What do you think about India’s economic future? I do realize it has potential, but there just seems to be so many obstacles for the country. Hopefully, we can come up with a list of strengths and weaknesses.
I am pessimistic about India. India’s extremely large federal government is extremely corrupt. India is now one of the most corrupt states. Its “Five Year Plans” are socialist. The average IQ of India is only 82, as in the book IQ and Global Inequality, by Richard Lynn. It is caused by its malnutrition and the poverty of its vast majority of its population. Its increased usage of its toxic skin whitening products also degrades intellectual ability. Miscegenation between Indians and white Europeans is common, as white skin and white people are highly valued in India; partly caused by its colonial mentality. Prostitution is also a huge problem in India, but its AIDS problem is relatively low.
Let’s see.
One of the main problems could be how, like many other modern national countries, India is an hodge-podge of various people, tribes etc. Far from being a willing federation the present state merely took over where the Raji left and has been living on its own people inertia ever since. Without going into detail (it would take many, many hours) let’s just say that the North and the South don’t get along that well, to the point that despite all the claims towards “universal” use of Hindi as a universal language northern and southern bureaucrats only communicate in English, which is the country lingua franca.
The same attitude is more or less shared by the people at large: northeners believe southeners to be lazy, corrupt and living off their hard work. Southeners believe northeners to be haughty, arrogant and power-crazed.
Another problem could be that India is, economically-wise, two completely separate countries in one. On one side you have roughly around a hundred million persons making up the “Indian boom”, attending prestigious universities, building up economic giants etc. On the other you have a billion persons still living like when the British left in 1947, perhaps even worse. The gap between these two countries is widening each day.
Third and final problem is India’s inferiority complex and (partly justified) paranoia, which led them to build an enormous, absolutely useless army and navy which are guzzling up precious resources. The Indian military still wants to prove their tougher than their “martial” Pakistani neighbours (British preferred Sikhs, Punjabis and other “martial races” over the “debased” people of the East and South) and, more importantly, the still want revenge for the crushing defeat the Chinese inflicted upon them. They know very well that Chu En Lai stopped his victorious divisions to avoid troubles with the Soviets and the Americans, not the broken Indian regiments. Also they feel “encircled” by enemies, particulary China. But that’s another story for another day.
Yes, I see that too. Pakistan, Ceylon, Nepal, and Bangladesh are having severe internal problems (Afghanistan is in worse shape). Bhutan’s economy is a basket case. Burma and the the Maldives are dictatorships. Then there is China. This hurts India’s potential.
Besides corruption, another problem with the government is its democracy. It seems that in order to form a Parliament majority, the main political party has to form an alliance with socialist members.
But what are India’s economic strengths? And why is there such a focus on its economy nowadays?
Cheap labor…
China has been stepping up the ladder as have most of the early adopters to pick up the slack from the de-industrialization of the States and Europe. Companies now have to go elsewhere to relocate their factories to take advantage of cheap labor and India is the next stop.
The first rounders, Japan and Korea, are world players and the second rounders, Thailand and a few others aren’t too far behind. China is a special case since they recently adopted the capitalist craze and have always been world players in their own way.
India is the next logical choice – highly educated skilled workforce combined with almost unlimited super cheap labor, they’re a Big Pig Capitalist’s wet dream… well, if they can buck their socialistic tendencies.
That’s my take anyway.
Why is India always considered to be a capitalist country? It isn’t, even less so than China. The morons who authored the Black Book of Capitalism were probably desperate to find countries to list in their book; after all they included colonialism as a capitalist phenomenon…
i thought under mises’ criteria, the existence of a stock exchange was enough.
i’m bullish long-term on india. rao’s reforms of the early nineties seem to have cleared out a good deal of the old nehru socialist mindset. the software industry flourished in the international arena, leap-frogging the local obstacles to enterprise. the currency is heading in the right direction (48 rupiah/usd in 2002, 39 now), never a bad long-term proxy for economic health. india is the world’s biggest gold consumer. the indian diaspora is very wealthy and numerous (and a big source of domestic investment). rule of law is a plus, although pitifully slow and tainted by corruption. (chinese property rights seem very much a work in progress, a lot of peasant anger about land seizures, i don’t like where that’s heading…).
other than that, i agree on the negative points mentioned in the other posts, though i think i.q. is a useless concept (“libertarian”/richard lynn).
Well yes, but at most it’s a hampered market economy. A lot of people seem to think it is highly market-oriented, which it isn’t.
libertarian, I wonder where you got your facts. This is simply not true. Yes, many Indians (not all) prefer fair skin (not white), but they are also rabid about genetic purity. It’s hard enough for inter-caste and inter-religious marriage to gain acceptance. Children from inter-racial marriages are faced with life long humiliation and discrimination. You might find this strange and cruel, but that’s the way things are today.
I agree that the federal Govt is extremely large and corrupt, and it’s getting bigger and more powerful because tax-revenues are rising with increasing prosperity.
Cheers!
MCLA
It may not be such a good time to ponder India’s future right now. Depending on what happens in Pakistan, India may not have a future. Especially if the unfolding events lead to an Islamic takeover in Pakistan and control of the nuclear weapons fall into the hands of Islamic militants.
The situation in Pakistan is very bad at the moment. As I mentioned before, Afghanistan, Nepal, Burma, and especially Pakistan are all in a real mess. The issue with Pakistan, however, is the most dangerous for India. One of my history professors, Allan R. Millett, talked about this issue. He viewed the possibility of a military confrontation between India and Pakistan as the most likely place for a nuclear war to occur.
Speaking of Pakistan, Ron Paul had this to say about the situation:
To be honest, Dr. Paul’s stance is pretty much common sense. Unfortunately, I do share his fears on increased U.S. involvement in Pakistan. I know that a few months ago Obama supported an American military presence in Pakistan. Although I found this position extreme even for mainstream politics at that time, something tells me it will become a “legitimate” issue now.
My dad wrote a book arguing for free-market reforms in India, where he answers your question. However he’s not an Austrian economist, since his training is in mainstream economics. Although he’s slowly coming around I think, at least on certain issues.