India Rising

India Rising

This is the title of a <a href="http://news.bbc.co.uk/2/hi/in_depth/south_asia/2007/india_rising/default.stm">BBC series of articles</a> and programs. The country and subcontinent is in rapid transition, though for a country of this size even rapid transitions will take time, making for greater regional and individual differences from the <a href="http://news.bbc.co.uk/2/hi/business/6289521.stm">globalisation</a> hotspots like Mumbai and Bangalore to the Indian rural majority.

What are your opinions on the changes in the world's largest democracy, how it may affect Indians as well as the rest of the world?

NIC 2004-13

The likely emergence of China and India as new global players-similar to the rise of Germany in the 19th century and the United States in the early 20th century-will transform the geopolitical landscape, with impacts potentially as dramatic as those of the previous two centuries.

Mapping the Global Future

We can only hope that the impact will not be as dramatic as those of the previous two centuries...

This address is useful for quick movement through the document.
http://www.odni.gov/nic/NIC_globaltrend2020.html#contents

Originally posted by jax:

What are your opinions on the changes in the world's largest democracy, how it may affect Indians as well as the rest of the world?

In both instances, that is, those of India and China, how the economic and political changes work their ways outward and downward will be critical. Both countries have an enormous underclass that will not rest forever happy with their respective positions vis-à-vis their more favored countrymen. This is already manifesting itself in Chinese upheavals, which have become quite common.

Indian disequilibrium is both noteworthy and intransigent because it is socially embedded. Note the following from Asia Times Online (a bit dated, but still applicable):

"Between 1990 and 2004, India's average annual rate of real gross domestic product (GDP) growth was about 6.5%. This compares to average annual real GDP growth of less than 2% in Latin America over the same period. However, India's economic growth has been extremely uneven.

The real annual average growth rate of India's agricultural sector was about 2% between 1990 and 2004. In sharp contrast, real average annual growth of the country's industrial and services sectors was about 7% and 8%, respectively, over the same period. The uneven nature of India's economic growth over the past 15 years stems from the fact that the agricultural sector accounts for about 65% of the country's employment."

"Apart from statistical indicators, recent political and social developments argue that growing income inequality and poverty are inspiring a backlash against India's government. This was very clear in the aftermath of India's 2004 general election. Despite the strongest rate of economic growth in 16 years, the incumbent National Democratic Alliance was trounced in the polls."
http://www.atimes.com/atimes/South_Asia/GL20Df01.html

Add to that the religious problems in the country, and the future might not be as bright as present Western hype would have us believe. What happens if the traditional underclass is politicized?

As I've demonstrated, I have no idea.

The same arguments in favour of India and China were made in the 70's and 80's for other far eastern 'tiger' economies. Why did they not acieve the level that was expected?

India's and China's circumstances are different of course - direct comparisons don't exist. But do they have similar problems that will have to be faced? Different ones that are equally difficult?

Today BBC has a report of India's caste system - a huge challenge which perhaps must be overcome. But how? Even in the UK, Indians are practising age old cultural systems that are detrimental to their potential. Watford General will not now, for example, tell parents the sex of their unborn child - there exists the temptation to abort girls.

For China, rising to the top of the heap would be a return to power for the world's traditional economic superpower. Why do so many in the west fear that outcome?

Originally posted by garydenness:

For China, rising to the top of the heap would be a return to power for the world's traditional economic superpower. Why do so many in the west fear that outcome?

But for the ecological impact, I don't. These people are as dangerous as Americans.

That reminds me of an experience in Hong Kong, where it was hot (well over 30C) and as humid as possible, but where several buildings not only had air condition, but turned it all the way down to refrigerator temperatures. I was thinking what if one billion Chinese and one billion Indians did the same. Oil prices would reach triple digits, that would be for sure.

Temperature control can be done much more efficiently than the fairly wasteful methods used today, but for high-density areas where you move heat around this is bound to be costly.

Originally posted by Krake:

We can only hope that the impact will not be as dramatic as those of the previous two centuries...

I think it is safe to assume that in this century Asia will create most of the headlines. There will be greater changes and there are more unresolved conflicts than elsewhere. Some of these are likely to turn violent, but hopefully fairly few.

Originally posted by Jaybro:

Indian disequilibrium is both noteworthy and intransigent because it is socially embedded. Note the following from Asia Times Online (a bit dated, but still applicable)

Or to pick another <a href="http://news.bbc.co.uk/2/hi/south_asia/6268487.stm">article from BBC</a>, both for India and China you can subdivide into dirt poor, middle class, and stinking rich. The former are not getting any better, at least in the short run. In both cases we are talking about rural poors. They are likely to become urban poors before they, at least in theory, aspire to middle class. The best economical case for India is something like Brazil, with huge class differences. For the developed world the numbers along is enough to attract (us being no exception). Both countries have a proportionally small middle class, but it is still huge in numbers.

