Saturday, April 24, 2010

BRIC, Chindia and the Indian Miracle

India's rapid economic growth has brought it enormous positive attention of the world media, billions of dollars in foreign investments, and new-found status on the international diplomatic scene. Goldman Sachs has promoted it by coining the term "BRIC" which groups India with other major emerging markets like Brazil, China and Russia as an investment destination. Inclusion in G20 has put the Indian leaders alongside the world's richest G7 nations. Indian business leaders in partnership with India's planning commission have mounted unprecedented "India Everywhere" branding campaign at the World Economic Forum held in Davos, Switzerland each year. Indian writers have been promoting "Chindia" which seeks to put India on an equal footing with China.



Goldman Sachs has clearly contributed to the euphoria about India, by projecting that its economy could be 50 times its 2006 size by 2050, which would make it the world's third largest, after China and the United States. However, Goldman's Jim O'Neill has also said that when he ranked countries by the potential risks to their growth — everything from inflation to corruption — India ranked 97th in the world, behind Brazil and the Philippines. London-based Maplecroft terror risk index based on 2009 data ranks Iraq first, Afghanistan second, with Pakistan and Somalia third and fourth respectively. They are rated at extreme risk along with Lebanon 5, India 6, Algeria 7, Colombia 8 and Thailand 9, according to Reuters.

The UK-based risk advisory group's index tracks the risks of an attack, the intensity of violence as measured by casualties per incident, a country's history of extremist violence and threats made against it by groups such as al Qaeda.

"Media coverage can often skew public perceptions of terrorism risk in a country by publicising mass casualty attacks," said Maplecroft political risk analyst Eva Molyneux.

Having been subjected to a barrage of Indian marketing messages in the last decade, I have been trying to assess how much of it is real, and what part is just pure hype by the western and Indian media. A recent interview given by Dr. Jayati Ghosh has helped me put it in perspective. Dr. Jayati Ghosh is Professor of Economics and currently also Chairperson at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi.

Comparing China and India:

Here are the key points Dr. Ghosh makes:

1. Talk of Chinindia is nonsense. China and India are two very different countries with different histories. India has never done the hard work of basic reforms that China did decades ago. Unlike India, early reforms combined with greater state control on the economy have helped China achieve rapid and massive reduction in poverty.

2. Unlike China, India does not run any trade surplus or current account surplus to fund its growth. In fact, India has been running significant twin deficits. India depends much more on foreign investments for its growth than China.

3. Although large number of Indians estimated at 110 million have been the main beneficiaries of India's rapid economic expansion, their numbers are only about 10% of India's 1.1 billion people. The growth has excluded the rest of the 90% of the population, leaving them in abject poverty.

4. Instead of fighting against economic injustice, people are being divided along ethnic, religious and caste lines. There is an increase in all kinds of unpleasant social and political forces in India, where people are turning against each other, against linguistic, caste and faith groups, because they can't hit at the system—it's too big. So they pick on somebody their own size, or preferably smaller.

Comparing India and Pakistan:

There are some arrogant Indians in cyberspace as well as the physical world who contemptuously dismiss any comparison of India and Pakistan. However, the responsible Indian and UNICEF officials concur that Indians are much worse off than Pakistanis and Bangladeshis in terms of basic nutrition and sanitation.

India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement in the area despite big money being spent on it, said India's Planning Commission member Syeda Hameed.

"There has been an enormous infusion of funds. But the National Family Health Survey gives a different story on malnourishment in the country. We don't know, something is just not clicking," Hameed said.

Speaking at a conference on "Malnutrition an emergency: what it costs the nation", she said even Prime Minister Manmohan Singh during interactions with the Planning Commission has described malnourishment as the "blackest mark".

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," she said. The conference was organized in 2008 by the Confederation of Indian Industry and the Ministry of Development of Northeastern Region.

According to India's National Family Health Survey, almost 46 percent of children under the age of three are undernourished - an improvement of just one percent in the since 2001.

India might be considered an emerging economic power, but it is way behind Pakistan, Bangladesh and even Afghanistan in providing basic sanitation facilities, a key reason behind the death of 2.1 million children under five in the country. Lizette Burgers, chief water and environment sanitation of the UNICEF, has said India is making progress in providing sanitation but it lags behind most of the other countries in South Asia.

While a mere 14 percent of people in rural areas of India - that account for 65 percent of its 1.1 billion population - had access to toilets in 1990, the number had gone up to 28 percent in 2006. In comparison, 33 percent rural Pakistanis had access to toilets in 1990 and it went up to an impressive 58 percent in 2006.

Similarly in Bangladesh, 36 percent of rural people have access to proper sanitation. The corresponding figures for Afghanistan and Sri Lanka were 30 percent and 86 percent respectively.

“This is a huge problem. India has made some progress but there is a lot to be desired. The speed in which we are (India) increasing the toilet usage will not help much,” Burgers told IANS, a day before an international sanitation campaign in Delhi.

She, however, said that the huge population in India is a major challenge. Burgers said that between 1990 and 2006, rural areas of the country has witnessed a growth of 181 million people of which 39 million people did not have access to toilets.

According to the international health and sanitation watchdog, there are at least 2.5 billion people across the globe who do not have access to toilets and 50 percent of them are in the south Asian region.

Pakistan's water quality is not good, but it is significantly better than in India.

On page 288 of his book "Water management in India" the author P. C. Bansil quotes a UN study that says India ranks a poor 120 on a list of 122 countries in water quality.

India's neighbors Bangladesh, Nepal, Sri Lanka and Pakistan rank much better at 40, 64, 78 and 80 respectively.

Growing Poverty in India:

Part of the problem fueling anger and insurgencies is the growing number of the poor in India. Here's a recent Reuters report:

"India now has 100 million more people living below the poverty line than in 2004, according to official estimates released Sunday.

The poverty rate has risen to 37.2 percent of the population from 27.5 percent in 2004, a change that will require the Congress-ruled government to spend more money on the poor.



The new estimate comes weeks after Sonia Gandhi, head of the Congress party, asked the government to revise a Food Security Bill to include more women, children and destitutes.

"The Planning Commission has accepted the report on poverty figures," Abhijit Sen, a member of the Planning Commission told Reuters, referring to the new poverty estimate report submitted by a government panel last December.

India now has 410 million people living below the U.N. estimated poverty line of $1.25 a day, 100 million more than was estimated earlier, officials said.

India calculates how much of its population is living below the poverty line by checking whether families can afford one square meal a day that meets minimum nutrition needs.

It was not immediately clear how much more the federal government would have to spend on the poor, as that would depend on the Food Security Bill when it is presented to the government after the necessary changes, officials say.

India's Planning Commission will meet the food and expenditure secretaries next week to estimate the cost aspects of the bill, government officials said.

A third of the world's poor are believed to be in India, living on less than $2 per day, worse than in many parts of sub-Saharan Africa, experts say".


Here is the entire transcript of Dr. Ghosh's interview:

PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay. Joining us again from Amherst, Massachusetts, from the PERI institute, is Jayati Ghosh. She's a professor of economics at the Center for Economic Studies and Planning at the School of Social Sciences at JNU in India. Her recent book is After Crisis. Thanks for joining us again, Jayati.

JAYATI GHOSH: Hello.

JAY: So there's a lot of talk about the growth and expansion in India and China, and especially India these days. We're hearing again about the Indian miracle. Whose miracle is it, anyway? And is it such?

GHOSH: No, it's not actually a miracle. In fact, I think—first of all, let me clarify. India and China are very, very different. We really can't compare them. And all this talk about Chindia and so on, it's nonsense, because China is a fundamentally different country. It's not just that it has had much more rapid growth for a longer period and been more successful in poverty reduction, but it's a whole different institutional system. It still has much more substantial state control, especially over finance. It is still able to manipulate the nature of the growth of the economy more directly through the central state than India is. And because it had a revolution and because it had land reform and egalitarian income distribution it was operating on a much more equal asset base, which then allowed economic policies to have different effects. India is different. In India we never did the hard work in terms of the major transformations, like asset redistribution, land reform, and so on. We still have a very unequal society, of course, income distribution as a distribution.

JAY: Well, before we go to India, let's just back up to China for a second, because we'd been hearing that a lot of that income distribution, land reform, and a lot of that's been undone over the last 10, 15 years, and this kind of rise of state-managed capitalism in China is going back the other way. Is that not the case?

GHOSH: To some extent. But remember that the base on which it was operating was still fundamentally more egalitarian. And that's important because, you know, the major episodes of poverty reduction in China, if you look at it, are the early 1980s and the mid-1990s, and these were periods when agriculture prices rose and benefited the farmers. Now, that helped poverty reduction and income distribution, because there was egalitarian land distribution—it was the peasant households that benefited and became less poor and all of that kind of thing. So poverty reduction had been closely related to that feature of China, which is very different from India. But you're right that the pattern of growth from the early 1990s has been in equalizing, has been one which has, you know, focused on this export-led growth paradigm in the coastal region, neglected the west and the central regions, you know, brought in migrant workers, often in terrible conditions, by suppressing growth in the countryside. All of that did happen. Again, I think the difference is that from about 2002 you find that the Chinese state is more aware of this, so there's a shift in terms of public investment towards the central and the western regions. The latest stimulus package disproportionately they're spending in the west and the central regions of the country. There was an attempt to give more rights to migrant workers who are normally denied all the rights that are available to urban workers. There is now the attempt to revamp the health system and make it once again something which is affordable for all Chinese citizens. So there has been a shift in the recent past in China.

JAY: So in India you're saying there never was major reforms and it's getting worse.

GHOSH: Absolutely. If you look at the pattern of Indian growth, it's really more like a Latin American story. We are now this big success story of globalization, but it's a peculiar success story, because it's really one which has been dependent on foreign—you know, we don't run trade surpluses. We don't even run current account surpluses, even though a lot of our workers go abroad to Saudi Arabia and the Gulf, to California, as IT workers. We still don't really run current account surpluses. So we've been getting capital inflow because we are discovered as this hot destination. You know, we are on Euromoney covers. We are seen as this place to go. Some of our top businessmen are the richest men in the world. They hit the Fortune top-ten index. All of that kind of thing. This capital inflow comes in, it makes our stock market rise, it allows for new urban services to develop, and it generates this feel-good segment of the Indian economy. Banks have been lending more to this upper group, the top 10 percent of the population, let's say. It's a small part of the population, but it's a lot of people, it's about 110 million people, which is a pretty large market for most places. So that has fuelled this growth, because otherwise you cannot explain how we've had 8 to 10 percent growth now for a decade. Real wages are falling, nutrition indicators are down there with sub-Saharan Africa, a whole range of basic human development is still abysmal, and per capita incomes in the countryside are not growing at all.

JAY: So I guess part of that's part of the secret of what's happening in India is that the middle, upper-middle class, in proportion to the population of India, is relatively small, but it's still so big compared to most other countries—you were saying 100, 150 million people living in this, benefiting from the expansion. And it's a lot bigger. It's like—what is it? Ten, fifteen Canadas. So it's a very vibrant market. But you're saying most of the people in India aren't seeing the benefits.

GHOSH: Well, in fact it's worse than that. It's not just that they're not seeing the benefits. It's not that they're excluded from this. They are part of this process. They are integrated into the process. And, in fact, this is a growth process that relies on keeping their incomes lower, in fact, in terms of extracting more surplus from them. Let me just give you a few examples. You know, everybody talks about the software industry and how competitive we are. And it's true. It's this shiny, modern sector, you know, a bit like California in the middle of sub-Saharan Africa. But when you look at it, it's not just that our software engineers achieve, it's that the entire supporting establishment is very cheap. The whole system which allows them to be more competitive is one where you are relying on very low-paid assistants, drivers, cooks, cleaners. You know, the whole support establishment is below subsistence wage, practically, and it's that which effectively subsidizes this very modern industry.

JAY: What's happening politically? Do you see a reflection of resistance as a result of all this, coming from the impoverished people?

GHOSH: Well, you know, unfortunately, I think that there is a tendency now in India for these very major income distribution shifts and this very significant increase in exploitation and destitution not to have a political voice. It's surprising to me. Food prices have been going up by 20 percent now for two years. When this was happening in the '70s, you had food riots all over the country. You had major social instability. You don't have that today. You don't have that same outcry. We've had a big crisis where lots of workers lost their jobs, people's money wages are falling. You don't find the outcry. What you do find is the increase in all kinds of unpleasant social and political forces, where people turn against other linguistic groups, they turn against other caste groups, they turn against other religions, you know, because you can't hit at the system—it's too big. So you pick on somebody your own size, or preferably smaller than you so you can actually bash them up.

JAY: But why is that in a country like India, which is one of the few countries that has had a kind of left political tradition that has more or less remained intact?

GHOSH: Well, I wish I could say it's intact. I think the left also, in India, it's still, I think, a very vibrant and very important political force, but it is under attack and it's under attack from both the right and left. It's under attack from imperialist forces who want to suppress a genuine left movement in India. And it's been queried by a lot of confusion by all kinds of conflicting, you know, political groups that are based on caste or on religion or on other kinds of identity politics. I do believe, though, that the future of the left is integral to the future of India as we know it, which is to say a secular democracy. So it's absolutely critical to keep that left voice not just alive but expanding in India.

JAY: Thanks very much for joining us, Jayati.

GHOSH: Thank you.

JAY: And thank you for joining us on The Real News Network.


Here's the complete video of Dr. Ghosh's interview:



Related Links:

Comparing India, Pakistan in 2010

The India You May Not Know

Western Myths of Peaceful, Stable, Prosperous India

100 Million More Indians Slide Below Poverty Line

No Indian Miracle

UNESCO Water Ranking of Nations

India Worse Than Bangladesh, Pakistan in Nutrition

India Trails Pakistan, Bangladesh in Sanitation

Pakistan's Foreign Visitors Pleasantly Surprised

Escape From India

Reflections on India

After Partition: India, Pakistan and Bangladesh

The "Poor" Neighbor by William Dalrymple

Pakistan's Modern Infrastructure

Access to Improved Water Sources Rankings HDR

Video: Who Says Pakistan Is a Failed State?

CO2 Emissions, Birth, Death Rates By Country

India Worse Than Pakistan, Bangladesh on Nutrition

UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Amartya Sen on Hunger in India

Pakistan's Financial Services Sector

Pakistan's Decade 1999-2009

South Asia Slipping in Human Development

Asia Gains in Top Asian Universities

Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Goldman Sachs' Investment Risk Ranking of Nations

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

99 comments:

Anonymous said...

Good you chose Jayanti Ghosh of JNU(India's left bastion),an analouge will be us going to the red mosque and asking the maulana questions about Pakistan's economy.

A few inconvenient facts:
1.Indian poverty rates have come down in percentage terms and are on a downward trajectory,the UN changed its definition of what the poverty line is so miraculously 100mn more poor people appeared in India.
2.China's gini coefficient is higher than India's as per chinese stats 18% of Chinese(250mn+) live on less than $1/day but the difference is you aren't allowed to see them and they aren't allowed to migrate into cities courtesy internal passport system.
Point being India China difference is NOT Shanghai Mumbai difference.

3.China's export led growth model is under severe strain for the simple reason that there are natural limits to how many shirts,toys etc the west can buy i.e a $5 trillion economy cannot sustainably grow its exports at 25% + infact 80% of the 11.9% growth now comes from forced state inestments in non remunerative assets like 12000 kms of High speed rail lines.

4.The world has surplus capital GCC,western pension funds etc have collectively $10 trillion but a limited demand for finished goods so an economic model that utilizes this capital rather than currency manipulation to boost exports is much more sustainable in the long run.

5.HDI has a strong corellation with per capita income if India's per capita income becomes $4000 in 2020-25 as seems likely are you stating that HDI figures won't improve?

Data Cruncher said...

aha I was just wondering what has happened to our Riaz bhai. This post proves all is well. Full of fire and brimstone.

Couple of points

1. It seems you have the following policy
a. when it comes to Pakistan, even 1/4 glass full is good because you are glass is half full type.
b. when it comes to India, unless the glass is 100% full, it doesn't mean to you.

So Goldman Sachs hype India. But few economist or institutions praise Pakistan and you make sure that it is a headlines in this blog

Why can' you and other intelligentsia of Pakistan simply admit that Pakistan is in dust compared to India in economy, stature, education. India's rise is not one-time phenomenon, it is on going. Being a Pakistani myself, I know how hard it is for fellow Pakistani to admit this simple fact. I get a feeling that they fear admitting that will negate the reason behind creation of Pakistan. A friend of mine hates India and keeps showing negative news about India. cont...

Data Cruncher said...

part 2

Yet his facebook page shows bollywood movies like Dilwale Dulhaniya Le Jeyenge and Taare Zameen Par as his favorite movies. He was the one who
said IPL will be a flop because Pak players were not invited. Guess what, it has been as big a success as cricket can be.


Why can't Pakistan simply admit that this so called superiority of Islam is a myth and pakistan and Pakistanis have done nothing to show that. Admission of that will be the first step in our progress. Our progress should be measured by what we do, not highlighting India's negative things.
I can fully understand why Indians are proud of what their country did in last 20 yrs and I can also understand why we Pakistanis have such low self esteem.

Data Cruncher said...

However I do admit that some indians have a swollen head about India's rise and exaggerate India like anything.

Rahul said...

Mr. Riaz, you have focussed on social areas.-

If your country is so much better than India than why India is at 134 in HDI & Pakistan at 141. Maybe, UNO did not have a bright economist like you...correct...

Riaz Haq said...

Rahul: "If your country is so much better than India than why India is at 134 in HDI & Pakistan at 141. Maybe, UNO did not have a bright economist like you...correct... "

First, both India and Pakistan slipped on HDI, India by six places and Pakistan by three from 2008 to 2009. So neither has done well.

But this whole notion of United Nations human development index makes a mockery of what it means to be "developed".

How can India be considered more "developed" than Pakistan when nearly half its children are malnourished, severely underweight and stunted, far more than Pakistani children?

How can India be considered more "developed" when two-thirds of its people defecate in the open (as opposed to one-third in Pakistan), completely devoid of basic human hygiene or dignity?

How can India be considered more "developed" than Pakistan when India is killing baby girls by the millions, many before they are even born?

How can India be considered "developed" when a third of India's people are segregated by a caste based system of apartheid, and treated as slaves?

Maoists are on to something here. They do not buy the crap spewed out by the "India Shining " crowd day in and day out because they know better.

Riaz Haq said...

Pakistan's water quality is not good, but it is significantly better than in India.

On page 288 of his book "Water management in India" the author P. C. Bansil quotes a UN study that says India ranks a poor 120 on a list of 122 countries in water quality.

India's neighbors Bangladesh, Nepal, Sri Lanka and Pakistan rank much better at 40, 64, 78 and 80 respectively.

http://books.google.com/books?id=u7ojYC9csS8C&pg=PA288&lpg=PA288&dq=India+ranks+a+poor+120+in+a+list+of+122+countries+ranked+for+their+water+quality&source=bl&ots=_m4oQAa7kK&sig=r-qPJRUB2Xg1u3wQQ0FphcATDe8&hl=en&ei=oyLVS7j7GYqiswPIyrScCg&sa=X&oi=book_result&ct=result&resnum=2&ved=0CAoQ6AEwAQ#v=onepage&q=pakistan%20water%20quality&f=false

Adel said...

Dear Riaz,
I am an Indian Muslim based in Kuwait. Firstly, I would like to thank you for bringing out through your blog a lot of India's problems albeit with an intention of humiliating Indians. (or is it plain and simple love for India that you want to change it for better voicing your concern, which I am sure is not the case).
This lets us firmly grounded and makes us realise that there is a lot to be done. Yes we do agree India is not an ideal model for growth but never the less it is on its path and InshaAllah it will achieve for what it set on.
I have seen a trend in all the Paksitani bloggers and commentators on India that they compare India with China and take pride in China's accomplishments as if it were their own.
Anyways we are different countries, we are a democracy and no matter how chaotic it looks it is still a democracy giving freedom (you may argue about dalits and how badly they are treated but things are changing and try calling a dalit by the names they were called some years ago like "chamar" or "bhangi" and chances are you will land up in jail). we have huge gap in income distribution, glaring poverty but just a thout "Rome was not built in a day". China on the other hand is accelerating and on what cost we don't know coz no one can see what the government doesn't want to show. China will be next super power for sure but how long can it sustain is the question. India on the other hand is being developed by people despite corrupt politicians, injustice, poor infrastructure but braving all these there are still success stories. unlike China where most development is state based, So the likely hood of India sustaining the growth once most of the problems are solved is high. We have lived in poverty for hundreds of years but to get fast pace growth like China Do we sacrifice are hard fought freedom, No we can wait for another 50 years for that.
On the other side of the spectrum is people like you who believe India will crack and explode.
But its just a question of perception. Glass half full or half empty and I would like to believe that its half full and work to be done to fill the glass completely Lives of millions have transformed but Billions still need transformation and InshAllah it will happen in my lifetime ( I am 27). I think I can speak on behalf of Muslims in India, We love it more than aything after God and his prophet and his teachings and am sure One day India will return to its golden period.
I would like to thank you once again for your great work of keeping Indians around the globe grounded and making them realize this success is partial there are still Miles to Go.
May Allah Bless You,
May Allah Bless India.
Thanks

chimung said...

Riaz sir,

Aap thak the nahi ho... really impressive. I started reading your blogs well over a year ago. But, if you really want to retain your readers both from your own country and Indians (like me), please post on some more refreshing things. We know that despite all the hype and hoopla, things on ground are not so great. But really there are some pleasant things to report on, rather than harangue about the same old HDI, GDP, GNP and other assorted alphabet soup.

Rahul said...

HDI is a index which does not take the facts of exports, growth rate, GDP, Manufacturing or any macro-economic indicators.

It includes - Life expectancy(malnourished, hunger, medicinal facilities), literacy(GRE, primary & secondary school going children), standard of living(Water quality, sanitation, electricity services, and all other social indicators.) It also includes per-capita income and remember Pakistan has 1/6th of India's population.

Perhaps you did not do your research before writing the previous answer. Now answer me, how is Pakistan better than India.

Riaz Haq said...

Rahul: "Now answer me, how is Pakistan better than India."

The entire South Asia is comparable to sub-Saharan Africa in terms of most of the social indicators.

But I have given you plenty of data on nutrition, sanitation, water quality, food, clothing, shelter, etc. that shows Pakistan has done and continues to do better than India.

