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New Delhi: Promising
demographics, freedom of speech and respect for investor rights
make India one of the most appealing growth venues, says a leading
American B-school head while advising that the country must
"truly" integrate into the global economy - despite the risks - to
be a world leader.
"India represents one of the most appealing growth venues in the
world today. The reasons for this are its geopolitical setting and
the respect for investor rights," Robert F. Bruner, dean of the
Darden Graduate School of Business Administration at the
University of Virginia, told IANS in an interview.
In the robust and large emerging economies that have the potential
to stimulate growth in the rest of the world, India "represents
one of the bright spots in the global economic scene", said
Bruner, who has authored seminal works on mergers and acquisitions
and the US stock market crash of 1907.
India's growth rate during the 2010-11 fiscal ended March 31 was
8.5 percent.
Noting that India is one of the few economies that is "growing
robustly" and had diversified the basis for growth, he said: "It
has one of the most promising demographics of any large country in
the world. This means that the growth is probably sustainable in
the later stage of the century."
"And then, there is the freedom of speech, respect for the right
of the property holders and rule of law, to mention just a few,"
said the head of Darden, which Forbes has ranked ninth in its list
of top US B-schools.
Bruner, who joined Darden in 1982, became its dean in 2005. He was
on his seventh visit to India, which boasts of a vibrant alumni
association of the B-school.
Stressing the need for greater globalisation, Bruner disagreed
that the checks and balances in place in spite of the
liberalisation process that began in 1991 were responsible for
India remaining immune to the East Asian meltdown of the mid-1990s
and emerging relatively unscathed from the global meltdown of
2008.
"You can build a wall around the country that excludes the impact
of foreign influences, panics and crashes, and there are always
elements in society that are used for that. Certainly we have it
in the United States, it's there in Germany and in Japan, but that
comes at a cost," Bruner maintained.
He enumerated the cost as very slow transfer of technology, of
best practices and even of capital.
"The question that India must ask itself is can it strike a
balance between the benefits of more openness with the potential
costs and risks?"
Saying this is "possible", Bruner said: "Indeed, my counsel to
India would be that India will never attain a role of true global
leadership, to which its size and dynamism might entitle it to,
unless it becomes truly integrated into the global economy."
"If that happens then India will be vulnerable to periodic crashes
and panics, market upsets and reversals," he added.
What then would be the benefits of greater globalisation?
I've looked into the flows of capital in and out of India: they
have become more amplified and extreme in the past five years.
This is just a small manifestation of the means to be more
integrated into the global economy," Bruner said.
Admitting that there is "no perfect system" in the world, he
added: "You have a choice between pretty good or not so good.
Given the huge welfare implications to the millions of citizens of
India I'd say put your bets on the integration in the global
economy."
Speaking about the global economy in the context of the Indian
experience, Bruner said developed economies "are struggling even
to grow at all".
"Japan is still contracting, Europe is on the brink of either
success or potential collapse of the European Union, the US
continues to struggle with relatively high rates of unemployment
and stubborn reluctance on the part of companies to invest," he
said.
(Vishnu
Makhijani can be contacted at vishnu.makhijani@ians.in)
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