Just a quick one for today and for a change something not particularly related to defence. While the main thrust of this blog will remain defence, I do want to pick up some non-defence issues now and again, like economics and politics, and one of those has cropped up unexpectedly in India.
As I'm sure everyone is aware by now major power cuts have crippled parts of India. This however is merely a case of large numbers of people being affected in one go. India has long had problems with its electricity generation and distribution, not least because of the amount of people that essentially steal power from the grid.
The supply is so unstable that many factories and offices in India have generators, not as back ups in case of disruption, but as their primary power supply. This is - understandably - quite expensive. And it serves to demonstrate one of the many considerations that businesses make before making the choice as to where to set up their offices or foreign manufacturing plants.
We are often told that British companies would run for the hills if corporation tax in the UK were increased. This is simply not true. There are a myriad of reasons completely unrelated to tax as to why companies choose to do business here in the UK. Reliable power supply for both places of work and public transport being just one of them.
The power cuts in India also serve as a reminder of the challenges that still face many developing economies in their bid to develop economically. Too rapid an expansion can place excessive demands on power supplies and logistic facilities such as ports, constraining growth and diverting investment elsewhere.
Low cost wages and an abundant labour supply are all very well and good, but without power to operate businesses and the logistic capacity to import raw materials and export finished goods, large quantities of low cost labour are of dubious value in a competitive global market place.