Here's how British writer William Dalrymple summarized his views comparing India and Pakistan on both nation's 60th birthday:

"On the ground, of course, the reality is different and first-time visitors to Pakistan are almost always surprised by the country's visible prosperity. There is far less poverty on show in Pakistan than in India, fewer beggars, and much less desperation. In many ways the infrastructure of Pakistan is much more advanced: there are better roads and airports, and more reliable electricity. Middle-class Pakistani houses are often bigger and better appointed than their equivalents in India.
Moreover, the Pakistani economy is undergoing a construction and consumer boom similar to India's, with growth rates of 7%, and what is currently the fastest-rising stock market in Asia. You can see the effects everywhere: in new shopping centers and restaurant complexes, in the hoardings for the latest laptops and iPods, in the cranes and building sites, in the endless stores selling mobile phones: in 2003 the country had fewer than three million cellphone users; today there are almost 50 million."

Riaz Haq said...

It seems that India is beginning to recognize the seriousness of sanitation crisis, according to UNICEF. Here's recent news:

Lizette Burgers, the Chief of Water and Environmental Sanitation of UNICEF has said India is heading towards achieving Millennium Development Goal in sanitation as it has put sanitation on national agenda.

Addressing a press conference here, Burgers said: “In the case of sanitation, the total sanitation campaign has succeeded in putting sanitation on the national agenda.

Sanitation has been showing an increasing trend since 1999. The latest …programme data indicates a sharp acceleration from 2006 onwards and we are hopeful that with further dynamics and sustained supportIndia is inching closer to the MGD target.” Rural Development Minister of West Bengal Chandra Prakash Joshi said the state had achieved the MGD goals for drinking water.

“I am happy to say that we have achieved the MGD for drinking water by providing 84 percent of our rural population with access to improved sources of water as compared to goal of 83 percent. However, there is much more to achieve, our goal is to provide every household with an improved source of drinking water by 2012. Our challenge is also to meet the increasing demand from the rural areas to provide piped water and household tap connections. In this sense, we have quite some distance to go,” Joshi added.

He further said that provision of sanitation and a clean environment are important to improve health of the people and reduce the incidence of diseases among children.

The Programme focuses on sharing India’s development experience and its drive towards achieving the MDGs for water and sanitation. Experts from around 18 countries would visit different states to study aspects of water safety and sanitation.

The groups would be visiting Orissa, Jharkhand, West Bengal, Karnataka, Tamil Nadu, Uttar Pradesh, Assam and Madhya Pradesh. (ANI)

http://breakingnews.gaeatimes.com/2010/04/13/sanitation-now-on-national-agenda-in-india-says-unicef-representative-21203/

Rahul said...

Mr. Riaz thats what I am asking you. You say Pakistan has done better than India. But how, India has an HDI value better than Pakistan. And I have told you the composition of HDI. Then again you are quoting data from anywhere to support your answer. If you want facts I can give you many.
Want some

1. Pakistan's literacy rate is 49.9%.

2. More than 75% of the Pakistani population lives on less than $2/day. This is your recent govt. report.

3. You have quoted about slums. perhaps you didn't read the recent report that China & India have alone lifted 112 million people from slums in the past decade with India lifting more than 60 million people alone. India aims to be slum-free by 2015.

4. Defecating in the open is a problem with close to 600 million Indian people affected by this. But you also didn't see that India has improved from 1% coverage in 1981 to 48% coverage in 2007. The Govt has sanctioned TSC pro-grammes in all districts. The Govt. aims to achieve total sanitation by 2012.

Mr. Riaz there is a fundamental difference between India & Pakistan, which I hope you accept.

We do not claim that India is developed or has achieved everything. No Indian says so. What we say we are on the track of being a superpower or being a developed country. But Pakistan is stagnant or is going backwards. I have seen your newspapers and haven't seen any scheme. In India we have NRHM, NUHM, NREGA, PMGSY, SGSY, RKVY and many more. These are being implemented and effects are being felt.Your govt doesn't implement any scheme. Go to WB reports. They have not acknowledged any improvement in Pakistan's people life for the past decade. The world is optimistic about India 2020. It is not about Pakistan.

SO I just urge you to stop showing the world a hopeless picture about India. Try to improve your picture. Or else in 10 years you won't be able to quote any of the facts you are doing today.

Riaz Haq said...

Rahul:"But how, India has an HDI value better than Pakistan. And I have told you the composition of HDI. Then again you are quoting data from anywhere to support your answer. If you want facts I can give you many."

Go into the HDI sub-indices to understand how UNDP weighs different factors to arrive at a composite figure.

You will see that UNDP is overweight in terms of literacy which gives India a slight edge in the overall ranking. But both India and Pakistan are near the bottom and slipping on HDI rankings.

Here are some more recent comparative indicators:

One out of every three illiterate adults in the world is an Indian, according to UNESCO. Pakistan stands fourth in the world in terms of illiterate adult population, after India, China and Bangladesh.

One out of very two hungry persons in the world is an Indian, according to World Food Program. Pakistan fares significantly better than India on the hunger front.

Poverty:

Population living under $1.25 a day - India: 41.6% Pakistan: 22.6% Source: UNDP

The reason for higher levels of poverty in India in spite of its rapid economic growth is the growing rich-poor disparity. Gini index measuring rich-poor gap for India is at 36, higher than Pakistan's 30. Gini index is defined as a ratio with values between 0 and 100: A low Gini index indicates more equal income or wealth distribution, while a high Gini index indicates more unequal distribution. Zero corresponds to perfect equality (everyone having exactly the same income) and 100 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income).

Nutrition:

Underweight Children Under Five (in percent) Pakistan 38% India 46% Source: UNICEF

Health:

Life expectancy at birth (years), 2007 India: 63.4 Pakistan: 66.2 Source: HDR2009

Education:

Youth (15–24 years) literacy rate, 2000 to 2007, male Pakistan: 80% India 87% Source: UNICEF

Youth (15–24 years) literacy rate, 2000 to 2007, female Pakistan 60% India 77% Source: UNICEF

Economics:

GDP per capita (US$), 2008 Pak:$1000-1022 India $1017-1100

Child Protection:

Child marriage under 15-years ; 1998–2007*, total Pakistan - 32% India - 47% Source: UNICEF

Under-5 mortality rate per 1000 live births (2007), Value Pakistan - 90 India 72 Source: UNICEF

Rahul said...

There you go again Mr. Riaz....quoting facts. You didn't get the point I was making.

India has not achieved till now, what we aspire to achieve. India was quite worse of a decade ago. But it has improved substantially. This has been possible because of the good economic growth we had for the past 2 decades.

Perhaps you need to apply some thoughts about reports which you quote facts from. These also mention that India has progressed on these indicators and with the current scenario is capable of achieving more. Our Min. Kapil Sibal said that the govt. could implement right to education now because it has enough money today. If you clearly see, most of today's schemes have been started after 1991.

10 years ago we had an electricity generation of less than 95,000 mw. by 2012 we will be reaching 200,000 mw. How was this possible because of more money and reforms. We have achieved the MDG of which you mentioned. We took out lot of people from slums.

What we talk about is not what we have till now, but what we will be in 10 years. We talk about how can we make this country develop faster. But the trend in Pakistan(what I have seen from many sites) is that how to project India in the worse way, because they know that there is bleak future for their country.

What is the current scenario of your nation. It has no money, no growth. If IMF hadn't bailed you out, it would have collapsed. Can you enumerate any good anti-poverty schemes started recently. Yesterday I read a report in DAWN that between 2007-2010, poverty levels in Pakistan has increased from 24% to 37%. That too of people living under $1/ day.

Can your country implement RTE, National food security act, NREGA, NRHM or aspire to inject $1 trillion only in Infrastructure(India is planning the same between 2012-2017). No. its not possible for your govt. It is busy in handling wars, at the behest of USA.

Rahul said...

Mr. Riaz I just say rather than always trying to project India in a bad way, talk how can you solve your problems. Have you seen Indians demolishing China? Because we admire the Chinese, of how they have progressed. Thats why Indians are trying to match them in progressing. We are aspiring to reach their position in 10 years.

Your Pakistan is currently stagnant. It somewhat progressed during the Musharraf era, but now it has lost its momentum. The power crisis have hit the trade severely. Your previous articles were good, but now you again have gone on demolishing India.

Riaz Haq said...

Rahul: "What we talk about is not what we have till now, but what we will be in 10 years."

My post is about where we are now, not based on speculation about some future date.

As to the future, Goldman Sachs's Jim O'Neill, who started the whole BRIC business, has said that when he ranked countries by the potential risks to their growth — everything from inflation to corruption — India ranked 97th in the world, behind Brazil and the Philippines. London-based Maplecroft terror risk index based on 2009 data ranks Iraq first, Afghanistan second, with Pakistan and Somalia third and fourth respectively. They are rated at extreme risk along with Lebanon 5, India 6, Algeria 7, Colombia 8 and Thailand 9, according to Reuters.

About Pakistan back in 2000, who would have bet that Pakistan's nominal GDP would more than double by 2008 from $60 billion to $170 billion? But it did. And Pakistan attracted more FDI than India as percent of GDP during these years, and its KSE-100 grew in the last decade 1999-2009 by 900%, far exceeding all of the BRIC markets including Mumbai.

Rahul: "Can your country implement RTE, National food security act, NREGA, NRHM or aspire to inject $1 trillion only in Infrastructure(India is planning the same between 2012-2017). No. its not possible for your govt."

No govt alone can end poverty. But the Pak govt does have safety net programs like Bait-ul-Mal and Benazir Income Support programs which are growing. Only time will tell how it'll turn out.

Several NGOs in Pakistan are actively helping in alleviating poverty through microfinancing.

Hopefully, Pak economy will start growing again as the insurgencies are brought under control. That will also help in poverty reduction and improved HDI indicators.

Riaz Haq said...

Rahul: "Your previous articles were good, but now you again have gone on demolishing India."

Critics of India or China can not demolish either country, nor can I as a blogger. However, the response to such criticism from the people in India or China can potentially make or break these nations.

Spectator said...

Lies, Damn Lies and Statistics

The author of the blog gives out % figures because it is easy to hide under them (Lies, Damn Lies and Statistics). So

Population est. Pak: 169,342,000
(Source: Official Pakistani Population clock". Ministry of Economic Affairs and Statistics. http://www.statpak.gov.pk/depts/pco/. Retrieved January 17, 2010.)


Population est. Ind: 1,180,082,000
(Source:Indiastat. "Indian Official Population Clock". http://www.indiastat.com/. Retrieved 27 January 2010.)

Youth (15–24 years) literacy rate (Figures from blog)
With 80 pc Pakistan managed to educate 135,473,600 people while with 87 pc India managed to educate 1,026,671,340. India educated 891,197,740 more than Pakistan that is 5.2 times the 2010 Popoulation of Pakistan.

I could go on denting his claims but author seems to be educated himself and I'd hope he gets the point. Maybe Pakistanis should come to India to get educated. It now seems we are doing a better job of it.

Anonymous said...

Here is an interesting calculation of the US trade balance, taking into account the US companies "importing" from offshore plants:

The U.S. trade deficit figure for 2008 was $695 Billion (Exports minus Imports, $1.8 Trillion minus $2.5 Trillion). However 34% of the imports were from U.S. multinationals abroad (some put this figure at 39%). When these multinationals send their product to the US it gets counted as "import". ...Adjusting the $2.5 trillion for such "imports" reduces the import figure to a little over $1.5 Trillion, converting the actual trade deficit into a TRADE SURPLUS!!.

The trade deficit goes into calculating the GDP, which as it stands with the official figures places the U.S. at the top with a GDP of $ 14.8 Trillion. U.S. occupied Japan is second with a GDP of $ 5 trillion. The largest economy in Europe is Germany (also US occupied) with a $3.4 Trillion GDP. Adjusting for this fictitious trade deficit, US GDP gets bumped up by almost another trillion dollars.

Spectator said...

What makes an objective commentator is the question. Or rather,let's start with definition of what makes an objective account or analysis

[A]n objective account is one which attempts to capture the nature of the object studied in a way that does not depend on any features of the particular subject who studies it. An objective account is, in this sense, impartial, one which could ideally be accepted by any subject, because it DOES NOT draw on any assumptions, prejudices, or values of particular subjects.

In view of this definition let's study the interview of Dr Ghosh and analyze few points,

1. I think the left also, in India, it's still, I think, a very vibrant and very important political force

Is that so? Left rules in 3 states in India of which in West Bengal it is in tatters. It was mauled in last parliamentary elections and is left as an inconsequential party in Lok Sabha.

2. It's under attack from imperialist forces who want to suppress a genuine left movement in India

No serious economist worth his salt (except for one bigoted with leftist ideology) would use terms like "Imperialism" when analyzing a modern economy.

3. that the future of the left is integral to the future of India as we know it, which is to say a secular democracy.

Going by election results, not sure how this is true. Left were in government last year but were summarily rejected by people in this Lok Sabha.

What you have in this article is a JNU leftist trained economist who's issue with Indian economy is that is has liberalized. I won't argue if her arguments hold any water, but someone who is openly endorsing a particular ideology or political thought itself suggests that her logical analysis wold be clouded by her personal opinions and prejudices. In fact, the left ruled states in India are worst performers in social sector. There is hardly any industry to speak of in Kerala and West Bengal.

By selectively posting comments of economist critical of Indian system on account of their ideological thoughts as against economic principles, the blogger can go on an ego trip but would hardly achieve anything more than that. India is not the best of countries or even far from best and every Indian is open to critique as it is first step towards self correction. However, such opinionated interviews and number calisthenics should be outright rejected.

Anonymous said...

the sad part is the casteism, that is rampant in this region. i heard a story, about a woman maoist sniper, who had played havoc with the security forces. they could not find her for three months, and toll was mounting....one day by sheer luck, they caught her and killed her. she had fallen and the security forces just watched her die, gasping for breath, for they were afraid, that she might detonate a hand grenade. the officer of the troops however took a chance to approach her and give her water. she just spat that water on his face. he says there was a look on her face that he will take with him until his death. she was high up in the maoist hierarchy so the officer went ahead to check her background. he found that she was from a village in srikakulam, in andhra pradesh. she was married at 16. On her first night, it was not her husband who came to her, but the landlord of the place. a 60 year old man abusing a 16 year
old. it is a custom it seemed in that region, that the first night should be with landlord. she lost her mind after that night, recovered , left her husband and wandered ,eventually joining the maoists.

there are many indians here who blame pakistanis. we say Pakistan is going wrong because of its establishment. namely the mullah, military and rich anglican pakistani elite. dont we have that oligarchy here in india! do we not have the upper caste hindus, the landlord, the rich businessmen and the politicians forming an oligarchy? An oligarchy that is simply growing rich by exploiting the vast riches of our soil?
whatever we might say about Pakistan, please understand that atleast some of them, have opened their eyes to this oligarchy. have we in india done that? the answer is no.

there is a company called vedanta resources. it is headquatered in london, and they are billionaires. they want minig rights to a mountain hill in jharkhand, that a real rare find. it has amongst the best Bauxite content. but the gond tribes who are in that area say, our god lives on this hill! we have a temple there, so we will not allow you to mine!
you know what the company management said? We will rebuild a better temple for you in the plains? (take it from our corporate social responsibility account) WOW! great minds these MBA`s are from our management institutes?
we have a temple atop palani hill in tamilnadu. we have been praying over it for few thousand years, if vedanta or anyone tells us, hey there is gold in that mountain you guys better shift, then do you think we will allow that? we will skin those MBA`s right there and hang it to dry.
but then the poor gond tribals and their tribal god? thats fate isnt it?
the officer who told me this story, weeps at the guilt of having killed a poor girl. i left him saying if you carry fighting with guilt, you will get killed.
how many more lives will we corrode?

aamsvad said...

Its like two students who have failed in 3rd class comparing each others marks.whats the use if A got better marks than B, both need to repeat an year in school.both are not worth comparison.


I think we Indians do over-hype things and think that India is an 1st world nation.On the other hand , in spite of the whole world envying china, they are smartly humble in saying "We have lot more to achieve."

Frankly if Indians over hype Pakistan cannot be far behind as we are from the same stock.But if they are smart, both can learn from one another.Its never wrong to learn "good" from others.

Riaz Haq said...

Here's an interesting commentary by Sudha Ramachandra about India's future prospects:

The populations of Europe and Japan are already graying, and the working-age populations of the United States and China are projected to shrink too in the next two decades. By 2020 the US will be short 17 million people of working age, China 10 million, Japan 9 million and Russia 6 million. However, India will have a surplus of 47 million people, giving the country a competitive edge in labor costs, which will be sustainable up to 2050, according to a study by Goldman Sachs.

Economists say India will catch up with the Chinese economy beginning in 2030, when the latter could cool off as the result of an aging population. "The window of opportunity offered by a population bulge has clearly opened for India," points out noted economist C P Chandrasekhar of Jawaharlal Nehru University in New Delhi. After decades of evoking despair, India's demographic profile is finally beginning to stir hope.

But not everyone views the population bulge with such optimism. Some analysts say it is not enough to have a young population. The working-age population needs to be healthy and literate.

India's score on this, while improving, is certainly not inspiring. About 50% of all Indian children are undernourished, a large percentage of them born with protein deficiency (which affects brain development and learning capacity, among other things). This is hardly the ideal foundation for a productive workforce, as the likelihood of a malnourished child growing up to be an able adult is rather dim.

There is also the question of whether the population has the skills and knowledge to take on India's future work. Literacy has improved dramatically over the years - just 14% of the population was literate in 1947 versus about 64.8% today - but many who are classified as literate can barely read or write. And 40% of those who enroll in primary schools drop out by age 10. The curriculum in the schools, especially the government-run ones, does not prepare the child for the domestic job market, let alone the global one. The huge "workforce" might not be qualified to do the work.

Moreover, India's rich and educated classes are preferring to have small families, so the additions to the population are coming largely from the poor, illiterate sections in society. Nicholas Eberstadt, who researches demographics at the Washington-based American Enterprise Institute, points out that while India's overall population profile will remain relatively youthful, "this is an arithmetic expression averaging diverse components of a vast nation. Closer examination reveals two demographically distinct Indias: the north that stays remarkably young over the next 20 years, and a south already graying rapidly due to low fertility."

Riaz Haq said...

Here's an excerpt from a BBC story about India's worries over "string of pearls" which describes ports China is building in Bangladesh and the Indian Ocean:

The various forms of Chinese assistance to Bangladesh have caused jitters in India - the huge country next door which some Bangladeshis still call "Big Brother."

India is concerned because a similar story is unfolding in Pakistan, Sri Lanka and in Burma - where China is also building roads and deep sea ports.

Indian defence experts fear that China is surrounding India with ports. They call it China's "string of pearls".

"This is not a fear, this is a fact," says Professor Shrikant Kondapalli of Jawaharlal Nehru University in Delhi.

He believes China is "setting up shop" in smaller countries around the Indian Ocean because of oil. An estimated 80% of oil for China's resource-hungry economy comes from the Middle East and Africa, via the Indian Ocean.

Rapidly-growing India also needs oil, and it stands directly in the middle of China's supply route.

The Indians fear that although these deep sea ports will be for trade, China could call them in for military or strategic purposes if oil becomes scarce.

"When you put together all these jigsaw puzzles it becomes clear that Chinese focus in Indian Ocean is not just for trade," says Professor Kondapalli. "It is a grand design for the 21st Century."

'Indian paranoia'

In Beijing, India's fears are given short shrift. "During peace time, these kinds of facilities are only for commercial purposes," says Hu Sisheng, head of South Asia policy at the China Institute for Contemporary International Relations.

“ About 20 years ago, China was also a very poor country - but now it is developing ”
Chinese engineer Shar Wei

It's a tightly guarded government-run facility in Beijing which analyses foreign affairs and directly advises China's leaders.

China is keen to reassure the world that it has no hostile intent. Mr Hu says the Indians are being paranoid when they talk of a "string of pearls".

"It was minted by a young Pentagon guy," he points out.

The phrase "string of pearls" to describe China's strategy for building ports was originally used by analysts working for the US Department of Defense.

Mr Hu believes Washington is playing games and trying to cosy up to India, as it becomes increasingly concerned about China's rise.

Bangladesh is also adamant that there is nothing in its plans to concern India. "I don't believe if China helps us build this sea port, that China will be able to use it for other purposes," I'm told by Dr Dipu Moni, Bangladesh's foreign minister.

Bangladesh wants to be seen as a "bridge" from China to India, and is careful not to offend either of its giant neighbours.

"Bangladesh will never let any part of its territory be used for any kind of attacks or anything like that," she says.

Impoverished Bangladesh is hoping to capitalise on its location between China and India to develop its economy. I see the remarkable impact for myself on the outskirts of Chittagong.

I am stunned when a single track road surrounded by slums suddenly turns into a four-lane motorway. It then crosses a suspension bridge built of gleaming white concrete.

The funds for this bridge came from a Gulf country, and a Chinese firm has done the work.

Vivek said...

Here are the key points Dr. Ghosh makes:

1. Talk of Chinindia is nonsense. China and India are two very different countries with different histories. India has never done the hard work of basic reforms that China did decades ago. Unlike India, early reforms combined with greater state control on the economy have helped China achieve rapid and massive reduction in poverty.


Bollocks. China started its market reforms two decades before India did. India has hit the 8%+ growth path very recently. China on the other hand has registered over 8% growth since 1980. And that's responsible for the poverty reduction today, not the illusion of 'basic reforms'.

That said, having started earlier China has a vast lead on my economic and social parameters.

2. Unlike China, India does not run any trade surplus or current account surplus to fund its growth. In fact, India has been running significant twin deficits. India depends much more on foreign investments for its growth than China.

Yes India isn't an export driven economy(at least not yet). The Chinese model of development was never an option for India given its democratic setup.

3. Although large number of Indians estimated at 110 million have been the main beneficiaries of India's rapid economic expansion, their numbers are only about 10% of India's 1.1 billion people. The growth has excluded the rest of the 90% of the population, leaving them in abject poverty.

The size of the middle class is 300 million, not 110 million. For the record, growth is never equitable. And India's Gini Index is comparable with most regional countries.

4. Instead of fighting against economic injustice, people are being divided along ethnic, religious and caste lines. There is an increase in all kinds of unpleasant social and political forces in India, where people are turning against each other, against linguistic, caste and faith groups, because they can't hit at the system—it's too big.

India has more peaceful today than its been at any time in the past 60 years since Independence. Insurgencies in J&K and the North-East are waning. And contrary to public opinion, the Maoists problem today is much better than it was five years ago. Its only gained a much larger public profile today because the central government finally put its foot down. Half of the CPI(M)'s top leadership is either dead or behind bars today.

