Poor, little, rich protestors

The event is organised by IIM USA, the association of the alumni of all six Indian Institutes of Management in North America. The association is only six months old, young in comparison to the better-known IIT alumni network. But already it has 800 members and plans to get to 2500 members soon. Ashima Jain, the articulate president of IIM USA, is high on the self-fulfilling nature of leveraging networks of intelligent energised people.

The University of Maryland is seeking to position itself as a thought-leader in the globalised economy. Professor Frank, the dean of its Business School is happy to associate with peripatetic Indian managers who are embodiments of globalisation in their careers and lives. He makes a warm and welcoming speech.

Raminder Singh Jassal, who is deputy chief of mission at the Indian embassy in Washington, makes an interesting point. Global engagement is not new for India. If Indian traders could supply ivory and peacock-feathers to Solomon, the great king of antiquity in Israel, it should not be surprising that Indians today supply diamonds to Tel Aviv or software to the US.

There is a fine presentation by an IIM alumnus, Sahay, who is leading an Indian IT company in the US. Like many others in the fray, he takes globalisation for granted. The survival and success of IT firms (not just Indian IT firms, but players of different hues) in the context of “Globalisation 3.0” is his theme.

I am in Maryland as a guest of the incongruously named Allan Krishnan, making me relieved that it is quite okay for Jaithirth to be called Jerry! I get an opportunity to speak. My story is one that is getting familiar. By a series of circumstances, both planned and fortuitous, India is well-placed to take advantage of globalisation. British rule was not planned, at least by Indians! The English language is the unintended positive consequence for us. IITs and IIMs were planned. But no planner wanted India to be a sluggard in economic growth. And it was India’s sluggishness that resulted in so many engineers and managers migrating. Without this intellectual diaspora, India’s forays into knowledge-based industries would not be possible.

Apropos of Globalisation 3.0, we are going well beyond labour cost arbitrage. We are doing to the digitised paper-intensive service industry what Henry Ford or Fredrick Taylor did to manufacturing. Our assembly line or better still our real-time work bench allows for collaborative work across complex supply chains — opportunities undreamt of ten years ago.

But living in India I am denied the selective euphoria of the diaspora. I conclude on a sober note that there is a fragility to India’s success as the unskilled and the “excluded” are not benefiting from these trends. We need to be inclusive, not only of manufacturing which is beginning to happen, but of agriculture. Large numbers of malnourished, illiterate and un-empowered fellow-citizens are not only a blight on our moral conscience but constitute a reservoir of human capital that is woefully under-leveraged. It is not sufficient if our children learn English, Java and C++. We must make that opportunity available to all Indian children.

Professor Venkatraman of Boston University makes a brilliant presentation on the disruptive nature of technology in industries as diverse as photography and music. Not changing, not adapting to change is an option on par with committing suicide. He makes a powerful plea that the entire paradigm of management studies has been built on insights from the automobile industry. These thoughts may be inappropriate, even misleading for the digital world.

Professor Anil Gupta of the host university makes a subtle presentation underlining the fact that the global economy and its constituent national ones provide an eco-system, no more, no less. It is up to individual firms to chart their courses for survival and success.

And then we get to the inevitable question-and-answer session. The most awkward and difficult question comes from a young lady: “If it seems so obvious to everyone that globalisation is a force for the good, why is there so much opposition to it in rich as well as poor countries?” This remains a puzzle. The protestors in Hong Kong, the disrupters in Seattle, their fellow marchers elsewhere, claim to talk on behalf of the poor.

Yet without free trade, the foundation of globalisation, China’s poor would have remained poor and India would have easily acquired sub-Saharan status. The overwhelming beneficiaries of free trade are poor people. This is not in dispute. And yet there seems to be some persistent fear, some inchoate anxiety that will not go away. Not all the shrill anti-globalisation types are loonies. What exactly is their concern?

Rajiv Dubey from the audience may have got it right. There is a lobby in rich countries that pretends to be pro-poor, but in fact is elitist. They are cosy and comfortable. Wal-Mart, seen as an egregious symbol of globalisation, upsets their refined upper class sensitivities. That Wal-Mart may be enriching poor Chinese and making erstwhile luxuries affordable to poor Americans is dismissed with all the disdain that privileged intellectuals can summon!

What is puzzling is why the intellectual “poshocracy” of poor countries going along with this anti-globalisation posture knowing full well that opting out of world trade flows would remove the slim hope that we will dig ourselves out of poverty in our lifetimes. Clearly, this has something to do not with absolute improvements in economies, but with relative shares of the pie. It is the basic law of capitalism that a pot-bellied pan-chewing businessman who wears safari suits and who is in the “import-export” business will on average take more risk and on average will make a lot more money than a PhD in multi-cultural anthropology from JNU. And this is from the perspective of the left-wing intellectual both unpalatable and unjust.

The intellectuals of communist China don’t seem to have a problem with this. It is only the leftist elites of the West and their counterparts in India who seem to feel this way!

The writer is chairman & CEO, Mphasis. Write to him at jerryrao@expressindia.com