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Thoughts on the Emerging Global Economic Superpowers

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what’s inside 2

A Message from the BGS President

Letters to the Editor

Better Together

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have the opportunity – with members of the Central Office staff – to travel to Germany this summer and take part in collegiate chapter and alumni events held there. The enthusiasm for Beta Gamma Sigma by members in that part of the world was invigorating, and truly reminded us why our efforts with the Society are so important. We held a Collegiate Chapter Officer Training Seminar at HHL – Leipzig Graduate School of Management in Leipzig, Germany in May. Representatives from several European chapters attended, and it was great to help them learn more about Beta Gamma Sigma and for us to learn how we can assist them in their goal of honoring the very best students of business at their schools. The give-and-take at training seminars held in the United States is always valuable, but this was even more significant. I’m sure we learned a great deal more from them than they did from us. The highlight of the Germany trip was our Alumni Reception at The Westin Leipzig. We were

A Message from the BGS President

hen you receive this magazine, or any of the other communication pieces from the International Honor Society Beta Gamma Sigma, you’re often reminded about the size and scope of the Society. Sometimes you are told, “There have been more than 580,000 lifetime members inducted into BGS.” Other times we point out that the Society will celebrate its 95th anniversary in February 2008. Often, especially in communications to collegiate chapter officers and other chapter volunteers, we highlight the fact that Beta Gamma Sigma is the goal of the very best students of business at more than 460 of the world’s best business schools. All of this is true, and it’s very important for members to consider the overall significance of their honor society. I sincerely hope that lifetime membership in Beta Gamma Sigma is something you actively cherish; that membership is not just a memory from your college days, but something you value no matter what your stage in life. One aspect of Beta Gamma Sigma that you may not have considered is that our members reside in nearly every corner of the globe. Of course, lifetime members can be found in each of the 50 U.S. states, but have you ever wondered about the numbers found in other countries and territories? I thought it might be interesting to see just how far – and wide – Beta Gamma Sigma has spread: Canada – 4,707 lifetime members People’s Republic of China – 3,846 Germany – 1,557 Japan – 1,138 United Kingdom – 1,068 Taiwan – 1,050 Singapore – 1,024 India – 992 Malaysia – 771 France – 671 Thailand – 625 Australia – 596 Mexico – 486 Brazil – 307 Turkey – 258 I must admit I was very surprised myself when presented with that list. Of course it’s only a representative sample, as BGS members can be found in more than 160 countries around the world. In our database, we currently have more than 25,000 lifetime members living outside the United States. In other words, when we call it the International Honor Society Beta Gamma Sigma, we mean it. With that in mind, I was very honored and excited to 2 BGS INTERNATIONAL EXCHANGE FALL 2007 WWW.BETAGAMMASIGMA.ORG

John Wholihan, President of Beta Gamma Sigma, meeting with Society members in Germany

able to meet with more than 60 lifetime members of Beta Gamma Sigma – mostly from Germany but also a few from Italy. It was a great opportunity to share our vision of the Society’s future, while also hearing more about their hopes and expectations as members living in Europe. If we had accomplished nothing else, this reception was worth the trip on its own. I was fortunate enough to have the chance to speak to them about Beta Gamma Sigma’s initiative, Ethical Business Leadership. Billed as a “Kickoff to the Global Discussion” on the initiative, we found a very engaged and excited group. They were very interested in continuing to be part of the discussion, and ended the evening calling for another European Seminar next year in Paris. I certainly hope that can become a reality. In the final eight months of my Beta Gamma Sigma presidency, I am looking forward to continuing our efforts to reach members wherever they reside. But, I need your help. I would like to know what it is you expect from your honor society. If we’re doing a good job, let us know what you like best. If not, tell us how we can improve. Please send any suggestions you have to the email or mailing addresses listed on page 1. As more business schools around the world earn AACSB accreditation, Beta Gamma Sigma will have even more opportunities to provide lifetime recognition. Our Society will only grow more international in its scope. I hope you are very proud of the part you play in these developments.

I read with interest your article “The New retirement.” I am 82 years old, a former Vice President of American Standard Inc., a former owner and operator of three hotels in South Florida, and for the past 17 years a Vice President for Corporate Development for Lynn University in Boca Raton, Florida.