On the terrorism front too, since the Mumbai carnage, the country's been pretty peaceful(with the exception of the Pune blasts).

So far the UPA is done a decent job as far as spurring growth and social spending is concerned.

So they pick on somebody their own size, or preferably smaller.

I can see Pakistanis feel(understandably) threatened by India's growing economic and military profile. Unfortunately, for better or worse Pakistan seeks to change the status quo by use of force or supporting elements inimical to the Indian state. If that were to change, I'm sure defence spending all round would come down(with social spending increasing).

Riaz Haq said...

Vivek: "China started its market reforms two decades before India did." and "Yes India isn't an export driven economy(at least not yet). The Chinese model of development was never an option for India given its democratic setup."

It's true but Dr. Ghosh is referring to the hard work in terms of human development through massive spending on health and education giving it a major advantage over south Asian nations. Besides, democracy doesn't stop you from building an export oriented economy. Germany is an example.

Vivek: "The size of the middle class is 300 million, not 110 million. For the record, growth is never equitable. And India's Gini Index is comparable with most regional countries."

It depends on how you define middle class. The World Bank defines it as people making $10 a day or more but excluding the top 5% of the population. Economist Nancy Birdsall says that India's middle class is zero by the WB definition. Everyone who makes $10 a day or more is in the top 5%.

And India's Gini index at 36 is worse than Pakistan's at 30.

Vivek: "India has more peaceful today than its been at any time in the past 60 years since Independence. Insurgencies in J&K and the North-East are waning. And contrary to public opinion, the Maoists problem today is much better than it was five years ago. Its only gained a much larger public profile today because the central government finally put its foot down. Half of the CPI(M)'s top leadership is either dead or behind bars today."

Data says otherwise. Conventional Western understanding about modern India has recognized a degree of political instability, and the persistence of armed insurgencies in the country’s Northeast and Northwest regions. However, there has only been a slight awareness of the rural insurgencies and challenges to the state’s writ in the heartland of India. These have rarely been seen by outsiders as a systemic challenge to the dominant narrative of a democratic society engaged in economic and social development. The recent trajectory of India’s economic development has created an optimistic narrative that rarely includes discussion of internal instability. While there is focus on a small section of the urban elite, not much attention has been given to growing rural poverty, mass farmers' suicides and increasing rich-poor gap. Meanwhile, Maoists have gained significant momentum in rural India.

It is conservatively estimated that Maoists, also known as Naxalites, control almost 25% of Indian territory in eastern and central states. Indian defense analyst Bharat Verma claims that "New Delhi and the state capitals have almost ceded the governmental control over 40 percent of the Union's territory to the Naxalites". A Newsweek story last year quoted Deepak Ambastha, the editor of Prabhat Khabar, a Hindi daily newspaper in Jharkhand state, as saying that "the state's writ runs only within city limits." Similar situation exists in many of the 20 Indian states, home to nearly 80 percent of those 836 million Indians, where the Maoists dominate the rural landscape. Indian government knows that it can ignore the Naxal threat at its own peril.

Vivek said...

Riaz:It's true but Dr. Ghosh is referring to the hard work in terms of human development through massive spending on health and education giving it a major advantage over south Asian nations.

The problems with the health and education system are delivery related rather than funding. And borne out by the fact that the majority of India's illiterate population comes from three or four(traditionally poorly governed) states.

But the central government is doing its part with the passage of the Food and Education acts in the Parliament. It'll take time and there are still lots of bottlenecks but the effort is certainly being made.

Besides, democracy doesn't stop you from building an export oriented economy. Germany is an example.

You've misquoted me. I did not say democracy hinders an export oriented economy. Those are your words.

I said the Chinese model isn't an option for India. And I was referring to the 'command capitalism' system. China's export capacity is largely because of its infrastructure. And rapid growth in that sector is restricted in India but the democratic setup. Despite those restrictions, the government has still managed to do an excellent job of balancing growth and social spending.

"It depends on how you define middle class. The World Bank defines it as people making $10 a day or more but excluding the top 5% of the population. Economist Nancy Birdsall says that India's middle class is zero by the WB definition. Everyone who makes $10 a day or more is in the top 5%."

Nominal figures can never serve as an adequate benchmark for income. I'd like to see that figure after being PPP adjusted.

And India's Gini index at 36 is worse than Pakistan's at 30.

I didn't single out Pakistan. I said other regional countries, but I guess you're welcome to highlight that fact. Bangladesh - 34, Sri Lanka - 40, Nepal -47, China - 47.

The UK has the same figure as India, so the impression that there is a unprecedented disparity of wealth is false.

Yes there are still a lot of poor people, but they HAVE benefited from the reforms and growth just as China's poor have.

Data says otherwise. Conventional Western understanding about modern India has recognized a degree of political instability, and the persistence of armed insurgencies in the country’s Northeast and Northwest regions. However, there has only been a slight awareness of the rural insurgencies and challenges to the state’s writ in the heartland of India. These have rarely been seen by outsiders as a systemic challenge to the dominant narrative of a democratic society engaged in economic and social development. The recent trajectory of India’s economic development has created an optimistic narrative that rarely includes discussion of internal instability.

First off it doesn't appear you contest the fact that J&K and the NE are more peaceful than they have been in the last decade and a half. I've addressed the Maoist issue in the subsequent post.

While there is focus on a small section of the urban elite, not much attention has been given to growing rural poverty, mass farmers' suicides and increasing rich-poor gap. Meanwhile, Maoists have gained significant momentum in rural India.

'Growing rural poverty'? Where did you get that idea from? While its true the standard of living among urban citizens has increased much faster than their rural counterparts, figures everywhere are still in the black(so to speak). Poverty hasn't increased anywhere.

Vivek said...

It is conservatively estimated that Maoists, also known as Naxalites, control almost 25% of Indian territory in eastern and central states. Indian defense analyst Bharat Verma claims that "New Delhi and the state capitals have almost ceded the governmental control over 40 percent of the Union's territory to the Naxalites". A Newsweek story last year quoted Deepak Ambastha, the editor of Prabhat Khabar, a Hindi daily newspaper in Jharkhand state, as saying that "the state's writ runs only within city limits." Similar situation exists in many of the 20 Indian states, home to nearly 80 percent of those 836 million Indians, where the Maoists dominate the rural landscape. Indian government knows that it can ignore the Naxal threat at its own peril.

First off, I'm surprised to see you, as a Pakistani, quoting Bharat Verma to justify your argument. It would be tantamount to an Indian quoting Zaid Hamid to make his point about the US.

Secondly, 25% controlled by Maoists? While its not a practical idea, I would suggest you tour India and find out for yourself if a quarter of the country is administered by Naxals.

Fact is only 4 out 28 states and 7 union territories have a Naxal presence - West Bengal, Orissa, Chattisgarh and Jharkhand. Also included is a small part of Maharashtra. And unlike the government or NGOs, when I say presence, I mean a military presence(militia) and not Maoist sympathisers or underground workers. From those states, security forces have cleared WB of Naxals. In fact only Chattisgarh and to much smaller extent Jharkhand remain a challenge.

The PM's oft quoted 'greatest internal threat' statement often overshadows the fact that the Home Ministry is looking at a conservative figure of four or five years for eradicating the Maoist threat. The fact is that the Naxals have been around for over 40 years, with the central and state governments as well as the media turning a blind eye. Its only because of the current government's offensive that the media's spotlight has been trained on the affected regions, giving people the impression that the Maoist insurgency is a new development.

Rather than cherry pick statements from different commentators, I suggest you go through the documented timeline of Naxal violence. You'll find most of it occurred in Chattisgarh and Jharkhand, with the occasional incident in Orissa or West Bengal. In rare occasions, they've also been known to happen in western Maharashtra and Bihar, but they've lost all ground there in recent times.

Riaz Haq said...

Vivek: "And borne out by the fact that the majority of India's illiterate population comes from three or four(traditionally poorly governed) states."

I think it's the other way around. A few southern states like Kerala have good HDI indicators, with the rest of India being very poor and backward. The nation ranks near the bottom on HDI rankings.

Vivek: "Nominal figures can never serve as an adequate benchmark for income. I'd like to see that figure after being PPP adjusted. "

The $10 a day figure is PPP, not nominal. Just as the $1.25 or $2 are PPP for poverty line. And 78% of Indians live on less than $2 a day vs 60% of Pakistanis according to HDR 2009.

Vivek: "The UK has the same figure as India, so the impression that there is a unprecedented disparity of wealth is false."

Very few countries have the kind of abject poverty India does. Comparison with UK ridiculous given the depth of poverty, malnutrition, hunger and lack of sanitation in India.

Vivek: "First off it doesn't appear you contest the fact that J&K and the NE are more peaceful than they have been in the last decade and a half."

I do. Kashmir is relatively quiet because of Pakistan's help but the ongoing Naga blockade has created a serious emergency in Manipur.

Vivek: "'Growing rural poverty'? Where did you get that idea from? While its true the standard of living among urban citizens has increased much faster than their rural counterparts, figures everywhere are still in the black(so to speak). Poverty hasn't increased anywhere."

I guess you are not keeping track of growing farmers' suicide under a debt burden, and a recent Indian Planning Commission report that there are 100 million more poor people in India today than there were in 2005.

Riaz Haq said...

Vivek: "The fact is that the Naxals have been around for over 40 years, with the central and state governments as well as the media turning a blind eye. Its only because of the current government's offensive that the media's spotlight has been trained on the affected regions, giving people the impression that the Maoist insurgency is a new development."

I'm afraid you don't understand the root cause and scope of rebellion by Maoists in India. The root cause is increased rural poverty, the land confiscation from the poor tribals that forces them to move, and the growing desperation of the rural-tribal folks that is driving them to take up arms. Maoists are gaining strength and launching more and more daring attacks on security forces claiming more lives than ever.

Vivek said...

Riaz:

I think it's the other way around. A few southern states like Kerala have good HDI indicators, with the rest of India being very poor and backward. The nation ranks near the bottom on HDI rankings.

You think so? I suggest you actually look up the figures and see what proportion of the total come from the states of UP, Bihar, MP and Rajasthan.

Also for the record, the growth in literacy for the period 1991-2001 was the fastest ever on record at 12.63%.

http://www.nlm.nic.in/literacy01_nlm.htm

While the new census for this decade is yet to be done, the growth rate is expected to be much better.

The $10 a day figure is PPP, not nominal. Just as the $1.25 or $2 are PPP for poverty line. And 78% of Indians live on less than $2 a day vs 60% of Pakistanis according to HDR 2009.

Factoring in the relatively low Gini coefficient with the per capita daily income of around $8, I'm doubtful of those figures.

The size of the middle class is a subjective question. The methodoloy used by Nancy Birdsall defines only 7% of China's population as middle class. If one were to go by Banerjee and Duflo, they'd be a very different figure.

Very few countries have the kind of abject poverty India does. Comparison with UK ridiculous given the depth of poverty, malnutrition, hunger and lack of sanitation in India.

You're taking that statement way out of context. You've starting talking about standard of living, while the statement was about disparity of income. The figures are very obvious, the rich-poor divide in India is not any more skewed than the global average.

I do. Kashmir is relatively quiet because of Pakistan's help but the ongoing Naga blockade has created a serious emergency in Manipur.

None of that contradicts the fact that casualties both among security forces and civilians are a fraction of what they were a decade ago? On what basis are you claiming that trend is not positive?


I guess you are not keeping track of growing farmers' suicide under a debt burden, and a recent Indian Planning Commission report that there are 100 million more poor people in India today than there were in 2005.

I suggest you look up the government's farmer debt bailout estimated at $16 billion. Fact is the UPA is a left-of-centre body and its doing a lot to bridge the social divide within the country.

With regard to your figures for poverty, its an absolutely ridiculous idea that 10% of the population suddenly became poor within a period of less than five years at a time of rapid economic growth. The 'increase' in poverty is simply because its definition has been changed. If tomorrow one were to start using OECD definitions, the poverty would become almost absolute without the standard to living changing.

Vivek said...

Here are some relevant facts quoted from a McKinsey Report on India:

"India’s rapid economic growth has set the stage for fundamental change among the country’s consumers. The same energy that has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centered in the cities."


"In short, India's economic reforms and the increased growth that has resulted have been the most successful anti-poverty programmes in the country,"



""Overall, a further 291 million people will move out of poverty during a period when 32.2 million people will be added to the country's population. In effect, India will have 465 million fewer poor by 2025 than if the poverty rate remained at 2005 levels"

Vivek said...

Riaz:

I'm afraid you don't understand the root cause and scope of rebellion by Maoists in India. The root cause is increased rural poverty, the land confiscation from the poor tribals that forces them to move, and the growing desperation of the rural-tribal folks that is driving them to take up arms.

Its true the grievances among tribals are genuine and the government has finally woken up to that fact and is finally taking steps for their upliftment in conjunction with its offensive against Maoists.

At the same time it needs to be said that the Maoists are pursuing a cause that will hobble the nation. Rejecting a democratic state for a communist setup is a recipe for disaster.

Maoists are gaining strength and launching more and more daring attacks on security forces claiming more lives than ever.

The citadel of Naxalism has traditionally been West Bengal and Andhra Pradesh. I suggest you look up the AP government's strategy that has almost wiped the state clean of the Maoists in the last couple of years. The central forces recently cleaned out the only remaining Maoist stronghold in West Bengal. The only problem regions left are rural regions in Chattisgarh and Jharkhand.

Like I said before, the home minister has stated a figure of four to five years to completely eradicate the Maoist problem(that's over 40 years old) and that's been borne out by successes at a macro level. Almost half of the Maoist top leadership is either dead or behind bars. And the successes are borne out by the fact that its now centre that has rejected talks with the Maoists unless they renounce violence.

Riaz Haq said...

Here's an excerpt from an Op Ed by ex Indian diplomat Bhadrakumar:

Clearly, relations with the US are of the highest priority for India, as they are for Russia or China. But the similarity ends there. For the foreseeable future, despite the heart-warming prognosis by the world community hailing India as a potentially emerging global player, the hard reality is that such a prospect remains distant in the scheme of things. When it comes to issues such as the situation around Iran, India lacks the wherewithal of Russia or China.
---
On the other hand, India is almost similarly placed vis-a-vis the US as Brazil or Turkey are. The fact that these two countries, which are close partners of the US, have not drawn Washington's ire shouldn't go unnoticed. New Delhi's apprehensions that any independent line on the Iran nuclear issue might upset the rhythm of US-India relations seems, in introspect, to have been entirely unwarranted. Countries that have taken an independent line on the Iran nuclear issue during crucial IAEA votes - Pakistan, Afghanistan, Malaysia, Egypt - have not exactly come to grief. On the contrary, India's traditional ties with Iran grievously suffered when it began blindly toeing the American line.

Worse still, Tehran harbors a suspicion that New Delhi might have used its ''Iran card'' to ingratiate itself with the George W Bush administration. The signs are that Tehran has made a cool analysis about damage control and has decided to more or less relegate its ties with New Delhi to a place on the backburner, even while going through the occasional motions of friendship and exchange of views that the two neighbors cannot do without.

New Delhi needs to take stock that Obama is an extraordinarily gifted politician endowed with intellectuality and it is conceivable he may come up with new thinking and a new approach to the problem. Monday's swap deal underscored indisputably that US policy on Iran is in a cul-de-sac. A reversal becomes inevitable. To be sure, Obama has taken note that Turkey and Brazil highlighted the existence of a whole world beyond the secretive, cloistered framework of the "Iran Six".

New Delhi has of late been attempting to follow in the footsteps of Russian and Chinese policies. Here too, a rethink is in order. India needs to factor in gains accruing to Russia and China from a continuing US-Iran standoff. The Western embargo against Tehran is keeping Iranian energy exports out of the European energy market that might otherwise have competed with Russian supplies. Energy exports constitute the single-biggest trump card of Russian foreign policy to modulate Western policies toward Moscow.

As for China, it is indeed having quite a field day as an exporter of goods and services to Iran as well as for advancing plans to evacuate Iranian gas and oil through pipelines across Central Asia that are nearing completion. In sum, Beijing has done splendidly well.

--------
India's diplomatic ingenuity lies in working on the US thinking to persuade it to become a partner in the Iran pipeline project. The prospect offers a "win-win" situation. Iran doesn't hide its panache for Big Oil. The US has stakes in India-Pakistan normalization. India and Pakistan's energy markets offer massive business for American oil companies. The US involvement acts as a guarantee for the pipeline. Least of all, Washington too wishes to make Tehran a stakeholder in regional stability.

Riaz Haq said...

Diplomat Bharakumar Op Ed on Iran-India contd:

Russia and China, therefore, have complementary interests in shepherding Iranian energy exports to the Asian market. How is India placed in the energy equations? On balance, India in no way benefits out of the US-Iran standoff and, in fact, has a great deal to lose as regional tensions prevail in a region which forms its extended neighborhood. The Iran nuclear issue potentially can complicate the US-India strategic partnership as New Delhi will be firmly opposed to any use of force in the resolution of the problem.
Equally, the bottom line is that Iran is a major source of energy supplies for the expanding Indian economy. In geopolitical terms, a leap of faith uncluttered by the debris in the India-Pakistan relationship will dictate that the Iran gas pipeline project offers a rare opportunity for New Delhi to make its western neighbor a stakeholder in regional cooperation. Even at the height of the Cold War with nuclear armies preparing for Armageddon, pipelines criss-crossed the Iron Curtain. Alas, the Indian strategic community has a closed mind, as things stand, when it comes to developing a matrix of regional cooperation that even remotely includes Pakistan.

India's diplomatic ingenuity lies in working on the US thinking to persuade it to become a partner in the Iran pipeline project. The prospect offers a "win-win" situation. Iran doesn't hide its panache for Big Oil. The US has stakes in India-Pakistan normalization. India and Pakistan's energy markets offer massive business for American oil companies. The US involvement acts as a guarantee for the pipeline. Least of all, Washington too wishes to make Tehran a stakeholder in regional stability.

New Delhi should closely study Turkey's motivations on the Iran nuclear issue. Turkey has interests almost similar to India's and its supple diplomacy enables it to astutely position itself for the day when the US-Iran standoff dissipates. Turkey estimates that Iran is a neighbor (although they have had a troubled relationship) while the US is a key North Atlantic Treaty Organization ally and any midwifery in the inevitable US-Iran rapprochement becomes a strategic asset for Ankara's growing stature as a regional power.

Indian diplomacy has lately made some interesting moves toward Iran, beginning with Foreign Secretary Nirupama Rao's visit to Tehran in February. The desire to craft a fresh approach is also evident in External Affairs Minister S M Krishna's consultations this week in Tehran. The path is strewn with thorns, as the Iranians harbor a deep sense of hurt about India's stance at the IAEA votes. Therefore, as the US's tug-of-war with Iran intensifies, New Delhi faces the challenge of not treading on Tehran's sensitivities all over again.

On the whole, Indian policy is principled, especially its line that the IAEA ought to be in the driving seat rather than a cabal of states with dubious intentions. But New Delhi is lurking in the shadows in a blissful state of masterly inactivity.

India should openly join hands with Turkey and Brazil in opposing the need for a continued push for UN sanctions against Iran. No doubt, the diplomatic initiative by Turkey and Brazil creates an altogether new situation and Indian diplomacy should grasp its importance and seize its potentials.

Riaz Haq said...

Vivek: "I suggest you actually look up the figures and see what proportion of the total come from the states of UP, Bihar, MP and Rajasthan."

Yes, there is a clear north-south divide in India in terms of human development. At the same time, the fertility rate in the north remains high and it has declined in the south. It's a worrisome prospect for those who are counting on the size of the skilled workforce in India in the future to sustain growth.

Vivek: "The size of the middle class is a subjective question. The methodoloy used by Nancy Birdsall defines only 7% of China's population as middle class. If one were to go by Banerjee and Duflo, they'd be a very different figure."

There are a lot of studies, including McKinsey's, that bandy about Indian middle-class figures without defining it.

Doing a rough calculation, the largest possible size of India's middle class is no more than 200 million, even if you count some people making less than $10 a day as middle class. If you exclude the bottom 76% making less than $2 a day (HDR 2009) and exclude the top 5%, you have about 19% left, most of whom are probably closer to $2 than $10 a day.

You'd have to really stretch middle class definition if you include any one who can afford a motorbike in India.

Vivek: "With regard to your figures for poverty, its an absolutely ridiculous idea that 10% of the population suddenly became poor within a period of less than five years at a time of rapid economic growth."

Why is it ridiculous? What if most of the benefits have gone to the top 5% as seem in the growth of Indian billionaires? Indian planning commission counts people making less than $1.25 as poor, same as WB. Here's an excerpt from a recent Reuters report:

India now has 100 million more people living below the poverty line than in 2004, according to official estimates released on Sunday.

The poverty rate has risen to 37.2 percent of the population from 27.5 percent in 2004, a change that will require the Congress-ruled government to spend more money on the poor.

The new estimate comes weeks after Sonia Gandhi, head of the Congress party, asked the government to revise a Food Security Bill to include more women, children and destitutes.

"The Planning Commission has accepted the report on poverty figures," Abhijit Sen, a member of the Planning Commission told Reuters, referring to the new poverty estimate report submitted by a government panel last December.

India now has 410 million people living below the U.N. estimated poverty line of $1.25 a day, 100 million more than was estimated earlier, officials said.

India calculates how much of its population is living below the poverty line by checking whether families can afford one square meal a day that meets minimum nutrition needs.

Riaz Haq said...

In a recently published book "Superfreakonomics", the authors highlight the following points about India:

1. If women could choose their birthplace, India might not a wise choice to be born.

2. In spite of recent economic success and euphoria about India, the people of India remain excruciatingly poor.

3. Literacy is low, corruption is high.

4. Only half the households have electricity.

5. Only one in 4 Indian homes has a toilet.

6. 40% of families with girls want to have more children, but families with boys do not want a baby girl.

7. It's especially unlucky to be born female, baby boy is like a 401 K retirement plan, baby girl requires a dowry fund.

8. Smile train Chennai did cleft repair surgery. A man was asked how many children he had. He said had 1, a boy. It turned out that he had 5 daughters which he did not mention.

9. Indian midwives paid $2.50 to kill girl with cleft deformity

10. Girls are highly undervalued, there are 35 million fewer females than males, presumed dead, killed by midwife or parent or starved to death. Unltrasound are used mainly to find and destroy female fetuses. Ultrasound and abortion are available even in the smallest villages with no electricity or clean water

11. If not aborted, baby girls face inequality and cruelty at every turn,

12. 61% of Indian men say wife beating is justified, 54% women agree, especially when dinner is burned or they leave home without husband's permission.

