A High-Tech Fix for One Corner of India

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Of course, some of these controversial politicians have the way of
becoming the darlings of the Western media. Anyway, here goes one
story...FN

A High-Tech Fix for One Corner of  India

An Indian politician has moved decisively to transform
Hyderabad into a computer programming and pharmaceuticals hub
that is trying to rival Bangalore.

[ Full story at...(requires free registration)... .ed ]  
http://www.nytimes.com/2002/12/27/technology/27RUPE.html?today
sheadlines

December 27, 2002

A High-Tech Fix for One Corner of India

By KEITH BRADSHER




HYDERABAD, India — Soon after N. Chandrababu Naidu became 
chief minister of the state of Andhra Pradesh in August 1995, he 
ordered that a partly built and abandoned government building here 
on the edge of the city be finished and turned into a college for 
computer software engineers.

Today, the building houses one of 300 institutions of higher learning 
in a state that graduates 65,000 engineers a year, compared with 
7,500 when Mr. Naidu took office. The institute is one example of 
how Mr. Naidu has moved decisively to transform Hyderabad from 
the quiet administrative center of an agricultural state into a 
computer programming and pharmaceuticals hub that is trying to 
rival Bangalore, nearly 300 miles to the south.

With a businesslike, long-term approach to public policy in a 
country long bedeviled by populists pursuing short-term fixes, Mr. 
Naidu, who is 52, has become the darling of Western governments 
and corporations.

He has emerged in their eyes as one of the most promising local 
leaders not just in India but in the developing world. Big 
international companies like Microsoft and Oracle have been setting 
up operations here in Hyderabad, even though Andhra Pradesh has 
long been one of the poorest states in India.

"It's only the last four or five years that this place is booming," said 
Maruvada V. Raman, the executive officer of the college, the 
International Institute of Information Technology. "These things 
might not have happened if someone else were in his place."

Mr. Naidu's successes have made him a hit for the last six years at 
World Economic Forum meetings in Davos, Switzerland, and 
elsewhere, where he has moderated panels and been praised as an 
example for other leaders of poor regions. His agreeing to appear is 
a breakthrough of sorts for the chief minister of an Indian state. 
Other chief ministers — whose responsibilities are similar to those 
of a governor of an American state — have avoided the event for 
fear of hurting populist credentials by hobnobbing with corporate 
leaders.

"They are all thinking, `We will get a negative image,' " Mr. Naidu 
said. "It is not true."

Mr. Naidu added, "If you do not meet business people and rich 
people, you will not get investment."

He has watched the success of Bangalore, India's Silicon Valley, 
and tried to turn Hyderabad into sort of a Route 128 high-
technology region to match.

Andhra Pradesh has been developing so quickly that although rural 
areas in the state still have many problems, the departing Treasury 
secretary, Paul H. O'Neill, quipped in a visit here last month that the 
state no longer even seemed to need foreign aid. "I don't think he 
needs any help at all," Mr. O'Neill said. "I was really impressed with 
him and what he is doing."

That was an exaggeration. Hyderabad, home to about 6.6 million 
people, has become a green, prosperous hub for computer 
programming, telephone call centers and drug manufacturing. But 
most of the state's 76 million people still live in rural villages where 
change has been slow, and where a two-year drought has brought 
considerable suffering.

Andhra Pradesh is nonetheless becoming an international model for 
certain public policies. Some involve little details, like using 
automation to cut the time needed to get a new driver's license to 
two hours from two days, or quintupling the number of trees in 
Hyderabad to make it one of India's greenest, most livable cities.

Mr. Naidu has also been one of the first Indian politicians to tackle a 
problem that has effectively bankrupted most of the country's state 
governments: electricity subsidies. State politicians across India 
have long won elections by promising cheap electricity, a middle-
class subsidy in a country where the poor have no access to 
electricity at all.

Electricity has been kept so cheap in most of the country that it has 
been uneconomical to build new power plants or even maintain 
many power cables, resulting in frequent lengthy blackouts that 
force businesses to buy and run their own diesel generators. Murky 
laws have long discouraged private investment in power generation 
and distribution, although efforts are now under way in New Delhi to 
change this.

Despite sometimes-violent street protests in the late 1990's, Mr. 
Naidu has succeeded in raising electricity prices here by 70 
percent. He has used the extra revenue not just to improve the 
electrical grid, so blackouts are now uncommon and brief, but also 
to improve many other public services and to come close to 
balancing the state budget.

Under Mr. Naidu, Andhra Pradesh has enacted a law requiring 
union leaders to be workers from the factory or office they 
represent. Outside political activists have sometimes used Indian 
labor unions in struggles between political parties instead of 
seeking better contracts for the workers. Andhra Pradesh has also 
relaxed some of the restrictions on laying off workers, removing a 
major obstacle that has discouraged many businesses in India from 
hiring additional employees.