Originally posted by garydenness:

The same arguments in favour of India and China were made in the 70's and 80's for other far eastern 'tiger' economies. Why did they not acieve the level that was expected?

You can't be serious about China. Economically it has outperformed the tiger economies or any other economy every single year for three decades, and by a large degree (though of course from a much smaller base).

India is a different case entirely. By the same metrics up until fairly recently it hasn't fared so good. This can be seen as a poor case for democracy. India has a democratically elected government where the centre is relatively weak, pretty much the ideal by Western ideology. Both are predominantly rural, with the difference between the rich and poor enormous. Business has been salivating over China for decades, while India is a more recent arrival. But India has had a good run now for a decade, across different governments.

On the globalisation topic, the <a href="http://news.bbc.co.uk/2/hi/business/6293349.stm">following phrase</a> is telling:

The Indian companies answer that it is their global production systems and their skills, not low wages, that give them comparative advantage.

But they are also hedging their bets.

All the Bangalore tigers have set up development centres in China, where they can employ software engineers for considerably less than they are currently paying their Indian staff.

At the same time Bangladesh, a country with half the population of USA on 1.5% of the area and with 1% of the GDP/head, and which has done many of the required economical moves, has been buffeted by its large neighbours.

Originally posted by jax:

They are likely to become urban poors before they, at least in theory, aspire to middle class. The best economical case for India is something like Brazil, with huge class differences.

Perhaps the difference here comes from the institutional political nature of elites in Brazil. The model for S. and Central American countries is the control the elites had over both politics and resources. I can't argue this specifically for Brazil simply because I don't have the history to support the argument. India's economic disparities that result from class structure aren't matched by any country that I know about. Additionally, India is troubled by significant religious difficulties that will certainly exacerbate her problems in integrating a coherent economic future.

Originally posted by jax:

You can't be serious about China. Economically it has outperformed the tiger economies or any other economy every single year for three decades, and by a large degree (though of course from a much smaller base).

If one looks at the gross economy. When one looks at the penetration of economic growth, the outcome is different. While China's growth is undeniable, I find it difficult to chime brightly when it is compared to the S. Korean miracle and other Asian examples where change runs deeply. The immensity and torpor of China is a factor, however.

Originally posted by jax:

On the globalisation topic, the following phrase is telling:

The Indian companies answer that it is their global production systems and their skills, not low wages, that give them comparative advantage.

But they are also hedging their bets.

All the Bangalore tigers have set up development centres in China, where they can employ software engineers for considerably less than they are currently paying their Indian staff.

At the same time Bangladesh, a country with half the population of USA on 1.5% of the area and with 1% of the GDP/head, and which has done many of the required economical moves, has been buffeted by its large neighbours.

This is very interesting. So we can now expect US engineering jobs to be sublet to China via India. I should have trained my children to gain a living by plundering across the Canadian border.

But Bangladesh is a very special case that is wracked by periodic disasters, rampant poverty and a school system and infrastructure akin to that of 12th century Kamchatka.

Originally posted by garydenness:

The same arguments in favour of India and China were made in the 70's and 80's for other far eastern 'tiger' economies. Why did they not acieve the level that was expected?

Because they didn't fail on economic policies, but on monetary ones. Or rather, they failed because they didn't put enough protectionist measures on their currencies (which were discouraged by the IMF, IBS and World Bank alike), whereas the countries that did weathered the storm much better.

It wasn't evil intend (as a section of anti-globalists aver), presumably, on part of the Big Trinity either; they just happened to live in the pre-Nixon mindset still. In that world, between Bretton-Woods and the Nixon Shock (1945-1971), valuta crisisses just didn't happen because there was little room to take undue advantage of the financial system. Conversely, today most recessions are caused by errant monetary policies, rather than actual economic failures.

How can a country ensure that it will not give in to speculative attack? It can attempt to raise the stakes, by placing the prestige of the government on the line; it can sign solemn treaties; and so on. The only absolutely sure-fire way not to have one's currency speculated against, however, is not to have an independent currency. True monetary union is one answer to the problem of currency crisis.

Paul Krugman - CURRENCY CRISES; 8. Can crises be prevented?

(it's really "crisisses", not "crisises")

Damn, forgot the reason for posting in first place:

Originally posted by Jaybro:

In both instances, that is, those of India and China, how the economic and political changes work their ways outward and downward will be critical. Both countries have an enormous underclass that will not rest forever happy with their respective positions vis-à-vis their more favored countrymen. This is already manifesting itself in Chinese upheavals, which have become quite common.

