Endgame with Gita Wirjawan - Naushad Forbes: Criticism is Patriotism

Episode Date: November 21, 2022

Entrepreneur, academician, and author Dr Naushad Forbes illustrates a humbling notion of what needs to be done to correct past underperformances and realize a developing nation's immense potential. Dr Forbes is currently co-chairman of Forbes Marshall, India's leading steam engineering and energy conservation firm. He was a lecturer and consulting professor at Stanford University from 1987–2004, where he developed courses on Technology in Newly Industrializing Countries. He is the author of 'The Struggle And The Promise: Restoring India's Potential', which provides a logical, actionable blueprint for getting the balance right between industry, institutions and policy. #Endgame #GitaWirjawan #NaushadForbes ------------------- Isi survey Endgame dan menangkan merchandise Endgame: https://endgame.id/survey Pre-Order merchandise resmi Endgame: https://wa.me/628119182045 Wujudkan mimpi menjadi pemimpin visioner berikutnya. Hubungi SGPP Indonesia di: admissions.sgpp.ac.id  [e-mail] https://wa.me/628111522504 Playlist episode "Endgame" lainnya: https://endgame.id/season2 https://endgame.id/season1 https://endgame.id/thetake Kunjungi dan subscribe: @SGPP Indonesia @Visinema Pictures

together with the humility, you need confidence. Because you don't just want to take what's given to you on a plate and say, I have to do this because it's better. Yeah, it's better. But now, having learned, let's improve what we've learned. I'm no believer in colonialism. I think colonialism was a terrible thing. But I don't blame colonialism and the fact that India was once a colony for all our ills.

Because if we blame it for, you know, if we blame colonialism for all our problems, then we won't fix them. We've been an independent country for 75 years. So it's up to us to fix our problems. And get on and do things ourselves. Hello, time, time. Hello, time, today we're on the no-shot Forbes. He was a Pimpinan from Forbes Marshall,

and also a manthan, Pimpinan of CIA, or Confederation of Indian Industries. No shot, it's a pleasure to have you on our show. Thank you so much. Thank you very much for having me. Thanks. Yeah.

You've accomplished so many things, but as I do with all the other guests on our show, I'd like to dig up a little bit on your early childhood and where you grew up and how you got hooked up with Stanford, where you spent a lot of time studying and lecturing and then all the way to your, you know, a recent gig of writing a really nice book, which I think resonates with a lot of people in Southeast Asia. Please tell us. Sure. So I grew up in India. I was born in, born in what was then called Bombay,

was now called Mumbai, but really grew up in the city that I now live in Pune, had all my schooling here, went to the US for college when I was 17, I suppose, and ended up doing my bachelor's, master's and PhD, all at Stanford, one after the other, and I was there for so many years that by the time I finished in the industrial engineering program,

I'd been there, as I say in the book, I'd been there longer than, you know, half the faculty and all of the furniture. So I was really there a long time. And then I continued to teach a course there once a year for a further 17 years. So it was a very long association and I love the place. I mean, it's a wonderful university physically and it's a wonderful university in terms of its intellectual environment, the brightness of the students is wonderful. I mean, they're so easy to teach because they're just so bright. And it was a place that it's a place that I love going back to

and sort of wandering around the campus, you know, hearing what talks are being given and so on. It's a very vibrant, a vibrant, pleasant, almost idyllic place to be. In terms of, you know, after I came back to India, I split my time between working in our family business. It's an engineering business that my father started in 1946. My brother and I have been running it for several years. And I split my time between the family business

and then going back to teach my course. And over the years, I got more and more involved in different things in India, university, industry, interaction groups, and so on. And one of the things that I got very involved with was the Confederation of Indian Industry and played various roles with the Confederation of Indian Industry over several years, including in their higher education committee, in their international group, in their technology committee and so on. So that got me quite involved with policymakers and,

policy making, especially when the year that I was president. And it was really coming off that period that prompted me to say, well, maybe I should write a book. And I should write a book on, I came off my CIA president year in 2017. And I came off it sort of really, well, I was really impressed by our potential. I came off it saying, you know, we have so much potential. in India as a country. Right.

And by the way, I should say that, you know, I've not spent enough time in Indonesia. I've only been, I've visited maybe three or four times. And each time I've visited, I've, number one, felt completely at home and very comfortable. In many ways, which maybe we can talk about, both good and bad, by the way. We'll definitely talk about those. Yeah, yeah. Definitely including many good. things that I feel very comfortable. And second, I just get this exact same sense of potential,

you know, of these are, you know, I think both our countries, our countries of just tremendous potential. And we, so I thought, well, I should write a book about our promise. And also, right, you know, very clearly talk about the things that we struggle with and how we can struggle less and focus on the things that we do really well and where we have great strengths. So that really is what prompted me to say I should write the book. Harper Collins then asked me if I would write a book, sort of almost in parallel, they were reading, I think, articles that I was writing in the papers. And I said, well, a good way of, I know how I work.

and if I'm going to do something that's out of the ordinary, like write a book, I better commit to doing it and, you know, have a deadline. Otherwise, it'll never get done. So, so I did. I did that in 2019. Wow. How long did it take you to write that book? Well, so, so I did, as I said, I did that in 2019. What I did not know, and the world didn't know in 2019, was that the pandemic was going to hit in 2020, early 2020.