To the anger of public-sector unions in a country famous for its 
slow-moving and often unresponsive bureaucracy, Mr. Naidu has 
begun measuring state employees against one another and preset 
targets, and he has instituted surprise inspections. He has fired 50 
people just in the state's agriculture department and disciplined 
many more for nonperformance.

One of Mr. Naidu's early moves as chief minister was to buttonhole 
Bill Gates, the chairman of Microsoft, at a dinner party at the home 
of the American ambassador in New Delhi. "I told him I needed 10 
minutes exclusively," Mr. Naidu recalled. "I had a presentation for 
him on a laptop, and the 10-minute meeting stretched to 40 minutes 
— the dinner was late."

Microsoft later opened a 150-person programming center here, and 
Mr. Gates announced on a visit to the city on Nov. 14 that the 
company would expand the office to 500 people over the next three 
years. That is particularly good news here because Hyderabad, like 
other technology centers, has been hurt by the bursting of the 
Internet bubble, although employers are still looking for engineers 
with more academic or professional experience. Chitra Sood, 
Microsoft's finance and human relations manager here, said that the 
company had 50 serious applicants for each programming job here.

Although Andhra Pradesh seems to have received another windfall 
with the recent discovery of natural gas fields off its coast, the state, 
like the rest of India, still faces serious economic problems. Looking 
out the window of his helicopter during a recent trip across the 
state, Mr. Naidu pointed to several wide lines of brown mud that 
meandered across a drought-parched farming area. "Generally, all 
these rivers flow with water — you can see there is no water now," 
he said.

A small Maoist insurgency has attacked trains and buses for years 
in remote jungles in the state. More disturbing, a bomb exploded 
outside a Hindu temple here, wounding 20 people, three hours after 
Mr. O'Neill left the city. Mr. Naidu reached the site in less than half 
an hour and publicly emphasized that there was no proof that the 
explosion was religiously motivated. There was no sectarian 
violence after the blast, as might have happened in northern India.

Taking on middle-class electricity users and the public-sector 
unions has forced Mr. Naidu to articulate a vision of efficient 
government. He has also needed the uncommon political 
nimbleness and even ruthlessness that got him to the top in the first 
place.

The son of a middle-class farmer from near Hyderabad, he studied 
economics as an undergraduate at a college outside Madras and 
started but never completed graduate work in the field. He was 
elected to the state assembly of Andhra Pradesh in 1978 as a 
member of the Congress Party, and he almost immediately became 
the minister of technical education, making him the state's youngest 
assembly member and youngest minister at 28.

He also became a friend of Nandamuri Taraka Rama Rao, a famous 
film star from Andhra Pradesh, and married Mr. Rao's daughter in 
what Mr. Naidu described as an arranged marriage. Mr. Rao 
entered politics in 1982, setting up a regional party, Telugu Desam, 
and Mr. Naidu left the Congress Party to join it. With Mr. Rao's 
popularity from appearing in more than 300 movies, together with 
an appeal to regional pride, the party gained control of the state 
assembly, and Mr. Rao served three terms as chief minister.

But when Mr. Rao, a widower, married a much younger woman who 
sought political power on her own, Mr. Naidu deposed Mr. Rao in 
1995. He took control of the party with help from one of Mr. Rao's 
sons and replaced his father-in-law as chief minister.

Mr. Rao publicly compared himself to Shah Jehan, a 17th-century 
Mogul emperor imprisoned by his son, and he vowed to return to 
power and destroy his son-in-law. But Mr. Rao died of a heart attack 
early in 1996, leaving Mr. Naidu in complete control of the Telugu 
Desam Party.

The party's hold on power seems secure in Andhra Pradesh, partly 
because Mr. Naidu and his allies speak Telugu, a language spoken 
only in this state and by a few people in two adjacent states. He has 
also maintained a variety of popular subsidy programs for rural 
areas, even while forcing urban middle-class families to pay more 
for electricity.

But while some corporate executives say they wish Mr. Naidu would 
seek national office, he disclaims any such ambition, and his party's 
local and linguistic roots could hinder him if he tried.

Mr. Naidu's own command of English is very good but not perfect. 
He admitted that he spoke little Hindi, the language of much of 
northern India, although he understands it.

Krishnamoorthy Thiagarajan, the senior vice president for corporate 
strategy at Satyam Computer Services, a big Indian software 
company based here, said that Mr. Naidu nonetheless set an 
example that could begin to influence other Indian politicians. 
"Politicians tend to look at `Can I win my next election?' and if it 
takes subsidies, then that is often done," Mr. Thiagarajan said.

Mr. Naidu, he continued, "looks at something in business terms, in 
metrics, in measurable things you can improve."


Copyright 2002 The New York Times Company 

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