Transcription
There'll be the US, there'll be China. The Indians are going to be themselves. They're not going to be anybody's lackey. They may not be as big as China and GDP. And you also suggest they've got to develop a manufacturing capacity. Yes, of course.
The major changes that are taking place is the recovery of China and to uh to a lesser extent of India. The places they occupy two centuries or three and a half three centuries ago before western colonization blanketed them. Three centuries ago, they were between the two of them, 60% of the world GDP, just the population and the production that they put out. The 20th century was the American century. The first half of the 21st century, or a large part of it, will still be the American. But I believe the second half, you will have to share top places with China and also with India. Make space for them too.
Inspired by India's leaders, the late Lee Kuan Yew once believed India's democratic model would be vastly superior to China's, stating, "As a young student, I admired Nehru and his objective of a secular multi-racial society. I had wondered whether India or China would become the model for development. I wanted democratic India, not communist China, to win." But as the decades rolled on, Lee watched Communist China pull off an unprecedented economic miracle. While democratic India found itself bogged down by its own internal systems, his early optimism slowly evolved into a brutally honest critique. India has been a country that has enormous potential and for the last five decades has missed many opportunities to achieve its potential. Here are the top reasons Lee Kuan Yew believed India would struggle to keep up with China.
Will India have an advantage? Some argue because it's democracy and China is not. Let me put it this way. If India were as well organized as China, it will go at a different speed. But it's going at the speed it is because it is India. It's not one nation; it's many nations. It has 320 different languages and 32 official languages. So no prime minister in Delhi can at any one time speak in a language and be understood throughout the country. You can do that in Beijing.
Let's start with the most fundamental problem. Lee never considered India a real country. In his eyes, its very foundation was an artificial construct, stating, "There is no comparison between China and India. China grew organically and became one people. It was not a nation created by outsiders." In India, there are more than 400 indigenous languages. And before the British Raj came and unified them by building a railway network, they were multiple groups of people, each under a Maharaja, a sultan, or a nawab. Any Indian leader speaking in any language at one time doesn't reach more than, say, 40%. You speak in Hindi, you might get the Hindi north. You speak in English, you get the upper classes throughout the country, maybe 30%. You speak in Tamil, you get 70 million in Tamil Nadu. And you speak in Malayalam, I don't know how many, 40 million. So that is an enormous uh diversity which makes it difficult to get the same policies through. And you can see that after each election, you get a tussle of how to form governing coalitions. This diversity paralyzes the entire country and bleeds straight into its politics, creating a gridlock that Lee contrasted sharply with Beijing.
The difference between India and China is stark. In India, Delhi says, "Do that." But the chief minister says, "You, you're not appointing me. I have to follow you. It's my voters who will make me the chief minister in the next election. So I say, 'Yes, yes, of course,' but I don't do it." But in China, when I tell the party secretary, "This must be done," and you don't do it, you know, in the next reshuffle, you move sideways. So if you want to get up to the Politburo, you make sure it's a success because that's the way it is. The system works because if you perform, I promote you. You don't perform, you're out sideways. So that's a systemic difference.
Furthermore, India's diversity creates a culture of endless debate where politics always comes before results. Lee compared India to China again, stating, "One country gets things done. The other talks incessantly, but seldom finds the will or ability to get up and go. India simply does not have the same push or the singleness of purpose that you see in China." Lee even saw this cultural trait play out inside his own government in Singapore, stating, "You will notice the Indians have a different tradition. They love contention. They love argument. So the majority of our opposition have always been Indians."
But there is a far more dangerous consequence to India's diversity where politicians start weaponizing identity just to survive. Lee watched this play out firsthand under Prime Minister Indira Gandhi, stating, "A sad chapter in her many years in office was when she moved away from secularism and to win the Hindi Hindu vote in North India, consciously or otherwise, brought Hindu chauvinism to the surface. It was to lead to the recurrence of Hindu-Muslim riots, the burning and destruction of the ancient mosque at Ayodhya, and the emergence of the BJP." If you read Mark Tully on his book on India, he is the BBC correspondent in India. He points to Mrs. Indira Gandhi as the turning, as the person who made India more Hindu because, according to him, she was faced with a different situation and she decided to rally the north, which was Hindu, by appealing to the Hindu-ness. Meanwhile, of course, Islam had gone through a resurgent phase. But now it has a political tinge to it. It's a riot about power, about the way the Hindus were governing India at the expense of what Muslims claim to be their rights. Even today, modern India is a complex grid of deep-seated friction: from the diaspora Khalistan movement, the frozen conflict in Kashmir, ongoing Hindu-Muslim flashpoints, and a hostile nuclear-armed Pakistan across the border.