And when it hit, and when I wasn't traveling at all, I said, you know, if I don't write the book now, I'll never do it. So I said, this is an opportunity to actually focus and write. So essentially between March 2020 and I sent it to the publisher finally in July 2021. Wow. Okay. So about 15 months. But really the book was done in March, 2021. sort of in time to send to the publisher.

And then I delayed sending it because, well, the second wave, the Delta wave hit India at that time. It hit India so badly. The Delta. That I felt I needed to go through the book and actually edit it to reflect some of those experiences in terms of governance and what our strengths are and what we struggle with. That's sort of the story, if you like. Let me set the scene for our conversation with something you described or something you alluded to in the book, where in 1980, China's GDP was equivalent to that of India. Yes. And in a span of a few decades, things changed dramatically.

And weave us through your observations in the book and your observations outside the book in terms of how that would have. have happened between China and India? Sure. So, you know, India and China, as you mentioned, in 1980, were at the same level of per capita GDP. In fact, India was slightly ahead in 1980. Today, as you know, China is five and a half times India in terms of per capita GDP.

Yeah. And this growth for China has come and this change in, in our role in the world, in a sense, has come at a time when India has actually been growing very rapidly too. So India has grown at 6% a year for the last 30 years, which is the fastest we've grown in our history, actually. But China in that same period and also in the 80s grew at 9% a year. And that differential of 3% growth over 40 years is what's delivered this huge difference in where we are now, where China is today over five times richer than India is. So now, how did China do it? With a huge focus on export-oriented labor-intensive manufacturing

in the early years under Deng Xiaping, with a lot of agricultural reforms as well. But in later years, from the 90s onwards, very focused on. moving people from relatively low productivity agriculture into modern manufacturing. And that single thing that happens when people move from living in rural areas and working primarily in agriculture, which very often is very low productivity because you have more people there than you really need. They're there because they have no other choice. When they move to cities, they get involved in various occupations, all of which are more productive, which pay better. And if they can get into manufacturing and modern manufacturing, you get a huge jump in productivity.

I mean, to give you the Indian number, if every one of the 400 million people in India's labor force were employed in modern. manufacturing. We're not. I mean, you know, only 30 million are. But if every one of the 400 million was employed in modern manufacturing in India and had the same productivity as the 30 million people who are employed in modern manufacturing, India would not just be as rich as China, we would be much richer than China. We would actually be as rich as South Korea, which is a country that has 15 times the per capita GDP. It would be 15 times richer than we are now. You attributed this difference between China and India to leadership amongst other things,

or the differential leaderships. And leadership really relates to three elements that you mentioned in the book. Institutions, economy, and culture. I want to talk about the institutions part. Talk about how you would have seen institutional building taking place in China in a very different way compared to how you would have seen institutional building taking place in India thus far. Well, you know, my take, I don't know, first of all, I should say that I'm not, I know a certain amount about China. Yeah.

So, but I'm no, I'm no specialist. And so I'm going to just give you impressions, you know, that I've, that I've sort of, that I've formed over the years from a few visits and some reading on China. But I'm, but I'm no, I'm no specialist in China. The sense I have is that in China, the state has played a really critical role in the success so far. of its development journey. The state has played the leadership role in economic policy, the leadership role in deciding which fields to go into, how to educate people in more and more sophisticated ways,

how to set up schools and institutions of higher education that are more and more research-oriented, investing and subsidizing investments in technology and R&D, on a very substantial scale, and indeed even investing and participating directly in the economy through state-owned enterprises. So it's been very much of state-led development. The argument that I make is that India is different, and I sense that Indonesia actually shares more with India in this respect than it does with China, in that the role that the state plays needs to necessarily be quite different. The role that the state plays in, it seems to definitely in India, and I

would think also in Indonesia, needs to be as more of an enabler and less of a doer. So not deciding which fields one should invest in or what plans should come up or how much should, what technologies one should develop, but instead enabling private entrepreneurs and enterprises to do the right thing for the country and NGOs to play their part actively and more actively in the country. Now, if you want such an environment to operate effectively, then you need institutions. It's not that China doesn't have institutions. It does have institutions, and it's built up many institutions over these 40 years that have, whether it's institutions of higher education, etc.

But the autonomy and independence of those institutions varies quite significantly. There is this state-directed approach to wider development, including institutional development in China. I think for a country like India, we need much more in the way of independent, strong, independent and autonomous institutions that set their own rules. And between them, they set the rules under which we can all operate. Because that's the way we will then as private individuals and entrepreneurs be enabled, as opposed to controlled, be enabled to do the right thing for our countries. I've raised this paradox a few times in classrooms and also in conversations where an autocracy like China ever since 1978 or 1980 has been able to democratize talent,

much better than many democracies around the world, where they have not been able to democratize talent, as well as an autocracy like China has. And to me, that I think correlates with the lack of ability of many democracies in building institutions that could be more inclusive, if not, you know, less extractive, you know, referring to A's mold, and Robinson's book, you know, Nations Fail, Why Nations Fail. And you kind of alluded to that. Would you agree that the inability to build inclusive institutions in some democracies, call it India or Indonesia or many others, is a bit paradoxical in that they have not been

able to democratize talent, the way we've seen democratization of talent in an autocracy like China? So, you know, it's, you've seen in my book, one of my favorite quotes is whatever can be said about India, so can be opposite, you know, from the British economist Joan Robinson. Right. And I think it applies here too, you know, that the, we've been able to actually democratize talent in certain areas. Right. So, for example, if you take startups and unicorns, you know, in recent years, India has this, we've been a big success story in the number of unicorns, you know, over a hundred unicorns, you know, companies with a valuation over a billion dollars

that have started up in India in different parts of the country, but mainly concentrated in Bangalore, but single largest group. So we've, and that's important. a sense, that's a form of more inclusive growth. It's not, you know, it's not just the traditional industrialists who keep getting bigger and bigger and bigger. You also have these new entrants that are starting new enterprises that compete and very often out-compete the incumbents. So we have been able to democratize talent in many areas. We've not been able to democratize talent in many areas. we've not been able to do it everywhere.

