Can India ever compete with China?

Emerging country

"India is the only functioning anarchy!" stated the economist and US diplomat John Kenneth Galbraith about four decades ago. In "World Power India", Olaf Ihlau, who was active for the Süddeutsche Zeitung and the Spiegel as a correspondent on the subcontinent for two and a half decades, takes up Galbraith's frequently quoted saying - and illustrates it with extremely colorful descriptions of the multicosmos at the foot of the Himalayas:

"There are two Indies: there is the advancing India of around 250 to 300 million, who are therefore an urban middle class, and who bring the country forward. And there is the atavistic, archaic India, which has hardly changed. There is the nuclear reactor and next to it the farmer with the wooden plow. There are the rocket hangars for space rockets and next to it the empty water pipes. These contrasts will remain! "

A sleeping giant wakes up, is the message from Olaf Ihlaus. In his book he draws broad circles, from general considerations about the changes in Indian politics and society, character studies of impressive entrepreneurs and social reformers to anecdotes from the still lively "traditional" India. Ihlau is a reporter and is strongest where he describes in detail - as in his description of a cycle rickshaw ride through the holy city of Ayodhya:

Brown and white cows are carefully turned around, rummaging in piles of rubbish or dozing in the middle of the street, as if they knew about the sanctity assigned to them. A group of eunuchs dance with rattles and bells to celebrate their appearance. The ascetics wave wildly with trident and spears.

The other Indian extreme that Ihlau delves into is the seemingly unstoppable rise of its economy. Here, too, clichés have now become established that Ihlau picks up on: that of the unrestrained creative, never resting entrepreneur - or that of the enormous potential of academics who do the most demanding jobs for dumping wages. India's economy is about to jump to the top and will surpass the old world in the process, Ihlau also believes:

One would like to send whole squads of German trade unionists, managers, ministers and association representatives to Bangalore or Delhi for a fortnight so that they can see what challenges Europe, and Germany in particular, are facing. (...) The Indians are not yet ready to capture and colonize entire industry strongholds on the old continent. (...) But the Indians are now also going on a massive shopping spree, and like the Anglo-Saxon locusts, they are starting to graze on companies.

The unusual rise of the Indian economy - based on the success of its software industry - not only seduces Ihlau into occasional euphoria. Anyone who can assert himself against all the rigors of a traditional social structure, unfavorable social framework conditions and countless obstacles in politics, bureaucracy and infrastructure appears unbeatable, his future success unstoppable. The author, too, tends to be glorified at times, for example when he talks about company founders such as Azim Premji or Nandan Nilekani. The charisma of these iconic entrepreneurs is beyond doubt. But sometimes it seems to give the Indian economy an almost mystical power that sets completely new standards in terms of innovation and expansion. It is easy to forget that the durability of the rise of the Indian economy has yet to be proven. Ihlaus' characterization of the geopolitical and military situation on the subcontinent also makes one a little skeptical:

Unlike the extremely nationalist China, which raises territorial claims towards several neighbors and sometimes acts like a ruffian, India does not drive any desire for expansion a position of equilibrium with China in the Asian power game. The nuclear potential (...) serves as a credible deterrent; it is not intended as an offensive weapon for the first strike.

The view that Indian foreign and defense policy is strictly defensive is widespread in the West - despite expansionist sins like in Goa and Sikkim and suppressed independence movements like in Assam, Punjab and Kashmir. Especially since in the Kashmir conflict three years ago India appeared to be under nuclear threat from the Pakistani leadership:

"I still remember when I was sitting with Musharraf and who threatened that he would use the atomic bomb if necessary. India will never be the first to do that. Nobody can occupy or control India. In this respect, India has an inner peace and can calmly develop track around. "

In fact - and Ihlau is wrong here - the Hindu nationalist leadership in New Delhi would not have hesitated to use nuclear weapons if the conflict had actually escalated. Such punctual false conclusions do not reduce the charm of the book. Ihlaus new work is a captivating foray into the subcontinent at the beginning of the 21st century. The author himself wants it to be understood as an introduction. To do this, however, it requires a little prior knowledge in some places. Oliver Müller's book "Wirtschaftsmacht Indien" is politically underpinned, but thematically more focused on the boom in trade, services and industry. The Handelsblatt correspondent in South Asia also assumes that the rise of India cannot be stopped and that the new global player will even overtake Europe. Thoroughly exploring the depths of this development, Müller also goes into the dark side of the upswing in detail:

Nothing holds the country back more than its blatant infrastructure bottlenecks ... Even with great efforts, India is unlikely to ever succeed in having sufficiently good roads and airports in anticipation of future growth. Its economic future depends on whether it can improve ports, railway lines and energy supplies quickly enough to avoid their total collapse.

Using numerous examples and diligently compiled facts, Müller demonstrates how India has worked its way up from a corruption-ridden, technologically underdeveloped and economically highly questionable emerging market - in less than half a decade. Sometimes the reader is overwhelmed by the abundance of numbers. But the author knows how to present important connections and contradictions very clearly. He describes the clash of new wealth and poverty inherited over generations in the new economy metropolis of Gurgaon at the gates of New Delhi:

In the noble "China Club", cooks flown in from the People's Republic serve first-class Szechuan chicken (...) for the weekly wages of a construction worker. (...) The atmosphere is modern and dignified. But right in front of the windows of this culinary oasis, in the eyes of your guests, stretches a tangle of blue plastic sheeting, straw huts and corrugated iron roofs, between which naked children run around. On the street in front of it, ragged figures knock on the car window and beg. (...)

However, Oliver Müller also loses his critical distance when he approaches the entrepreneurs from Delhi and Hyderabad, Bangalore and Bombay. They are "exceptional entrepreneurs" with "bright ideas in their heads and brute energy in their stomachs":

These new tycoons don't eat croissants for breakfast, but rather chickpeas with flatbread. They are not always cultured and often indulge in a penchant for pomp that unsettles Europeans. But they are cold computers and have an entrepreneurial killer instinct.

Müller has prototypes in mind like the steel baron Lakshmi Mittal, who caused a sensation with the takeover of the renowned Arcelor group. Full of fascination, he looks at the turbo capitalists who came from the jungle - and praises them as role models for the supposedly satiated and satiated company leaders in the West. Müller's continuous comparisons with the People's Republic of China, where he previously worked as a correspondent, are particularly well-founded and illuminating. After reading this book, it seems quite plausible that India might even overtake its northern neighbor in the long term. "India as an economic powerhouse" is aimed primarily at readers who are interested in world economics in the broadest sense and especially in the rise of the subcontinent. But Müller's book also serves as an in-depth introduction to politics and society in modern India. Olaf Ihlaus "World Power India" will probably find significantly more readers because of its more popular writing style. Where Müller lets numbers speak, Ihlau often relies on anecdotes. Both works are recommended.

Olaf Ihlau World Power India. The new challenge from the west
Siedler Verlag. Munich 2006.
224 pages. 19.95 euros.

Oliver Müller: India as an economic powerhouse. Challenge for us
Hanser publishing house. Munich 2006.
302 pages. 19.90 euros.