The Star Deputy Editor Charles Kerich visited India and found a country with a robust economy, expanding middle class with buying power and growing pains
ELEVEN million Indian nationals now travel out of their country as tourists and Kenya could get a piece of the pie. The huge number of tourists has resulted from a burgeoning middle class with more spending power and spirit of adventure. “200 million people are now in the middle class with buying power,” explains Vishnu Prakash, the spokesman for the Ministry of Foreign Affairs. “Most go to neighbouring Sri Lanka and Australia among other countries."
Kenya tourism marketing in India is in the hands of High Commissioner, Prof Festus Kaberia, in New Delhi. He presented a concept paper on cooperation on tourism at a meeting of ministers of the Indian Ocean Rim States last week that seeks to have member countries promote each other's tourism sectors.
India has the world's second largest population at 1.2 billion, after China with 1.5 billion. With a growth rate of 1.6 per cent, it is expected to overtake China by 2035. This may not necessarily be a bad thing. "60 per cent of the population is young which makes it a strength for India as it now has a huge workforce," says Vishnu Prakash, the spokesman for the Ministry of Foreign Affairs. "We now have to harness the demographic dividend of such a huge workforce."
India is managing to harness the potential it has, with hundreds of companies in technology and pharmaceuticals providing jobs for millions of young people. At Bangaluru City (formerly Bangalore) I visited Infosys Technology, listed as the number one most valuable technology company in India.
Started in 1981 by seven people with US$ 250, it is today a global leader in the "next generation" of IT and consulting with revenues of US$ 6.604 billion.
At the Bangaluru campus, over 20,000 people mainly aged between 25 and 30 work as programmers, engineers, developers and other specialists. The company's Business Processing Outsourcing centre (BPO) alone has more than 4000 staff, providing services to several multinationals, some in the US and UK.
Standing at 90 acres with over 50 buildings, the company infrastructure is bigger that the United Nations Environment Programme (UNEP) complex in Gigiri, Nairobi. The 20,000 people use plenty of water and all the used water is recycled, treated and used to water the gardens, lawns and trees. It has won the state award for environment seven years in a row.
India has the world's second largest mobile phone users with over 865 million as of August 2011, with 10 to 12 million new connections every month. It has the world’s fourth largest Internet users with over 100 million as of December 2010. About 85 per cent of the population has access to a TV set and 100 per cent to radio. "This translates into awareness of the world and consequently to demand for opportunities for growth, equality, basic necessities and the right to participate in decision making," said Prakash.
Demand has also risen for better infrastructure. "In the last five years, India has been allocating 6 per cent of its 1.6 trillion dollars income to infrastructure development. We hope that in one and a half years this can increase to 2 trillion dollars and by 2030 we should be a moderately developed country," said Foreign Affairs minister S.M. Krishna.
Per capita income however remains low with a quarter of the population (300 million people) below the poverty line. Services accounts for 60 per cent of India's income followed by industry (20 per cent) and agriculture (20 per cent). One lesson Kenyans can learn from India is how to save money. With most income earning people in India setting aside up to 35 per cent of their income, dependence on foreign investment is low. It means that 35 per cent of money generated is ploughed back into to the economy to generate even more. India earns about US$ 25 billion a year from foreign trade, but spends a similar amount investing abroad.
According to the Foreign Affairs minister Vishnu, the biggest threat to this robust economy is terrorism. “We live in a difficult neighbourhood with 15,000 kilometers of land boundaries and 10,000 kilometers of maritime boundaries,” he said. “There is a terrorism network that targets India regularly. As they say, you can choose your friends but you can’t choose your neighbours.”
Prakash says that as a result, India maintains constant dialogue with its neighbours, particularly Pakistan with which relations sometimes become frost. “Terrorism is a cancer, a menace, a fire which consumes everybody,” said Prakash. Like Kenya, India has for some years now had a “looking East” policy of trading more with countries in Asia and officials say it is bearing fruit. For instance, there has been a 40 per cent growth of trade with South Korea since 1992.
It also has policy to explore and build more trade with Africa. The last big initiative was the India Africa Summit on May 2 2011 in Addis Ababa. “We are very keen to add greater content, dynamism and vigour to relations with Africa,” Prakash says. Perhaps Kenya can start by expanding its tourism marketing office in its High Commission in New Delhi, India. Just one per cent of India’s 11 million tourists is enough to double the 1 million tourists Kenya received in 2010. This would turn around our hospitality industry and inject much needed foreign exchange into the economy.