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India has to make dramatic changes to have same opportunities as China, say authors John and Doris Naisbitt

The husband-wife duo tells Sarika Malhotra that the rise of the Global Southern Belt is a great opening up for Indian entrepreneurs, as their playground is no longer only India, it is the world.

twitter-logo Sarika Malhotra        Last Updated: January 28, 2016  | 12:42 IST
John and Doris Naisbitt (L), authors of international bestseller Megatrends
John and Doris Naisbitt (L), authors of international bestseller Megatrends

John and Doris Naisbitt, authors of international bestseller Megatrends, in their latest work Global Game Change: How the Global Southern Belt will Reshape Our World published by Sage Publications, talk about the rise of the Global Southern belt and its impact on the world. The husband-wife duo tells Sarika Malhotra that the rise of the Global Southern Belt is a great opening up for Indian entrepreneurs, as their playground is no longer only India, it is the world. Edited excerpts:

BT: Even as you mention that the western hegemony is diminishing, for most from the developing world, New York is and will be the dream city, and they will go all out to chase their American dream.What explains this paradox?

Authors: In many talks we have with young people, we notice that their picture, especially the one from the US, is of the booming America it once was, not the struggling America it is now. When we speak from a diminishing Western World, it is a process, not a sudden death. We live in Austria, and Vienna is one of the most liveable cities in the world - not only by rankings but on the ground. The West is declining from and on a still high comfort level. It also is not an averaged-out decline. Declining countries can have companies positioned very successfully in global markets. And there is, of course, always the possibility of a U-turn. It is not the potential of the West that causes the problems. It is the lack of leadership and the gridlock in party-political quarrels blocking necessary reforms.

What had made America so attractive was its social mobility. It was the land where dreams could come true. Almost every immigrant had the chance to rise to middle class and even further up with hard work. This has changed in the past years. Now we sadly witness a decline in America's middle class and many families whose members have more than one job to meet basic needs. Many young graduates are struggling to find a job despite good education.

Compared to hurdles in India, the caste system, access to education to just name two, the West many might still seem to be the Promised Land, but only if you blend out the reality of an increasingly harsh economic climate.

BT: What is the time frame you estimate it will take for the rise of the Global Southern Belt?

Authors: The time frame in which we expect the countries of the Global Southern Belt to collectively become the drivers of the global economy will be the first half of the 21st century. There are still large economic gaps among them and great differences in the speed in which they develop. We also have to take into account this will not be a smooth ride. Like other historical shifts, there will be ups and downs on their paths. Asian nations are ahead of African countries. Brazil, like other Latin American nations, had promising starts, but keep making three steps forward and two steps back. If you listen to local entrepreneurs it is always the same complaint, competiveness in global markets depends on local conditions. And if they are not entrepreneurial-friendly, most companies will suffer. This is the main cause for the different speed in which countries rise.

BT: In the Global Southern Belt... What will be India's and China's role and position? Which out of the two will be stronger and why?

Authors: We love India and its people. But the reality is that India has to make dramatic changes to have the same basic opportunities as China. The most difficult is a change in the mindset of the average Indian. While well-educated Indians blend in with any other global thinking citizens, India's lower classes are still caught in caste and class thinking. Corruption is another huge hurdle and while it is on the agenda of Premier Modi, it needs results to bring forth change. India's education system is poor and any private initiative to jump in and improve it are blocked rather than supported. While China can proudly announce its good results in Programme for International Student Assessment (PISA) studies, India has decided to go into denial and pull out of the tests. To achieve real change, it is necessary to face and accept reality.

As the world's so-called largest democracy, India has a lot of sympathy from the West. That's nice, but does not bring India one step further.

There is no question that China is far ahead of India in almost every regard. China's weight in the global community is rising because of what has been achieved and not what have been the announced goals. Of course it does help that China's governing model is result driven. This allows long-term strategic planning without worrying about the next election. On the other hand that put enormous pressure on the government to achieve economic progress. Social mobility is a key pillar on which the justification for the rule of China's Communist Party is resting.

BT: 2016-17 is being predicted as being as bad as 2008... Is it the next recession? How will the Southern Belt cope with it?

Authors: It is very dangerous to make conclusions based on a few bad months. It is also a reality that the stock markets are increasingly detached from the real economy. To make a judgement of future developments, we have to look at substance and potential. This is true for companies as well as countries. Many of the nations of the Global Southern Belt are developing from a very low point. Many of the small and one-person businesses are at first addressing local markets and needs. While in the past large multinational corporations were large drivers of economic progress, today app developers, freelancers, small businesses and individuals can participate in the global economy. This opens countless doors for the young and ambitious populations in Africa and of course also in India. There are many domestic opportunities for much less spoiled and more diligent entrepreneurs. That's a big asset of the nations of the Global Southern Belt.

In regards to China's slowdown to 6.9 per cent growth, it is significant that China's leadership announced the goal to slow down growth in favour of sustainable industries and a real hit on corruption. The fight against corruption is estimated to be accountable for around 2 per cent less in GDP. China is not only shifting from low price manufacturing to high tech industries but also from an export-driven to a domestic consumption-driven economy. It would be naïve to think such profound shifts would take place without problems.

BT: What are the big things for India to worry and address, if it has to live up to the potential it holds? Any lessons that India can learn from China?

Authors: The most worrisome condition is that India seems stuck in obsolete and blocking mindsets. In any culture it was the spirit of the people that brought forth change. That was the case in the Reformation and Enlightenment in Europe as well as in the 1980s in China. China's change was not achieved top down but bottom up. The reform and opening up under Deng Xiaoping was based on the will to make U-turns to create the conditions that allowed entrepreneurs to chase their dreams. This was including accepting a shadow economy and many unorthodox methods. But at the end they all contributed to a changing mindset from communism to market economy and from being stuck in social orders to opportunities for all. There were winners and losers, depending on their flexibility to change. But the country achieved to fight poverty in unprecedented speed never seen before.

It is not only India that can learn from China, from its impressing economic progress as well as from its mistakes. The West could, just as China did and does, choose and pick from its successful trial-and-error method: to create experimental zones to see what works and what does not before implementing it nationwide.

India's governing system, of course, is very different and China's strongest advantage, long-term strategic planning might be the hardest for India's leadership to achieve. So far in our experience, great excitement for political change and promising plans and announcements were followed by the disillusion of the slow pace of execution and implementation.

Nevertheless, the rise of the Global Southern belt is a great opening up also for Indian entrepreneurs. Their playground is no longer only India, it is the world.

 

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