Next, we have the problem of brain drain. You see, while every country loses talented people to richer countries, Lee identified something specific about India's brain drain that made it qualitatively different from China's and more damaging, stating, "Because of the relative lack of opportunity or the frustration at the inability of their country to fulfill its potential, many talented Indians are leaving India for greener pastures and do not go back." The Chinese also go to America in large numbers, but quite a few return to China to start businesses. There are opportunities in China beckoning that may not exist in India. China is not suffering a brain drain to the same extent that India is.
You see, India has historically struggled to keep its most exceptional minds at home. Indian-born talent sits at the absolute pinnacle of global tech and business. But this phenomenon highlights a much deeper domestic crisis: the complete refusal of these elite minds to enter Indian politics. This creates a destructive self-fulfilling cycle where the nation's political and administrative system grows increasingly mediocre. Even when an Indian entrepreneur asked him for advice on entering politics to fix the country, Lee told him to forget it.
"My name is Akram Mishra. I'm an entrepreneur, uh, investor now, and I retired at 40 to become a politician. You have dynastic politics, and we are all successful entrepreneurs, individuals, and we want to change the nation. What will be your advice to people like us who really have given up our flourishing career to do something for the country?"
"I think you have a very formidable mountain to climb. You have dynastic politics because of the size of the country. The most important thing in a one-man, one-vote system is that people recognize your name. So if you are a Gandhi or Nehru, that's an enormous advantage. If I were an Indian and I were an entrepreneur, I think I will try and be a Tata or a Birla or an Infosys because I met your Infosys chairman in Bangalore. I spent an hour talking with him. I said, 'You should bring those skills into government. Be a minister. Change that ministry. The way you have changed this.'" He laughed at me. He didn't think it was doable. And he's dealt with the government. He knows. And this is a gargantuan bureaucracy that moves in a very measured, elephantine way. I was thinking to myself, only he, he had India had such ministers and changed the ministries, you'd be making the kind of progress that you deserve."
Which brings us to India's democratic bureaucracy. You see, to hold the country together, India's constitution divided power between the central government and regional states. But this created a democratic trap. Power belongs to whoever has the most votes. And in India, the majority of voters are rural. When Lee was asked how to transform Mumbai into a global financial powerhouse, the answer he received from Indian officials was a stark reminder of the democratic trap.
"Then you have the problem of the constitution. If you want Bombay to become like uh Shanghai Pudong, then you make it a self-governing unit, which the Chinese have done in Shanghai, in Tianjin, in Chongqing, and a few other cities recently. Then they deal direct with the central government. The central government gives them the funds for the infrastructure, and the revenue is shared with the central government, not with the Shanghai doesn't share revenue with either Jiangsu or Zhejiang or any of the neighboring states. It shares it with the central government. And the central government has invested enormous sums of money to make it the dragon head that goes up the Yangtze River right up to the Tibetan mountains. So I said, 'Do that.'" He looked at me, he says, "What will happen to my farmers?" I said, "You've just got to deal with the central government." Says, "The central government won't give me anything more." So two days later, I was in Delhi, and I met the prime minister. I said, "This problem can be solved. You see, it's China. Make it an independent unit." The prime minister looked at me and said, "You don't understand. I will never get this passed through parliament." I said, "Why? You have to go to parliament?" "Yes," said, "all this requires an amendment in the legislation and in the constitution, and that requires a two-thirds majority of some in the central government and in the states. We'll never get it passed. So Bombay will always be at the mercy of the Maharashtra government, and the Maharashtra government, quite wisely, takes its revenue and gives it to the farmers because they are the people who voted them in. So until you break that chain, how do you break the chain?"
But more importantly, this system of voter pleasing directly fuels India's aggressive economic protectionism. Lee observed that while China built a hypercompetitive, world-class manufacturing industry, India's inefficient domestic companies remain too fragile to survive without government shields.
