The Indian Rupee Crunch..........(5)

The field of development fascinates many, in both depth and dimension from the perspectives of critical infrastructure, human capital, environmental sustainability, social inclusion, health, safety, literacy, regional/national competitiveness and others. The understanding is from as simple as feeder road construction with specific justification in the back-seat to a complex situation whereby one tries to catch-up with other -- nationally, regionally and even internationally -- looking into new prospects, untapped potentials, and even missed opportunities. More simpler the understanding of it, the lesser the chances of doing well! In my view, casual oversimplification dilutes innovative drive as well as development accountability. I am now wondering if we are suffering from this syndrome. Let me go on why it is this way.

Following the trend is creating value while herd-mentality is chasing profit. Former needs tracking “open interest” over a long period to detect subtle patterns and creating one’s worth, be it of a country or an individual. You create your niche and try and excel in it. "Those guys" don't put flashing neons for you to see in broad day light which will enable you to outclass them in their own game with start-up advantage. Or else the world would have seen many Steve Jobs by now.

And, with the herd-mentality drifting on intuition,  you will not even notice the world go by outside your window.  You will eventually reach the point where it becomes a cubicle black-mountain devoid of anything resembling real-world logic, and feel good about being grazed around.

In private sector, they moved in herds: constructing buildings the rates of return of  which cannot even hang onto elephant’s tail leave aside riding on top, buying tipper trucks of which you are not sure who the real owner is – the driver or you,  and excavators, resorts, Prados/Santa Fes, dealerships, shopping malls, and so on. So far so good, as long as the banks were flooded with cash and desperately trying to find sanity somewhere to park their deposits from across the fence. But to assume that the economic growth that is supposedly as a result of increasing capital investment will support long-term return on such investments is showing lack of passion and commitment. There is no problem in investing with such assumption if you are financially accountable no one. The people with passion and commitment are stylish, dignified, distinguished and civilized -- qualities sadly fading these days. They do not belong in the herd. They follow the trend.

In public sector, we have not moved much from doing things the way those were being done 20/25 years ago. Not much incremental value addition in gewogs. Nobody’s fault at the moment, I guess. There is no capacity to analyze resource potentials and local/regional/national competitive advantages, and make strategic plans that set the gewog visions to optimize their contribution to national development goal. So it is essentially service-oriented-inward-looking development model there. From strategic perspective, gewog is too small a unit to do anything creative with vision. The technical resources are too scare, both in quality and quantity, even for thin spread at gewog level. If the gewog is given authority and responsibility without resources, I have no idea where the accountability lies. Should we  believe in the same model, we will be repairing BHUs, rural water supplies, feeder roads that have neither technical values nor economic justifications for years to come and drawing satisfaction from the excuse that no substantive contribution to the economy could be possible from grass-root level. No doubt about it!

Nationally, it is the old institutional/organizational lust -- that reflects value, attitude, ethic, culture, discipline, strength, ability and pride – that has lost its way. Why would a government official tell me he was doing me a favor by coming to his office right after his official tour and processing my case that was pending for more than a week? It’s not the case that was pending is of concern; it’s his work attitude, ethic and culture that bothered me. Was it an isolated situation? I do not think so but you would have had your experiences too. What exists generally matter. In another situation I asked the director of an authority (autonomous organization), “do you know what you have to do?” “Yes”, he said. “Do you know the importance of your authority nationally and have clear idea with regard to its authority, responsibility and accountability?” He said, “no one has ever explained to me these.” I asked one more, “do you have full realization of your professional space within which you perform your tasks quite freely as an autonomous body and feel that it’s adequate to do your work well without interference?”  This triggered stories connected with ministries, RCSC, audit, ACC and other forces of thrust: each coming with their own version and understanding of the autonomous authority. How can the authority be result-oriented the way every autonomous body is supposed to be, I wondered.   


For true professionals, motivation need not be always in the form of benefits. It can be in the form of job satisfaction,  innovation, creativity, sense of being part of great team/product, being helpful to others in need, clear career path and others. It takes massive effort and time to build institutions/organizations with such values. But to destroy those values it takes few minutes. The Apple is the company where people are motivated to make great products: IPODs, iPhones, IPADs. So products, not profits, are real motivation for Apple engineers. The profit is inevitable result of their products. That's why it is $550 billion (equal to Google+Microsoft+Amazon) company today.  No country can expect to motivate its government staff to Apple-level. The point here is organizational capacity cannot be built without staff motivation. And, the bottom line: we have to improve organizational capacity of the economy, not only of the institutions!

Well, despite the above we are doing good -- the GDP was growing at 11.8% last year.  So far so good, everyone seems happy with status quo. So, we move ahead with the national philosophy and goals. Then swings the economic pendulum, the driver - rupee crunch!  The swing is almost from one end to the other. The rupee rationing followed by complete suspension of rupee flow, suspension of loans and import licenses, closure of non-resident foreigner accounts and so on. It’s like closing the household tap. Earlier the tap was full-open and water flooded the house. Now it’s closed-tight to let the flood dry.

Even with INR 9.7 billion plus INR 1.6 billion refill, we have to find more stable solution to the rupee problem. With no immediate opportunity for export increase, the inward way is to look into import substitution. The import substitution – the latest lead to improve productivity and ease rupee crunch – of shoes, vegetables, dairy products, and many. Great, if we can do it. But the fact is I find no one talking about economic and strategic rationale of import substitution. Will there be cost and quality advantage to importing those products? Will there be resource (say, emphasis on agriculture may take people back to villages for farming) imbalance in the economy because of such activities? Do we have capacity, technology, potential and/or infrastructure? Most importantly, does it fit into the country’s long-term development strategy? With the aim of import substitution in agriculture near-term, are we aiming for agriculture-based economy longer-term, more in terms of export earnings through vegetables and agricultural produces? What level market we aim at, organic level? Does it go hand-in-hand with other strategic goals? The import substitution is good provided these issues are cleared at the policy level. Then, we go all-out with no room for reverse future. Half-hearted attempt will not work.

 In late fifties when I was a little lad in the village, my family was self-sufficient except for clothes and salt. I wore no shoes. Can you apply that definition of self sufficiency in 2012 so that my requirements are met through import substitution? I guess not. Time does not move, it changes. And, we have to move with time, not backward but forward!

I strongly believe that no country can excel in everything, not even the US, China or India. The best strategy is to realize, in every sense of the word, what you are good at and focus fully on it with an intention to carve out your own space. It is by far the best development strategy rather than trying to spread your resources thin with an aim to cover near-term difficulties/short-comings without proper focus and longer strategic purpose. For this,  it is crucial to put the house in order, do homework, and change gears with an aim to enhance the lives of the total population through  resource-based economy. Change is the essence of life. We should be willing  to surrender what we are, for what we could become. We have to have vision!

You won’t get anything unless you have the vision to imagine it. – John Lennon

continuation under May.....................The Indian Rupee Crunch..........(6)