CONSTITUTION OF INDIA

The Maharajah's new clothes

India’s ‘advantages’ are worthless assets or even risky liabilities

India is like he Emperor with his new clothes

Yet again the nation has cheered on a piece of news, that in its core exposes the misery of this nation. India now is the most populated country on the planet and has the third largest GDP before Great Britain.

Such is the behavior of a nation desperately searching for evidence of its perceived superiority, the country they call ‘the permanent nation of the future’. Predictably, the media celebrates and happily promotes ‘advantages’, that are in reality worthless assets or even risky liabilities!

India’s high GDP figures

GDP figures became a fetish of politicians and economists alike, but they do not measure overall success of a country.

• India to boast a higher GDP than Great Britain is no accomplishment, since India has roughly 24 times as many inhabitants as Great Britain.
• Indian GDP may have risen, but the GDP of US and China have risen even further, by that the gap to both economies has actually widened.
• GDP is not connected to employment-figures.
• GDP does not paint a good picture on the quality of the goods and services exchanged: A higher-quality economy produces for example computer-chips (like the Taiwanese economy), a lower quality economy offers for example only tourism or cheap movies.
• GDP does not factor in whether the economy is based on trade of a homo- or heterogeneous set of goods and services.
• GDP does not factor in whether the economy is interconnected with foreign economies or produces products vital to other nations.
• GDP does not factor free goods and services at all: Eating at a fast-food-restaurant adds to GDP while eating home-cooked food doesn’t, despite the later being more nutritious.
• Economists often enough ignore the dept accumulated to generate the GDP. The methods to measure the same are not always credible. China for example looks far less impressive with that in mind.
• GDP doesn’t tell anything about productivity of the average worker, even in a country where workers boast about high number of work-hours. So much work resulting in such a low productivity is a strong indicator for poor management and a non-existent culture of innovation!
• GDP doesn’t picture the overall life-quality. For example, many people rather spend time with family than earn high salaries for overtime in the office.

India having the third largest number of startups is a worthless aspect, as many of those startups implement business-models already to have failed in other nations (zomato, etc.). Remember, a startup is a company, that doesn’t generate profits. Their income stems from investments, not from sales. As long as these companies are nascent, such a concept is acceptable. But so many of these startups (like Snapchat) weren’t able to generate profits for close to a decade and will never see any prospect to generate profits. Some have been scams from the get-go, with early investors looking for the dumb money to buy their worthless shares later. The system worked, as long as low interest-rates created a lot of easy money chasing quick returns, but with increasing interest-rates the funding is likely to dry out. Far more important than having startups is to have companies, that innovate organically and use those innovations to generate profits to finance the next batch of innovations.

Economic reforms haven’t been nearly thorough enough. Allowing private enterprise to execute Government-programs instead of Government-entities is effectively a transition from Socialism to crony capitalism / corporatism. Increased infrastructure-spending is essentially fake economic activity (and they build infrastructure for cars while the rest of the world wants to switch to trains). The education-system is still outdated. In a healthy economy people feel comfortable to spend their own money for either smart purchases or profitable investments. Government-spending stimulates fake economic activity; it’s impressive at first, but soon the economy needs the constant monetary fix by the Government to keep up economic growth. Domestic companies are still not competitive. Prime-Minister Modi should have allowed foreign competitors to come in, to provide superior goods and services, to train local staff, etc.. Globally recognizable Indian brands are irrelevant; it’s only relevant, that maximum amount of value is added to maximum amount of global goods and services inside the nation with the input of Indian workers, regardless for which brand.

Israel’s rise came with establishing a world-class education-system in combination with a high dose of freedom, not by building infrastructure!

Recently discovered rare-earths in Kashmir or Arunachal Pradesh are hardly a reason for joy. The CCP is likely drafting plans already to occupy that part of Indian territory to exploit those precious metals for themselves (they did so with Tibet for water and the South China Sea for gas). Apart from potential intrusion by the PLA, the Indian political system with all its corruption and incompetence is simply not adapt to absorbing all that new-found wealth. Corrupt politicians and business-men will likely funnel all that money into private pockets. Inefficiency, corruption and incompetency widens with more in-flowing money, not lessens!