My book, The Anti Retirement Book, talks about “never retiring.” You might be interested... I think more articles on this subject (would be) very important. People have to think about this before they actually retire. Bob Levinson Vice President for Corporate Development, Lynn University (BGS 1984, Miami University)

B-Zine Comments Thank you Beta Gamma Sigma for putting together this interesting magazine. I want to let you know that I read with interest the article titled: “An accent may be blocking your path to advancement” by Dana Mattioli. I am in that particular situation and I am taking the necessary steps to learn to control my accent. Nevertheless, I really appreciate that you add articles of particular interest to minorities to your magazine. Keep up the good work! Anonymous I liked your links to the in-depth articles. Several were very interesting. Nancy Fintzy (BGS 1978, New York University) I printed out 4 of the articles you listed to share with my team and co-managers. Great zine! Bill Longstreth (BGS 2004, University of Tampa) I just wanted to let you know that I appreciated the great linked articles in this month’s B-Zine. I felt that virtually all of the articles were relevant to me and provided me with a lot of great information. I was particularly interested in the articles regarding developing and maintaining your online presence, as one of my “New Year’s resolutions” was to set up and start actively using social networking proﬁles. Augustine Iacopelli (BGS 2006, Wichita State University)

During my 40 years of employment, I have stayed very close to the college student. Nearly half that time, I was a member of the faculty for a Big Ten school and most recently for a small private college. When I was in industry, I maintained my interest in the recent college graduate and have a great deal of experience and insight as to what motivates and retains them. Eight of the nine reasons given (Summer 2007, What are the reasons new hires leave your organization within the first year of employment?, page 7) could be resolved through the employment of an ombudsman within the organization. As most readers know, an ombudsman is a position of trust from all points of view, one who knows what the managers and executives of the company are doing as well as what the employees are thinking, and finally reports to the CEO (or better still the Compensation Committee of the Board of Directors)... The key is to establish a position within the firm that reports directly to the CEO, and is capable of helping the recent college student as well as management work through the first eight issues listed in the survey. In my current employment, the employer uses an open-door policy as their ombudsman and it is a total disaster. The fear of retribution is so high in the organization that most recent graduates leave within six months and never give the real reason or reasons why they became disgruntled. The only ones that stay are either trapped by low unemployment rates in the area or (they are) marginal employees in skill and intelligence... Hugh F. Madden (BGS 1968, The Ohio State University)

To answer your question about my opinion about the web site, I think you’re doing a great job. It’s too bad people liquidate their 401K plans. That’s probably the worst decision you can make. I’ve stayed with my company for over 30 years, put between 15-20 percent each year into the 401K plan and accumulated over $1 million. It pays to stay the course and quit switching jobs. But you can’t tell these young people anything. Keep up the good work. Kent Mitchell (BGS 1973, University of Missouri-Kansas City)

What do you think about this issue of the International Exchange? Send your letters and comments to the editor: exchange@betagammasigma.org BGS INTERNATIONAL EXCHANGE FALL 2007 WWW.BETAGAMMASIGMA.ORG 3

