The South Asian: The Company We Keep

December 21, 2005

The Company We Keep

We are yearning for foreign direct investment – FDI – and bending over backwards to attract it. We have changed laws – banking laws, regulations on farming, trade laws and domestic finance regulations – to attract companies. Which company would we rate the best?

One company seems to be far ahead of everyone else in terms of these criteria. It would perhaps rate, in 2005 Re terms, as the company that has had the largest FDI in India. In addition, it spent large amounts in building infrastructure – roads, railways, mills, and distribution networks.

It created and provided more jobs in India than any other company. Given the size of its operations, all the numbers are not clear. It may have even created more jobs than all the other companies put together.

It also invested heavily in training Indians and may have also influenced much of the training for jobs in 2005. In addition, it also provided the foundations for bureaucracy in India. The company was so committed to its investments in India that it even transferred thousands of its employees to India to help train and run its operations here.

Yes, we are talking about the East India Company. It was a company that invested in our resources – in building mines, in clearing our forests, in damming our rivers, and in investing in our resources.

And yet, we revolted. We chased it away. We fought to get that company off our backs.

What an imperial mistake that was. Now we have to beg companies to come invest in us. Unlike the East India Company, today companies hardly build any infrastructure and have little interest in building capacity in India.

We have to ask, what we learnt from the East India Company that we chased them away and why, now, are we inviting these companies to come and invest in our resources. Or, perhaps, we can learn how East India Company came to India in the first place and how they were able to influence policies to an extent that they could plunder at will.

It matters little that we elect the government – as long as it does what is in the interest of the companies, how does it matter?

The wheel has turned another circle perhaps.

Posted by collective at December 21, 2005 10:53 PM

Comments

Sorry to say, but your analogy is fatally flawed.
Companies that we chase today for FDI, e.g. POSCO, are subject to the laws that are enacted by our elected legislative. We finally control the "rule book" with which a POSCO or a Bechtel would play in India.
East India Company was subject to no such.
Different times, different contexts, utterly different political/legal milieu.
Such an analogy only serves as a fear-mongering tactic to blackball any attempts by India to get FDI. As such, it can only have a limited and narrow purpose.
Cheers, S

SM's response: Good point Shankar. But laws are being changed at the behest of these companies. Laws on a banking and credit, agro, retail, energy... Maybe, it is a repition of what happened in the 1800s. A more nuanced version perhaps.
Posted by: Shankar on January 5, 2006 11:17 AM

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