And have we been able to do it as well as China? I think you have a point. I think you have a very good point that one of the ways in which China has tended, I think, I mean, I don't know, this is an impression, but to do it is, you know, they have this institution called the Chinese Communist Party. And if you want to rise in,

the country, you become a member of the Chinese Communist Party, whether you want to become a teacher or a professor or run a company or start a company or go into the government. Right. And I think the Chinese Communist Party has some absurd number of members, right? I mean, a few hundreds of millions. Yeah. And in that sense, they've probably got some kind of. of a funnel and way of selecting people that maybe plays some part in their democratizing

talent. Now, having said that, I'm not sure it's the model I find. I'm not sure it's a model I like for India, because that says also that you then need to subscribe to a particular ideology. Right. And I am not sure that fits with India, and I'm not sure that fits with India, and I'm not sure that fits with Indonesia. So I don't know if it's a model I would advocate for us. I'm not advocating an ideology here. I'm just making an observation. And you know, Dang, dang ever since 1978 was clear-headed and he was steadfast in making sure that for anybody to get into the position of leadership in anything, be it academic, be it political, be it policy, be it state-owned or whatever, you've got to be smart.

It's merit-based, right? And that was really clear. And it has brought about so many benefits for hundreds of millions of Chinese. I agree. I think actually, I think the outcome that you're after is exactly the outcome we should all be after. Right. The way in which we get there in terms of, you know, the outcome should be democratizing talent. Right.

Really tapping into the widespread talent that we have in our countries, you know, between, you know, 200 and some million people in Indonesia or 1.4 billion people in India. If we can tap into the talent of all of our hundreds of millions of people, who can match us? Yeah. Because we're then really going to get the best. And that then does involve a lot of institutional development. involves a lot of investment in education, it seems to me. And, you know, we're currently involved in a group of us in an industry are involved in coming together to set up a university. And

one of the goals of the university is to really try to identify talent, try to identify kids when they're 12, 13, 14 years old and who are really smart and provide them with all the input that they need. so that they can later get into the university on merit competing with the best from everywhere. Right. And I think if we can do that and do that more widely through many such efforts, you know, in our societies, that's the way to unleash our potential. I think you're right on the button in saying that's one of the key outcomes we should all be after. You know, if you go to Silicon Valley, there is an assumption that, you know, 20 to 30% of the new ideas are coming out of Indians.

Yes. Be it immigrants or, you know, Indian Americans, right? And it's just, I think, a reflection of how India has been able to produce. in large scales, people that are just so well-educated in the fields of science, call it computer science, call it engineering, including yourself and all that. Doesn't I give you hope? And I watch this old movie called The Field of Dreams in the 80s, right? Yeah, there's a famous saying, right, if you build it, they shall come. Yeah.

And by way of what I've seen India in transforming since the 80s, I got to spend a bit of time out there in the 80s, you know, to now, I think you build it. And isn't there a bigger belief and hope that they shall come? You know, not only talents from India, but talents from anywhere around the world. So this, I think, relates to two parts, which you talked about. kind of, right? You have been able to produce talents in scale, and number two, to the extent that India can show open-mindedness with respect to talent coming from anywhere. So, you know, the hope is more easily realized, right? Absolutely. I fully, I fully agree. And I do talk in the book a lot about openness.

Yeah. That, you know, that one of India's great strengths, and I think one of Indonesia's great strengths, is diversity. You know, there are, we have very diverse societies. I mean, India, you know, especially so given, given the simple scale, given 1.4 million people, right? And, you know, the, an Indian from the northeast of the country

looks different to an Indian from the south of the country, from Indian from the northwest of the country. We just look physically different. We speak different languages. We use a different script. I mean, there's just huge diversity. Now, that has the outcome that we're pretty able to offer something attractive for anyone.

So, you know, from people from other parts of the world, I think when they come and spend time in India, I mean, you know, I always say that people, visitors to India are never indifferent to India. They either love it or they hate it. But I've never come across in all these years anyone who's been indifferent, you know, sort of come to India and so we're saying, oh, it's okay. You know, it's either we tend to spawn very strong reactions, you know, of either just loving it or hating it.

And I think many more people loving it. And I think that is because they feel so comfortable. They make friends, very good friends, people who they share interests and values with, almost regardless of where they come from and what field they come to India for. They find different cities that offer different things. They find India very attractive from a tourism perspective, but also from an economic opportunity perspective. So there's a huge amount on offer.

And that makes us very attractive. If we really want to capitalize on that, then our policies need to be completely open to everyone from everywhere and making it easy for people to come here. And we've gone some way in that direction in these last 30 years, but it seems to me that in the last few years, maybe the last four or five years, we've become somewhat less open and welcoming, even though we will officially keep saying we are still as open and welcoming as we were.

