India Is On The Brink Of A Huge Step Forward

India Is On The Brink Of A Huge Step Forward

EDITORIAL BOARDCHRISTIAN SCIENCE MONITOR DEC. 25, 2013, 3:19 PM 5,851 11

Two exceptional seeds were planted this year in India, the world’s largest democracy. Each one is worth watching in 2014 for its potential global impact. The first is the coming to power of the Aam Aadmi (Common Man) party in the state that includes the capital, New Delhi. Led by anti-corruption crusader Arvind Kejriwal, the party was hatched only a year ago on the premise that India’s poor would actually vote for clean government rather than trade their ballots for handouts.After a surprising showing in a Dec. 4 election, Mr. Kejriwal was able to form a minority government that took office this week. In defiance of pundits, his party defeated a three-time chief minister and booted out the ruling Congress party. If he can make progress in curbing graft for the state’s 15 million people, he plans to field candidates in national elections next year.

The other seed is a new law that creates an independent national agency to investigate and prosecute civil servants and elected officials for corruption. The measure was first proposed in 2011 after mass protests against corruption. But India’s lawmakers only passed the bill in the wake of Kejriwal’s electoral insurgency.

None of the world’s big and largely poor nations, such as India, China, and Brazil, has found a way to beat endemic corruption. Chinese leader Xi Jinping warns that corruption could “ruin the country.” But after a year at the helm, he has achieved little. One reason is that the Communist Party crushes popular impulses for fair and honest government. In democratic India, such impulses can find fertile ground.

Traditional Indian politics, however, often divides people by category – caste, language, region, or religion. Once in power, politicians rely on patronage and the doling of benefits in order to stay in office. The Common Man Party avoids that trap with a unifying theme of the need for transparency and accountability in government.

After the 2011 protests, Kejriwal tried to work outside politics and alongside social activist Anna Hazare, whose protest fasts sparked a nascent movement against corruption. But when lawmakers failed to enact the proposed bill, Kejriwal decided to build a party. He tapped into India’s rising middle class and disenchanted poor who know the world’s second most-populous nation can succeed only with better governance.

“It is not me who will be the chief minister,” he said this week. “It will be Delhi’s common man who will be the chief minister. Alone I cannot do anything.”

He and his youthful cabinet began well by not residing in official mansions or being escorted by security caravans. As a former tax official, he has seen government close up. As a trained engineer, he plans to methodically root out graft.

He is up against a culture that often prevents the spread of local success stories. Still, after two decades of looser state controls over the economy and increased ties to the world, Indians may be ready to shed the stereotype of a country that runs on greasy palms and monied politics. The average age is in the mid-20s. Income per capita has doubled in the past decade.

Anti-corruption reform in India will still need private activists and a watchdog media. And the two major parties, Congress and the Hindu nationalist Bharatiya Janata Party, must adjust to this new popular sentiment.

If India can make this critical course correction, it just might serve as a model for China and similar nations and show that prosperity is best built on a foundation of openness, freedom, and honesty.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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