Who’s India’s Wu?

I came across the name Gordon Wu in an item in a recent Knowledge@Wharton mailing. It was titled “Gordon Wu Sees Huge Opportunities in China’s Rapid Urbanization.” Wu, a Hong Kong native, graduated from Princeton in 1958, and in 1969 founded Hopewell Holdings, a civil engineering firm. “Wu’s Hopewell Holdings — where he serves as chairman of the board – has been a pioneer for nearly three decades in building highways, power plants and bridges in China and Hong Kong. In addition to Hopewell Holdings, Wu heads Hopewell Highway Infrastructure and other companies of the Hopewell Group, whose operations span property development, leasing and hospitality. Queen Elizabeth knighted Wu in 1997 for his contributions to Asian infrastructure – and in effect for building one of the continent’s largest civil construction firms.”

The article is an edited transcript of Wu’s talk at Wharton’s Global Alumni forum on May 26th. It is a refreshing talk. Here’s how he begins:

When I look back at the 30 years from 1949 to 1979, China, under the leadership of Chairman Mao Zedong, was in utter chaos. You will remember the Great Leap Forward of 1958, the Cultural Revolution, and other idiotic economic policies… Mao Zedong, like Joseph Stalin, wanted to make everybody equal. They both succeeded — because they made everybody equally poor.

In India, we don’t engage in plain-speak. Does anyone in India of any stature speak plainly of the “Nehruvian penalty” (as Rajeev Srinivasan calls it) and the utter stupidity of the socialistic policies that condemned India to the “Nehru rate of growth”? The Indian leaders are still trying to do their best in ensuring equality of outcome and the results are evident — heaps of poverty. And where they fail in making everyone equally poor, they engage in the rhetoric of envy, darkly hinting that unless the rich also become poor, there will be social unrest. But here’s more from Wu:

So those 30 years were wasted. While China was trying to make everybody equal, people in Hong Kong and Taiwan had no alternative but to buckle down and try to create some wealth. Hong Kong’s wealth and tremendous economic growth happened in those three decades, as did Taiwan’s.

India beats China in that department. China wasted only 30 years. India has wasted 50 years and its leaders are doing their best to push that to a century. Makes one wonder, doesn’t it, that collectively Indians are rather retarded? We cannot learn from the others. China can. They learnt from what the Japanese had over a hundred years previously. Here’s Wu —

I read Deng’s speeches very carefully, and by about the fourth time it dawned on me that what was going on in China was a replication of what had happened in Japan during the Meiji Revolution (Restoration) of 1868. At that time, Meiji [Japan’s emperor] was very young, but the officials in his court were very enlightened. They recognized that if Japan failed to change, the country would have no future. So they sent students and workers all over the world, and they led Japan through a complete transformation in which they remade their educational system, constitutional monarchy and industrial undertakings. As a result, 31 years later there was the birth of a new Japan. I saw Deng Xiaoping’s Open Door policy as nothing more than a replication of the Meiji Revolution.

You know, you don’t have to be a super-duper bright guy to figure that one out. Even I had with my limited understanding figured out that there is something worth emulating in the Meiji Restoration of Japan. Allow me to quote myself from a post from March 2003, “Enlightened Reformation

BEGIN QUOTE

The depth of the Indic civilization is awe inspiring when you consider that it has been around for many thousands of years. The Vedas were composed long before the start of the Common Era. The people of India can claim direct lineage to those who composed the Vedas and the Upanishads. The Rig Veda epitomizes in one of its invocations what I am concerned about: adoption of ideas.

Let noble thoughts come to us from all universe.

The puzzle therefore is why has modern day India been so insular and close-minded? (By modern day I mean the last few centuries, and not the period variously called ‘internet era’ or ‘post-industrial era’.) Other countries appear to have become enlightened in that regard. Consider, for instance, the Meiji Restoration:

The Tokugawa bakufu came to an official end on November 9th, 1867 with the resignation of the 15th Tokugawa Shogun Tokugawa Yoshinobu and the “restoration” (Taisei Houkan) of imperial rule. The 15-year-old Mutsuhito succeeded his father, Emperor Komei, and the following year took the reign name Meiji or “enlightened rule,” and signed the Five Charter Oath.

What was the Five Charter Oath?

