WEBVTT - Why India-China Comparisons Miss The Point 0:00:02.440 --> 0:00:06.480 India is often cited as the next rising Asian power, 0:00:06.920 --> 0:00:11.959 right thereafter China. Its balls say India as ascendant because 0:00:12.000 --> 0:00:17.280 of its growing population, tech savvy, d'aspora, and democracy, among 0:00:17.280 --> 0:00:22.520 other things. Few discussions of Asia's future are complete without 0:00:22.520 --> 0:00:26.400 the obligatory reference to China and India, often in the 0:00:26.480 --> 0:00:30.680 same sentence. Both are frequently shorthand for the future of 0:00:30.760 --> 0:00:36.320 the world. But is China really the best comparison or 0:00:36.400 --> 0:00:41.000 is it merely the easiest? Does the narrative about India 0:00:41.159 --> 0:00:56.760 China rivalry obscure more than it enlightens. Welcome to Benchmark, 0:00:56.960 --> 0:01:01.560 a show about the global economy. I'm Annual Moss, columnists 0:01:01.600 --> 0:01:05.440 at Bloomberg Opinion in New York, and I'm Scott Landman 0:01:05.520 --> 0:01:09.000 and economics editor with Bloomberg News in Washington. A more 0:01:09.120 --> 0:01:11.880 interesting way of looking at India today might be to 0:01:11.920 --> 0:01:14.960 compare it to America in the late nineteenth and early 0:01:15.000 --> 0:01:18.000 twenty centuries. That was the era of the so called 0:01:18.120 --> 0:01:23.040 robber barons of tycoons like Rockefeller and Morgan. And today 0:01:23.080 --> 0:01:26.440 in India we have tycoons that have a kind of 0:01:26.440 --> 0:01:30.200 a similar profile in their society. Dan tell us a 0:01:30.240 --> 0:01:33.640 little bit about our guests. Our guest is James Crabtree, 0:01:34.280 --> 0:01:37.679 an associate professor at the Lee Kuan New School of 0:01:37.760 --> 0:01:42.640 Public Policy in Singapore. He's a former Financial Times journalist 0:01:42.720 --> 0:01:47.920 who's just published The Billionaire Raj, a journey through India's 0:01:48.040 --> 0:01:52.560 new guilded age. James, congratulations on the book, Thanks for 0:01:52.680 --> 0:01:57.000 joining us, Thanks for having me. How different our India 0:01:57.080 --> 0:02:00.920 and China? And what, if anything does the shorthand link 0:02:01.000 --> 0:02:03.880 between the two, miss I think that you're starting premise 0:02:03.880 --> 0:02:05.680 in your introduction is the right one, which is, these 0:02:05.680 --> 0:02:09.880 are two very different economies. China's is state dominated. India's, 0:02:09.880 --> 0:02:14.800 although it has a healthy state sector, is predominantly private sector. 0:02:15.600 --> 0:02:18.320 Um China has a strong government that is capable of 0:02:18.320 --> 0:02:20.519 doing things India, with the best wood in the world, 0:02:20.560 --> 0:02:24.600 does not. And most crucially, China began its liberalization process 0:02:24.680 --> 0:02:27.480 a good ten years before India, maybe twenty years depending 0:02:27.480 --> 0:02:29.640 on how you count it, and so China is a 0:02:29.760 --> 0:02:33.560 much much larger economy. This plays out in the way 0:02:33.600 --> 0:02:37.080 that people misread these two Asian giants, or one Asian 0:02:37.080 --> 0:02:39.160 giant and one Asian giant in waiting. If you look 0:02:39.200 --> 0:02:41.440 at an issue like the size and the middle class, 0:02:41.960 --> 0:02:44.080 people look at them as if they're the same. But 0:02:44.120 --> 0:02:48.360 the Chinese middle class is vast. The number of online 0:02:48.400 --> 0:02:51.520 shoppers in China now is greater than the number of 0:02:51.639 --> 0:02:53.680 online shoppers in the entire of the rest of the 0:02:53.680 --> 0:02:57.240 world combined. The Indian middle class is stupid tiny. I mean, 0:02:57.280 --> 0:03:01.880 maybe eighty million people out of population at one point 0:03:01.919 --> 0:03:04.960 three billion would classify as the sort of middle class 0:03:04.960 --> 0:03:07.680 customer that that you know, your listeners would imagine someone 0:03:07.720 --> 0:03:10.959 who has a petrol driven vehicle and some savings in 0:03:11.000 --> 0:03:14.120 the bank and a higher education. So they're very, very 0:03:14.120 --> 0:03:17.120 different