Oct. 3 (Bloomberg) -- Lately India has been in the news for all the wrong reasons. Its once tigerish economy is growing at its slowest rate in more than a decade. Newspapers are filled with ever more depressing stories of rape, official plunder and gut-wrenching poverty. To an outsider the headlines can seem surreal: Last week the cabinet actually voted to allow convicted criminals to serve in Parliament and state legislatures, before being forced to back down.
Indians -- who know that almost a third of the members of the lower house of Parliament face criminal charges -- can be jaded about such things. But this kind of official brazenness can hardly inspire confidence in companies looking to invest in India, which has long touted the rule of law as its one crucial advantage over China.
And what about affluent Indians, who unlike foreign companies have a big stake in their country and society? Can they really continue to ignore the chaos and dysfunction that surrounds them, the broken infrastructure and equally threadbare laws? Can they thrive indefinitely in a country where most people exist on less than $2 a day, where half the homes lack toilets and three-quarters of the population doesn’t have access to safe drinking water?
There is no question that India has great potential. Having built successful operations for more than one multinational in my homeland, I know it’s quite possible to navigate India’s chaos and build profitable businesses here. Indeed chaos -- which is really shorthand for corruption, poor governance, uncertainty and volatility -- is a defining feature not just of India but also of many emerging markets. Global companies that learn to conquer it here will be well-prepared to succeed elsewhere.
But without a semblance of governance and the rule of law, India’s rise is hardly inevitable. Demographics and talent -- the lodestones of India advocates -- don’t automatically outweigh criminality, corruption and self-interest.
The culprits for this mess seem obvious: greedy politicians, corrupt bureaucrats and the greasy oligarchs who flatter and fund them. Many middle-class Indians blame democracy itself, which gives the vote to the unwashed and easily bought masses. Increasingly, though, I wonder if the problem isn’t us: educated, relatively wealthy, urban Indians.
Millions of creative and resilient citizens have done well by finding ways around India’s chaos rather than challenging it. We send our children to private schools and abroad rather than to government schools. We patronize world-class private hospitals instead of the public health-care system. We live behind the walls of gated communities, supplied by individual wells and powered by diesel generators.
Indeed, we take pride in our ability to succeed despite the government. The less influence the state has in our lives, the better: We don’t vote (turnout in elite areas is 35 percent or less) or pay taxes (less than 3 percent of Indians actually do). We shudder at the thought of entering government or politics.
Our disengagement has made the erosion of India’s public institutions possible. Now the fragile layer of insulation we’ve wrapped around ourselves is also eroding. Even the affluent and influential can no longer escape the extortion and lawlessness that the less lucky have always faced. I’ve been trying to build a house in Bangalore for more than two years, and have been stymied at every turn by rapacious demands for bribes. One friend’s home has been illegally occupied by a real-estate developer with political connections; the legal process to evict him has stalled because the judge hasn’t showed up for a year.
Another colleague, one of India’s most respected and influential industrialists, has had to move out of his home in Pune because an illegal mall sprouted a few feet outside his door. The state itself has turned predator. “Bribery and nepotism -- that’s what it now takes to succeed,” laments Narayana Murthy of Infosys, one of India’s most respected corporate leaders. “There is every possibility that India could slide down the path of becoming a banana republic,” legendary industrialist Ratan Tata has warned.
Let us be blunt: India’s rise is not inevitable. As with companies, success isn’t just about potential. It is about performance. Performance requires good governance, strong institutions and, most of all, the rule of law. When politics degenerates into family enterprises designed to plunder the country with the help of obliging businessmen and bureaucrats, when self-interest trumps national interest, sensible policies will always lose out to the lure of graft and loot.
These problems will not fix themselves. Even now many urban Indians are hoping for the emergence of a benevolent strongman in Delhi, perhaps the opposition Bharatiya Janata Party’s Narendra Modi. Even if Modi is the strong leader he tries to portray, however, this is wishful thinking. The only way the situation is going to change is if middle-class Indians -- those of us with education, money and a real stake in society -- work to change it.
We have to reclaim our country. That means becoming responsible and truly engaged citizens for the first time. We have to start following the law even when there are few consequences for breaking it. We have to vote in elections and pay taxes instead of bribes. We have to get out on the streets to protest publicly and vigorously against injustices -- not just once, when some horrible scandal moves us, but consistently. We have to donate money and our time to strengthen NGOs and volunteer organizations.
Ultimately we have to have the courage to join the civil service and to run for office. Unless honest and patriotic leaders replace the cynics and crooks, efforts to change the system will never gain sufficient momentum.
It’s no longer appropriate for Indians to ignore the chaos around them the way a multinational might. We can’t just wall ourselves off, emigrate or send our money and kids abroad. Our disengagement is producing a dysfunctional and unlivable society. If we don’t conquer the chaos, chaos will conquer India.
(Ravi Venkatesan, the former chairman of Microsoft India, is the author of “Conquering the Chaos: Win in India, Win Everywhere.”)
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