Better Together

the good. It’s much like marriage vows; those ancient words are Excerpted from an address by Muhtar Kent, etched in wisdom. President and Chief Operating Officer, The Coca-Cola Co., April 12, 2007 Let me give you a real case Originally printed in the June 2007 issue of Vital Speeches of the Day. in point. In 1989, at the age of 36, I was promoted to President of Coca-Cola’s East Central European Division to spearhead the entry of Coca-Cola into the former Soviet Union and Eastern Europe dvances in things after the fall of the Berlin Wall. This was a group of 23 countries where for like communications, between 45 and 70 years some 350 million people had lived literally behind transportation, life a wall. Concepts like basic human rights, freedom of speech, democracy, free sciences, materials technology enterprise and land ownership were all novelties. and international trade will create There was no Coca-Cola infrastructure to speak of. No bottling plants. No new industries, challenge existing distribution systems. Our challenge was to set up more than 20 bottling plants businesses and level the global and a modern distribution system in literally months, across 23 nations. economic playing field. At one point during this time, I was in Albania in southeastern Europe. Emerging market locomotives Albania at that time was one of the most politically and economically isolated like China, India, Brazil, Russia, nations in the world. Its economy was in shambles and its people were in Turkey and Mexico will continue great need. We saw potential there though and we were determined to open a to be the growth stars of the world bottling facility. economy. These once-distant and We needed to find the right people to help us. Someone pointed me to a foreign lands will also produce dentist, saying “you should meet this man.” millions of highly educated and I found the dentist in his office. His practice had no heating and he used mobile workers who will participate wood fruit boxes for his patients to sit on. I developed a relationship with in a fiercely competitive global talent him and would send him copies of Western newspapers and pool. periodicals. By 2015, not that far away, a One year later during the first free elections this billion new consumers will enter the dentist – Salih Berisha – became middle class. They’ll have a taste of the first elected president of the good life, and they’ll strive for Albania. Coca-Cola became the same things you’ll want out of the first foreign investment, life. and in 1993 we opened All of this will have direct the first modern Cocabearing on the way you – and all of Cola plant. The ribbon us – will work, live and prosper in was cut by President the years ahead. In this environment, Berisha, Mr. Isdell (our we would be naive to think we can chairman who was go it alone. then running our Collaboration, cooperation and Northeast Europe/ relationships will matter more than Africa Group) and ever. Who you get to know, who myself. you surround yourself with, how Today, Coca-Cola you interact with these formal and directly and indirectly informal networks of people, will employs over 2,000 have as much if not more bearing on people in this thriving your future success than anything country where we are the you’ll learn in a classroom or retain undisputed market leader. from a textbook. Another lesson I learned about Three Thoughts about the Power relationships early in my career was that of Relationships the best ones force you out of your skin, or your comfort zones, if you will, in The first is that relationships order to grow. only work when you’re there for You know, there’s a reason why people in the tough times as well as

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snakes shed their skin several times throughout their lives. (For the sake of the metaphor, bear with me!) Snakes, of course, shed their skin so they can grow. It’s the same with the kinds of relationships we choose to form. We can elect to create networks of people who see the world exactly as we do, and not venture too far outside that comfortable point of view. Or, we can surround ourselves with a variety of diverse people, attitudes, beliefs and experiences. People who may even be smarter than us and have a different and valid point of view. This latter approach has worked well for me. But I must say it’s an ongoing learning experience. Four months ago, I took on a new role as President and Chief Operating Officer. A major priority for me and the system was to re-ignite our business in North America which, quite frankly, has been flat in recent years. For me, personally, this posed a challenge because the vast majority of my career has been spent outside North America. This meant I had to jump in and learn fast. It meant establishing new sets of relationships; relationships with our people, our customers, our bottlers, our suppliers and our community leaders. And I’m not done. We are just getting started. While we’re not ready to proclaim a turnaround yet in North America, I will say, emphatically, that day will come. And it will come soon as it is already happening in many challenging markets outside the United States. But before it does, it will force all of us out of our skin, stretching and growing, together. The third and final lesson I’ve learned about relationships is probably the most basic: the power of the network – the strength you get from being part of something that is larger than yourself. Robert Woodruff lived and managed by one simple credo that he wrote down and kept on Continued on Next Page BGS INTERNATIONAL EXCHANGE FALL 2007 WWW.BETAGAMMASIGMA.ORG 5

‘BETTER TOGETHER’ (cont. from page 5) his desk. It said, “There is no limit to what we can do or how far we can go if we don’t mind who gets the credit.” That’s really the power of the network, and I know you’ve already experienced this power first-hand in your own life. Greatness and excellence are rarely, if ever, achieved alone. If you look close enough at any achievement you will see that it’s made up of many contributors. There’s a great metaphor for this over at Turner

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“We can elect to create networks of people who see the world exactly as we do, and not venture too far outside that comfortable point of view. Or, we can surround ourselves with a variety of diverse people, attitudes, beliefs and experiences. People who may even be smarter than us and have a different and valid point of view.” Muhtar Kent, President and Chief Operating Officer, The Coca-Cola Co.

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Field. When you go to the (Atlanta) Braves (baseball) game tomorrow night I want you to do me a favor. Be sure to make a trip up to the Skyfield above the left-field fence. Up there you’ll see, up close, the giant 40-foot contour Coke bottle. Now, from down below in the regular seats it looks like a colorful work of sculpted metal – a monument to Southern folk art. As you get up close, however, you’ll notice that it’s made up of everyday items found at any baseball stadium, including: 5,788 balls, 983 bats, 79 fielder’s gloves, 23 catcher’s mitts, 24 jerseys, 64 bases, 48 batting helmets, 16 chest protectors, and scores of other objects. None of which will be individually visible from your seats down below. They are all, however, part of something that is truly great and inspiring; part of something that is bigger than themselves. That brings us back full circle. Being there for people in the tough times as well as the good times. Getting out of our skin and growing through new relationships. And harnessing the power of the network. That’s what I’ve learned.

