What Europe can learn from India
Pundits often point to the US as a model for Europe. They should be looking east instead.
By IMD Professor Amit S. Mukherjee
The EU is wrestling with seemingly insoluble human and financial crises. Pundits routinely draw unfavorable parallels to the US to illustrate needed changes. They say Europe needs a stronger central bank and greater political integration. Pointing to Puerto Rico's $72 billion debt crisis, they note that financial markets have assumed that unlike Greece, this US Territory will make a soft landing.
This technocratic prescription, though valid, doesn't address a key fact: Europe's diverse population will impede the creation of the "US of Europe". India, which has comparable diversity, can teach much. But will Europeans be willing to learn from an emerging economy where corruption is rife? They should. Indians have got a lot wrong, but they got this right.
The EU's efforts at managing diversity have been woeful. Its politicians haven't made a cogent case why diverse peoples should come together. Politicians – like Jean-Claude Juncker – who ardently champion the EU, offer technocratic rationales, not ones that ordinary people can feel in their guts. The absence of an emotion-laden rationale for unity has produced today's "What's in it for me?" ruptures along national and linguistic lines, as well as the alienation of European Muslims.