A Letter from America

Hi from the Big Apple. Brilliant day outside with snow from yesterday’s blizzard blanketing the city. I am visiting with my friend Reuben who lives on 116th and Broadway (Columbia U.)

I have been wandering around the world for the past couple of weeks. Which partly explains why I have been neglecting this blog. Then there is the acute case of writer’s block that I am suffering from. It is with some trepidation that I am pushing against that block. So here goes nothing.

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My journey began on the 16th of February when I left Mumbai for New Delhi. After a bunch of notable meetings, I headed south to Nagpur, my home town. A few days there and then I went to Bangalore. It had been donkey’s years since I had last been there. Things had changed. It was the center of India’s information technology storm. The city appeared to have hit puberty and grown big overnight and was too big for its boots. I had been warned about the vehicular exhaust pollution but it was still a shock to be actually immersed in it in the city center. In any event, I had a bunch of good meetings and visited with my friends. I arrived back in Mumbai on the evening of the 28th.

This one is turning out to be a real web log: an account of where I have been. Boring stuff but I think this will get me out of the fear of writing.

Anyway, the next day, March 1st, I had a bit of bureaucracy to take care of. I had overstayed my 180-day visitor’s visa by a few days and it appeared that I will not be allowed to leave India without having my visa extended. So off I went to the Foreigner Registration section at the Mumbai Police Commissioner’s office. It took about 3 hours to pay a penalty of $30 and get a piece of paper that extended by visa by a few days.

It had been a long time since my last encounter with the Indian government bureaucracy. I had to fill in a few forms, wait for a long time to meet with the appropriate official and witness first-hand antiquated processes which appeared to serve no apparent purpose other than to employ people and fill numerous registers with handwritten notes. The main official I met was courteous and helpful. Why had I overstayed? Circumstances I could not avoid, I replied. He filled in a few forms, walked over to various parts of the office where he pulled out other various registers and wrote in them. Then he went to another part of the office and brought with him a rubber stamp and stamped one of the registers. Went back to put away the rubber stamp and then moved the register to another part of the office.

After about 15 minutes of this, he finally declared that I will have to pay a penalty of $30. I reached for my wallet. No, he said. I had to go to another section and pay the fine and then I have to bring him back a receipt and we will continue with the process. So off I went and waited for about 20 minutes at the other section. When my turn came, the man filled in three different registers with the same details that had already been entered several times in various registers earlier: name, date of birth, father’s name, passport number, etc. In each case he would carefully pick up carbon papers, carefully insert them in to the registers, then enter things in triplicate. Another 15 minutes and I was all done with paying my fine and getting a receipt. Back to the other guy. He now gave me a piece of paper which extended my stay till March 2nd. And then he got up and went to another part of his office, found a rubber stamp, and stamped my passport with it. I was about to thank him profusely when he said, “Please collect your passport after 6 PM.”

He explained that they only take in the cases between 10 AM and 2 PM, and after processing, returned the passport in the evening. Could I please have my case expedited? Well, since you are leaving in less than a day, perhaps an exception could be made, he said. He handed me the passport and I left.

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Information technology tools are great for handling information. Computers are useful things for pretty much any application which deal with information processing, storage, and retrieval. At that Foreign Registration office, I am sure that a bit of IT hardware and software would not be out of place. But it would of little utility unless the processes that run in that office are rationalized. The need for rational processes is greater than the need for hardware. Buying hardware is easy; rationalizing processes is hard.

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Later that night (early morning of 2nd March, actually), I took an Air France flight from Mumbai to New York’s JFK via Paris. Same awful Air France food. Why do they serve icy-cold hard rolls with the food? In any event, I met my friend Courtenay in Paris during my 5 hour layover and had lunch with her. It was snowing and cold in Paris, the coldest March they have had in 30 years.

OK, writer’s block cleared. I guess from now on, I will be writing regularly. Be well, do good work, and keep in touch.

Homelessness in Mumbai

How shall I go in peace and without sorrow? Nay, not without a wound in the spirit shall I leave this city.

Long were the days of pain I have spent within its walls, and long were the nights of aloneness; and who can depart from his pain and his aloneness without regret?

Kahlil Gibran The Prophet

My days in Mumbai are numbered. Strictly speaking, all the days of our lives are numbered. I will soon be saying goodbye to the city that has epitomized to me all that is wrong with India. I know there are people who swear by the city. I think that they are in a minority. But then, one might say that even minorities in Mumbai are pretty large numbers. Continue reading

Oh To Be in Kolkata For Puja

The city formerly known in English as Calcutta (now known in all languages as “Kolkata” which is its Bengali name) is an unfortunate city. Its misfortune derives from two major sources primarily. Two of the world’s most destructive ideologies — Islam and communism — have brought a city full of promise to its knees and today it is best known around the world as the “City of Joy” and the “Black hole of India.” It breaks the heart of any culturally sensitive person — not just someone like me whose ancestors claimed Bengal as their home — to behold the depths that Kolkata has been dragged to first by Islam and then by communism.
Continue reading

