Why democracy will win, at the photo finish

Post script to Delhi’s 19th CWG 2010

After a dazzling opening ceremony and an equally scintillating closing ceremony, the Delhi 19th CWG 2010 has concluded after 11 tense and exciting days. After years of lethargy the Government finally got its act together and moved in powerfully to get the infrastructure and arrangements into place.

Just-in-time operation

In the meantime, India’s free press tore the games, the organisers and the arrangements apart and the international media followed suit. This seemed to finally spur the Indian authorities into action, in the face of a threatened boycott by ‘white’ Commonwealth countries. But still it was a last minute, ‘just in time’ operation.

The athletic running track was damaged at the scintillating opening ceremony and was under repair until 2 a.m. on the morning of the first event! Some swimmers suffered from Delhi Belly, an infection thought to be from water in a training pool. The boxers weighing machine was malfunctioning. A Games information system which was described as shambolic left the world’s press scrambling to collect even the most basic news.

Mike Fennel, Commonwealth Games Chief, even after the scintillating opening ceremony, was constrained to state: “It’s only the first day, let’s see how it goes!” Speaking at the close he congratulated India on getting its act together, but later told a reporter: “The creaking show piece needs to rethink its timing and re-brand its image.”

Australia came first with 74 golds and a total of 176 medals, India second, and England third.

Inevitable comparison

Inevitably Delhi 2010 was compared with the Olympics at Beijing in 2008 and further analogies drawn as to the stark contrast of the two Asian big hitters as to a foreign investment and leisure destination and in terms of human development. They both have their advantages and factors which will hold them back.

The main difference between the two nations is the system of government – India an open liberal democracy, with a Government subject to law and justice, as against China an autocracy managed by the Communist Party. Albeit China has achieved, if not regime change, at least a change of ruling personalities, all loyal members of the Communist Party, in a stage managed, non violent manner over the last few years.

Sustainability of that process in China is the question; the system, with no independent checks and balances, may very well throw up another Mao or another Gang of Four. They will need another Deng Hsiao Ping to sort matters out!

Nandan Nilekani, the former Deputy Chairman of Indian software giant Infosys, now working for the Government of India on the Adhara programme, to give every Indian an identity number, has described India as a “global sweet spot”.

Vijay Govindarajan of the Tuck School of Business at Dartmouth College, in the US, predicts that the expansion of Indian corporates in global markets is moving at such a fast pace that firms now worth $ 5 billion could be soon worth $ 30 billion, assuming growth and demand keeps moving at the same trajectory.

This year India’s GDP is expected to grow at 8.5%. Chetan Ahya and Tanvee Gupta of the investment bank Morgan Stanley predict that India will start to outpace China within the next three to five years; predictions are that China will stick to around 8% growth for the next few years while India will in successive years achieve growth rates of 9 to 10%.

Growth spurt

Most long range forecasters predict that India, in the next 20 to 25 years, will grow faster than any other large country. McKinsey, the consultants, predicts that the Indian economy will grow fourfold in the next two decades.

India is seeing a surge in its working age population. It is in a very convoluted way reaping the rewards of being unable to bring its population growth under control. The excesses on sterilisation carried out in Sanjay Gandhi’s time got so much negative publicity in India’s free press and caused so much revulsion in Indian society that all governments have soft-peddled issues of population control ever since.

Conversely, China strictly and brutally implemented the one child policy, no dissent was allowed and now the Chinese population is ageing very rapidly, especially the majority Han people, which brings its own tensions.

Each young person has to support the parents and two sets of grandparents. India is seeing a humongous surge in its working age population. As Nilekani points out, this is bucking a worldwide trend in ageing; an ageing world needs workers, India with its young demographic profile has the workers.

The East Asian boom was driven by a young low cost educated working population. This now seems to be India’s turn. UN figures indicate that the proportion of the population of India below 15 years and over 64 years has declined from 69% in 1995 to 56% in 2010. This means that India’s working age population will go up by 136 million in 2012. The growth projection for China for the population number for the same period is only 23 million.

