy “Western standards of living and high consumption.” **
There is, however, no denying many Indians their conviction that the
21st century will be the Indian Century just as the 20th was American.
The exuberant self-confidence of a tiny Indian elite now increasingly
infects the news media and foreign policy establishment in the United
States.
Encouraged by a powerful lobby of rich Indian-Americans who seek to
expand their political influence within both their home and adopted
countries, President Bush recently agreed to assist India’s nuclear
program, even at the risk of undermining his efforts to check the
nuclear ambitions of Iran. As if on cue, special reports and covers
hailing the rise of India in Time, Foreign Affairs and The Economist
have appeared in the last month.
** It was not so long ago that India appeared in the American press as a
poor, backward and often violent nation, saddled with an inefficient
bureaucracy and, though officially nonaligned, friendly to the Soviet
Union. Suddenly the country seems to be not only a “roaring capitalist
success story” but also, according to Foreign Affairs, an “emerging
strategic partner of the United States.” To what extent is this wishful
thinking rather than an accurate estimate of India’s strengths?
Looking for new friends and partners in a rapidly changing world, the
Bush administration clearly hopes that India, a fellow democracy, will
be a reliable counterweight against China as well as Iran. ** But trade
and cooperation between India and China is growing; and, though
grateful for American generosity on the nuclear issue, India is too
dependent on Iran for oil (it is also exploring developing a gas
pipeline to Iran) to wholeheartedly support the United States in its
efforts to prevent the Islamic Republic from acquiring a nuclear
weapon. The world, more interdependent now than during the cold war,
may no longer be divided up into strategic blocs and alliances.
Nevertheless, there are much better reasons to expect that India will
in fact vindicate the twin American ideals of free markets and
democracy that neither Latin America nor post-communist countries -
nor, indeed, Iraq - have fulfilled.
Since the early 1990’s, when the Indian economy was liberalized, India
has emerged as the world leader in information technology and business
outsourcing, with an average growth of about 6 percent a year. Growing
foreign investment and easy credit have fueled a consumer revolution in
urban areas. With their Starbucks-style coffee bars,
Blackberry-wielding young professionals, and shopping malls selling
luxury brand names, large parts of Indian cities strive to resemble
Manhattan.
Indian business tycoons are increasingly trying to control marquee
names like Taittinger Champagne and the Carlyle Hotel in New York.
“India Everywhere” was the slogan of the Indian business leaders at the
World Economic Forum in Davos, Switzerland, this year.
** But the increasingly common, business-centric view of India suppresses
more facts than it reveals. Recent accounts of the alleged rise of
India barely mention the fact that the country’s $728 per capita gross
domestic product is just slightly higher than that of sub-Saharan
Africa and that, as the 2005 United Nations Human Development Report
puts it, even if it sustains its current high growth rates, India will
not catch up with high-income countries until 2106.
Nor is India rising very fast on the report’s Human Development index,
where it ranks 127, just two rungs above Myanmar and more than 70 below
Cuba and Mexico. Despite a recent reduction in poverty levels, nearly
380 million Indians still live on less than a dollar a day.
Malnutrition affects half of all children in India, and there is little
sign that they are being helped by the country’s market reforms, which
have focused on creating private wealth rather than expanding access to
health care and education. Despite the country’s growing economy, 2.5
million Indian children die annually, accounting for one out of every
five child deaths worldwide; and facilities for primary education have
collapsed in large parts of the country (the official literacy rate of
61 percent includes many who can barely write their names). In the
countryside, where 70 percent of India’s population lives, the
government has reported that about 100,000 farmers committed suicide
between 1993 and 2003.
Feeding on the resentment of those left behind by the urban-oriented
economic growth, communist insurgencies (unrelated to India’s
parliamentary communist parties) have erupted in some of the most
populous and poorest parts of north and central India. The Indian
government no longer effectively controls many of the districts where
communists battle landlords and police, imposing a harsh form of
justice on a largely hapless rural population.
The potential for conflict - among castes as well as classes - also
grows in urban areas, where India’s cruel social and economic
disparities are as evident as its new prosperity. The main reason for
this is that India’s economic growth has been largely jobless. Only 1.3
million out of a working population of 400 million are employed in the
information technology and business processing industries that make up
the so-called new economy. **
No labor-intensive manufacturing boom of the kind that powered the
economic growth of almost every developed and developing country in the
world has yet occurred in India. Unlike China, India still imports more
than it exports. This means that as 70 million more people enter the
work force in the next five years, most of them without the skills
required for the new economy, unemployment and inequality could provoke
even more social instability than they have already.
For decades now, India’s underprivileged have used elections to
register their protests against joblessness, inequality and corruption.
In the 2004 general elections, they voted out a central government that
claimed that India was “shining,” bewildering not only most foreign
journalists but also those in India who had predicted an easy victory
for the ruling coalition.
Among the politicians whom voters rejected was Chandrababu Naidu, the
technocratic chief minister of one of India’s poorest states, whose
forward-sounding policies, like providing Internet access to villages,
prompted Time magazine to declare him “South Asian of The Year” and a
“beacon of hope.”
** But the anti-India insurgency in Kashmir, which has claimed some 80,000
lives in the last decade and a half, and the strength of violent
communist militants across India, hint that regular elections may not
be enough to contain the frustration and rage of millions of have-nots,
or to shield them from the temptations of religious and ideological
extremism.
Many serious problems confront India. They are unlikely to be solved as
long as the wealthy, both inside and outside the country, choose to
believe their own complacent myths. **
Pankaj Mishra is the author of “Temptations of the West: How to Be
Modern in India, Pakistan, Tibet and Beyond.”