But I think we've turned away from that a little bit. And I hope we will turn, it's not, I wouldn't say it's, we haven't any way gone back to where we were in 1991. But I hope that some of the smaller recent reverses that we've seen will get reversed again. And we'll go back to keeping on becoming more open, making it easy for not just people of Indian origin to come to India and work in India, but people from all nationalities and all countries. If they want to come here, make homes here, make enterprises here, make careers here. we have opportunity and space for everyone because there's so much that needs to be done. We've seen this trend of populism or increasing populism in many countries around the world. And I've seen that as something that would hinder any country's desire to be more open-minded. And it just seems pretty structural, you know, in many countries, this trend of increasing populism.

Are you concerned with that as a potential hindrance to your desire as a nation to become more open-minded? I am, you know, and as you say, it is a trend in many, many countries. I mean, you know, it's, you know, you look at the U.S. with Donald Trump. You look at Brexit and the UK. These were two countries that prided themselves on their openness, pride in themselves on attracting people from all over the world to come in and make careers there. I think the reality in some places, some of those places actually continues to be very positive. You know, the very fact that someone named Rishi Sunak is in the run to the Prime Minister of the UK.

is to me a statement of great openness. And I think that's terrific. And I think it's the fact that it's not an issue in the race for the premiership is, to me, wonderful. I can't imagine the same thing happening in India today. Maybe we just need to develop for a few more years before we would be. But in a way, you have someone who maybe would be born in India, but to take the equivalent of British parents, but then later, you know, becoming the leader of an Indian political party and being in the run for prime minister, if that happens, we're there in openness. Yeah. We're not there yet.

I know. That's a high bar. That's a high bar. It's a very high bar. I'm very impressed. I'm very impressed by, you know, this country that sort of. have seemed to turn its back on Europe and become more inward-looking, you know, is now close to having its first non-white prime minister. Yeah, it's pretty amazing. And how quickly it's happening.

Yes. Yes. Yes. So, so, so, so, so I, I, I hope that, you know, so as you say, you do have this trend in the world, but you have some of these counter trends also. Absolutely. And I think it's for all of us to make the case for openness for. And at the same time, I think we have to do more to give people the input and the resources so that they feel more confident that they can compete with the best. Right. And so whether those inputs and resources are,

education, it certainly includes education, probably starts with education, or whether those are access to capital, or whether it's an ability to network and connect with others all in the country and around the world in a very cheap and easy and efficient way, you know, so that they can access technology and ideas and communicate their own. All of that, I think, is what we have to enable and give people that reassurance that, okay, and if everything doesn't work out, then there's a certain base safety net that we're also providing so you won't be destitute. I think if we can keep going back and appealing to the best in people, it would be great. But I agree with you.

I mean, I'm as worried as you are that, you know, populism can too often degenerate in many, many societies into appealing to people. people's worst instincts and appealing to their fears and appealing to the other and blaming the other for their own problems. And it can take that form. And, you know, we have too many leaders and too many countries who approach things that way. Well, you know, some would argue that the reason why India opted not to join our SEP, the regional comprehensive economic partnership was partly populism-centric, right? Or maybe nationalism,

whatever. But the good news is, or the good thing is we gave you an open, you know, ended window to enter, which I think is encouraging, and it gives me hope. And it should give hope to India also, that they've got this open window. Absolutely. You know, I was against India dropping out of RSEP. I thought it was very much in our interest, you know, to be part of what is after all the most vibrant part of the world economy. I mean, you know, it's the part of the world. You know, you take the 10 countries of ASEAN. They have a GDP that's roughly the same as India's. So you level the Indian market just with ASEAN. You add in Japan and South Korea and you treble, you know, well, you more than treble India's GDP. And then you add in, okay, China and Australia and New Zealand, and, you know, you have a huge market. Yes, there were fears about China.

My sense is, and my take is that the challenge in our set was a challenge that came from Indian industry. And I'm, you know, it came from my colleagues who were afraid of competition from China, afraid of imports. And that was the trigger for us, you know, then arguing against our set. And unfortunately, the government listened to us and did drop out of the process. But I'm also very happy that the door has stayed. open for India. The challenge for us at present is actually China. You know, it wasn't, it wasn't dominated. Our concerns when we dropped out of our set were not dominated by China. But given the experience of the last two years and the problems that we've had on our northern

border between China and India, the challenge is that it's very, very difficult for an Indian government today to, it seems to me, enter a trade agreement that includes China. That would be very politically difficult for them to do and for them to sell. So I don't see, unfortunately, movement towards RSEP, but I do see a change in openness and in trade in being more open to trade in the Indian government in the last year and a half or so. You know, since dropping out of our set, you know, we've signed a free trade agreement with the UAE. We've signed a free trade agreement with Australia. We're in the process of negotiating and finalizing one with the UK, with Canada, with Israel, and also with the EU.

