Rural Economic Development: Lessons from an Indian Billionaire

My reading takes me far from the shores of Lake Herman this morning, to an interesting counterexample of sorts to all my Wendell Berry-Kirkpatrick Sale anti-corporate exhortations. Mukesh Ambani is the modern Gandhi, says the New York Times, in that he is currently India's most famous and powerful private citizen. But would Gandhi himself be provoked out of his non-violence to hear himself compared with India's richest man and owner of petrochemical giant Reliance Industries?

Gandhi was a socialist; Ambani's family has built its fortunes through "bare-knuckles capitalism." But in some odd ways, Ambani shares Gandhi's goals of Indian self-reliance and support of village life:

Two-thirds of India’s 1.1 billion people still live off the land, and to combat the cycle of poverty that ensnares rural dwellers — while presumably making a handsome profit for his company — Mr. Ambani also wants to foment an agricultural revolution.

He has begun building a nationwide network of hundreds of Western-style supermarkets and other retail outlets, hoping to connect them directly with farmers who have traditionally sold to middlemen, many of whom pay less than market prices and are widely regarded as deceitful and usurious... [Anand Giridharadas, "Indian to the Core, and an Oligarch," New York Times, 2008.06.15]

Imagine Wal-Mart tapping hundreds of local producers around each of its Supercenters instead of big global suppliers. Imagine making a living making actual stuff you and your neighbors can use. Would this model work... or is it just one more way rural folks become serfs of faraway corporations?

Ambani seeks to combine small-scale production with his large-scale capital in manufacturing as well:

One of the more intriguing ideas swishing around is a quixotic plan for making India a rival to China in manufacturing. The Chinese model consists of large factories in urban areas, populated by millions of migrant laborers who produce goods at cheap prices. Similar efforts have lagged in India, because it remains difficult to acquire land from farmers here, because corruption hinders large infrastructure projects, and because red tape remains so sticky.

Mr. Ambani’s vision is to turn India’s weakness on its head. If manufacturing remains small-scale and fragmented, let it stay that way, he says. “The next big thing is how do you create manufacturing with decentralized employment,” he says. “The Chinese have got very disciplined top-down systems. We have our bottom-up creative systems.”

He mentions products like handmade leather sandals from the Sugar Belt a few hours south of Mumbai, tie-dyed Bandhani saris from Gujarat, artisanal pottery, clothes, jewelry and the like. These wares would be produced in rural areas, sometimes in a villager’s own home. Reliance would forgo manufacturing them and instead teach residents what to make, gather the wares from disparate villages, oversee quality and market and distribute the products.

This is yet another sense in which Mr. Ambani, the most unlikely of Gandhians, is vaguely Gandhian. Mr. Gandhi was famous for his passion for small-scale rural production, symbolized by the spinning wheel. (It is, of course, unlikely that Mr. Gandhi would have endorsed Mr. Ambani’s plan to profit on such goods.)

“How do you really bring about, in a country of a billion people, the individuality of every single individual?” Mr. Ambani asks. “How do you make sure that you create systems that empower everybody and bring them to their true potential? This is what actually Gandhi taught us" [Giridharadas, 2008.06.15]

Massive corporate systems promoting the potential of every individual? My anti-corporate soul reels at the thought. But then how many times do Mrs. Madville Times and I look up from one of our brainstorming sessions and think, "If we just had some capital, we could change the world!"

Corporations can wreak a lot of havoc. I still say Hyperion and TransCanada will do South Dakota more harm than good. But India's Mukesh Ambani reminds me that I can't throw out all the capitalists with the corrupt bathwater. He's making billions off dirty, polluting petrochemicals (something his daughter has reminded him of), but he's putting at least some of that wealth toward business projects that might help hundreds of millions of rural folks live better and more (dare I say it?) independently.