I talked about learning from China in an article a couple of months ago. Yet the world would not be complete if the world most populous nation and our friendly western neighbour is to be left out. The history of relations between India and Myanmar dated back thousands of years ago. The two countries were once jointly managed by then the colonial powerhouse of now dwindling Britain. Among international crowds, Indians are always welcoming. I have not encountered anyone other than Indians welcoming Myanmar businesses to come to India to sell things. It is always the other way round especially for most of the ASEAN countries. So, here it comes…
On top of the pyramid
There are altogether 218 million migrants around the globe. Migrants defined as those who live outside their country of birth. Based on 2020 UN estimates. The top rank went to the Indians, followed by the Mexicans and the Chinese, with 18m, 11.2m and 10.5m, respectively. In 2022 alone, these immigrants boosted Indian inward remittances to 108 billion, or 3% of GDP, more than any other country in the world. There are 2.7m Indians in US, 835,000 in UK, 720,000 in Canada and 579,000 in Australia.
The Indians are at the top of the pyramid by not just the numbers alone, but also in terms of skills and $. Their mastery of English language makes it possible to deploy them in professional positions by all multinationals. E.g., only 22% of Indian immigrants to US above 5 years old has a limited command of English, compared with 57% for the Chinese, based on MPI (Migration Policy Institute) of America. Of H1B visas issued in America to work in skilled professions, 75% were granted to people born in India.
India universities are technical schools are held in high regards in the developed world and that makes their graduates highly employable. Of the cohort of 2010 students of IIT, 36% migrated abroad among top 1000 performers and 62% migrated among the top 100. Most went to the US. Among top 20% of ai researchers in the world, 8% did their undergraduate degree in India.
They are in fact very qualified. In US, 80% of Indian born population has at least a university degree compared to 50% for Chinese and 30% for the total US population. In Australia, two third of India born population has at least a bachelor degree compared to 50% for the Chinese and one third for the whole of Australia.
In terms of $ and cents, Indians are also the highest earning migrant group in the US. Median household income for Indian is $150,000 per annum, compared to 95,000 for the Chinese. In Australia, median household income for Indian immigrants is $85,000, $56,500 for the Chinese and $60,000 for the whole country.
All this qualifications, language skills and earning power, only need to be complimented by hard work to make it possible for Indians to reach powerful positions. 25 CEOs of S&P 500 are of Indian descent. The tech giants Adobe, Alphabet, IBM, Microsoft, are all led by Indian CEOs. Deans at three out of five leading business schools, including Harvard Business School are of Indian descent.
Not just in business, but in politics too. UK Prime Minister, US Vice President, Head of the World Bank are all Indians too.
India Digital Power
If we talk about technology, long before Alibaba, Tencent and Baidu, India’s Infosys, Wipro, TCS has been dominating the tech world through outsourcing and operating call centres for the MNCs of the West. Now they are way past these basic services. The country itself is taking advantage of IT and language skills and taking the management of the world most populous country to a whole new level.
They are developing Digital Public Infrastructure (DPI) that rival China and they are doing it in a fully democratic environment, where it is typically more difficult to get things done. DPI involves a triad of identity, payment and data management. Biometric digital identity system, unified payment system (UPI) and data management via a personal Digilocker. (Myanmar is also trying to accomplish a similar structure, trying to integrate identity cards, bank accounts, mobile payments and mobile phones IDs altogether.)
UPI makes digital payments as easy as sending a text or scanning a QR code. Starting from 2016, the platform now account for 73% of all non cash retail payments in India. For personal data management, using the 12 digit identity number, Indians can access online documents whose authenticity is guaranteed by the government. Called Digilocker, the system is connected to tax docs, vaccine certs, high school certs and transcripts, etc of the individual concerned. To make payments, verify identity or get crucial personal documents, Indians can ditch the wallet and reply on the phone. Hundreds of millions in welfare system receive ‘direct benefit transfers’ straight to their identity linked bank accounts, an arrangement that has slashed losses due to corruption.
Identity system (Aadhaar) is run by the government. UPI is managed by public private JV, National Payments Corporation of India (NPCI). Other platforms are created by non-profits.The key idea behind DPI is not digitalisation of specific public services, but building minimal digital building blocks that can be used modularly, to enable society wide transformation.
