Lee Kuan Yew begins an article in Forbes.com with:

Even though the [Indian] economy’s annual growth rate has been 8% to 9% for the last five years, India’s peaceful rise hasn’t led to unease over the country’s future. Instead, Americans, Japanese and western Europeans are keen to invest in India, ride on its growth and help develop another heavyweight country.

He contrasts that with the apprehension associated with China’s rise:

Why has China’s peaceful rise, however, raised apprehensions? Is it because India is a democracy in which numerous political forces are constantly at work, making for an internal system of checks and balances? Most probably, yes–especially as India’s governments have tended to be made up of large coalitions of 10 to 20 parties.

“Internal system of checks and balances” reminds me of a joke. At a particular seaport, they were unloading shipments of live crabs in crates from various countries. The crates from all countries, except those from India, had lids on them to prevent the crabs from escaping. The Indian exporter explained that the Indian crabs have internal checks and balances: if some crabs try to escape, the others pull them down and therefore those crates don’t need to have lids.

Lee Kuan Yew continues:

One example of India’s “checks and balances” at work was the suspension of its talks on a U.S. nuclear power deal. Although this deal is manifestly in India’s interests, 60 communist MPs–part of the Congress Party-led coalition government–opposed the deal. Subsequently, the Communists allowed negotiations to resume, reserving their position on the outcome. India’s development will, from time to time, run into domestic obstruction.

The Indian communists do the job of keeping a lid on the Indian economy and prevent it from escaping the crate of Nehruvian socialism. But the communists are not the problem — they are a symptom of a deeper problem with India. In the broadest terms I think it is Indian culture. Saying this exposes me to all sorts of charges. But unpalatable though it is, it is an inescapable conclusion. LKY goes on:

The speed of China’s change and the thoroughness, energy and drive with which the Chinese have built up their infrastructure and pursued their goals spring from their culture, one that is shared by the Koreans, Japanese and Vietnamese, who adopted the Chinese written script and absorbed Confucian culture. The Chinese are determined to catch up with the U.S., the EU and Japan. Fast-forward 20 to 30 years and the world will have to accommodate a more technologically advanced and economically more sophisticated China, whether under a single- or multiparty system.

The drive to excel derives from a knowledge of one’s place in the larger context, an understanding of one’s own worth, a certain confidence and pride in one’s heritage. At least in the Indian policy-making circles, this is impossible as they all Macaulay’s children.

LKY states what India needs to do simply:

India does not pose such a challenge–and won’t until it gets its social infrastructure up to First World standards and further liberalizes its economy. Indeed, the U.S., the EU and Japan root for India because they want a better-balanced world, in which India approximates China’s weight. [Emphasis added.]

So what is social infrastructure and what does “liberalize the economy” mean? I think social infrastructure is the set of rules that govern society. Do the rules allow individuals freedom or do they make the individual subservient to the group? Is discrimination institutionalized in the legal and civil code? Does the system create incentives for groups to fight against other groups?

How can we build social infrastructure if we are stuck with governments that insist on dividing and ruling? Can we at least have an argument about this?