He talks about the culture of those countries. If you managed a typical Indian worker all you would ever hear is "yes, sir, I understood sir, it will get done, sir". Then an endless myriad of excuses and blame shifting and promises. People there are simply wired to always say "yes", never to question, never to doubt, never to criticize. I hope you can see why this might be a problem for transitioning to a "first world" economy, which relies on workers performing services, rather than standing on an assembly line.

Things in China are a bit different, but not quite. Chinese culture makes people very reluctant to admit they do not know something. In addition to that in Chinese culture it is the responsibility of the listener to understand what is being said, as opposed to western culture where it is the speaker's responsibility to make sure that he is understood. This makes transfer of knowledge en mass a very difficult task.

These simple, but fundamental differences are major hurdles for those economies going further.