Aug 1, 1998|
Optimistic on India
No, this is not a suggestion to buy
into the Indian stock market. With a budget that is changing every day,
the accounting books of the wise government in Delhi must be in shambles.
Add to this minor inconvenience of not knowing the macro economic framework,
the major irritant of not knowing which finance minister or which government
will present the next budget, and there is very little reason to buy shares
in a hurry. But this is supposed to be an optimistic article. And it is
an article triggered by some responses to previous columns: is India really
a write-off? Do I have anything good to say on India?
Yes, there are a lot of good things
about India to make one optimistic. But one has to step back a bit and
figure out the meaning of life, what one wants in life, and then how does
one go about getting there. Most of our policy makers and economists (in
keeping with their passion for all things foreign: news channels, technology,
capital, accents, and conferences) have become obsessed with the (western)
measurement of GDP as a measurement of happiness. Higher GDP, we have been
brainwashed into believing, is more happiness and a better life. But that
need not be true. The United States may be the largest GDP nation in the
world, but the sickness of much of its society is immeasurable though visible
in many forms. School children shoot other children, deranged men with
an ability to buy guns roam the streets, and the elderly have to be sent
to homes. The late Mahbub al Haq, a Pakistani economist, had created the
Human Development Index that sought to measure the true wealth of citizens:
the level of education they achieved, their life expectancy, and even their
material wealth. Though this Index has gone a long way in measuring how
countries compare in non-monetary aspects (India is somewhere in the bottom),
even this Index falls short in determining the quality of life or quality
of education. The US may look pretty good on GDP and even on the Human
Development Index but fairly low in the Gross Happiness Product, a concept
introduced to me by Professor Behrman, my mentor at University of North
Carolina at Chapel Hill.
Over the years, the US has built its
entire economic model on one factor: consumption. The more you consume,
the better it is for the companies. And if you cannot afford it, buy the
next better product on credit. This solution gives the consumer his next
dose of instant happiness from purchasing the newest car, keeps the factories
humming as they produce more not-really-required goods, and keeps the consumption
model in place. This consumption also ensures that in most homes in the
US, both parents have to work to pay down their debt, spend less time with
their children, and send their aging parents off to retirement homes. So
the children get a good education (plus points on the Human Development
Index) but are probably low on “family values” (negative points on the
Happiness side). Meanwhile, the elderly live longer in retirement homes
(plus points for the Human Development Index) but are socially dead (negatives
for the Happiness factor).
With probably 500 cars to choose from,
I doubt if a US consumer is “happier” than an Indian consumer is. The US
may have sacrificed much of its richness of a family life and of family
values for higher GDP. India is low on the GDP list - and getting lower
thanks to the policy of weakening our own currency! - and even lower
on the Human Development Index (that is what happens when you spend money
on guns and nuclear bombs rather than on sanitation and education) but
should be still high up on the Happiness list. Yes, there has probably
been an erosion in values as we in India chase the capitalist ideal of
acquiring more goods, but the family as a unit is still coherent. And that
is what makes me optimistic. We have travelled just a little down the consumption
road, so our path is reversible. Don’t get me wrong. I am all for goods
and products as a way to make our lives easier but feel that many countries
have adopted an economic model that is based on the production of such
goods as an end in itself. The attempts for “globalisation” are largely
a way to expand potential markets for products to ensure that factories
keep humming - not necessarily a step towards increasing the Gross Happiness
Product of any country.
And here is a prediction for the sattawallas
out there: If you missed out on the big export boom of the textile, leather,
and software sectors that caused their share prices to rocket, don’t worry.
And if you got caught (like I did) in the bust of the textile and leather
exporters, and fear being trapped in the software collapse, then buy shares
of Indian godmen. The next big export from India will be Canned Spiritual
Happiness for US$ 2 per can. With zero raw material costs and an insatiable
thirst, it could be the next Coke – except Happiness is The Real Thing.
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