Toilet Paper at $80 Tames $1.3 Trillion Tiger: William Pesek
In our technology-driven world, no metric is rawer than that of human bodily functions.
Sadly for India, it’s one that keeps cropping up. Toilet shortages leave all too many of India’s 1.2 billion people relieving themselves outside. Illness, lost productivity and other consequences of fouled water and inadequate sewage treatment are literally crimping gross domestic product.
Toilets have also played a role in the Commonwealth Games, which end tomorrow. Prime Minister Manmohan Singh wanted the event to “signal to the world that India is rapidly marching ahead with confidence.” The media focused instead on filthy bathrooms in the athletes’ village and 100-roll packs of toilet paper for $80.
We’re talking about a nation in which 828 million people live on less than $2 a day. An Indian making that could buy two rolls of Commonwealth Games toilet paper with a day’s wages. The mess shines a bright spotlight on the shortcomings that hold back a $1.3 trillion economy.
Yet all this bad press might be exactly what India needs. It could generate enough shame to catalyze officials in New Delhi to get serious about fixing the economy. It also may just be the shove in the direction of private-sector leadership that India so clearly lacks.
Shoddy construction, excessive work delays, claims of tainted swimming-pool water that some athletes say caused “Delhi belly” and a dengue-fever outbreak are products of the forces squandering the benefits of India’s 8.8 percent growth. Smart and well-intentioned as he is, Singh has made little progress since 2004. Is that about to change?
Airport Lessons
The tale of New Delhi’s new airport terminal, run by a company called GMR Infrastructure Ltd., shows not only why it must change, but how it can. It was finished on schedule in March. Now contrast that with government-built stadiums such as New Delhi’s weightlifting hall. It was among 17 arenas that also were supposed to be finished by March.
Worse than running behind schedule, the roof at the weightlifting venue leaked and required frantic rebuilding before the games, which end tomorrow. That didn’t fit with the smooth opening of the airport terminal, which began handling flights on July 28.
Just as with India’s battle with poverty, the private sector is outshining the public one. Look at technology, where homegrown companies put India firmly on the global business map. The industry blossomed partly because it developed around India’s political system as opposed to within it. In the beginning, there was no overbearing government ministry stifling its growth. Microcredit lenders also have done far more to help the poor than the government.
Not Up to It
India needs more of this dynamic, and now, because politicians aren’t up to the task. Few examples prove the point better than the Commonwealth Games.
Staging the event, a $4.6 billion undertaking attended by 71 nations and territories, contrasts in cartoonish ways with Beijing’s hosting of the 2008 Olympics, which cost $70 billion with 204 countries participating. New Delhi’s efforts have been mired in ridiculous delays and accusations of rampant corruption and mismanagement.
There’s a silver lining here. India must improve infrastructure to accelerate growth and broaden its benefits. While growth has averaged 8.5 percent over the last five years, poor transport and other facilities could cost 1.1 percentage points of growth, or $200 billion by fiscal 2017, McKinsey & Co. said in a report last year.
Private Sector
India needs to spend about $1 trillion on highways, ports, airports and utilities from April 2012 to March 2017, twice the amount the nation’s Planning Commission recommended in the previous five years. Given the government’s missteps, the private sector can expect a far bigger share of that business.
Asia’s third-biggest economy would be better off for it. It’s naive to think letting companies like GMR and Reliance Infrastructure Ltd. play a bigger role in building efforts is a panacea for what ails India. It’s a great start, though.
Transparency International ranked India behind Guatemala, El Salvador and Serbia in its 2009 corruption perceptions index -- and six places behind China. Clearly, Indian companies are home to more than their fair share of crony capitalism. Yet getting politicians’ hands out of the economy is the key to India’s long-term prosperity.
Job Opportunities
Doing so will help create the hundreds of millions of good- paying jobs India needs to harness enviable demographics. Thirty percent of the population is younger than 15, which is in sharp contrast with aging China. A young, English-speaking workforce is only useful if it has opportunities.
India has seen several false big-change moments. One came in May 2004, when voters tossed Prime Minister Atal Bihari Vajpayee out of office. Another came in May 2009, when Singh was re-elected with a solid mandate to retool the economy.
The “Commonfilth Games,” as the Daily Mirror dubbed them, could be the real turning point. Ignoring such a cringe-inducing spectacle is impossible for Singh, his nation’s people and the high-profile entrepreneurs who congregate at World Economic Forum confabs in Davos, Switzerland.
India has much potential, and its economy may even outpace China’s in the years ahead. Yet India desperately needs to clear the layers of dysfunction clogging progress. Embarrassment over toilets might just be the catalyst.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net
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