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India's people are the jewel in its crown; On top of the horrific toll in Pakistan, this week's earthquake left 1,300 dead in Indian-controlled Kashmir. High Commissioner to India Sir Michael Arthur says the Indian people are one of its strongest assets.

Byline: Sir Michael Arthur

People are India's thing. Everywhere, all the time. By 2030 India will be the biggest country in the world, overtaking China.

People are India's future - 54 per cent of the population under 25. Those people are a huge asset - provided they are educated, trained and employed. If not, they are a huge burden.

Indians have faced much down the millennia - they have tough resilience, an absorptive capacity when invaded, and an ability to cope with challenges.

For those who break out of the structured social system, there is a hunger, an ambition, a drive in modern India such as I fail to see in the West.

And there is a sense of Indian identity. For all India's diversity, there is a common uniting thread of "being Indian".

India is famously diverse - 28 states, 18 different official languages and literally hundreds of others. The difference between the Kashmiri and Keralan is at least as great as between the Portuguese and the Pole.

India is a genuine and deep-seated democracy - one of the fantastic achievements in the last 60 years of independence.

Democracy, with its distinctively Indian characteristics, is ever present and deep-rooted. In fact state elections are so constantly on the horizon that it is sometimes hard for coalition governments to get their acts together. There are three million people who hold elected office at local council level, one million of them women by law. Eighteen parties form the Indian Government coalition, with more outside support necessary to secure parliamentary votes. Politics in India is three-dimensional chess.

India has at least 250 million people on less than a dollar a day.

About as many have been brought out of poverty in the last generation - a huge achievement.

The extent of subsistence agriculture - 65 per cent of people on the land - and the problems of a developing country's economy, mean there is still a long way to go. The United Nation's Millennium Development goals will be won or lost on the soil of India - simply because of the sheer numbers.

We are doing what we can to help. Britain's biggest aid programme is in India - soon to be pounds 300 million a year.

And quite rightly so, because of the scale of India's challenge. But also, given India's other economic strengths, because when well invested - think of aid as an investment - the returns in India are higher than in most other parts of the world.

But poverty there is. There is prosperity too. As Prime Minister Manmohan Singh himself says, in India you can find four centuries coexisting. Including of course the 21st century.

Rich Indians are world class rich. The spending middle class in India grows by the population of Australia every year at least. India is first World competitive in a growing number of economic sectors - obviously in IT and the out-shoring/off-shoring success of the last few years.

Increasingly in bits of biotech; in pharmaceuticals - India will soon, if not already, be the world's biggest generic drug producer. Engineering too.

I personally think that one of India's big future economic growths will be in agricultural exports - once they break out of the subsistence and protected/managed farming to produce higher value added crops, responding to market signals. India ought to be feeding the entire Gulf.

India probably has the longest, proudest, tradition of mathematics in the world.

It was Indian mathematicians who discovered zero. India discovered Pythagoras' theorem 300 years before his birth.

Indians today have a natural technological bent. And a huge technological drive.

A visitor to China and India will contrast the lack of modern infrastructure across India. The airports, the roads, the ports - all of these need a generational upgrade. And it is not just physical infrastructure, it is drinking water and proper distribution of power.

The telecoms sector stands in sharp contrast - through rapid liberalisation, there hasbeen a revolution in the telecoms industry in India, with world class capability, and world beating prices.

A second big challenge for India is education.

At its best, it is world class. Yet many rural children go to school and the teacher simply does not turn up.

It seems possible that the Millennium Development goal of getting every child, into and perhaps even through, primary school may be reached. But is India ready for that huge bulge of expenditure and skills needed to get those children through secondary school?

Governance is another problem. There is so much variety across India. Poor performing states alongside good performing states. All linked into a democratic system that works by consensus. So there is a huge challenge in just getting things done.

One of my worries is that the differentials between good and poor performing parts of India are growing all the time - and how far can India stretch the elastic? When do taxpayers and states rebel against cross-subsidation? And what then? What of the social strains too - some say that up to 40 per cent of Biharis already work outside Bihar.

But India has huge potential.

What has really struck me is how India has acquired a new self-confidence on the international stage, an outward looking frame of mind.

The IT success story had a part to play in that, psychologically even more than just the economic benefit.

But it is much more than just an economic change of attitude.

India plays at the global level. That is why India seeks - quite rightly - to become a permanent member of the United Nations Security Council. That is why Tony Blair invited Manmohan Singh to Gleneagles for the G8 for discussion on the economy, the environment and energy.

Energy matters. India is going to double its energy use over the next 20 years, and will be a major player in world energy markets. The fact is that India is emerging as a global giant. By 2040 so say the forecasters, India will be the third biggest economy in the world. In absolute GDP, it will overtake the UK by 2020.

Britain clearly has a deep and longstanding relationship with India, for historical reasons. This plays through into our common approach to the law, to democracy and our shared language. I see exciting times ahead.

Just as India is a country on the move, so, I believe strongly, is Britain.

We are becoming a dynamic, multicultural, diverse society. We are repositioning ourselves as something of an international, economic hub.

We are natural partners for an emerging global giant like India. Because of history, because of our people to people links - two per cent of the British population is now of Indian origin.

All these attributes position Britain and India to have what Dr Singh has described as a Special Relationship.

How many household name companies in Britain now have a business critical function performed in India?

And if we were worried about India's future - which we certainly aren't - there would be a significant contingent liability for the UK economy based on India. But that just shows the integration.

HSBC has, in Pune, a huge new office block, crammed full of Indian IT engineers, all working directly on the mainframe computer in Sheffield.

How can the the economies get more integrated than that?

With that particular potential for the UK/India relationship there are two particular risks. First, that dynamic class leading India forwards has a natural tendency to look to the English language speaking world, but particularly to the United States. Fine, they will work with Britain, if we reciprocate. And inward investment into Britain from India - now our eight biggest partner - shows that is happening. But it will not happen automatically.

Second, there is still an image problem.

In both countries, a generation remembers the country they studied in or travelled in in their youth. That image of each country is now blatantly out of date. You cannot just rest on cricket and curry as our fond mental associations of each other - even if Britain now do both quite well.

We have a huge advantage in being part of Europe. Sixty per cent of the Indian investment into the EU comes to Britain, for obvious reasons.

I see no conflict between both the UK bilaterally, and the EU collectively, developing the substance and the visibility of their relationship with emerging India.

So both on the bilateral and on the multilateral side, I am optimistic. But it does require effort and imagination on Britain's behalf

Sir Michael's comments are taken from a recent speech to the British American Business Council in Birmingham


Sir Michael Arthur says Indian democracy is one of its greatest achievements in the last 60 years of independence; Enjoying the British American Business Council dinner in Birmingham were, from left, Gurjit Kaur Bains, Sir Michael Arthur, John Hardbattle (Grant Thornton) and Jaspal Singh Bains
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Oct 12, 2005
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