About a week ago I had the opportunity to visit India for the first time. The trip was an eye opener. When you get to New Delhi you soon realise that you have arrived at what must be one of the most fortified capitals in the world.
Since the co-ordinated terrorist bombings of hotels in Mumbai in 2008, India has had to beef up security immensely.
Visible policing is nearly everywhere – there are checkpoints with heavily armed police on about every stretch of the road in New Delhi. Even when you check into a major hotel your luggage has to be X-rayed before you are let in.
To an outsider all this might seem a bit of an inconvenience, but Indians say that the heightened security merely reflects a fact of their lives – that they live in a dangerous neighbourhood.
Security challenges to India are nothing new. Indian government officials say that the country has been a victim of terrorism for more than 30 years.
In conversations with financial editors from Brazil, Russia, India, China and South Africa government officials were quick to point to neighbouring Pakistan as one of the biggest security challenges.
Both India and Pakistan have nuclear weapons. While India is a strong democracy, Pakistan is beset with instability that the US and others say provides refuge for terror groups.
Even so, speaking to the Indians and observing how the country is transforming itself, one gets a sense of an India that has its eye confidently on the future. India’s economy is forecast to grow by between 8.5 percent and 9 percent over the medium and longer term.
If this growth trajectory is maintained for the next 25 years the Indian economy should become the third-largest economy in the world by 2035, when China is expected to be number one, ahead of the US at market exchange rates.
The other good news for India is that global investors view the country favourably, making it an attractive destination for foreign direct investment.
Total foreign investment in India in 2001/02 was about $4 billion (R29bn at Friday’s exchange rate), and by 2009/10 it had increased to $37bn. India’s domestic savings rate of about 35 percent also gives the country significant appeal.
But even with the rosy economic prospects, India pretty much has two parallel economies – one rich and the other poor. It is the very same problem that South Africa faces and currently has little foresight to tackle.
The slums of New Delhi and Mumbai underscore the fact that an increasing number of Indians remain shut out from the economic miracle that India is experiencing as its clout in such critical spheres as information technology grows and its push to liberalise its economy continues.
Likewise, the many South African shanty towns also illustrate how much little progress we have made to build an economy that is inclusive and rewards hard work, not political connections.
But as the world’s biggest democracy, India is acutely aware of the risks that are attendant to an economy whose gains accrue disproportionately to a few.
About 37 percent of India’s 1.2 billion people live below the poverty line, recent government figures show. That is more than 440 million people.
And as one of the fastest-growing emerging economies, India’s challenges offer South Africa the best case study from which to glean insights about how we could also deal with some of the very same problems that India is grappling with. Our shared history should make this easier.
One of India’s core strengths that became apparent during my visit is its institutional capacity, thanks to the country’s highly educated civil service.
Strong institutional capacity is one of South Africa’s major shortcomings. Without it, the government cannot deliver on its mandate, and policy formulation and implementation is fragmented and uneven.
As such, there is a lot that South Africa can learn from India in terms of building strong institutional capacity to improve such critical areas as education and health.
Likewise, India can learn from South Africa how it has been able, for example, to open up its financial services and retail sectors to foreign investors – the very same sectors that remain rather off limits in India.
Understandably, India has chosen to take a more measured and calibrated approach in opening up the rest of its economy, but what it must try to avoid is being seen as protectionist at a time when its growing breed of multinationals like Tata Group and Bharti Enterprises are making major international forays.
Ellis Mnyandu was in India as part of a delegation of financial editors from South Africa, Brazil, China and Russia, hosted by India’s Ministry of External Affairs.