Education challenge

But education remains a challenge for India yet. Already in China’s industrial belt, on the southern coast, in areas like Guangdong and Shenzhen, the power houses of Chinese manufacturing industries is seeing worker shortages, labour unrest and actual strikes, even in factories owned by multinational firms, normally good paymasters, for higher wages.

The supply from the rural hinterland has decreased mainly due to the one child policy; combined with the permission given for private enterprise in those areas, people have no reason to migrate for employment away from the village, if they can as much or even earn less than that in Shenzhen, but without the related costs, hassle and family disintegration caused by of migration.

Head of the Sri Lankan garment giant Brandix, Ashroff Omar was quoted as stating in New York that in his view even Sri Lanka will remain as competitive with China as far as labour wages are concerned.

Economic reforms

The economic reforms which India implemented in the early 1990s, dismantling the permit Raj, which held growth to a static 4%, the much derided Hindu rate of growth, is another advantage India has. It has released an explosion of pent up business synergy.

Indian corporates such as Infosys, Wipro, Tata and Mittal are world beaters. But it’s the small and medium sector which has really exploded at geometrical proportions – analysts talk of 45 million entrepreneurs.

Up and down the supply chain, Indian manufacturing industries have outsourced the assembly of products destined for world markets at competitive prices to small sub contractors. This business expansion is based upon a huge emerging urban middle class with humongous purchasing power.

It is an export powerhouse built on sound domestic demand. For products such as electronic white goods, India is in reality an emerging market. Demand is going through the roof. The Korean firm LG’s annual sales are about $3 billion and have risen by 30% in the first seven months of 2010.

Bottlenecks

But India also has the bottlenecks. The confusion, dislocation and lack of drive and coordination, highlighted during the Delhi CWG 2010, is clearly one; the allegations of bribery and corruption in procurement, another.

Pratyush Sinha, who recently retired as India’s anti corruption watch dog, estimates that at least a minimum of 30% of his country men are “utterly corrupt”. India has a literacy and skill deficit. Huge gains are being made, mostly market driven in skill training, and more parents are aware of the value of education.

The populism of India’s open democracy is also, according to some analysts, holding back India’s economic growth. Investors have voiced the opinion that it is much easier to deal with the Communist Party of China and the unidirectional policy and implementation, than with the rambunctious plethora of Indian institutions at national, state, local and city level.

In India issues like land acquisition for industrial sites, end up as virtual war zones with running battles between police and agitators. Tata had to relocate a planned factory out of Bengal to Gujarat for the revolutionary Nano, the poor man’s four wheeler, due to them being demonised by a local politician.

But, on the other hand, all the dire predictions which preceded the Ayodhya judgment of communal violence did not materialise. Indian society showed a restraint and maturity which was commendable.

Essential difference

There are two examples which would show the essential difference between India and China. India’s problems with the 2010 CWG were in the public domain, as they should be, in an open democratic liberal society. Every aspect of all possible issues and non issues were publicised, domestically and internationally, before, during and after the Games. Indian officials were held to a very high standard of public accountability.

Compare and contrast just one incident in China in 2008. On 2 August, just six days before the Games opened, a baby milk powder producer Sanlu approached the city Government of Shijiazhuang, informing them about an issue with their baby milk powder being contaminated with melamine, an industrial chemical used to make plastic cups and saucers.

They suspected that two brothers who ran a milk collecting centre had adulterated the milk they collected from farmers with melamine to increase the apparent protein content of the milk. However, the problem was not reported to the Hebei provincial Government until 9 September.

Newspaper reporters had information of parents complaining about problems caused to babies fed Sanlu milk, many developing kidney stones, but were unable to publish their findings because of the strict media controls imposed by Communist Party censors, during the August 2008 Olympics.

The scandal was brought to light only when Fonterra, the New Zealand 43% joint venture partner of Sanlu, informed Helen Clarke, Prime Minister of New Zealand that Sanlu was refusing to recall the contaminated product and she contacted the highest level of the China’s Government. The lives of four babies and 53,000 sick children, was the price paid by the Chinese people for this scandal.

Later President Hu of China, when visiting dairy companies, said: “Food safety is directly connected to the wellbeing of the masses, Chinese companies should learn lessons,” in an attempt to assuage the public outrage. The Government issued a formal apology, an unusual event.