India has the largest population on the globe

Generally a large population is a symptom of women, that have no access to birth-control or education. India around 1945 had roughly 300 Million inhabitants, which would have been the ideal population-size for such a small territory. However, the entire subcontinent today has 1.7 Billion inhabitants; such a large population puts stress on the environment. Incompetent economists have long glorified the demographic dividend, but there has never been tangible benefits from such a demography!

So far red-tape has prevented the influx of jobs to keep all those young people working. A few thousand jobs here and there won’t absorb the millions of job-seekers. A super-power needs manufacturing in every industry-segment (defense, green-tech, aerospace, agriculture, biotech, chemical-engineering, etc.), not just mobile-phones. Companies despite lofty announcements hold back on their investments. Low-skilled workers will find it difficult to fill jobs with the rise of Automation and AI. Whatever demographic advantage there is wastes away in the current system!

Businesses in the private sector today try to have as few employees as possible with each employee being expected to add maximum value to the assembly-line. Market-value actually increases, if a company figures out how to produce more with less personnel. India has over 1,4 billion citizens, most of which work in agriculture, many have little to no meaningful education, few work in productive jobs. India today can not even compete with either Switzerland or Israel, small countries with each roughly 10 million citizens. If even 1% of the population of either Switzerland or Israel vanishes, the world would suffer the loss of economic power equivalent to organ-failure. If 99% of India’s population disappeared, the world would neither notice nor care!

Countries as far as citizens are concerned should seek quality, not quantity! A nation needs exactly the citizens, that make a nation great and minimize less desirable kinds of people.

Workers to fill the available jobs in the economy and work productively on goods and services that society actually needs.

• Worker with diverse range of skills to fill all kinds of jobs, from Manufacturing to R&D, in a modern economy.
• Workers, that are flexible enough to move from one role to another one.
• Citizens to follow the rule of law, settle their disputes in a court of law and to honor their (legal and private) obligations.
• Citizens to deliberate and debate changes in the laws in the Legislative Branch with the goal to reach results acceptable to everyone.
• Citizens to take responsibility over their own lives unless there are dire economic circumstances.
• Honest and wise politicians, who feel obligated to protect liberty.
• Pleasant companions, that people actually want to associate and socialize with.
• Caring parents and stable families, where parents can provide for their children without outside financial help and raise children properly.

A large group of unskilled, unemployed, and unemployable people presents are real danger to a society’s stability!

Allowing workers to work in Israel is a laudable step. Anything, that deepens the India-Israel-ties is welcome. Indians of all types are emphatically welcomed by Israelis and one can learn so much from their culture to hopefully introduce these traits at home: Israelis love Indians, whether they respect Indians is another matter! While Israel as a democracy with a strong record on human rights is a far better place to work than Arab countries, where foreigners are essentially treated as slaves to be exploited and abused, the Jewish state will be even less willing to naturalize these workers into their societies than Europe in the 1970s. Despite all the buzz, having a lot workers abroad wiring remittances home doesn’t excuse the shortfall of economic reforms.

India’s technological advances

The buzz around Chandrayaan-3 has the entire world excited around space again. But one better not forget, that the former Soviet Union, today’s Russia, Japan, Türkiye and the now struggling China had some of the finest engineers and scientists as well: The Soviet Union send the first cosmonaut into space, Russia today developed the first hyper-sonic missile. Africa is already waiting in the wings with Kenya being dubbed Silicon Savannah. India actually suffers a shortage of highly-trained engineers and those who can move to other nations. Individual technological accomplishment can not overshadow to dismal state of the Indian education system.

