India at Crossroads on Path to Superpower Status

Spet. 9, 2012— -- Poverty is still rampant in India and chaos remains a defining characteristic. But the country is also a global leader in high tech, has become the world's leading weapons importer and is planning a mission to Mars. On the way to superpower status, India must first overcome deep-seated corruption and internal division.

It's the most expensive private dwelling in the world, but it isn't in Los Angeles, London or Dubai. It's in Mumbai, just a few stone's throws from one of the world's biggest slums. The property is called "Antillia," named after a mythical island in the Atlantic that the persecuted developed into a refuge.

The new home of Indian billionaire Mukesh Ambani is a steel-and-glass collection of superlatives thought to be worth $1 billion (€800 million). The 27-story structure has three helipads on its roof, nine elevators, a movie theater and crystal chandeliers in multiple rooms, from the ballroom to the parking garages. There are 168 parking spaces in the six lower floors for the luxury cars of Ambani, 55, who is also known as "Mister Big." He is the chairman and CEO of Reliance Industries, a conglomerate with holdings in oil fields, solar-panel manufacturers, pharmaceutical firms and textile companies. Ambani, one of the 20 richest men in the world, once gave his wife, Nita, an Airbus A319 jetliner for her birthday -- not a gold-plated model, but the real thing, with, of course, a somewhat more upscale interior than usual.

Ambani's Mumbai residence provides roughly 37,000 square meters (about 394,000 square feet) of living space for its six residents: Ambani and his wife, their three children and his mother. In the Dharavi slum, a 30-minute drive to the north, an estimated 12,000 people live in about the same amount of space, often without running water, toilets or electricity. In fact, more than 60 percent of Mumbai's 18 million residents still live in slums. But aside from a little grumbling in the local press (the Indian Express described the house as "obscene"), there is little evidence of outrage.

The poorest of the poor would seem to view Ambani's Villa Megalomania with indifference, while it is even a source of pride for some members of the Indian middle class, who apparently see it as evidence of India's growing importance in the world. "The Palace of Versailles is a poor cousin by comparison," writes columnist Shobaa De, brimming with national pride.

A Power on the RiseThere is no doubt that India feels that it has arrived. Some of its politicians and business leaders believe it has reached a status as a third superpower, alongside the United States and China. On August 15, the country celebrated the 65th anniversary of its independence from British rule with elaborate parades. Prime Minister Manmohan Singh, 79, promised: "No power in the world can stop our country from achieving new heights of progress and development."

Reasons for the growing pride are not hard to find. Based on purchasing power parity, the economy is the world's third-largest. High-tech centers, such as Bangalore and Hyderabad, have given rise to IT companies like Infosys and Wipro, which are among the international elite in their industry and are now bringing back the computer experts who once left Indian for California to chase higher salaries.

Almost no other country has as many cell phone users; almost nowhere is the communications industry growing faster. Today, Indians can choose from among more than 400 private television channels. The subcontinent is also making great strides in renewable energy. Indeed, Suzlon, the world's fifth-largest wind turbine manufacturer, headquartered in the western city of Pune, recently enlarged its ownership stake in the German wind turbine company REPower and now plans to create more than 100 new jobs in Germany.

India is now the world's largest weapons importer. It has become a self-confident player among leading nations and is now aggressively seeking a seat on the United Nations Security Council. It's also a nuclear power that has expanded its arsenal of warheads and has no intention of signing the Nuclear Non-proliferation Treaty. The Indians sent satellites into space some time ago, and only last week did they announce plans for a mission to Mars. Prime Minister Singh described it as "a giant step for us in the field of science and technology."

The Elephant vs. the Dragon

That's the one India, the high-tech powerhouse of a rising global power, backed up by numbers and proof of its prowess. But then there is the other India: where one in three of the world's malnourished children lives; where two-thirds of the population lives on less than $2 a day; where half the population has no access to toilets and 25 percent still cannot read and write. It's also a country where the power supply is so scandalously unreliable that, in late July, almost 700 million people were without lights and electricity for two days, the railroads stopped running, factories stood idle and some hospitals were crippled.

Is India on the road to becoming a superpower? Or is it condemned to forever remain a developing-world power, on the outside looking in?

