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About Those BRICs Being The Answer...Start w/India

Posted on June 7, 2012 at 9:00 PM

On a late evening train back to Kent from London yesterday my eye was caught by a man deeply engrossed in his Financial Times. He wasn't just reading it, he was virtually eating it - he was that hungry. Having done my usual careful read much earlier in the day, and judging by the way he had it open (ok I'm a geek) I guessed he was reading this: James Crabtree's excellent piece on India :  'Bollygarchs at bay'. We got off at the same stop and chatted: I was right. His company is doing business in India.

I was born there, and I still have to deal with the country's bureaucracy in a host of ways. I am always amazed that any UK plc can do business with India and stay within UK law, in particular the Bribery Act.

The FT piece is very interesting indeed. You should read it, but to sum up in a simplistic manner: while public demand for transparency grows, as does anger over corruption, "cosy relationships between political insiders and industrial giants" are being called into question. Of course, the problem is, that it is just those "cosy relationships" which have kept everything going...and maybe even delivered the growth rate that the developed West has bought into, the one that is faltering badly (that's me, not the FT).

FT quotes Ashutosh Varshney of Brown University: "Because of democratic public scrutiny, crony capitalism is bound to recede but its end will take longer." Mr Crabtree: "In the short term, the result is much less welcome: a toxic mixture of government inaction and business caution." Toxic indeed. Probably even more so than the orginal attraction of the seemingly burgeoning economy lifted up on a cushion of just that 'crony capitalism.'

Facinating, isn't it ? I haven't pulled it together yet but there is something simmering in the back burner of my brain around the BRICS and their appeal, the illusion of the success of the 'emerging market' story - if you look at the governance that is (or isn't) part of its foundation. More on that soon - China next ? 

No wonder Mr Hungry on south-eastern trains was poring over his FT. In this climate, any UK plc doing business in India should ask an awful lot of questions and beware the responses that sound an awful lot like what you want to hear.

Ah, and I was at an event at Sotheby's last night - about to hold a Modern and Contemporary Indian Art Auction - and what were the Indians saying ? That "no one I know is buying at the moment, everyone is holding on to their money, the climate is bad."

But I don't believe that for a minute - which proves nothing, except when it comes to India, branded heavily as 'Incredible India' I would look closely at the grey areas and not be blinded by the (wonderful) vibrancy of the colour all around. It can be blinding.

Note: June 8th. I stand corrected. A flat sale at Sotheby's this morning.......the Indians, it seems, expressed interest beforehand but then did not bid. And may well come back in a private capacity, now they see where the prices are....very canny. Maybe instead of #eurozonecrisis it's time to think #globalfear.

Categories: Corruption, Behaviour, Scrutiny