Indian disequilibrium is both noteworthy and intransigent because it is socially embedded.

Suppose so, but still, China's disparity is just a little under that in the US, whereas India's is far less (on par with Canada). The next Civil War doesn't appear in the offing anytime soon, so would think China and India both can handle their social divisions.

How the heck does the States do that anyway?

There is a paradox of prosperity most evident in the USA. It is among the most prosperous countries in the world, but still many citizen struggle. The disparity of income is fairly high, but not abnormally so. The same phenomena can be seen in the rest of the developed world.

Hmm, the UN richest/poorest 10% lists the US as having one of the widest disparities in the world (it's two-thirds down the list), followed by the Philippines, Cote d'Ivoire, Turkey and Iran. The list of developed countries that have lower income disparity than the US stops at zero.

The US really is the odd-one-out, but how?

edit:
Nevermind, the UN's 2006 Human Development Report (page 270) provides the answer: even though income inequality is the highest among developed countries (17% below income poverty line: <50% median income), the HDI of the bottom quintile is still equal to Cuba's average.

(btw, nice global data on health expenditure, smoking prevalence, foreign aid, internet access and much, much more )

Originally posted by Jaybro:

In both instances, that is, those of India and China, how the economic and political changes work their ways outward and downward will be critical. Both countries have an enormous underclass that will not rest forever happy with their respective positions vis-à-vis their more favored countrymen. This is already manifesting itself in Chinese upheavals, which have become quite common. [...]The real annual average growth rate of India's agricultural sector was about 2% between 1990 and 2004. In sharp contrast, real average annual growth of the country's industrial and services sectors was about 7% and 8%, respectively, over the same period. The uneven nature of India's economic growth over the past 15 years stems from the fact that the agricultural sector accounts for about 65% of the country's employment.

It is practically a given that the Chinese and Indian farmers are not going to remain farmers in the future. That means a monumental job-creation scheme to make up for the hundreds of million of lost jobs, and also mean a major pool of cheap unskilled and skilled labour for a long time to come as people move from the countryside into the cities.

Originally posted by jax:

and also mean a major pool of cheap unskilled and skilled labour for a long time to come as people move from the countryside into the cities.

The pool is already there among the underemployed, about 250 million as of last year. Somewhere in the world people will have to produce food. China will always have many millions in the fields.

India is already having to protect its agricultural workers against the global market. Peculiar world. All of this as people in the US are beginning to rail against the Indian and Chinese markets.

Personally, I like solving my Comcast cable connection problems with Indian women who are convivial, competent and better spoken that their US counterparts. Why not...they have PhDs. If they ever figure out how to collect trash and garbage via the internet, I'm there!

Originally posted by jax:

It is practically a given that the Chinese and Indian farmers are not going to remain farmers in the future. That means a monumental job-creation scheme to make up for the hundreds of million of lost jobs, and also mean a major pool of cheap unskilled and skilled labour for a long time to come as people move from the countryside into the cities.

Just as during Europe's industrial revolution, artificial 'fog' included. You'd hope they'll be able to skip that step a bit faster than we did, India appears to score better on that aspect; due to lots of micromanagement on local level?

I haven't sifted through this yet, but others might be interested.
http://agricoop.nic.in/stats1.htm
A quick view suggests that the number of agricultural workers has kept rough pace with census numbers.
...................
Something suggested earlier, but not fleshed out, can be gleaned from the following. I failed to mention Christian terrorism in India because I didn't have a site handy. If you check out the following site, do a 'find' for Assam, and you'll see some of the problems that India has to confront if she is to move ahead.
http://www.state.gov/g/drl/rls/hrrpt/2003/27947.htm

You might also look at
http://www.colaco.net/3/relintol.htm

Originally posted by Niddhogg:

Originally posted by jax:

It is practically a given that the Chinese and Indian farmers are not going to remain farmers in the future. That means a monumental job-creation scheme to make up for the hundreds of million of lost jobs, and also mean a major pool of cheap unskilled and skilled labour for a long time to come as people move from the countryside into the cities.

Just as during Europe's industrial revolution, artificial 'fog' included. You'd hope they'll be able to skip that step a bit faster than we did, India appears to score better on that aspect; due to lots of micromanagement on local level?

This topic appeared the same day one of the employees here got back from a business trip to the India office in New Dehli. She said that on a previous trip (two years ago) she couldn't see the sky the smog was so bad. It sometimes looked like rain in front of street lights. Nasty. This time she saw the sun and stars. No rain of pollution in front of the streetlights. She figured it was due to the recent completion of a plan to make all public transportation run on natural gas (methane). Very encouraging She said there was a lot of new development going on too.