The Triple Point of the World at Zero Degrees Humanity

MonsoonRain

I keep waiting for the real monsoons to show up in Mumbai. Do they have any thunder and lightening and huge downpours around here or does this anemic occasional rain showers pass for the monsoons? Thank goodness that I went to Lonavla last weekend with a bunch of guys from work. As we entered the Western Ghats, we passed through the mother of all rain storms. Waterfalls by the hundreds cascaded down the rocky cliffs at the edges of the Mumbai-Pune highway. When we reached Lonavla, the downpour had created fast-flowing rivers of the narrow roads of the busy tourist town. Being situated in a hilly area, shortly after the storm ended, the rivers vanished and the narrow streets reappeared. Continue reading

Overtaking China

Here is another bit from Anand’s comments.

The collective leadership that is fueling china’s growth today will have to go away in the future. Communism is not going to last long enough for china to become a developed nation. Once communism collapses and democracy begins to form in china, there will be a prolonged period of little or zero growth in the country’s economy.

That is when India will overtake china.

It is very likely wishful thinking combined with admirable patriotism that motivates Anand above. The engine of communism has been decoupled from the Chinese train long ago and it is the engine of capitalism that is driving that one. As Pranab Bardhan had observed, the Chinese were better socialists than Indians, and now the Chinese are proving to be better capitalists than Indians.
Continue reading

Crouching Tiger, Lumbering Elephant

In Crouching Tiger, Lumbering Elephant, an essay which recently appeared in a collection, Pranab Bardhan of UC Berkeley (one of my advisors during my doctoral work there) compares India and China while leading up to the main thesis of the paper. He concludes that

By most criteria of standard economic measurements of levels of living and their growth, China has clearly won the race.

To support his conclusion, he notes

Over the last three decades official data suggest that the average annual rate of growth of per capita income was about 7 per cent in China1 and 2.5 per cent in India. Productivity per hectare in agriculture (say, in rice) has been much higher in China for centuries, but the relative progress in manufacturing in recent decades has been phenomenal. In the early fifties the total GDP in manufacturing in India was slightly below that in China , in the late nineties it was less than a quarter of that in China. In 1999 the manufacturing share of GDP was 38 per cent in China, while it was 16 per cent in India. Indian labour productivity in manufacturing was about 71 per cent of that in China in 1952; in 1995 it was 37 percent2. Compared to India, total electricity use per capita is twice as high in China and teledensity (the number of telephones per thousand people) is several times higher. In 1999 the share of world trade (exports plus imports) in goods was 3.3 per cent for China, 0.7 per cent for India; in services the corresponding percentages were 2.1 and 1.2. The total amount (in dollars) of foreign direct investment in China was 18 times that in India in 1999. In the same year gross domestic saving as a proportion of GDP was exactly twice as high in China as that in India.

… The social or human development indicators all indicate the superior performance of China. The life expectation at birth is about 70 years in China, to India’s 63. Under 5 child mortality (per thousand live births) was 37 in China and 90 in India in 1999. Female illiteracy for above age 15 was 25 in China and 56 in India in 1999.

Dismal reading if you are an Indian wondering what went wrong. Bardhan’s thesis is that China has been better able to resolve collective action problems.

I have been convinced for many years that both at the macroeconomic level of political economy and the micro level of management of public space in general and of common property resources in particular , one of the most serious problems that Indian society faces is that of collective action. At the macroeconomic level collective action is necessary in formulating cohesive developmental goals with clear priorities and avoiding prisoner’s dilemma-type deadlocks in the pursuit of commonly agreed upon goals.

He had analysed India’s fiscal crises and development gridlock as an ‘intricate collective action problem in an implicit framework of non-cooperative Nash equilibria’ nearly two decades ago. In his judgement, Indian reform would lumber along, clumsily and haltingly. It is a despiriting conclusion reached by one who knows something about India and economics.

What interests me particularly in the paper is his identification of China’s township and village enterprises (TVE’s) as an important institutional innovation that has changed China’s fortunes. These are non-state industrial enterprises under local government (and sometimes semi-private) control.

Take the TVE’s which formed the leading sector in the industrial economy in the last two decades. I believe that the clue to their dramatic success particularly in coastal China lay in three major elements of this unique institutional experiment: (1) there was intense competition among the TVE’s run by different local governments; (2) this competition had teeth (unlike , say, in the case of the competition of public sector banks in India) in the sense that there was a “hard budget constraint” imposed on them, so that by and large a failing TVE could not expect a bailout by the provincial or central government (although there was some cross-subsidisation between enterprises within the same township or village); and (3) when the TVE made money, the local authority was largely allowed to keep most of it (residual claimancy without private ownership was the novel institutional feature).

Institutional innovation is what India chiefly needs. Like China’s TVE’s, we too have to find our innovation that would transform India’s economy. Since rural India is demographically larger, we need to focus on rural India seriously. Some of us are convinced that something like the RISC model is the appropriate innovation that needs to be implemented.