Aviation Anarchy

venture partners is to defy logic. If we propound such policies which are illogical and inconsistent, we as a country will lose all credibility. People both here and abroad will begin to wonder whether there is another Sukh Ram behind these policies!

One of the key infrastructure requirements in the development of business in a country is its airlines. Indian Airlines is in a permanent state of decline and is perhaps terminally ill. Jet Airways, which is the only acceptable alternative in the Indian skies, is beginning to show the strains of rapid expansion without the commensurate resources. Delayed flights, cancelled flights, overbooking etc. are becoming increasingly evident. It is too fragile to be counted upon to become Indias major airline. In any case, we will need another healthy airline to provide competition. Tata-SIA will have much greater resources with the backing of Singapore Airlines, which is one of the best (if not the best) airline in the world. And they know how to operate an airline profitably. In Tatas they have the best possible Indian partner. If we do not allow them in, Indias aviation industry and passengers will remain at the mercy of the sick Indian Airlines and the fledgling Jet Air.

 

Now let us turn to the larger implications of the so-called civil aviation policy. The first one is about our credibility as a country in which to invest.

India has been wooing foreign investors and NRIs to stimulate flow of investment funds into our country. The prime minister and finance minister have taken a week off from they busy pre-Budget schedule to go to Davos and talk to industry leaders. Their credibility is seriously open to question when their own Cabinet colleague propounds such an illogical policy and is allowed to get away with it at least so far. While the Jack Welchs of this world will be polite, I am sure they will all be putting India on a watchlist if the final outcome in civil aviation policy remains so illogical. All the effort put in over the last five years by this country to improve its image as a good place to invest in will be compromised.

The second implication is even more serious in my view and has not been realised by many people in government or the media. Singapore is a City State which has tremendous surplus funds and is seeking investment opportunities for its surplus funds all over the world, including the US, Europe, China and Asean. The funds available with the Government of Singapore Investment Corporation itself are estimated to be about $60 billion (Rs 2,16,000 crore). Then there are other funds like Temasek, with their own tens of billions of dollars. Singapore Telecom, Singapore Airlines and several other companies and banks in Singapore have their own resources to invest. After several decades of a no go policy with regard to India, the Singapore government and its leaders Lee Kuan Yew and Goh Chok Tong decided to open the door to India three years ago and encouraged Singapore institutions and companies to consider investment in India. The Tata-SIA project is one such project. Others are the technology park and the airport

Bangalore. If we frustrate such investments from Singapore, we have a great deal to lose. To understand these, one has to realise the significant advantages of attracting investment from Singapore as compared to any other country in the world. These are as follows:

Unlike multinationals with objectives of global dominance in their chosen sectors, Singapore is a mere investor. It has no product, no brand, no desire to be dominant in managing any joint venture. It is looking for large investments on which it can get a satisfactory long-term return with relative safety. It is more like a pension fund, but operated with sharp commercial skills.

If we can cultivate and encourage Singapore to invest in India, large Indian companies can develop their business without having to depend on foreign multinationals. If our companies have access to funding from a non-domineering source like Singapore, they can negotiate and buy technology from anywhere in the world instead of having to surrender shareholding and control to multinationals.

Singapore has a very modern technology base, especially in information technology and communications, which are the key technologies of the future.

In terms of compatibility of management culture, Singapore will make a better match for India than many others. Singaporeans are very competent managers, especially in finance and technology. Yet they do not exhibit the aggressiveness and seeming arrogance of some of the people from western countries. English being their official language, we will have much more compatibility than with the Japanese.

All agencies of the Singapore government are free from corruption. They do not take or give bribes as the anti-corruption laws in Singapore are very stringent. If we as a country wish to cleanse our system, Singapore will be a good partner.

Politically, Singapore is a neutral country. It is friendly with China as well as with the US and Europe. It has no territorial or military ambitions. The fact that it has an ethnic Indian minority provides some understanding of our culture (unlike the Japanese).

By linking ourselves, as a country, more strongly with Singapore, we will gain better access to Asean and the Greater China markets. This is the region of the world that is growing fastest and the future of our international trade will increasingly lie in this region. Singapore is our friendly gateway into the rest of the prosperous Asia.

It is high time that our prime minister, who was very positively involved in the Singapore initiatives in Bangalore, took note of these facts and cleared investments from Singapore, including the Tata-SIA project. It has become a touchstone of our ability as a country to evolve logical policies and to apply them with some measure of consistency, and not according to the whims of ministers who come and go.