The Spice-route

PM Modi announced the creation of the Spice-route, an economic corridor from India over the Middle East to Europe. It is widely seen as a counterbalance to the Silk-route or Belt-and-Road-Initiative (BRI). Current partners to the BRI accuse China of debt-trap-diplomacy and dumping their products on western markets. The hopes in the Spice-route however is that India opens up as a market for foreign goods. India’s low-skilled workers aren’t competitive and there aren’t enough high-skilled workers to attract investment in R&D: What is there export? Absent reforms in economic policy this economic corridor will likely be used to ship goods to, not from, India! Even worse, if India continues to import that much goods from China, the Spice-route may end up exporting relabeled Chinese goods to Europe and the West.

India’s image in the world

Soft-power is no power at all! People may dance to Bollywood, but that will not translate into any substantial support for Indian causes. Actually, US, UK, France, Israel, China all have substantial soft-power: technology, commercial products, universities, language-courses, movies, music, etc., all far more valuable assets than Bollywood. But it is their hard-power and ability to wield it that protects their interests. Bollywood really makes Indians look like buffoons, that one may not have to take serious (Bollywood movies are substandard and actresses in that industry could not make it even through central casting in Hollywood). A nation needs to be respected, not loved! Sure, the death of democracy in India may be vastly overstated, but democracy in India mustn’t mean politicians just bribe every voter equally; it doesn’t bode well to see farmers reverse by force the decision of a democratically elected Parliament.

Diaspora isn’t helping. Most people with talent still dream about a visa to another country. The curse of the Indian people is that they are successful everywhere except in the motherland. Successful nations usually attract successful people from around the world; they do not send them away. Other countries will certainly not take the less productive members of society. Romantic memories over ties to India rarely translate into anything useful for the motherland.

Aspects of the Indian culture are a hindrance. Everyone here feels in charge, but nobody feels accountable. Individualism is a curse-word. Children are often seen as extension of their parents, not free to form their own will or make their own choices. Indians seem neither smart nor well-educated, nor healthy, pretty or pleasant citizens. The mob often gets its way. Proper conflict-resolution does not exist. Temper rises quickly and disputes are settled too often by violence. Strict hierarchy — not through merit, but by birth- determines the structure of society; in such a society, in which nobody earned their place, people engage in extreme face-saving in order to not admit to their mistakes. Obedience is valued over being right. Innovation even when successful is often sneered at, however mistakes are remembered forever. There is internal self-racism with Indians treating westerners far better than their fellow citizens.

L’etat c’est Modi. PM Modi today is a global superstar. Most people around the world know him and wouldn’t know any other Indian politician. They may even feel PM Modi is all powerful. Indeed, he does place value in his image as the savior of the nation. He mimics behavior he has seen in the leaders of Türkiye and China, countries which after a period of growth declined, because there was no substance in their economy, cause neither nation removed the hand of Government from the economy. Savvy investors see through the cheap show the Government puts up. India has been here before, because after the removal of the license-raj necessary reforms to follow up never materialized, because Indian politicians went back to their usual modus-operandi to grow Government. The tainted praise come from the same experts, who predicted the rise of Brazil, Japan, China, Türkiye, etc.; look where those countries ended up. For the time being India will be the next place to dump western goods, not a source of innovation or destination for innovators from around the world. The moment the nation is sucked dry the world will move on to the next dumping-ground.

A good Government-structure is important, but so is a good culture!

Constant need for the emotional fix

The key to success is gratification delay. The ability to display discipline.

Strong adherence to hierarchy

Only in India do people yell at you for not following orders, while mocking You if You do follow them.

Jealousy of other peoples fortunes

Low respect for hard work

Lack of imagination

Seen Bollywood lately? When was the last time Bollywood or any of the national movie industries shined with a great plot, acting talent or innovative stunts.

Learned helplessness

Sure, socialism isn’t the sole source for cultural deficits and capitalism won’t fix all of them. However, socialism magnifies those deficits, while capitalism shrinks them.

No nation has a right to exist! Deng Xiaoping understood back then, that China's rise was not a given. Economic growth doesn’t come without major reforms. The Chinese are steeling Indian territory and Indians traditionally had no inhibitions to leave the country to find their fortunes elsewhere.

New Delhi may have new clothes, but the nation is still naked!