13. Unwanted pregnancies, STDs, HIV infections happen when 15% o the condoms fail. Indian council of med research found that 60% of Indian men's genitalia are too small by international standards.

14. Indian laws to protect women are widely ignored. The government has tried monetary rewards to keep baby girls and supported microfinance for women. NGOs programs, smaller condoms, other projects have had limited success.

15. People had little interest in State TV due to poor reception or boring programs. But cable television has helped women, as 150 million people between 2001-2006 got cable
TV which gave exposure to world.

16. American economists found that the effect of TV in 2700 households empowered women to be more autonomous. Cable TV households had lower birthrates, less domestic abuse and kept daughter in school.

Vivek said...

Riaz:

Yes, there is a clear north-south divide in India in terms of human development. At the same time, the fertility rate in the north remains high and it has declined in the south. It's a worrisome prospect for those who are counting on the size of the skilled workforce in India in the future to sustain growth.

Himachal Pradesh? Punjab? Haryana? NCR? Uttarakhand? They are more north than UP or Bihar and their figures clearly contradict your north-south divide theory.

There are a lot of studies, including McKinsey's, that bandy about Indian middle-class figures without defining it.

Doing a rough calculation, the largest possible size of India's middle class is no more than 200 million, even if you count some people making less than $10 a day as middle class. If you exclude the bottom 76% making less than $2 a day (HDR 2009) and exclude the top 5%, you have about 19% left, most of whom are probably closer to $2 than $10 a day.


Except that the figure of 5% for exclusion has no scientific basis.
Why not 7% or 3%?

Why is it ridiculous? What if most of the benefits have gone to the top 5% as seem in the growth of Indian billionaires?

Its simple economics. A major change at a macro level cannot be created in the space of 5 years without a major economic meltdown as in Zimbabwe for example. And even if ALL the benefits of growth went to only the top 5% of the population, the trickle down effect would ensure that every strata of society would gain, no matter how marginally. And with India having possibly the best government it has seen since independence, its even less likely that poverty would increase.

India now has 100 million more people living below the poverty line than in 2004, according to official estimates released on Sunday.

The poverty rate has risen to 37.2 percent of the population from 27.5 percent in 2004, a change that will require the Congress-ruled government to spend more money on the poor.

India now has 410 million people living below the U.N. estimated poverty line of $1.25 a day, 100 million more than was estimated earlier, officials said.

India calculates how much of its population is living below the poverty line by checking whether families can afford one square meal a day that meets minimum nutrition needs.


I would you atleast read the context instead copy pasting extracts. The 'change' in poverty levels is because of a redefinition of standards. The absolute terms the poverty HAS decreased substantially.

A simple graph of wikipedia makes the trend very obvious.

http://upload.wikimedia.org/wikipedia/commons/c/ce/BPL_Data_GOI.png

Look it up.

Riaz Haq said...

India is continuing to run large fiscal and trade deficits. India's trade deficit was an estimated $86.6 billion in April- January 2009-2010, according to media reports. The Reserve Bank of India said the nation's current account deficit widened to $29.8 billion in fiscal 2009, compared with a deficit of $17 billion in prior year.

Vivek said...

India is continuing to run large fiscal and trade deficits. India's trade deficit was an estimated $86.6 billion in April- January 2009-2010, according to media reports. The Reserve Bank of India said the nation's current account deficit widened to $29.8 billion in fiscal 2009, compared with a deficit of $17 billion in prior year.

That's more than affordable given the current rate of GDP growth and quantity of FDI and FII entering the country. Until the recession set in, India's fiscal deficit was expected drop to 3% of the GDP. That's very much achievable in the near future.

Riaz Haq said...

Vivek: "That's more than affordable given the current rate of GDP growth and quantity of FDI and FII entering the country. "

You may be right. But India needs to worry about recent data that its capital account continued to be negative for the second quarter in a row. The gauge of investment flows into and out of the country showed a shortfall of $4.44 billion in the three months to 31 March, compared with a net inflow of $26.5 billion a year earlier, RBI said.

Riaz Haq said...

Here's NY Times story about India's decrepit rail system slowing freight movement:

MUMBAI, India — S. K. Sahai’s firm ships containers 2,400 nautical miles from Singapore to a port here in four or five days. But it typically takes more than two weeks to make the next leg of the journey, 870 miles by rail to New Delhi.

For most of that time the containers idle at the Jawaharlal Nehru Port near Mumbai because railway terminals, trains and tracks are severely backlogged all along the route. Counting storage and rail freight fees, Mr. Sahai estimates the cost of moving goods from Mumbai to Delhi at up to $840 per container — or about three times as much as getting the containers to India from Singapore.

“They don’t have any physical space,” Mr. Sahai, who is chairman of SKS Logistics of Mumbai, said about the government-owned Indian Railways. “And all their trains are booked.”

As the world looks to India to compete with China as a major source of new global economic growth, this country’s weak transportation network is stalling progress.

Economists say India must invest heavily in transportation to achieve a long-term annual growth rate of 10 percent — the goal recently set by the prime minister, Manmohan Singh. But whether measured by highways, airways or — particularly — far-reaching railways, India’s transportation is falling short.

Critics say the growth and modernization of Indian Railways has been hampered by government leaders more interested in winning elections and appeasing select constituents, rather than investing in the country’s long-term needs. It is one of the many ways that the political realities of India’s clamorous democracy stand in contrast to the forced march that China’s authoritarian system can dictate for economic development.

A 40,000-mile, 150-year-old network, Indian Railways is often described as the backbone of this nation’s economy. And in fact it is moving more people and goods than ever: seven billion passengers and 830 million tons of cargo a year. But its expansion and modernization is not keeping pace with India’s needs.

“If it has to serve as the backbone of the Indian economy, the leaders of the Indian Railways have to think big, and they need to have a larger vision,” said S. Ramnarayan, a professor at the Indian School of Business and co-author of a book about the railways. “Thinking in terms of incrementalism — a little extra here, a little extra there — doesn’t solve anybody’s problem.”

The crash on an eastern rail link late last month that killed 151 people and injured hundreds of others underscored the vital nature of the railroads, as well as their vulnerability. The crash, which authorities have attributed to Maoist rebels, was particularly disruptive because it disabled a busy east-west line that, along with many others, was already stretched thin.

Traffic between big cities like Mumbai and Delhi, for instance, often runs at more than 120 percent of planned capacity, which means trains travel more slowly and tracks wear out faster than intended.

And because the railways’ tracks are too lightweight and the locomotives underpowered, Indian trains can haul no more than 5,000 tons of cargo, compared with 20,000-ton capacities in the United States, China and Russia.

Riaz Haq said...

Here are some excerpts from a recent piece "Is the Nation in a Coma?" in the Hindu Businessline by Mohan Murti:

It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades.

In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”

One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”

An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.

A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.

“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”

The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”

This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while travelling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.

My father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be Asatyameva Jayete.

Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.

Vivek said...

You may be right. But India needs to worry about recent data that its capital account continued to be negative for the second quarter in a row. The gauge of investment flows into and out of the country showed a shortfall of $4.44 billion in the three months to 31 March, compared with a net inflow of $26.5 billion a year earlier, RBI said.

Yes India needs to be concerned about its finances. As does the US. As does Germany. As does the UK and Pakistan and Russia and most other countries in the world that aren't overflowing with mineral resources. Its a simple outcome of the global recession. The government was forced to spend more to sustain the economic momentum. Spending is already being scaled back(partly due to inflation) and India will be back on track to pursuing the aims of the FRBM Act.

Vivek said...

With regard to your comment on corruption -

First of all is there a point to it? Because it seems that you're simply harping on problems faced by India today without explaining how its related to the issue at hand?

And with regard to the actual corruption, the most authoritative figures - as you no doubt know - come from Transparency International. While not the final word its one of the most commonly accepted standards. Here's the rating of a few countries with ranking in brackets -

Brazil - 3.7(75)
China - 3.6(79)
India - 3.4(84)
Sri Lanka - 3.1(97)
Bangladesh - 2.4(139)
Pakistan - 2.4(139)
Nepal - 2.3(143)
Russia - 2.2(146)


In addition the UPA-I government by implementing the Right to Information took the single most effective step to tackle corruption in country. Other project like Nandan Nilekani managed UID project are expected to do almost as much. Overall things have improved a lot over the last ten years on the corruption front and seem to be getting even better.

Riaz Haq said...

A recent ilog on Chowk titled "Some code coolies!!!" boasts of India being ranked second in global manufacturing competence in a survey by Deloitte Touche Tohmatsu and the US Council on Competitiveness.

In reality, though, India remains heavily dependent on foreign manufactured imports of basic infrastructure equipment needed in telecom, power, defense sectors etc.

India is continuing to run large current account and trade deficits. India's trade deficit was an estimated $86.6 billion in April- January 2009-2010, according to media reports. The Reserve Bank of India said the nation's current account deficit widened to $29.8 billion in fiscal 2009, compared with a deficit of $17 billion in prior year.

The nation’s capital account continued to be negative for the second quarter in a row. The gauge of investment flows into and out of the country showed a shortfall of $4.44 billion in the three months to 31 March, compared with a net inflow of $26.5 billion a year earlier, RBI said.

Riaz Haq said...

In Awakening Giants, Feet of Clay: Assessing the Economic rise of China and India, Mr Bardhan says it is not clear whether economic reforms are mainly responsible for the recent high growth in India.

Reforms have made the country's corporate sector more vibrant and competitive. But, he says, most of the Indian economy is not in the corporate sector, which absorbs only 6% of India's labour force. The fast growing info-tech sector - India's pride- employs less than 1% of India's workforce. Services - financial business services and telecommunications where reforms may have made a significant impact - constitute only about a quarter of the total service sector output. "It is yet to be empirically and convincingly demonstrated how the small corporate sector benefiting from reforms pulled up a vast informal sector," says Mr Bardhan.

Globalisation's impact on economies has been a divisive issue with economists. Some say it sharpened inequities and made the poor poorer; others believe it has pulled lots of people out of poverty.

Mr Bardhan isn't very sure about either.

He cites India's national household data, which suggests that poverty did not decline sharply in 1993-2005, when India experienced extensive opening up of its economy. Social indicators like child health remained - and remain - abysmally poor. At the same time, the growth rate in agriculture, where most of the poor work, has declined somewhat in the past decade. This is largely because of the decline of public investment in farm infrastructure and has nothing to do with globalisation, argues the economist.

Globalisation also does not appear to have helped in boosting India's social development indicators, Bardhan suggests. How else can one explain that Gujarat, the country's richest, high-growth, reform-friendly state, has a higher percentage of underweight children than sub-Saharan Africa?

Mr Bardhan suggests China's stunning growth rates (9% on an average) in the early years of liberalisation - 1978 to 1993 - happened because of domestic factors - farms reforms, distribution of land cultivation rights - which raised rural incomes.

Also, contrary to popular perception, China's growth has not been primarily export driven, the book argues. Bardhan shows how domestic investment and consumption have been the main drivers of China's growth. No doubt globalisation and economic reforms have trigged off economic growth but, as Bardhan argues, most of us may have overstated their importance.

Source: Biswas on BBC.com

Vivek said...

How else can one explain that Gujarat, the country's richest, high-growth, reform-friendly state, has a higher percentage of underweight children than sub-Saharan Africa?

Gujarat's poverty rate is well below the national average and it scores pretty well on most social indices. This statistic has more to do with inadequate dissemination of education to young mothers. For example, rural children are typically weaned from exclusively having mother's milk too early. And one of the many figures that support this fact is that the average adult in Gujarat is NOT malnourished.

Riaz Haq said...

The first India State Hunger Index (Ishi) report in 2008 found that Gujarat, 13th on the Indian list is ranked worse than Haiti, ranked 69.

Riaz Haq said...

Here's an excerpt from a Businessweek article titled "Why India's Singh Can't Reform?"

Just as they did after the terrorist siege in Mumbai in 2008, Indians have seen the government's failure to handle the Games efficiently and effectively as a metaphor for how it handles the country. What Indians want to know is very simple: When confronted with a challenge, can their government get it right?

Under Singh, the answer often has been no. His second term as Prime Minister and head of a coalition built around the Congress Party, which runs until 2014, started with great expectations. In the 2009 election Congress had managed to assemble a strong enough majority in Parliament that it no longer needed its Communist allies, who had been an obstructive force during Singh's first term.
------
Instead, Singh's promises to reform rigid labor markets and ease the difficulties that manufacturers encounter in acquiring land have gone nowhere. Efforts to introduce banking reform have failed, as have halfhearted attempts to tamp down double-digit food inflation, leaving India's poor buffeted by global commodity markets.

A long-running guerrilla war in India's mineral-rich central states has gotten worse, claiming more lives in 2010 than at any other point in the 33-year struggle. More than 100 people have been killed in recent street protests in Kashmir. "What we've seen since the [2009] elections are minuscule reforms—dropping petroleum subsidies, higher education reform at the margin," says Razeen Sally, director of the Brussels-based European Center for International Political Economy. "The bigger things that are needed are things he hasn't even tried for." A spokesman for the Congress Party did not return calls.

Many critics wonder how such an able man could achieve so little. As Finance Minister in 1991, Singh cut import tariffs, allowed foreign companies such as Ford Motor (F) to set up factories, and removed regulations requiring government authorizations for new plants. The result was a burst of growth that ended the acute fiscal crisis threatening India.

One reason Singh has not repeated this performance may be his tendency to bore in on details—a useful trait when you're fixing a single ministry, less so when you're running an entire country. Singh showed this side of himself when he jumped into the Games mess, personally inspecting sites and ordering investigations. "It should not be the Prime Minister's problem to see if the loos are clean or the ceilings of a stadium are solid," says Lord Meghnad Desai, a professor emeritus of the London School of Economics and a member of the British House of Lords who knows and admires Singh.

Structural issues are hobbling Singh, too. India's raucous politics have never been amenable to the kind of discipline China's one-party state is capable of displaying, especially in economic development. Finally, the dynamics of the Congress Party may have affected the Prime Minister's performance. Rahul Gandhi, the 40-year-old son of the assassinated Prime Minister Rajiv Gandhi, is being groomed by his mother, Sonia, to take over as Prime Minister in a Congress government someday soon. (Rahul is grandson of Indira Gandhi, who was also Prime Minister, and also assassinated.) Both mother and son have shown a tendency for well-meaning yet expensive social programs, including food subsidies, rural work programs, and farm loan waivers. "The most significant change has come about in the social sphere, and one wonders how much that has to do with Singh," says Prior-Wandesforde, the HSBC economist. "The 2009 election was a vote in favor of social reform rather than a vote for massive economic reform."

Vivek said...

In Awakening Giants, Feet of Clay: Assessing the Economic rise of China and India, Mr Bardhan says it is not clear whether economic reforms are mainly responsible for the recent high growth in India.



Mr Bardhan isn't very sure about either.

Mr. Bardhan doesn't seem sure about much. And his opinion is at odds with MOST other economists.

Vivek said...

Just as they did after the terrorist siege in Mumbai in 2008, Indians have seen the government's failure to handle the Games efficiently and effectively as a metaphor for how it handles the country. What Indians want to know is very simple: When confronted with a challenge, can their government get it right?

India hasn't seen any major attack (save the Pune blasts) since the Mumbai massacre. And that's very impressive performance from the government in a country where bomb blasts used to happen twice or thrice every year. I suppose when bad things get prevented people forget to give the administration the credit its due.

With regard to the Games, while the build up was chaotic, the final event has been relatively fine. Not as smooth as the Beijing Games, but then again it was never expected to be so.

Instead, Singh's promises to reform rigid labor markets and ease the difficulties that manufacturers encounter in acquiring land have gone nowhere. Efforts to introduce banking reform have failed, as have halfhearted attempts to tamp down double-digit food inflation, leaving India's poor buffeted by global commodity markets.

And yet despite the biggest global financial meltdown since WWII, India has been able to clock 8.5% growth. That's because a very able team of bureaucrats is changing the system from within. Reform by stealth (for political reasons) has been this government's motto. But, eventually all the small reforms add up.

Reform in the food system is currently on the books. So far the ministry has been under a NCP figure (Sharad Pawar) not a Congress appointee, and he's had the reputation of being more interested in cricket than reform.


Through the unique identification scheme the government will be able to make its social programmes far cleaner and reform the PDS structure. The Right to Information Act is already resulting in greater accountability. The GST tax once implemented will give a major fillip to tax collection across the country.

The protests in Kashmir are dying down, the insurgencies in both NE and Kashmir are at record lows.

The offensive against Naxals has already started taking effect -

http://timesofindia.indiatimes.com/india/Govt-regains-control-over-10000-sq-km-areas-dominated-by-Naxals/articleshow/6678160.cms

(Copy the link into your browser)

By 2014 they should be totally wiped out.


And most importantly spending on infrastructure particularly roads and power has been an unprecedented levels. And anyone who travels by road can tell you of the massive transformation in the condition of the highways in India. The power projects will also begin to mature in the next two years.

Too bad, news critical of the government always sells more.

Riaz Haq said...

Can China rekindle its innovation spirit? Here's a piece on it published by OECD Observer:

The great 20th century sinologist, Joseph Needham, once drew up a list of 24 technical innovations brought from China to the West. They ranged from gunpowder and the wheelbarrow to printing, cast iron, the magnetic compass and the chain suspension bridge. By 1600 the torch of innovation had passed to the West.

Could it now be returning? In 2003 China became the third nation to put a man into space, and has busily launched satellites since. On the ground, communications companies such as Huawei and ZTE now compete head-on with the likes of Ericsson and Nokia.

Against this background, it is no wonder that China is one of the world’s largest investors in research and development. Spending on R&D has climbed by 19% per year since 1995 to reach US$30 billion in 2005, putting China sixth in world ranking. That is at current exchange rates; if these were adjusted for purchasing power parity between different countries, then China would rank third!

However, according to a new report examining Chinese innovation, some of this progress flatters to deceive: R&D spending is still low as a share of GDP per capita and far lower than the OECD average. Consider also the number of researchers in China, which while second in the world only to the US, is still very low for China compared to OECD countries, given the size of the country’s labour force. Chinese researchers may have contributed 6.5% of research articles to scientific publications in 2004, up from just 2% a decade earlier, and are second after the US in nanotechnology research publishing, for instance, but their innovation system still shoots below potential.

Safeguarding intellectual property rights is the soft belly here. China is well in line with international regulations as a signatory of TRIPS (the Agreement on Trade-Related Aspects of Intellectual Property Rights), but despite clearer and tighter regulation, infringement still dogs the system. The difficulty is enforcement. This discourages domestic investors as much as investors from abroad. Worse, IPR infringement poses health and safety risks for consumers, and damages the reputation of Chinese firms. The government, as well as the Chinese Patent Office, is toughening up on IPR, though fixing the system will take time and effort.

For many historians and scientists, what makes Chinese civilisation so brilliant is that it had “another way” of doing science. According to Joseph Needham, Chinese innovators simply did not translate their knowledge into mathematics. This left them remote from ensuing scientific dialogue. Whether or not this is true, the global economy has now changed and so has China. In the end, the Chinese are set to reinforce the country’s innovative capabilities both by trying out their own approach and looking to advanced OECD countries for inspiration. If the underlying systemic shortfalls are also corrected, then China may soon be in a position not only to push to the heart of scientific discussion, but to lead the world to new frontiers of knowledge as well.

Riaz Haq said...

Here's an LA Times story on "Chalta Hai" attitude that was at the root of the mess in lead up to the CWG 2010:

The international embarrassment that India suffered in the run-up to the Commonwealth Games — marred by massive cost overruns, a collapsed bridge and widespread corruption allegations — has focused attention on a stubborn cultural condition that if not checked, analysts here say, could undercut India's superpower ambitions.

An attitude referred to in Hindi as "chalta hai," which translates to "it goes" but can mean "don't be bothered," "whatever," "it'll do," or "don't fret (such problems as corruption, delays, shoddy quality)."

Or in the words of one commentator: "It's OK dude, who cares?"

As the Games' closing ceremony wrapped up Thursday, the attitude appeared to be borne out. Chaos reigned until opening day of the international sports competition, but India ultimately pulled it off. There were no major terrorist attacks, India won 38 gold medals and dancing and marching bands wowed the closing crowd.

As the hangover sets in, however, some wonder why it took prime ministerial intercession to get toilets cleaned in the athletes village, why Indian planning compared so poorly with neighboring China's hosting of the 2008 Summer Olympics and whether a wing-it attitude befits a nation with such talent, potential and prospects.

"It doesn't matter if we're a growing superpower or the stock market's at record levels," said Vinod Mehta, editor in chief of the Outlook media group. "What these Games showed is that we've hit the limit on chalta hai."

Some see the attitude growing out of Hindu fatalism and rigid social hierarchies.

"It's a sense of 'que sera, sera,' pre-destination, you're born upper or lower caste," said Ravinder Kaur, a sociologist at the Indian Institute of Technology.

Others cite India's huge population and limited resources, which can leave individuals feeling powerless. "It's a coping device," said Amita Baviskar, a sociology professor at Delhi's Institute of Economic Growth.

For Santosh Desai, president of McCann-Erickson India, chalta hai is epitomized by a story his father recounted of a classmate who stole test answers, then only bothered to memorize the bare minimum required to pass.

Most cultures have something similar of sorts, including the Latin American "manana" and the Middle Eastern "bukrah, insha Allah" ("tomorrow, God willing") attitudes.

India's slack Games preparations epitomized chalta hai thinking, analysts said, but examples are widespread in India.

Riaz Haq said...

Here's an India blogger Abhinav talking about "India's growth story" on hunger and starvation:

Today’s news on the death of fifty people from hunger at Balangir in Orissa is a grim reminder of the little growth story that India has had. It clearly indicates many negative facets of our system, bureaucracy and the public at large. As per the World Food Program, almost half of the world’s population who are deprived of food live in India. Another website of a well known NGO (http://www.bread.org/learn/hunger-basics/hunger-facts-international.html) offers a grim picture of this particular issue especially when the same is getting the least attention by the policy makers across the world. If 50% of the starving residents belong to India, we do not need to look beyond our borders to nail the culprits.

More than six decades post independence and being counted as one of the key growth engines to the world economy, why are hunger deaths still happening in India? Is it because there is a scarcity of food to offer the ones hungry? Clearly that is not the case.

