Arvind Singhal: Lessons from China

MARKETMIND

In recent years, a lot has been written on the Chinese economic miracle and the inherent learnings for India. The March issue of National Geographic has a disturbing cover story titled "China: The Price of Growth".

The sheer magnitude of ecological damage that has already been inflicted on the Chinese landscape makes the author of this very insightful article wonder "whether the Chinese have not so much been creating an economic superpower as committing ecological suicide".

And over the years, if this remains unchecked, the impact on the environment shall be felt globally rather than merely in China.

As India begins to dream of sustained economic growth of 8 per cent-plus for the next many years, the Chinese growth model does offer some crucial lessons for India.

China, in quest of becoming the leading manufacturer- exporter of almost every consumer and industrial product under the sun and thereby fuelling the growth of its economy, has very recklessly turned a blind eye to environment protection needs.

Insatiable demand for energy and natural resources such as water and timber has led to an almost irreversible destruction of the quality of air, groundwater, and arability of land.

The need to create millions of jobs has prevented the Chinese planners from taking a pause and come out with alternative strategies to sustain economic growth without taking further toll on its natural resources.

India, fortunately, can do better than China in this regard. The new found strength in a wide range of "service" industries such as information technology and business process outsourcing (BPO) can be leveraged more aggressively in the coming years to generate hundreds of thousands of new jobs without putting up thousands of smokestacks.

There is an incredible potential for India to exploit opportunities for "exports" of many other services beyond IT and BPO.

India, for instance, can become a very formidable "producer and exporter" of research of all kinds "" be it pharmaceutical or bio-technology or industrial design or financial analysis and thereby create hundreds of thousands of relatively high-paying, white- collar jobs that rely more on high quality civil and communication infrastructure and have practically no hazardous effluents or emissions to talk about.

It is also not a pipe dream to create a world class "health care" industry in India targeted towards treating the ageing millions from many of the European countries, and even Japan and the US, besides South and Central Asia. (Medical services, of course, do produce hazardous wastes and laws need to be further tightened and very strictly enforced).

"Well Being" services based on increasingly (internationally) well-respected Indian alternative medicine systems such as ayurveda, naturopathy, and yoga can be successfully exploited to bring in hundreds of millions of dollars without any degradation of the environment.

India is amazingly well blessed with tourism options. Incredible landscapes ranging from Ladakh to Rajasthan to Kerala; inspiring architecture ranging from the palaces and forts of Rajasthan to the temples of southern India; spirituality and religion; epicurean journeys from Kashmir to Punjab to Rajasthan to Gujarat, Andhra, and the coastal regions; arts and crafts, all offer an amazing array of options for developing India as a unique destination for "speciality" tourism.

If only we can take the requisite steps to preserve/restore our heritage zealously, and improve the enabling infrastructure such as airports, taxis, roads, hotels, restaurants and pubs, and qualified (and reliable) guides, we can generate billions of dollars (and millions of jobs) for the country without ravaging our environment with toxic waste.

With the new found respect for the Indian education system that has been credited with the creation of hundreds of thousands of brilliant engineers and other professionals every year, India can aspire to also become a major hub for providing education to the students from other countries. It will not be a pipe dream to generate billions of dollars of revenues for the country by marketing "education/training in India" to rest of the world.

The list can go on and on. Of course, this is not to imply that the entire Indian economy can be based on services alone. Growth in the manufacturing sector is absolutely essential and should be facilitated albeit with very strict environment protection regulations.

Reforms in the agriculture sector are an absolute must to provide the added fillip to the overall GDP growth. My message is that we can put more emphasis on service industries in our planning process, and concurrently, come out with a futuristic environment protection vision and policy that then needs to be propagated across the country with unflinching commitment. Only then we can create an affluent India that would also be a wonderful place to live in!