economies, and so it's often not that helpful to 0:03:17.280 --> 0:03:20.000 take a kind of crude comparison between the two of them. James, 0:03:20.080 --> 0:03:24.320 let's talk about how that plays into your book, you know, 0:03:24.360 --> 0:03:28.239 thinking about the government's role in the economies of China 0:03:28.360 --> 0:03:33.519 and India. China had the state sponsored economy for some 0:03:33.600 --> 0:03:37.840 decades after the Communist Revolution. Subsequently, in the late nineteen 0:03:37.880 --> 0:03:42.400 seventies started to step away, which allowed the flourishing of 0:03:42.760 --> 0:03:45.720 the kind the economy that you see today. Can you 0:03:45.800 --> 0:03:49.000 tell us about India and how the government plays a 0:03:49.120 --> 0:03:52.880 role in India's economy and how that has either helped 0:03:53.000 --> 0:03:56.280 or held back and how that set the stage for 0:03:56.640 --> 0:03:59.800 the rise of the billionaire class that you talk about 0:03:59.800 --> 0:04:02.480 in your book. So India and China have been through 0:04:02.680 --> 0:04:06.040 a similar stage in their economic development, or China has 0:04:06.080 --> 0:04:08.680 been through. In India is going through this early stage 0:04:08.680 --> 0:04:12.400 of industrialization, which comes with a number of other things, 0:04:12.440 --> 0:04:16.800 massive urbanization, the development of the middle class um and 0:04:16.880 --> 0:04:19.520 big infrastructure development and its infrastructure, which I think is 0:04:19.560 --> 0:04:22.800 the most instructive comparison, because China has been through the 0:04:22.880 --> 0:04:27.039 largest infrastructure investment in human history, and it was predominantly 0:04:27.160 --> 0:04:31.600 driven and even directed by the states. So the government 0:04:31.640 --> 0:04:33.640 decided what should be built, and the people who are 0:04:33.640 --> 0:04:37.320 building it were largely state back companies, not necessarily wholly 0:04:37.360 --> 0:04:40.159 stay owned, but they were controlled by the state. India 0:04:40.680 --> 0:04:44.919 in the two thousands went through a similar infrastructure boom, 0:04:45.120 --> 0:04:48.839 and typically we view India as having fairly hopeless infrastructure. 0:04:48.880 --> 0:04:50.920 But actually if you go to the major Indian cities 0:04:50.960 --> 0:04:52.599 now and you go to their airports, they're not the 0:04:52.600 --> 0:04:55.240 airports that you think. They are. World class airports in 0:04:55.279 --> 0:04:57.640 almost every case. Now every big Indian city has a 0:04:57.720 --> 0:05:00.560 has a world class airport, and the most they opened 0:05:00.600 --> 0:05:03.000 in the last five to ten years and almost all 0:05:03.040 --> 0:05:06.880 of these were put in by big private sector conglomerates 0:05:06.960 --> 0:05:09.520 run by tycoons. The same is true of the steel 0:05:09.560 --> 0:05:12.039 mills and the iron ore mills, and the ports on 0:05:12.080 --> 0:05:14.760 the coast, and the and the toll roads between the cities. 0:05:15.360 --> 0:05:18.159 And that is where the comparison with America and the 0:05:18.160 --> 0:05:21.839 Gilded Age sort of bears out, because these have both 0:05:21.920 --> 0:05:27.080 been countries where the risk taking and industrial development has 0:05:27.160 --> 0:05:30.200 predominantly been taken on by the private sector. Now in 0:05:30.240 --> 0:05:32.719 the Indian case, it is funded by public sector banks. 0:05:33.360 --> 0:05:36.080 And you know, the government plays an important role because 0:05:36.120 --> 0:05:38.880 you can't get land to build a road or or 0:05:38.920 --> 0:05:42.000 a steel mill without the government say so. But it's 0:05:42.000 --> 0:05:44.240 really been the private sector that has taken the lead. 0:05:44.279 --> 0:05:47.880 And I think it's probably fair to say that the 0:05:47.920 --> 0:05:50.320 investment that went into India in the two thousands was 0:05:50.360 --> 0:05:54.040 probably the largest private sector investment in history since America 0:05:54.080 --> 0:05:56.960 built its railways. So you know, you're you're talking about 0:05:56.960 --> 0:06:00.680 a very substantial role for the