Those leading a life above the poverty line pay taxes to the Central and the State Governments so that it is used for public facilities, amenities and for the benefit of those living the poverty line. Obviously, those in power have to let go of their hunger for corruption or we have to watch the country going down the drains. Otherwise, it would constantly fail to administer the proper distribution of food and nutrition to people who matter.

We all talk about “3 idiots” and how a college principal is called a murderer who is responsible for the suicide of the students in his college. In the same way, aren’t the following responsible for the demise of people from hunger in our country?

1. Politicians responsible for making food security and food distribution laws.
2. Governmental agencies responsible for proper storage of food grains.
3. Bureaucrats responsible for administration and distribution amongst the right people.
4. Local security agencies which must maintain law and order to ensure proper distribution.

And why is it that they are not punished for these deaths. We have poor being imprisoned for thefts but those in power prosper, while the poor suffer. Is there any accountability for what is being and can be done to break this nexus? Would those in urban cities who are fortunate enough to be writing and reading this blog do something about it? Would they start taking candle light walks in memory of those unfortunate who die in India of hunger every day? Will they go beyond the regular candle marches or force those in power to take responsibility and amend their ways?

Riaz Haq said...

Here's an IANS report on "The dark side of India's economic growth" leading to growing hunger and malnutrition in India:


New Delhi: A more inclusive growth policy targeted at marginalised communities and protection of their basic rights is required to combat hunger in India, international NGO ActionAid said.

"The dark side of India's economic growth is the fact that the poor have been dispossessed further, leading to malnutrition, hunger and starvation deaths," Sandeep Chachra, executive director of ActionAid India said here.


The International Food Policy Research Institute has ranked India 67th on the global hunger index, way below its neighbours China and Pakistan.

In a hunger score card released before the Millennium Development Goals Summit at the United Nations headquarters at New York in September, ActionAid said that while India's per capita income had tripled between 1990 and 2005, the number of chronically hungry had not reduced, standing at a staggering 270 million.

At this rate, India cannot halve its number of those starving until 2083, the report said.

"Implementation remains a massive challenge. Food and other entitlements have to be delivered on the ground, which requires greater political will," Amar Joyti Nayak, thematic head for food rights for ActionAid India, said.

Riaz Haq said...

Here are excerpts from a review of "Why The West Rules – For Now", by Ian Morris, published in Daily Mail:

I grew up in a golden age – I just didn’t know it. Things didn’t always feel golden in the Midlands during the Sixties.

And yet the West – a handful of nations clustered around the North Atlantic, plus their colonists on other continents – bestrode the world like a colossus. Westerners, on average, earned ten times as much as Asians or Africans and lived 25 years longer.

‘You’ve never had it so good,’ Prime Minister Harold Macmillan told us in 1957, and we hadn’t.


Westerners had televisions, cars and clean drinking water; unlike most of the rest of the world. European and American armed forces dominated the land, sea, and sky; Americans had even walked on the Moon. The West’s wealth and global domination had no parallels in history.

My oldest family Christmas photos, taken by my dad with a little Instamatic at our home in Stoke-on-Trent in the early Sixties, are crowded with this bounty – overflowing with toys, Cadbury’s selection boxes and bicycles.

But behind the beaming boy and the plastic Daleks, a shadow was already falling. Each passing year, more and more of the things we bought came not from the West but from the factories of the East.

First came Japan, which made the toys I loved; and as Japan, with bewildering speed, moved up the ladder to transistor radios and cars, new Asian manufacturers – South Korea, Taiwan and then China – filled the rungs it vacated. Japan’s economy outgrew Britain’s in 1963, and by 1967 was second only to America. Japan stayed in that spot until this summer, when China displaced it.

How did things change so much?
---------

In the 20th Century the American-dominated global economy drew in the resources of Asia just as Britain had once drawn in those of America.

Japan cashed in first, doubling its share of world production between 1960 and 1980. Next came the so-called Asian Tigers: the economies of Hong Kong, Singapore, South Korea and Taiwan.

And then, most spectacular of all, the People’s Republic of China. Its share of world production tripled in the 30 years after Mao’s death in 1976; rare indeed is the Westerner who does not now put on at least one piece of made-in-China clothing every morning.

Chinese industry has sucked 150 million countryfolk into cities – the biggest migration in history. According to Businessweek magazine, ‘the China price’ now represents ‘the three scariest words in the English language’.

So, whatever the analysts may think, the West’s global dominance and ongoing crisis have precious little to do with flukes, great men, or bungling idiots – and nothing at all to do with racial or cultural superiority.

Rather, they are the entirely predictable outcomes of the complicated interaction of geography and social development across the last 15,000 years – an interaction which, in just the past 200 years, has given the West unprecedented wealth and power. And which, within our own lifetimes, has begun tilting the playing field in China’s favour.

Things will never be the same again.



Read more: http://www.dailymail.co.uk/news/article-1323200/Western-society-rules-longer.html#ixzz13K5CZqSm

Riaz Haq said...

$200 billion is the target for India's exports in 2011, according to ADB, about 20% of it in engineered goods, about the same or slightly more than India's textile exports.

Overall, India imports most of its infrastructure machinery (power, telecom, construction equipment, etc) and defense armament and runs huge trade deficits. An example is a recent $10 billion contract by Reliance Power to import power plants from China.

India’s current account deficit tripled in the June quarter as imports soared, raising the spectre of volatile currency when the tide of overseas fund flows turns, according to Times of India.

Interest rate differentials between the domestic market and the developed nations raised the external debt too as companies found it beneficial to borrow in dollars. Widening deficit may make the central bank’s job of ensuring stability in the foreign exchange market, inflation and interest rates tough, economists say.

Current account deficit in the June quarter widened to $13.7 billion, from $4.5 billion in the year earlier, a data released by RBI showed. Current account in the balance of payments measures the net position of a country’s exports and imports of goods and services.

Riaz Haq said...

Here's the transcript of a recent NPR radio show on how Brazil has emerged as a major exporter of food:

Next we're going to explore how Brazil became an agricultural superpower. It is the world's biggest exporter of beef, poultry, orange juice and sugar cane. And it also supplies a quarter of the worlds soybeans. The credit goes in part to Brazilian scientists who've been working since the 1970s to make what was once an agricultural wasteland bloom.

And Brazil, which elects a new leader Sunday, promises to become even more productive in years to come. NPR's Juan Forero has the story from Brazils grain belt.

JUAN FORERO: Slowly, a powerful New Holland harvester advances over rolling hills here in Brazils dry, hot savannah, the Cerrado. In the cab is farm worker Luiz Tavares, who marvels as he cuts through golden stalks of wheat.

Mr. LUIZ TAVARES: (Foreign language spoken)

FORERO: This is a wheat thats resistant to plagues, he says, a wheat that has an especially high yield and is excellent for flour. Its wheat that Brazilian scientists created for this tropical climate and acidic soil. Paulo Kramer is the owner of this farm and he gives the credit to Embrapa, the government-run agricultural research institute.

Mr. PAULO KRAMER: (Foreign language spoken)

FORERO: When we started planting here, he said, we never thought wed be planting wheat. Wheats a cold-climate crop, Kramer said, usually found in places like Iowa or Argentina.

Barely two generations ago, many considered this 1,000-mile swath of low-lying trees and scrubland good only for raising cattle. The military government that ruled Brazil then decided, with unusual foresight, to create Embrapa. The head of its international wing is Francisco Souza, a tropical seed expert.

Mr. FRANCISCO SOUZA (Embrapa): Back in the '70s, Brazil imported most of the food. We had food crisis, the government at that time decided to really invest in modern agriculture.

FORERO: The nationwide system of laboratories that made up Embrapa was entrusted with improving Brazils soils. They also work on new crop varieties and find more efficient ways to fatten up cattle and hogs. Embrapa started by developing its know-how. And it did that by sending hundreds of young scientists to earn their doctorates in American universities. Among them was Thomaz Rein.

(Soundbite of footsteps)

Rein, a soil scientist educated at Cornell University, walks through experimental fields of sugar cane and beans. He stops in a stand of corn, the leaves of which look yellow and easily crumble in his hands.

Dr. THOMAZ REIN (Soil Scientist): So you see here the bottom leaves are necrotic, already dry, at this time, so this is a sign of nitrogen deficiency.

FORERO: The corn with the greener leaves, he said, was inoculated with nitrogen-fixing bacteria. Such is the work of Embrapa scientists trying to resolve problems particular to Brazil.

Mr. REIN: So the soil are very poor in terms of nutrients that are required by the plant like phosphorus, calcium, potassium, and what are called also micronutrients. And also the soil are very acid.

FORERO: The soil in the Cerrado, in fact, is so naturally toxic that roots cant grow well. Embrapa added just the right mixture of limestone and other nutrients to make the soil fertile.�And Rein said scientists determined that gypsum helped correct the acidity, permitting roots to reach deep for water.

Embrapas advances are important well beyond Brazil - in the tropical countries of Africa, which struggle to feed their people. As wind whips through a test field, Rein said Embrapa continues to tinker.

Some of its most recent advancements come with wheat. Wheat wont ever become a big export for Brazil, Rein said. But Embrapa is always looking to find ways for all crops to bloom.

Riaz Haq said...

Here's part 1 of a recent report titled "India: Economic Power House or Poor House?" by reporter The Star's Mary Albino that talks about how deceptive "India's Miracle" is:

India’s economic miracle is a perfect example of how appearances can be deceiving.

The dominant narrative on the country goes like this: as the fourth largest economy in the world, with a steady annual growth rate of close to 9 per cent, India is a rising economic superstar. Bangalore is the new Silicon Valley. Magazines such as Forbes and Vogue have launched Indian editions. The Mumbai skyline is decorated with posh hotels and international banks.

There are numbers to back up this narrative. The average Indian takes home $1,017 (U.S.) a year. Not much, but that’s nearly double the average five years ago and triple the annual income at independence, in 1947. The business and technology sector has grown tenfold in the past decade. Manufacturing and agriculture are expanding, and trade levels are way up.

India is also on the up and up in terms of human well-being. Life expectancy and literacy are steadily rising, while child mortality continues to decline. The poverty rate is down to 42 per cent from 60 per cent in 1981. While 42 per cent still leaves a long way to go, India’s situation seems rosy compared with that of, say, Malawi and Tanzania, which have poverty rates of 74 per cent and 88 per cent, respectively.

If we examine these statistics in real numbers, however, a different narrative emerges, one the Indian government likes less.

With a population as big as India’s, 42 per cent means there are some 475 million Indians living on less than $1.25 per day. That’s 10 times as many facing dire poverty as Malawi and Tanzania combined.

It means India is home to more poor people than any other country in the world.

To put it another way, one of every three people in the world living without basic necessities is an Indian national.

The real number is probably even larger. The recently launched Multidimensional Poverty Index (MPI), a more comprehensive measure of deprivation than the current “poverty line” of $1.25 per day, uses 10 markers of well-being, including education, health and standard of living. The MPI, developed by the Poverty & Human Development Initiative at Oxford University, puts the Indian poverty rate at 55 per cent. That’s 645 million people — double the population of the United States and nearly 20 times the population of Canada.

By this measure, India’s eight poorest states have more people living in poverty than Africa’s 26 poorest nations.

A 10-year-old living in the slums of Calcutta, raising her 5-year-old brother on garbage and scraps, and dealing with tapeworms and the threat of cholera, suffers neither more nor less than a 10-year-old living in the same conditions in the slums of Lilongwe, the capital of Malawi. But because the Indian girl lives in an “emerging economy,” slated to battle it out with China for the position of global economic superpower, and her counterpart in Lilongwe lives in a country with few resources and a bleak future, the Indian child's predicament is perceived with relatively less urgency.

One is “poor” while the other represents a “declining poverty rate.”

Riaz Haq said...

Here's part 2 of a recent report titled "India: Economic Power House or Poor House?" by reporter The Star's Mary Albino that talks about how deceptive "India's Miracle" is:

One is “poor” while the other represents a “declining poverty rate.”

What’s more, in India there are huge discrepancies in poverty from one state to the next. Madhya Pradesh, for example, is comparable in population and incidence of poverty to the war-torn Democratic Republic of Congo. But the misery of the DRC is much better known than the misery of Madhya Pradesh, because sub-national regions do not appear on “poorest country” lists. If Madhya Pradesh were to seek independence from India, its dire situation would become more visible immediately.

As India demonstrates, having the largest number of poor people is not the same as being the poorest country. That’s unfortunate, because being the poorest country has advantages. In the same way a tsunami or earthquake garners an intense outpouring of aid and support, being labelled “worst off” or “most poor” tends to draw a bigger share of international attention — and dollars.

When Bangladesh became independent from Pakistan in 1971, it was the poorest country in the world, so poor most economists were skeptical it would ever succeed on its own. But being labelled “dead last” worked in its favour: billions of dollars in aid money flooded in, and NGO and charity groups arrived in droves. The dominant narrative of Bangladesh at the time was of a war-ravaged, cyclone-battered and fledgling country on the brink of famine. That seemed to help rally the troops.

No doubt India’s government wants the world to perceive the nation in terms of its potential and not its shortcomings. But because it’s home to 1.1 billion people, India is more able than most to conceal the bad news behind the good, making its impressive growth rates the lead story rather than the fact that it is home to more of the world’s poor than any other country.

Still, at least part of the blame should be placed on the way poverty is presented on the international stage. If the unit of deprivation is a human being, then the prevalence of poverty should be presented in numbers of lives. If we know precisely how many billionaires India has — 49 in 2010, double last year’s number — than we should also know precisely how many people live without basic necessities.

Riaz Haq said...

Here's a piece by Eric Margolis on US-India ties titled "Welcome to India, Obama Sahib":

While the western media fulminates against Taliban’s or Iran’s treatment of women, a leading British medical journal reports an estimated 40,000 Indian women are burned alive each year by their in-laws to grab their dowries. Infanticide of female children is endemic. But few in the west seem to care.
India is a giant with feet of clay. A senior western diplomat in unhealthy Delhi told me that at any given time, half his staff is ill with serious maladies. India is plagued by grave health and environmental problems.
India is really two nations: modern, dynamic, high-tech urban India of about 100 million, and antique, timeless rural Mother India of 1.1 billion souls.
To China’s annoyance, President Obama proclaimed in Delhi that India should have a permanent seat on the UN Security Council. India is becoming a great power and deserves a seat among the world’s big boys. But so do Germany, Japan, Turkey and Brazil.

India and its people, long disparaged by British racist jokes, are delighted to be called equals by the great powers. In fact, nuclear-armed India sees itself very much as regional hegemon of the entire Indian Ocean extending from East Africa to Australia.

The Bush administration’s deal with Delhi to sanctify and facilitate India’s nuclear weapons programs was thought at the time a clever move. But it dismayed the rest of the world, made a mockery of non-proliferation, and outraged the entire Muslim world, which has been blasting the US for hypocrisy by threatening war against Iran, which is under UN nuclear inspection, while playing nuclear footsie with India, which rejected all UN inspection.

India’s leaders are no fools and will not be easily pushed or bribed into a stronger anti-China and anti-Iran stance by Washington – Delhi maintains cool but correct relations with Beijing, but behind the wintry, trans-Himalayan smiles lies growing rivalry over Chinese-occupied Tibet, Indian-ruled Ladakh and Kashmir, their long, poorly demarcated Himalayan border (another gift of the British Empire), strategic Burma, and their intensifying nuclear and naval rivalry.

India claims China is trying to surround it, using Pakistan, Sri Lanka, Bangladesh, and Burma. The two Asian superpowers have been locked in a strategic and conventional arms race for a decade. In 1999, this writer postulated that the two giants would one day clash over their contested borders.

India will follow its own strategic and diplomatic interests – which are not synonymous with those of the United States.

Delhi has a long record of clever diplomacy that has isolated Pakistan and kept the world and UN out of the burning Kashmir problem, where 40,000–80,000 Kashmiris have died in a long independence struggle against Indian rule.

But the United States is now slowly being drawn into the dangerous Kashmir dispute – which triggered the 2008 terror bombing in Mumbai. Just look for example at the embarrassing revelations that one of the men involved in the 2008 Mumbai massacre was working for the US Drug Enforcement Agency.

The more Washington backs and arms India, the more its relations with China will deteriorate. Japan is also quietly building up India against China, to Beijing’s mounting anger.

The US could even be drawn into an India-China regional conflict. So caution is advised to US diplomats as they charge into the murky, tangled, poorly understood geopolitics of South and East Asia.

We also wonder if President Obama was briefed on India’s growing strategic arsenal.Delhi already has enough medium-ranged Agni-series missiles to cover potential foe China. Why then is Delhi spending billions to develop a reported 12,000 km ICBM whose only targets could be North America, Europe or Australia? ..

Riaz Haq said...

Countries like BRIC nations with rapid economic growth are often promoted by the likes of Goldman Sachs and New York Times, while nations with top social induicators but low economic growth are dismissed as less important.

Steven Hill discusses this situation by comparing US with Japan in a piece he wrote for Common Dreams.

Here are some excerpts from it:

Look at it this way: In the midst of the Great Recession, the United States is suffering through nearly 10% unemployment and 50 million people without health insurance. A new report has found over 14% of Americans living below the poverty line, including 20% of children and 23% of seniors, the highest since President Lyndon Johnson's War on Poverty. That's in addition to declining prospects for the middle class, and a general increase in economic insecurity.

How, then, should we regard a country that has 5% unemployment, healthcare for all its people, the lowest income inequality and is one of the world's leading exporters? This country also scores high on life expectancy, low on infant mortality, is at the top in literacy, and is low on crime, incarceration, homicides, mental illness and drug abuse. It also has a low rate of carbon emissions, doing its part to reduce global warming. In all these categories, this particular country beats both the U.S. and China by a country mile.

Doesn't that sound like a country from which Americans might learn a thing or two about how to get out of the mud hole in which we are stuck?

Not if that place is Japan. During and before the current economic crisis, few countries have been vilified as an economic basket case as much as the Land of the Rising Sun. Google "Japan and its economy" and you will get numerous hits about Japan's allegedly sclerotic economy, its zombie banks, its deflation and slow economic growth. This malaise has even been called "Japan syndrome", sounding like a disease to warn policymakers, as in "you don't want to end up like Japan."

Riaz Haq said...

Here are some exerpts of a review by Ashok Mitra of Amit Bhaduri's "The Face You Were Afraid to See" as published in Calcutta's Telegraph:

Surely Amit Bhaduri is dead wrong. His recent book bears the title, The Face You Were Afraid to See. The “face” he has in mind is the stark reality of destitution, malnutrition, illiteracy and joblessness which is still the fate of a huge lot of citizens in independent India. The “you” Bhaduri addresses his epistle to are the roughly 10 — at most 15 — per cent of the nation at the top of the social ladder who, thanks to economic liberalization, had never had it so good: industrial tycoons, financial conglomerates, ruling politicians and assorted hangers-on of each of these species, including the media and the so-called intelligentsia. These latter categories, Bhaduri seems to assume, are scared to come face to face with the other India, the India of progressive immiserization and ruthless exploitation. Quite the contrary. For the first time since the British left, the richer layer of society has come to acquire an extraordinary self-confidence. The lurid contrast between how, on the one hand, its members are indulging themselves at spas, shopping malls, five star hotels and golf links and, on the other, the fact that at least 300 million of their countrymen exist at subhuman levels and, perhaps another 300 million or thereabouts, while not exactly starving, are bereft of a minimum of housing, education and healthcare, does not disturb them. The bizarre combination of happenings like India slipping down every year in the human development index constructed by the United Nations even as it attains the dubious distinction of having the largest number of billionaires after the United States of America is taken in its stride. More than half of Mumbai’s population lives in ramshackle jhoparpattys; awareness of this grim fact does not deter a tycoon from building in the city the obscenity of a mansion costing more than Rs 5,000 crore as his residential abode. Consider yet another instance. The loss to the national exchequer because of the 2G spectrum shenanigan, the comptroller and auditor general has estimated, is around Rs 1,80,000 crore. A public distribution programme covering the entire national population, which could reach food to each and every starving citizen of this country, would cost only one-half of that sum. But the powers that be are unwilling to endorse the programme; they even have the effrontery to suggest that public distribution reeks of corruption...
Bhaduri unravels these complex themes with an equal measure of acuity and elegance in The Face You Were Afraid to See. As one who identifies himself with the bottom 90 per cent of the community, he is, however, not satisfied with mere analysis; he is, so to say, stripped for action. And he has his own ideas regarding what activism should consist of. The established political parties, Bhaduri is convinced, are in cohorts with the ruling hegemony. He has equal contempt for the organized trade unions; these are, in his view, interested only in their own narrow interests and ignore such issues as the plight of villagers dispossessed of their cultivable land. He apparently forgets that the trade union movement, too, is itself a victim of the Machiavellian growth model fathered by economic liberalization. Any way, salvation, Bhaduri suggests, lies only in initiatives on the part of civil society groups in different spheres; these will then come together and accomplish the heroic task of smashing to smithereens the conspiracy hatched by corporate bosses and their crony politicians.

Riaz Haq said...

Here are excerpts from a Wall Street Journal report on Chinese Premier Wen Jiabao's visit to New Delhi:

Mr. Wen sought during the visit to strengthen commercial ties with big-ticket investment proposals and a promise to further open China's markets to India.

On Wednesday, Indian and Chinese companies signed more than 40 deals in the power, commodities and telecoms sectors for a combined $16 billion. Many of the deals were Chinese bank financing agreements for large Indian orders of Chinese exports of telecom and power-producing equipment.

During the first 10 months of 2010, China exported goods valued at $32.87 billion to India, but its imports totaled only $17 billion.Mr. Wen reiterated that Beijing will heed New Delhi's request to broaden access of Indian exports such as pharmaceuticals, information technology and agricultural products to shrink India's trade deficit.Mr. Wen also said in his speech to the diplomats that China understands and supports India's desire to play a bigger role at the United Nations, including the Security Council. China has long opposed a permanent seat for India on the council, and Mr. Wen's comments Thursday didn't appear to represent a change to that position. President Barack Obama during a visit to India in November for the first time publicly backed India's inclusion as a permanent member of the Security Council.

India, concerned over its trade deficit of $19 billion last fiscal year, wants better market access for its exports. For now, India's main export to China is iron ore, while it imports large amounts of high-value manufactured goods.

"The two sides agreed to take measures to promote greater Indian exports to China with a view to reduce India's trade deficit," the two countries said in a joint statement.

India-China trade ties have often been rocky, as India continues to impose antidumping duties—the highest by any country at the World Trade Organization last year—against Chinese products, alleging that the prices of some goods are set artificially low.