The country certainly can't complain of being ignored. A stop in New Delhi has become de rigueur for top world politicians: US President Barack Obama, British Prime Minister David Cameron, German Chancellor Angela Merkel and Chinese Premier Wen Jiabao have all paid their respects to Prime Minister Singh.

It is also the world's largest democracy, with a free press and an independent judiciary, an alternative to the successful Chinese didactic dictatorship and one-party state. India offers innovative private enterprise versus China's model of state capitalism, and creative chaos versus prescribed progressive thinking. The elephant has taken on the dragon, entering into a serious competition in the battle of the systems.

British historian E.P. Thompson wrote that India is "the most important country for the future of the world." Shashi Tharoor, a former United Nations Undersecretary-General for Communications and Public Information and now a member of parliament in New Delhi, says: "India, with its successes and failures, offers lessons for all of mankind, and, with its sustainable development, can outpace its Chinese competitors in the long run."

Lately, though, there has been cause for concern. The Indian economy, which grew at a healthy rate of 10.6 percent in 2010, has slowed, with just 6 percent growth expected for 2012. Even Prime Minister Singh warns that India's security will be in jeopardy unless the country achieves higher growth rates again soon. In addition, foreign investment is weakening, the budget deficit has grown and the Indian rupee has lost a substantial amount of its value.

Can the elephant really dance?

The Upper Crust

Until Indian independence in 1947, Hyderabad was a princely state for more than 220 years, ruled by some of the richest men in the world. The diamonds owned by the Muslim monarchs, the Nizams, were legendary. The most famous, the 184.5-carat Jacob Diamond, was used as a paperweight by the last Nizam for many years. The legacy of the Nizams includes structures that have been named UNESCO World Cultural Heritage sites, including the massive fortress of Golkonda and the tombs of the ruling dynasty.

But when a local resident is asked for directions to the center of the city, he will not lead a visitor through the maze of twisted streets that extend outward like spider webs from the Charminar monument in the historic part of the city, but to Hyderabad's new section, with its shopping malls, universities and the headquarters of IT, biotech and genetic-engineering firms. Hyderabad, a city of 7 million people, has acquired the nickname "Cyberabad," and it is second only to Bangalore, India's high-tech capital.

In polls, the Indian School of Business (ISB) in Hyderabad is routinely named as India's top business school, while the Financial Times ranks it among the top 20 in the world. It's the new jewel of Hyderabad.

The campus, with its airy, pink buildings surrounded by carefully tended, park-like grounds, feels like an island. "This cheerful serenity is deliberate. We like to see ourselves as a temple of learning," says Dean Ajit Rangneker, who worked in Hong Kong for more than a decade before coming to Hyderabad. "But don't be deceived. Our students work extremely hard, and 16-hour days are perfectly normal for them."

Entrance examinations and costs ensure that only India's elites can attend the ISB, where tuition runs to $40,000 a year. Besides, only those applicants who already have a college degree and business experience even stand a chance of being accepted. The roughly 600 students at the ISB are a temporary community of purpose, united by their determination to succeed and bound together in an elite institution.

The school was established in 1996 by Indian business experts at McKinsey, the international consulting firm, "in cooperation with the Indian state." But the students view the government in New Delhi with nothing but contempt and cynicism. In the eyes of these young people, corruption and nepotism are "endemic," while political parties and their representatives are nothing more than obstacles to doing business. "If something works in India, it isn't because of politics but despite politics," says ISB graduate Kumar. Nevertheless, dispensing with voting altogether is not an option for him. Like everyone we interviewed, he votes regularly.

"We have advantages because of our pool of well-educated, innovative experts, and also because of our demographics. Our society isn't aging as quickly as societies in China and the West," says Sunil, a student. The new industries, with their data highways, rely less heavily on classic infrastructure, he adds, so that the disastrous state of Indian roads becomes less of a limiting factor than one might suspect.

When asked whether India's progress is sufficient to catch up with China and the West in the long term, the elite students aren't quite as confident. They are quick-witted, fun and cosmopolitan. And yet none of the budding business professionals has any idea what the words "red sorghum" mean. "Red sorghum? Never heard of it," they say. And what about "Protex?" The students shake their heads.