In India an event like this would have been headline and prime time news, being constantly analysed until everyone was paralysed, including the world famous Gujarat brand of Amul milk! They are still going on about the Bhopal contamination incident of 1984, a leak of methyl isoceyanate gas, estimated to have killed 8,000 people within the first week and another 8,000 since, and leaving tens of thousands more affected, a quarter of a century later.

Treatment of Liu Xiao Bo

The second example is how China treated Liu Xiao Bo, a veteran of the Tiananmen massacre, who was awarded the Nobel Peace Prize in October 2010. He was in jail at the time of the announcement, in December 2009, after a one day trail he was sentenced to 11 years jail for being one of the drafters of Charter 08, a manifesto for political change in China.

He was awarded the Nobel at a time when even the PM of China Wen Jiabao is joining the debate on the need for greater political liberalisation. Now the world will hear about his small, brave act of defiance and many will want to emulate it.

Such acts have been well documented by Crawshaw and Jackson in their book ‘Small Acts of Resistance: How Courage and Tenacity and Ingenuity Can Change the World’. They cite several such acts which have been the proverbial ‘straw which broke the camel’s back’ and resulted in hitherto, impregnable, repressive autocracies, disappearing into the dustbin of history, in double quick time, both peacefully as well as violently.

China had before the award warned the Norwegians against giving it to a ‘criminal’. Afterwards, Liu’s wife was escorted by police his jail to see him, her mobile phone had been disconnected and a police guard was placed in front of her house and she was kept incommunicado. But Liu’s jail guards had told him of the award before; his wife said he had broken down and cried. The Norwegian Ambassador to Beijing was also summoned to the China’s Foreign Ministry and told about China’s unhappiness.

The difference between the two systems is stark: India, an open democracy, warts and all; China, a closed autocracy, trying to unsuccessfully closet and hide its warts and more, in today’s globalised communication and information technology environment. Talk of lighting up a candle to fight the sun!

India’s democracy

It is India’s democracy that will finally confer long term sustainable benefits. Granted, India’s political system complicates their system of government, responsibilities are split between national, state, local and city politicians and administrators; every decision is contested and argued over in the public domain.

Consider how the Ayodhya judgment is being discussed and criticised. India changes governments through free and fair elections conducted under the auspices of an autonomous Election Commission. In India, the practice of running down protesters by battle tanks like at Tiananmen Square does not and will not happen. If anything like that happens there will be open, violent public outrage which cannot be suppressed.

Even in the BIMAROU states (Bihar, Maharashthra, Rajasthan, Orissa and Uttar Pradesh) in the Red Corridor, the 588 districts in which the Maoist are waging war against the Government of India , the government’s response has been one of restraint.

The Central Reserve Police Force (CPRF) has taken on the Maoists fighters, not the Indian Army. The Indian Air Force flies logistic missions in support of the CPRF Jawans but under strict rules of engagement which do not permit the flyers to fire back, even if shot at.

Of course, the Kashmiri Azadi situation and the border with Pakistani controlled Kashmir are historically more complicated, but yet, there too the Indian Army operates on the line of control under legal constraints.

Emerging power

Beijing Olympics 2008 showcased China as an emerging power; a country in which it would be get things done effectively, it raised China’s diplomatic profile, influence and would have bought commercial benefits, but together with a suppressed melamine milk scandal.

India received huge amounts of negative publicity due the Delhi CWG 2010. Poor sanitation, poor governance, corruption, an inefficient bureaucracy, incompetent, confused politicians and sports administrators – this was what the world saw.

But the world would have also seen the right to open dissent, a robust independent and fair judiciary, a free press, bureaucrats and politicians subject to the rule of law, a final Delhi CWG, which managed to get its act together, and athletes who performed impressively before the world – without the equivalent of a suppressed melamine milk scandal.

Democracy, open, accountable and answerable to the law and justice and to the people, is the final differentiator. The experience of the Delhi CWG 2010 and comparison with Beijing 2008 seems to establish that beyond any reasonable doubt.

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)