Don't you Mean Hannibal Rising

<a href="http://www.ft.com/cms/s/0/1629d4e8-eb40-11df-811d-00144feab49a.html#axzz14k1WtyC4">Obama call for top India role at UN</a>

Originally posted by FT:

Barack Obama, US president, has backed India for a permanent seat on the UN Security Council in a diplomatic finale to his three-day visit that highlighted the tightening relationship between the world’s two largest democracies.

India’s leaders have campaigned for permanent Security Council membership for years, seeking an endorsement of a stronger role in multilateral forums, such as the UN, that reflects their claim to be a responsible global power. “The just and sustainable international order that America seeks includes a United Nations that is efficient, effective, credible and legitimate,” Mr Obama said in an address to India’s parliament.

“That is why I can say today, in the years ahead, I look forward to a reformed UN Security Council that includes India as a permanent member.” Mr Obama had previously supported Japan for a permanent security council seat.

Recognising he would struggle to match the US-India civil nuclear deal promoted by his predecessor, George W. Bush, Indian officials had lowered expectations for Mr Obama’s visit. They identified support for the permanent security council seat and the relaxation of export controls on US technology as the best they could hope for, and held out for strong criticism of neighbouring Pakistan for harbouring terror networks.

Mr Obama delivered on all counts, saying India had arrived as a global power that could stand “shoulder to shoulder” with the US.

I think though the image of rising india is created in front of the world,the true case is just different.Though india is riding on high tide now,but their basic facilities r just poor.Thr is 46% population of India which can afford food just for one time.Though image of rising india is created only few percent of people r getting advantage.Wealth in india is decentralized.And govt. is not at all interested in common man.All policies and advantages r for big fishes.

That is often the case unfortunately narutosenin. Even in the West take the US which is the richest country on the planet and there have always been legions of poor and downtrodden and homeless. It was just that they didn't fit into the dream picture and weren't part of the pr equasion. That you have got to almost 50% is something and the hope is this will gradually improve. The poor however will always be with us when you look at at most rich countries.

India has advantages over China among them is a more flexible government, You can criticize the Indian government Where in China dissenters end up disappearing and in a few months their body organs end up being sold with a bill for a bullet being sent to the surviving relatives.

Like who? You have the components. There were multiple disappearances after 1989, and after violent riots later. China has the death penalty and uses it very actively. If you are a dissident you may end up in jail, or if you threaten business interests you may be beaten up, though there are millions who criticise the government, it is a popular habit, without such consequences. There is a capricious element to it though, two people can do a very similar offence with one being jailed, and another let go. A common response can be to lose social benefits. In short the rule of law is lacking.

But if you peacefully protest the leading role of the Communist Party or something similar, you might possibly end in jail or getting a berufsverbot, you would not get a bullet. If you were found guilty of murder or arson you might get one (and I wouldn't put it past the legal system of getting the wrong guy). There are influential voices in China that believe that jailing people for their opinions is pointless and embarrassing, and political dissidents are harmless anyway, and there are voices of a different opinion. I wouldn't be surprised to see substantial liberalisation in <a href="http://my.opera.com/community/forums/topic.dml?id=773892">the next five year period</a>.

The most dangerous thing to do in China today would be to stand in the way of business interests. There is rampant corruption and considerable organised crime (to some extent that can be said about India as well). There is a change though. In the past a party boss could get away with murder, these day a corrupt boss (there are plenty) has to be a lot more careful. Bribing government officials is also fraught with danger.

It appears that the Communism leads to a breakdown of institutions associated with public safety. Civil rights go first. If you want to do business in either Russia or China there is a need to bribe a military and or party member. Admittedly in western countries Presidents, Ministers, Parliamentarians, Congressmen, etc are also bribed. In western Societies the process is institutionalized where when you place your bribe there are set prices and it is in the open, in the form of campaign contributions, expense paid trips, and jobs with a salary with no work or attendance required; guaranteed at leaving public service.

It is because that bribe taking has not been institutionalized in Communist Countries and Former Communist countries that they will never pass a certain economic plateau. The skyscraper fire in China is an example of this breakdown. Little or no planning for fire escapes, no fire or smoke alarms. In a western society when you bribe politicians you get a safe building due to the institutional safeguards. In China when you bribe a politician or inspector you end up with a lot of dead people.

