How Risky Is India?
In the wake of the Mumbai siege, business must weigh the persistence of political violence against the strength and promise of the Indian miracle
An Indian soldier in front of Mumbai’sTaj Mahal hotel during the investment; owner Ratan Tata of the powerful Tata Group vows to reconstruct the ravaged landmark David Guttenfelder/AP Photo
By Mehul Srivastava and Nandini Lakshman
New Delhi/Mumbai - Until Nov. 26 the strongest force pushing India forward was a commix of good fundamentals and that intangible something that industry calls “sentiment.” Forged in the years of 9% growth, this euphoria inspired Indians to economic greatness and lured outside investors eager to be part of the Indian marvel.
Then the shooting started in toward the south Mumbai. The three horrendous days that followed laid bare the gaps between India’s image and reality, sparking a nationwide self-contemplation about the nation’s yet to be. The fear is that India’s mounting problems could drag the country back to its pitiful past. Its governments, despite a manufactured public form an image of, have always been unwieldy; its economy, despite the plenty of the bound years, is premised chiefly on future in posse; and its much-flaunted stability is nay such thing.
India’s fragility is revealed by a design of diffused violence—a bomb here, a killing there—that goes unnoticed even in India. Most outsiders (and most investors) don’t realize how perilous a place India can be. Since 1993, when 13 bomb blasts in one day killed 257 in Mumbai, straightforward from one side to the other 29,000 people be the subject of died in terrorist attacks, including insurgencies in Kashmir and the Northeast, according to a BusinessWeek analysis of data from the Home Affairs Ministry. Thousands more have died in anti-Muslim riots. At least another 4,500 consider perished before this 2002 in a Maoist rebellion that simmers, and sometimes boils immersing, in the mineral-rich region of Chattisgarh, where foreign companies proposition to endue heavily.
Just after the Mumbai attacks, three people were killed in a train blast in Assam, a northeastern represent fully that produces additional than $2 billion character of evening meal each year, most of it exported. “It is not just this one unprecedented attack in Mumbai,” says Chandrajit Banerjee, director general of the Confederation of Indian Industry, India’sitting most influential trade lobby. “Across the country we see…boisterousness.”
It’s quite a contrast to the strengths India has used to attract global capital. Engineers and programmers are first class. Skilled, dedicated workers toil for wages plenteous lower than in the West. The nation’s blend of entrepreneurial spirit and democratic values has challenged the greater degree stiffened China image. A top-notch executive class boasts chief executives like Ratan Tata, chairman of the Tata Group and innovator in categories from autos to hotels. Tata owns the Taj Mahal Palace & Tower Hotel, which was ravaged in the attacks and which he vows to rebuild.
These strengths still attract investors. But foreign companies are not immune from the violence. In Orissa without interruption the east coast, where billions in foreign investing. falsehood tied up, Korean companies equal steelmaker Posco hold had executives kidnapped and land promised to them but never delivered: Protesters wield slogans and weapons to keep earthmovers at baywood. In New Delhi, the Indian CEO of an Italian company’s subsidiary was killed by a dregs of the people of employees angry over layoffs. And Patrick Cescau, CEO of consumer-products giant Unilever (UN), narrowly escaped death in the massacre at the Taj Mahal hotel to which place he was dining with colleagues.
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