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India – From Third World to Emerging Giant. Really?

As I look at modern India afresh, it is eye-opening to say the least, to witness the scope of change that has swept across the country over the past couple of decades. This is the case ever since the country opened its doors to international trade under the Rao administration in the early ’90s. So over the years of visiting India since that time, one could feel the transformation occurring. Today, what I see is really the accumulation of all that has happened in these intervening years and it’s remarkable and amazing. [In this post, I will try my best to stay away from some basic things that should have changed, but did not].

All in all, these economic reforms have made a profound and  colossal impact on the country – in how people live today and in how they think about the future and in its sheer economic potential.

Map showing India and Worldwide Foreign Relations

LEGEND: Grey:India; Dark Blue: Countries with key military, strategic and economic relations with India; Med Blue: Key strategic and economic relations; Lt Blue: Favorable Relations; Red: Border/Territory disputes with India

I recently came across an interview with an economist who put some numbers to my thoughts. As much as one may imagine they know about India’s future, these numbers were…well, mind-boggling.

The economist in question is Arvind Panagriyaa Professor of Economics & Jagdish Bhagwati Professor of Indian Political Economy at Columbia University and a Non-resident Senior Fellow at the Brookings Institution.  He is also author of a book, The Emerging Giant, which was published in 2008 and described by Fareed Zakaria as the ‘definitive book on the Indian economy’. 

Here are some of the points he made about India and the future of the nation in a recent interview (content of interview paraphrased below):

India will be a global Superpower in the next 15 yrs – by about 2025.

In the last eight years, India has grown about 8-9% in real rupees, which translates to about 13% in real dollars. Even if the growth is 10% a year, the economy will go from $1.7 trillion to $7.0 trillion by 2025 which will enable it to pass Germany, UK, France and Japan.  India will be the 3rd largest economy, behind only China (#1) and United States (#2).

“Browning” of the globe

In the next 15 years, the world (basically the developed countries and China other than India) will be less 100 million people. On the other hand, India will be adding 130 million people in the age group 20 to 49. This means that India will actually be supplying the global work force.

What about inflation and corruption?

Inflation and corruption are issues that have plagued this country even during this past time of growth. So, while they will always have a negative impact, the projected growth rate will not suffer. 

What might be some deterrents to meeting these projections?

The only real deterrent is if something unexpected happens to reverse the economic reforms that have been in place for the past two decades.

And, of course, there are innumerable things that the Government can do better.

Some of the needs of the country, according to Panagriya, include the following:

    • Better education policy and opportunities, particularly in higher education
    • Land reform
    • Redistribution of wealth to reduce poverty
    • Less government control of implementation of policies and services delivery – involving private sector more and more; the government of India simply does not have the capacity to carry out some of the more ambitious goals of the country.

Poster; Artist: Maurice Mellier, 1941-43 (Source: US Library of Congress)

Based on Panagriya’s opinions and his projections, India indeed appears to be an emerging giant. Its future appears assured and bright, whether looking at in isolation, or on the evolving global stage. And the realization of the scope of this country’s potential is only now penetrating and spreading around the world.  

Remember Japan?

But.  As bright as it looks in the future, the reality can differ from projections. And how! Does anyone remember Japan and the predicted glory days that ended in a crash that the country is yet to recover from? Some three decades ago, Japan was like China is today. It was a relentless growth story towards far-reaching economic progress. It was only going to be a matter of time before Japan became mightier than the US as the world’s largest economy.

Or the case of Southeast Asia – until 1997, Asia attracted almost half of the total capital inflow into developing countries. The economies of Southeast Asia attracted foreign investors looking for a high rate of return while the regional economies of Thailand, Malaysia, Indonesia, Singapore, and South Korea experienced high growth rates, 8–12% GDP, in the late 1980s and early 1990s. This was widely acclaimed and was known as part of the “Asian economic miracle”. Then came the Asian financial crisis which was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown.

What about India?

This is not to say that the same will occur in India!  However,  it’s prudent to mix caution with high flying projections.

In addition, it is disheartening to see some of the endemic issues that plague this country being ignored by the government. Am I sounding like a broken record about this? Well, so be it.

For example, corruption is a top-of-the-mind issue and a mighty blight that needs to be eradicated.

Here is one of the most fundamental ways that it impacts this country: The way I see it, once it is less easy to be a corrupt politician, I feel that this country can count on getting real leaders to step forward – those who are there to be of service to the citizens and country, not just to fatten their bank balances. Isn’t it past time for Indian politicians to stop treating their work as a personal business?

Until such a time that the right leadership (which is not apparent where I look) is not part and parcel of India, I must be honest, it is very, very, very hard to believe in these numbers alone. 

With the right leadership, everything has a much better chance of falling into place.

As India is often touted as the largest democracy in the world, it will be up to the people to vote carefully – with a view to bringing in those leaders that can leverage potential into reality, assuring a bright future for them and their descendants.

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India Foreign Relations Map: By User:SpartianSpartian at en.wikipedia or Deepak Gupta at Wikimedia Commons.  User:Spartian with changes by User:Emperor Genius [Public domain], from Wikimedia Commons

The Naysayers of Anna Hazare – Are they right?

As the protests grow and massive momentum builds among people of India, whether they live in large or small cities here, or whether they live in cities around the world, criticism for Anna Hazare also mounts (though not quite at the same pace or scope).

