Harvard, Rockefeller Are Coming Back in Vogue: William Pesek

Barack Obama’s protocol people have some explaining to do.

It’s grand that the U.S. president will kick off his four- country Asia trip in India. The biggest democracy deserves special attention. Only it would have been better if Obama didn’t visit this coming weekend during Diwali.

Imagine a world leader rocking up to the White House at midday on Christmas or July 4 wondering why their U.S. counterpart isn’t ecstatic to see them. Obama showing up in Mumbai during the Hindu festival of lights is a cultural faux pas that hasn’t been lost on the second-most populous nation.

The traveling city that is any presidential visit will ruin the holiday for countless families, executives, police officials, hotel staffers and street merchants. And you can imagine what will become of Mumbai’s already snarled traffic.

This lost-in-translation moment is a metaphor for how Obama has given short shrift to Asia’s other superstar. Now is an ideal opportunity to court a rising power that may have more to teach the world’s economies than even China.

The so-called Washington consensus of free markets, transparency and unfettered globalization is more of a punch line these days than a recipe for prosperity. In its place stepped the Beijing consensus of open markets, autocratic government and limited press freedom. Well, what about a third way -- a Mumbai consensus?

People-Centric Model

Count Lawrence Summers, departing director of Obama’s National Economic Council, among those asking this question. The former World Bank economist and Clinton administration Treasury secretary is one of the faces of the Washington consensus and its neoliberal policies.

In Mumbai last month, Summers talked up the merits of a “developing state driven not by mercantilist capitalism or exports but a people-centric focus on growing levels of consumption based globally.” He said that “in 2040, the discussion will be less about the Washington consensus and the Beijing consensus than about the Mumbai consensus.”

A couple of caveats are worth mentioning here. One is that India should be careful about becoming too American; accumulating billions of dollars of debt isn’t the way to go. Also, such comments are clearly part of a U.S. charm offensive ahead of Obama’s trip.

Indian Alternative

Yet it’s important to highlight an alternative to the Beijing-inspired model making the rounds. Obama’s itinerary could be seen as a physical manifestation of his desire to champion one. After India, he will visit Indonesia, Japan and South Korea.

What all four have in common is democratic principles. And each nation has probably been put off by China’s immature reactions to territorial disputes in Asia, standoffs over fishing vessels and rare-earth metals. China’s support for countries like North Korea complicates efforts to address Asia’s biggest geopolitical challenges. The absence of nuance in China’s diplomacy may drive Asia’s democracies away.

India has much to gain from that dynamic. Yet let’s not step too far in the direction of India gushing. China has done a far better job of raising hundreds of millions out of poverty, its infrastructure is infinitely better and its economy is zooming along at a faster rate. About 830 million Indians live on less than $2 a day and all too many don’t have easy access to toilets or clean water.

Entrepreneurial Energy

For all its failings, India has an entrepreneurial energy that’s already created world-class companies indigenously like Infosys Technologies Ltd. and Wipro Ltd. It has a free and lively press and a reasonable respect for intellectual property rights. For all its warts, India’s economy is one in which the energy comes more from the ground up than from the top down.

Thirty years from now, Summers says, 2010 to 2020 will be seen as the decade that saw the emergence of India’s John Harvards and John D. Rockefellers -- an intellectual and industrial explosion that will pay dividends for many years to come. The future may show that while India lacks a Shanghai, it offers a model from which other developing economies might learn.

Asia’s future lies not in its sweat shops, but in its ideas, technologies and sciences. Success requires free access to the debates and breakthroughs of the moment. Perhaps China can thrive even as it censors the information and knowledge its Steve Jobs wannabes need to create the next Apple Inc.

Obama’s Focus

Obama’s sudden focus on India encompasses business as well as geopolitics. India’s capitalistic spirit and demographics could propel it past China in the years ahead. It won’t be a smooth ride, yet it’s one U.S. businesses want to join.

One way Obama might benefit all involved is reducing visa costs and making the process less onerous. If you get a degree from a U.S. university with a skill set America needs, the government should staple a work visa to your diploma. Training professionals and then telling them to leave is bad for corporate America and America’s image abroad.

Another way is shining a bright spotlight on India’s alternative to China’s development model. In the short run, it could make up for all those lost Diwali plans. In the long run, it might pave the way for a freer, more vibrant world.

(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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