The Indian Economy Blog

March 27, 2009

IPL Rescheduling & Signals To Investors

Filed under: Basic Questions,Business,Defense & Security — Arjun Swarup @ 5:29 pm

After 26/11, Jack Welch pointed out that the attacks posed a question for India in terms of its ability to manage itself. China, although under authoritarian rule, had managed to pull off the Beijing Olympics, and assured safety for investors. India faced that question, post 26/11.

Now, with the cancellation of the IPL tournament in India and its move to South Africa, what message has gotten sent out?

Is the “offshoring” of the tournament a signal that the government is unsure of the overall security situation? Is this an indication of how over-stretched and creaky the governance infrastructure is?

What signal does this send to investors? After all, perception is everything, and for really large investments, it is typically “which BRIC ie, Brazil or Russia or India or China” which is often key.

Of course, it is also possible to read too much into one thing. Apparently England also got pushed out because their security would be over-stretched, so the questions raised above need to be qualified.

India’s elections ARE a mammoth exercise, and even more so, with terrorism threats.

What do you think?

9 Comments »

  1. Overstretched infrastructure, yes, but creaky may be not. It may not be easy for the states to take care of the increased manpower to handle both the elections and the IPL. Also, once the elections are over, what will the function of the extra manpower? There can be also an slight escalation courtesy of the 3/3 attacks. It was the second time sportsmen were directly targeted by terrorists, but the first time when the ones attacked had no apparent connection with the attack. That changed the threat perspective. The government needed to be “absolutely sure” nothing untoward will happen from “reasonably sure”.

    Comment by Arby K — March 27, 2009 @ 6:04 pm

  2. Infrastructure overstretch and the atmosphere of insecurity are just symptoms of the actual underlying problems, IMO, that of lack of capacity planning and absence of culture of national security, which again, BTW, boils down to us(..and I mean a majority of Indians, not just urban or educated sections..) not being aware and informed of the real issues facing the country.

    Comment by NotReallyAnonymous — March 27, 2009 @ 7:16 pm

  3. I think taking the IPL to SA is going to affect India in short-term, but in the long run may be we are preventing an unfortunate event like what happened with SL team in Pakistan.
    That would definitely jeopardize India’s future in sports, after all we have Commonwealth games coming up and who wants to take a chance.

    Comment by Jodhbir — March 28, 2009 @ 9:59 am

  4. The Indian elections are a massive exercise and have correspondingly huge security requirements. The BCCI should understand that. After all they are a product of the same culture that mandates that we need such security. Recall for instance how a young cricketer was dragged out of a cricket ground in Mumbai by a BCCI official for being associated with the ICL. And no one was surprised. So if “officials” behave like goons, then the “real” goons’ game would be at a much higher level. Thus we need all the security for the elections, which ARE more important than the IPL. Thus the IPL needs to move. And thats a reality, which as you say has now been highlighted to foreign investors.

    Comment by Kiran — March 28, 2009 @ 2:36 pm

  5. IPL is not a stupid concept. It is one of the stages to display India to the world. Apart from that, it is one of the very few businesses making money even in recession. It is with the business point of view that IPL is moved out to SA. The loss, criticism and results of any untoward incident by hosting it in India will be worse that those of moving it to SA. To be on safer side, it is good to see IPL moved. To the investors, it sends a strong message that India doesn’t give any chance in security lapse in India, even if it needs to shed out a part of its profit.

    Comment by Arunkumar KL — March 29, 2009 @ 12:19 pm

  6. IPL is definitely one of the few contemporary events that makes India stand out in the global stage. Apart from being a mass puller IPL also paves ways for the lower middle class and the lower class of people of India to reap rich harvest. Their association is very much essential for the success of it and can’t be neglected . It is therefore sad that such a major chunk of our population are losing out this time which could have done wonders to their livelihood. This is one of the few major economic drawback of the “offshoring” of IPL.

    Comment by Biswajyoti Das — March 29, 2009 @ 2:51 pm

  7. I would disagree with the thought that the IPL is a flawed concept. It was a huge success the last time around and it is contributing to the development of a sports culture that we lack. It is also unearthing talent and democratizing sport. This is aside of the obvious economic angle to the event.

    It is easy to be cynical of the security or governance infrastructure but merely insofar as security is concerned, we ought to recognize that the situation has become extremely challenging. Unlike China, control and organization of multi-locational events as well as ensuring protection of normal citizens is a good deal more challenging in a democracy like ours. However, I am not one of those who despair. I see in the enthusiasm and energy of the population the capability to resist this menace of terrorism.

    My conviction is we will overcome this challenge in the long run by finding a way of surmounting the threat posed by terrorism. However, in the short to medium term this aspect will no doubt disrupt peaceful progress sporadically. Sure, the offshore location of IPL this year when the calendar coincided with the General Elections is one such disruption, but I prefer to view it as a triumph. IPL and normal life will go on despite obstacles. We will elect another Govt. democratically and we will get to enjoy sport, despite the logistical difficulties, despite the cost. I am not able to think of another country that could manage a similar situation. That is the lesson I am taking away at any rate.

    Comment by little ram — March 30, 2009 @ 4:35 pm

  8. I don’t think it is a negative signal to investors. You have to remember that the government’s reasoning is sound. Its priority is maintaining tight vigil during the elections. It would look worse for an overstretched security apparatus to slip up, and there be an incident at a cricket game. It is a smart decision. IPL should have thought about the elections when they planned the timing of the tournament.

    Comment by HAL Tejas — April 11, 2009 @ 4:44 am

  9. I think IPL could have been organized in India itself with a slight change of dates avoiding the clash with hectic election schedule. There was no urgency to organize such a big event out of the country. It sent the wrong message globally regarding security conditions in India.

    Comment by Pragmatic — April 19, 2009 @ 2:56 pm

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