Originally posted by jax:

Like who?

http://www.businessweek.com/blogs/eyeonasia/archives/2008/01/plastinated_bodies_from_china.html
http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=Chinese+disadents#hl=en&sa=X&ei=dcfiTKfFFYXCsAOk9phn&ved=0CBIQBSgA&q=Chinese+dissidents+disappearing&spell=1&fp=e101ff708d439543

Adventures in capitalism

Originally posted by The Economist:

ON AUGUST 1ST India’s finance minister, Pranab Mukherjee, gathered the country’s senior businesspeople for a pep-talk in New Delhi. The event (pictured) was notable for two reasons. First, the subject of discussion was the wobble in confidence that has taken place over the past year. Although a mini-industry has arisen of India optimists who predict that the country’s entrepreneurial spirit will make it an economic superpower over the next two decades, many business folk on the ground feel disillusioned. They worry that India’s notorious red tape, graft and lack of infrastructure are finally catching up with it. Largely unnoticed abroad and eclipsed by the rich world’s sovereign-debt crisis, the Indian economy has hit a sticky patch, with investment slowing, inflation high and growth expected to dip to perhaps 7%, from a peak of 10%. After two and a half hours, needless to say, the bosses emerged and expressed boundless optimism with the gruff air of men in the grip of a half-Nelson.

The second surprise, given India’s reputation as a land of red-hot start-ups and new entrepreneurs, was the dynastic nature of those captains of industry. They included Ratan Tata, the fifth-generation head of Tata Sons, a conglomerate; Anand Mahindra, the chief executive of the Mahindra group, which was co-founded by his grandfather; and Anil Ambani, who inherited a chunk of the Reliance empire built by his father. The main representatives of first-generation entrepreneurs were Shashi Ruia, who built the Essar group with his brother and who has handed day-to-day management to his son; and Sunil Bharti Mittal, who controls India’s biggest mobile-phone operator, and whose son recently joined the firm after a stint as an investment banker in London. True, not all Indian firms are dynastic: Y.C. Deveshwar, a veteran business leader, attended in his capacity as chairman of ITC, a firm controlled by institutional investors, rather than a family. But ITC has become the kind of conglomerate that Western textbooks advise against, spanning everything from stationery, cigarettes and spice-grinding to noodles and hotels.

I don't mind "India rising" but I sure as heck think it's about time our ever increasing Overseas Aid budget is cut back and excludes the country. That it is one of the few government departmens here to be boosted and we give money to places like India and Pakistan who are into great military spendng and H bombs (never mind space) is ridiculous.

The Great Overtaking, step 1.

Originally posted by Shanghaiist:

A new study released at the World Economic Forum in Davos, Switzerland claims that India now has the worst air pollution in the world, besting traditional crazybad air champion China, as well as Pakistan, Nepal and Bangladesh.

India ranks last out of 132 countries in the ‘Air (effects on human health)’ category of the annual Environmental Performance Index, compared to China's position at 128th worst air in the world (yes!). The overall EPI ranking for India is also worse than China's, with the world's biggest democracy coming in at 125th out of 132 while China fares a little better at 116th.[...]

The solution? Do it the Chinese way! Suck it up for the time being, get rich, overspend for a ridiculous house in a foreign country, and then move abroad. Easy!

70% of india's total income(3.73 trillion dollars approximaly)is held by some 7200 ultra-high rich out of the crores of people present in india.this is quite a outrageous figure.this is all due to the nexus present between politicians,corporate world and the underworld which has had huge negative implications.the recent coal mine scam worth 10.7 lakh crore rupees is the epitome of this existing vicious nexus.india would would have to make sweeping reforms(like bringing lokpal)to tackle this problem.

70% of india's total income(3.73 trillion dollars approximaly)is held by some 7200 ultra-high rich out of the crores of people present in india.this is quite an outrageous figure.this is all due to the nexus present between politicians,corporate world and the underworld which has had huge negative implications.the recent coal mine scam worth 10.7 lakh crore rupees is the epitome of this existing vicious nexus.india would would have to make sweeping reforms(like bringing lokpal)to tackle this problem.

the idea of tackling poverty is right,but poverty can only be tackled if they are helped monetarily. the nexus between the politicians,corporate world and underworld results in corruption which robbs the poor people of their fair share of money.many schemes(like MNREGA)have been launched to help them out,but about 50% of the sanctioned money is wasted due to corruption.i think only educated people should be allowed to contest elections in india.implementing this step will make india a better nation.

Well educated people are not somehow automaticcally honest hence the corruption in India! They are the ones wielding the control not the poor. It is also the same educuated who want large armed forces the H bomb and space directions. It is a damn shame for millions but their is money there but yet again another democracy gradually taken over by the corporates. Sad the people deserve better>