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Did you enjoy this article? Let Beta Gamma Sigma know! Send your comments to: exchange@betagammasigma.org

ver half of the world’s major exporting countries still lack the political will to prosecute foreign bribery, according to a new report by Transparency International. “Stronger measures must be applied to ensure compliance by governments that have not shown the political will to prosecute foreign bribery,” said Huguette Labelle, chair of Transparency International. “Inaction by one country undermines enforcement by others, ultimately hurting international competition and business.” The report shows that more than half of the 34 countries that have signed onto the Convention on Combating Bribery of Foreign Public Officials are not enforcing the agreement or keeping their commitments. Countries that have agreed to the Convention account for approximately two-thirds of the world’s exports of goods and services. The news isn’t all negative, however. The report shows that there is “significant enforcement” in 14 countries, compared to 12 in 2006 and eight in 2005. Of the eight largest exporters, the report shows that France, Germany, Italy, the Netherlands and the United States have made significant progress. Labelle said all countries should see this effort as significant and should do all they can to improve.

Many Countries Still Not Doing Enough to Stop Bribery

“Allowing companies to compete through bribery is short-sighted and will backfire,” Labelle said. “Major exporting countries stand to gain by complying with their own commitments and stopping companies from undermining efforts to improve governance and strengthen institutions overseas.” The key problem in non-enforcing countries is lack of political will, according to the report. Additional obstacles identified include national legal systems that do not sufficiently comply with the Convention’s provisions and a lack of resources, which in turn hinders investigations and prosecutions. Finally, the report indicated that rigorous company compliance programs are missing in many countries that are economic powerhouses and the base for major multinationals. The report stressed that it’s very important to increase the awareness that bribery is illegal. This, combined with better complaint procedures and whistleblower protection 07-460sa Group 8/9/07 1:21 PM for publicBeta and Gamma privateSigma:Educator sector employees, will Ad increase willingness to report cases.

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ith a soaring economy and an expanding “soft power” initiative to expand its global influence, China appears on the road to superpower status. Yet, in recent years, India has emerged as a contender with a booming IT sector, GDP growth that rivals China’s, and a similarly massive labor force. The rapid rise of the world’s two most populous nations has spurred discussion on whether democratic India or authoritarian China will emerge as the greater economic power. The following are excerpts from an online discussion conducted in June 2007 by the Council on Foreign Relations. The complete discussion is accessible at www.cfr.org. Manjeet N. Kripalani Indian Bureau Chief for BusinessWeek Edward R. Murrow Press Fellow at the Council on Foreign Relations

ndia and China have been described as “non-identical twins.” The two countries have much in common: a proud, ancient culture with a central global role in the pre-colonial era, intellectual sophistication, and recently, poverty, and a large, young, hard-working population, which is nationalistic and has high aspirations. Both nations want to reassert their historical roles, but have chosen diﬀerent paths to achieve their goals. India’s path has been democratic, China’s authoritarian. India’s model is that of bo�omup, demand-driven, grassrootsled change, without the help of foreign direct investment but with local entrepreneurial energy. Unlike China, which has grown on a manufacturing base, India’s

Thoughts on the Emerging Gl lopsided, politically motivated policies have made its blue-collar labor uncompetitive. Consequently, India’s growing on the back of a high-end, hightech services industry and entrepreneurial energy. Most important, India has chosen social equity over economic equity; choosing democracy and instituting universal franchise and affirmative action programs immediately upon independence from British rule in 1947. Those moves empowered the vast underprivileged in India, whose voices had been suppressed for centuries; through the ballot box, and through their elected representatives, they were heard on the national stage. Now many poor, lower caste Indians are state and national leaders. This political mobility provided social dignity – a choice they have made over economic parity. With the hard work done, India is now turning its a�ention to the painful task of economic equity. China, on the other hand, is the model of elite-run, top down, foreign direct investment-driven, manufacturing and exports-led, supply-side growth. It chose economic equity over social and political equity. But India has done the hard work first – overcoming centuries of social injustice of the caste system, and becoming inclusive, whilst staying largely tolerant, pluralistic and democratic. Economic growth will take off as a young, confident population releases its creative, entrepreneurial juices, less reliant on the state for jobs or assistance. China’s economic miracle is admirable, yet its social and political record is not. China’s hard work will now start: teaching freedom of thought and action to a people who have lived with obedience for decades; teaching them to negotiate for their rights when the only way they know is authoritarian. How will the Communist party evolve to encourage debate from within and tolerate debate from without? How will the Chinese, accustomed to a world of black and white, navigate today’s shades of grey? The answer is unclear. Perhaps it will be as hard for India to get its economy on a par with China’s as it will be for China to get its politics and society as integrated as India’s. Perhaps both nations, using divergent paths and models, will reach the same destination of giving their people a decent, dignified and prosperous life at the same time.

