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India's global dreams, a Bavarian view

October 17, 2006 17:02 IST

Two weeks ago, as most Indians heading towards Germany were winging their way to the Frankfurt Book Fair, where India was the Guest of Honour, a few of us, under the auspices of the BMW Foundation's Indo German Young Leaders Forum, were congregating at Gut Ising, a Bavarian hotel village some 150 km south of Munich, at the foot of the Bavarian Alps.

As Frankfurt perhaps recognised and toasted the new India, in industrial Bavaria, I noted, interestingly, the concerns about the impact of the Indian juggernaut on the German economy and its people. The concerns were raised, incidentally, as a larger fallout of globalisation - the presiding theme for the forum was "Shared Responsibilities: Business, Society and The State".

Globalisation as a theme figured prominently. It was interesting to me, a novice in the debate, that while globalisation had levelled the world in many ways, the debate and the resultant responses across businesses, societies and states were different. Particularly between India, a country where I hail from, and Germany, a developed country, where we were sitting. To me, this was worrying and encouraging.

What do I mean by all this? First, let me use the words of Hasnain, a journalist working with Der Spiegel, a leading German daily. According to him, his newspaper, like many others, has been frequently publishing special supplements on India. Moreover, Hasnain says he now visits India almost every other month. Even Bollywood attracts interest.

It helps that Hasnain is of Indian origin. "I am the resident India expert on everything," he quips. Significantly, Hasnain raised issues he encountered as a journalist on the field. There is concern amongst German workers, he said, over the increasing number of Indian acquisitions of German engineering firms. As is the possible impact of India's medical tourism efforts on the country's medical practitioners.

Which brought us to a larger point. Has globalisation been good or bad for us? The Indian view is that globalisation is neutral to good for India, so far. Or many of us don't care. While in the West, questions are often raised, for instance, if it has resulted in a diminishing role of the state.

Stefan A Schirm, a professor with Ruhr University of Bochum, studied this issue closely. He said data did not suggest that globalisation forced the state to reduce its share in GNP and reduce its welfare payments. According to him, total government outlays as a percentage of GDP had not seen substantial change in most developed countries. In 1990, total government outlay as a percentage of GDP for the United States was 37.1 per cent. In 2005, it was 36.6 per cent. For Germany, in 1990 it was 44.5 per cent. In 2005, it was 46.8 per cent.

Which is not to say there are no structural adjustment problems. But in Germany, the answer is very clear. As a German entrepreneur pointed out to me. For him, his country was his Father Land. "Like a father who has the traditional responsibility of caring for the family and the children, so does the state," he said.

Unfortunately, for many of us Indians, the state barely exists in our outlook. If it does, it's as an institution that has to be "grappled" with. Or as an institution that has largely failed or is struggling to deliver the very basic needs to its broader mass of citizens. Not quite for the Germans. The belief in the state was high. And it was expected that the state would and have to deliver.

The difference in the two worlds became a little more evident in a breakout discussion, which talked about how young leaders had profited from the opportunities of a free and globalised economy. The question was: does this entail a special obligation vis-à-vis the less privileged members of society?

The Germans and Indians both agreed that young leaders had a responsibility. The young Germans' disappointment with the state centred around a creaking pension system where something like two young people paid to support one old person. Second, a relative inability of the state to provide higher vocational education.

The Indians listed poverty, education, caste-based discrimination and broad infrastructure as some basic problems that had to be fixed. There were of course many more.

Which brought us to the big question. Who was going to do what? Most Indians had plans of their own, individually or in their organisations. One entrepreneur spoke of micro-irrigation projects his company was funding in Andhra Pradesh. Others spoke of social work they were doing in their cities.

The Germans on the other hand agreed they had to focus more on retraining, particularly older labour, which had been retrenched in recent years. And mentoring for younger people. Most importantly, they were clear the state had to do everything else.

To conclude, as nations, we were on different points on the curve. It was clear to me that India can build on the perception that it is a nation on the prowl. But to do that, the state will have to play an ever greater role. In creating a workforce, in building basic social and physical infrastructure. The entrepreneurs will do the rest. But the entrepreneurs need to trust the state and have greater faith as well. Then only can we speak of shared responsibility.
Govindraj Ethiraj
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