I was a participant in negotiations for a joint venture between a large American corporation and a tiny Indian one. The key issue was the valuation of the new enterprise. After all the ingrediends for the calculations were poured into the cauldron, a mustard-like factor was added that brought up a thick pungent cloud. WACC, that vital additive is called, and is itself a mix of various factors, one of which is the business-risk attached to a nation.
When the cooking was done the valuation was disappointing for the little Indian company. It tasted not so good for them, and it seemed that a too-small portion had been served. “The WACC is not right,” they complained, and their Mumbai-based counsel agreed. “It is high because our top-management assigns a high risk to India,” the negotiator for the five-member American team argued. The Americans nodded, not looking at anyone. The soft-spoken counsel replied firmly, softly. “The kind of growth that’s going on here, America is the higher risk,” he told them. The Americans looked up from their meal that they’d been eyeing with approval. Their eyes were steady, and they held a dignified silence, and with them everyone fell silent, and I watched all the people in the room, seated round a U-shaped table with a well in the middle, and I felt happy for the Indian and his new-found pride, and respect for the dignity of the Americans. That was some weeks ago: the negotiations are still going on, and as you must have guessed, there isn’t silence between the parties any more. The final monies are being counted and, in the giving and taking, good graces have retreated many miles, but they’re raring to come back, because the two are good parties. They are all very nice people.
It is just that there is this thing about money.
Now I have in hand and in my iPad The Economist of this week, with the fine cartoon on its cover of the elephant that is India. The caparisoned elephant has braked, its brow is bristling, and its eyes are saying a thousand words. Some courtiers are pushing it and one of them is tugging at its trunk, but an elephant is an elephant and it can be terribly Indian. The thing that has come a good distance has refused to move now in mid-journey. There is not in the picture a mahout with the little prod that can shake the tusker, and there is a reason for it: do we have someone young to climb atop this recalcitrant mammoth nation and poke it and get it back to the speed that it has come to know? The old among the rulers cannot shake off their stupor; the old among the opposition are senile in addition to being soporific. The young in both are hopelessly divided, and none among them seems likely to accept the leadership of another in their fold. So I am worrying this weekend if the Americans that I am involved with will read this issue of The Economist, or the other bad press of the recent weeks regarding India, and I am thinking, how dear is this joint venture now to these Americans? Has this small Indian company which I am involved with shrunk further?
And so I am struck by a longing that I’d never imagined would come upon me. My political leaning is opposite to Narender Modi’s, and I’ve liked him less and less since the riots, but there is Gujarat regarding which state articles come to hand in odd respectable magazines round the world, and no one argues about Modi’s incorruptibility, or his competence, and in his vigor the man’s beans may be seen and you can see they are in fine trim. He is not so young but he is not so old. I am veering toward this man. Yes, I am, because there is this thing about money…
Help me, God.