1/10/2005 » News

Fareed Zakaria agrees in Newsweek that India really feels like a boomtown right now. There’s a sanguinity there that had been missing for many years:

What has changed in these four years is the most important new reality about India: the growing wealth, strength and confidence of Indian society... Over the past 15 years, India has been the second fastest-growing large economy in the world... Per capita income in the country has almost doubled... and more than 100 million Indians have moved out of poverty.

Tired of waiting for the government, some desis are running parallel local services:

In Chennai, one sees the rise of private street-cleaning that last year had 17,000 chapters, covers 40 percent of the city and 75 percent of the suburbs and serves 1.7 million homes.

Everywhere you look, there’s upgrade, expansion. On an India trip just three years ago, I had to take traveler’s checks and change them for rupees at the airport. But last month, I used gleaming new international ATMs throughout the country, not to mention fancy new Reliance cybercafes (flat screens, joysticks, headphones, nationwide login) three steps up from the cheap ones. The government is upgrading 80 airports and building some brand-new international ones; many airports now have Internet access via WiFi.

Barista is nicer than Starbucks in terms of interior design (blondwood, orange, blue and chrome), service and perks (guitars you can strum at most locations). Driving through Delhi, I saw express toll roads, flyovers and new malls all over the place. Most middle-class people I saw have long since remodeled their bathrooms with Western toilets and marble surfaces, although most still use the combined shit, shower ’n shave layout I last saw in Russia.

There’s the feel of hustle everywhere, the rule of multicolored notes and a pervasive neighborly envy. Do you know, so-and-so’s son is running a medical transcription service. He’s got turnover of n crore! Yes, and so-and-so’s uncle just started a call center; so-and-so’s brother-in-law is doing good business in auto finance, in tech distribution, in software. Everybody has a car, everybody has a mobile; I bought a camera in Bombay, a new model that had only just been released in the U.S. My niece has an iPod and a laptop, my brother-in-law has mobile Internet access over a fast, 3G cellular network and my nephew’s car stereo plays MP3s. Cousins visiting New York malls chew their lips and frown, ‘But we can get this in India.’

The private sector is building out a whole archipelago of islands of quality. It’s the public sector and infrastructure that lags: getting from your decent apartment to your sleek office to your fancy restaurant, or getting approval to open your business in the first place.

India’s not just exciting right now, it’s also risky. There’s little regulation by private tort, which is the exception handler, the leading edge of the legal system, because the courts take 30 years to resolve cases. So you see exposed wires hanging from strip mall ceilings, parking lots using barbed wire at toddler level and outdoor barbers using straight razors. You still risk stomach upset or worse by eating food from unlicensed street vendors, which makes you want to just shake the local babus and say, ‘Come on, guys, this is just so basic. Nothing should come between me and my kachoris.’ And you know that if the government does regulate them, it’ll just be another excuse for the cops to shake them down for another hundred rupees.

As a person with libertarian leanings, I have new respect for government regulation of food, transportation safety and public health. If ‘there are no atheists in foxholes,’ I’d add that there are no pure libertarians in developing nations. If ‘no revolution on empty bellies,’ I’d say that libertarianism is uniquely a rich person’s vice :)

Because the legal system doesn’t work, it forces people to turn to the parallel legal system, gangsters. Any time you see a country with a parallel legal system, a parallel black economy, parallel power generation and parallel street sweeping, you know its government is dysfunctional.

But people know how to route around. And route around they do.