private sector. In the US, 0:06:00.800 --> 0:06:05.039 there's a strong perception that China's government and its companies 0:06:05.279 --> 0:06:09.080 are one that the state that is a communist party, 0:06:09.440 --> 0:06:14.760 has co opted business in pursuit of national goals. Listening 0:06:14.800 --> 0:06:17.320 to you speak, I wonder whether the reverse is true 0:06:17.320 --> 0:06:21.320 in India. Companies have co opted the state. It's a 0:06:21.400 --> 0:06:23.680 very nice way of putting it. I think that definitely 0:06:23.960 --> 0:06:26.520 was true in the middle of the two thousands. So 0:06:26.560 --> 0:06:29.919 take take a step back. India became independent from Britain 0:06:29.960 --> 0:06:33.720 in seven and then for forty years shut itself off 0:06:33.760 --> 0:06:35.799 from the rest of the world and developed a socialist 0:06:35.800 --> 0:06:38.920 planned economy. Your listeners may be familiar with the phrase 0:06:38.920 --> 0:06:41.600 the Hindu rate of growth, the sense that India was 0:06:41.640 --> 0:06:44.200 a basket case that couldn't really grow more than four 0:06:44.279 --> 0:06:48.279 or five It opened up and began to liberalize, but 0:06:48.320 --> 0:06:53.000 it was really in the two thousands when things really 0:06:53.120 --> 0:06:55.279 kicked off, and that was when India began to grow 0:06:55.279 --> 0:06:58.600 it around eight percent a year, and you also got 0:06:58.640 --> 0:07:01.760 a wave of corruption handles, many of them to do 0:07:01.839 --> 0:07:06.720 with infrastructure investment or extractive industries or rent seeking. And 0:07:06.720 --> 0:07:08.640 it was at that moment that the point you make 0:07:08.800 --> 0:07:11.320 appeared to be true, where it really looked as if 0:07:11.360 --> 0:07:13.760 the large tycoons had just got the government in their pocket. 0:07:13.840 --> 0:07:17.600 They were bribing left, right and center, and that was 0:07:17.640 --> 0:07:20.600 when you had a big public reaction against grand corruption 0:07:20.680 --> 0:07:24.040 India in its pre liberalization time, We've always had corruption, 0:07:24.040 --> 0:07:25.680 but it was pretty small bore stuff. You know, you 0:07:25.680 --> 0:07:27.360 had to play a bribe to a policeman, you had 0:07:27.360 --> 0:07:29.200 to pay a bribe to get your driving license, your 0:07:29.200 --> 0:07:32.880 marriage certificate. It was only after liberalization. And this also 0:07:32.960 --> 0:07:35.680 happened in different ways in China and Russia too. But 0:07:35.760 --> 0:07:39.160 as the economy grew, the value of corruption grew with it, 0:07:39.240 --> 0:07:41.760 and so suddenly you had this grand not rather than 0:07:41.840 --> 0:07:45.600 retail corruption, you had a wholesale corruption. That has tapered 0:07:45.640 --> 0:07:50.040 off a little bit. So into India's people elected Randramodi, 0:07:50.120 --> 0:07:53.760 the current Prime Minister, won an overwhelming landslide. That was 0:07:53.800 --> 0:07:57.720 partly because he stood as a pro growth, pro business candidate, 0:07:57.760 --> 0:07:59.840 but he was also staunchly anti corruption. And so this 0:08:00.000 --> 0:08:03.120 sense that the tycoons have the Indian government in their 0:08:03.160 --> 0:08:05.600 pocket has tapered off a little bit. But I think 0:08:05.600 --> 0:08:07.480 it's certainly true to say that if you look at 0:08:07.480 --> 0:08:10.040 it the other way around, which is China. China's government 0:08:10.080 --> 0:08:12.440 is very strategic in the way that it directs investment, 0:08:12.560 --> 0:08:15.360 and presently, for instance, is trying to roll out it's 0:08:15.400 --> 0:08:19.679 China Plan to develop world class advanced manufacturing in areas 0:08:19.760 --> 0:08:24.760 like robotics and aeronautic manufacturing. India is much less good 0:08:24.760 --> 0:08:29.800 at that at sort of the state directing industry strategically 0:08:29.800 --> 0:08:32.560 and enabling it so that you get the kind of 0:08:32.559 --> 0:08:36.120 injuries industries you need to develop. Why don't you tell 0:08:36.200 --> 0:08:38.640 us a little bit about one of the main figures 0:08:38.840 --> 0:08:43.240 in your book, Mukesh Ambani, one