Here the common themes of the naysayers –

1.Anna is subverting the democratic process by insisting on his version of the Lokpal be passed.

2.Anna’s version of the Lokpal is seriously flawed. It is too complex. It will create a parallel bureaucracy.

3.Every time a citizen has a complaint, he can’t just fast and hold the government hostage.  This is blackmail.

4.The people who are supporters of Anna Hazare really don’t understand or know the details of Jan Lokpal. This is blind trust.

5.Team Anna is being stubborn and are not willing to compromise. It’s their way or the highway.

Let me try to address these points based on what Team Anna has been saying, combined with some of my own reading (& opinion!) on the topic.

1.Anna is subverting the democratic process by insisting on his version of the Lokpal be passed.

This comment has come from several quarters – many bureaucrats, babus and politicians especially. In April, when Anna held his first fast, he wanted to work with the government to create a strong Lokpal bill. After first refusing to consider this, the government capitulated to create a Joint Committee to work on such a bill. This was only after they saw the massive citizen support that Anna received. Anna stopped his fast, deceived into believing in the sincerity of Government.

Unfortunately, what happened in the joint committee was a sham and what came out is nothing short of a joke.  Anna is not about to be taken for a fool a second time around. This time, merely the government “giving their word” that they will listen and take serious action is just not going to be enough. Team Anna will be insistent on strong and unbreakable assurances. The government created this situation of distrust. Team Anna truly were left feeling tricked and used. Can anyone blame Anna?

2.Anna’s version of the Lokpal is seriously flawed. It is too complex. It will create a parallel bureaucracy.

According to Arvind Kejriwal and Prashant Bhushan, the Jan Lokpal bill has been created and evolved over several months. The process has been transparent and over 3000 suggestions received on their website have been reviewed and incorporated. Everything is relative so at this time, just compare Jan Lokpal to the government’s Lokpal bill.  Even if it is flawed, it incorporates policies and procedures that will make it hugely more effective than the joke that the other side has put forth. Likely, it does have flaws, but nothing says that these cannot be debated and worked out over time. The trick is getting an honest platform to do so.

3.Every time a citizen has a complaint, he can’t just fast and hold the government hostage.  This is blackmail.

Actually, every citizen of a democracy (not just India but any democracy) has a right to express his or her opinion, and has a right to fast, if that is the way he chooses to protest.  In fasting, he is not harming any body else. India has had a history of people fasting for various reasons (including religious ones). Gandhi engaged in several famous hunger strikes to protest British rule of India. Fasting was a non-violent way of communicating the message and sometimes dramatically achieve the reason for the protest. This was keeping with the rules of Satyagraha.

Here is what has the government running scared. It is not that Anna Hazare is fasting. It is the sheer scale of support that he has received across the board – from people of all ages, all religions, all political parties and all walks of life. This support is what is holding the government hostage.

4.The people who are supporters of Anna Hazare really don’t understand or know the details of Jan Lokpal. This is blind trust.

This begs the question of whether everyone who lived through India’s independence movement really knew all the strategies and tactics used by the leaders – Gandhi and others around the country. Absolutely not.  But they believed and they followed. What was it that they believed and followed?  It was the leaders themselves who had selflessly demonstrated their conviction for right. They had not done this overnight; in fact, their credibility was built over many years of service and results.

Today, people have heard a clarion call to end corruption. It touches every one in some way or the other. Many are not just “blindly” following these new leaders. On the other hand, Anna Hazare and his lieutenants, all of them being luminaries who have demonstrated in various ways – through thought, word and action their honesty, fervor and service to people of India – have thus gained their inherent trust.

5.Team Anna is being stubborn and are not willing to compromise. It’s their way or the highway.

This is in many ways related to the first point above. By actions that the government took since April, they have instilled great mistrust within Team Anna. Therefore, there is wariness about trusting anything they say now. Any assurances given by them now have to deep, sincere and truly believable.

Until then, it is unlikely that Anna Hazare will budge. Now, he has the strength of the masses behind him as well. So, why should he compromise? Especially when he feels so strongly that this country needs an effective and actionable Lokpal bill to truly end the scourge of corruption in India.

TRUST – The Missing Piece of the Puzzle?

It’s really not clear what actions the Government will take to end this impasse. Now, rallies are being organized around the world. Today, I saw videos of people gathering in support of this movement by Indians in Canada, U.S., U.K, Australia and Germany. The movement only seems to be expanding further afield than even Anna imagined. Meanwhile, the Government is undoubtedly wishing that it would wane.

What is needed now, before anything else can be accomplished, is the establishment of trust between the two parties, possibly through a strong mediator who Anna (i.e. the people) have the utmost confidence and faith in. Once the impasse is broken, only then will it be possible for any remaining issues in Jan Lokpal to be worked and appropriate laws be passed.

Until that time, I’m afraid, the Government will look by turns, arrogant and weak, while the Anna Hazare team has a fast growing people’s movement and momentum behind it that is becoming more robust and intense by the hour. In one word, formidable.

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P.S. I just realized something. The title of the post is “The Naysayers of Anna Hazare – Are they right?“.  Although I pontificated above, I see that I have not directly answered this (non-rhetorical) question that I posed.  So, here is my answer.  The simple answer is no.  And it’s really almost more important to understand what is behind these critical statements to get to the crux of the matter. 

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Cartoons; Source: India Against Corruption Facebook Page

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