Fw: Take a Better Look at the Work of a Rebounding India

["Ram Narayanan" <ramn@adelphia.net>, <debate@indiapolicy.org>]

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>Sub: Take a Better Look at the Work of a Rebounding India
>
>From: Ashok Chowgule, Mumbai.
>
>9 September, 99.
>
>Pranam,
>
>I am sending this article not with an intention of saying that
>everything in India is fine, and that we will soon be a land of milk
>and honey, but because I think this is the first article that I have
>seen in the popular media where the issues are put in the right
>perspective.  It talks about what we have achieved - not just in
>economic terms but also in social terms, particularly the latter.  Of
>course, we could have achieved much more, and should have.  But
>belittling the achievements only makes us feel bad about ourselves and
>gives us less confidence in the future.
>
>I am also convinced that the achievements have not been as much as it
>should have been because of faulty planning by people who had no
>empathy for our civilisational greatness.  It was these people who
>swore (and still do) by the so-called Nehruvian plan.  They did
>everything possible to suppress indigenous entreprenuership.  And
>today they chant the so-called liberalisational mantra, without even
>feeling an iota of remorse for the mess that they created in the past.
>
>Namaste.
>Ashok.
>
>=======================================
>
>Title: Take a Better Look at the Work of a Rebounding India
>Author: Prasenjit Basu
>Publication: International Herald Tribune
>Date: August 20, 1999
>
>
>SINGAPORE - India recently passed two milestones: the 52d anniversary
>of its independence and, by some estimates, the birth of its billionth
>living citizen.  The latter event was accompanied by a lecture from
>Lester R.Brown and Brian Halweil (''The Billion Mark Should Be a
>Sobering Feat for India,'' IHT, Aug.  11) about the need to spend on
>health care and primary education rather than on defense.
>
>Virtually unremarked on Independence Day, amid the focus on military
>matters and next month's national election, was the fact that India's
>real GDP has sustained a compound annual growth rate of 6.5 percent
>for the last six years - a performance that makes its economy the
>fastest growing among the world's democracies.
>
>Indian software exports have increased at an annual rate of 65 percent
>over the same period, and agricultural production by 4 percent - well
>ahead of the 1.8 percent pace of population growth.  Food grain output
>has trebled in the last 30 years.
>
>It is also worth celebrating what India is not.  It is not seeking
>handouts from the rest of the world.  (Net inflows of foreign aid
>amount to considerably less than $1 per person.) Nor is it among the
>42 highly indebted poor countries for which debt forgiveness is now
>being worked out.  In fact, India has never had to undertake a
>rescheduling of its external debt.
>
>During 190 years of British colonial rule, India was regularly
>afflicted by famine.  Since independence it has had none.  And despite
>some serious religious and ethnic conflict, India has remained united.
>
>In 1947, India inherited an economy that had grown at an annual pace
>of 0.7 percent in the previous 50 years, less than the rate of
>population increase.  It had an adult literacy rate of 14 percent and
>a higher education system oriented toward producing a narrow elite of
>imperial bureaucrats.
>
>By contrast, South Korea and Taiwan at that time had adult literacy
>rates in excess of 50 percent (a level that India achieved only at the
>beginning of this decade).  They had, after all, been ruled by a
>country, Japan, which was the first after the United States to achieve
>universal literacy, and so paid special attention to education.  That
>difference in the initial endowment of human capital (plus massive
>infusions of external aid per capita in the early years) goes most of
>the way toward explaining the faster trajectory of their initial
>growth.
>
>But India can and must do better.  The untapped potential remains
>enormous, especially when you consider the talents and achievements of
>India's diaspora in business, technology and the professions.
>
>For approximately 200 years, India has had a larger number of
>illiterate and poorly nourished people than any other country on the
>planet.  Presumably it was not always so.  According to the Yale
>historian Paul Kennedy, India accounted for about 24.5 percent of
>world manufacturing output in 1750, a share that fell to 1.7 percent
>by 1900 as the per capita level of industrialization declined
>sevenfold.
>
>Never before in human history has there been an attempt to lift a
>population of even 150 million, let alone 400 million, out of abject
>poverty within a democratic system.  India is making that valiant
>attempt and, ever so gradually, beginning to succeed.
>
>The point is that in the case of India, the achievement of the whole
>is greater than the sum of its flawed parts.  Despite stresses, its
>society remains secular.  Its prime minister may be a Hindu, but the
>creator of its nuclear bomb and its richest entrepreneur are Muslims,
>the creator of its recent economic miracle is a Sikh, and its defense
>minister is a Christian.
>
>India's judiciary is lumbering and slow, but it maintains a genuine
>check on both the legislature and the executive.  Parliament appears
>chaotic, but it unfailingly produces laws that are humane and faithful
>to the country's secular tradition.  The executive is overstaffed and
>almost always poorly led, but it can never function arbitrarily
>because of the checks and balances in the democratic system.
>
>Despite a ponderous state, economic growth has accelerated from the
>3.5 percent of the first three decades of independence to 5.5 percent
>in the 1980s and 6.5 percent in 1990s.  Inflation has rarely reached
>double digits, while current account deficits have usually been less
>than 2 percent of GDP.  Only on fiscal policy have there been serious
>slippages in the past two decades.  Adult literacy has risen from 52
>percent in 1991 to an estimated 65 percent today.
>
>As a democracy with functioning institutions and a vibrant capital
>market, India has been the great, if largely untold, success story of
>the 1990s.  Where Russia failed, India succeeded in completing a rapid
>transition away from quasi-socialism.  With its vast army of
>professionals and its abundance of labor at every level of skill and
>creativity, it can achieve more in the decade ahead.
>
>What remains is for the talents of the vast rural population to be
>effectively deployed in labor-intensive exports, and for urban
>infrastructure to improve without further increasing the budget
>deficit.  Then, perhaps, a decade from now, India will begin to
>benefit fully from the return of what the late Prime Minister Rajiv
>Gandhi called its overseas ''brain deposit,'' and become again the
>economic beacon that once attracted the European explorers Christopher
>Columbus and Vasco da Gama.
>
>The writer is chief economist, Southeast Asia, for Credit Suisse First
>Boston in Singapore.  He contributed this personal comment to the
>International Herald Tribune.



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