Travel and Personal

India Nuggets: Happy Republic Day

January 26 is India’s Republic day, the day in 1950 that we chose to be a republic. As a modern republic and nation state, India is today 57 years old.Some interesting guardedly optimistic readings to celebrate, and thank those that preceded us, for what they built (and a hope that we don’t screw it up).

Goldman Sachs is bullish on India: Various papers (IHT, HT) are reporting a new Goldman Sachs report that predicts India will be the 2nd largest economy in the world by 2050, surpassing the US in size. This latest report marks an upgrade for India, from Goldman Sachs. According to IHT:

India has moved onto a much faster growth trajectory than the bank had previously expected, fueled by strong and steady productivity gains in its legions of new factories, which are producing everything from brassieres to cars.

Goldman now expects the Indian economy to grow at 8 percent a year through 2020, higher than the 5.7 percent rate it predicted in 2003 (original report here).

It is not all good news. The growth will create competition for resources and severe environmental damage. It will also result in an estimated 700 million migrants into urban centers.

The Harvard International Review has a special feature on India, with three articles (the APAC section has more, worth reading):

• Going Forward: A review of future prospects
• India Needs its NGOs: A piece on civil society
• Regenerating Lands and Livelihoods: on sustainable resource management

Going Forward, by Nirvikar Singh is peppered with western influenced economic ideals such as a preference for free trade, which is somehow expected to promote employment. Still, it understands well India’s challenges and its fairly unique context:

Among developing nations, the combination of a large population, a democratic government, and a strongly multi-religious and multi-ethnic demographic makes India somewhat unique.

The plan to create growth first and then equity later may work in the Chinese political system, but it will not be successful in India’s democracy. India needs a more inclusive model of development.

Milton Friedman did some work on India, in 1955 and after. As reported by Sepia Mutiny (part I and part II), Friedman was both appreciate of India’s potential, and frustrated for its waste. In 2000, he said:

I continue to be impressed by India’s enormous potential and depressed by the contrast between that potential and the minimal progress that has been achieved in the forty-five years since I was first in India. The latest decade shows more signs of change. India may finally be on the way to realizing its potential. If so, it will be a blessing for the people of India and for the world as a whole.

In July 2006, he said of India and China in an interview:

Yes. Note the contrast. China has maintained political and human collectivism while gradually freeing the economic market. This has so far been very successful but is heading for a clash, since economic freedom and political collectivism are not compatible. India maintained political democracy while running a collectivist economy. It is now unwinding the latter, which will strengthen freedom of all kinds, so in that respect it is in a better position than China.

© 2007 The Discomfort Zone.