China has also raised objections to India's stringent regulations in sourcing power and telecommunications equipment, calling them discriminatory.

China and India have shared interests in reform of the council, with both supporting expanded representation of developing countries, Mr. Wen said Thursday.

Riaz Haq said...

Here are some excerpts from a piece by Dost Mittar on Chowk.com comparing China and India:

India’s foreign exchange reserves at $300 Billion are only a fraction of China’s and those, too, are not based on export earnings but due to inward remittances and fickle inflows of institutional investments in its stock markets.

Some analysts, especially Indians, have recently become much more aggressive in their economic forecasts for India and started comparing their country to Tortoise in a race with the Chinese Hare. They have suggested that China has peaked in its growth whereas India is just starting. They claim that India has strong legal and financial institutions which the Chinese lack. They foresee bottlenecks in the growth of China just as India’s potential is beginning to be realized. How far is this a valid hypothesis?

India is expected to invest a trillion dollars in its infrastructure and many countries are vying with each other to get a slice of this large pie. This is the reason why leaders of almost all major countries have visited or due to visit India this year. These investments are likely to generate large employment opportunities directly and many more indirectly, in addition to improving economic prospects of regions which are currently not well served by infrastructure.

India’s economic growth has been largely based on the domestic market. India’s middle class is booming and is now gradually expanding to smaller towns and even rural areas. The telecom revolution has been real and now covers most villages. Television has reached into the hinterland and raised aspirations of rural masses for the kinds of goods and services that they see being enjoyed by the urban middle class. India largely escaped the recent global recession in part due to the strength displayed by consumers in small towns and villages which were not dependent upon IT and other sectors which are closely tied to the global economy. The rural sector now accounts for half of the two-wheelers sold in India and an increasing number even of small cars. However, a relative lack of growth has led to a serious trade deficit for India, which has so far been filled through capital inflows which cannot be relied upon on a long-term basis. High and rising costs of oil imports of petrol, large infrastructure projects and large-scale defense purchases indicate that these imbalances are likely to worsen rather than improve in the coming years.

Riaz Haq said...

Here are some trade figures from India's commerce ministry:

A. EXPORTS (including re-exports)

Exports during August, 2010 were valued at US $ 16644 million (Rs. 77509 crore) which was 22.5 per cent higher in Dollar terms (18.0 per cent higher in Rupee terms) than the level of US $ 13586 million (Rs.65670 crore) during August, 2009. Cumulative value of exports for the period April-August 2010 was US $ 85273 million (Rs 392811 crore) as against US $ 66326 million (Rs. 322424 crore) registering a growth of 28.6 per cent in Dollar terms and 21.8 per cent in Rupee terms over the same period last year.

B. IMPORTS

Imports during August, 2010 were valued at US $ 29679 million (Rs.138211 crore) representing a growth of 32.2 per cent in Dollar terms (27.4 per cent in Rupee terms) over the level of imports valued at US $ 22449 million ( Rs. 108506 crore) in August, 2009. Cumulative value of imports for the period April-August, 2010 was US $ 141894 million (Rs. 653828 crore) as against US $ 106605 million (Rs. 518024 crore) registering a growth of 33.1 per cent in Dollar terms and 26.2 per cent in Rupee terms over the same period last year.





C. CRUDE OIL AND NON-OIL IMPORTS:





Oil imports during August, 2010 were valued at US $ 7795 million which was 12.4 per cent higher than oil imports valued at US $ 6936 million in the corresponding period last year. Oil imports during April-August, 2010 were valued at US$ 40736 million which was 31.7 per cent higher than the oil imports of US $ 30929 million in the corresponding period last year.





Non-oil imports during August, 2010 were estimated at US $ 21884 million which was 41.1 per cent higher than non-oil imports of US $ 15513 million in August, 2009. Non-oil imports during April - August, 2010 were valued at US$ 101157 million which was 33.7 per cent higher than the level of such imports valued at US$ 75676 million in April - August, 2009.

D. TRADE BALANCE

The trade deficit for April - August, 2010 was estimated at US $ 56620 million which was higher than the deficit of US $ 40279 million during April -August, 2009.

Riaz Haq said...

There is no question that the Indian economy is doing much better than Pakistani economy as Pakistan fnds itself mired in som serious crises.

BUt there is a patterns of some western magazines, probably inspired by their Indian staffers, that exaggerate India's accomplishments, while making Pakistan look worse than the reality warrants.

The latest example is data published by The Economist on India and Pakistan in its current issue.

It says the following about India:

GDP growth: 8.2%
GDP: $1,832bn (PPP: $4,508bn)
Inflation: 5.8%
Population: 1,202.1m
GDP per head: $1,520 (PPP: $3,750)

And Pakistan:

GDP growth: 3.2%
GDP: $188bn (PPP: $487bn)
Inflation: 9.9%
Population: 189.6m
GDP per head: $992 (PPP: $2,570)

Here are the problems with the above:

1. Pakitan's population is about 180 million, not 190 million as stated by the Economist. This distortion causes Pakistan's GDP to look smaller than it is.

2. India's GDP is not $1.8 trillion. The highest figure I have seen is $1.5 trillion. This exaggeration makes India's per capita GDP higher than reality.

3. The magazine puts India's inflation rate at 5.8%...the actual inflation rate in India is in double digits....wth the latest figures closer to 15%.

The fact is that, using credible data from multiple souces, the real per capita GDP of both India and Pakistan hovers a little over $1000 in nominal terms.

Isn't it shoddy journalism by the Economist?

What happened to fact-checking at the Economist magazine?

Aren't these figments of The Economist's Indian staffers' imagination?

Riaz Haq said...

Over 17,000 Indian farmers committed suicide in 2009, according to an Indian government report:

NEW DELHI (AFP) – More than 17,000 Indian farmers committed suicide in 2009, a seven percent rise on the previous year, according to new government figures.

The National Crime Records Bureau (NCRB) study titled "Accidental Deaths and Suicides in India" revealed the rise without attributing causes, with the states of Maharashtra, Karnataka and Andhra Pradesh the worst affected.

Many farmers, particularly in the southern and western states listed, were pushed further into debt in 2009 after the weakest monsoon in 37 years left fields parched and crops ruined.

Despite economic development in cities, two out of three Indians still live and work in rural areas and as many as 150,000 farmers have killed themselves in the past decade, the Tata Institute of Social Sciences said in 2009.

The subject was taken up in an acclaimed Bollywood film last year called "Peepli Live" made by the production company of superstar Aamir Khan.

The film, directed by first-time director Anusha Rizvi, revolves around two poor farmers who face losing their land over an unpaid debt after poor monsoon rains, with one considering killing himself so that his family receives compensation.

In other statistics, the study said that a total of 127,151 people took their own lives in 2009 and about 125,000 people or about 350 a day died on the country's notoriously dangerous roads.

Road deaths increased by 7.3 percent in 2009 from 2008, following a long-term trend that has seen road deaths mirror increases in vehicle sales.

Since 2005, the number of fatal road accidents has increased by 30 percent, tracking a 35-percent rise in the number of vehicles.

India's booming economy is raising personal incomes and corporate profits, enabling middle-class consumers and businesses to invest in greater numbers of cars, vans and lorries.

However, as a study published in the British medical journal The Lancet last week pointed out, economic change sometimes produces harmful behavioural shifts, such as driving faster and further without due regard to safety.

The head of the National Safety Council of India (NSCI), K.C. Gupta, told AFP last September that changing attitudes was a "huge job" but that economic development would lead to more awareness.

India's generally bumpy and overcrowded roads remain poorly policed and chaotic in nature.

Whole families are often found crammed onto a single motorbike -- with only the father wearing a helmet -- while the overloading of trucks and buses is endemic.

A total of 175 people died of starvation and thirst in 2009, 261 in bombings, 25,911 from drowning, 8,539 from electrocution and 1,826 had fatal falls into manholes or pits. Around 8,000 died from snake or other animal bites.

Experts warn that government statistics in India should be treated with caution because of inefficient public administration in many areas, meaning accidents go unreported.

Riaz Haq said...

Thousands of Indian illegal immigrants are slipping into Texas from Mexico, according to LA Times:

Reporting from Harlingen, Texas — Thousands of immigrants from India have crossed into the United States illegally at the southern tip of Texas in the last year, part of a mysterious and rapidly growing human-smuggling pipeline that is backing up court dockets, filling detention centers and triggering investigations.

The immigrants, mostly young men from poor villages, say they are fleeing religious and political persecution. More than 1,600 Indians have been caught since the influx began here early last year, while an undetermined number, perhaps thousands, are believed to have sneaked through undetected, according to U.S. border authorities.

Hundreds have been released on their own recognizance or after posting bond. They catch buses or go to local Indian-run motels before flying north for the final leg of their months-long journeys.

"It was long … dangerous, very dangerous," said one young man wearing a turban outside the bus station in the Rio Grande Valley town of Harlingen.

The Indian migration in some ways mirrors the journeys of previous waves of immigrants from far-flung places, such as China and Brazil, who have illegally crossed the U.S. border here. But the suddenness and still-undetermined cause of the Indian migration baffles many border authorities and judges.

The trend has caught the attention of anti-terrorism officials because of the pipeline's efficiency in delivering to America's doorstep large numbers of people from a troubled region. Authorities interview the immigrants, most of whom arrive with no documents, to ensure that people from neighboring Pakistan or Middle Eastern countries are not slipping through.

There is no evidence that terrorists are using the smuggling pipeline, FBI and Department of Homeland Security officials said.

The influx shows signs of accelerating: About 650 Indians were arrested in southern Texas in the last three months of 2010 alone. Indians are now the largest group of immigrants other than Latin Americans being caught at the Southwest border.

Riaz Haq said...

Chandran Nair argues in his book "Consumptionomics" that the Asians need to rethink the whole idea of western-style consumer-driven capitalism to ensure a better, more sustainable future for their massive population.

Here are some excepts from Financial Times review of the book "Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet":

, -- Life might not be as much fun in his world as it is for the lucky ones who become wealthy under liberal capitalism. “Golf and car racing might be out but badminton and social dancing are more popular,” he suggests in his vision of leisure time in a Nairian society. But the benefits of development would be spread more widely, damage to the earth’s resources would be controlled and people would probably spend less time working.

Nair’s starting point is that the world simply cannot survive the consequences of the growth of highly populous Asian economies to levels of development reached by industrialised countries if that is to be achieved on the same resource-guzzling terms as western development.
-------------
Throughout the book, Nair evinces an angry disdain for western-style capitalism, which he regards as setting the world on a path to destruction by its devotion to the ideology of markets and its voracious appetite for finite resources. He’s none too complimentary either about its media cheerleaders, including this newspaper.

“The biggest lie of all is that consumption-driven capitalism can deliver wealth to all,” he writes. “In Asia it can only deliver short-term wealth to a minority; in the long term, it can only deliver misery to all. This is the intellectual dishonesty at the heart of the model the west has peddled to Asia.”

Nair points to the familiar issue of energy use, saying that if Asia’s population was to use as much energy per person as Europeans do today (relatively modest compared to Americans), then it would use eight to nine times as much energy as the US currently consumes. Perhaps more startling is an estimate he uses for poultry consumption. Americans will eat 9bn birds this year, apparently. If by 2050 Asians ate the same amount per person, they would swallow more than 120bn. That’s a lot of battery chickens.

Nor is Nair impressed by arguments that technology will ultimately solve issues such as energy shortages and climate change, allowing economic growth and consumption to go on expanding. He dismisses the notion that Asia should concentrate on growth and then, when it is rich, clean up afterwards. What he demands is a radical change in the prevailing global economic model and its governance.
-----------
But the shape of a Nairian Asia does emerge. It would be made up of strong nation-state governments willing to take unilateral action on issues such as controlling natural resource exploitation and domestic agriculture and industry. Governments would get bigger and spend more with an emphasis on sustainable infrastructure such as public transport. Carbon, natural resources and financial transactions would be taxed – possibly allowing for a reduction or elimination of payroll taxes. Agriculture would be deindustrialised, with a drive to return to labour-intensive farming to ensure sufficient output and stop mass migration to cities.

What would life be like for the individual? They would be expected to forgo owning a car, would pay high prices for meat and restaurant portions would be restricted. But income differentials would be minimised and access to the benefits of technology widely shared.

He doesn’t say it but Nair is describing a kind of Asian Norway, with the benefits of natural resources controlled and socialised to a high degree, rural communities subsidised to keep people on the land, fisheries protected, a high commitment to energy efficiency and high taxation to support high levels of social welfare.

Riaz Haq said...

Humanity would need five Earths to produce the resources needed if everyone lived as profligately as Americans, according to a report, says Times of India:

As it is, humanity each year uses resources equivalent to nearly one-and-a-half Earths to meet its needs, said the report by Global Footprint Network, an international think tank.

"We are demanding nature's services — using resources and creating CO² emissions — at a rate 44% faster than what nature can regenerate and reabsorb," the document said. "That means it takes the Earth just under 18 months to produce the ecological services humanity needs in one year," it said.

And if humankind continues to use natural resources and produce waste at the current rate, "we will require the resources of two planets to meet our demands by the early 2030s," a gluttonous level of ecological spending that may cause major ecosystem collapse.

Global Footprint Network calculated the ecological footprint — the amount of land and sea needed to produce the resources a population consumes and absorb its CO² emissions — of more than 100 countries and of the entire globe.
Back in 1961, the entire planet used just over slightly more than half of Earth's biocapacity. Today, 80% of countries use more biocapacity than is available within their borders.

The average American has an ecological footprint of 23 acres, or the equivalent of 17 US football fields. At the other end of the scale are impoverished countries like Malawi, Nepal or Bangladesh, where the footprints are 1.25 acres — often not enough to provide for basic food and shelter.

Riaz Haq said...

Here's an opinion piece by Amartya Sen published in The Hindu:

... I managed to resurrect the memory of having said in passing, in a meeting of TIE (The Indus Entrepreneurs) in Delhi in December, that it is silly to be obsessed about overtaking China in the rate of growth of Gross National Product (GNP), while not comparing ourselves with China in other respects, like education, basic health, or life expectancy. Since that one-sentence remark seems to have been interpreted in many different ways (my attention to that fact was drawn by friends who are more web-oriented than I am), I guess I should try to explain what that remark was about.
-----------
Let me look at some numbers, drawing from various sources — national as well as international, in particular World Development Reports of the World Bank and Human Development Reports of the United Nations. Life expectancy at birth in China is 73.5 years; in India it is still 64.4 years. Infant mortality rate is 50 per thousand in India, compared with just 17 in China, and the under-5 mortality rate is 66 for Indians and 19 for the Chinese. China's adult literacy rate is 94 per cent, compared with India's 65 per cent, and mean years of schooling in India is 4.4 years, compared with 7.5 years in China. In our effort to reverse the lack of schooling of girls, India's literacy rate for women between the ages of 15 and 24 has certainly risen, but it is still below 80 per cent, whereas in China it is 99 per cent. Almost half of our children are undernourished compared with a very tiny proportion in China. Only 66 per cent of Indian children are immunised with triple vaccine (DPT), as opposed to 97 per cent in China. Comparing ourselves with China in these really important matters would be a very good perspective, and they can both inspire us and give us illumination about what to do — and what not to do, particularly the glib art of doing nothing.
------
Life expectancy in Bangladesh is 66.9 years compared with India's 64.4. The proportion of underweight children in Bangladesh (41.3 per cent) is a little lower than in India (43.5), and its fertility rate (2.3) is also lower than India's (2.7). Mean years of schooling amount to 4.8 years in Bangladesh compared with India's 4.4 years. While India is ahead of Bangladesh in male literacy rate in the youthful age-group of 15-24, the female rate in Bangladesh is higher than in India. Interestingly, the female literacy rate among young Bangladeshis is actually higher than the male rate, whereas young females still do much worse than young males in India. There is much evidence to suggest that Bangladesh's current progress has much to do with the role that liberated Bangladeshi women are beginning to play in the country.

What about health, which interests every human being as much as anything else? Under-5 mortality rate is 66 in India compared with 52 in Bangladesh. In infant mortality, Bangladesh has a similar advantage, since the rate is 50 in India and 41 in Bangladesh. Whereas 94 per cent of Bangladeshi children are immunised with DPT vaccine, only 66 per cent of Indian children are. In each of these respects, Bangladesh does better than India, despite having less than half of India's per-capita income.
-------------
And perhaps more worryingly, this group of relatively privileged and increasingly prosperous Indians can easily fall for the temptation to treat economic growth as an end in itself........

Riaz Haq said...

Here is an excerpt from a Time magazine opinion piece by Hannah Beach on the status of Asian democracies:

Asia gave birth to people power in 1986, when a sea of yellow-clad demonstrators peacefully overthrew a dictator in the Philippines. Other popular uprisings against authoritarianism followed, from Thailand, South Korea and Taiwan to Mongolia and Indonesia. Watching the events unfold in the Arab world, Asia's fledgling democracies can be forgiven for indulging in a moment of nostalgia. While revolutionary zeal may have toppled the region's strongmen, however, too few of their successors have bothered to build the institutions needed to sustain democracy beyond its first flush. Democracy through revolution is heady stuff, but it's not always a template for building lasting freedom and justice.

The withered potential of people power is best examined on its home turf. This month, the Philippines will celebrate the 25th anniversary of the start of its historic uprising. Those following the events in Egypt will find many parallels. Ferdinand Marcos, a corrupt, aging, U.S.-backed dictator, was ousted by a populace that rallied, in part, thanks to technology. (Then it was radio, not Facebook or Twitter.) But a quarter-century later, with the son of people-power heroine Corazon Aquino now serving as President, the Philippines is still beset by the poverty, cronyism and nepotism that provoked the 1986 protests. (See a brief history of people power.)

These failings are not the Philippines' alone. Across Asia, elections are held, but vote buying taints the results. Politics is dominated by the same old families. Economic growth often rewards the few rather than the many. And from Malaysia and East Timor to Taiwan and Thailand, I have met local journalists who passed information on to me because they felt it was too dangerous to write about the issues themselves. Without the crucial check of a free press — or independent legislatures and courts, for that matter — democracy exists in name only.

Still, Asia also offers heartening lessons for the Arab world. There's South Korea, for instance, which overthrew a U.S.-backed military dictatorship, then carefully constructed a prosperous democracy. And then there's Indonesia, the world's largest Muslim-majority nation. In 1998, after 32 years in power, strongman Suharto was forced out by massive street protests. Since then, change in Indonesia has occurred not in one cataclysmic jolt but instead through years of brick-by-brick nation building. That may not sound sexy, but it works. Indonesia has now peacefully cycled through several secular-minded leaders, and its civil society is flourishing. The country's problems are still immense: graft and poverty persist, as does sectarian conflict. But Egypt could do a lot worse than to follow the model of this moderate, Muslim-majority democracy

Riaz Haq said...

Here's Maplecroft risk warning for investing in India, according to Times of India:

LONDON: The United Kingdom-based Global Risks Atlas 2011 on Friday described India as the 16th riskiest country to invest in for the security hazards it poses and rather embarrassingly clubs it with Niger, Bangladesh and Mali. The Atlas is published by Maplecroft, a consultancy founded by Alyson Warhurst, chair of strategy and international development at Warwick Business School.

The evaluation is structured on seven key global risks including macroeconomic risk and threats around security, governance, resource security, climate change, social resilience and illicit economies.

Maplecroft assessed India faces simultaneous threats of terrorist attacks from Islamists and Maoists. It also points at India's lack of social resilience despite a robust economic growth and cites its poor human rights record. It says large sections of the population lack access to basic services such as education, healthcare and sanitation, and highlights its less productive workforce, greater susceptibility to pandemics and susceptible to social unrest.


A press release by Maplecroft lumps Pakistan with Russia on investment risk:

Dynamic political risks constitute immediate threats to business and Maplecroft rates 11 countries as ‘extreme risk.’ Most significantly, the emerging economy of Russia has moved up five places from 15th to enter the top ten for the first time, whilst Pakistan has also moved two places up the ranking to 9th.

The ‘extreme risk’ countries now include: Somalia (1), DR Congo (2), Sudan (3), Myanmar (4), Afghanistan (5), Iraq (6), Zimbabwe (7), North Korea (8), Pakistan (9), Russia (10) and Central African Republic (11).

Russia’s increased risk profile reflects both the heightened activity of militant Islamist separatists in the Northern Caucasus and their ambition to strike targets elsewhere in the country. Russia has suffered a number of devastating terrorist attacks during 2010, including the March 2010 Moscow Metro bombing, which killed 40 people. Such attacks have raised Russia’s risk profile in the Terrorism Risk Index and Conflict and Political Violence Index. The country’s poor performance is compounded by its ‘extreme risk’ ratings for its business environment, corporate governance and the endemic nature of corruption, which is prevalent throughout all tiers of government.
-----
Jim O’Neil, Chairman of Goldman Sachs Asset Management, states: "Growth is happening where political risk is most challenging. So, meticulous monitoring and mitigation now will enable business to flourish and benefit from the opportunities presented by the future growth economies of the BRICs and Next 11".

Looking to the longer term, the BRICs countries are witnessing increasingly worse structural political risk trends for 2011. China (25), India (32) and Russia (51), rated ‘high risk’ and Brazil (97) medium risk, have all seen risks increase compared to scores from last year’s Atlas.

Riaz Haq said...

Here's a Times of India report on lagging research in India:

DHARWAD: India may not compete with other countries in the field of science and technology (S&T) if our scientists fail to make serious efforts to improve the track record in the field of scientific research and development (R&D), said VTU vice-chancellor H Maheshappa.

Inaugurating a six-day workshop on `Graph algorithms' jointly organized by the department of Computer Science, Karnatak University, and VTU here recently, he said India's track record in the field of scientific R&D has remained insignificant when compared with countries like China. This trend has to be changed if we really wish to emerge as successful competitors and carve a niche for India in the field of S&T, he said.

Pointing out the progress achieved by China in this regard, he said China is far ahead of India in the field of scientific R&D. "While the researchers from China file hundreds of patent applications everyday, India stands not even nearer to China in this respect. He said India has potential, including talented pool of teachers and researchers, state-of-the-art research institutes and financial investment by the government for the promotion of scientific R&D.

Expressing concern over the lack of teachers with research background in technical educational institutes, he said though the state has nearly 200 engineering colleges, the number of teachers with research degrees is minimal. "This scenario has to be changed. VTU has plans to tie up with universities like Karnatak University to assist engineering college teachers on understanding of basic science and research methodology," he added.

Riaz Haq said...