And I hope if we can maybe then take, say, the old ASEAN FTA that we have and if we can revisit it and expand it. You know, maybe there are, and then if we pursue our, you know, the Australia one also to make it deeper and we all and we have existing agreements, trade agreements with Japan and South Korea. So we could pretty well, I hope, achieve. many of the trade benefits that RCEP provided, it would have provided it more easily. Yeah. Instead of doing each one separately, but if we can push in that direction,

maybe there's an opportunity for us to get many of the benefits that we would otherwise have got mutually between Asia, within Asia, more generally. I hope so. You know, we've seen the global order shifting, right from what used to be a bipolar to a unipolar and now a multipolar ironically multilateralism occurred in a much bigger way when the world was unipolar because one guy basically could tell everybody else what to do but now in a multipolar setting multilateralism

has become more difficult and I'm sort of like in the camp that is not too optimistic I'm optimistic, but not too optimistic about being able to multilateralize as easily as we might have been able to do, you know, 10 to 20 years ago. Would that be a view that you share? You know, I think there's a, I think your analysis of where we are is exactly right. And the reason I think that the unipolar structure was more multilateral was because the single power, the U.S., was a believer at that time under Clinton and Bush and Obama in the multilateral system to a significant extent. I mean, with important exceptions and it was quite flawed in certain areas like the invasion

of Iraq and so on. But it was still broadly a support for a multilateral, for a multilateral mechanism. to sort out the world's problems, whether it's the WTO or the World Bank or the UN to some extent or the WHO or so on, and so on. I think there's an alternative in a multi-polar world, which is that if a few like-minded countries, you know, many of us claim to be believers

in the rules-based international order, this is the phrase that everyone likes to use, right? And I always worry that when we say rules-based international order, we each mean different things, and sometimes we mean different things, you know, different rules. within the country itself. So I wonder if, you know, if we take a set of countries, you know, certainly including both Indonesia and India, but, you know, India, Indonesia, Germany, Japan, South Korea, you know, Australia, New Zealand, you know, a set of countries, maybe Vietnam, you know,

a set of countries in Singapore, and say, listen, you know, if we all say we believe in a rules-based international order, let's specify what that means, that what will we bind ourselves to? What are those rules that we will bind ourselves to at the WTO, at the World Bank, at the United Nations, at the WHO? And if we can specify that, then I think we could be more immune to the outcome of U.S. presidential elections. Otherwise, you know, we're all as a world held ransom to what happens in the U.S. election,

which, yeah, I don't like. I don't want my future and the future of the world to be subject to, you know, whether or not they reelect Trump or a scarier successor. I would much prefer that we have a more robust basis for progress. I agree. That's multilateral. So do you see this? The problem, of course, with needing many countries to sign up to a set of rules is who moves first?

Who makes the first move? And the person who makes the first move, in a way, needs to do it in a very inclusive way, you know, where you don't, you don't say that, listen, you know, U.S. you're a mess, so therefore I'm stepping forward. You say, U.S., join us, be part of this process, and help us establish these rules. And if it chooses not to, that's fine, but it's then the U.S.'s choice. But, you know, I think that's what the world needs. And if we can somehow do it.

Not easy. It would be wonderful. Yeah, not easy, but we should, we should, we should attempt. I'm a realist in a world where we're stuck with having to bilateralize more than multilateralize. I think productivity is key, right? The higher, the productivity you have, I think the more you can bilateralize. Of course, at the expense of the other guy, but, you know, I want to take this to your two earlier points, education and access to capital.

Because I think both of these elements sort of dovetail into productivity, right? Talk a little bit about education. What does it take for one to be educated and so that India could catch up with China or catch up with ASEAN or even outperform any of these two others? So, you know, it starts with school education. It starts with primary education.

Yeah. For many, many years, for decades, in fact, I think, and I think this is true of Indonesia as well. You know, we've had enrollment ratios in primary school that are over 100%. In other words, if you take the total age, the total population of the school going, primary school going age, the percentage of children in the number of children enrolled is greater than the population. in that age group and that, of course, the reason it's over 100% is because you have some older kids who are also in those young classes and so on. So our problem is not primary school enrollment. Our problem is what kids learn when they're in primary school. And do they come out of primary school

at the level that you expect as that outcome? And that's the first challenge in education. that how do we ensure that every child coming out of primary school can read and do arithmetic at the level of their class? And there's a lot of research, as you know, now around the world, that shows that teaching at the right level is the essential thing that needs to be done for effective primary school education. So there's a particular program. now in India, that every second standard, second grade student should be able to read and do arithmetic at the second grade level. Wow.

And there is then a testing system that assesses how they do. And by the way, today, our numbers are very scary, very scary. We have some large states in the country, particularly in the north, in Uttar Pradesh, in Bihar, where well under half. the children in grade five, in grade five, can read and write at the grade two level. So it's a very scary position to be in. Now, how do you improve that? You improve that by ensuring that every second standard child, every second grade child can read and do arithmetic at the second grade level, so that they're then in a position to learn what they should be learning in grade four and grade five.

Because otherwise, they eventually learn how to read and do arithmetic, but they've missed out on all the rest of education that they're supposed to be getting in higher classes. So that's the first thing. It's a very specific thing. It's something that I think we should engage with very actively in all our CSR work in our companies. we can make a real impact if with all the schools that we work on in Indian industry, we focus on that one thing, second standard outcomes, and ensure good, high-quality second-standard outcomes for any school that we're interacting with, working with.

It could make a difference to the long-run potential development of millions of children. So it's a well-worthwhile task. After that, it's a matter of keeping kids in school through high school. I agree. Through middle and high school. And ensuring that they finish high school. And if they finish high school, then many things work better. You know, girls get married later in life.

They have autonomy and control over their lives. A whole set of things follow. They have access to jobs that they would otherwise not get. even unskilled jobs, relatively unskilled jobs. And many new opportunities opened up for them. And then third, higher education and freeing the system to really be more responsive to what people want. Lots to do there. But I think the widespread impact of improving school education will be much greater for both our countries.