"The growing Chinese middle class is good for everybody, though."
"Oh yes. It makes a consumer demand that everybody wants a piece of."
"Exactly. Including India."
"I'm not sure."
"You're not sure India does? Because they're scared of the competition. The Chinese have offered the Indian a free trade agreement. The Indians have not snapped at it because then Chinese goods will go into India and compete, and the Chinese car will knock out the Maruti."
This fear of competition is deeply woven into the mindset of India's state-run enterprises, and this was a personal source of frustration for Lee. Over the years, Singapore tried to partner with India on massive projects only to watch them get systematically choked by red tape and protectionism.
"Uh, I have some reservations because I've had several disappointments. For example, when your last or former prime minister Narasimha Rao met my prime minister a few years ago and said, 'You have 7 million foreign tourists come visit you. Why not bring them to India?' He said, 'Yes, delighted.' So we put up a plan, beautiful sketch plans of hotels that we will build, tour coaches that we will bring, but we needed an airline with landing rights. And he agreed that Singapore Airlines will form a joint venture with Tata and compete against Air India, and all these tourist destinations will be direct flights from Singapore. The minister for civil aviation says, 'No, this is a family heirloom.' Prime minister was overruled. The plan is gathering dust for the last 5 years now. A new plan is out to sell Air India up to 40%. So Singapore Airlines is in discussions with Tata to buy 40%. I am tempted. It's not my business, but I was thinking of dropping a little note to the chairman of Singapore Airlines to say, 'Does 40% give us management control? We're putting in, let's say, 20% of that 40%, and will be run around by Air India management and Air India unions. Where does it go? So why not start a new airline?' But then you'll be back to the same old story. So I don't know what's going to happen. We try."
Even decades later, Lee's reservations about India came back to haunt Singapore. When Singapore Airlines took a 25% stake in the newly privatized Air India, the investment backfired, dragging SIA's net profits down by a staggering 57%.
But nowhere is this friction more destructive than in India's physical infrastructure. While China builds world-class highways and high-speed rail almost overnight, India's projects remain chronically paralyzed. Lee observed, "Many Japanese investors in China who want to diversify their bets have gone to India in the hope of setting up a plant or a mine only to be surprised by the poor state of the infrastructure." Even when India announced massive spending plans to improve their infrastructure, Lee remained deeply cynical of their execution, stating, "If it is going to be built by Indians, it will take a very long time. It will be much more realistic to franchise it and allow the Japanese, Koreans, and Chinese to come in and build them. But will India do that? I am not so sure."
Decades later, the Mumbai-Ahmedabad bullet train project proved him entirely right. In 2017, India did exactly what Lee suggested, partnering with Japan to build a high-speed rail network. But the project has since been caught in a wall of political gridlock and land acquisition battles.
And this brings us to another deep-rooted structural barrier: India's caste system, a deep-rooted hierarchy that strictly divides Indian society into hereditary groups based on ancestral occupation. Controversially, Lee didn't just identify India's caste system as just a social problem, but rather an economic one, stating, "The caste system is a further complication for India. It is another key factor that holds back development." According to the rules of the caste system, when you marry downwards, you automatically lose caste. Therefore, Brahmins tend to marry only Brahmins, Vaishyas only Vaishyas, Dalits and so on.
Lee recounted a conversation during one of his visits to India where a government minister explained just how ruthlessly these boundaries are enforced if a lower-caste individual attempted to marry a Brahmin.
"In 1970, I was in Agra and I was driving from the Taj back to the hotel, and I had accompanying me the district commissioner of Agra, and we talked about caste and marriage and so on. So I said, 'Well, look, tell me, with mobility and big cities, if I were an Indian, I came to Agra, and I'm successful and I have wealth, I say, well, I'm a Brahmin.' In fact, I'm, say, a lesser breed. I said, 'And you will accept me as a friend?' He says, 'Yes, after a while, if you behave like a Brahmin.' So I said, 'Supposing I decide, I decided to court a young lady.' He says, 'Ah, that is different.' He says, 'I said, what will happen?' He says, 'They will ask whether your intentions are serious.' And I said, 'Well, yes, I will say they are.' I said, 'Then he says, the most thorough and exhaustive investigations are made.' I said, 'But how do you know?' He says, 'I've come from Calcutta or Bombay, 10, 12 million people. Who says?' No. He says, 'You must come from somewhere in Kolkata, from somewhere in Bombay, and we have the means to find out where.'"
