Davos, barometer of the changing way the investor views India

Over 20 years, transition from an economy without allure to India Everywhere to Make in India

Written by Tavleen Singh | Updated: January 19, 2016 9:30 am
make in india, world economic forum, world economic forum annual meeting, meeting in Davos, davos meeting, india growth, india economic growth The world’s political and business elite are being urged to do more than pay lip service to growing inequalities around the world as they head off for this week’s World Economic Forum in the Swiss ski resort of Davos. (AP photo)

This week, the World Economic Forum’s annual meeting begins in Davos and for the 20th time I find myself on my way there. In the years that I have attended this conference I have come to see it as a barometer of change in our times. It was in Davos that I first learnt about the Internet from MIT professors who talked in a language so futuristic I barely understood what they said. It was here that I sent my first email to a fellow participant without knowing that it would soon become the world’s main method of communication.

India in 1995, when I first came to Davos, was still emerging from her socialist cocoon so I found myself bedazzled by the changes in technology and world affairs that we knew nothing of. Nobody talked much about India that year and you could count on the fingers of two hands the number of Indians there.

I remember that we drove to Davos that year from Milan through the Italian Alps on a cold, luminous day and by the time we got to the Fluella Pass that was the entrance to Davos there was a snowstorm and we had to drive back and take another route. My first impression of Davos on that dark, winter evening was of a small, unattractive town made magical by its thick blanket of snow. The Central Sports Hotel where we stayed was (and still is) a place of small, dismal rooms that were ominously reminiscent of an earlier time when Davos was known mostly for sanitariums for people suffering from tuberculosis. It acquired a certain dubious celebrity as this mountainous hospital town when Thomas Mann brought his wife to a famous sanitarium here and wrote about this experience in his novel The Magic Mountain. When I went cross-country skiing on my second day in Davos, my ski instructor pointed to a decrepit building with boarded-up windows at some distance from the main town and said it was the laundry where the sanitariums sent their washing. The laundry no longer exists.

Much else has changed, of which the most remarkable change is that the number of people coming to the WEF meeting has more than tripled and the number of Indians coming here has gone up hugely as well. I am not certain exactly which year the number of Indians in Davos suddenly increased but remember it was when H D Deve Gowda was prime minister. He himself came to Davos that year but nobody noticed him much and he himself seemed to think of his visit as a holiday because he came accompanied by a large contingent of family members.

They stayed in the finest hotel in Klosters (a nearby ski resort more popular than Davos) and the women wore South Indian silk saris and slippers which made going out onto icy streets impossible so they hung about the lobby with their children. The officials who came with Deve Gowda were also inappropriately dressed and wandered about the promenade in monkey caps and thin sandals instead of attire and footwear more suitable for icy streets and freezing weather. It would have made no difference had nobody come at all with the Indian prime minister because our economy then had no allure for foreign investors. And there were too many other things happening in the world. Not just in terms of new technology but even politics.

In South Africa apartheid ended and the year after Nelson Mandela became President he came to Davos and one evening arrived in the Central Sports Hotel for a media conference. His presence was so awe-inspiring that everything came to a standstill with every member of the hotel staff gathering in the lobby in the hope of catching a glimpse of him. I happened to come within speaking distance of him as he was leaving and when I said to him that I was from India he said he appreciated very much what India had done for the cause of ending apartheid. I would have liked to talk to him some more but he exuded an energy that was so powerful that I found myself unable to do more than mutter a few words.

Another memory from those early years was when Shimon Peres and Yasser Arafat faced off in a special session in the main hall of the conference centre. It was meant to have been a moment of reconciliation but Arafat was belligerent and aggressive and nothing Peres said could persuade him that Israel was genuinely interested in peace. So at the end of a meeting fraught with visible tension, Peres said with his usual dignity that he had hoped to be attending a wedding ceremony and was disappointed that instead he found himself in the middle of divorce proceedings.

In those early years the WEF’s annual meeting was a small, intimate affair that was attended mostly by rich businessmen who had to be members of WEF to be invited. They were accompanied by their beautifully dressed, glamorous wives who seemed more interested in celebrities and social events than in the state of the world. When Bill Clinton came one year they fought one another for seats close to the stage and refused to move when they were told they were reserved for dignitaries.

India became important in Davos when Indian companies became important members of WEF. This started to happen after the licence raj ended and the growth rate of India’s economy tripled and quadrupled. Indian companies which in licence raj days functioned with their hands tied and feet shackled became suddenly free to grow and led the boom that the economy experienced between 1995 and 2005.

Suddenly foreign investors became interested in India and in Davos India no longer came to be seen as a faraway land stuck in an economic time warp. Indian businessmen and officials began to participate in important sessions and learned to hold their own. Chief ministers started receiving invitations to the annual meeting and took time to discover that meaningless verbosity was not appreciated in this forum. Their officials wrote for them the usual lengthy monologues filled with quotes from Gandhi and Tagore when they first started to come but they realised this kind of speech did not appeal to investors.

Then came a year when Indian companies pooled their efforts and money to lay on a spectacular show that was called ‘India Everywhere’. And India was indeed everywhere that year. There were fashion shows and concerts of Indian music and from the cafes on the promenade came the sound of Bollywood music and the scent of kebabs and Indian spices. That year every Indian in Davos felt exceptionally proud to be Indian. But this euphoric nationalism did not last long. When Dr Manmohan Singh began his second term as prime minister and Sonia Gandhi began to put her personal stamp on economic policies, India’s image changed once more to that of being a country that did not believe in free markets.

I remember endless conversations with people who had invested in India only to find themselves tied up in court cases and red tape. They said that whenever they had tried to fight their way out of the tangles they found themselves in, they found goalposts changed and mysterious new taxes to contend with. On top of all this came the retroactive tax as a last nail in the coffin of the economy. Indian investors faced their own problems when a new kind of licence raj was introduced through the Ministry of Environment. A thick gloom descended over the Indian contingent in Davos that has only just begun to lift.

Last year Arun Jaitley came for the first time and did his best to assure investors that as finance minister he guaranteed that the retroactive tax would not be used. But since he had not removed it in his first budget, it sent mixed signals. What was reassuring was Narendra Modi’s image among prospective investors as a man who had every intention of making India a country in which doing business would become easier and more profitable. On the promenade last year there were huge posters of the Make in India tiger and at the India evening there were more foreigners than there had been in recent years. So there are definite signs of renewed interest in the India story but it is still early days. When this year’s annual meeting ends we shall know more.

Meanwhile on a snowy morning in Zurich I sit in my hotel room pondering over the theme of this year’s meeting: Mastering the Fourth Industrial Revolution. The press release from WEF informs me that ‘over 2,500 leaders from business, government, international organisations, civil society, academia, media and the arts will participate in the 46th World Economic Forum Annual Meeting’.