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Thursday, October 28, 2021

Having the right reflexes

Whatever the shape of our new government,it must have the clarity to address looming threats

Written by Vikram S Mehta |
May 5, 2009 12:26:13 am

The new government — whatever be the acronym of its political combination —will take office against the backdrop of a combustible combination of global threats —terrorism,financial meltdown,energy scarcity,climate change,regional civil strife and possibly a pandemic virus. Each of these threats could (if it has not already) spill over our borders. The question is whether the new arithmetic in Parliament will allow individuals of requisite talent,experience,and competence to handle these emergent threats. Will it provide such leaders the space and flexibility to give precedence to the ‘truly important’ task of tackling these dangers over the ‘seemingly urgent’ pressures of party politics? Will it be prepared to accept some short-term pain for assured longer-term gain?

Time will provide the answers. What I wish to draw attention to here is the nature of the responses that will be required to successfully mitigate the consequences. Let me do so by drawing on historical experience.

Thomas Edison illuminated the lower half of Manhattan in 1882. His revolutionary technology did not however spread through the US immediately. It was not until the mid 1930s that even half of the factories had displaced steam power with electric motors. The reason for this slow diffusion was the design of the factories. They had been built vertically to accommodate the pulley system of steam power generation. Electric motors could not be accommodated within this architectural frame. The factories had to be consequently gutted and rebuilt — a long and capital-intensive process — before they could be electrified.

A century later computers hit the markets. This was a comparably revolutionary breakthrough. The economic benefits were self-evident. Yet it was years before computers occupied the interstices of the economy — a puzzle that provoked Prof. Robert Solow to remark “computers are everywhere but in the productivity statistics.” In this case the reasons were institutional and corporate inertia and the instinctive reluctance of humans to alter ingrained habits.

I have outlined these two experiences to highlight three trends. First the lag between technological breakthroughs and its material impact. Second,the inherent physical and psychological (human) limits to the quick and widespread application of new ideas and products and third,the need for a multidimensional and coordinated approach (i.e. there are no silver bullets). Let me elaborate this last point further through the lens of energy scarcity and environmental protection.

We all know that global warming is fast reaching a tipping point and that the emissions of greenhouse gases (GHG) must be quickly arrested. Many governments and companies are expending a great deal of R&D effort and money to commercialise renewable energy (solar,wind,bio,nuclear). Obama has for instance announced a massive package of financial incentives to promote clean energy. These efforts will no doubt pay off sooner rather than later. There will be a technological breakthrough that will sharply reduce the costs of solar and wind energy; biofuels from cellulosic material rather than the food chain will be commercially available; and replacements for petrol and diesel as a transportation fuel will be developed. The question is whether the associated supply and distribution infrastructure required to bring these new sources of energy from the production point to the householder will be created within the same period; whether vehicles will be redesigned and produced in mass numbers to use the replacement transportation fuels; and whether people will alter their way of life to accept and adapt to a new energy system. Clearly if these parallel developments do not take place viz smart grids are not built; hybrids or flexifuel vehicles are not produced in significant numbers; behaviours do not change — then the new energy technologies will be everywhere but in the real economy.

The above has contemporary relevance. It gives a clue as to what needs to be done to tackle existing and emergent global threats. It tells us that there are no quick fix solutions and that a successful response will depend on the effectiveness with which technology is harnessed to physical reconstruction and attitudinal change. It also underlines the importance of experienced leadership and individual’s capability to walk the tight rope between ‘competitive populism’ and ‘public interest’.

The big question to my mind is who will wield the levers of key ministerial portfolios in the new government. Will it be individuals of competence and integrity or others. If it is the former,then irrespective of the party configuration of the new Parliament,we can be optimistic.

I say that because history is replete with examples of people who have single handedly overcome systemic blocks to shift the needle of change. Barack Obama is the most extraordinary recent testament of this fact but our own PM also offers a good example. His successful fight to secure the civil nuclear 123 agreement was in the teeth of considerable opposition. Less dramatic and certainly more subtle,we also have the example of how officials in the Company Law Board and people like Deepak Parekh,Tarun Das and Kiran Karnik pulled Satyam back from the brink of bankruptcy and saved not just a company but also 50,000 jobs. The point is that when ‘good’ people take the bite between their teeth they can effect disproportionately positive change. Japan lost a decade of economic growth and social development in the 1970s,because of misplaced policies and shortsighted governance. It would be sad if years hence a similar verdict were passed about India — that as a result of fractured mandates and opportunistic leadership the country failed to smother the burning fuse of identified and emergent threats.

The writer is chairman,Shell Group in India; the views expressed are personal

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