Interesting. Interesting. The second point is with regards to access to capital. I'm going to take you to foreign direct investment, right? And if we take a look at a number of ASEAN countries, their FDI on a per capita per year basis, is around $100 for Indonesia, Thailand, and the Philippines, give and take, sometimes higher, sometimes low. India is lower than that. Singapore is at $16,000 to $19,000 on a per capita per year basis. You alluded to Singapore as a country of competence and governance. And you talked about how you met up with a minister and by the time you met with the second minister, he would have been briefed with the results of the earlier meeting with the earlier minister. and everything else. How do we get the needle up from $100 to $19,000? From your perspective? Well, you know, first of all, we can't get it up to $19,000 if you multiply the $19,000 by 1.4 million people.

It'd been the trillions. Yeah, I mean, it would, it would just be a... Right, maybe to $1,000 per capita per year. We put it to a thousand. A thousand dollars would be fabulous. would be fabulous. And by the way, there are opportunities for productive investment in India that are that huge. You know, India needs to invest, the general view is, by the way, that India needs to invest something on the order of $20 to $30 billion a year, a year, on infrastructure

alone, on infrastructure alone, and infrastructure of various kinds, which includes then green energy investments. It includes, you know, there's a huge need for green energy investments and a move away from coal-fired power. There's a huge need for investments in all the, you know, in railways, in ports, in the road network, in educational infrastructure. There's, you know, we have, there are opportunities everywhere. And these, these are projects that will, have very attractive returns for investors. So the opportunities are there. It's a matter of, I think, trying to get everyone in to do it.

You know, we've been working very, you know, you mentioned Singapore. We've been working very closely with the two sovereign wealth funds of Singapore. And both, both, you know, you know, of GIC and TEMASIC are very actively involved in India. They have high investments in India. They're growing their investments in India. And we should encourage much more of it. We should be really welcoming and helping them go faster.

And I think if we do, they will invest even more and make India a bigger and bigger part of their portfolios. So, you know, India, by the way, and Indian companies are a part of that $19,000 of the FDI in Singapore. Indonesia too. Yeah, Indonesia too. It's right. That's right. That's right.

I mean, you know, many Indian companies that do business in Indonesia, it doesn't show as investment from India. It shows us investment from Singapore. Correct. Because of the tax structure and all that. It's all run through holding companies in Singapore. But I think it's safe to. assume that Singapore has been able to project itself as a country that's very clear

when it comes to you know in foreseeability of rules and regulations that's that's where I think you know some other countries you know still need some work on you know Singapore is well known as a country of law where some others is well known as a country of lawyers we just need to make sure that you know it becomes more of a country of law. Yes. And that I think will dovetail into greater realization of foreign direct investment into the respective countries, right?

I absolutely agree. And you know, one of the things that we need to work on in India is actually contract enforcement. Yeah. And the speed with which disputes get resolved in courts and in our court system, it's a big gap today. And it's actually an area that should attract much more attention and focus because that will, I think, show directly in our attractiveness as an investment destination. I want to bring up another point that you alluded to earlier in the book.

You know, 500 years ago, the GDP per capita of the richest was twice as high as the lowest. 200 years ago, the GDP per capita of the richest, or the highest GDP per capita was five times. Today, it's more than 300 times, more than the lowest GDP per capita in the world. This relates to the topic of inequality, right? And I'm just in awe with how it has changed so dramatically, right? the richest vis-a-vis the poorest. At a time or during a period when we've seen so much more financial inclusiveness, so much more liquidity being pumped,

and so much of this financialization, be it at the individual level, the corporate level, and the national slash government levels. It just seems that financialization has not really float into the right places, right? How do we fix this? No shit. It's a, I mean, it's a very good question. I'm not sure I have an answer for you. You know, it's a, it's, I think it has, you're quite right that, you know, we've seen unprecedented financial flows, unprecedented financial availability in terms of investments that are taking place all the time,

new financial instruments that have been invented, and so on, why isn't it showing in significantly more inclusive growth? Now, some people would argue that the 90s and 2000s, not so much the 2010s, but the 90s and 2000s, that the world actually did do, very well. There was convergence that took place between the poorer world and the richer world. Right. Poorer world, emerging economies grew faster than the richer economies, etc. Yeah. In the last, in the last 10 years or so, that convergence has slowed. And if you remove China from the emerging world, I think that that convergence has, you know,

Tiltz it even more. It looks even worse. So you're right. I mean, why are we not seeing financial, the movement of finance around the world showing up in greater convergence in the world? I think it's an issue of what we fix within our countries. You know, it's, I've always been one of those people who, you know, I mean, I'm, I'm no, I'm no believer in colonialism. I think colonialism was a terrible thing. But I don't blame colonialism and the fact that India was once a colony for all our ills. Because if we blame it for, you know, if we blame colonialism for all our problems, then we won't fix them. Right. You know, we've been an independent country for 75 years.