Yet, as Singapore's Kishore Mahbubani points out, the old shackles of the caste system are beginning to fade, giving rise to a silent social revolution. "If you were born in the untouchable caste in India, you could never leave the untouchable caste. So can you imagine millions of brains being wasted? But in India today, you can have someone who grew up in an untouchable family, uh, suffered a terrible childhood, being excluded, being kept aside from his classmates in class, and then that same person could go on, do well in school, get a PhD at Columbia University, and become the chief economist of the Reserve Bank of India. His name is Narendra Jadhav. And the prime minister of India, Manmohan Singh, says that this is an enormous silent revolution taking place in India. And all the brains like Narendra Jadhav that were wasted for centuries are now emerging and creating a tremendous explosion uh of gifted people all over Asia."
But Lee remained deeply cynical about the pace of change, stating, "In India's most cosmopolitan cities such as Mumbai, the caste system would have weakened slightly. But looking across the nation, the overall decline in caste consciousness is very marginal. It may take many more decades or centuries of gradual shifts before India can declare itself free from the influence of caste."
"You've got a well-educated workforce of about, what, 200-300 million who can manage uh technical jobs. Your computer software programmers are amongst the best and much sought after. So are the Chinese. Uh, the Japanese will make use of you. So will the Europeans. So will the Americans. So will we, because our wages are up, and therefore not as economic as getting things done in Bangalore."
While Lee always acknowledged India's brilliant tech hubs and talent, his final verdict on the nation's future was stark. He predicted that the economic divide between India and China was permanent.
"You've become over the years more and more positive about India, and I've noted many of your comments about India's developments in recent years. Just curious, in light of recent uh events in India, do you still maintain a positive outlook on India's future? And how do you see India in relation to other Asian powers, particularly China, and of course, this part of uh, Asia, Southeast Asia?"
"Well, India has maintained high growth rates of 8 to 9% for several years now, and with the young population, is likely to continue, and is largely domestically driven. So I see that as going on, and that will keep the country relatively peaceful. But whether it will be a challenge to China is a different question. In fact, if you read the Chinese commentaries, they don't consider India as uh rival. And if you watch the growth rates of the two, you're starting from a base of one-third that of China and growing at a rate of two-thirds of China. So you never catch up."
Today, many economists point to China's crashing demographics as India's ultimate advantage. But Lee saw this booming youthful population not as a silver bullet but as a ticking time bomb if left unmanaged. He stated, "The problem for India is housing, education, schooling, and living standards for its young. In some parts of the country, they have no schools, and they teach their students under trees. So the growth in population may ultimately result in more illiterate people."
Lee ended his lifelong observations on India with a note of genuine heartbreak, stating, "It is with sadness that I make these observations about India. I started out rooting for India because it was a democracy while China was an autocracy. Then I grew older, and I realized two things. One, that democracy is no magic potion. It does not solve all problems for all peoples. Two, that there are certain fundamental forces at work in societies, especially those with long histories, that do not change easily. India is trapped by the almost unchangeable realities of its internal composition and the persistent grip of the caste system."
Yet despite these deep structural flaws, Lee didn't believe India would stagnate entirely. He recognized that sheer population size would eventually push India back to its historical position as a global economic heavyweight. It might not develop at the same pace as China, but it will grow, moving forward entirely at the beat of its own drum.
"I think despite all the failings, uh, highly bureaucratic red tape, uh, inefficient, uh, linkages between central and state governments, unwieldy coalitions in the center, and unwieldy coalitions in the states, the progress is made is quite remarkable. 6, 7, 8% growth in India."
"We deeply valued his friendship and his support for India's economic progress and a global role. He believed in India's potential more than many of us did. Personally, he was a source of inspiration for me. His achievements and thoughts give me confidence in the possibility of India's own transformation."
"The people of India share this nation's grief over the loss of its founding father and leader. We are observing a day of public mourning in India today in honor of the departed leader and the deep bonds of friendship that we share with Singapore. I bring here today the condolences and prayers of the people of India. Thank you."