Focus, for pity's sake!

Indian governance is short of the top-down thinking Daniel Kahneman defines as equally necessary

Steve Jobs’s resurrection of Apple’s fortunes from the late 1990s is a much repeated business parable. But, it may contain a lesson important for Indian governments seeking to reform the dysfunctional legacies of a state that between meddling in industrial production, running a lousy airline and creating a vast bureaucratic apparatus has done little in public education and public health relative to our neighbours in Southeast Asia and even Bangladesh. The lesson from the late Steve Jobs’ triumphant return to Apple is that he and the company learned to focus. Jobs whittled down a product line that included 12 different types of Macintoshes and computer peripherals to essentially four products: one computer and laptop each for the consumer market and the professional market. As Jobs said, “Deciding what not to do is as important as deciding what to do.”

 

Survey the past 25 years and there have been brief periods of single-minded focus on the economy. For almost two years after the near default in 1991, Manmohan Singh, P Chidambaram and Montek Ahluwalia made a bonfire of India’s absurd industrial licensing rules and import-export controls. Nandan Nilekani’s stewardship of an excellent team of Silicon Valley returnees and government employees at the entity that oversaw Aadhaar, which is approaching the milestone of 1 billion enrolled Indians, is another instance of an unwavering focus. Arguably, GST and Raghuram Rajan’s effort to get public sector banks to classify non-performing loans realistically are examples as well, but for the most part India, relative to its East Asian counterparts, is all too easily blown off course. 

In our mostly tragic, sometimes comic recent history, notebandi is only the latest own goal. As 2017 approaches, here is a resolution for state and central governments: Zoom in on a few important things. As Daniel Goleman writes in his book, Focus, quoting from the work of Daniel Kahneman, our brains operate at two levels: the bottom-up is reflexive and multi-tasks while the top-down reflects, is self-aware and plans for the future. Indian governance, even if you account for the creation of endless committees, is notably short of the top-down thinking Kahneman defines as equally necessary.

The Reserve Bank of India’s mind-warpingly inconsistent regulations in the past seven weeks as it has grappled with the consequences of having printed too few notes as well as constraining the national genius for getting around government rules have shown a shortage of the second quality can wreak havoc with an institution’s reputation. There has not been much sign of long-term thoughtfulness in the bombastic counter-charges hurled by the two protagonists in the Tata Sons battle, either. It has all the dignity of a saas bahu TV soap. Empathy and the ability for course correction in a crisis are all aspects of top-down thinking and have been missing in both instances.

The country has paid an enormous cost for its love of political games and its lack of interest in sensible economic policy. It has been apparent since 1991 that India needed radical changes to its labour laws if it was going to compete for jobs in the garment sector and electronics assembly. Twenty-five years on, we are still waiting. By contrast, former Chinese premier Zhu Rongji used China’s accession to the World Trade Organisation in 2001 as a base for radical reform while also laying off hundreds of thousands of workers of state-owned enterprises who found jobs elsewhere in the economy as the country’s grip on labour intensive exports became stronger and its services economy grew apace. Zhu’s was heroic and focused leadership.

I arrived in southern China in late 2010 just as the government mandated the doubling of factory wages in five years. I found that most Taiwanese and Hong Kong companies preferred to move within China rather than out of China because the country’s ports and roads were so efficient and the eco-system of suppliers hard to replicate. When the production of lower-margin goods such as shoes and garments moved, the factories decamped to Vietnam and Bangladesh – and India mostly missed the trade dividend yet again.

In 2012, I travelled to Cambodia – from where I happen to be writing this column – because it was attracting a lot of garment factories that had once been in southern China. Now, if you subtract the number of ethnic Indians on foreign passports counted as tourists, I would wager this tiny Southeast Asian former basket-case of the killing fields of Pol Pot draws about as many tourists as India does. Its primary schools look far better than those in Indian villages.

Here then is a short list of New Year’s resolutions for this and future governments: 1) improve our pitiful primary and secondary education 2) launch an intensive, year-round campaign to change mindsets that result in more than one in every two Indians defecating outside. The effects of open-defecation mixing with the water supply kills and damages more young Indians through malnutrition and the stunting of their brains and bodies than any terrorist organisation could. Forget bullet trains, get real about the hurdles ahead for digital money, and dump the delusions about becoming an economic superpower. From restoring the environment to creating an educational system that equips youngsters for the jobs of the 21st century, we have enough daunting challenges already. For pity’s sake: Focus.