Charlie Munger who was a very integral arm in the formation of the Berkshire Hathaway and very witty businessman had quite a lot to say about India and Indians. In 2017, he said India is bogged down by problems and it’s hard to get anything done in the country.
“I’d rather work with a bunch of Chinese than I would the Indian civilisation mired down, caste system, over-population, assimilated the worst stupidities of the democratic system,” he said. “It’s hard to get anything done in India. And the bribes are just awful…The Indians I know are fabulous people. They’re just as talented as the Chinese, I’m speaking about the Indian populace. But the system and the poverty and the corruption and the crazy democratic thing where you let anybody who screams stop all progress? It mires India with problems that Lee Kuan Yew didn’t have.”
Charlie Munger made these remarks when asked about Indian scenario (Berkshire Hathaway exited India in 2013 and haven’t returned since):-
“India is grossly defective because they took the worst aspects of our culture, allowing a bunch of idiots to scream and stop everything. And they copied it … They’ve taken the worst aspects of democracy,”
Why did the great American investor; Charlie Munger prefer China over India?
“The Chinese government really tries to help its companies,” Munger said, contrasting that with India. “What I like about China is they have some companies that are very strong and still selling at low prices. And the Chinese are formidable workers and they make wonderful employees.” Charlie Munger said.
Chinese electric vehicle maker BYD was Munger’s favourite stock. He first bought about 220 Million shares, then priced at $230 Million, for Berkshire Hathaway in September 2008.
Fast forward to 2023, according to a Berkshire Hathaway filing cited by CNN, the firm held about 7.98% of BYD by late October. Those shares are now worth $2.4 Billion, as per the report.
Like many others previously believed that India is a tough place to do business Charlie Munger admitted the same. The last decade since before PM Modi led BJP part came in over not only him but the entire world though India’s democratic issues and ability to settle a company never existed.
His company Berkshire Hathaway left India in 2013 and never looked back. Possibly, the lack of consumer demand and a huge monopoly of other dish-tv providers led to the downfall of the company and probably a grudge in the heart of Charlie Munger.
Similarly, China was growing exponentially. The world was depending on China for its exports, imports and policies. The huge population increased employment opportunities. Less democratic problems in the country gave rise to behemoth increment in the business sector.
Did Charlie Munger ever expect India to grow?
Evidently from his statements, Charlie Munger thought that by the end of 2023 India would be down and out with inflation and huge unemployment issues.
According to his projections India could not have gone past $3 Trillion economy and would have asked for funds from prestigious institutions such as IMF.
Apart from his pin-point dislike-ness for Indians and the country; he appreciated the Patel community in USA who own the motel chain. He was impressed from their expansion and profit controllability strategies.
It will not be an exaggeration to say that the time of 1947-91 was India’s wasted decades. Due to license permit raj and controlled production, no businesses worth its name could come up. India prided itself for creating IIMs and IITs, but it had no resources to employ its educated, the best of whom emigrated to foreign shores at the first opportunity.
Countries like Malaysia, Singapore and South Korea, which were much poorer in 1950s than India, started their reforms earlier and today have the kind of infrastructure which India will struggle to catch up for two decades at least. No one wanted to touch China with a ten foot pole in Maoist times, but after it began its reforms in 1980, the rest they say, is history.
It was only after India opened up its economy in 1991 under PV Narsimha Rao, that India shrugged off years of misery and set forth to the journey of becoming the fifth largest economy in the world.
But thats history, the present is witnessing India grow exponentially and the future will foresee India dominate the world. From G20 Presidency to becoming the largest growing economy India has rendered her nay-sayers speechless.