of the wealthiest men 0:08:43.520 --> 0:08:48.600 in India. Who is he? Is there anybody in the 0:08:48.720 --> 0:08:52.240 United States that might be an equivalent to like Jeff 0:08:52.280 --> 0:08:56.160 Bezos or you know, how how did he amass not 0:08:56.320 --> 0:08:59.319 just his wealth but the power. You have some pretty 0:08:59.360 --> 0:09:03.760 interesting ecdotes in your book where people don't even want 0:09:03.800 --> 0:09:06.160 to talk about him. He just has so much hidden 0:09:06.200 --> 0:09:10.079 power behind the scenes. There's an Indian newspaper editor called 0:09:10.120 --> 0:09:13.400 Shaker Gupta. He's one of the pre eminent columnists in India. 0:09:13.480 --> 0:09:15.720 On Twitter earlier this week he sent me a little 0:09:15.720 --> 0:09:18.040 message saying, you know, you're quite brave to have written 0:09:18.040 --> 0:09:20.800 this book. And partially what he means is that people 0:09:20.800 --> 0:09:24.120 in India a bit careful writing about the big business people. 0:09:24.160 --> 0:09:26.240 Not because like Russia, you're going to end up dead 0:09:26.280 --> 0:09:28.719 in a ditch. But these people, they have a lot 0:09:28.720 --> 0:09:31.600 of power they remember, and so people are somewhat cautious 0:09:31.640 --> 0:09:34.360 about about writing about them. I mean, I had left 0:09:34.360 --> 0:09:37.920 the country son, since I'm somewhat protected, and Ambani is 0:09:38.200 --> 0:09:41.199 the most sort of famous I suppose of these examples. 0:09:41.240 --> 0:09:43.920 So let's start from the beginning. The American edition of 0:09:43.960 --> 0:09:46.240 my book on its front cover has a picture of 0:09:46.320 --> 0:09:49.680 his house, which is called Antilia. It is a a 0:09:49.760 --> 0:09:54.959 hundred and seventy meter residential skyscraper that towers over downtown Mumbai. 0:09:55.679 --> 0:09:59.480 It's a family home for Sambani, his wife and his 0:09:59.520 --> 0:10:02.440 three chill Droun and you know, it's large enough to 0:10:02.480 --> 0:10:05.520 be a gigantic hotel. It has all sorts of luxurious 0:10:05.920 --> 0:10:09.040 a coutoment from an indoor put football pitch and swimming 0:10:09.040 --> 0:10:12.760 pools and all the things you'd expect, hanging gardens, roof terraces, 0:10:13.440 --> 0:10:16.040 and people call it the billion dollar Home. Nobody really 0:10:16.040 --> 0:10:17.800 knows how much it actually cost to build. But there's 0:10:17.840 --> 0:10:20.560 this sense that this is really the icon of what 0:10:20.679 --> 0:10:23.440 I have called India's New Gilded Age, because it's one 0:10:23.440 --> 0:10:25.760 of the most visible buildings in Mumbai, which is the 0:10:25.800 --> 0:10:28.000 financial capital and the richest city in India. But it's 0:10:28.000 --> 0:10:31.200 still a city where something about half the residents live 0:10:31.240 --> 0:10:34.440 in slums and in a country where GDP per capital 0:10:34.800 --> 0:10:38.280 is about sevent d dollars. Muka Schambanni who is he? 0:10:39.040 --> 0:10:43.040 It's quite difficult to compare him to an American capitalist 0:10:43.160 --> 0:10:47.160 because he runs, as many Asian tycoons do, a very 0:10:47.160 --> 0:10:50.679 distributed conglomerate. So he inherited it from his father, and 0:10:50.720 --> 0:10:56.199 his father started out in plastics and moved into petro 0:10:56.320 --> 0:11:00.439 chemicals and oil refining. Muk Shambani has recently he spent 0:11:00.600 --> 0:11:04.200 an enormous amount of money thirty billion dollars launching a 0:11:04.280 --> 0:11:07.440 fourth generation mobile telephone business. But he has his fingers 0:11:07.440 --> 0:11:11.520 in all sorts of pies. He has media, hotels, bits 0:11:11.559 --> 0:11:13.679 and bobs of financial services, all sorts of things, and 0:11:13.760 --> 0:11:16.000 it's a very distributed business. Oil and gas it's a 0:11:16.000 --> 0:11:19.680 big business. So they do energy exploration. And he's not 0:11:19.720 --> 0:11:22.040 just the richest man in India and his personal fortune 0:11:22.080 --> 0:11:23.760 is forty billion dollars, so he's the richest man in 0:11:23.760 --> 0:11:27.160 Asia according to the most recent Forbes list. The reason 