“India and China are the two giant experiments of our time. No other country has attempted to do what they are doing. These two ancient cultures dominated and changed world history in the past...India and China will once again change the course of world history.” Manjeet N. Kripalani, Indian Bureau Chief for BusinessWeek Edward R. Murrow Press Fellow at the Council on Foreign Relations

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lobal Economic Superpowers Adam Segal Maurice R. Greenberg Senior Fellow for China Studies at the Council on Foreign Relations Author, Digital Dragon: High-Technology Enterprises in China

few hours a�er I appeared in Mumbai on a panel on China and India, I met with a CEO of one of India’s most successful so�ware companies. “Everyone is too polite to say it,” he told me, “but the race is over. The Chinese have won. We will do well, but we will not catch up.” The numbers would appear to bear him out. Until the early 1990s, per capita income was about the same in the two countries. In 2005 China’s GDP was more than three times India’s, its per capita income more than twice India’s. Over $70 billion in foreign investment has flooded into China, less than $7 billion into India. China’s exports totaled $762 billion, 7.3 percent of global share, while India exported $95.1 billion. Even in the service sector, where India a�racts the most a�ention, China held a larger global share of commercial services. Beĳing also has done a be�er job improving the material life of its citizens. Take just one example. In 1999, as part of the World Millennium Development Goals, the UN called for countries to halve the percentage of underweight children and reduce the death rate for children under five by more than onethird by the year 2015. China accomplished this goal last year. Over the same period of time, the share of children who are undernourished dropped by only 6 percent in India. Forty-seven percent of children under five remain underweight. These in the long-run may be the wrong measures of “success,” overvaluing GDP over political freedom. Others note two strengths that do not show up in these ledgers: India’s youth and its democratic system. But these, for now, are measures of potential, not of outcome. China (until demographics catch it) also has a young population with a new mindset and energy for change, and its education system is expanding faster than India’s. Indian democracy faces the challenges of not only managing religious and caste tension, but also pushing economic liberalization further. The economic reforms that might help India’s poorest – changes to labor laws, the privatization of state industries, and reforms of fiscal policy – are the same

ones that will inflict the most shortterm pain on those at the bo�om. With the voting rates of the lower classes and castes already high and rising, few governments at any level have the ability to inflict short term pain on voters. Yes, China is still a one-party state, and it probably will be for a long time. But something is happening on the ground – there are now, for example, over 350,000 nongovernmental organizations – and it may be enough to push the inevitable political accounting further down the road. Kripalani For sure, the Indian business elite admire China’s success and bemoan India’s plodding democratic process; the endless debate about economic reforms; the three-stepsback-one-step-forward, drunkenman’s-walk that is the Indian growth pa�ern. Business prefers predictability. But Indian politicians, who are closely connected to their constituencies’ needs, take a different view. A few years ago, the chamber of commerce took a group of Indian parliamentarians to China to show them what the competition looked like. I asked one of them a�er he returned, “How was China? Did it make you think differently about India?” And he replied, “When I got out of the airport, I thought I’d stepped into America. Everywhere in China there were billboards of U.S. brands and U.S.-style skyscrapers. China wants to be America. We don’t want to be like anyone; we just want to be more of ourselves.” Continued on Next Page

“Clearly we are seeing a historical righting of the balance of inﬂuence in the world, away from Europe and North America, and toward Asia. China and India will be major poles in this new world.” Adam Segal, Maurice R. Greenberg Senior Fellow for China Studies at the Council on Foreign Relations; Author, Digital Dragon: High-Technology Enterprises in China

