beijingwalker
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India losing out to China on development
21 JAN, 2013, 01.18AM IST, NEW YORK TIMES
21 JAN, 2013, 01.18AM IST, NEW YORK TIMES
As recently as 2006, when I first visited India and China, the economic race was on, with heavy bets being placed on which one would win the developing world sweepstakes.
Many Westerners fervently hoped that a democratic country would triumph economically over an autocratic regime.
Now the contest is emphatically over. China has lunged into the 21st century, while India is still lurching toward it.
That's evident not just in columns of dry statistics but in the rhythm and sensibility of each country. While China often seems to eradicate its past as it single-mindedly constructs its future, India nibbles more judiciously at its complex history.
Visits to crowded Indian urban centers unleash sensory assaults: colorful dress and lilting chatter provide a backdrop to every manner of commerce, from small shops to peddlers to beggars. That makes for engaging tourism, but not the fastest economic development.
In contrast to China's full-throated, monochromatic embrace of large-scale manufacturing, India more closely resembles a nation of shopkeepers. To be sure, India has achieved enviable success in business services, like the glistening call centers in Bangalore and elsewhere. But in the global jousting for manufacturing jobs, India does not get its share.
Now, after years of rocketing growth, China's gross domestic product per capita of $9,146 is more than twice India's. And its economy grew by 7.7 per cent in 2012, while India expanded at a (hardly shabby) 5.3 per cent rate.
China's investment rate of 48 per cent of GDP a key metric for development also exceeded India's. At 36 per cent, India's number is robust, particularly in comparison with Western countries.
But the impact of that spending can be hard to discern; on a recent 12-day visit to India, not many rupees appeared to have been lavished on Mumbai's glorious Victoria Terminus, also known as Chhatrapati Shivaji Terminus, since it was constructed in the 1880s.
Parts of Mumbai's recently built financial district Bandra Kurla Complex already look aged, perhaps because of cheap construction or poor maintenance or both. It's hardly a serious competitor to Shanghai's shiny Pudong.
China has 16 subway systems to India's five. As China builds a superhighway to Tibet, Indian drivers battle potholed roads that they share with every manner of vehicle and live animal. India's electrical grid is still largely government controlled, which helped contribute to a disastrous blackout last summer that affected more than 600 million people. Yet Morgan Stanley stands resolutely behind its 2010 prediction that India will be growing faster than China by the middle of this decade.
It isn't going to happen, India's better demographics notwithstanding. For one thing, many of India's youths are unskilled and work as peddlers or not at all.
For another, despite all the reforms instituted by India since its move away from socialism in 1991, much more would have to change. Corruption, inefficiency, restrictive trade practices and labour laws have to be addressed.
With 5.3 pc growth rate, India losing out to China on development - The Economic Times
