With the US Crash, the possibilities of a unipolar world have totally disappeared.
Thus, this article advising the Russians to adopt a gold rouble is really worth reading. (Thanks to Lew Rockwell).
If the Russians do adopt gold as their currency, the entire world’s private savings will go into Russian banks.
This is precisely what happened in the 17th century when London and Paris crashed and the Dutch set up the Municipal Bank of Amsterdam with a gold guilder backed by a 100 per cent reserve. Honesty in money and banking paid off – and the Dutch became Europe’s biggest and freest market economy, earning the admiration of both David Hume as well as Adam Smith.
These are points for Indians to keep in mind as a multi-polar world order emerges. What should we cash in on? Of course, we must have a solid currency and banking system. But what else?
Some say manufacturing. And Manmohan has set up a body to look into this. This body, led by a former PSU steel bureaucrat (ugh!), has submitted a list of absurd recommendations:
“No 100% subsidiaries for foreign manufacturers. No special economic zones. And no so-called ultra mega power projects. These are some of the radical changes suggested by a group set up by Prime Minister Manmohan Singh to review the country’s manufacturing policy.”
Read the full story here.
In my book, manufacturing can never take off here without adequate infrastructure – power, water, roads etc. Our labour laws actually lower our competitiveness by making it impossible to cash in on a cheap resource.
Yet, I wonder why no one high up talks of the potential for tourism in India. We have 2500 miles of sunny beaches. We have dense forests. We have a desert, and high mountains. We have culture and tradition. And cuisine.
Tourism is the world’s biggest industry – and India does not feature in it. Today, more Indians go on foreign holidays than foreign tourists come to India. We have negative tourism earnings.
Tourists only come to certain areas: Rajasthan, Goa and Kerala top the list. But even from Kerala there is a report today that infrastructure is inadequate.
This is a fact. From southern Goa, Gokarna’s fabulous Om Beach is just 45 kms – but no road. Tourists fly from Goa to Kerala, missing out on the Karnataka coast, because there are no roads. Electricity invariably trips everyday. Cities and towns are dirty.
Then, of course, there is the issue of Liberty. Indians do not have the freedom to cater to tourists. The ganja smoker is just one example – but right across the board, The State has crippled our ability to keep customers happy. But the tourist is on a holiday – to enjoy life. He will go where life can be enjoyed. Why will he suffer in India?
Whereas Manmohan has supported manufacturing – just as Nehru made steel – I am all for tourism. They say in Goa that one tourist creates 12 local jobs. Can steel-making beat that?
Very interesting. I am curious about the argument that tourism is more or less a seasonal industry and hence wont be able generate income steadily.
ReplyDeleteIf true this coule be something of an issue in India, where domestic tourist volumes arent that high.
What are your thoughts on this?
Interesting! I live in Switzerland and have visited India a few times and, personally, I find that India, in many ways, is a lot more interesting and attractive than Switzerland. And yet, the latter has a very sound tourist industry, apparently better than India's. I wonder why...
ReplyDelete"They say in Goa that one tourist creates 12 local jobs. Can steel-making beat that?"
ReplyDeleteI agree with the basic focus of your post. Tourism is indeed an industry that has not achieved its full potential in India.
However, the last couple of lines are a bit hyperbolic. Goa receives more tourists than its population. I was there in 2005, and the tourism department told me than Goa was set to receive about 3 million tourists that year. Goa's population was about 1.3 million then. [Yes, I realize that all tourists do not come at the same time. But then, all Goans are not involved in tourism-related jobs. I didn't see much evidence of large-scale intra-India immigration in Goa either.] Anyway.. that's just nitpicking, I guess.
To make a case for tourism industry generating more jobs than steel industry, some more data would be required rather than what "they" say.
@Anonymous: Tourism is seasonal at a local level (no tourists visit Rajasthan in Summer), but at the all-India level, tourism is a perennial industry. The conditions are always right *somewhere* in India. You can download stats from Tourism Ministry's website. There is some dip during Summer, but not much. And then, there is a lot of domestic tourism, which makes up for a lot.