Here's a Wall Street Journal story titled "India Graduates Millions, But Too Few Are Fit to Hire":

BANGALORE, India—Call-center company 24/7 Customer Pvt. Ltd. is desperate to find new recruits who can answer questions by phone and email. It wants to hire 3,000 people this year. Yet in this country of 1.2 billion people, that is beginning to look like an impossible goal.

So few of the high school and college graduates who come through the door can communicate effectively in English, and so many lack a grasp of educational basics such as reading comprehension, that the company can hire just three out of every 100 applicants.

India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middle-class workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges.

Yet 24/7 Customer's experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its 8,000 employees are now based outside of India.

In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore.

"With India's population size, it should be so much easier to find employees," says S. Nagarajan, founder of the company. "Instead, we're scouring every nook and cranny."

India's economic expansion was supposed to create opportunities for millions to rise out of poverty, get an education and land good jobs. But as India liberalized its economy starting in 1991 after decades of socialism, it failed to reform its heavily regulated education system.

Business executives say schools are hampered by overbearing bureaucracy and a focus on rote learning rather than critical thinking and comprehension. Government keeps tuition low, which makes schools accessible to more students, but also keeps teacher salaries and budgets low. What's more, say educators and business leaders, the curriculum in most places is outdated and disconnected from the real world.

"If you pay peanuts, you get monkeys," says Vijay Thadani, chief executive of New Delhi-based NIIT Ltd. India, a recruitment firm that also runs job-training programs for college graduates lacking the skills to land good jobs.

Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group.

But 75% of technical graduates and more than 85% of general graduates are unemployable by India's high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group.

Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance at 13,000 schools across India. It found that about half of the country's fifth graders can't read at a second-grade level.

Riaz Haq said...

Is India too wealthy for British aid? asks the BBC:

Bihar children being fed under a government scheme More than a million children in Bihar suffer from severe malnutrition
Continue reading the main story
Related Stories

* How UK overseas aid will be spent
* 'More poor' in India than Africa
* Ignoring India's 'republic of hunger'

Britain's decision to give £280m ($457m) in annual aid to India for the next four years has prompted questions in the UK about whether India needs the aid these days. The BBC's Geeta Pandey travels to the northern state of Bihar to see where a sizeable chunk of the British money will be spent.

About two dozen children squat in a narrow lane separating mud and brick homes in Madhaopur village.

It's a hot sunny afternoon and the children sit facing each other, hugging the wall where a thin sliver of shade keeps them out of direct sunshine.

A woman puts steel plates in front of each child, another ladles out khichdi - a rice and lentil dish - onto each plate.

Within minutes, the chattering ceases and the children begin to eat hungrily, scooping out khichdi with their hands and putting it in their mouths.

Ideally, the children should be served inside the Anganwadi (government sponsored child development) centre, but the pokey, window-less room that passes for the centre is too small to accommodate them all.
'Malnourished'

The building provides pre-school education to children between three and six years and gives them one cooked meal a day to supplement their nutritional needs.

"Nearly 50% children here are malnourished," says Geeta Verma, who is part of the technical assistance team of DfiD (Department for International Development).
A baby being vaccinated in Bihar DfiD supports vaccination programmes in the villages of Bihar

"They are given a daily meal by the Anganwadi workers. It's a naturally fortified meal - for proteins we use lentils, for micronutrients, we use leafy vegetables," she explains.

Research has shown that the diet in Bihar leaves children with a 300-calorie deficit and this meal aims to bridge that gap.

"This meal provides each child with 300 calories and 10 grams of protein," Ms Verma says.

The team has helped prepare the menu and has been coaching the women in the important role nutrition plays in the physical and mental growth of their children.

In Madhaopur, DfiD is also supervising and assisting with immunisation of babies and has helped with a project to teach illiterate women.
'Too wealthy?'

Since being opened up in 1991, the Indian economy has grown rapidly. And at a time when most economies around the world are in recession, India's continues to grow at an enviable 9%. This has helped lift millions out of poverty.
Continue reading the main story
“Start Quote
Sangeeta Kumari

Bluntly speaking we are struggling for existence, we are trying to perform our best in the midst of a crisis. We have very poor infrastructure.”

End Quote Sangeeta Kumari Bihar government official

This has led to some in the UK wondering if India is too wealthy to qualify for receiving aid. They say the £280m could be put to better use in Britain where the economy is ailing and many services are being cut back.

Critics also point out that India has 69 dollar billionaires; it has its own space programme; plans to send a man to the Moon; spends billions of dollars annually on defence; and even has its own overseas aid programme.

But India has its areas of darkness too - according to World Bank estimates, 456 million live on less than $1.25 a day; tens of millions of children suffer from acute malnutrition; millions of Indians are illiterate; hundreds of thousands continue to die of totally preventable causes; and eight million children remain out of school.....

Riaz Haq said...

Here are a few excerpts from Wall Street Journal story titled "India's Boom Bypasses Rural Poor":


The Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGA), as the $9 billion program is known, is riddled with corruption, according to senior government officials. Less than half of the projects begun since 2006—including new roads and irrigation systems—have been completed. Workers say they're frequently not paid in full or forced to pay bribes to get jobs, and aren't learning any new skills that could improve their long-term prospects and break the cycle of poverty.

In Nakrasar, a collection of villages in the dusty western state of Rajasthan, 19 unfinished projects for catching rain and raising the water table are all there is to show for a year's worth of work and $77,000 in program funds. No major roads have been built, no new homes, schools or hospitals or any infrastructure to speak of.

At one site on a recent afternoon, around 200 workers sat idly around a bone-dry pit. "What's the big benefit?" said Gopal Ram Jat, a 40-year-old farmer in a white cotton head scarf. He says he has earned enough money through the program—about $200 in a year—to buy some extra food for his family, but not much else. "No public assets were made of any significance."

Scenes like this stand in stark contrast to India's image of a global capitalist powerhouse with surging growth and a liberalized economy. When it comes to combating rural poverty, the country looks more like a throwback to the India of old: a socialist-inspired state founded on Gandhian ideals of noble peasantry, self-sufficiency and a distaste for free enterprise.

Workers in the rural employment program aren't allowed to use machines, for example, and have to dig instead with pick axes and shovels. The idea is to create as many jobs as possible for unskilled workers. But in practice, say critics, it means no one learns new skills, only basic projects get completed and the poor stay poor—dependent on government checks.
----------
But shortly after the program started in February 2006, workers complained that local leaders were docking pay and asking for money in return for job cards. The central government responded in 2008 by sending money directly to workers' bank accounts. But according to workers and auditors, the money takes so long to reach those accounts—up to 45 days—that workers are often forced to accept lesser cash payments from local leaders on the condition that they repay the money at the full amount.

Audits of the program in the southern state of Andhra Pradesh found that about $125 million, or about 5% of the $2.5 billion spent since 2006, has been misappropriated. Some 38,000 local officials were implicated, and almost 10,000 staff lost their jobs.

In one study of eastern Orissa state, only 60% of households said a member had done any of the work reported on their behalf. Earlier this month, the central government gave the green-light for the Central Bureau of Investigation, India's top federal criminal investigation body, to launch a probe into alleged misuse of program funds in Orissa.

In other states, audits are nonexistent or have faced a backlash. Non-governmental groups that have tried to carry out audits in Rajasthan have complained that village leaders often refuse to hand over documents about the employment program. At times, auditors say, they have faced harassment and physical intimidation.

In Nakrasar's one-room village council office, people continue to sign up for the program—many of them women whose husbands have gone to work in urban areas. Shilochandra Devi, a 37-year-old with her program work book in hand, said she could buy more spices because of the program. "And anyway, we're not doing anything else. So why not?"

Riaz Haq said...

Here are some excerpts from an Op Ed in The Hindu on growing disconnect between mass media and mass reality:

•The mass reality in India (which has over 70 per cent of its people living in the rural areas), is that rural India is in the midst of the worst agrarian crisis in four decades. Millions of livelihoods in the rural areas have been damaged or destroyed in the last 15 years as a result of this crisis, because of the predatory commercialisation of the countryside and the reduction of all human values to exchange value. As a result, lakhs of farmers have committed suicide and millions of people have migrated, and are migrating, from the rural areas to the cities and towns in search of jobs that are not there. They have moved towards a status that is neither that of a ‘worker' nor that of a ‘farmer.' Many of them end up as domestic labourers, or even criminals. We have been pushed towards corporate farming, a process in which farming is taken out of the hands of the farmers and put in the hands of corporates. This process is not being achieved with guns, tanks, bulldozers or lathis. It is done by making farming unviable for the millions of small family farm-holders, due to the high cost of inputs such as seed, fertilizer and power, and uneconomical prices.
•India was ranked fourth in the list of countries with the most number of dollar billionaires, but 126th in human development. This means it is better to be a poor person in Bolivia (the poorest nation in South America) or Guatemala or Gabon rather than in India. Here, some 83.6 crore people (of a total of 110-120 crore) in India survive on less than Rs.20 a day.
•Eight Indian States in India are economically poorer than African states, said a recent Oxford University study. Life expectancy in India is lower than in Bolivia, Kazakhstan and Mongolia.
•According to the National Sample Survey Organisation, the average monthly per capita expenditure of the Indian farm household is Rs.503. Of that, some 55 per cent is spent on food, 18 per cent on fuel, clothing and footwear, leaving precious little to be spent on education or health.
•A report of the Food and Agriculture Organisation of the United Nations shows that between 1995-97 and 1999-2001, India added more newly hungry millions than the rest of the world taken together. The average rural family is consuming 100 kg less of food than it was consuming earlier. Indebtedness has doubled in the past decade. Cultivation costs have increased exorbitantly and farming incomes have collapsed, leading to wide-scale suicides by farmers.
•While there were 512 accredited journalists covering the Lakme India Fashion Week event, there were only six journalists to cover farmer suicides in Vidharbha. In that Fashion Week programme, the models were displaying cotton garments, while the men and women who grew that cotton were killing themselves at a distance of an hour's flight from Nagpur in the Vidharbha region. Nobody told that story except one or two journalists, locally.
Is this a responsible way for the Indian media to function? Should the media turn a Nelson's eye to the harsh economic realities facing over 75 per cent of our people, and concentrate on some ‘Potemkin villages' where all is glamour and show business? Are not the Indian media behaving much like Queen Marie Antoinette, who famously said that if people had no bread, they should eat cake.
No doubt, sometimes the media mention farmers' suicides, the rise in the price of essential commodities and so on, but such coverage is at most 5 to 10 per cent of the total. The bulk of the coverage goes to showing cricket, the life of film stars, pop music, fashion parades, astrology…

Riaz Haq said...

China builds San Francisco Bay bridge, reports NY Times:

At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

The project is part of China’s continual move up the global economic value chain — from cheap toys to Apple iPads to commercial jetliners — as it aims to become the world’s civil engineer.

The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

“They’ve produced a pretty impressive bridge for us,” Tony Anziano, a program manager at the California Department of Transportation, said a few weeks ago. He was touring the 1.2-square-mile manufacturing site that the Chinese company created to do the bridge work. “Four years ago, there were just steel plates here and lots of orange groves.”

On the reputation of showcase projects like Beijing’s Olympic-size airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil and huge apartment complexes in Saudi Arabia.

In New York City alone, Chinese companies have won contracts to help renovate the subway system, refurbish the Alexander Hamilton Bridge over the Harlem River and build a new Metro-North train platform near Yankee Stadium. As with the Bay Bridge, American union labor would carry out most of the work done on United States soil.

American steelworker unions have disparaged the Bay Bridge contract by accusing the state of California of sending good jobs overseas and settling for what they deride as poor-quality Chinese steel. Industry groups in the United States and other countries have raised questions about the safety and quality of Chinese workmanship on such projects. Indeed, China has had quality control problems ranging from tainted milk to poorly built schools.

But executives and officials who have awarded the various Chinese contracts say their audits have convinced them of the projects’ engineering integrity. And they note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

The new Bay Bridge, expected to open to traffic in 2013, will replace a structure that has never been quite the same since the 1989 Bay Area earthquake. At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. (California issued bonds to finance the project, and will look to recoup the cost through tolls.)

California authorities say they had little choice but to rebuild major sections of the bridge, despite repairs made after the earthquake caused a section of the eastern span to collapse onto the lower deck. Seismic safety testing persuaded the state that much of the bridge needed to be overhauled and made more quake-resistant.

Riaz Haq said...

Here are some excerpts from an NPR interview of Siddhartha Deb, the author of "The Beautiful and The Damned":

......
DEB: Well, I was interested in the changes that were happening there. Obviously, it's a lot of people experiencing change in new ways, in some sense, and I had gotten the impression that there was a very triumphalist version of this change, which is that the country is doing very well.

There was even a slogan that was coined by one of the political parties. It was called India Shining. And I was going back. I was writing feature articles. I was a freelance writer. And I was somewhat skeptical of this. It was pretty obvious that at the upper levels people were much better off materially than they had been in the past.

But certainly large numbers or swaths of people seem to be untouched or mired in the same poverty, or sometimes even worse because they could now see this incredible contrast. So I wanted to examine that. I wanted to do that by checking, by looking at the new rich. I wanted to look at people who were in the middle, people who were middle class.
----------

DONVAN: Well, and the style in which the book is written still reads like a novel. It is full of color and texture and even sights and sounds and smells.

DEB: Thank you. That was very much the intention, to write something like a nonfiction novel, if that's possible. So the facts aren't made up, they're very scrupulously researched. I've tried to be as accurate as possible, but I wanted the texture, the flavor of a novel, of people in motion in some sense.

DONVAN: Can I say that the story that you've written reads to me as a very sad story?

DEB: That would be - that's a fairly, I think, reasonable, actually, interpretation. I think it's a sad story to me too, in many ways.

DONVAN: Even among those who feel that you describe - you describe an engineer named Chuck who is building a house. He had lived in the United States, and he's now building a house in the American model. He gives you a tour. He even uses American language. This is the open-plan kitchen, this is the master bedroom.

And yet you portray him as - his desires as being somewhat hollow, as though he's not a happy man himself.

DEB: Well, I mean, I think Chuck would see himself as a happy man, and I think that's reasonable. I've tried to allow people that space. But yes, I as a narrator come in, and I do sometimes question what some of my characters are saying.

So when someone like Chuck says, you know, he did say this, that there are these incredible contrasts in India, but that's okay, we're kind of one big happy family, and I question whether that's really the case, when, you know, you have at the very top end of the country, say you have, say, something like 66 billionaires.

And these numbers might be slightly old, but there are probably a few more billionaires since I last checked. But 66 billionaires who seem to have something like 30 percent of the country's wealth.

On the other end, you have like 800 million people, over 800 million people living on less than $2 a day. When you have a country where 40 percent of the children under the age of five suffer from malnutrition, it seems to me that these contrasts aren't really healthy. They're not just differences. They are really like living different worlds within the same country.

So yes, I actually come in as a narrator, and I question when, say, Chuck is a character, he sees his life as striving and successful. And I think that's reasonable, again, but I also question the fact that this house, this special zone in which the house is constructed, is being built on what is a demolished village, and I have very hard questions......


http://www.npr.org/templates/transcript/transcript.php?storyId=141213308

Riaz Haq said...

Occasional and isolated but nonetheless tragic suicide cases like Raja Khan's in Pakistan get a lot of media coverage as they should. Meanwhile, over 200,000 farmer suicides in India have passed with little media attention in India.

Here's a Washington Post report on rising suicides in India:

NEW DELHI — Ram Babu’s last days were typical in India’s growing rash of suicides.

The poor farmer’s crop failed and he defaulted on the $6,000 loan he had taken to buy a tractor. The bank’s collectors hounded him, even hiring drummers to go round the village drawing attention to his shame.

“My father found it unbearable. He was an honorable man and he couldn’t take the humiliation. The next day he hanged himself from a tree on his farm,” his son Ram Gulam said Friday.

Babu’s suicide went unreported in local newspapers, just another statistic in a country where more than 15 people kill themselves every hour, according to a new government report.

The report released late Thursday said nearly 135,000 people killed themselves in the country of 1.2 billion last year, a 5.9 percent jump in the number of suicides over the past year.

The suicide rate increased to 11.4 per 100,000 people in 2010 from 10.9 the year before, according to the statistics from the National Crime Records Bureau.

Financial difficulties and debts led to most of the male suicides while women were driven to take their lives because of domestic pressures, including physical and mental abuse and demands for dowry.

A 2008 World Health Organization report ranked India 41st for its suicide rate, but because of its huge population it accounted for 20 percent of global suicides.

The largest numbers of suicides were reported from the southern Indian states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka, where tens of thousands of impoverished farmers have killed themselves after suffering under insurmountable debts.

The loans — from banks and loan sharks — were often used to buy seeds and farm equipment, or to pay large dowries to get their daughters married. But a bad harvest could plunge the farmer over the edge.

Sociologists say the rapid rise in incomes in India’s booming economy has resulted in a surge in aspirations as well among the lower and middle classes, and the failure to attain material success can trigger young people to suicide.

“The support that traditionally large Indian families and village communities offered no longer exists in urban situations. Young men and women move to the cities and find they have no one to turn to for succor in times of distress,” said Abhilasha Kumari, a sociology professor in New Delhi.


http://www.washingtonpost.com/world/asia-pacific/government-report-says-15-people-commit-suicide-every-hour-in-india/2011/10/28/gIQAVFGWOM_story.html

Riaz Haq said...

Here's a critical analysis of Tom Friedman's "Flat World" on India:

In the first chapter of his bestseller on globalization, The World Is Flat, three-time Pulitzer Prize–winning foreign affairs columnist for The New York Times Thomas Friedman suggests that his repertoire of achievements also includes being heir to Christopher Columbus. According to Friedman, he has followed in the footsteps of the fifteenth-century icon by making an unexpected discovery regarding the shape of the world during an encounter with “people called Indians.”

Friedman’s Indians reside in India proper, of course, not in the Caribbean, and include among their ranks CEO Nandan Nilekani of Infosys Technologies Limited in Bangalore, where Friedman has come in the early twenty-first century to investigate phenomena such as outsourcing and to exult over the globalization-era instructions he receives at the KGA Golf Club downtown: “Aim at either Microsoft or IBM.” Nilekani unwittingly plants the flat-world seed in Friedman’s mind by commenting, in reference to technological advancements enabling other countries to challenge presumed American hegemony in certain business sectors: “Tom, the playing field is being leveled.”

The Columbus-like discovery process culminates with Friedman’s conversion of one of the components of Nilekani’s idiomatic expression into a more convenient synonym: “What Nandan is saying, I thought to myself, is that the playing field is being flattened… Flattened? Flattened? I rolled that word around in my head for a while and then, in the chemical way that these things happen, it just popped out: My God, he’s telling me the world is flat!”

No compelling justification is ever provided for how a war against deterrables will solve the problem of undeterrables who by definition cannot be deterred.

The viability of the new metaphor has already been called into question by Friedman’s assessment two pages prior to the flat-world discovery that the Infosys campus is in fact “a different world,” given that the rest of India is not characterized by things like a “massive resort-size swimming pool” and a “fabulous health club.” No attention is meanwhile paid to the possibility that a normal, round earth—on which all circumferential points are equidistant from the center—might more effectively convey the notion of the global network Friedman maintains is increasingly equalizing human opportunity.

An array of disclaimers and metaphorical qualifications begins to surface around page 536, such that it ultimately appears that the book might have been more appropriately titled The World Is Sometimes Indefinitely Maybe Partially Flat—But Don’t Worry, I Know It’s Not, or perhaps The World Is Flat, Except for the Part That Is Un-Flat and the Twilight Zone Where Half-Flat People Live. As for his announcement that “unlike Columbus, I didn’t stop with India,” Friedman intends this as an affirmation of his continued exploration of various parts of the globe and not as an admission of his continuing tendency to err—which he does first and foremost by incorrectly attributing the discovery that the earth is round to the geographically misguided Italian voyager.

Leaving aside for the moment the blunders that plague Friedman’s writing, the comparison with Columbus is actually quite apt in other ways, as well. For instance, both characters might be accused of transmitting a similar brand of hubris, nurtured by their respective societies, according to which “the Other” is permitted existence only via the discoverer-hero himself. While Columbus is credited with enabling preexisting populations on the American continent to enter the realm of true existence by reporting them to European civilization, Friedman assumes responsibility for the earth’s inhabitants in general without literally having to encounter them.


http://www.guernicamag.com/features/3284/fernandez_12_1_11/

Riaz Haq said...

Here's Times of India on philanthropist Dominique Lapierre citicism of India's rich:

KOLKATA: Celebrated author Dominique Lapierre is upset and frustrated by affluent Indians' "reluctance to help the underprivileged in this country". He has been funding projects for the needy in West Bengal for nearly three decades, emphasizing on deprived and inaccessible areas in the Sunderbans.

The City of Joy Aid, Lapierre's non-profit organization, has funded and operated a network of health clinics, hospitals, rehab centres, boat hospital and schools for the poor since 1981. He has contributed extensively through royalties generated from his international bestsellers, lecture fees and donations from readers.

In the city to celebrate his 80th birthday, he said it's quite sad that neither Indians nor their government have done enough for the poor and downtrodden. "India is shining but a part of it is still lying in darkness. I request every Indian to come forward and do something for their very own people so that they, too, enjoy a better life," he said.

The Padma Bhushan recipient and his wife visited Goramari Island in Bengal's South 24-Parganas district with 40 international donors and friends who contribute to his charities and other humanitarian work in India. Lapierre was concerned by the plight of poor children who, he said, are yet to get a proper livelihood despite money flowing in for nearly three decades. "I am surprised that India's rich and famous have been ignoring the reality of this country," he said.

Lapierre has been a major benefactor of Southern Health Improvement Samity (SHIS) for over 30 years. "It is an absolute delight to have Dominique Lapierre among us. We are extremely grateful to him and his eminent compatriots from Western Europe who come and visit us every year, without fail," said SHIS president Sabitri Pal.


http://timesofindia.indiatimes.com/city/kolkata-/Indias-rich-not-doing-enough-for-the-poor-Lapierre/articleshow/11025282.cms

Riaz Haq said...