These are terms from another world, a world with which the ISB graduates will probably never be confronted. They will soon become members of the top echelon of society, people who will remain largely insulated from ordinary Indian life in the rest of the country. They will have drivers and air-conditioned cars, and they'll live in guarded, gated communities. One of these developments, near a downtown highway in Hyderabad, is advertised as a place "where the gods are envious of humans."

Desperation and Despair

For people who work 100 kilometers (62 miles) north and east of "Cyberabad" in the same state of Andhra Pradesh, "red sorghum" and "Protex" are terms that relate to their fight for survival. They live in the other India. They slave away as migrant workers in chemical plants and steel mills, usually without protective clothing. Not even China has such a horrendously high rate of industrial accidents. The current accident rate on construction sites is 165 in 1,000. Or they farm on barren land and are often unable to say whether they will be able to put food on the table for their families in the coming week.

Any trip through the vast Indian countryside is a journey through time, back to era of bonded labor and Manchester Capitalism.

The village of Hasakothur, a three-hour drive from Hyderabad, is a case in point. Farmers there experimented with seeds sold to them at rock-bottom prices by international corporations. Red sorghum and the pesticide Protex, which was applied to the fields at the same time, were seen as miracle products because of the initially high yields. But, today, the villagers view them as a curse.

After three or four harvests, the soil is depleted and requires more and more fertilizer. By artificially pushing down sorghum prices and thereby forcing the farmers to take on more and more debt, distributors were the only ones to profit from the higher crop yields. Thousands of farmers committed suicide out of sheer desperation, many taking their lives by drinking the highly toxic pesticide that they had once hoped would bring them economic success.

More than half of Indians work in agriculture (generating about 14 percent of the gross domestic product), while some 2.5 million people work in information technology (generating about 6 percent of GDP). "We send our children to the city. Any job there is better than here," says Kiran, a farmer.

Kiran believes that he is about 60, but he doesn't know his exact age. He looks very old. Like everyone in the village, he is in debt to his distributor, and any farming profits are offset by the interest on the debt. "It's like a race against a clock that's ticking faster than you are," he says. Indian farmers are also harmed by New Delhi's policy of allowing major Indian corporations to lease agricultural land in countries like Ethiopia. For someone like Kiran, democracy doesn't translate into having an effective and competent government, nor does strong economic growth mean that he and millions of other people in rural areas are better off by an iota.

This realization has prompted others in the village to join the Naxalites. The Maoist insurgent groups, who use violence to combat large landowners and big industry, are currently active in about a third of India's more than 600 districts. In its July report, the organization Human Rights Watch accuses both the government and the Naxalites of violating human rights.

In the "red corridor" extending from the north all the way to Andhra Pradesh, insurgents repeatedly attack police officers and engage in firefights with the authorities. More than 600 people died in these conflicts last year. It is an irony of history that, in the 21st century, Mao Zedong could very well have more supporters in democratic India than in communist China.

At War against CorruptionAs we leave Hasakothur, a group of men from the village wave goodbye. They are about a dozen emaciated figures standing at an old railroad crossing, their heads wrapped in plastic bags to ward off a sudden downpour. They are the losers of India's frenzied progress.

India has splendid programs for the poorest of the poor, but they exist only on paper. The government guarantees every economically disadvantaged rural household 100 paid working days. Rural schools are supposed to distribute free lunches to students. Just a few weeks ago, the prime minister promised that every Indian household would have electricity within the next five years.

But these are mostly theoretical promises. On the long road between greedy politicians in New Delhi and corrupt local officials, the money tends to disappear before it reaches the poor. Neither Maoism nor the constant danger of terrorism from neighboring Pakistan is the greatest internal threat to the subcontinent. Instead, it is poverty and, more than anything, corruption.

One man has declared war on this scourge. He is determined to win at whatever cost, even if it means risking his life. Kisan Baburao Hazare, 75, is India's most influential political provocateur. He is hated by some, admired by many and, most of all, seen as a force for change. Through his hunger strikes, the social activist with the honorific "Anna" ("big brother") is even likened to Mahatma Gandhi -- the ultimate honor.