So it's up to us to fix our problems and get on and do things ourselves. So I believe that it's up to each country to figure out how it can really be, how it can converge on the rich world by growing more rapidly. How can we grow at 9% and 10% year on year for 30 years, as South Korea and Taiwan did? you know, for 30 years, as China has come close to doing for 40 years. Yeah. You know, how can we do that? As, you know, Indonesia grew very rapidly as well. Right. If one goes back to the 70s, 80s, and even 90s, some of 90s, yeah. 90s. You know, how do we, how do we revive those growth engines that were so powerful

for extended periods of time. And it does have, it seems to be a lot to do with the inclusiveness question that you were. Right. That you were talking about earlier on. You know, that how do we invest in people so that they have the capabilities to participate in the modern economy

in a much more effective way? How do we ensure that our institutions are such that it provides access, widespread access to people and doesn't keep privileges with the privilege You know, whether those privileged people are industrialists or whether those privileged people are people in political power doesn't matter. But, you know, how do we ensure that institutions are accessible to everyone? And how do we ensure that we balance sort of incentives and freedom with safety nets? Right.

So that people have, people feel secure enough. and if they really get into trouble, they are not really on the streets. While at the same time, we have enough freedom and opportunity for people to really succeed without having to be controlled and adhere to 20 different requirements with each move that one makes. You know, if you take a look at ASEAN, vis-a-vis China in the last 25 years, ASEAN's economy would have grown around three times, whereas China's economy would have grown nine to ten times during the same period of 25 years, right? Right.

I'm sort of optimistic about the next 25 years. In the sense that, you know, by way of the unicorns that we're seeing, emerging in Southeast Asia, we're talking about unicorns that have been able to empower low-tech, not high-tech stuff. Yes. And by way of the pre-existence and the continuing existence of what I call the tech-enabled disruptors, in low-tech fashion, we're going to be able to create so much delta in value. And that gives me optimism for Southeast Asia.

And this is even on the back of the fact that perhaps in some countries the politics is not perfect, but there's enough political, I mean, there's enough institutional building inertia that will ensure that there's going to be enough stability for the region to get money and to boost productivity and to create the equity story that's needed for the next 20 to 25 years. And I kind of see it the same way with India, where I might even think, you know, India can actually employ or empower more of the high-tech stuff because you guys are ahead of, you know, some of us, if not many of us, in Southeast Asia. That gives me hope for both, you know, ASEAN and India, you know. I share your hope. I share your hope for me. I think it's, I think that's exactly, that's exactly right. And, you know, you see, you see a, you see a, you see. a lot of change, right, in both Asia and in India, in solutions that are being deployed all

around us. And, you know, okay, including grab and Gojek and everyone else. But I mean, you know, it goes well beyond that to delivery services. And unfortunately, it tends to be quite service-oriented. I wish it was also more manufacturing-oriented. But that's okay. That's okay. I mean, Absolutely. Let's get all the enterprises we can. Right. Right. I mean, look, I mean, you know, some of the stuff we read out of Silicon Valley when they talk about the applications of the five disruptors, right, call it artificial intelligence, robotics, genomics, energy storage, and blockchain.

Some are even opining that, you know, these five disruptors could entail over $200 trillion. worth of economic delta in the next 10 to 20 years. I mean, if we just take a bit of, you know, a bit of bite of that, it's going to be massive for a $3.3 trillion economy in Southeast Asia. And at least similarly with India, right? Very much. Very much. And that means, as, you know, as what we were talking about earlier on,

that means being open, being accessible, encouraging people from, you know, we have so many, I mean, you mentioned all the Indians in Silicon Valley, you know, they say, you know, they say that Silicon Valley is built on the IC and IC stands for Indians and Chinese or should stand for that. So, you know, and, and, and I mean, you know, really being open to to, to people investing in, in, in, at home and then coming back to, you know, coming to, coming to, coming to, coming to, coming to, coming to, ASEAN and coming to India and so on. You know, you see this, by the way, Singapore has this large expat population. You know, who are entrepreneurial, who invest, who use the place as a base to do business

in the region. I mean, it's... They're resolute. When they know you're smart, they'll give you a job. And when they know that you're going to be able to pay taxes, good enough. they'll give you a passport. Yes. And then that's a policy and a philosophy, you know, that I've been in place for quite a long time.

I don't think Indonesia will get to that point anytime soon. It's just a bit more open-minded than, you know, I would have hoped Indonesia to be similarly with India. Yes. I want to bring up your point from the book with regards to, you know, you know, being patriotic by way of being critical and being humble. Elaborate on that. So, you know, so I believe that if you want to progress, I'll come to the patriotism and sort of critical question second.

But the, you know, first, if you want to be, the reason humility matters is that it's the way to be a good learner. And I think as societies, we need to learn from the best that's being done elsewhere. So what is being done in Silicon Valley, but not just Silicon Valley. What is being done in Jakarta that we can learn from to make Bombay a better city? There are many things we can learn. And we will only learn if we have the humility that says we have something to learn. Because that will make us open enough to look around us and see and appreciate. what's being done that's better.

And if we can learn from that better, then we can move ahead that much faster. Together with the humility, you need confidence because you don't just want to take what's given to you on a plate and say, I have to do this because it's better. Yeah, it's better. But now, having learned, let's improve what we've learned and take it further.

And that then requires confidence. So it's a balancing act between having the humility to learn from the best that's going on everywhere. And from everywhere, and I do mean everywhere, not just from the West, from everywhere, from each other. And having enough confidence to then improve on what we learn wherever it is we learn from. So that's one piece. Right. The second piece is on criticism. I do talk a lot in the book about the role that, you know, I think there's a subheading or something somewhere that says criticism is patriotism.

