Wednesday, September 3, 2008

Indians Are Bad for Indian Business

*Make sure to read the update, "India, When it Can't Get any Worse" found here.*

Huh? In today's The Wall Street Journal print edition, there is an article titled, "Protests in India Push Tata to Stop Building Car Plant." (03 Sept. 2008, A8).

Tata Motors has a design and wants to build the world's cheapest car, the Nano. Priced around $2500, "...the minicar has been touted around the world as revolutionary." It is revolutionary mainly because of its price point, but also because of its Indian construction for global consumption.

However, some farmers near the proposed "...plant in Singur, in the eastern state of West Bengal, about 25 miles from Kolkata..." are upset that they have "lost" their land. Lost is a relative term. Tata purchased 1000 acres from farmers, though some decided not to accept the money. Instead, they are organizing with other farmers and politicians to demonstrate against the plant.

This is only the beginning of the incongruity. From the article, "...Tata is known as one of India's most powerful, yet socially responsible employers." Additionally, the building of the plant brought over 4,000 jobs to the depressed area. The total investment was about $345 million, and 60 suppliers were setting up to support the plant and production. All of this was promoted by the local ruling party, the Communist Party of India (Marxist).

Confused yet? A benevolent corporation, setting up shop in a poor area, with good jobs (close to 20,000 new jobs), supported by the Communists (of all people), is seriously considering closing their plant because very poor people (subsistence farmers) want to stay poor. Of course, local politicians are in on the action, "... to portray the Communists as insensitive to the interests of small farmers and local constituents."

It gets better. If Tata pulls out, it is almost guaranteed that no new investment will come into the state, leaving Mitsubishi Chemical Corp the loan survivor. Breathtaking, isn't it? By far, this has got to be one of strangest stories I have read in a long time. Communists are trying to improve the economy with private investment. The poor want to stay poor. A car made for poor people won't be made because the poor are protesting a factory and 20,000 new jobs.

Good job, protesters in Singur! Enjoy poverty!

Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.- Albert Einstein (Hat tip to

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