Hamish McRae: Mumbai is too resilient to bow to the bomb

The crucial thing is that it manages its chaos very well. Because it looks a mess, does not mean it is a mess
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Mumbai is to India as New York is to the US, or Shanghai to China: one of the half dozen greatest, most vibrant, most interesting and in many ways most chaotic cities on the planet. As of yesterday the full picture of the attacks on its railway network was still unclear, but what is beyond doubt are two things.

First, Mumbai is hugely important to India for it is the country's financial capital as well as its largest city. And second, it is also tremendously resilient, for despite great difficulties it works remarkably well. In both instances it bears a sharp resemblance to New York. That, perhaps, is why it is a natural target for terrorist attack.

Cities become huge because they are successful in economic terms. People go there because they feel they would have better opportunities than they would were they to remain where they are. At the moment Mumbai has become one of the great global magnets for hard-working people, with hundreds of thousands coming into the agglomeration every year. Total population is now approaching 16 million, the third largest city in the world, and this in a place where the physical fabric, the housing, the commuter system and so on - is designed for perhaps a quarter of that number.

We hear a lot in Britain about Bangalore, the hi-tech city down in the south, as a symbol of India's modernity. That perception is understandable, particularly since so many call centres are located there. We seem to end up speaking to someone in Bangalore almost every week. But you have to realise that Bangalore is about one-third of the size of Mumbai. It matters, just as Chennai (formerly Madras) and Kolkata (formerly Calcutta) matter. But Mumbai matters most of all.

So it looks a mess, as any recent visitor will testify. Maybe one-third of the population sleeps on the streets. It has Asia's second largest slum, Dharavi, which you drive past on the way in from the airport. The rail network, which has to carry millions of working people from the outer suburbs down into the spine of the peninsular to the central business district towards the point, is grossly overcrowded - an obvious target.

As the capital of the financial services industry, with the country's largest stock exchange, and its entertainment industry, Mumbai is in a way New York and Los Angeles combined. Those two industries are inevitably steeped in excess: excesses of money, of style, of all the twists of human behaviour. That flash lives alongside the squalor. You look at the glittering Mumbai twentysomethings climbing out of the BMWs and into the nightclub below the boutique Gordon House Hotel - and then you look 10 feet away at the sleeping bundles they have to step over as they do.

But the crucial thing to realise about Mumbai is that it manages its chaos very well. Because the place looks a mess, it does not mean it is a mess. Shortly after the hurricane hit New Orleans, a similar tropical storm shut down Mumbai. More water fell on Mumbai than on New Orleans, and since parts of it are also below sea level, there was serious flooding too. Yet there were very few deaths directly attributable to the storm, there was no breakdown of civil order at all - and in three days the city was up and running again.

So while there are huge variations of wealth and great ethnic diversity, there is a great practical get-things-done mentality. I find that inspiring. I'm sure that the quality of management of the municipality leaves much to be desired. I know there is a lot of corruption and friends have had direct experience of that. But the ability of ordinary people to rise above all this is astounding.

On my last visit the most moving part was visiting infant schools in Dharavi. Slums happen because of bad municipal management and there should be no condoning of that. So official education is woefully inadequate, as are all public services. But thanks to a wonderfully run charity, the Spastics Society of India, children there get some education.

Rooms are rented in private "houses" - I suppose you would say shacks - for a few hours each day. The families' goods are pushed to one side and instant schools are created. These classrooms are of course spotless; teachers are paid; parents pay a tiny contribution to the cost; and their children, some of them handicapped, have a period of calm, of order and of learning.

As a matter of fact, by parental request, one of the things they learn is English. This is a city where people come to better themselves and give a better life for their families. They know that one way up the ladder is to be able to speak English.

This is a hard-working, orderly society, more hard-working and in some ways (all right, not many!) more orderly than our own. It is the apex of the Indian economic pyramid, a giant city growing in economic terms by something close to 10 per cent a year. That gives the Mumbai economy huge momentum. The Indian economy will not be deflected by terrorism any more than the US economy was deflected, or indeed was our own.

So what happens now? I cannot answer for the political consequences but there are some things that can be said about the issues that matter in economic terms. From that perspective the most important thing is the need for financial confidence to be maintained. That is not just a matter of stock market levels; rather it is stability in financial and economic relationships. Business has to go on: people have to feed their families, so they have to have jobs. I see no reason why, for all its horror, this attack should undermine the commercial fabric of the city and if that is right, it is hugely encouraging. India needs a prosperous Mumbai.

The second thing that needs to happen is for foreign confidence to be maintained. India is on the verge of receiving a large increase in foreign investment, investment that will not only create jobs but also create markets. In that sense it is starting to move closer to the Chinese economic model, which has relied heavily on such investment to increase its exports. Foreign direct investment helps build commercial relations with the investing countries.

And the third thing that needs to happen is for ordinary Indian people to keep their confidence in their economic futures. India is experiencing a boom. That boom has yet to reach down to everyone but it is transforming the lives of tens of millions, maybe hundreds of millions, bringing them from little more than subsistence levels of consumption to something like a middle-class lifestyle in less than a generation.

India is a huge country but Mumbai, more than any other place, is the centre of economic power, the city that is driving the boom. I'm sure it will drive on - and we should all respect and admire its citizens as it does so.