The Amazing Progress of India

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By: Dr. Abarru Gebeda
(08/21/2006)

I have read with keen interest the interview India’s Ambassador Gurjit Singh gave to the Ethiopian reporter. In this short piece, allow me to embellish a little further on India’s current achievements and the lessons Ethiopia can take from such success. Let me start from the beginning.

Although India’s attempt to extricate itself from its abject poverty has been its main agenda ever since independence, the last two decades have brought its eventual liberation, not from the yokes of colonialism, but from its own captivity due to a bankrupt, intolerable socialism. India simply bolted out from that prison and went berserk.

Before independence, the Indian economy was in a lethargic state under the grip of the colonial masters. Only 0.8 percent a year growth was recorded before the 1950s. Things didn’t improve as quickly as expected after independence either. Prime Minister Jawaharlal Nehru’s introspective and import-substituting economic policies in the 1950s, followed by his dictatorially minded daughter Indira Gandhi’s inflexible and rigid policies proceeded the country’s horrific economic ages, taking India to its moribund state. The talk then was that India was bound to be a paradigm of the world’s poverty case, unable to liberate itself from the grip of famine and disease.

But the advent of the 1980s and the leadership of Prime Minister Rajiv Gandhi, son of Indira Gandhi, brought a modicum of reform after India slowly disentangled itself from the previous rigidity that shackled the nation. Hence, the high tax rates and tariffs that limited the business sector from vigorously engaging even in the local economy were lifted. A new beginning of expansionism, the idea of looking outward and promoting export with moderate tariffs laws, was instituted. Soon thereafter, India posted a 3.5 percent growth in its economic development.

But in 1991, the then Finance Minister Manmohan Singh (current prime minister), staged another series of bold economic policies, taking the bar a bit higher. Singh lowered tariffs and threw out multiple trade barriers, including deleting industrial licensing, reducing taxes and devaluing the rupee. By rolling back currency controls, his unprecedented move allowed a flooding of the market with foreign investors reaching out to a 1.2 billion population of potential consumers. Singh’s foresight catapulted the awakening of the giant. The post-1991 development, therefore, turned the economy around and took India to new heights. Since that decade, the economy has grown by more than 6 percent annually, reaching 7.3 percent in 2003 (8 percent in 2004 & 2005), and bringing the GDP per capital up from $1,255 to $2,732.

What did India do to reverse its dying economy?

First, India’s regional competitiveness sharply rose on several fronts. As soon as interest rates came down, capital became available. The revolution in telecommunication technology brought a remarkable improvement. Highways and ports were improved, real estate markets began to boom, resulting in over 100 Indian companies showing market capitalization of a billion dollars and with great potential to become global brands. Mr. Singh’s obsessive approach to improve India’s economy (I can see Mr. Meles’s obsession here as well), by setting priorities certainly paid off. Although India, like South Korea and Taiwan (or Ethiopia for that matter), faces security threats, thereby demanding substantial resources to secure military preparedness, still, the economic development didn’t go into hibernation. As a result, India today plays a far more active role in guiding its rapidly growing corporations to emulate the Japanese “non-capitalist market economy” of caring for the interest of employees, suppliers and communities more than that of the shareholders’ interest as is apparent in the Western model. I am sure when the Ambassador said, “We realize that a large number of people in India are poor. We must provide them better opportunities. The success of the Indian economy must percolate down. That's what I call the process of representative democracy where every individual counts. Mahatma Gandhi used to say, ‘It is not till I wiped every tear from every eye that I do have good government.’” he meant to point out the imbalances that should be eliminated.

It’s important to note here that regardless of the Prime Minister’s fervent desire to balance the share of the Indian melting pot, again, millions of Indians are buried deep in an inescapable poverty. Its high growth that created massive employment and gains in revenue for the middle-class (college educated, mostly males, between the 20 to 40 age group) didn’t reach particularly the millions of the rural poor. Unlike China that has addressed the burdens of its peasant population by creating low-end manufacturing jobs and exporting goods like clothing and toys, India went to high-tech, high-skilled manufacturing, skipping the most affected class: the poor.

But work is in progress to correct this problem. India has certainly inherited several decades of rigid bureaucracy, hard to root out immediately. Under Prime Minister Manmohan Singh, a new India is emerging. Not only is India a regional player today, but it is a soon-to-be world power. Its companies are ambitious, often dominant, players on many industrial fronts. As the Somali proverb has it: “If you want to dismantle a hedge, start with one thorn bush at a time,” Singh’s sensible (one at a time) approach to defeat the age-old stagnant system is paying dividends.

Additionally, India’s escalating demand for energy, steel, aluminum, lumber and even agricultural products cannot be ignored. The metamorphosis of its burgeoning nouveau-riche class, which vies to be pampered, is a glaring result of its resurgence from ashes to riches. In only forty years, hundreds of millions of Indians have risen from being poor to being middle-class citizens. As its global trade continues to grow by commanding a large chunk of the region’s share, I am sure India will continue to prosper even more.

