Our Trillion Dollar Neighbour

by Ajit Kanagasundram

President Ranil Wickremesinghe, our most economically literate leader of recent times, announced at our 75th independence celebrations, that we would be a “developed” country by 2048 – the 100th anniversary of our independence. There were no plans announced just a plain statement that this will happen and that an obscure government department would draw up the plans – no analysis or retrospection on why we had failed for 75 years and what we must change. Our politicians have always made unrealistic promises for the future like Mrs Bandaranaike’s promise to bring rice from the moon but we have a right to expect something better from an economically educated President.

One generation ago it was President J R Jayewardene’s promise to develop the country by emulating Singapore. Rather than trying to emulate Singapore, which is now beyond our league, we should look closer to hand at Tamil Nadu, which was recently forecast by Forbes to become a Trillion dollar economy within three years. This was in the context of India becoming a five trillion dollar economy within the same period – the third largest economy in the world.

Tamil Nadu, formerly Madras state, had none of the advantages we had at independence in 1948. The British did not lavish attention and build infrastructure and institutions there as they did in Ceylon, the model colony. They do not have our strategic location that attracts foreign patrons with deep pockets like China. At independence it was a backwater and lost 60% of its land and 80% of its water resources to Andra Pradesh and Karnataka when they were carved out of the Madras state. It has none of our physical attraction – hot, dry and dusty. It had only one asset – its people.

Over the past 30 years it has become the centre of the automotive manufacturing industry in India with Korean and Japanese companies leading the way. It is the centre for electrical components manufacture and recently Apple ( the world’s largest company by market capitalization) announced that it would make its new model iPhone in Tamilnadu. This is the first time that Apple has manufactured any of its products outside China and speaks volumes about the quality of the technical manpower in Tamilnadu and the available infrastructure and supply chains.

It is with Bangalore a major hub for India’s booming software industry (the word’s largest software firm Tata Consultancy Services is headquartered there and IBM, Accenture, HP and the Computer Science Corporation all have major investments). It has 34 science and engineering colleges, the graduates of which are snapped up as soon as they finish – and the jewel in its crown is the prestigious Indian Institute of Technology in Chennai. It has eight medical colleges (all but one private) whose graduates easily find jobs in India or abroad, where unlike ours, their medical degrees are recognized.

So how did they achieve this? Certainly not because their leaders have been visionary or corruption free as in Singapore – it is difficult to imagine a more venal and self serving pair of leaders than Jayalalitha or Karunanidhi, who between them have ruled the state for a majority of time during the last 40 years. Fortunately the Present Chief Minister Stalin is both honest and competent. Tamil Nadu progressed, despite having this corrupt and self-serving duo at the helm because, being mere state level politicians, they lacked the power to undermine national institutions like the Civil Service and judiciary, or corporations like the Indian Railways or the elite IT engineering schools or to change the constitution 22 times like ours have done.

While they were corrupt in their personal dealings, the inherently sound fundamentals established at time of India’s independence enabled the states like Gujarat or Tamil Nadu or Punjab, who had the right human resources, to progress such that they considered today to be a model for the rest of the country, despite their lack of resources like water.

Our politicians could do whatever they wanted if they had a parliamentary majority and they proceeded to use this absolute power to undermine all our institutions, because they were both self-serving and ignorant and stupid. Political power in India has always been with the Hindi speaking heartlands in Uttar Pradesh and Bihar and the centre has lavished state investments there.

Tamilnadu has always been a stepchild. Tamilnadu has achieved this because the people are intelligent, humble and hardworking, they do not believe the world owes them a living or depend on handouts. They do not go on strike, there has never been a communal riot, they have embraced science, technology and English. All qualities that make them an ideal workforce and Indian industrialists and foreigners have beaten a path to their door. Per capita income is among the highest of Indian States (almost equivalent to Sri Lanka), unemployment is negligible, in fact there is a labour shortage now filled by immigrants from other states).

Their tertiary institutions turn out graduates who can compete anywhere in the world – people like Sundar Pichay the CEO of Google soon tipped to be the largest high-tech company in the world. Or Indra Nooyi, the CEO of Pepsi/KFC, and featured regularly in the list of the 50 most influential business leaders in America. It has world class teaching hospitals and a thriving medical tourism business, with patients flying in from all parts of the world for kidney transplants and bypass surgery.

The universities continue to churn out superb mathematicians, in the footsteps of Ramanujan one of the all time great mathematicians and are to be found in the faculties of all the major Universities. Most of the Indian Nobel prize winners are from Tamil Nadu, and a recent Nobel prize winner in Biochemistry, Sir Venkataramn Ramakrishnan, now a fellow of Trinity in Cambridge and President of the Royal Society, stated that the reason he had to go abroad for his education was that he could not get through the competitive exam for IT Chennai!

Tamil Nadu has also had a balanced progress – not only in industry and services but in agriculture it is one of the largest producers of food grains and has a thriving dairy farming sector with surplus milk to export to other states. In dairy farming they patiently created higher yielding cows by cross breeding Holsteins and Jersey cows with local breeds – we on the other hand tried to short circuit this process and failed by importing pregnant Holsteins wholly unsuitable for our climate (95% of the cows were heat stressed and died within three months)– the only persons who benefited were the politicians who earned substantial commissions. Its horticultural industry is highly sophisticated with modern techniques of genetics used to create new and more productive breed. Meanwhile we, with better land and water resources, are reduced to importing cheap apples and oranges!

With higher income they have been able to build infrastructure – a nuclear power plant at Kalapokam, the world’s largest solar power plant (684 MW) built in eight months, water desalination plants etc. They have been able to do what we have never achieved in 70 years with one of the highest per capita levels of aid in the world – provide decent jobs for their youth in the land of their birth. They do not have to depend on the remittances from their womenfolk exploited as cheap labour abroad. And what jobs!

I can tell you from personal experience setting up the Citibank offshore technology centre in Chennai that the starting salary for regional engineering college graduate as a programmer/analyst is Indian Rupees 4 lakhs a year – equivalent to Sri Lanka rupees 75,000 per month (we should keep in mind that the cost of living, especially food, is 50% lower in Tamilnadu). Half are females and we could not get sufficient recruits for our positions because of competition from the likes of IBM. We could not even aspire to the graduates of elite institutes like the IIT whose graduates snapped up by US investment banks and consultancy firms for megabucks.

Chennai is becoming a centre for the arts – the South Indian film industry is located there and it is the centre for all Indian film music (even for Bollywood) as A R Rahman, the doyen of Indian musicians is based there and has his state of the art recording studio and school to train young musicians. There is a thriving performance culture in Bharathanatyam and traditional Carnatic music. It is a magnet for religious tourism with its ancient temples venerated by Hindus the world over.

The developments in Tamilnadu have been so remarkable that the Economist magazine devoted a recent article to it. We too can profit from their experience if we can only get over our arrogance and innate sense of superiority over the humble South Indian Tamil. We have much to learn from him.

(ajitkanagasundram@gmail.com)