Is it only restricted to India or any
other emerging markets?
Our focus is very clearly emerging
markets, so India is purely a lab; so
everything we do is with the idea that
we can port it out to other markets.
We have an existing product in
education, which is aimed at a school
system in Pakistan and the structured
financial product for that was
developed in Switzerland. It's fairly
international
Do you think Switzerland is a
kind of emerging market?
No, the money is in Switzerland.
How soon is it going to be
extended to other emerging markets
may be Brazil, Mexico, Argentina
other countries?
We have no time frames. If you work
with that sort of ideologies, chances
are there that you fail. We are
completely opportunistic. The
Pakistan opportunity came to us by
chance and we took it. If some other
opportunity comes to us we would
greet them. Through Soros we do a
bunch of things in West Africa and
Liberia and if it that gets translated
into something that we can do to ISB,
it's fine. We are completely
opportunistic about it.
What is actually interesting in
emerging markets? May be few
characteristics you can tell us?
I was trained as a development
economist. So, if you ever ask
yourself the question why are some
countries rich and some countries not
that's the question that can occupy
your entire life.
What differentiates the emerging
markets from let's say, a gulf nation?
There are some varieties of things like
Poor infrastructure and poor
education. If you want to put a large
scale differential, I say its
infrastructure. When I say
infrastructure it includes healthcare,
education, airports, housing,
transportation etc. The trouble in
India so far has been the logic, we are
poor and therefore we can't afford the
infrastructure; we are poor and
therefore we have very poor
infrastructure.
Is this the same in all the emerging
markets something like a legacy cost?
There are built-in legacy costs. There
are also Government issues like
extremely bad public policy.
Especially in this country, I don't
have to go into details as to how bad
the public policy has been.
Therefore, do you suggest firstly,
unlearning in all these emerging
markets so that people can see the
light of the day?
I would rather think about it as
unlearning process. The more the
government can step out, the better
and better we are, because there is no
evidence in the last 50-60 years of the
government actually having helped.
Based on that evidence may be it's
time to think of different ways of
doing things. Now If you look at
Hyderabad airport, it's a great
example. It has got 7 kms of most
fantastic road, great airport and you
run into the worst infrastructure
imaginable. You can ask them why
the infrastructure is so poor: I have
heard reasons including lack of
money.Well, there is a lot ofmoney in
the world, as I said there is a $160 tn.
So don't tell me that there is no
money.
You have to ask the question why
these things are not being done. It's
not been for the lack of money.
Obviously, there are rent seekers in
the business. No flyovers in a rich
country would take this much time to
build. I mean, how long did the
airport itself take to build? 2yrs? At what scale is Beijing build up things
for the Olympics? So there is no
doubt that even in an emerging
market if you put your will to it and
have enough cash, you can do
anything you want and about very
quick time.
George Bush once used this
memorable line, which I think as
completely true for everything that
keeps happening in India. The line is
"The soft bigotry is of low
expectations". No one in this country
expects an outer ring road to be
finished in anything less than 5 years.
That's the problem because a ring
road should not take more than six
months to complete or a year
maximum. But in this country the
expectations is for 5 years. The
incentives are all messed up.
I think people start living with this
low expectation.
Exactly the soft bigotry is of low
expectation.
