Why can't countries think like companies? By Kishore Mahbubani

http://timesofindia.indiatimes.com/home/stoi/all-that-matters/Why-cant-countries-think-like-companies/articleshow/45163437.cms

Why can't countries think like companies?
By Kishore Mahbubani
The Times of India
16 November 2014

When the history of the 21st century is written and a list is made of the century's greatest missed opportunities, the visit of President Xi to India will probably be on it. No, the visit was not a failure. But it failed to seize the great opportunity that beckons China and India in this century. Why was that? The simple answer is that the minds of Chinese and Indian policymakers are polluted with a European concept invented 366 years ago in the Treaty of Westphalia. That concept is "sovereignty". Why is this concept destructive? Let me explain.

Just imagine that China and India were companies, not countries. As companies, they would study each other's strengths and weaknesses objectively and see whether economic synergies could be exploited to make both companies profitable. Any such objective study would show that enhanced economic cooperation between China and India would be akin to a marriage made in heaven. India badly needs world-class infrastructure. As an infrastructure superpower, China has demonstrated that it can deliver super-highways, fast trains, and cheap power stations to India. And it can even fund them. At the same times, China is running short of labour. India has labour in abundance. Chinese manufacturers could become globally competitive by manufacturing in India. India would then become a manufacturing power.

If I were a McKinsey or Bain consultant looking around for companies with synergistic opportunities, I could not possibly find a better economic partnership. In his heart of hearts, Prime Minister Modi understands this because he visited China four times as chief minister of Gujarat to seize these opportunities. This is why Gujarat has about 31% of Chinese investment in India. President Xi also understood these opportunities. This is why he took the bold step to be among the first foreign leaders to call on PM Modi. Before the visit, the Chinese consul general of China in Mumbai, Liu Youfa, said that $100 billion of deals could be signed. Instead, only $20 billion were signed. So what went wrong?

Sovereignty reared its ugly head. While President Xi was in India, there was a Chinese incursion into disputed territory. The Indian media, predictably, went berserk. PM Modi had no choice but to read out a strong statement reaffirming India's "sovereignty" over the disputed territories. The concept of "sovereignty" is particularly toxic because it brooks no compromise. The words "sovereign control" mean absolute control.