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‘INDIA & CHINA’ (cont. from page 9) Segal I would disagree with the impressions of the (Indian parliamentarian) returning from Shanghai. China has not articulated a coherent alternative to India’s (but given Chinese concerns, primarily the United States’) multi-ethnic, liberal democracy. China is so clearly exerting its influence today through bilateral trade relations, an increasingly activist role in multilateral institutions, and growing military might. In a 2006 survey conducted by the Chicago Council on Global Affairs, Indians and Chinese both viewed their influence in the world today as second only to the United States. But when the same question was asked in different countries, India placed last in a list of nine countries (China also fell, but usually to about third). China does not want to be the United States. It wants to be as

powerful as the United States, and most of the world thinks it is moving down that road. Kripalani China’s strengths are visible. India’s strengths are invisible. Both have diﬀerent pasts and presents, and we will see where the future leads them. The truth is that India does not see itself in a race with China. India truly wants to chart its own course, and is willing to pay the price of slower economic growth. China, too, is charting its own more ambitious course. For now, from what is visible, the Chinese people seem willing to pay the price of freedom for economic might. Even if they are given political freedom, they may choose to have exactly the same government, the same system – but then it will be their choice. India and China are the two giant experiments of our time. No other country has a�empted to do what they are doing. These two ancient cultures dominated and changed world history in the past. The rise of the western, industrialized powers in the 19th and 20th centuries was a brief interruption. India and China will once again change the course of world history – for now India will do it though its so� power and China through its hard power. Hopefully, they will learn from each other. Then Asia will regain its central global status. Segal If India does not see itself in a race with China (and I suspect it does), then it be�er wake up, because China is engaged in a race with India, as well as with Japan and the United States. When I was in India, some of the CEOs I spoke with suggested the two economies were perfect complements. I responded that I doubted the Chinese

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wanted to complement anyone’s economy, and that they would try to do everything on their own. And they are. Beĳing is now trying to develop a globally competitive so�ware industry through a combination of top-down initiatives, such as the State Council’s Document No. 47, which identifies a series of specific targets for the industry, and the Ministry of Science and Technology’s China Offshore So�ware Engineering Project as well as joint ventures with companies such as Tata Consultancy Services. Clearly we are seeing a historical righting of the balance of influence in the world, away from Europe and North America, and toward Asia. China and India will be major poles in this new world. India, as a multi-ethnic, tolerant democracy and developing economy, can offer important leadership to this new world. But for India to fulfill this role, it will still need to build the traditional measures of hard power. It will be be�er for China, India and the United States if Indian strengths do not remain invisible. The complete transcript of this online discussion is available for viewing at the Council on Foreign Relations website www.cfr.org.

CHINA vs. INDIA

Expert Views on Regional Supremacy Pete Engardio Senior Writer, BusinessWeek; Editor, Chindia: How China and India Are Revolutionizing Global Business

n terms of which country has greater long-term potential, it depends on how you measure success. If one means sheer GDP growth and exports, China should continue to trump India for at least another decade, and perhaps longer. China’s model is all about promoting rapid economic growth at all costs. Also, China likely will remain far more open to foreign direct investment in many sectors for quite some time, meaning its industries will keep getting a bigger push. And it will be a more important market for foreign companies. But if one measures success on the impact of its companies on the world stage, I vote for India. Strip away multinationals and Taiwanese electronics companies, and China’s industrial achievements are much less impressive. The mainland’s big high-tech companies, in particular, seem to be struggling even though they have every advantage in the world, such as access to what is becoming the world’s biggest consumer market for many items. Unlike China, (India’s) biggest companies – like the Tata Group, Reliance, Infosys, and Ranbaxy – are led by modern, professional managements that are proving they can compete globally. What’s more, they are doing so in knowledge-intensive, higher value-added industries.

