It is now common to mention China and India in the same breath. For good reason. They are geographically close. They are the two most populous nations. And most importantly, they are the two fastest growing economies of the world. But people who have visited China or have a working familiarity with the dragon nation are quick to correct the notion. There is one aspect where China is remarkably different from us. Its attitude towards economic development. That attitude is reflected in Shanghai's skyline. It is this attitude which has made China the world's factory.
India needs to learn a great deal in this regard. And the latest reminder comes from none other than world's largest steel maker ArcelorMittal. Lakshmi Mittal believes that India is not equipped to handle big-ticket investments. He should know. The company's projects worth US$ 22 bn have been held up for over four years. It had plans for two major projects in Orissa and Jharkhand but progress has been painfully slow. Mr. Mittal believes that India was simply not prepared for the kind of growth it has witnessed. As a result, neither the central government nor the state governments were prepared for the massive investment in the Indian steel industry. It is ironical because India has abundant deposits of the raw materials required for making steel. It is also one of the few countries where the demand for steel is robust.
As per reports, India needs more than US$ 500 bn to improve its infrastructure. And given the interest of the international business community in steel, auto, power or telecom, we must grab the opportunity with both hands. Yes, due process must be followed. Especially with regard to land acquisition. But, in our opinion, it would be a shame if we miss out simply for the lack of preparedness.
After tallest building comes tallest hotel
Recently, Dubai threw open the world's tallest building - the Burj Khalifa. You must have seen the congratulatory advertisements and news programmes. Interestingly, the western media had a different take. For example, the New York Times recollected how breathtakingly tall buildings generally are built during financial excesses. In fact, they often debut right before a massive slump. The paper also called the Burj Khalifa a celebration of Dubai's troubled real estate market.
To add more fun to the proceedings, Dubai has launched a 72 floor hotel. The world's tallest. Such feats certainly increase the appeal of Dubai as a tourist destination. But one has to ask if it makes financial sense. Much of Dubai's construction boom has been fuelled by debt. It is now having difficulties in servicing it. Had it not been for neighbouring Abu Dhabi's last-minute intervention, we would have had another debt crisis on our hands. Surely, at some point the high profile Emirate should consider giving it a rest.