The world\’s biggest capitalist get-together, the annual meeting of the World Economic Forum at Davos, Switzerland, has started this week. Change is in the air. This is what the inaugural speech in 2035 will sound like.
Ladies, gentlemen and transvestites (no gasps of surprise please, true capitalism recognises no gender boundaries). Let me welcome you to the annual meeting of the World Economic Forum in Gulmarg. This brings to a happy end the recrimination that, sadly, has paralysed our organisation for several years. You will recall that Chinese businessmen began boycotting Davos in 2020 on the ground that China was now richer than any European country, and so the annual meeting should be held at Shanghai.
Then last year, Indian businessmen joined the boycott, pointing out that India had surpassed not only every European country but also Japan in GNP (as was predicted with uncanny accuracy by the CIA in 2004-05). I am glad to say that we have reached an amicable resolution: the annual meeting will now be held in rotation every three years in Davos, Shanghai and Gulmarg.
I can let you into a secret: some of our members were disappointed with the Chinese choice of Shanghai. Davos is splendid for skiing, whereas Shanghai offers nothing better than water-skiing on a rather polluted river. But everybody is delighted with the choice of Gulmarg, which has become the skiing capital of Asia. It is hard to remember that this beautiful resort was once affected by terrorism, a scourge that disappeared with the creation of the autonomous region of Kashmir 15 years ago. It is also hard to remember how difficult it once was for international visitors to get to Gulmarg. But once India joined the global open skies agreement in 2010, Srinagar rapidly became as large an international airport as Zurich. Indians call Kashmir their Switzerland. They can now call Gulmarg their Davos.
We must all celebrate the opening up of what used to be a western club. Some regard Lakshmi Mittal as the pioneer of Asia\’s ascent: after all, he created the world\’s largest steel empire three decades ago. However, whatever his ethnic origin, he was a British-based businessman. The real pioneer, I believe, was China\’s Lenovo, which back in 2005 took over the personal computer business of IBM, the company that had invented the PC in the first place. Since then, Chinese and Indian acquisitions across the globe have been swift and fast, and capitalism has become truly global in ownership. Infosys became the world\’s biggest consulting group when it took over Accenture. And Tata Motors became the world\’s largest auto company when it rescued General Motors from the brink of bankruptcy.
Many of us in here flew in on United Jet Airlines, created when Jet Airways outbid Dragon Airways to take over United Airlines and become the world\’s biggest carrier. It now seems hardly credible that Pan American Airways once ruled the skies.
Globalisation has brought inestimable benefits to the world. Incomes have doubled or tripled in most developing countries, with China and India becoming high-income countries. Yet, protectionist pressures continue to block true integration of the world. Many countries still want to protect national champions.
When BBC was put up for privatisation this year, the highest bid came from Prannoy Roy\’s New Delhi TV. But the deal has been held up because the British Labour Party opposes takeover by a foreigner. Similarly, several senators in the USA want to stall the takeover of The New York Times by The Times of India.
The outsourcing debate refuses to die either. US Senators complain that 20 million jobs have been outsourced to India in the last three decades. True, but high-income jobs have replaced low-wage ones in the USA. Besides, India is now a high income country that attracts only high-skilled jobs. China and India have moved up the skill ladder, and the poorest countries are now becoming the back offices of the world. Low-skilled outsourcing now benefits mainly Nigeria,
Malawi, Tanzania and Nepal, spreading the benefits of globalisation to once-neglected remote corners. No country has matched India in the courage and innovation it has shown in outsourcing its own work. After decades of economic stagnation, the Bihar government decided ten years ago that it could gain a place in the sun only through a complete separation of the legislature, administration and judiciary. So, the legislature voted to outsource the entire administration to a Korean company, and the judiciary to an Australian company. In consequence, Bihar now boasts some of the best governance indicators anywhere, and Transparency International ranks it as the least corrupt state in India.
We need to follow Bihar\’s example in thinking out of the box. That is the way forward.