I have no clue why this man thinks that the model of living off natural
resources is a China syndrome. I tried to read his book, but it irritated the
hell out of me.
Truth is that growth in both India and China are based on human capital. The
Chinese one is based on human capital tuned to working in manufacturing (which
is not as some would imagine "unskilled"), while the Indian model is tuned to
the service sector. As one of my former teacher is fond of saying "China is the
world's factory and India is the world's back-office."
The orgin of this divergence is partially rooted in the very nature of Indian
and Chinese immigration to the west. Chinese human capital in the industrial
sector involves a lot of learning by doing - at home and abroad - acquired
through the century - partly by the overseas chinese (OC) labor force. The
Indian human capital is based on publicly funded technical higher education
(and more recently, its private sector off shoot) and the links established by
its cream - the NRI labor force in the last few decades.
Santanu
-----Original Message-----
From: [EMAIL PROTECTED] on behalf of Dilip/Dil Deka
Sent: Thu 6/22/2006 9:51 AM
To: ASSAMNET
Subject: [Assam] Fwd: Thomas Friedman: Are Latin Americans going to
emulateIndia or get addicted to China?
What did they feed Mr. Friedman in India that he is ga-ga over the India model
every time he writes? :-)
Dilip
===================================================
Ram Narayanan <[EMAIL PROTECTED]> wrote:
To: [EMAIL PROTECTED]
Subject: Thomas Friedman: Are Latin Americans going to emulate India or get
addicted to China?
From: "Ram Narayanan" <[EMAIL PROTECTED]>
Date: Thu, 22 Jun 2006 09:35:21 -0400
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Dear Dil & Dilip Deka:
Thomas Friedman turns the spotlight on an important choice that Latin Americans
face: Will they allow China to continue exploiting their natural resources -
timber, iron, soybeans, minerals, gas, fish meal -- to feed China's voracious
appetite and keep jobs and factories humming in China -- which, over the longer
run, will leave the Latin Americans poor OR will they focus as India does on
developing their human resources?
Cheers,
Ram Narayanan
US-India Friendship
http://www.usindiafriendship.net/
http://select.nytimes.com/2006/06/21/opinion/21friedman.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fThomas%20L%20Friedman
THE NEW YORK TIMES
Latin America's Choice
Are Latin Americans going to emulate India or get addicted to China?
By THOMAS L. FRIEDMAN, June 21, 2006
There are a lot of ways to describe Latin America's challenge today. Some will
tell you it's the age-old question of overcoming the staggering gap here
between rich and poor. Some will tell you it's rooting out corruption and
misgovernance. But I come at this issue with my own perspective, and I would
describe the big question facing Latin Americans this way: Are they going to
emulate India or get addicted to China?
This question was, at least implicitly, a subtext of the recent election here
in Peru. But it's true throughout this continent, which has always been better
at mining its resources than mining its people.
Let me explain by introducing Gabriel Rozman - a Jewish technologist of
Hungarian roots who was raised in Uruguay, educated in America and now heads
the Latin American operations of India's biggest software/outsourcing company,
Tata Consultancy Services of Mumbai.
Mr. Rozman runs Tata's Latin American business out of Montevideo, where 550
Uruguayan programmers, trained and directed by Indians, are writing code and
running the computer systems for companies all across this continent. They are
backed up by Tata engineers in India, Hungary, China, Brazil, Chile, Mexico and
Argentina. India now thinks Latin America is its backyard, too.
And so does China. China, though, is almost exclusively focused here on
extracting natural resources - timber, iron, soybeans, minerals, gas, fish meal
- to feed its voracious appetite and keep jobs and factories humming in China.
There is nothing wrong about that. America and Spain did the same for years -
and often rapaciously. Today, China's appetite is helping to fuel a worldwide
boom in commodity prices that is enabling a poor, low-industrialized country
like Peru to grow at 5 percent.
But countries that get addicted to selling their natural resources rarely
develop their human resources and the educational institutions and innovative
companies that go with that. So after the ore has been mined, the trees cut and
the oil pumped, their people are actually even more behind.
"Why can't Latin America do what India is doing?" Mr. Rozman asked when I spoke
with him in Washington last week. It can, he insists, but only if it changes -
fast. "Right now I have 500 job openings I can't fill, and the problem is
education. The prestige career to follow in India is engineering, and in Latin
America it is [still] law or being a notary public."
"We need more computer courses with real standards and starting at an early
age," he said. A lot of higher education in Latin America is modeled on the
French/European system, which is better at producing philosophers than
programmers. Philosophers are important, but not in bulk.
Latin America also has to do a better job of teaching English, he added, and
eliminating the red tape that prevents economic integration in Latin America
and makes it very cumbersome to start new businesses here.
"To go from Argentina to Montevideo is only a 20-minute flight," Mr. Rozman
explained, but in terms of the economic integration demanded today by global
firms, they are 10,000 miles apart. In addition, most of the legal systems in
Latin America are designed to promote agriculture and light industry, not
intellectual property or innovation. "All the laws were made for another type
of society," he said. "If we don't get caught up with the next wave, we're in
trouble."
That next wave is called "follow the sun," he said. "We like to start a project
in Bangalore or Mumbai, then, as the day moves on, move it to our offices in
Eastern Europe and then to Latin American." Tata expects its engineers in each
place to be equally trained, speak English and have the computing
infrastructure to seamlessly receive and hand off projects. This is a
global-scale business.
"We have 50,000 employees in India and are going to 100,000," explained Mr.
Rozman. Eventually, Tata will grow to 100,000 in China. "But I can't go to
100,000 in any one country in Latin America, so I have to be able to put [the
whole continent] together."
Latin Americans may think that their big choice is between two models of
Western capitalism - a European welfare state model and a hyper-competitive
U.S. model. But before they divide their pie, they need to expand it - and here
their most important choice is between an India example that focuses on
developing human resources and a China syndrome that focuses on selling natural
resources. Since countries tend to do either one or the other, here's hoping
that Latin America discovers India before it gets hooked on China.
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