The Way To The Future

The way to the future


Last night I watched a rerun of The Aviator (2004), the acclaimed film on the life of maverick American billionaire Howard Robard Hughes Jr., visionary, inventor and entrepreneur extraordinaire. And I wondered afresh, and not without envy, about a political system and business environment that lets entrepreneurship have full play without any significant let or hindrance.

Competitors, in all his different fields of endeavour: making independent movies, running commercial airlines, designing and manufacturing military planes, making tool bits, were allowed their say, and the effect of their lobbies. They did all they could to retard or stop Howard’s progress but not, it is seen, with much success.

The US Government investigated and harassed Hughes also, partially at the behest of his competitors, and partially because they had some difficulty comprehending his audacity even if he did epitomise the “American way”.

But, through it all, they let Mr. Hughes fight back hard, and let the nation hear his counter arguments. By the time he died in 1976, there was, for all to see, a wonderful flowering of enterprise, invention, daring and robust accomplishment. Howard Hughes enriched not only the quintessential American experience but much of the world at large, owing to the fact that he lived and worked his vision in a proven “land of the free and home of the brave”.

Actor Leonardo di Caprio’s fairly recent rendering of Hughes reminded me of another great American media pathfinder, crusader and newspaper baron, William Randolph Hearst, immortalised in Orson Welles’ masterpiece Citizen Kane(1941). These men are both great American stereotypes, and there are dozens more, such as Henry Ford of Model T mass production, and “you can have any colour as long as it’s black” fame.

That is not to say things were stage-managed for any of them. It doesn’t work that way in “melting pot” America. But the dynastic way does bedevil and stultify most of Europe, South America, large swathes of Asia and Africa, and some of what goes on here in this country.

In such places, the tug of the past, caste, rank, order of birth, gender, feudal position, family money, tribe, religion, loyalty, patronage, ideology, cadre, and so on, exerts a greater, if static pull, than the merits involved, and the beckoning of an uncharted future, however exciting.

So, almost axiomatically, men without the right backgrounds and connections are rendered ineligible. Of late however, meaning the last two decades, the top ten corporations in India have given the partial lie to this “tradition”, by a kind of Darwinian evolution, as opposed to anything pre-ordained by the existing establishment.

Dhirubhai Ambani came from a no-name village in Gujarat notwithstanding his highly educated and capable sons at the helm today, and Sunil Mittal and his brothers, though their father was a businessman already and a Congress MP, were modest bicycle parts manufacturers in hometown Jullunder a scarce 20 years ago.

The brothers Mittal went on to create a telecommunications behemoth and storm into the top ten corporate entities in India, going to over $5 billion in turnover with dizzying speed, and then doubling it again (market value today is over $ 33 billion). And till very recently, they stood at the edge of effecting a $ 23 billion merger with South Africa’s MTN that would serve 200 million customers.

That our home-grown Mittals, the Ambanis, Azim Premji, Narayana Murthy and company, the Singh brothers of Ranbaxy, the Mahindras etc. have done it in a politically suspicious, highly regulated and uncomprehending bureaucratic environment, is all the more creditable.

Other fabled second and third generation players like the Tatas and Birlas have also accomplished much, given a cautious and controlled step-by-step approach to market reforms at all times.

And of course, NRI Steel Baron Laxmi Mittal has demonstrated what can be done by a second-generation businessman without the fetters of Indian command and control to hamper things.

I find myself wondering what might our entrepreneurs have done already with the brakes off! Of course there have been subversions and scams, big ones since 1991, but just because some will abuse a liberal market-centric approach, how can we refuse to play?

Mr. Sunil Mittal and Brothers are stymied elsewhere as well. Bringing in the most successful “pile it high and sell it cheap” mass-marketer in America, namely Walmart, as partners in their retail venture, is viewed by our policy makers, not with joy it should elicit, but with trepidation.

Instead, they favour a self-serving nationalist lobby in favour of reserving retail for domestic players even though it is doubtful if they have access to either the massive finances required or the necessary expertise for organised retail on a grand scale.

Most of our other big companies are facing similar Governmental blocks on what they can and cannot do on top of a highly taxed environment riddled with infrastructure bottlenecks and shortages.

All in all, if we are to face up to the demands of the future we cannot continue to make deliberately dwarfish policy. If we are not yet ready for universal foreign exchange convertibility on the capital account, we might consider devising a second track for our top ten corporate players at least. We should grant them special privileges and backing by way of a soft launch of capital account convertibility.

We can monitor progress to see how it works in a limited context before enlarging the space on a phased basis for others just as we have done already on the current account. This shouldn’t be anathema because we have already declared that we will go in for a convertible currency in much less than a decade.

The Government, in which the PM and FM have already pronounced themselves in favour of the Bharti-MTN deal, should now take the lead in reviving it on South Africa’s terms. After all, all they want is to be able to trade in one of their biggest corporations on their own bourses. How can we fault them for that? Would we like to see a Tata or Reliance bought-over or merged with a foreign entity without that option?

Let us remember we only liberalised in the face of a World Bank ultimatum in 1991 when we were practically bankrupt. But we haven’t done badly because of it since. Maybe it’s time to act of our own volition this time.

(1,055 words)

4th October 2009
Gautam Mukherjee


Published as Op-Ed Page Leader in The Pioneer on 7th October 2009 as "The way to the future". Also published online at www.dailypioneer.com and is archived there under Columnists.