Good Lord! Patten’s got India on his mind

 

 

HONG KONG: As the last British Governor of Hong Kong before the colony was handed back to China in 1997, Chris Patten had a feisty, combative relationship with the Chinese leadership. Patten’s efforts to initiate democratic reforms in Hong Kong in the run-up to the handover incensed Beijing to such an extent that it resorted to vitriolic outpourings and name-calling. Patten was branded, among other things, a “jade-faced whore”, a “sinner of a thousand generations”, and an “eternally unpardonable criminal”. 

 

Much water has flowed down the Yangtze since then. Today, Lord Patten who is now Chancellor of Oxford,  has a more balanced, mature relationship with Beijing. As an advocate of free trade, he has argued against protectionist measures in developed economies that seek to build walls to insulate their economies — and protect their jobs from moving to China. And, increasingly, to India. 

 

The rise of India and China, Patten said in Hong Kong on Friday, is in fact good for the world. “I’ve always thought it was difficult to believe that if two and half billion people get better off, it would somehow be bad for America and Europe.” And in fact, the rise of Asia only marks a “turn of the wheel” to an earlier time when India and China accounted for half of the world’s GDP.

 

Patten’s articulations on the emerging economic contours of the new world showed just how much India is on his mind, and how much he holds India’s “spectacular” success in promoting innovation in esteem. He recalled that on a recent visit to India, he had been to the Infosys campus in Bangalore. “In that spanking new campus, I saw 14,000 young Indian software engineers — in Pepe jeans, Gap t-shirts, Nike trainers and iPods. And I couldn’t help thinking: This is the future!”

 

The critical difference, notes Patten, is that today, India and China aren’t just competing for low-skill, low-cost jobs “but for high-skill, low-cost jobs.” 

 

“Look at the kind of jobs that go to Mumbai and Bangalore and Mysore,” he says. “Companies in the West aren’t just losing unskilled, blue-collar jobs. Very often, they’re losing white-collar jobs — of lawyers, chartered accountants, and human resource managers.”

 

In an earlier time, Patten says, “when we learnt economics, we learnt that the main ingredients for economic growth and productivity were land, labour and capital.” But in today’s world, it’s knowledge and information that matter critically. 

 

Television commentators in the West complain of a “hollowing out of American middle-class”, and the fear, says Patten, is that you will find European and American politicians embrace that populist economic argument as well. 

 

But it is Patten’s response to that inevitable comparison between India and China — specifically, whose economic growth is sustainable — that show up his preference for the Indian model starkly. “If you’re a Western liberal pluralistic democrat like me, it’s inevitable that you should think that there is something bout Indian democracy that gives it a long-term advantage,” he says. “It’s also inevitable that, sooner or later, China will have to make political adjustments in order to accommodate its rate of economic growth and social change.” 

 

Patten acknowledged that his analysis may, to an extent, be influenced by his prejudice. “I know that India has a problem in dealing with its appalling infrastructure,” he said. “And the political reality is that if the Congress party wants to stay in office, it has to depend on the communists — and Indian communists, unlike the Chinese communists, actually believe in communism!”

 

Yet, says Patten, “India has also proved spectacularly good at promoting innovation.” Once you start a new industry — telecom, software or pharmaceutical — and are able to operate outside of the infrastructural bottlenecks, “Indians do fantastically well.”

 

China’s manufacturing exports may be many times that of India, and China may be able to make decisions and implement them much faster, he acknowledged. “But I’ll come back to what I said: I still believe in my gut that sooner or later there will be a tipping point in China, and the rest of us can only hope that China can manage that.”