Hazare's village is in an arid region of the western Indian state of Maharashtra. Bumpy paths lead past filthy tearooms that help to explain an angry outburst by Minister of Rural Development Jairam Ramesh, one of India's few plain-talking politicians, in November 2011. He complained that India remains "the dirtiest and filthiest country" in the world, adding that it was paradoxical that women were demanding cell phones rather than toilets.

But as soon as the car turns into Ralegan Siddhi, everything looks different. The place is striking for its clean-swept streets, its immaculate white school with a computer room, and its irrigation project. Hazare, the social activist, is the unofficial mayor of Ralegan Siddhi, and he is proud of what he has achieved there. "My village should be a model; I want it to be copied 100 times in India," he says with the self-confidence of a victorious warrior. He is standing in front of a bust of Gandhi at the temple where he lives in a modest back room, with a snow-white Gandhi cap placed carefully on his head.

Hazare's story is remarkable. He left school at 12 and, for the rest of his teenage years, sold flower garlands in the streets of Bombay (now called Mumbai), where he was homeless. A committed patriot, he joined the army in 1963. During the war with Pakistan, in 1965, he was the only survivor of an enemy airstrike at the border post where he was stationed. Grateful to have escaped alive and convinced of his "divine calling," he decided to return to civilian life and change his country, always keeping Gandhi's concept of sustainable village development at the back of his mind. He also followed Gandhi in his later commitment to a life of celibacy.

"Ralegan Siddhi had hit rock-bottom. Most of the men made their money with illegal stills and had become alcoholics themselves," Hazare says.

And how did he bring about change in the village?

"I brought about change with persuasion and, when necessary, with tough punishment." He pauses for a moment. "Anyone I caught with alcohol after three warnings was tied to a post and whipped." Alcohol and cigarettes are still banned in his village today, and no vendor would dare to sell them. Hazare has consistently remained true to his fanatical desire to improve the nation and the circumstances of its citizens. There has been a lot of Gandhi to his methods, but also a healthy portion of Taliban.

Fighting Back with Hunger Strikes

Back in 1991, Hazare recognized nepotism as the fundamental evil of Indian society. He established the People's Movement against Corruption (BVJA), a group that only gained regional significance. But the time for change seems have to come to India now that large parts of the country are no longer willing to look on as politicians and government officials line their pockets. India is ranked 95th in Transparency International's Corruption Perceptions Index, making it even more corrupt than the People's Republic of China and many African countries.

There have been many recent reports of scandals in India. When the country hosted the Commonwealth Games in 2010, it cost taxpayers at least 15 times as much as the original estimate. The country also lost about $40 billion when then Telecommunications Minister Andimuthu Raja allegedly sold a mobile wireless network for much less than it was worth.

But Indians aren't just outraged about corruption at the highest levels. In daily life, hardly anything happens anymore without paying bribes. According to an unofficial list, bribes are now commonplace in the capital. Residents can expect to pay bribes of up to $100 for a driver's license and $1,000 to register a private automobile. By comparison, the average $10 bribe expected by the police during routine traffic checks is a bargain.

In April 2011, Hazare hit a nerve when he went to New Delhi to protest against nepotism with a hunger strike and demand that politicians take concrete steps to fight corruption. His supporters built a stage for him in the city's central Ramlila Ground, where he staged an attention-grabbing public fast. The crowd grew from a few hundred to several thousand and, after a week, there were upwards of 100,000 people witnessing his hunger strike. Well-informed through private TV stations and the Internet, they flocked to the square and supported him with their chants.

In August 2011, Ramlila Ground was somewhat reminiscent of what happened in Beijing's Tiananmen Square in 1989. But the violence that China's leaders chose to employ at the time was never an option for the Indian government. After a 12-day hunger strike, the parliament bowed to the activist's demands and promised to pass a tough anti-corruption law.

Hazare drank a little coconut milk and honey and left his stage in the capital while being celebrated by his fans as a victor. But, today, the bill remains bogged down in the upper house.

Is Hazare's popular movement truly the birthplace of a new civil society, as his supporters have gleefully proclaimed? Or does it actually harm India's democratic institutions? Or, as the magazine Outlook put it, is the movement like a torrent threatening to "overflow the banks of the constitution" and possibly bearing "shades of anarchy"?

