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Tuesday, April 24, 2007 

The Biggest Problem with India

Yesterday I wrote how India is hot for VC and PE activity these days. But there is another side to this growth story as well. The story of what is hindering India from unleasing its true potential. And that according to me, is its politics, and the people running it - its politicians!

Image courtesy: Reuters Alertnet

In other news recently, it seems like US intelligence sources have published a report called 'India: The Islamisation of the Northeast'. Given that it is from Rediff, I am highly uncertain regarding the truth of the story. However, if it is true at all, it marks a very important step in India's progress for the following reasons. It is an acknowledgment from some agency that belongs to US that ISI is meddling with internal Indian affairs. Indians and Indian news have always claimed this, but it fails to make a stir in the international news and political circles. Granted that India doesn't need US approval for what it believes, but it helps every inch given that Pakistan and US have come closer and co-operated on George Bush's War on Terror. Even though it is just an intelligence report and nothing at the political/diplomatic level yet, its a step forward. Who knows, when in the future, this may help shape some US policy that helps India out in this regard.

To many Indians, this sentence - "some US policy that helps India out" may sound very harsh. But its time we admit it. Most of our foreign policy is blunder. In my opinion, India doesn't have cordial relations with any of its neighbors. It bent over backwards in helping Bangladesh gain independence from Pakistan. But then it failed to play its cards right and sadly for it, today Bangladeshi army and its intelligence is co-operating with Pakistan (Bangladesh's one time enemy) to work against India in the North East. Bangladesh was carved out of India's Bengal state by the British (resulting in West Bengal that belongs to India and East Bengal which is today's Bangladesh). These two regions, it seems, should be separate only in political boundaries. They share thousands of years of ties and common culture. They even share the same language. Shouldn't India and Bangladesh find easier to maintain friendship rather than bicker over religion? I blame India's leadership for letting this friendship wither.

India's brother country Nepal, who India claims important trade and political friendship with, also doesn't look up to India anymore. In undergrad, I met many Nepali's who would openly admit that almost all Nepalis hate Indians' guts! I don't know how true it is, but I think if some local says that, I feel like there must be some element of truth in it. The common man, the local on the ground is more in touch with reality no matter what the top level governments say. The saga of India having screwed its relations with Sri Lanka is no secret either. China is whole another story. After sharing so many friendly trade (the silk route), education (Nalanda university and the famous Xuanzang) and religious (Buddhist) links for thousands of years until the 13th century or so, how these two countries ended up hating each other completely beats me. And Bhutan and Myanmar - its other neighbors geographically or culturally, are too instable themselves. The sad reality is, India has no neighbors it can count as its best friend.

Now that we have established that, we have to look at some problems that arise because of these sour relationships. India is finding it increasingly difficult to maintain the integrity of its own land. China and Pakistan claim entire states that have belonged to India in the past. There are many insurgencies going on within India itself - not only in its border states, but also states like Madhya Pradesh and Orissa which border no foreign country!

Given this state of the country, it is a surprise India is growing at all, let alone growing at 8% annually. And bulk of the growth should be attributed to the resilience and strength of the common Indian man and business-people, rather than the government (as it always takes credit). But this growth cannot carry on unless the government can figure out a way to stabilize the country internally as well as maintain good relations with its neighbors. One can only live peacefully and carry on with daily business if one doesn't have to constantly worry about his/her own life. If someone was waiting outside your door to bomb you the moment you stepped foot outside, would you even dare to go out to get milk, let alone go out to work? The answer is No!

Similarly, it will be increasingly difficult for India to conduct its own business with so much instability around in the future. Unless the top leadership takes things in its own hands and improves the conditions. This is an issue where businessmen cannot help. If they could, this would have been under control too! But this is entirely the realm of India's leadership. And for once, BJP and Congress - India's two leading national political parties - should stop bickering among themselves trying to pull each other down. They should work together to figure out what they as India's leadership can do to provide its countrymen the best conditions for them to conduct business within India as well as with the world and help keep India growing!
Do you think this will happen? Do you think the politicians will ever stop monkeying around?

Insurgencies in various parts of India
High & Low Intensity, Foreign Controlled Conflict: North (Kashmir) and Northeast
Internal Conflict: Central Parts (Andhra Pradesh, Chhatisgarh, Orissa, Bihar, West Bengal)
(Image Courtesy: The South Asia Terrorism Portal.)
Article: Major terrorist groups operating in India

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About me

  • I'm Indyman
  • From Seattle, WA, United States
  • I am a Risk Management Consultant at KPMG. Before this, I was an Investment Associate at University Venture Fund in Salt Lake City, UT. My personal interests are in venture capital, private equity, technology, real estate, entrepreneurship, investing, stocks, india, patriotism, mumbai, hanoi, vietnam and life in the united states.
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