From the Book The Grand Master’s Insights on China, the United States, and the World:
....On my earlier visits in 1959 and 1962, when Nehru was in charge, I thought India showed promise of becoming a thriving society and a great power. By the late 1970s, I thought it would become a big military power…but not an economically thriving one because of its stifling bureaucracy
......India has wasted decades in state planning and controls that have bogged it down in bureaucracy and corruption. A decentralized system would have allowed more centers like Bangalore and Bombay to grow and prosper…The caste system has been the enemy of meritocracy…India is a nation of unfulfilled greatness. Its potential has lain fallow, underused
.....India has poor infrastructure, high administrative and regulatory barriers to business, and large fiscal deficits, especially at the state level, that are a drag on investment and job creation
....If all Indian ministers and top bureaucrats were like Narayana Murthy [cofounder and former chief executive officer of Infosys]— hardworking, tough taskmasters, hard negotiators, but always forwardlooking—India would be one of the fastest-growing countries in the world, and in one generation would become a first-world country. However, Murthy probably realizes that no single person can change India’s system of governance to become as efficient as Infosys.
...I am against a society which has no sense of nurturing its best to rise to the top. I am against a feudal society where your birth decides where you stay in the pecking order. The example of that, par excellence, is India’s caste system.
......India is an established civilization. Nehru and Gandhi had a chance to do for India what I did for Singapore because of their enormous prestige, but they could not break the caste system. They could not break the habits
...Unless India moves away from its mindset, it will be a case of lost opportunities…It has to build super highways, introduce super fast trains, and build bigger and better airports. It will also have to accept that to be a developed nation, it has to move its people from the villages to urban areas, as China is doing
..After Indira Gandhi’s son died, I said to her…“Take this chance, open up India, change the policy. Look at Indians overseas, see how well they are doing in England, in Singapore, all over the world. You are confining and conscribing them by your policies, by your bureaucracy.” She told me: “I cannot do it. This is this. That is the way India is”…I did not see anybody else. She had the gumption to declare a state of emergency, and by the time you have the guts to do that, you should have the guts to change the system and let Indian enterprise break out. So that was when I became resigned that India was going to go the slow path. And at that time, I saw China rising…breaking away from communism. So I knew that the race would not be an equal one. I gave up
...........To create jobs, the main thrust of reforms must be in manufacturing. That requires a change in labor laws to allow employers to retrench workers when business demand is down, streamlining the judicial processes, reducing the fiscal deficit, loosening up the bureaucracy, and most of all, improving infrastructure
...India’s narrower band of educated people will be a weakness in the longer term. And although top quality Indian manpower is in high demand, large numbers of engineers and graduates lack the skills required in a changing economy and remain unemployed…Only over half of each Indian cohort completes primary school, a big loss
...A second relic of India’s historical legacy is its preoccupation with fair distribution… To redistribute all the gains in the early stages of growth will slow down the capital accumulation necessary to generate further growth. Wealth springs from entrepreneurship, which means risk taking…The only way to raise the living conditions of the poor is to increase the size of the pie. Equality of incomes gives no incentive to the resourceful and the industrious to outperform and be competitive.
...There are three Indian schools in Singapore. There were going to be more, but I said no. You either go to a Singapore school or you go back to India, because…even if they [Indians] stay on as permanent residents and do national service, they are not readily absorbed because they have been oriented toward Indian culture…The textbooks in these schools are all India-oriented, the knowledge is Indian, the sentiments, and everything. That is the problem
.....Democracy should not be made an alibi for inertia. There are many examples of authoritarian governments whose economies have failed. There are as many examples of democratic governments who have achieved superior economic performance. The real issue is whether any country’s political system, irrespective of whether it is democratic or authoritarian, can forge a consensus on the policies needed for the economy to grow and create jobs for all, and can ensure that these basic policies are implemented consistently without large leakage
....India does not geographically fit in the Pacific. But the contest between the U.S. and China will be in the Pacific and the Indian Ocean. China has moved naval forces into the Indian Ocean to protect its oil supply from the Gulf, and commodities from Africa. That is where the Indians are a force. If the Indians are on the American side, the Americans will have a great advantage. So the Chinese have to have a counter, and have developed ports in Myanmar and in Pakistan
....On my earlier visits in 1959 and 1962, when Nehru was in charge, I thought India showed promise of becoming a thriving society and a great power. By the late 1970s, I thought it would become a big military power…but not an economically thriving one because of its stifling bureaucracy
......India has wasted decades in state planning and controls that have bogged it down in bureaucracy and corruption. A decentralized system would have allowed more centers like Bangalore and Bombay to grow and prosper…The caste system has been the enemy of meritocracy…India is a nation of unfulfilled greatness. Its potential has lain fallow, underused
.....India has poor infrastructure, high administrative and regulatory barriers to business, and large fiscal deficits, especially at the state level, that are a drag on investment and job creation
....If all Indian ministers and top bureaucrats were like Narayana Murthy [cofounder and former chief executive officer of Infosys]— hardworking, tough taskmasters, hard negotiators, but always forwardlooking—India would be one of the fastest-growing countries in the world, and in one generation would become a first-world country. However, Murthy probably realizes that no single person can change India’s system of governance to become as efficient as Infosys.