The Five charter oath (Gokajyo no Goseimon) was an outline of the main aims and the course of action to be followed by the new Meiji era government of Japan after the fall of the Tokugawa Shogunate in 1867 during the Meiji Restoration. The oath set a new path in Japanese history with an emphasis on modernization and the establishment of a new social structure.

I draw your attention to the fifth oath which reads:

“Knowledge shall be sought throughout the world so as to strengthen the foundation of Imperial Rule.”

That, ladies and gentlemen, is what transformed Japan and made it strong enough to dream of world domination and to ultimately grow so economically powerful that the US was forced for the first time after the Second World War to do some very urgent soul-searching.

The successes of the Meiji Reformation can be traced ultimately to their thirst for knowledge and understanding from around the world. They used ‘noble thoughts’ from all universe to learn and then out-do what others had done. They adopted and adapted to the modern world — a world that they indeed helped create at least in part.

It is time for India to have a reformation of its own. It has to have enlightened rule if it is to survive. There is no other way.

END QUOTE

Wu points out that in the old China there was equality – in poverty. Now, there are some people who make a lot of money but overall there is prosperity in the land. He points the rapid urbanization of China. “Today we are talking about some people who make a lot of money. Now, 43% of the people live in cities and within the next 20 years, I bet your bottom dollar that the number of people living in cities in China will be the greatest migration that the world has ever seen. Urbanization will probably hit a figure of 80%.”

I have argued here before that India’s development is tied with the urbanization of the Indian population. If we continue to be a nation that lives in tiny little Gandhian villages, we will continue to live in Gandhian poverty, enjoying the Nehru rate of growth, paying the Nehruvian penalty.

There is a sure way to success: stop being stupid, as I have been arguing for a while. (See my thoughts on “Aping for Fun and Profit.”) Wu apparently agrees with me. “Looking back I say, well, we are not going to be that stupid again. We are going to follow sound economic principles. What economic principles? I believe an American businessman has defined them very candidly – they have worked in the past, and I believe they will also work in the future. His name was J.P. Morgan, and he said the only way for someone to make money is either by providing others with services or providing them with capital. That is what China has done – it has become a manufacturing center that provides the world with services. In the beginning, the factory owners were in Hong Kong. They helped the people in China start the manufacturing process. Of course, the Chinese are very smart, and they have learned very quickly during the past 20 years. That is why there is a lot of manufacturing in China today.”

Here is some more quotes, for the record:

China still needs lots of infrastructure and hardware — for instance, telecommunications, power stations, superhighways, hotels, and so on. These are very easy to create, although in 1979 when I first went in and negotiated with Chinese leaders, it didn’t seem to them to be an easy thing to create. I told them that it was the easiest thing. An example is when I was trying to sell my concept of building superhighways in China, I explained that without transportation, there was no way modernization could be achieved or the economy put in order.

If you look at China today, the country already has 40,000 km of superhighways, which is second only to the interstate system in the U.S. with its 75,000 kms. Also, the consumption of electricity, steel and copper are in high demand right now, and China’s needs are driving the world market. The demand for urbanization will create enormous opportunities.

Ah that urbanization bit again. Not for India of course. We have to continue to keep our people in villages, and keep them poor.

One can either be original and smart, or one can be smart enough to copy what others have figured out. The Japanese learnt from the Westerners, and a little over a hundred years later, the Chinese learnt from the Japanese. Will Indians learn from the Chinese at least? Or do we need to continue to condemn hundreds of millions of Indians to dire poverty?

Author: Atanu Dey

Economist.

14 thoughts on “Who’s India’s Wu?”

  1. Hi Atanu,
    In general, I respect your views and ideas a lot. I also like the straight talking you do. In last couple of posts, you have ridiculed Indian politicians a lot. Whereas I believe they deserved to be ridiculed, isn’t it a problem with our society as a whole that we elect these absolutely incompetent people in a democratic government? And if our community elects them, don’t we deserve the incompetent government who merrily indulges in dividing our society on the lines of caste and religion?
    China and Japan’s success also lies in the fact that the society as a whole took to reformations and better life.
    Looking back at India, there seems to be extreme friction at every little reformation step, just look at the Indian Airlines strike.
    So, if there is something wrong, it’s with all of us including you and me. And we should do something positive about it by getting our hands dirty, to start with, why don’t we start voting in every small elections including corporations and municipalities? Just complaining about it is surely not an answer.
    Cheers,
    Hobbes.