While China dominates the high-tech manufacturing sector, India with its10 percent (100 million + people) highly skilled, fluent in English and computer savvy population, controls the high-tech service sector. Big American companies look to India for outsourcing their businesses. Intel and Texas Instrument have a group of Indians designing cutting-edge semi-conductors as we speak. General Electric has an R&D center in India. Microsoft is massively engaged from Chennai to Kolkatta. It is believed – and this is no exaggeration – that India may outdo Japan and eventually the US by inventing the next technology that could eclipse those that dominate the market.

Isn’t this music to the ears of every Indian?

Nowadays, ambitious Indian entrepreneurs in Mumbai and other cities believe that whatever can be done in the West – can be done in India – actually at 15% of the cost and resulting in by far a better product. India has taken its cues from Japan whose 1950s and early 1960s shoddy products were vociferously ridiculed, hurting Japanese businesses in the West in those trying years. Japan, however, quickly learned of its shortfalls, thereby improving gradually and producing first class brands to capture the commanding role of the world market it holds today. India is following in Japan’s footsteps, ensuring that its products are distinct, winsome and durable.

There is, however, the question of terrorism and security threats that hovers over the nation’s psyche. While the economic outlook for India is bright (like Ethiopia’s today), yet, the unending Kashmir quagmire poses a threat (Ethiopia has Eritrea to her north, and the Somali Islamist extremists to her east). There are also the unsettled problems of India’s neighbors whose internal conflicts can affect India. For example, the ongoing struggle for democracy in Nepal, the Islamist extremist insurgencies in Bangladesh and the looming civil war in Sri Lanka can all affect India. Like Ethiopia, who is hoping that religious extremism will vanish, India too has her fears that fundamentalism from Pakistan and Afghanistan will spill over to poison the normally docile Indian populace. Promoting peace and prosperity to the region is therefore India’s priority, just as important as her economic priorities.

On the Indo-Ethiopian friendship, we can go back to several decades. In the 1950s and early 1960s, most Ethiopian high school teachers were Indians. They were astute, dedicated and brilliant educators. Assimilating quickly into the Ethiopian society, they mingled easily. Indian taste found similarities to its preferences in Ethiopian cuisine. Like Ethiopians, Indians are aficionados of exotic spices. Food preparation is a ceremony in Ethiopia and India as well. The cultures, therefore, complimented each other.

Additionally, the Indians of the past were keen to the Ethiopian plight. Coming with an indomitable will power to overcome poverty, they understood the Ethiopian suffrage. Identifying quickly with the Indians (perhaps the color of their skin and the untiring energy of the Indians to listen had something to do with it), the Ethiopians became comfortable with their guest. Indian-Ethiopian juxtaposition in the 1950s and the 1960, therefore, was remarkably smooth and exciting.

As the result, the outcome of the relationship was outstanding. Ethiopian high school students of those eras excelled in math, science, history, and English. The unwavering dedication of the Indian teachers produced the best and the brightest of the nation. The ethics of hard work, dedication, and commitment were instilled in the Ethiopian youth by their indefatigable Indian educators.

The relationship between the two countries has also remained steadfast. It’s however the right time today to take that friendship to another level. In this regard, Ethiopia should open her doors widely once more for the Indians. They have more to give than to take. There is the old, lame argument that massive Indian infiltration would usurp essential employment opportunities from well-educated Ethiopians.

That just isn’t true!

Ethiopia today suffers from brain drain in the fields of engineering, medicine, and other professions. More engineers, physicians, technocrats and skilled professionals in various fields find means to leave the country and never return. Huge vacancies in the areas of science, medicine, computer technology, R&D, and education (Ethiopian colleges and universities suffer acute shortage of highly trained educators) are open, leaving the country hobbling in its stride toward the future. Having recently begun to add more universities and colleges, Ethiopia still lags far behind other African countries in education. For example, the health service sector, although decent today, loudly begs for dedicated professionals to ameliorate the reprehensible conditions in both urban and rural areas. More people die from AIDS due to shortage of healthcare workers than to the lack of medicine. Skilled professionals are desperately needed all over.

The Indians blamed for taking away jobs, a 1970s schizophrenic paranoia, stemming from a bashing given to those coming into the country, doesn’t manifest in today’s global culture. An Indian or a Taiwanese in the Silicon Valley is much more wanted and appreciated than ever before in this changing world. Ethiopia should discard the 70s mentality, and make room for foreign workers, giving them her unmatched hospitality. Seventy million good-hearted Ethiopians, known for their biblical cordiality, should welcome with warm hearts those who are coming to be their friends.

True, Ethiopians are quick to discern those who come to their land only to loot. They feel violated when their trust is broken. Loss of respect for their guests usually follows a non-violent hostility and rejection. Indians have never faced a serious problem in Ethiopia, only finding love and mutual respect.

This piece, therefore, is only to compliment Ambassador Singh’s interview with the Ethiopian Reporter. His counterpart in India, Ambassador Genet Zewdie, with the encouragement of the Ethiopian government, should do everything in her power to lure skilled Indians to Ethiopia. The lessons Ethiopia could take from India’s achievements are endless. In their relationship, the sky is the limit for these two old friends as I can only see a celebration of success between them in the near future.

Thank you.

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