During a meeting in his village, it becomes apparent how much Hazare has become an important player in Indian politics. It feels a little like being at court, with parliamentarians from all parties watching each other furtively in the small center of action, a room filled with books, constantly keeping an eye on the closed door to the inner sanctuary. The moment that Hazare steps into the waiting room, everyone pounces on him, telling him about their concerns, touching him and, in the truest sense of the word, trying to grab a piece of the coattails of the newly powerful activist.

Hazare waves some of them away like flies, while lending his ear to others. Only a few days ago, Hazare decided to stage another public hunger strike and to form a party with his group, "Team Anna." He says that he is not interested in running for political office, but added that he will continue to keep a close eye on those politicians who behave as if they owned the country.Different Visions of ProgressIn an inconspicuous government building in New Delhi, we meet with Kapil Sibal, 64, who is both the Minister of Human Resource Development and the Minister of Communications and Information Technology. Sibal is often mentioned as a potential prime minister.

Two people in the public eye couldn't be more different than Sibal and Hazare. Sibal, a member of parliament for the ruling Indian National Congress party, wears tailored suits, and his office, filled with oak furniture, can only be reached after passing through a number of security checkpoints. It is conspicuously silent in the waiting room. Sibal attended Harvard Law School before embarking on a classic political career. He has been president of the Supreme Court Bar Association several times, and he has also represented his country at the World Economic Forum in Davos, Switzerland.

A versatile politician capable of serving in various government capacities, Sibal's office has one thing in common with that of Hazare: There is a photo of Mahatma Gandhi on the wall.

Of course corruption is a problem, he says, just as it was a problem in comparable stages of economic development in Europe during the 20th century. The government has recognized this, he adds, and is prepared to take action. "But this country, with its great successes in business and education, can't be reduced to that," he says. "We have significantly reduced our illiteracy rate."

And yet, Amartya Sen, an Indian winner of the Nobel Memorial Prize in Economic Sciences who teaches at Harvard, wrote in a recent study that China makes far better use of its opportunities to advance social development throughout high economic growth rates, and that India is falling behind its rival in terms of life expectancy, education and infant mortality.

The minister doesn't like to hear this. "I don't compare India with China," he says, but then he does. "We have two different development models. Democracy is a process through which one arrives at consensus on the issue of how to proceed. This may be a slower here in India and, of course, Beijing can acquire property for building projects in other ways. But if something is legitimized by the rule of law, it will ultimately be more sustainable."

Sibal wants to talk about successes, not shortcomings. "Of course I'm never satisfied," he says. "But look, for example, at what we are doing with the installation of broadband cable in the countryside. Some 250,000 villages are already connected, and then we have our project that will provide revolutionary tablet computers for the masses. It will change the lives of millions of people."

Many a technology aficionado is thrilled about the "Aakash" ("Sky"). The tablet computer, with its 7-inch touchscreen and two USB ports, will likely be priced at less than $50. The government in New Delhi wants to begin the project by buying 100,000 computers and distributing them to schools throughout the country. Later, when the price of the tablet -- developed by the British company DataWind in cooperation with Indian software engineers -- can be brought down even further, the government expects to see 10 million users gaining access to the Aakash's Internet connection.

Social activist Hazare sees high-tech firms and leading universities as small islands of prosperity in Indian cities that have little to do with the persistent state of misery in rural areas. Sibal, for his part, envisions top-class performance that will contribute to the expansion of a middle class. In the last decade alone, the ranks of the Indian middle class have grown from 50 million to more than 200 million.

But even the minister can hardly deny that there has been a serious drop in economic growth in recent months. Prime Minister Singh, once so eager to bring about reform, seems exhausted and tired of his position. Populist regional parties are becoming stronger, and his coalition is in bad shape. There are rumors that Rahul Gandhi -- the general secretary of the Indian National Congress party, the grandson of former Prime Minister Indira Gandhi and the son of the powerful party leader, Sonia Gandhi -- could enter the cabinet and become Singh's successor if early elections were held. But the 42-year-old has yet to demonstrate how he intends to stop the demise of the dynasty and what qualifies him to be a strong leader -- and one who could make a break with crippling old traditions.