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  2. If you present false binaries like Urban Smart Rural Stupid, based upon one single data point viz China, you should expect your readers to be both Rural and Stupid to vote you in. But then they are actually Urban and Smart 🙂 so what will you do ?

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  3. @ButSir: You wrote

    If you present false binaries like Urban Smart Rural Stupid, based upon one single data point viz China, you should expect your readers to be both Rural and Stupid to vote you in. But then they are actually Urban and Smart 🙂 so what will you do ?

    What exactly is your point ButSir? I have noticed that many comments on Indian blogs have this vagueness. Is that a cultural thing? Can you not spend a couple more minutes writing down what you actually mean to say? In language that others can understand? Atanu provides great example of clear writing in his posts. At least try to emulate him if you have the brains to understand

    “One can either be original and smart, or one can be smart enough to copy what others have figured out.”

    @Atanu:
    You must have figured out by now that if you want anything to happen you have to do it yourself. That’s the way things work – and not just in India.

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  4. Banerjee,
    My point would be very obvious if you have been following Atanu’s blog. Every other post is about moving Indian villagers into cities. Earlier he was into RISC, now he is into DeCi. In both cases idea is the same ie. get villagers to urbanise. While this is a very noble intention, it has been tried in the past several times and ended up making slum-dwellers out of the villagers. Village is not just a backward place, it provides land, tradition, permanent agrarian jobs, ties to land & people etc. – things you cannot quantify with economic models. Similarly city is not just apartments, jobs in infy, malls, multiplex, 8% growth. City also means slums, beggars, disease, slave labor, uncertain future.

    There is also a clear insinuation in all of his posts which is that if you agree with him it is Smart, otherwise you are agreeing with status-quo which is Stupid. But there is no proof since he has not actually done anything concrete besides putting out econ literature. What seems Smart on paper becomes Stupid when you try and execute, that is India’s tragedy.In that sense, I completely agree with you when you say “if you want anything to happen you have to do it yourself. That’s the way things work – and not just in India.”

    One final point is that it is not correct to ask questions like Who is India’s Wu ? Shall I ask Who is China’s Godse ? Who is Japan’s Lincoln ? Every country has its own history, growth models & heroes. While inspiration from others is certainly good, one has to find solutions that are intrinsic to one’s own nation/culture/peoples, not imitate what some Wu did for his people.

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  5. ButSir,

    Thank you for your clarification. My understanding is that you feel that the road to hell is filled with good intentions – as far as India is concerned. Atanu’s point is that good intentions need not always lead to hell and a bit of freedom goes a long way in making sure that mistakes are corrected as soon as they occur.

    There is also a clear insinuation in all of his posts which is that if you agree with him it is Smart, otherwise you are agreeing with status-quo which is Stupid.

    I don’t agree with your assessment. The comments section on this blog is open. However, I’m yet to see a convincing critique of Atanu’s ideas and I’m sure there are many flaws in his thinking. Personally, I do not have the needed understanding of the issues involved to say much of value. But if you do, please elaborate. What I have seen so far on your part is mostly cynicism and emotional outbursts but not much food for constructive thought.

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  6. Atanu, you are becoming so predictable in your posts. Enough of Nehruvian bashing, and hindsight 20/20. Those men implemented what they thought was the best system, given the conditions at that time. By the way, you speak so much of Nehruvian penalty, why don’t you talk about massive civilization threatening capitalist penalty we are paying now in terms of environmental destruction ? What are your suggestions on how India can avoid those problems, still implement your ideal urban lifestyles ? Rs 1 Lakh car ?

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  7. chaitanya,if Nehru did what was right, he (and his still unreal supporters) should also be open for bashing when things go wrong because there is nothing inevitable about taking a right decision. Capitalism may have created environmental damages – but it has the capacity to clean it up. Socialistic industrial policy destroys the environment too with no capacity to clean it up. Capitalist civilizations aren’t threatened by global warming, poor socialists ones are (many because they can’t cope with it).

