As the aircraft veered off the active runway at Jomo Kenyatta airport, my cellphone flashed “Airtel.” Upon clearing customs, I was pleased to note that our Kenyan distributor had sent an elegant Jaguar to pick me up.
Upon reaching the hotel, I put the kettle on and helped myself to a cup of Tetley Tea. It was then I realised that there was a common thread running through all these brands -- they are owned by Indians.
The rise of the Indian multinational corporation is, of course, old news. Indians have ventured out in the world, aggressively acquiring companies and brands since the turn of the new millennium.
In fact, Indian ownership of foreign brands is so common that very few people are surprised that, say, a quintessentially English brand, such as Peter England shirt, is actually owned by -- yes, you’ve guessed it, Indians.
Let’s move on to sunny Italy. Although a workaholic, my wife has a healthy habit of going on vacations to wind down.
As she drifted along the canals of Venice, the gondolier commentated on the buildings along the banks: “Thees beeg beelding, howned by Chinese. Actually, that one halso, that one too ...”
Again, none of this is breaking news. In fact, one reacts to this kind of information with a dismissive shrug of the shoulders.
It is well-known that the Chinese own large tracts of agricultural land in Africa, prime real estate in Europe, and various companies in the US, and elsewhere.
Yet, our “it’s a nothing burger” reaction to the rise of India and China Incorporated belies the monumental change in attitude that has taken place regarding foreign exchange policy.
Once fiercely penurious about spending hard-cash, these two countries had an epiphany that to earn foreign exchange one must be permitted to spend it.
It sounds so obvious, doesn’t it? After all, to export finished goods and earn foreign currency many countries have to import machinery and certain basic raw materials. Government policy in most countries, quite rightly, tends to be very relaxed about import of capital-machinery and raw materials.
Yet, the moment one expresses an interest to buy a company or brand overseas, policy-makers break out in hives, rushing to protect the nation’s foreign currency reserves from the grubby paws of avaricious, malicious business folks.
Well, at least, they once did. The Indians and Chinese realised that permitting local entrepreneurs to purchase the produce of foreign companies, while restricting them from acquiring foreign companies was an absurd inconsistency.
Ms Shyamala Gopinath, an erstwhile Deputy Governor of the Reserve Bank of India, said it best:
“Earlier, there was an accent on inward flows -- FDI, portfolio investments, joint ventures, and collaborations to tap the growing Indian market, and also technology transfers for enhancing competitiveness of Indian firms.
“Exports were predominantly the main door to step out towards globalisation. Now, the scenario has changed. There is a growing realisation that the future growth of Indian companies will be influenced by the share that they can garner in the world market, not only by producing in the country and exporting, but also by acquiring overseas assets, including intangibles like brands and goodwill, to establish overseas presence and to upgrade their competitive strength in the overseas markets.”
So, if Bangladeshis were permitted to acquire foreign companies, brands, licenses, etc, they would have fast and in-depth access to foreign markets. Moreover, investment within Bangladesh should also rise since manufacturing would most likely be shifted here.
It is encouraging that our policy-makers are warming up to this line of reasoning. Some approvals have already been granted. However, this acceptance is still in its infancy and a long way from becoming a routine matter.
Thursday, April 25, 2024