Over the very long term, meaning 15 years and further out, India has greater raw potential for high growth. The simple reason is demographics. China has one of the world’s most rapidly aging populations. That means Baby Boomers will soon begin retiring en masse, while the workforce will stop expanding. India, by contrast, has a much younger, growing population, meaning it will soon be the world’s biggest source of new workers. It also will have more time to solve basic social needs such as health care and pensions. China faces the danger of seeing the bulk of its population retire into serious poverty and without adequate health care. Because India just now is starting to witness a takeoff in heavy industry, it also has more time to correct a budding environmental crisis before it gets out of hand, as in China. China can well aﬀord the he�y investments required to start cleaning up its environment and to provide a social safety net. But that means it will have to start diverting resources for industrial expansion, and that could also slow down growth. Continued on Next Page

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‘CHINA VS. INDIA’ (cont. from page 11)

Dr. Rahul Mukherji Associate Professor, Centre for Political Studies, Jawaharlal Nehru University Editor, India’s Economic Transition: The Politics of Reforms (Oxford University Press, forthcoming September/October 2007)

ndia’s overregulation is a major bottleneck for the promotion of its competitive industries in India. Overregulation was built over decades on the premise that state 40 intervention and a closed economy were good for India’s development 35 aftermath of colonial rule in in the 1947. It was reinforced by the logic of the 30 Cold War. This policy became especially prominent from the mid1950s 25 and gained momentum in the early 1970s. Political, bureaucratic and20commercial interests favoring a closed overregulated economy became 15 entrenched over a period of time. While some East Asian 10 countries opted for export orientation in the late 1960s, China in the 5 late 1970s; India’s gradual reforms evolved at a very slow pace from the mid-1970s, gained some

momentum in the mid-1980s, but really took off after the balance of payments crisis of 1991. India’s reforms took off more than a decade after China’s. The good news is, while evolutionary change renders the process of change more tedious, reversion to overregulation and closure are not very likely. What distinguished India from China was perhaps India’s more gradual pace because reforms in India could be vetoed by a number of players. It evolved by making piecemeal changes, often leading to a situation where neither the state nor private actors were willing to make sacrifices. Progress often occurred in response to crises of investment when financial crises necessitated the promotion of private and often foreign investment. The extent of success in a sector often depended on whether decisions

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could be made exclusively at the elite level or whether they were likely to become issues that would affect the ballot box. India’s telecommunications succeeded to a greater extent than power sector reforms partly because telecommunications tariffs were not considered a right but free electricity was considered a right by farmers. Moreover, rampant thefts by the industrial and middle classes characterized electricity markets. The gradual evolution of private investment and competition in the telecom sector in response to financial crises made the industry competitive by world standards, whereas the state had great trouble in securing private investment in the power sector. Similarly, India was able to reform its industrial and financial sectors to a significant degree because they did not affect the politics of the ballot box. However, India could not implement a policy of flexible labor laws. Trade unions in India, which constituted less than 10 percent of the labor force, were a well organized lobby. Inflexible labor laws protecting 10 percent of the work force worked to the detriment of 90 percent of the toiling masses. Economic reforms, which were largely a response to an unsustainable fiscal situation, could not be reversed by left of Centre parties in power either in the Centre or in the states. The centrist Congress Party ushered reforms in 1991; the right-wing Hindu nationalist Bharatiya Janata Party (BJP) sustained them (1999-2004), and, the Congress-Left coalition (2004-present) has pursued them. Second, investments in productive activities entailed regulatory changes, which needed to be pursued by governments in the sub-national states of the Indian federation. While the reforming states in the South and the West were doing well, states in the North were performing moderately well, and the East was lagging behind. Some of India’s poorest states also carried the majority of its people. Third, economic reforms needed to be complemented with welfare policies, which were typically less developed in poor post-colonial states. This required attention to

the promotion of economic growth, while at the same time ensuring that human capital was adequately nurtured to sustain the growth. The human condition of the majority could build an enduring winning coalition favoring pro-growth policies. Gradual home-grown economic reform based on lessons of the past and consensus building was politically more sustainable than the shock therapy administered to many countries in East Europe. India had a long way to go in the direction of consolidating broad pro-growth coalition. What do you think about this topic? Share your opinions with the editor: exchange@betagammasigma.org