0:11:27.200 --> 0:11:30.760 why he's so feared partly is the legacy of his father, 0:11:31.120 --> 0:11:34.719 who was India's pre eminent tycoon before him. And had 0:11:34.720 --> 0:11:38.320 a reputation for you know, knowing how to work the 0:11:38.360 --> 0:11:42.880 system to to make money. Is a ferociously competitive and 0:11:42.960 --> 0:11:46.200 his son has inherited some of that as well. Chambani 0:11:46.280 --> 0:11:49.400 is known as a ferocious competitor who will spend whatever 0:11:49.440 --> 0:11:52.720 money and you know, indulge in whatever tactic is necessary 0:11:52.720 --> 0:11:55.000 to get what he wants. And his investment in what's 0:11:55.000 --> 0:11:58.839 called reliance Geo. This new Greenfield mobile telephone network is 0:11:58.880 --> 0:12:02.760 an example of a quite tycoon like venture in the 0:12:02.840 --> 0:12:09.040 sense that no sensible board of a Western style company 0:12:09.200 --> 0:12:13.080 would have green lit spending thirty billion dollars to build 0:12:13.200 --> 0:12:15.959 a new fourth generation mobile outfit in India, which is 0:12:16.000 --> 0:12:20.400 an incredibly competitive mobile that mobile market in which almost 0:12:20.400 --> 0:12:23.480 none of the companies make any profits because it's so competitive, 0:12:23.520 --> 0:12:26.760 And yet he sank more money into one company than 0:12:26.840 --> 0:12:28.960 all of the rest of the Indian telecom companies had 0:12:29.000 --> 0:12:32.599 spent collectively since liberalization. I mean, it was just a 0:12:32.679 --> 0:12:35.840 it's an insanely ambitious venture. And in the book, so 0:12:35.840 --> 0:12:37.640 I suppose I have to say I sort of admire that. 0:12:37.720 --> 0:12:40.240 I mean, what's the point of being a tycoon if 0:12:40.280 --> 0:12:43.720 you can't take these ridiculous big bets that's sort of 0:12:43.760 --> 0:12:47.320 the point of building a railway between New York and 0:12:47.400 --> 0:12:51.720 Los Angeles, or you know, these huge, bold, visionary things. 0:12:52.240 --> 0:12:55.600 The problem in India traditionally has been that you can 0:12:55.640 --> 0:12:57.360 take a lot of risk as a tycoon, but you 0:12:57.400 --> 0:13:00.000 don't take any of the downside of that risk because 0:13:00.000 --> 0:13:03.000 as you have great control over the banks, you don't 0:13:03.000 --> 0:13:05.280 have to pay back your debts. It's it's almost unheard 0:13:05.280 --> 0:13:07.160 of for Indians to go bust. So the tycoons have 0:13:07.160 --> 0:13:09.559 a lot of power. So tell us a little bit 0:13:09.600 --> 0:13:13.640 about your background. You were the ft bureau chief in Mumbai. 0:13:13.960 --> 0:13:17.040 Did that mean you were the head of all FT 0:13:17.240 --> 0:13:21.840 reporters in India. No, the South Asian Bureau chief sits 0:13:21.840 --> 0:13:24.800 in Delhi. So typically that's how it works. The Ft 0:13:24.880 --> 0:13:28.120 obviously is a much smaller operation than the giants of Broomberg. 0:13:28.160 --> 0:13:29.520 So we had a couple of people in Mumbai and 0:13:29.559 --> 0:13:31.640 a couple of people in Delhi, and so I was 0:13:31.679 --> 0:13:38.360 in charge of writing about banks and finance, heavy industry, tech, telecoms, cricket, Bollywood, 0:13:38.400 --> 0:13:40.319 whole range of fun stuff. But it was we'll get 0:13:40.320 --> 0:13:42.240 to cricket in a second. If it was, it was 0:13:42.280 --> 0:13:44.440 from the beginning of the right from the start that 0:13:44.480 --> 0:13:46.800 I got there. I arrived in twenty eleven. That was 0:13:46.880 --> 0:13:50.000 the period of these corruption scandals, and so I sort 0:13:50.000 --> 0:13:52.160 of arrived on the on the turn, as it were, 0:13:52.200 --> 0:13:56.040 the moment when the real boom years were just beginning 0:13:56.080 --> 0:14:01.360 to peter out. And what then happened, which was, uh, 0:14:01.400 --> 0:14:03.360 you know, the tide went out and you began to 0:14:03.360 --> 0:14:06.439 see who was still less standing, as it were, and 0:14:06.679 --> 0:14:10.720 so a number of these conglomerates, it turned out to 0:14:10.840 --> 0:14:14.240 have taken on far too much risk and got themselves 0:14:14.240 --> 0:14:16.000 into big trouble. And this has been a theme of 0:14:16.000 --> 0:14:18.120 the Indian economy ever since. Then. You have what's called 0:14:18.120 --> 0:14:21.200 the twin balance sheet problem, where there's far too much 0:14:21.280 --> 0:14:23.400 debt in the corporate center and much too much bad 0:14:23.440 --> 0:14:25.560 loans in the banking system. And so India has been 0:14:25.600 --> 0:14:28.720 struggling to come to terms with the sort of the 0:14:28.760 --> 0:14:31.080 after effects of the boom in the mid two thousands. 