Saturday, November 22, 2008

Snooty Indians and Rough Chinese

Anyone who has followed the media in the last decade will know that the biggest story in the last decade has been the spectacular econmic rise of China and then India. The two Asian Giants contain two fiths of the human race and even at current levels form a formidable economic block. China has been taking over much of the world's manufacturing and this Summer, a proud, resurgent China hosted one of the most spectacular Olympic Games in living memory and as an Asian, it was exhilerating to see China top the gold medal table. The question is no longer whether China becomes the world's biggest economy but when. Despite protest by unfortunate Tibetans, 2008 has been pretty much China's year and as America and Europe fall deeper into the economic doldrums, the world is looking nervously to China as a new engine. 

India has also been interesting. While China has become the world's factory, India with it's vast, educated and English speaking population is becoming the back office of the world. Call centres, the job of last resort for those in the developed world is a serious career option for bright, MBA's in India. Then there's software. Western multinationls these days cannot afford to get along without Indian software programmers, doing not just work the multinationls disdain, but also creating programms that run entire opperations. First it was giant companies like Tata Consultancy Services (TCS), Infosys, Satyam and Wipro that hit the world. But now you also have a wave of smaller, niche market players like Polaris, 3i-infotech and i-cell (part of Oracle) Software creating highly specialised systems for particular industries. These small companies are highly cash rich and although they don't make the headlines that they're larger cousins do, the software they produce helps to run many of the basic functions we take for granted.

Perhaps it's because I've moved back to Asia for the last 8-years but I think the rise of the Asian giants is probably the most hopeful thing in human history. As much as Westerners may bitch about outsourcing stealing jobs and Singaporeans may complain about snooty Indian nationals and rough China hookers, there is no reason why two fiths of humanity should be mired in poverty. Furthermore, the growth of prosperity in the world's two largest population centres benefits the West and it's allies. Poor and unstable countries do not make good allies, but strong and confident ones do. Look at the way the Indian Navy has taken a lead in dealing with piracy in the Gulf of Aden, a role you once only expected of the Western Powers.  

How has this happened? I remember a talk I attened by the Secratery General of the Commonwealth, HE Mr Kamalesh Sharma. He mentioned that it was found that the only thing countries that developed quickly, such as the Asian Tigers, had in common was heavy investment in education and healthcare. He noted that, "All policy is ultimately social policy." I write from Singapore, a country that has benefited from heavy investment in education and whose government understands that the nation's future is in how it adjusts its education. 

This point on education was brought home to me by Mr Rajendra Kumar Srivastava, Provost and Vice President Academic Affairs at Singapore's Management University (SMU). Mr Srivastava, who was chairman of a pannel discussion at the Indian Institute of Technology's (IIT) Alumni Association meeting (one I had the honour of attending), compared the situation in Indian States that had invested in education and those that did not - Kerela is highly litterate and although not rich, life is good for its residents. Bihar by contrast has a low rate of litteracy and a high rate of poverty and corruption. 

What was even more interesting about his comments and comparisons was the fact that he brought a direct comparison between India and China. It's an enlightening comparison. You can understand why the Asian giants have taken the development path they've taken if you understand the different approaches to education.

India has excelled in high-end services like software development, pharmaceuticals and movies. In Singapore, we've seen a concerted government effort to woo the growing class of professional Indian workers. Minister for Community Development, Youth and Sport, Dr Vivian Balakrishnan told the gathering of IITians, "You are welcome and You ARE NEEDED." The Indian Nationals that I've had the honour of working with in Singapore are amongst the most educated and well brought up people I've encountered, though there are admitedly grumblings from Singapore's Indians that the Indian Nationals are snooty and snub them. The Indian Nationals argue that it's not about looking down on people - they merely point to the fact that Singaporean Indians do not have India as a refference point - it seems to me that the Indian Nationals are educated to a level where they no longer use race as a reference point in the same way our Singaporean Indians do. 

How has this come about? The answer is simple, India has focused on higher education for its elite. The result is world class university campus's. Both the Indian Institute of Technology (IIT) and the Institute of Management (IIM) compete with the likes of MIT and Harvard Business School in international surveys. The guest at the IIT gathering read like a who's who. You had prominent speakers like Mr Jeet Binda, President of Global Manufacturing at Chevron and Mr Rajat Nag, Managing Director-General of the Asian Development Bank amongst others. Obviously the organisation has done something right to produce people who climb to such positions. 

