Telecommunications is one of the easiest sectors to open up. It will not lead to the Coca-Cola gobbling up Thums-Up syndrome. There are no indigenous private companies in this sector. Public sector companies, including C-Dot, are strong enough to enter into strategic alliances, both technological and financial, with foreign companies on much better terms.
If only the government is flexible enough in its response, foreign tieups can provide space to develop indigenous technological capabilities in the telecommunications sector. Technological autarky will only perpetuate backwardness. Tieups will help supplement domestic capital and bring in foreign capital. The growth of this sector can also help boost government revenues. Also, there are fewer hassles involved in attracting private capital, both indigenous and foreign, in telecommunications than in other infrastructure areas.
Unlike the power sector, there are no subsidies and cross-subsidies. Telecommunication is still in the stage of infancy, with not too many distortions in the system as yet. The entry of foreign capital in this sector will create few disruptions and would require minimal changes in the existing economic customs and practices. There are not many vested interests to be hurt. It is almost a virgin field.
This is just the time when the country needs a strong-willed and far-sighted government to take full advantage of the new opportunities available globally. There is a saying in India: `Behti Ganga me haath dho lo (Wash your hands in the flowing Ganges). International money is flowing, technology is flowing. Get both, and it will help achieve in 10 years what other countries took 50 years to achieve. But unfortunately, we have a government which is not sure of itself. Distrust of foreign capital is strong some sections. Telecommunications is the most potent vehicle of globalisation, pushing the world towards becoming a global village. But this also entails a cultural shock.
Foreign capital in this sector is unlikely to affect domestic capital in a big way. At best, it will block future opportunities for Indian capital. Foreign capital is undergoing a change in character. As multinationals expand their international operations, they are increasingly acquiring the characteristics of transnational companies. Traditional MNCs had global operations but drew their economic and business clout from operations in the mother country. With capital flows becoming freer, the comparative advantage of manufacturing is increasingly shifting away from mother countries. Thus, the Mercedes-Benz has changed its tag from Made in Germany to Made by Mercedes-Benz. Bulk of parts and components of its products being sold in Germany are manufactured outside the country.
This change in character is beginning to reflect in both the share ownership pattern and the top management. We must grasp the significance of these changes and adapt our responses accordingly. The `East India Company syndrome must not haunt us anymore. Even multinationals acting as an arm of neo-imperialism has become a piece of history.
The opening up of the telecommunications sector will bring globalisation at the doorsteps of the professional classes in particular, and the middle class in general. If this sector opens up, the opening up of electronic media cannot be resisted and will follow soon. With technological breakthrough, the DTH (direct television transmission to home), there will be a revolutionary breakthrough towards globalisation at the mass level. Already foreign films, mostly English ones dubbed in Hindi are being shown on cable TV. Indeed, there is bound to be a cultural shock when the rural population and slum dwellers are exposed to foreign culture, values, lifestyle and, of course, their economic prosperity. There are no easy answers to the problems which globalisation will bring along with it. But we cannot run away from them. Globalisation is the tide of time. We can resist it, but only at the cost of our perpetual backwardness. Perhaps, we need a bigger tyrant than Pol Pot to attempt it. Wisdom lies in planning for
globalisation.
There is one big positive fall-out though. An articulate American thinker, Samuel P Huntington, has expressed the fear that after the end of the ideologically-oriented cold war, humankind is destined for a clash of religion-based civilisation. Since this would involve stronger emotions than ideology, the new clash could be more destructive. There were many takers of this thesis in the intellectual world. But increasing interaction and globalisation of cultures which the new telecommunication accord will facilitate, will make the passage to future less stormy. Nothing suits India more than a less stormy world.
We should have confidence in our cultures ability to absorb new shocks and enrich itself in the process of interaction with other cultures.
The world is offering us many opportunities, we only have to put our own house in order.