0:14:31.120 --> 0:14:33.240 And did you ask to go to India or were 0:14:33.280 --> 0:14:36.160 you assigned? Now I've desperately wanted to go. I've been 0:14:36.200 --> 0:14:38.840 to India before. You know, India's a fascinating country. It's 0:14:38.840 --> 0:14:42.080 a wonderful place to be a journalist. It's very open. 0:14:42.160 --> 0:14:46.320 If you compare South Asia, which is chaotic, to East Asia, 0:14:46.360 --> 0:14:48.720 which is very well organized. But but South Asia is 0:14:48.800 --> 0:14:52.160 very open society. Indians love to talk. If you go 0:14:52.200 --> 0:14:54.600 in there, particularly if you work for a top tier 0:14:54.720 --> 0:14:57.200 media organization like Bloomberg or the Wall Street Journal or 0:14:57.240 --> 0:14:59.920 the Ft, get great access. People will talk to you. 0:15:00.440 --> 0:15:04.200 The Indian elite it's quite Western in its orientation. They 0:15:04.200 --> 0:15:07.360 send their kids to American universities, their own houses in London, 0:15:07.560 --> 0:15:11.000 they care, they get their capital from Western capital markets. 0:15:11.000 --> 0:15:13.360 None of this is really true in China. That's not 0:15:13.400 --> 0:15:15.560 to say that the Chinese are for the kids going 0:15:15.560 --> 0:15:17.840 to university in the US. That's true. But and that's 0:15:17.840 --> 0:15:20.160 not to say that China's elite is insular. It isn't. 0:15:20.160 --> 0:15:24.040 But the Indian elite is particularly concerned with what is 0:15:24.080 --> 0:15:28.160 said about it and is very well networked into the 0:15:28.200 --> 0:15:30.720 global financial sectors London and New York. And that means 0:15:31.440 --> 0:15:34.840 you get a peculiar insight into what's going on. And 0:15:34.840 --> 0:15:38.040 I also think that typically when outsiders like us right 0:15:38.120 --> 0:15:40.840 about India, we tend to do it from Delhi. The 0:15:41.120 --> 0:15:44.680 typical book written by a foreigner about about India tends 0:15:44.720 --> 0:15:48.720 to look at Indian politics. And so although I've often 0:15:48.800 --> 0:15:50.480 joked that it's not as if the world was crying 0:15:50.480 --> 0:15:52.280 out for another book written about India by a white 0:15:52.320 --> 0:15:54.880 British journalist, I think mine is at least a little 0:15:54.920 --> 0:15:56.920 bit different because it was written from Mumbai, and it's 0:15:56.960 --> 0:15:58.960 written through the lens of business, and that's what I 0:15:59.040 --> 0:16:01.560 was interested in. I never was that interested as a 0:16:01.600 --> 0:16:06.080 journalist in writing about MidCap companies in London. But what 0:16:06.240 --> 0:16:09.760 captured my imagination was the sheer risk taking that has 0:16:09.800 --> 0:16:12.160 to go on in India at this stage in its development. 0:16:12.160 --> 0:16:13.960 And I think if you were a journalist in America 0:16:14.040 --> 0:16:17.960 and eight and you're watching Cornelius Vanderbilt or Jay Gould 0:16:18.120 --> 0:16:21.360 or the true robber Barons, then these are exciting people. 