India and the New Economy

There is a fairly good library here at the Technology Park where we have our office in Kuala Lumpur. I get to read many books that I might never have read otherwise, because it has a large number of books on business, the East Asian cultures and Islamic history which had never really attracted my attention in the past. One book that I recently read was The Miracle. Written by financial journalist Michael Schuman it describes how Asia has become the success story of the past 50 years since the Second World War and more particularly since the sixties, when first Japan, then Korea, Singapore and now several other countries have broken free from poverty and reached first world status. And now the story is of China and India which are finally also breaking free from poverty levels that had remained unchanged for hundreds of years while we were under European domination. India and China were the world’s dominant economic powers until 1600 when India and China together accounted for 52% of the world’s GDP until we fell behind as the Industrial Revolution happened and colonial exploitation reduced us to poverty. Only today we are breaking out of this poverty trap and taking our rightful position in the world.
The story of Asian success suggests that economic development is related to State controlled capitalism, and lack of democratic freedoms. This has been true of South Korea during the days when it rose from being a poverty stricken third world country to the proud heights of today; Singapore has always been a tin pot dictatorship since the day it split off from Malaysia and Malaysia too has had a fairly rigid one party rule with a captive judiciary. The state of freedom in China, of course is well known, Tiananmen Square proved that whether favouring a capitalist model or a classical communist one, the rulers are an unpleasant, and ruthless crew, especially when there is any threat to their absolute rule
However these countries have also had a huge rate of growth dwarfing that of other parts of the world for the past four decades. Only South Asia, or to be more specific, India has had a much lower growth rate , though this too has been larger than most other regions of the world and way above the world average. For instance South Korea increased its income by about 15000% from 1965 to 2007, Taiwan by more than 7000% China by 2260 % and India by almost a 1000% .However what is unique about India is that this is the only region where growth has taken place in a full scale democracy and a more raucous and fractious democracy would be hard to find. It must be remembered that while India has been a cultural whole from time immemorial, it has only been a political entity for 60 years. Even the British did not wield it into one country as they often claim , as more than one third of the country was a patch work of semi independent fiefdoms, where the rulers pretty much made up all the rules so long as they paid the due tributes to the Empire. And to this famously argumentative country came democracy. There is no country in the world that so many regional pulls and pushes exist, there is no country where there are so many religions and sectional groups all demanding their pound of the fiscal pie. Sometimes one despairs that any development can ever take place in India.
But it has! Over the past two decades, India has grown at a pace that defies all logic. Those of us who got their first jobs in the middle eighties know to our advantage what a sea change has come to salaries and incomes in this period. I do not pay any attention to those Cassandras who only find desolation and despair in the growth story of India. We are a nation of professional pessimists who refuse to see what is happening even if it is in front of our eyes. I sometimes read our lefty pals telling us that Bangladesh is doing so much better than us in many parameters which they conjure up from somewhere. It reminds me of the glossy magazines from the Soviet Union that we all used to subscribe to in the sixties and the seventies. All was so wonderful in the Communist countries, but it was their citizens who risked life to try to escape to the exploitative West at any opportunity. I never heard of any oppressed citizen from the Western democracies defying bullets to cross the Berlin Wall from the West to the East, it was always the other way around.
Similarly though, according to the lefties we have such a poor record, the Bangladeshis and Nepalis are rushing to enter our country, I have never heard that even anybody from the minority community has gone Eastwards to Bangladesh or of our Indian Gorkhas escaping to Nepal. So we must be doing something right and to anybody who has eyes to see, the evidence is in front our eyes.
The point I was trying to make is that whole we have not yet escaped from the third world, there is every hope that we will do so in the next 15-20 years if we go on the way we are. And if we do so, we will be first to do so as a democracy, with so many pull and pushes from all sides, so much dissent, so much debate and so many difficulties which the dictatorships did not have to face. This will prove that lack of civil liberties is not a sine qua non for development. To my mind this will be as important a contribution to mankind as our religions which today control the hearts and minds of a full half the world’s population, a fact that is not really registered because of all the noise made by the Semetic religions.
The only question is we going to get there? Of will Kisshanji force us back to the China of the sixties or North Korea of today? Will the hypocrites of the CPM push us back to policies that may have had their uses in Nehruvian times but are totally irrelevant today and force us back to where they believe we belong: the last few benches in the class of 2020?


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