My good friend Tosh (author of “The Rising Elephant“) sent me one of his recent articles last week titled, “Eye On The Tigers” which makes the point that putting the all the BRIC countries in one basket may not only be unwieldy but also confusing and possibly inconsistent.
Excerpts:
The BRICs report published in 2003 by Goldman Sachs – which foresaw the rise of Brazil, Russia, India and China as global economc powerhouses, has acquired the aura of a Delphic Oracle.
Nevertheless, it remains confusing with regard to some key assumptions and conclusions, particularly for policymakers.
The first problem is the heterogeneousness of the BRIC membership. Demographically, Brazil and Russia have a combined population of just 330 million – against 2.4 billion for India and China.
Russia, by many accounts still a nuclear-armed superpower, is essentially an exporter of com m odities to the West and of arms to China and India – which, in some cases, its own armed forces cannot afford.
Russia is also ageing fast: 15 percent of its population is over 65 years old,against a mere 5 percent in India.
For its part, Brazil’s growth is three to four times lower, and its income distribution far more skewered, than India and China.
Indeed, the lack of a meaningful middle class is one reason for Brazil’s stagnation, while its presence in India underpins the surprising spurt in its GDP growth.
More perplexing is Goldman Sachs’s faith in the three-fold gap between Chinese and Indian GDP lasting for the next 25 years.
India has been far more efficient than China in moving up the global value chain.
Its telecoms market is now the w orld’s fastest grow ing.Outbound Indian acquisitions, ahead of China in both quality and scale, are another example.
… All this may be overlooked.
What cannot is the report’s unquestioning faith in the continuity of the current global order.
To show precedents for the BRICs, the Goldm an Sachs team turn to Japan and Germany’s rapid growth after World War II. Such straight-line insight may well apply to Japan and Germany, or Brazil and Russia…
To imagine this is true for India and China, inhabited by a third of the w orld’s population (and sometime soon, half its workforce), is curious.
…Devoid of the yardstick of the dollar, things look quite different . Both within the BRICs,and for the world outside.
For in purchasing power terms, China’s econom y is over tw ice the size of India’s, while India’s is larger than those of Brazil and Russia combined.
More dramatic is the fact that the Indian and Chinese econom ies are together already equivalent to those of the U S or the EU.
*****
I would enourage you to read the article in full – especially if you have anything to do with policy-making in Europe.
June 6th, 2007
Posted by
Shantanu |
China, Emerging Markets, Globalization, India |
2 comments
When I first heard of Lokmanch.com earlier this year, I was intrigued.
“Lokmanch”(”People’s Platform” in Hindi) is an independent Hindi news aggregator site operating out of India. About three months ago, I got in touch with the two founders and was impressed by their enthusiasm, passion and obvious love for the business.
Although their position on (and perception of) “Globalization” is very different from my own take on it…I could not help admire the amount of work and energy that they had put in this effort. As it happened. I had the chance to meet with them a few weeks after the first conversation…and I came away from the meeting hooked!
Lokmanch’s vision is simple yet powerful – to make news and content available easily and freely in languages other than English and to be an alternative to current mainstream (English) media in India.
I would like to extend this idea a little further…and this is the dream – to make information/content available to anyone, anywhere and anytime, freely…In the context of India, other than the obvious difficulties in “anywhere” and “anytime”, you also face the challenge of “anyone” since a large number of people do not speak English* – hence the appeal of non-English online news aggregator(s) like Lokmanch. This is what I would call ”Democratizing Content“.
I am excited by this and will be watching them closely…and I wonder if there is any similar site (independently aggregating regional, local news content) catering to the Chinese speaking population?
.
* Although by 2010, India will have the world’s largest number of English speakers and as Prof. David Crystal has memorably noted elsewhere, “When 300 million Indians speak a word in a certain way, that will be the way to speak it.”!
May 17th, 2007
Posted by
Shantanu |
Entrepreneurship, Globalization, India, Miscellaneous |
10 comments
An amazing slideshow by Jeff Branman (Winner of the Best Presentation award at the “World’s Best Presentation Contest” ShiftHappens
.
and for my readers familiar with India, another un-missable one…People’s Choice Winner at the same contest Panipuri by Thakkar
May 15th, 2007
Posted by
Shantanu |
China, India |
3 comments
Earlier last week, Shefaly alerted me to this FT article by TN Ninan, editor and publisher of Business Standard (one of India’s leading business newspapers) comparing India and Israel.
In the article, Ninan noted that:
“…it takes a quick visit to Israel to put these signal achievements (of the Indian software industry) in perspective. At dinner in Tel Aviv with the man who advises Israel’s prime minister on economic policy, the subtle point is made to us that those armies of people walking every morning into the campuses of Infosys and Wipro are not in the same category as the large numbers of high-tech entrepreneurs being turned out by Israel.
…Israel has no fewer than 3,000 high-tech companies, supported by a flourishing venture capital industry that buys into garage-scale enterprises and takes them public once they have reached a certain scale. Last year alone saw foreign investors coughing up $10bn to buy into just 30 Israeli tech firms.
