The chairman of the financial consultancy Oxford International Group, Percy S. Mistry, headed a government-appointed committee that last year suggested measures to transform Mumbai into an international financial centre. Following the terrorist strikes in Mumbai, Mistry spoke to Mint about the fallout on that ambition and India’s image in the eyes of investors. Edited excerpts:
When you look at Mumbai as a powerful national financial centre and a potential international financial centre, you have to keep in mind that when New York was attacked, it was the world’s premier financial centre. When London was attacked, not once but twice, it was the world’s premier financial centre. Those centres were capable of a robust response.
The difference in India is the repetitiveness with which the attacks occur all over the country. What seems now to be taking hold in the public mind is: the US and the UK have dealt with the issue in one way and with a certain degree of effectiveness. The other country with which we are compared is China and that would have acted in a very decisive and different way. I think what is beginning to trouble the minds of both the Indian corporates as well as those people who want to invest in India is the sheer ineffectiveness of our forces of law and order. There just seems to be no confidence on anyone’s part.
I think you would have to have a singularly ignorant investor, either domestic or institutional, for this kind of incident to change your mind. The investors we have had understand the reality of democratic India. They understand that we are very different from China. We are not forceful, we are not decisive, we are not aggressive. We do things in a typically muddled sort of way. Obviously, what has happened in Mumbai this time is a game changer. Terrorists have not acted with this kind of aggression and sent out multiple teams to create scare and terror especially where there are concentrations of foreigners. It is very worrying indeed and that is very different to anything that has happened in the past.
Packing off? Foreign guests vacating the Taj Mahal hotel. Wednesday’s terror strikes will give the impression that India is a soft target where foreign citizens can also be attacked because India can’t protect them. Nesil Staney / Mint
It almost gives the impression that, since the US and the UK have been far more effective in blocking attacks on their territory, India has now become a soft target where not only will Indians be attacked, but US, UK and other citizens also will be attacked because of India’s incapacity to protect them.
That raises a whole new issue and a whole new dimension to how foreign investors may view us... If they feel terrorists in Pakistan or elsewhere have taken hold of the notion that look, let’s forget about trying to attack New York or London, it’s just too tough and too expensive, let’s focus on a soft target and we can kill all the Brits and Americans we want to, that would be fatal for India. But that only adds to the fact we create our own internal problems. Let’s not focus only on terrorism.
It is the internal rot, it is the ability of ourselves, without the help of terrorists, to damage ourselves that worries me equally.
I think what this shows now is that every single institution in India has now been permitted to degenerate. Now there is no single institution or state in India one can really rely on in terms of integrity, in terms of capacity, in terms of focus or mission. That is really troubling.
The general sense of the Indian population is that when it comes to our local forces of law and order, the police seem too wonderful in surrounding VVIPs (very, very important persons), and they seem to be wonderful in harassing and oppressing the poorest of the poor, they seem to be great at collecting hafta (bribes). When it comes to keeping Indians secure and safe, they fail abysmally. I think that sense is definitely taking hold. Frankly, the incapacity of the forces of law and order to do anything in this instance was made even more apparent by the speed with which the army and navy had to move in to deal with the situation.
For a mature, capable democracy, for the army and the navy to move in to deal with the situation, would be regarded as extreme, almost like a martial law-type situation. But in our case, it is now so generally accepted by everybody that our civil forces of law and order are so profoundly useless that the army and the navy almost have to move in as a matter of course. That is one impression that I think is going to hurt India.
The other thing that is going to hurt India is the seeming ineffectualness of both our Central home ministry and home minister and the bluster and bullying nonsense of our state home minister.
I don’t think it is helpful for the Opposition to start wagging the finger because I don’t think the opposition government would be able to do very much given the pathetic state of forces of law and order.
As told to Sanjiv Shankaran.