Yeah. Keep WalMart at home.
Let's send them a Union Carbide plant instead.
this can go really bad for small business in India. There used to 4 small businesses in my neighborhood. But in my next visit they might be closed.
What? It's OK for India to compete in the global markets for all kinds of white collar or semi-white collar labor, but we need to insulate it from retail competition? Why? Because they'll turn to violence if we don't?
Hmmm. Guess maybe all the would-be tax preparers and tech supporters here should threaten to burn something down.
You should no more fear Walmart's coming into India than anyone should fear modern farm implements being introduced to a predominantly agrarian society. Yes, there will be dislocations and, yes, there will be some social upheaval. But unless it's your long-term goal to see these people of India perpetually tied to marginally profitable retailing, you should embrace Walmart or any other well-run retailer entering the markets there.
(Hey, has anyone thought of sending Overstock to India? Now THAT might be a fair fight. HO HO HO.)
At the end of the day, living standards are inextricably tied to productivity. "Creative destruction" is a dirty phrase to a lot of people, but it is the means by which stagnation gets transformed into an economy that can sustain healthy, long-term growth.
Word up, Mr. Brownfield.
Yes they need more Bhopals,that way they'll be able to afford more Walmarts.Hmmm......Kinda a funny to be worried about terrorists at this stage of the game we're our own worst enemy.Methyl Isocyanate anyone ?
James, funny you should mention agriculture, because one of India's nastiest social problems is suicide among its debt-strapped farmers. I don't think Wal-Mart's worth the price it will extract from Indian society, but that's just my opinion. I'll be curious to see how this plays out in India.
As for Overstock.com, all I can say is that any merchant in India who was going down the tubes like that company would find the shame unbearable and commit suicide.
Carlos Lee:
I am not a Walmart hater. May be my comments sound hypocritical which I agree because our entrepreneurs globally setting up tech shops using the advantage of Free market system. And Walmart has every right to set up in any place of their choice , but I think India is not ready for Walmart yet, as Gary Weiss pointed about our agriculture.
Phani,
Sounds like India may need a dose of bankruptcy reform, too.
You don't fix a deeply indebted and inefficient sector of an economy by adopting protectionist measures. You fix it by weeding out the marginal/unprofitable producers.
I know. It sucks ass if you're the bloke busting your back on a small plot of land for chump change. But it is the only proven path to long-term prosperity.
But what do you do when the vast, vast majority of your producers are inefficient and unprofitable? These are rural, sometimes tribal people, very often using methods that American farmers abandoned in the 1850s.
In one rural area of India I was traveling through, the farmers dried stuff in the sun by spreading it over a well-travelled road. I forget offhand what they were drying. Hay, maybe. Oxen are still pulling plows in India. I didn't see one tractor while I was there.
To me, the solution is pretty obvious, though the particulars won't be politically popular:
Do everything reasonable within your power to attract foreign capital.
That must include welcoming Walmart.
Why? India has no obligation to include every foreign operation that wants to do business in that country. I think they have every right, and many good reasons, to tell them to get lost.
You're right, Gary. India, indeed, has no obligation to include every foreign operation that wants to do business in their country.
Similarly, foreigners with capital have no obligation to commit their capital to India. India is well within their rights to remain committed to policies that leave huge chunks of her population impoverished.
People with capital will always have plenty of other options in this world. India needs foreign investors a lot more than foreign investors need India.
Right JB. Maybe what we should do, Gary, is prevent US companies from outsourcing labor to India. Leave India to it's own devices.
That scenario would have some winners (protected labor) and some losers (US businesses and/or consumers, depending on the competitiveness of the relevant industries)here, but only losers in India. So, it seems entirely reasonable (and well within our rights - to borrow a phrase) to expect some quid pro quo with respect to trade - from India, China, Viet Nam, etc.
Don't be so sure we need India more than they need us! Outsourcing is not going away, and neither is foreign companies building factories in India and despoiling the environment there. Wal-Mart, as I said, is a special class. Factories give people jobs. Wal-Mart takes them away. The economic glory of W-M is lost on people in India.
Have you guys been to India? Fascinating country. Great food, too.
Gary,
That's my point: I think India needs us more than we need them right now.
Anyway, I've never been to India. I would love to go, but am planning to get to West Africa first. Anything that you think should not be missed on a trip to India?
I'm at a bit of a loss, Gary. Every innovative step, regardless of sector, leads to temporary job losses. We celebrate (or at least most of us do) the process whereby fewer and fewer workers become necessary to provided us food, shelter, medical care, clothing, communication service, and every other commodity or service desired by consumers.
Why does this process somehow fall apart when the topic meanders to Walmart? Not that I'm particularly beholden to Walmart. Besides being particularly adept at low-end retailing, there's nothing that special about them.
I don't expect Indian-based outsourcing to go away nor do I have any particular interest in engaging in any sort of "punitive" measures with India because of their persistent trade surpluses. I don't see the "trade deficit" with India or China or any other country as being a flaw on our part. The flaw is theirs. Their investment environments are unattractive relative to the rest of the world.
So if it's important enough for Indians to maintain that cultural flavor of theirs with all those tchotchke merchants, again, that's certainly their right. But that choice comes at a price: Lower standards of living for Indians.
Yes, James, we in America do celebrate temporary job losses for the greater good. In India they do not, and in fact have been known to resort to violence and suicide.
People live on the edge there. Lose your job and you have no safety net. You literally may starve or be forced into a slum where the conditions are unimaginable. India has a massive labor surplus which is growing, and its unions and trade associations are far more powerful than ours.
To give you an example, in Delhi the dobi wallas -- the people who work on the street doing laundry -- are actually part of an "association" that regulates their little industry. Yes, you can start up a large commercial laundry to drive these people out of business. Instead of charging the equivalent of 2 cents a shirt your laundry can charge 1 cent. Will the dobi wallas, who are from the lower castes and have few opportunities, allow their families to starve in the name of economic efficiency? These are lovely people, but don't push them up against the wall.
Change will come to India but it is a tradition-bound country, and one must keep the culture in mind.
In Delhi, the recent high court decision on padlocking shops resulted in widespread civil disturbances. They had to call out the army. These are otherwise peaceful, law-abiding people.
So it's a little different than the situation here in the U.S. when W-M opens a superstore. That's the reality of India, I'm afraid. You know, you're not wrong in theory. The problem is that carrying out the many required reforms in India results in more dislocation than India is willing to tolerate. It is a massive, poor country, but believe me, it has many virtues and I think it is really quite an investment opportunity as well, if you know your way around the country.
Carlos there's much not to be missed, but I'll leave that to another time.
So basically you're saying that India is full of Darren's. Their failure to engage in meaningful, productive activities justifies violent, destructive behavior?
I don't find anything particularly lovely about Darren. Entertaining? Yes, but certainly not lovely.
So India, this tradition-bound country with a long track record of blatant misogyny and a vile caste system, is supposed to get special consideration for their cultural issues? Yes, yes, I know, it's an amazing, law-abiding country... as long as you leave the lighter-skinned males to do as they please.
No, I'm just describing the reality of India, which is harsh. I don't think Darren would be happy there.
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