I was surfing through my laptop and stumbled upon this.Ok this is not exactly blog material pe se,this was something I was “supposed” to write for my college newsletter but lethargy got the better of me.
F1 Grand Prix.Slowly but steadily India is announcing her dominance on the stage of entertainment and technology.It brings forth very important questions.Are all the activities a blatant waste of money?Can we put the money used for these activities to solve our immediate problems of poverty and health care?Is urbanization the right way forward for a country with 60% of its population in its villages?How can you justify this expenditure?
We are still a developing nation,41.6% of our population lives below the poverty line(USD 1.25 per day),we are still an economy dependent on annual rainfall.Can we make a judicious investment of time and money in extravagant events like Olympics or the F1?.One way of justifying it is by referring to soft power.Soft power was a word coined Joseph Nye of Harvard University and used by Shashi Tharoor in one of his TED talks.And to quote him “It is essentially the ability of a country to attract other countries or people.”Physical values,foreign policies,geographical location etc constitute soft power.The aesthetic value of soft power lies in its ability to attract power and materialize it into profit.The US economy has thrived on soft power.It is the world’s largest manufacturer,it is home to 139 of the world’s largest 500 companies.How does soft-power come into the socio-economic scene?A cultural landscape favouring entrepreneurship,investment friendly policies,setting cultural and technological trends(read Silicon valley,Apple inc,Microsoft ,Hollywood,MTV,McDonalds etc) together have joined forces to contribute and create a brand value for the United States of America.This brand value has attracted the best brains in the world,cheap labour and an unquestionable willingness to work for the biggest and the most flourishing economy of the world.
F1 or the Olympics is still meant for the rich gliteratti.Maybe our country cannot afford to host them.But by hosting them you are making a statement of intent and exercising soft power,regardless of the obscurity associated with profit generating ability of event.Agreed F1 is a cruel joke being played on a billion people,but the long term benefits are worth the effort.We have come far away from the days of economic regulation,protectionism and social democratic policies.After the economic liberalization of 1991,India economy has flourished and to truly establish ourselves as the next global superpower we need to take our economy to the next level by encouraging foreign direct investment(FDI).To put it in a simpler language,the more we make others like our country the better it is for us.
A better way of looking at it is by looking at a hypothetical situation.Say after the F1,Ferrari appreciates the availability of cheap labour and infrastructure in our country and opens a manufacturing plant.Which inturn translates to 20,000 odd jobs in the plant,another 10,000 directly involved in building the plant.It would also mean prevention of brain drain by a small percentage.Engineers would be willing to work for a reputed company in their homeland.On seeing this the government relaxes the non-friendly norms and we see more investment from foreign countries.Entrepreneurs would be inspired by business friendly atmosphere and we could see our very own desi version of Apple or Microsoft.
To finish off,we need our rural areas to flourish as much as we need the urban cities to march forward.China is predicted to become the world’s largest economy by 2016 and it made a huge statement with the 2008 Bejing Olympics.We need to seize every given opportunity to enhance our brand value.For one would always prefer Nike over Paragon because brand value counts and our country is too big a brand to be ignored.
Frankly speaking I had my doubts about India hosting an event of this magnitude successfully,all the internet humor did not help the case either but Jaypee Sports International pulled it off.