…more than a third of Israel’s total exports in some years have come from the high-tech area, and 20 per cent of the revenue earned by the electronics industry is ploughed back into R&D – some of which is a spin-off from the country’s massive investment in defence research.
…when you are told that firms in Israel have developed the voice over internet protocol (VoIP), Intel’s multi-core processor, the cellular telephone and most of Microsoft’s Windows NT operating system, and that the world’s electronics giants have invested much more in Israel than in India, Bangalore’s very creditable record begins to pale.
To be sure, Indian companies and the Indian branches of international firms have been doing more high-end work in recent years and helping to develop cutting-edge technologies useful for a range of industries. But for every product development claim that you can make on behalf of India, Israel can perhaps make a matching if not superior claim…”
Ninan’s footnote profile mentions that he is an award-winning journalist but this particular report was far from any award-winning news-story.
At the very least, it could have done with a little more homework…and in any case, a comparison between India and Israel is not simply apples and oranges…it is just PLAIN BAD.
Why do I say that?
The two countries have been on vastly different growth trajectories, have had very different business environment for several decades and share very little in common when it comes to development challenges…
To make it a more “apples with apples comparison”, you need to factor in (on the Indian side) an impoverished population of several hundreds of millions, stage of development, questionable government policies, problems of national identity, challenges of running a democracy on an empty (or partially-filled stomach) etc etc…Once you do that, India (surprise) begins to look much much better…or may be it is just the proud Indian in me rushing to India’s defense?
You decide.
.
P.S. I hope Barak is still talking to me after this!
May 12th, 2007
Posted by
Shantanu |
India |
33 comments
Under a nicely provocative headline titled “UK businesses signing their death warrants with their ignorance“, the chilli recently quoted from Grant Thornton’s International Business Report, while commenting on UK SMEs and globalization.
Amongst other things, it noted that:
“…less than half of UK businesses (46 percent) believed that globalization presented an opportunity to their country” compared to “82 percent of Indian businesses who believed that globalization presented a significant opportunity for their country…”
The story also mentioned: “UK business owners felt that (the economic expansion of the BRIC countries) over the past few years (has) had very little impact on their own companies”
A few other startling findings:
- 79% of UK businesses are ignoring opportunities to import from China
- 90% have no plans to export to India and
- 87% have no plans to export to China
…all of which suggests to me a great opportunity (and a market) waiting to be tapped.
May 10th, 2007
Posted by
Shantanu |
China, Emerging Markets, Europe and Asia, Globalization, India |
4 comments
Late on Thursday afternoon last week, I had a very interesting conversation with Chris Devonshire-Ellis during which we talked about China, India and the impact their rise is going to have on the global economy.
Chris heads Dezan Shira and Associates and after spending 20 years in China has now turned his eyes to India (I credit him with great timing!).
After a recent visit, he wrote this article for the Shanghai Daily which captured the “electricity in the air” feeling that Mumbai (and to a large extent, the rest of India) has these days: “”Mumbai has that sizzling Shanghai state of mind” – amidst all the heat and dust.
Excerpts (emphasis mine):
“…while people complain about the traffic in Shanghai, in Mumbai it takes three hours just to get from one side of the city to the other. Taking a taxi to see someone is a half-day journey.
But amid all the traffic chaos, Mumbai has that Shanghai feeling.
…The talk on the streets, from fashionable Bombistas wearing Prada and with Nokias glued to their ears, are of investments being made in Shanghai and Dubai.
The stock market too, is booming. Mumbai is Asia’s oldest stock exchange, and has a market capitalization of US$900 billion. Shanghai by comparison is US$1.56 trillion, and Shenzhen US$246 billion.
Those figures reflect the GDP position, with China’s US$2.7 trillion being about three times the size of India’s US$904 billion.
It means that India is about six-seven years behind China in terms of development, and those of you who were here then will recall the can-do spirit of late 90s Shanghai.
That is how Mumbai feels now – change is coming – fast, and the good times are back.
One, two and even three-billion-dollar investments are being secured, just as they were in Shanghai.
BMW, Nokia, General Motors – all major players are investing in the new India. Direct flights between Shanghai and Mumbai are now full on a thrice-daily basis, and the Beijing-Delhi route is even busier.
The brands are recognizable too – LV, Cartier, Paul & Shark, Burberry, Hermes, all present and correct, and with a middle class of some 350 million people, the Indians are buying.
…Sometimes Mumbai feels so different, and sometimes so much the same.
Both cities were moribund for so long, and both have awakened. Shanghai with its tradition of jazz and “qipaos” and Mumbai with its love of big bands and saris.
The two cities match each other, and for sure the sea routes between these two Asian giants are busy as trade reignites between these sisters of destiny…”
**********
…and here are some great slides by Chris on India and China that contrast and compare the two countries.
Great stuff Chris…I will be watching for more.
May 6th, 2007
Posted by
Shantanu |
China, Emerging Markets, India |
8 comments