...I am against a society which has no sense of nurturing its best to rise to the top. I am against a feudal society where your birth decides where you stay in the pecking order. The example of that, par excellence, is India’s caste system.
......India is an established civilization. Nehru and Gandhi had a chance to do for India what I did for Singapore because of their enormous prestige, but they could not break the caste system. They could not break the habits
...Unless India moves away from its mindset, it will be a case of lost opportunities…It has to build super highways, introduce super fast trains, and build bigger and better airports. It will also have to accept that to be a developed nation, it has to move its people from the villages to urban areas, as China is doing
..After Indira Gandhi’s son died, I said to her…“Take this chance, open up India, change the policy. Look at Indians overseas, see how well they are doing in England, in Singapore, all over the world. You are confining and conscribing them by your policies, by your bureaucracy.” She told me: “I cannot do it. This is this. That is the way India is”…I did not see anybody else. She had the gumption to declare a state of emergency, and by the time you have the guts to do that, you should have the guts to change the system and let Indian enterprise break out. So that was when I became resigned that India was going to go the slow path. And at that time, I saw China rising…breaking away from communism. So I knew that the race would not be an equal one. I gave up
...........To create jobs, the main thrust of reforms must be in manufacturing. That requires a change in labor laws to allow employers to retrench workers when business demand is down, streamlining the judicial processes, reducing the fiscal deficit, loosening up the bureaucracy, and most of all, improving infrastructure
...India’s narrower band of educated people will be a weakness in the longer term. And although top quality Indian manpower is in high demand, large numbers of engineers and graduates lack the skills required in a changing economy and remain unemployed…Only over half of each Indian cohort completes primary school, a big loss
...A second relic of India’s historical legacy is its preoccupation with fair distribution… To redistribute all the gains in the early stages of growth will slow down the capital accumulation necessary to generate further growth. Wealth springs from entrepreneurship, which means risk taking…The only way to raise the living conditions of the poor is to increase the size of the pie. Equality of incomes gives no incentive to the resourceful and the industrious to outperform and be competitive.
...There are three Indian schools in Singapore. There were going to be more, but I said no. You either go to a Singapore school or you go back to India, because…even if they [Indians] stay on as permanent residents and do national service, they are not readily absorbed because they have been oriented toward Indian culture…The textbooks in these schools are all India-oriented, the knowledge is Indian, the sentiments, and everything. That is the problem
.....Democracy should not be made an alibi for inertia. There are many examples of authoritarian governments whose economies have failed. There are as many examples of democratic governments who have achieved superior economic performance. The real issue is whether any country’s political system, irrespective of whether it is democratic or authoritarian, can forge a consensus on the policies needed for the economy to grow and create jobs for all, and can ensure that these basic policies are implemented consistently without large leakage
....India does not geographically fit in the Pacific. But the contest between the U.S. and China will be in the Pacific and the Indian Ocean. China has moved naval forces into the Indian Ocean to protect its oil supply from the Gulf, and commodities from Africa. That is where the Indians are a force. If the Indians are on the American side, the Americans will have a great advantage. So the Chinese have to have a counter, and have developed ports in Myanmar and in Pakistan
