Forget China: India is the economic future
J. COLIN DODDS
Halifax Daily News, Canada
Media attention has focused on the rise of China to be the workshop of the world, yet waiting in the wings is India - a member of the BRIC countries (Brazil, China, India and Russia), the world's largest democracy and an emerging economic powerhouse in its own right. It also possesses a nuclear capability.
With a population of more than 1.1 billion, 23 recognized languages and over 1,650 dialects (Hindi is the official language and English a functional subsidiary official language), a stereotyped view many have of India would be one of poverty, illiteracy, disease and bureaucracy.
While these factors still exist, the India of today is showing both an internal and external economic dynamism that will catapult the country into one of the major economies of the 21st century.
With a more free-market approach than has existed since independence from the U.K. in 1947, and an emerging middle class of over 300 million, the economic emergence of India is illustrative of the fact that models of development are not uniform.
Indeed, India's approach has by necessity and culture been very different to that of China's, both in terms of the role of government and in the sectors of development.
Not exporting
Despite a strong manufacturing base, it has not sought to compete in offshore manufacturing, so its growth has not been exported.
Rather, building on its strengths, it has developed a very successful outsourcing capability in the service sector using the English-language skills of its population.
Of particular note is India's role as a world-class leader in the IT sector. After decades of exporting people, India is now attracting back former residents and their children, including many from Canada, to work in this sector.
With a more modest growth rate of six to eight per cent, the Indian economy is the fourth-largest in the world as measured by purchasing power. The development model adopted by India has been more demand-driven and bottom-up, using indigenous funds as opposed to foreign direct investment (FDI).
The entrepreneurial drive found so much in India has now expanded into Indian multi-nationals across the globe.
For example, less than a decade ago, few would have heard of Tata.
Founded in the mid-19th century, domestically, its operations are well diversified, but it has recently emerged as a global brand name with 246,000 employees and operations in over 85 countries including Canada (with Tata Consultancy).
Visitors to Boston might be surprised to learn that Tata owns the Ritz Carlton hotel.
Leading phone carrier
Through its ownership of undersea cables bought from Tyco International, it is the largest carrier of international telephone calls in the world.
Through its acquisition of Corus, an Anglo Dutch steel maker, Tata is now one of the largest steel producers in the world.
Closer to home, fans of Tetley Tea may not realize this is a Tata company
Also, the famous icons of the U.K. automobile industry - Jaguar and Land Rover - may be bought from Ford. While they are the favoured bidder, if they are not successful, there is another Indian firm, Mahindra and Mahindra, in the wings.
The continued economic success of India is important to the vision of an Atlantic Gateway and the Port of Halifax.
With congested ports on the West Coast, the Suez Canal provides a closer trade route and we have spare port capacity.
With Nova Scotia Business Inc. playing a key role, Halifax has hosted business delegations from India eager to see the opportunities for developing these trade linkages.
To assist in furthering these and other trade and investment opportunities (including in education), executive MBA students from the Sobey School of Business will be in India again in February 2008.
India is on the ascendency and unlike Vietnam, it is not a direct economic competitor to China.
However, it will assume not only a key regional economic and political role, but through its rich history and culture, it will be a strong and stable force in the world for democracy, civil society and social justice.
J. Colin Dodds is President of Saint Mary's University and a Professor of Finance in the Sobey School of Business.