    Atanu, top down policies, whether urbanization or industrialization will never work in India – too many competitive influences (and ensuing corruption). India is having it’s Meiji restoration – ie learning from outside world. Our utterly intellectually dishonest PM may not send people to learn from the world (when he has free time slicing and dicing people for quotes and making dumb speeches), but people and companies are learning from outside world and rapidly incorporating in practice the best practices. Surely government could help, but not intervening is help too (especially in a socialist country). Who knows we may figure our a way to live productively in the country side (although I doubt that very much).

    As far as Wu is concerned, he made his money sitting in Hong Kong working in Asean countries, away from communist party influence – it would have destroyed him long time ago. Ramachandra Guha comes to mind when critiquing Nehru (there are others, of course) and DLF Group comes to mind on a purely infrastructure basis (it surely is a global third tier company, but one has to start somewhere).

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  8. Well said chandra. capitalism has the ability to clean up the accumulated mess and to that extent its good for the any society, rich or poor to begin with. we did lot of talking and singing on what should have been the means to prosperity and that how erstwhile tribal, flesh eating neighbours are prospering, how the west made all the wealth etc but in the process somewhere we all left one major impediment to this whole urbanization, industrialization, production and prosperity thing completely untouched viz. the cultural ecosystem, by culture i don’t mean festivals, food habits, religious beliefs and attire. It means the collective set of motivations, needs, desires of the people of each geography within the nation that determines how much of labour and capital each individual is WILLING to put forth to attain something good for him. Education is one of the sureshot ways to enable a person use his rational and judgement to decide whats good for him and whats not, what he needs and what he doesn’t, but thats not all. It doesn’t simply bring about a step change to his way of living. This is more true because hazaar centuries of external oppression and spineless rulers and butchers even before Nehru had made the people of this country skeptical of every intention of rulers and they simply don’t tend to trust administartion, governance and any ideology for their good future. Thar might be one of the reason why people choose to live in villages and not to venture into nearby nearby towns, only exception being landless farmer and the rich farmers. both migrate to city to find a small job or educate their kids in convent schools of the city. So they end up electing “local” leaders who irrespective of character promises them some free stuff, different statehood and different identity etc. In fact as a nation we never had a one single identity. Pakistan has one, djibouti may be even has one, somalia has one, poland has one, japan has one, chinks have one but we don’t and we never will have one. That makes us a laughing stock to the rest of the nations where people prospered based on single set of motivations and ideologies, gods and even similarity in what they eat, wear, think and talk, i.e predicatability but we are a dangerous mixture, immiscible, random, diverse, adhoc, fragments and figments of people making a nation called india – spineless, identityless and unpredictable.

    At this point of time i am a 100% cynical as i feel it doens’t take much brains to conclude that we have reached a state of recurring cyclical mess that will only continue to cripple us further, unless we reduce the nation into independent states with similarities in motivations and ideologies , or for that matter just let every state become an idependent nation by a decree of parliament. Let them set their own goals and work towards that. That the only predictable way to prosperity of the individuals.

    Loknath

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  9. China has created illegal migrant worker of its citizen by issuing cards who can work where nonesense.
    So Hoo Hoo I am glad that india does not have a Wu. Fu to any one suggesting emulating a chinese model.
    India will work better with more liberty for the individual. It needs more Economic liberty (easy access to markets for capital,goods and services). Its difficult to set up a business in india and I blame the government and the existing businesses(TATA,birla Ambanis dont want any competion).
    Apart from that there needs to be more political liberty. Randira changed indian constitution and no political party can be created in india if it doesnt call itself socialist.
    And of course Social Liberty, No Indian should be browbeaten by Taus et all.

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  10. As some Zen saying goes: don’t strive for truth, just cease to cherish opinions…it hurts to see a seeker like you being disrespectful toward Gandhi. The price that China is paying to grow would come to haunt it, the way Nehru betrayal of Gandhi is continuing to haunt India.

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  11. And how do you know China won’t overcome its difficulties? When you have grown a country from a North Korea into an increasingly prosperous 1.5 world nation, things like massive environmental problems are no longer so daunting to overcome.

    Right now, for India, I’m wondering what would happen if the plutocrats hijack the democracy. If, say, the emerging Indian middle-class and the Indian capitalists banded together, would they be able to destroy the power of the bureaucrats and thus begin faster economic growth? I’m sure the Russians would be pissed; the class of people that destroyed their country would be the class of people that would save another.

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