0:16:21.480 --> 0:16:23.880 If you were either Tarbell, yeah, exactly, if you're a 0:16:23.960 --> 0:16:27.680 muck breaker, these are exciting people. And they're exciting partly 0:16:27.720 --> 0:16:31.600 because of the boldness of their their capitalism, but also 0:16:31.640 --> 0:16:33.440 because of the way they're bending the rules. And so 0:16:33.480 --> 0:16:38.520 there's this this sort of very enchanting combination of risk 0:16:38.600 --> 0:16:42.200 taking of a sort that are more established Western PLC 0:16:42.640 --> 0:16:44.920 simply is not allowed to do. Maybe if you cover 0:16:45.000 --> 0:16:47.080 somebody like Elon Musk you could say that you have 0:16:47.840 --> 0:16:52.320 buccaneering tycoons of of a sort of similar quality who 0:16:52.320 --> 0:16:55.120 are who are doing things that are simply the sort 0:16:55.160 --> 0:16:57.680 of thing you wouldn't normally get on on Wall Street, 0:16:57.760 --> 0:17:00.960 or it's not stretched across the entire our economy the 0:17:00.960 --> 0:17:04.400 way someone like Muskies. Right, Well, I suppose that's true, 0:17:04.440 --> 0:17:06.240 But anyway, that was that was what that was what 0:17:06.320 --> 0:17:09.960 captured my imagination about India. This combination of risk taking 0:17:09.960 --> 0:17:12.639 and rule bending, I thought was just a fantastic story. 0:17:14.480 --> 0:17:18.800 Is the State of the Billionaire raj as we like 0:17:18.920 --> 0:17:22.119 to It's a great title for the book. By the way, 0:17:22.240 --> 0:17:25.160 Uh do you see that going on for a long time? 0:17:25.200 --> 0:17:27.959 And we talked a bit about at first we've alluded 0:17:28.000 --> 0:17:31.520 to the guilded age, you know, that era in the 0:17:31.600 --> 0:17:36.920 United States, and you just have this massive inequality in India. 0:17:37.040 --> 0:17:39.800 Obviously these you know, a billionaire like on body who's 0:17:39.800 --> 0:17:43.480 building his own billion dollar home. You know, often the 0:17:43.560 --> 0:17:46.680 politics from from the outside, it seems to be kind 0:17:46.680 --> 0:17:51.560 of paralyzed and not really going anywhere. Is this state 0:17:51.600 --> 0:17:56.199 of affairs of India's economy? Inequality? Is that likely to 0:17:56.280 --> 0:17:59.119 persist for a long time? Or you know, do you 0:17:59.160 --> 0:18:01.600 see this kind of working its way through the system 0:18:01.760 --> 0:18:05.880 that you know there might be a way to equalize 0:18:06.040 --> 0:18:09.119 that in the economy somehow. That's a great question. I mean, 0:18:09.160 --> 0:18:12.119 I think for India it has to be that this 0:18:12.200 --> 0:18:15.119 should be a passing phase and not a permanent condition, 0:18:15.200 --> 0:18:18.639 because if it's a permanent condition, that's problematic for a 0:18:18.720 --> 0:18:21.120 for a whole range of reasons. Countries that start off 0:18:22.119 --> 0:18:25.600 very very unequal tend to stay that way, like Brazil 0:18:25.760 --> 0:18:28.360 or South Africa, and that stores up problems for later. 0:18:28.440 --> 0:18:32.760 It's much more difficult to reverse these trends, and very 0:18:32.840 --> 0:18:39.080 unequal countries come with particular challenges. However, there's nothing particularly 0:18:39.160 --> 0:18:41.280 unusual about what's going on in India at the moment. 0:18:41.760 --> 0:18:43.920 We've talked about the American guilded age, and I think 0:18:43.920 --> 0:18:46.159 if you were sitting where we are now in New 0:18:46.240 --> 0:18:48.880 York as a media organization in eight and you looked 0:18:48.880 --> 0:18:51.639 at the United States, you could very well say, you know, 0:18:51.720 --> 0:18:55.160 this is an absolutely hopeless country. It's politicians are completely venal, 0:18:55.200 --> 0:18:59.800 it's tycoons are corrupt, its politics is disorganized. The no 0:19:00.040 --> 0:19:02.439 and that this is going to become a great superpower 0:19:02.560 --> 0:19:05.359 looks rather fanciful. And yet over the next twenty or 0:19:05.400 --> 0:19:07.760 thirty years you had a range of things that happened. 0:19:07.760 --> 0:19:11.280 The middle class began to assert more control over politics. 