Finding Unity in Diversity

Hindu scriptures describe a special place of the gods on the sacred Ganges River, a place that the god Shiva chose as his headquarters upon descending from the heights of the Himalayas. It was called Kashi ("City of Light") about 3,000 years ago, then Banaras for many years and, today, it's the city of Varanasi. Dying in Varanasi and having one's ashes scattered in the river is said to promise deliverance from the cycle of rebirths. For Hindus, washing their sins away in the holy river and drinking its waters are seen as great acts of deliverance.

Before sunrise, a long line of people pushes its way through the narrow, twisted streets. The scene is straight out of a Fellini film: There are grotesquely overweight women draped in bright-red muslin, naked beggars with close-cropped hair and bodies covered with white ash, bald sadhus carrying giant, ochre-colored umbrellas made of dried palm fronds, shy little salesgirls with bowls of coconut pieces, vermilion powder and hibiscus flowers, and cursing rickshaw drivers dodging sacred cows. They are all making their way down to the ghats, or steps leading down to the river, to participate in ritual bathing and to pray. "I am the promise and the memory, I am the silence about all secrets of the world," the faithful murmur.

There is an indefinable smell in the air, a mixture of coriander, goat droppings and incense -- and the sweet smell of human flesh. It is still the cremation period, especially at Manikarnika Ghat. Only a few hundred meters separate the steps from the area where men, women and children are taking their morning baths and even cleaning their teeth in the Ganges. Swollen animal corpses, as well as human body parts, often float by in the current within view of the pilgrims. The cremations must be done quickly, and not everyone abides by the rule that only ashes can be thrown into the water. But worst of all, businesses and households pollute the river with untreated sewage, pesticides and excrement.

The Ganges is also a goddess for Veer Bhadra Mishra. The silver-haired 73-year-old is a devout Hindu, a pre-eminent representative of his religion. He inherited the title "mahant" ("spiritual leader") from his father, and he has been the head of the Sankat Mochan Temple since he was 14. But Mishra is also a scientist. He specializes in hydraulic engineering and teaches at Banaras Hindu University.

Given his dual roles -- the man of faith who believes in the healing powers of the Ganges, and the man of science who knows that sewage can spread disease -- it seems almost inevitable that he would have a split personality. But he is able to keep the two apart. "It's nonsense to ascribe some sort of self-purification powers to the river, as some Hindus do. We have readings that clearly demonstrate that the Ganges is criminally polluted and full of dangerous pathogens," Mishra says angrily. "That's why I have made it my life's work to turn the Ganges into a clean river."

Mishra founded the Sankat Mochan Foundation, a non-governmental organization devoted to cleaning the Ganges, in 1982. The charismatic scientist traveled through Europe and the United States, where he found many supporters. The United Nations honored him with an environmental prize, and Time named him a "Hero of the Planet." When former US President Bill Clinton visited India, he asked to be seated next to Mishra at a banquet. "Indian bureaucracy has always ensured that all progress occurred at a snail's pace," Mishra says.

Meanwhile, the professor and his team of scientists have submitted a detailed new proposal that is based on a method tested in California and has received accolades from experts at the journal Science. In the proposed process, the water of the Ganges is conducted through four different pools at specific locations to remove pathogenic fecal bacteria.

The devout environmentist refuses to give up. "In Hinduism, losing one's patience is just as much a sin as showing too much indifference toward the suffering of others," says Mishra, as he stands up. He has trouble on his feet and has to rely on the support of friends when he walks. This determined dreamer doesn't know how much time he has left. But now he has his religious duties to attend to. The nightly drum dance has begun, the faithful are bringing their flower offerings to the temple and eating sweets, and the monkeys are squealing in anticipation.

India is not condemned to backwardness, and the Hindu religion -- at least as interpreted by enlightened people like Professor Mishra -- is not necessarily an obstacle to development. Despite its many setbacks and problems, the country that Winston Churchill once treated with such disdain, calling it "no more a united nation than the equator," has proven that it can be more than the sum of its parts, and that it can find unity in its diversity. India is a latecomer to the contest with its major rival, China, over which country has the better development model. It lags behind Beijing in some respects, but the race is still undecided.

The great French writer Romain Rolland once wrote: "If there is one place on the face of the earth where all the dreams of living men have found a home from the very earliest days when man began the dream of existence, it is India."

-- with Padma Rao

Translated from the German by Christopher Sultan