Of course, India has had the advantage of a sizeable educated class. The 300 odd million Indians who make up the Middle Class can read and write in English - they can work in the international market. However, if you upgrade their education at the university education, you can upgrade the type of work they do in the international market. 

Another sign of India's success in this area can be seen in Forbes's list of billionaires. Asia's richest people are no longer in Japan, they're in India. Until recent deterioration in the economy, four of the top ten richest men in the world, were Indian.

But the down side of India's emphasis on university education has been its failure to lift the masses out of poverty. India does badly in litteracy rates against China and while there may be more Indian billionaires than Chinese ones (The fact that there are billionaires in a Communist country is an achievement), China's GDP per capita is higher than India's. 

China, by contrast has placed emphasis on primary and secondary education and it excells in manufacturing. You don't need people to work in the international market for manufacturing, you just need to provide labour at a competative rate. As a result, the Chinese education system has produced skilled workers for manufacturing jobs. Other nations that try to compete with China simply can't because the Chinese engineers and technicians who are often as good as those in more developed places and cheaper and harder working or more suited to rough but skilled work.

I look at who from China comes to Singapore. It's quite often construction workers who are willing to do the jobs Singaporean Chinese disdain and yes, many of the girls that do make it here work as hookers. But all of them share one common trait - hunger and supperior street smarts that local Singaporeans lack. If local Indians complain about snooty Indian nationals, Singaporean Chinese complain about the coarse loud voices of China workers and China girls who sell themselves to the highest bidder. What the locals don't see is their determination to succeed - the workers are working in a way we won't and the girls make it a point to ensure our local men are enchanted by their presenation. 

Where China's system fails is in the fact that it does not encourage innovation. China's growth is based on its ability to make things cheaper than other people but as the experiences of Southeast Asia has shown, this edge wears out. Vietnam for example, is capable of giving China a run for its money and Indonesia and the Phillipines could too if they stabilised their political systems. 

The respective strengths and weaknesses of the Chinese and Indian systems complement each other. Both aknowledge their weaknesses and are looking to solve them. One of the deans of the IIT's admited that they need a stronger support system lower down the education system. China is sending students to develop their minds in the best universities in the West. Furthermore trade links between the two nations are growing and instead of seeing China as purely being about manufacturing and India as about services, there is a growing cross pollination of strengths. China is gaining in the software and services business. India has some competative manufactures - look at Birla motors as an example.  

So, where does that leave us in the rest of the world and in tinny Singapore. I'm with the government when it says we need to be open. Educated Indians with money to spend like spending it in Singapore. Nearly all the Indian Nationals I know have taken up permenant residency in Singapore and letting them trickle down their good fortune benefits Singapore.

But I also think the Chinese labourers need to be welcomed. Although less educated than the Indians, the Chinese have shown themselves to be hungry. Look at all the $20 dollar buffets spreeding around to cater to China nationals. These small businesses cater benefit the economy. So as well as letting the wealthy Indian's trickle their wealth down to us, we should also allow the Chinese to build it from the ground up. 

This will undoubtedly cause some social tensions but since when was integrating people ever easy. I'm of the belief that we should welcome people as citizens provided they're willing to pay the price of citizenship - which in the case of men is national service. You simply cannot expect Singaporean citizens to take up arms to defend Indians and Chinese for the sake of it. However, if a Singaporean serves next to a China or India National, chances of successful integration are higher. 

People are the best asset a nation can have. As a small nation, Singapore cannot afford to indulge in isolationst policies. A constant flow of people means a constant flow of money, ideas and opportunities. Yes, sometimes you also get the crooks in, but creating and increasing the flow people does not mean we need to sacrifice law and order. Keeping out people would be a mistake - educated Indians and rough Chinamen could well be anchors for our future. 

1 comment:

Anshuman said...

Great article!!
Being an Indian, I really admire your thoughts and parallels between India and China.

One correction, Instead of Birla motors it should be Tata Motors.