0:19:11.359 --> 0:19:15.840 You had the development of different types of institutions, You 0:19:15.920 --> 0:19:18.919 had anti corruption campaigns. There a whole range of things 0:19:18.960 --> 0:19:21.000 which meant that you know, twenty or thirty years later, 0:19:21.040 --> 0:19:24.960 things look rather different. The thing that has to happen, however, 0:19:25.040 --> 0:19:27.600 I in the billionaire rage, I say, has these three 0:19:27.640 --> 0:19:30.480 characteristics the rise of the super rich and the inequality 0:19:30.520 --> 0:19:33.320 that came with it, endemic chrony capitalism, and then a 0:19:33.320 --> 0:19:36.560 boom and bust investment model. And I think it's difficult 0:19:36.600 --> 0:19:40.120 to see India moving quickly from its current position. It's 0:19:40.119 --> 0:19:41.879 not really a poor country anymore. It's a sort of 0:19:41.920 --> 0:19:46.159 lower middle income country through the ranks of middle income 0:19:46.200 --> 0:19:49.800 status to become, you know, a rich country by some 0:19:49.960 --> 0:19:52.840 time in the second half of this century, unless it 0:19:52.880 --> 0:19:55.679 fixes these three problems. And we we've seen countries do this. 0:19:55.760 --> 0:19:58.840 I mean that the successful developing economies of East Asia 0:19:59.200 --> 0:20:00.960 have all managed to do this, but they did it 0:20:01.000 --> 0:20:03.959 in a particular way. They were more egalitarian than India 0:20:04.280 --> 0:20:07.200 is now. Crucially, they also had a different economic model 0:20:07.240 --> 0:20:09.840 because they were better at export focused manufacturing and India 0:20:09.880 --> 0:20:12.040 is not very good at that. So that's another part 0:20:12.080 --> 0:20:14.679 of the puzzle. But I think if India is going 0:20:14.680 --> 0:20:17.480 to develop successfully, it needs to act pretty quickly to 0:20:17.560 --> 0:20:19.879 try and find a way of bringing this extreme inequality 0:20:19.960 --> 0:20:23.399 under control. Cricket, let's talk about that. How has the 0:20:23.440 --> 0:20:27.399 game developed in India and what role does it play 0:20:27.440 --> 0:20:32.239 in trying to understand the modern Indian economy. I'll just 0:20:32.320 --> 0:20:35.680 back up a bit for some listeners. The game's ancestral 0:20:35.760 --> 0:20:39.760 home is England. In the late nineties seventies, thanks largely 0:20:39.840 --> 0:20:43.760 to changes initiated by an Australian businessman called Carrie Packer, 0:20:44.440 --> 0:20:47.840 Australia became the financial driver of the game. Has that 0:20:47.920 --> 0:20:50.639 now shifted to India? And what does that tell us? 0:20:51.200 --> 0:20:53.560 So cricket is a fascinating example and I think fits 0:20:53.600 --> 0:20:55.960 absolutely squarely within the book. So there's a chapter in 0:20:56.000 --> 0:20:58.679 the book on cricket. I used to cover cricket not 0:20:58.760 --> 0:21:01.320 as a sport but as the business of sports, and 0:21:01.359 --> 0:21:03.520 cricket is very, very lucrative in India. And yeah, I 0:21:03.520 --> 0:21:06.719 mean not absolutely no question that the idea that anyone 0:21:06.760 --> 0:21:09.199 other than India controls the finances of world cricket is 0:21:09.200 --> 0:21:11.840 now fanciful and has been for probably ten or fifteen years, 0:21:12.000 --> 0:21:15.000 but the gap just gets bigger and bigger. But cricket 0:21:15.040 --> 0:21:17.360 is interesting for a different reason, which is there are 0:21:17.520 --> 0:21:23.720 very few examples of industries in which India is the 0:21:23.720 --> 0:21:27.080 world leader. There will be over time, as with China, 0:21:27.200 --> 0:21:30.840 as India grows to become the It's already the third 0:21:30.960 --> 0:21:33.760 largest economy by by PPP. But you know, as it 0:21:33.800 --> 0:21:35.880 becomes bigger and bigger and bigger, there will be many 0:21:35.960 --> 0:21:37.920 areas that India comes to dominate, but at the moment 0:21:37.960 --> 0:21:40.399 there are very few, and cricket is definitely one. And 0:21:40.480 --> 0:21:43.760 you see, that's sort of the good and the bad 0:21:44.000 --> 0:21:46.960 of the Indian economy being reflected in the way that 0:21:47.000 --> 0:21:49.800 cricket is now run. So the good, all of that 0:21:49.840 --> 0:21:52.800 money has actually improved cricket a great deal. Cricket used 0:21:52.800 --> 0:21:56.879 to be a rather, you know, sort of tired, uninteresting game. 0:21:57.080 --> 0:21:58.879 People like you and me might have liked it, but 0:21:59.040 --> 0:22:02.800 it was compared to football or basketball, it's certainly lacked 0:22:02.800 --> 0:22:06.360 a bit of razzle dazzle. And India basically by pushing 0:22:06.440 --> 0:22:09.119 a short term, more vibrant, more television friendly form of 0:22:09.160 --> 0:22:13.159