And they have not stopped there. A version of DPI, called the Modular Open Source Identity Platform (MOSIP), launched in 2018 offers a publicly accessible version of Aadhaar like tech to other countries. Phillippines, Morocco, Burkina Faso, Ethiopia, Guinea, Madagascar, Sierra Leone, Sri Lanka, Togo already using that platform. That is digital influence.
It’s all about the economy, stupid!
In the mean time, Modiji is benefiting from a combination of good luck, political brilliance and a good economy to cement himself as the Prime Minister with the most favourable rating in the world.
India’s ever growing economic cloud is beginning to rival China as some of the MNCs emigrated from the second largest economy in the world. Tim Cook, just opened first store in India, declared to investors last month: “The dynamism in the market, the vibrancy, are unbelievable… India is at a tipping point.” Days later Foxconn, a Taiwanese electronics firm, broke ground on a $500m factory. India’s GDP grew by 6.1% in Q1, 2023, on a year on year basis. Investment as a share of GDP is at the highest over the decade.
For India to become a pillar of the world economy, no miraculous improvement is required. It just needs to keep growing at roughly its present pace. Goldman Sachs projects that India gdp will overtake EU area by 2051 and America by 2075. That assumes growth rate of 5.8% for the next five years, 4.6% in 2030s and lower beyond.
In 1700, India economy was the world’s biggest, eclipsing even china. Its share of global output declined throughout the colonial era and in 1993, after a financial crisis, hit a humiliating low of 1%. Since then it has grown fast, a trend that continued after Modi election in 2014. India now accounts for 3.6% of global GDP, same as China in 2000. By 2028, IMF forecasts, it will hit 4.2% overtaking both Germany and Japan. India’s heft is growing in other ways, as well: its stock market is 4th biggest after US, China and Japan. Its annual exports have grown 73% over the past decade and as a result, India’s share of global exports has gone from 1.9% in 2012 to 2.4% in 2022.
Transport infrastructure has improved dramatically under Modiji and his recent predecessors. Investment in it has more than tripled as a share of gdp compared to the mid 2010s. The length of road network has increased by about 25%, to 6 million km, since 2014. (157,000 km in total in Myanmar). The number of airports have doubled – many new ones rival sleekest in the rich world. Digital infrastructure has also blossomed, with 832m broadband connections as of last year and a range of state sponsored digital services, from e banking to welfare payments, that reach hundreds of millions of people. There is a build-out of energy infrastructure too: India will add more solar capacity in 2023 than anywhere else bar US and China.
India is unusually reliant on services for a developing economy: they account for ~40% of all exports, making India world 7th largest exporter of services, accounting for 4.5% of global total, up from 3.2% a decade ago. Some manufacturing is booming too: exports of machinery, electronics and vehicles or parts have risen by 63% in the past five years and are now a fifth of all goods exports. Apple now assembles 7% of handsets in India.
The banking system has been cleaned up and corporate debt is low. Like China, India has large currency reserves. It inhibits foreign investments in its banks and government debt markets to diminish the risk of destabilising via capital flight. An attack by short sellers in Jan 23 on Adani Group, revealed flaws in India capital markets, but also a degree of resilience, as they shrugged off the episode.
Learning from India
Just like China has uplifted the economic wealth of 1.4 billion people, under the context of building a socialist nation with Chinese characteristics, India is pushing all its people and economy into powerful positions, while touting itself as the world largest democratic country. In the mean time, a country, with nearly as long a history as the two of them and far more prosperous than either of them in the centennial past, has been woefully left behind, ineffectual in finding its own path to success despite trying out socialist, dictatorship, military and democratic systems of administration.
Finally it boils down to the people and the culture of hard work. Some of the people of our country are still hell bent on killing each other, without any grasp of the impact on the country’s development and standing. Ethics of hard work are hopelessly missing on some working adults and civil servants. The salient we can learn from here is that it does not really matter what political system of governance we use, it all boils down the the calibre of the people managing the country and the ethics of hard work to get the things done. Jugaad!