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Workplace Trends the survey. “It’s more an expression of the difficulties of combining responsibilities at work and home.” According to Gahrmann, author of Succeeding as a SuperBusy Parent, societal expectations – what is expected of women versus what is expected of men – still factor heavily. “In the home, gender roles are changing slowly, so working mothers are still doing most of the housework, cooking, shopping and caring for sick children,” she said. As a result, she said, many women feel overtaxed and pulled in too many different directions. Fathers given the same options feel the same way they did a decade ago: “Give me the job.” Approximately three-fourths of all fathers responded that the ideal situation for them is to work full time. Do mothers believe it’s good or bad for society when they work full time outside the home? It depends on which group you ask. A significant number of those working believe it’s good for society, while many (but certainly not a majority of) stay-at-home moms believe working full time outside the home is a bad thing. In addition, full-time working moms tend to judge themselves more harshly as parents. Mothers working full time give themselves slightly lower ratings as parents, on average, than do at-home mothers or mothers employed part-time. So, in 2007, does society still favor the concept of the “stay-at-home mom?” “I don’t feel that society places mothers who stay at home on any sort of pedestal,” said Gahrmann. “There is some envy from those who work (whether by need or choice) and have less flexibility or opportunity to be involved with many of the community or school-related functions. However, it’s time to stop (participating in) the mommy wars and to start empowering people to make choices for their own life.”

Fewer Mothers Feel Full-Time Work is Best for Them

ow much change can be expected in a decade? When it comes to the number of mothers who want to work full-time outside the home, the answer is, “Quite a bit.” Among mothers with minor children who hold fulltime jobs, only one-in-five say full-time work is the ideal situation for them. For those not currently working, only 16 percent would rather be working full time if given the choice. In 1997, responses from a Pew Research Center survey indicated that opinions of mothers were quite different. For those holding jobs a decade ago, more than a third responded that full-time employment was the ideal situation for them. Among those that stayed home, almost a fourth wished they could be working full time. “Working mothers grew tired of worrying about their kids and found other ways to manage,” said Natalie Gahrmann, author and work/life effectiveness coach (http://www.nrgcoaching.com). In the past decade, “many families have learned to do with less of the material things in order to have a parent home with their children.” She also stressed that affordable high quality childcare is still an issue for many families, leading more to decide to stay home. Others agree that staying home may not be many mothers’ first choice, but the best choice for their situations. “I don’t think it means people are going to give up their jobs,” said Cary Funk, a Pew researcher who worked on

“In the home, gender roles are changing slowly, so working mothers are still doing most of the housework, cooking, shopping and caring for sick children.” Natalie Gahrmann, work/life effectiveness coach; author of Succeeding as a SuperBusy Parent

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Workplace Trends

“

’ve been treated unfairly.” That’s the sentiment among many workers in the U.S., whether they belong to a “diverse” category or not. A new study by CareerBuilder.com and Kelly Services shows that many American workers feel they’ve been treated unfairly in the workplace. The study sought to find out the sentiments of diverse workers – African Americans, Hispanics, Asians, females, gay/lesbian/ bisexual/transgender (GLBT), disabled, and individuals age 50 or older – and those described as “non-diverse” – Caucasian males not fitting into any of the diverse categories. Twenty-three percent of diverse workers cited their diversity as the reason for the unfair treatment or discrimination against them. Disabled workers claimed the highest percentage of discrimination (44 percent), while Asians and older workers reported the lowest (21 percent). More troubling is that 19 percent of diverse workers described the discrimination against them as “severe,” while 55 percent reported it as “moderate.” “While employers have come a considerable way in implementing fair and equal workplace practices, this study indicates that there is still much room for improvement,” said Rosemary Haefner, vice president of human resources at

Workers Feel Discrimination and Unfair Treatment Rampant in the Workplace

21%

22%

54%

50%

22%

African American

26%

Asian

1% 14%

29%

42%

26%

Hispanic

No Effect

Mild

Moderate

Severe 2%

2% 15%

25%

23%

63%

61%

11%

14%

13%

Disabled

Female

GLBT

69%

16%

Age 50+

72%

CareerBuilder.com. “Diverse perspectives fuel rich idea generation, creativity and strong business performance.” Reports of discrimination and unfair treatment were not limited to those in diverse categories, however. Fifteen percent of non-diverse workers said they felt discriminated against or treated unfairly in their workplace, and that the main reason for that discrimination was their nondiverse background. Unfortunately, workers in both categories say that their cases of discrimination go unaddressed. A majority never make a complaint with supervisors or compliance officers, with many feeling they will lose their jobs or at least be labeled as “trouble-makers” by their employers. Haefner says that organizations profit by ensuring that discrimination is dealt with properly, and pay the price when they don’t. “Companies that are not fostering a work environment that embraces and cultivates diversity and open communications are working against themselves,” she said.

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