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While in India once, I ran into a friend from Google who was out there trying to build a data center. Total coincidence that we were both there at the same time

While in India once, I ran into a friend from Google who was out there trying to build a data center. Total coincidence that we were both there at the same time. I was there to hire and train for another company and he was there to break ground. He'd been there for week and they'd yet to start doing more than some bare minimums related to surveys and permits. I was surprised that he was there at all, given the current state of construction. It turns out, they were way off target and they thought there was more progress already. Every time he spoke to anyone about permits and approvals, they'd say it was almost done and then there would be a delay. Amazon and Microsoft had been building in the area already and they had started the process much later. The difference? Google has a very strict policy on bribes. If you pay one, you won't be reimbursed and if they do and out, you won't be employed any longer. Microsoft and Amazon had no such policy and the conversations my friend had with his counterparts at those companies were pretty forthcoming about it. It's just how business is done there and if you don't play ball, you will have a hard time. Of course they paid. You have to. If you don't, things will happen eventually but that timeline is unpredictable. I'm sure Google found ways to ethically encourage progress eventually.

missedthecue 5y ago
Meanwhile in America and the entire west to an extent, you have the government trying to "bribe" businesses to open in their jurisdiction through tax incentives and so forth. Really interesting cultural difference.
- rosndo 5y ago
  It’s the lack of corruption. In India the projects are blocked by individual officials seeking to line their pockets, they don’t care if that causes their area to lose out on the project.
zelon88 5y ago
I'm somewhat confused. Here in America when you want to accomplish something like open a new facility you basically force the potential municipalities into competing with each other to win your favor. A big company will go to all the Chambers of Commerce in a given area and basically say "we're considering opening a 100,000 Sq ft facility and hiring 300 people. What incentives can you offer me if I build it here?" Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location. Is it just cheaper to skip this step and bribe the city in other parts of the world? Why doesn't this practice work or take place overseas?
- AlexanderTheGr8 5y ago
  I'm originally from a small part of India, and the logic is quite simple. In your example, 300 jobs = 300 votes. But it would require millions in incentives to the company. But the local politician can just "buy" 300 votes with 300,000 INR (indian currency; 1000 rupees for 1 vote). So there is no point spending so much money on a facility when you can simply buy all the votes you need.
  - zelon88 5y ago
    That is terrifying. So is Microsoft literally buying and installing politicians in foreign governments?
    - markdown 5y ago
      Nah, only in the US. https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...
  - enugu 5y ago
    Election money is important but the role it plays is somewhat different. Politicians do often woo companies to come to their sate. A job (particulary a well paying one) creates a lot of economic activity and can make that region prosperous. Politicians want this both for votes created due to prosperity but more importantly, once the region becomes rich, they have more money for their social schemes and freebies which is a prominent part of how they come to power. Not to speak of more bribes obtained in richer areas.
- enugu 5y ago
  One issue in India is that local governance at level of cities and towns is very weak(very few know who the equivalent of the mayor of their city is). The state(as in say US states, not federal level) government basically runs the show. So, the state government does woo corporations with incentives to come to their state, but once the company reaches the level of permissions and deals with local officials who are looking for a cut(and in general, it is hard to fire these officials), the companies have to face the bribes process. You can transfer bureaucrats even if you cant fire them(and this does happen though sometimes for the wrong reasons). But the bribe network also involves local politicians. The intractable issue is that the journey to power of the top leaders in the state government involves taking support of local level leaders who either have some local support base or money which can be used for campaigning. In return, these local leaders demand a cut of bribe money which the top leader is obliged to allow or else risk losing their support. Of course, this is not an all encompassing explanation and some leaders are much worse(corrupt far beyond any political necessity) and some better.

missedthecue 5y ago

Meanwhile in America and the entire west to an extent, you have the government trying to "bribe" businesses to open in their jurisdiction through tax incentives and so forth. Really interesting cultural difference.

rosndo 5y ago
It’s the lack of corruption. In India the projects are blocked by individual officials seeking to line their pockets, they don’t care if that causes their area to lose out on the project.

zelon88 5y ago

I'm somewhat confused. Here in America when you want to accomplish something like open a new facility you basically force the potential municipalities into competing with each other to win your favor. A big company will go to all the Chambers of Commerce in a given area and basically say "we're considering opening a 100,000 Sq ft facility and hiring 300 people. What incentives can you offer me if I build it here?" Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location. Is it just cheaper to skip this step and bribe the city in other parts of the world? Why doesn't this practice work or take place overseas?

AlexanderTheGr8 5y ago
I'm originally from a small part of India, and the logic is quite simple. In your example, 300 jobs = 300 votes. But it would require millions in incentives to the company. But the local politician can just "buy" 300 votes with 300,000 INR (indian currency; 1000 rupees for 1 vote). So there is no point spending so much money on a facility when you can simply buy all the votes you need.
- zelon88 5y ago
  That is terrifying. So is Microsoft literally buying and installing politicians in foreign governments?
  - markdown 5y ago
    Nah, only in the US. https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D000000115 https://www.opensecrets.org/orgs/microsoft-corp/summary?id=D...
- enugu 5y ago
  Election money is important but the role it plays is somewhat different. Politicians do often woo companies to come to their sate. A job (particulary a well paying one) creates a lot of economic activity and can make that region prosperous. Politicians want this both for votes created due to prosperity but more importantly, once the region becomes rich, they have more money for their social schemes and freebies which is a prominent part of how they come to power. Not to speak of more bribes obtained in richer areas.
enugu 5y ago
One issue in India is that local governance at level of cities and towns is very weak(very few know who the equivalent of the mayor of their city is). The state(as in say US states, not federal level) government basically runs the show. So, the state government does woo corporations with incentives to come to their state, but once the company reaches the level of permissions and deals with local officials who are looking for a cut(and in general, it is hard to fire these officials), the companies have to face the bribes process. You can transfer bureaucrats even if you cant fire them(and this does happen though sometimes for the wrong reasons). But the bribe network also involves local politicians. The intractable issue is that the journey to power of the top leaders in the state government involves taking support of local level leaders who either have some local support base or money which can be used for campaigning. In return, these local leaders demand a cut of bribe money which the top leader is obliged to allow or else risk losing their support. Of course, this is not an all encompassing explanation and some leaders are much worse(corrupt far beyond any political necessity) and some better.