And I do believe that. And I come back to one of my favorite books, which is by the social scientist Albert Hirschman, which is called Exit Voice and Loyalty, one of the great social science books. of all time, I think. It's a nice little book, 100 pages. And Hirschman argues that, you know, if something declines or you think you see a problem, you can respond to it in one of two ways. You can respond to it by exit, by stopping buying the product or service, taking your kid out from that school, or in the most extreme form, emigrating.

or you can respond with voice by complaining. And if your complaining is listened to, then so much the better. Because if you complain and the state or the institution or the firm or whatever responds, you have then an improvement in that service and so on. what decides, what determines whether you choose to complain or you choose exit, it's loyalty. That's the third word in the book title. And if you're loyal, which is at the national level is an issue of patriotism,

then you choose voice instead of choosing exit. And I know too many, too many friends in Indian industry who don't express any, criticism, but are happily investing overseas and setting up enterprises outside of India. And I don't see that as being in India's interest. I think it's much more in India's interest for us to criticize the things that we think are going wrong, to praise the things that we think are going right, to suggest better things that we can do all the time. And if we do that, then that says we're loyal and we're patriotic and we care about the place that we live in and what needs to change. If we're otherwise, we might choose the exit option and how does that benefit anyone.

Interesting. This takes us to the last part of our conversation where I usually ask the guest about 244,000. draw us the picture for 2045 in the context of where you think the promise and struggle for India

would be manifested and how that is juxtaposed with the picture of ASEAN and the picture of China or the picture of the world that's a it's for your next book

maybe. I was going to say that's a, that's a, that's a, that's a book, that's a book level question. It's a wonderful question, by the way. Yeah. We should do the book together by the way. Amen. I'm game. I'm game. Yeah. It would be great to do. So, you know, it's, um, the, so for, let me start with India, which is going to be more, more, more factually based, and even that's a stretch. So the, uh, the, the, the, I think in 2045, if we do everything right in India, if we get it right, and what we have to get right is not perfect government. I don't think we should look for perfection.

Absolutely. How we're governed. Not in India, not in Asia. Maybe in Singapore. Outside of Singapore, I think we should not look for perfection and government. We should look instead for, us getting the balance between policy and government, institutions and what they do independently, and the role that the private sector plays right.

So I think we need a very active private sector. We need a private sector in India and in Indonesia that goes beyond the normal remit of business, which is concerned about society, which is concerned about education, education outcomes, which is concerned about inclusive growth, which is concerned about ensuring that as many, as higher proportion of our population as possible, is productively employed and has those skills that they can participate in the modern economy. And I think we should engage with that because inclusive growth is in all of our interests. You know, if we create opportunity for 200 and some million Indonesians and 1.4 billion Indians, we'll create opportunities. for the world, let alone for ourselves, definitely for ourselves, but we'll create opportunity for the world. That means then letting institutions get on and function. So too often, especially when we have strong popular leaders,

too often the strong popular leader wants to get on and do things that they think are right, and they see independent institutions as slowing them down. and I think one needs to take a broader picture of it and say, yes, maybe it slowed me down here, but I think independent institutions can ultimately protect us from making mistakes. And it can between a set of independent institutions, if we rely on those institutions to set the rules under which we all operate, then we can truly enable the private sector to do what it is. it has to do and private individuals and NGOs to do what they have to do. And then finally, I think I'd like to see us rely much more on our cultural strengths. So, you know, I agree.

In India, the diversity that I think is the hallmark of Indian society is something we have to treasure, preserve, and use. And any time that we work against it, and I worry, I worry, about social cohesion in India. I worry about attempts to try to kind of unify and make much more dogmatic what it means to be Indian. I think a much more diverse, diffused, even if less clean view of what it means to be Indian. of what it means to be Indian is the way in which we will progress, because that's what we've seen, you know, recently. Now, you know, for Indonesia, maybe many of those things apply,

maybe some of those things. Very similar. Yeah. My sense is that many things do apply. Right. I think it's different in other ASEAN countries. I mean, you know, I think, you know, I mean, you know, a Vietnam or a Cambodia are in a very different place in terms of role of government,

role of state, you know, role of democracy and role of independent institutions. A Malaysia is in a very different place. Of course, Singapore's in a very different place. So, you know, it's a Myanmar is, we know where it is. So, I mean, it's a very different, I can't claim to speak in any way for, for any of any of those countries. But I would come back again at the global level to, you know, this sort of plea that I think those of us who believe in, or say we believe in a rules-based international order.

And maybe we start with all the democracies, you know, start with India, Indonesia, Germany, Japan, South Korea, you know, Singapore start with countries that are democracies that keep saying we believe in this and then say now what are the rules that we really believe in and then we will subscribe to these and then be open and try to get others to join us. I think we can turn things around for the world if we collectively do that and we can then build pretty good futures for us all. Wow. You know, I got to say that a lot of the stuff that you've said, a lot of the stuff that's said in the book,

resonate with people in Southeast Asia and particularly in Indonesia. And just to be able to recognize that there's been some degree of underperformance, but also recognize what to do to actualize the potential. I think it really resonates with us in Southeast Asia. With that, I want to say thank you, No shot, for the opportunity. And I hope I get to see you in person soon. I would love to. I would love to. Thank you. Thank you for the wonderful questions and discussion. And I think you're right. I think you've got the right topic for for a book. We'll talk about it over coffee. We will indeed.

Yeah? Thank you so much. Thank you. Thank you. Bye-bye. Bye. Bye. Manton, that's No Shut, Forbes.

And co-chairman from Forbes, Marshall. Thank you. This is Endgame.