April 13, 2007
The famed German magazine Der Spiegel (The Mirror) interviews Ratan Tata (via Bainite). I was happy to see his commitment to the safety of Indian families:
Again and again here in India, I see entire families riding a single scooter: The father drives with one child standing just in front of him, and the mother sits behind with a baby on her arm. I have seen that so often… even during rainstorms or at night. And each time, I think: Oh God, can’t we do something to help these families travel more safely? So we launched this project. Our goal is to develop an inexpensive and safe vehicle.
I found his cautious optimism prudent:
We live in a highly competitive world — and we Indians have to struggle to catch up. So modesty is necessary, even if there is also a need for a certain amount of national pride. When it comes down to it, we have managed our country’s economy poorly for long enough. There is really no reason to now think that we can conquer the world.
However, I found that his views on democracy are not very different from that of his uncle, JRD Tata:
The political system of the People’s Republic of China can make things easy. Decisions are made quickly and results come quickly, too. In our democracy, on the other hand, such things are extremely difficult. We like to say that India has the advantage of being a large market. We have provinces, we have the rule of law, we have a system of justice. But those are also weaknesses when compared with China. On the other hand, one of our strengths is that we are very individualistic, and as individuals we are very creative. But that, too, is a weakness, because it keeps us from working well together. Everyone thinks only about his own profit. India has probably lost its position to China as the world’s workshop. At the same time it has the power to be ahead of China when it comes to knowledge. Not that the Chinese are far behind. They will get there. But our challenge is to invest sufficiently in education.
A pity!
April 13, 2007 at 2:51 pm
How is it a pity that he is pointing out the strengths and weaknesses of India?
April 13, 2007 at 3:27 pm
Dear Mathew,
As the Ram Guha article that I link to (which discusses the political views of JRD Tata) indicates, industrialists everywhere seem to be impatient with democracy. Further, they seem to think that an autocratic regime with a political head acting like the CEO of a company would be run more efficiently. In the process, they seem to think that rule of law and system of justice to be weaknesses.
As I point out elsewhere, economists themselves attribute it to the willingness of Indians to sacrifice a few percent in growth rate in order to preserve certain ways of living. That is what I meant by pity–that even an enlightened industrialist like Ratan Tata takes a narrow view of considering the rule of law and system of justice as impediments instead of considering them as strengths, and is not realising that they are at some level as important as (if not more) beating China in growth rate.
Further, as the perusul of the quoted paragraph shows, Ratan Tata seems to think that we have no strengths compared to China at all — which again is a pity.
In fact, throughout the interview, his impatience with the bureaucracy is evident. While I agree that there is no point in red tape putting impediments in the way of our economic growth, I fail to understand how the rule of law and system of justice has anything to do with it.
So, thinking through the interview, I believe what Ratan Tata is indicating is that if it is China, nobody would have known anything about the protests at Singur–instead the moment the West Bengal government decided to acquire land, Tatas would have got it, which would have speeded up the procedures, and that somehow is desirable than to have discussions, arguments, protests and public scrutiny!
April 14, 2007 at 2:38 am
Of course it would be more efficient if such a system were possible. (Of course it is not possible to find someone disintrested or benevelant to do the job, and those people are not to be found in political jobs usually).
Looking at the recent situations it is easy to understand the frustration that leads to such statements.
If you look at the recent problems that there has been in developing new factories, the problem is that your democracy isn’t running properly. The government elected by the people isn’t able to proceed with it’s plans, for the needed economic development, because of objection from some of the people. The objection is fueled and expolited by the politicial opposition to meet their own aims.
This can be seen as an example of why development is lagging. You have a big country and a lot of land, I can’t see how it would be so difficult to make a new factory. If you want to create new factories and jobs your industrialists are welcome to build their factories in Britain.
April 14, 2007 at 5:15 am
Dear Mathew,
You are not the first one to think that our democracy is not running properly; I believe you will also not be the last one. While I too am of the opinion that there is room for improvement in Indian democracy, strengthening the rule of law, system of justice and having a strong public discussion are part of the improvement package, and not getting rid of them, thank you.
We are a big country; we have lots of land; but, our population density is high too; further, companies want to build their factories close to areas which are populated, easy to reach, and with high level of amenities. So, if you do not see how it is difficult to create new factories, you are taking a simple minded view of a complex problem.
As far you offer to industrialists, our industrialists do run factories in Britain. And, if they find our democratic system difficult to deal with, there is nothing that is stopping them. The fact that they want to build in India shows that it is favourable for them to build industries here. So, whether they like it or not, they have to deal with our political system, which might not be the best, but certainly better than those suggested.
April 14, 2007 at 6:53 pm
Population density is higher in United Kingdom. We have a very small country. Having a bigger country should be an advantage.
Of course there is always room for improvement in every system. Democracy has been called before the ‘least worst system’. I don’t believe the U.K. had a democratic system at the time of our industrialisation. Probably our population was much smaller too.
April 15, 2007 at 12:40 am
Dear Mathew,
The population density of England is relatively high as compared to other European countries; but, it is still lesser than that of India; see this wiki page for the relevant data. Further, the local population density might sometimes be higher than the average at some of these places (obviously). We have a big country–but our population is high too!
I know that several economists think that in the early stages of industrialisation a non-democratic system might be more efficient. However, in a knowledge based economy such considerations might not be of primary importance. In that sense, the Indian experiment is one that is worth the close watch.
April 15, 2007 at 4:40 pm
OK, population density of England is 388.7 per square kilometer, about 50 million from the 60 million living in UK live in England.
Probably we should also consider land use and useability to make a comparison.
July 16, 2007 at 4:31 am
Maybe Ratan Tata would prefer that India followed China’s lead too:
http://news.bbc.co.uk/1/hi/world/asia-pacific/6286698.stm
While I can understand the frustration that businessmen feel with government regulations, I find it odd that they think democracy is to blame for it. What’s to blame is weak democracy, non-participation by citizens and corruption. And, the lively discussion (in the case of Narmada dam) just shows how robust our democracy is, and that poor people are left out of the “progress” as envisioned by people like Ratan Tata. It’s only fair that there be a discussion on these issues, and everyone’s interests are taken into consideration. What we need is stronger grass-root democracy, and not totalitarianism like China.
January 10, 2008 at 8:43 pm
I knew Ratan Tata when he was an undergrad at Cornell. He was a fine man then and a real blessing for India and the world now.