Results of PISA international test released by OECD in Dec, 2011, show that Indian students came in at the bottom of the list along with students from Kyrgyzstan:

Students in Tamil Nadu-India attained an average score on the PISA reading literacy scale that is significantly higher than those for Himachal Pradesh-India and Kyrgyzstan, but lower than all other participants in PISA 2009 and PISA 2009+.
In Tamil Nadu-India, 17% of students are estimated to have a proficiency in reading literacy that is at or above the baseline needed to participate effectively and productively in life. This means that 83% of students in Tamil Nadu-India are estimated to be below this baseline level. This compares to 81% of student performing at or above the baseline level in reading in the OECD countries, on average.
Students in the Tamil Nadu-India attained a mean score on the PISA mathematical literacy scale as the same observed in Himachal Pradesh-India, Panama and Peru. This was significantly higher than the mean observed in Kyrgyzstan but lower than those of other participants in PISA 2009 and PISA 2009+.
In Tamil Nadu-India, 15% of students are proficient in mathematics at least to the baseline level at which they begin to demonstrate the kind of skills that enable them to use mathematics in ways that are considered fundamental for their future development. This compares to 75% in the OECD countries, on average. In Tamil Nadu-India, there was no statistically significant difference in the performance of boys and girls in mathematical literacy.
Students in Tamil Nadu-India were estimated to have a mean score on the scientific literacy scale, which is below the means of all OECD countries, but significantly above the mean observed in the other Indian state, Himachal Pradesh. In Tamil Nadu-India, 16% of students are proficient in science at least to the baseline level at which they begin to demonstrate the science competencies that will enable them to participate actively in life situations related to science and technology. This compares to 82% in the OECD countries, on average. In Tamil Nadu-India, there was a statistically significant gender difference in scientific literacy, favouring girls.


http://www.acer.edu.au/media/acer-releases-results-of-pisa-2009-participant-economies/

Riaz Haq said...

Here are some excerpts from a piece by Lan Pritchett of Harvard University on India's poor performance on PISA:

Compared to the economic superstars India is almost unfathomably far behind. The TN/HP average 15 year old is over 200 points behind. If a typical grade gain is 40 points a year Indian eighth graders are at the level of Korea third graders in their mathematics mastery. In fact the average TN/HP child is 40 to 50 points behind the worst students in the economic superstars. Equally worrisome is that the best performers in TN/HP - the top 5 percent who India will need in science and technology to complete globally - were almost 100 points behind the average child in Singapore and 83 points behind the average Korean - and a staggering 250 points behind the best in the best.

As the current superpowers are behind the East Asian economic superstars in learning performance the distance to India is not quite as far, but still the average TN/HP child is right at the level of the worst OECD or American students (only 1.5 or 7.5 points ahead). Indians often deride America's schools but the average child placed in an American school would be among the weakest students. Indians might have believed, with President Obama, that American schools were under threat from India but the best TN/HP students are 24 points behind the average American 15 year old.

Even among other "developing" nations that make up the BRICs India lags - from Russia by almost as much as the USA and only for Brazil, which like the rest of Latin America is infamous for lagging education performance does India even come close - and then not even that close.

To put these results in perspective, in the USA there has been huge and continuous concern that has caused seismic shifts in the discourse about education driven, in part, by the fact that the USA is lagging the economic superstars like Korea. But the average US 15 year old is 59 points behind Koreans. TN/HP students are 41.5 points behind Brazil, and twice as far behind Russia (123.5 points) as the US is Korea, and almost four times further behind Singapore (217.5 vs 59) that the US is behind Korea. Yet so far this disastrous performance has yet to occasion a ripple in the education establishment.
------------
These PISA 2009+ results are the end of the beginning. The debate is over. No one can still deny there is a deep crisis in the ability of the existing education system to produce child learning. India's education system is undermining India's legitimate aspirations to be at the global forefront as a prosperous economy, as a global great power, as an emulated polity, and as a fair and just society. As the beginning ends, the question now is: what is to be done?


http://ajayshahblog.blogspot.com/2012/01/first-pisa-results-for-india-end-of.html

Riaz Haq said...

Chinese banks bailing out Indian company, according to the Wall Street Journal:

Reliance Communications Ltd. opened a window this week. India's second-largest mobile phone carrier by number of subscribers was under pressure to refinance $1.18 billion of foreign-currency convertible bonds. In the current market, that looked like a stiff challenge, as lenders in the U.S. and Europe struggle with their deteriorating economies.

Enter a consortium of Chinese banks to bail out the Indian company with a loan paying just 5%. The deal gives the banks the sort of exposure to India's fast-growing communications space that Chinese companies couldn't get otherwise. New Delhi routinely blocks Chinese business seeking a piece of India's strategic industries such as telecommunications, technology or energy. The government typically cites quality-control issues or national security, though political posturing is perhaps a more likely cause.

Yet the Reliance loan deal puts the Chinese banks in a strong position over a prominent Indian business. It might also help China Inc. get more leverage in the Indian economy.

Still, politics shouldn't cloud the positives for India. The deal is a savior for Reliance, whose share price is nearly 87% below the conversion price set on the bonds four years ago. Moreover, the loan means China, through its state-owned banks, now has a significant stake in the success of an Indian telecommunications giant.

Beyond Reliance, a host of Indian companies are in need of capital this year to fulfill expansion plans or repay debt. But traditional funding channels are drying up, local markets are jittery and interest rates are by no means cheap. Under those circumstances, more Chinese money may find a warm welcome in India.


http://online.wsj.com/article/SB10001424052970204468004577168443270938430.html?mod=topix

Riaz Haq said...

Here's Russian analyst Anatol Karlin on India's prospects and its comparison with China:

It is not a secret to longtime readers of this blog that I rate India’s prospects far more pessimistically than I do China’s. My main reason is I do not share the delusion that democracy is a panacea and that whatever advantage in this sphere India has is more than outweighed by China’s lead in any number of other areas ranging from infrastructure and fiscal sustainability to child malnutrition and corruption. However, one of the biggest and certainly most critical gaps is in educational attainment, which is the most important component of human capital – the key factor underlying all productivity increases and longterm economic growth. China’s literacy rate is 96%, whereas Indian literacy is still far from universal at just 74%.
-----------
The big problem, until recently, was that there was no internationalized student testing data for either China or India. (There was data for cities like Hong Kong and Shanghai, but it was not very useful because they are hardly representative of China). An alternative approach was to compare national IQ’s, in which China usually scored 100-105 and India scored in the low 80′s. But this method has methodological flaws because the IQ tests aren’t consistent across countries. (This, incidentally, also makes this approach a punching bag for PC enforcers who can’t bear to entertain the possibility of differing IQ’s across national and ethnic groups).
--------------
Many Indians like to see themselves as equal competitors to China, and are encouraged in their endeavour by gushing Western editorials and Tom Friedman drones who praise their few islands of programming prowess – in reality, much of which is actually pretty low-level stuff – and widespread knowledge of the English language (which makes India a good destination for call centers but not much else), while ignoring the various aspects of Indian life – the caste system, malnutrition, stupendously bad schools – that are holding them back. The low quality of Indians human capital reveals the “demographic dividend” that India is supposed to enjoy in the coming decades as the wild fantasies of what Sailer rightly calls ”Davos Man craziness at its craziest.” A large cohort of young people is worse than useless when most of them are functionally illiterate and innumerate; instead of fostering well-compensated jobs that drive productivity forwards, they will form reservoirs of poverty and potential instability.

Instead of buying into their own rhetoric of a “India shining”, Indians would be better served by focusing on the nitty gritty of bringing childhood malnutrition DOWN to Sub-Saharan African levels, achieving the life expectancy of late Maoist China, and moving up at least to the level of a Mexico or Moldova in numeracy and science skills. Because as long as India’s human capital remains at the bottom of the global league tables so will the prosperity of its citizens....


http://www.sublimeoblivion.com/2012/02/04/china-superior-to-india/

Riaz Haq said...

LSE study finds India can not become a superpower, reports The Hindu:

Despite India’s "impressive" rise, its ambition to be a super power may remain just that—an ambition, according to an authoritative new study by the London School of Economics to which several Indian scholars have contributed.

It pointedly dismisses what it calls the US Secretary of State Hillary Clinton’s "unequivocal verdict" during her India visit in 2009 that "India is not just a regional power, but a global power’.

The study, India: the Next Superpower? acknowledges India’s "formidable achievements" in fostering democracy, growth and cultural dynamism but concludes that these are nullified by its structural weaknesses, widespread corruption, poor leadership, extreme social divisions, religious extremism and internal security threats.

India, it argues, still faces too many "developmental challenges" to qualify for "super power" status, or to be considered a serious "counterweight" to China, a role sought to be thrust on it by some in the West. Some of the report’s authors wonder whether India should even aspire to be a super power given its institutional weaknesses and social and economic divisions.

Historian Ramachandra Guha, currently the Philippe Roman Chair in History and International Affairs at LSE, suggests that rather than being seduced by the bright lights of great power diplomacy, India should instead focus on reforming its institutions and repairing the social fabric that seems to be coming off its seams.

“We need to repair, one by one, the institutions that have safeguarded our unity amidst diversity, and to forge the new institutions that can help us. It will be hard, patient, slow work,” he writes.

The study, a summary of which was released on Wednesday, starts off by acknowledging that" India’s rise has certainly been impressive, and warrants the attention that it has commanded".

"India has been one of the world’s best-performing economies for a quarter of a century, lifting millions out of poverty and becoming the world’s third-largest economy in PPP (Purchasing Power Parity) terms. India has tripled its defence expenditure over the last decade to become one of the top-ten military spenders. And in stark contrast to Asia’s other billion-person emerging power, India has simultaneously cultivated an attractive global image of social and cultural dynamism," it says. But then come the "ifs" and "buts".

Plunging the knife into Indian ambitions, the report says:"Still, for all India’s success, its undoubted importance and despite its undisputed potential, there is cause for caution in assessing India’s claim to superpower status. India still faces major developmental challenges. The still-entrenched divisions of caste structure are being compounded by the emergence of new inequalities of wealth stemming from India’s economic success. India’s democracy may have thrived in a manner that few ever expected, but its institutions face profound challenges from embedded nepotism and corruption. India’s economic success continues to come with an environmental cost that is unsustainable."

These problems are compounded by India’s "pressing security preoccupations" arising out of "insurgent violence" affecting large parts of the country and long-festering cross-border disputes.

The best that India can hope for—the study offers as a consolation-- is "to continue to play a constructive international role in, among other things, the financial diplomacy of the G20".

"Yet the hopes of those in the West who would build up India as a democratic counterweight to Chinese superpower are unlikely to be realised anytime soon," it concludes....


http://www.thehindu.com/news/international/article2969252.ece

Riaz Haq said...

Here's a WSJ story on growth challenges for China and India:

India and China are grappling with different issues. China doesn't want to repeat the mistakes—such as triggering a property bubble—that it made in its all-out response to the global financial crisis of 2009. India, meanwhile, is struggling to carry out structural economic reforms it failed to enact during its recent boom years.

China's gross domestic product has grown at an average annualized rate of 10% since 2000, but government officials know they can't sustain that torrid pace. Growth fell to 8.1% year-over-year in the first quarter, the slowest pace since 2009, and is widely expected to fall to about 7.5% in the second quarter. If the euro-zone crisis persists—or China's stimulus is poorly carried out—China's growth may weaken further.

But China is better positioned to handle a shock than it was in 2008. It relies less on trade for growth: In 2008, China's net exports amounted to 7.7% of GDP; in 2011 the share had dropped to 2.6%. Beijing reported on Monday that inflation declined to 2.2% in June, compared with a year ago. With government debt at an estimated 22% of GDP, China has plenty of levers to pull to stimulate its economy in the face of declining demand.
---------
"China is in a very comfortable position compared to the rest of the world," said Luis Kuijs, project director at the Fung Global Institute, a Hong Kong think tank. "It's more a matter of choice of what policy measures it will take to stimulate the economy, rather than whether it will be able to."
-----------
"India's hands are tied, and because of that it's much more exposed to the global slowdown," said Frederic Neumann, co-head of Asian economic research for HSBC. "It has no fiscal ammo left to pump-prime the economy, so it has to endure a slowdown and take it on the chin."

India's main challenge is to stimulate business investment, which is drying up amid wariness among both domestic and foreign companies about shifting tax policies and regulations. The country's currency, the rupee, has tumbled against the dollar in the past year, partly due to growing investor concerns about India's high current-account deficit, which is roughly 4% of GDP. The rupee's fall has driven up real import costs for Indian companies and made foreign-currency loans more expensive to service.

The Reserve Bank of India in April cut interest rates for the first time in three years to fuel business lending. But when industry was looking for more last month, the central bank said it couldn't cut rates further with inflation uncomfortably high at 7.6%.

"The sad thing is that it makes sense in China for it to be slowing down, because it's maturing from a low-income to a middle-income economy," said Rob Subbaraman, Asia economist at Nomura Securities. "In India, growth should be picking up and not slowing down."


http://online.wsj.com/article/SB10001424052702304058404577496443063859250.html

Riaz Haq said...

Here's a TOI story of dearth of research in India:

NEW DELHI: At a time when India is being looked at as the next big knowledge superpower, this could come as a shocker. Just 3.5% of global research output in 2010 was actually from India. In most disciplines, India's share in global research output was actually much below this overall average count.

Sample this - India's share of world research output in clinical medicine was a meagre 1.9% in 2010, 0.5% in psychiatry, 1.4% in neurosciences, 1.8% in immunology, 2.1% in molecular biology and just 3.5% in environmental research.

In mathematics, India's share of world output stood at around 2% in 2010 while it was 17% for China. In case of materials sciences, India's share of world research stood at 6.4% in 2010 while China's stood at 26% -- a rise from 5% in 1996.

While India's research on physics stood at 4.6% in 2010, China's stood at 19%.

In 2010, India's largest shares of world research output were in chemistry (6.5%), materials science (6.4%), agricultural sciences (6.2%), pharmacology and toxicology (6.1%), microbiology (4.9%), physics (4.6%) and engineering (4.2%).

India is often referred to as the next big place for computer sciences. But the figures on its research is abysmally low. Only 2.4% of global research on computer sciences was from India in 2010 while the world share moved to three emerging research economies - China 15%, Korea 6.3% and Taiwan 5.7%.

India's global share of research in economics stood at 0.7% in 2010 while in social sciences it was worse - 0.6%.

The biggest declines in volume of research between 1981 and 2010 were in plant and animal sciences (-2.2%) and agricultural sciences (-1.6%). The most significant expansions were in pharmacology and toxicology (+4.2%), microbiology (+3.2%) and materials sciences (+3.1%).

These are the findings of the study on India's research output and collaboration conducted by Thomson Reuters and recently submitted to the department of science and technology.

"India has been the sleeping giant of Asia. Research in the university sector, stagnant for at least two decades, is now accelerating but it will be a long haul to restore India as an Asian knowledge hub. Indian higher education is faced with powerful dilemmas and difficult choices - public/private, access/equity, uncertain regulation, different teaching standards and contested research quality," the report said.

According to it, India's share of world output in engineering fell from 4.3% in 1981 to 2.2% by 1995. India later regained its lost share, increasing to 4.25 by 2010. However, even then, India was overtaken by China (16.4%), Korea (5.4%) and Taiwan (4.4%).

India, where agriculture dominates economic standards, had quite a large share in agricultural sciences which averaged 7.45% over the 1981 to 1995 period, well ahead of other emerging research economies. Its share, however, fell to 6.2% in 2010. Even in the field of plant and animal sciences, the global research output fell from 6.1% in 1981 to 3.9% in 2010.

The report said, "India has a long and distinguished history as a country of knowledge, learning and innovation. In the recent past, however, it has failed to realize its undoubted potential as a home for world class research."

It added, "During the 1980s and 90s, the output of India's research was almost static while other countries grew rapidly, particularly in Asia. China expanded with an intensity and drive that led it rapidly to overtake leading European countries in the volume of its research publications. India is just beginning on this gradient."


http://timesofindia.indiatimes.com/india/India-accounts-for-just-3-5-of-global-research-output-Study/articleshow/16551045.cms

Riaz Haq said...

Mary Kay Magistad of NPR's The World reported that China has reacted strongly to the Pentagon report on China's military growth and modernization with its first aircraft carrier, several nuclear submarines and stealth aircraft.

Magistead reported that Xinhua has for the first time talked about China as a global economic power with global interests and it needs a blue water navy to protect a tremendous number of sea-lanes.

http://www.theworld.org/2013/05/pentagon-china-military/

Riaz Haq said...

A billion people were lifted from abject poverty between 1980 and 2010. China accounts for nearly three quarters of these, or 680 million people brought out of misery, by reducing its extreme-poverty rate from 84% in 1980 to 10% now, according to a report in The Economist. The report adds that with "poorer governance in India and Africa, the next two targets, means that China’s experience is unlikely to be swiftly replicated there".

As China's share of the world's extreme poor (living below $1.25 per day per person level) has dramatically declined, India's share has significantly increased. India now contributes 33% (up from 22 % in 1981). While the extreme poor in Sub-Saharan Africa represented only 11 percent of the world’s total in 1981, they now account for 34% of the world’s extreme poor, and China comes next contributing 13 percent (down from 43 percent in 1981), according to the World Bank report titled State of the Poor.

The share of poverty in South Asia region excluding India has slightly increased from 7% in 1981 to 9% now, according to the report.

http://www.riazhaq.com/2013/06/indias-share-of-worlds-poorest-jumped.html

Riaz Haq said...

Here's a Reuters' blog post on lack of hygiene in India:

My Indian friends and I joke around a lot about me as the typical white American guy visiting India. Cows! Con men! Colors! Most people I’ve met in India have restricted their reactions to my westerner-in-the-east experiences to gentle teasing. When I stuck a picture of a man urinating in public on my Facebook page, calling it one more picture of what you see everywhere you go in India, people weren’t as patient. What was I doing? Insulting the nation? Focusing on the ugly because it’s what all the westerners do when they visit India? Why does India provoke such visceral reactions in visitors?

Public urination, public defecation, dirt, garbage, filth, the poor living on the street — talking about these things, even acknowledging that they’re in front of your face, risks making your hosts unhappy, and possibly angry. It’s the third rail of India, and the voltage can be lethal. That’s why I was surprised when B.S. Raghavan decided to touch it with all 10 fingers.

Raghavan’s column in The Hindu Business Line newspaper begins with this headline: Are Indians by nature unhygienic?

Consider these excerpts:

From time to time, in their unguarded moments, highly placed persons in advanced industrial countries have burst out against Indians for being filthy and dirty in their ways of life. A majority of visitors to India from those countries complain of “Delhi belly” within a few hours of arrival, and some fall seriously ill.

There is no point in getting infuriated or defensive about this. The general lack of cleanliness and hygiene hits the eye wherever one goes in India — hotels, hospitals, households, work places, railway trains, airplanes and, yes, temples. Indians think nothing of spitting whenever they like and wherever they choose, and living in surroundings which they themselves make unliveable by their dirty habits. …

Open defecation has become so rooted in India that even when toilet facilities are provided, the spaces round temple complexes, temple tanks, beaches, parks, pavements, and indeed, any open area are covered with faecal matter. …

Even as Indians, we are forced to recoil with horror at the infinite tolerance of fellow Indians to pile-ups of garbage, overflowing sewage, open drains and generally foul-smelling environs.

There’s plenty more that you can read in that story, but I’ll direct you to the article. I’ll also ask you some questions:

Some people say you shouldn’t point out these problems, and that every country has problems. Do you agree with this statement? Why?
Does anyone disagree with Raghavan’s descriptions of these sights and smells?
Is this even a problem? Or should people get used to it?
Should visitors, especially ones from countries where people are generally wealthier, say nothing, and pretend that they don’t see unpleasant things?
As for me, I can say this: I got used to it, but I would be lying if I said I didn’t notice it. Indians notice it too. Otherwise, people wouldn’t suggest public shaming campaigns against people urinating in public, they wouldn’t threaten fines for doing it, and they wouldn’t respond with relief to plans to finally make sure that toilets on India’s trains don’t open directly onto the tracks. Of course, these are people in India. It’s a family, taking care of business the family way.

As for me, the message usually seems to be: “If you don’t love it, leave it.” It would be nice if there were some other answer. Acknowledging problems, even ones that are almost impossible to solve, makes them easier to confront.


http://blogs.reuters.com/india/2012/11/17/indians-inherently-unhygienic-indian-writer-touches-third-rail/

HopeWins Junior said...

"1. Talk of Chinindia is nonsense. China and India are two very different countries with different histories. India has never done the hard work of basic reforms that China did decades ago. Unlike India, early reforms combined with greater state control on the economy have helped China achieve rapid and massive reduction in poverty. "
-------

(a) India did the hard work of building democratic institutions that have grown stronger over the decades. China is yet to even start. China may have achieved better social results, but they have yet to start their own "basic reforms" to their Totalitarian political system. South Korea may have been a Dictatorship during its early growth days, but it was NEVER a Totalitarian country.
(b) It is not state-control that has helped China grow faster than India; it is merely their higher savings (and hence investment) rate. And the reason why India was not able to match China's savings rates was because Dr. Ghosh and her colleagues at the Marxist JNU keep calling for redistribution-- which, ironically, keeps depressing the savings rate.
~~~~~~~~~~~~~~~

"2. Unlike China, India does not run any trade surplus or current account surplus to fund its growth. In fact, India has been running significant twin deficits. India depends much more on foreign investments for its growth than China."
-----

A poor country should not be running a current account surplus. A poor country, by definition, is short of capital and should be a capital IMPORTER. A capital importer, by definition, is a country that runs a current account deficit.

China runs a current account surplus because its savings exceed its investment needs. This is a sign of SERIOUS imbalances in the Chinese economy. It is not a sign of strength at all. Dr. Ghosh is up to her eyeballs in Marxist voodoo economics.

Over the last 10 years 80% of India's investments come from domestic savings, 10% from remittances, and only 10% come from FDI, FII and external debt COMBINED. In the last 10 years, India has invested 3.5 Trillion$ from its own domestic savings, 420 Billion$ from remittances, 200 Billion$ from FDI, 120 Billion from FII and about 100 Billion$ in terms of net external debt. India's investments are CLEARLY driven mainly by domestic savings. Again, Dr. Ghosh is using Marxist voodoo to come to the strange conclusions that she does.
~~~~~~~~~~~~~~~

“3. Although large number of Indians estimated at 110 million have been the main beneficiaries of India's rapid economic expansion, their numbers are only about 10% of India's 1.1 billion people. The growth has excluded the rest of the 90% of the population, leaving them in abject poverty.”
------

This is nonsense. Yes, it is true that in India, like in China, a larger chunk of the growth has gone to the upper 10% while less has gone to the middle. This is shown in the rising GINI Index numbers for both countries. But this is precisely why domestic savings rates are up due to the higher marginal propensity to save for the top 10%. In turn, it is this saving that has allowed the massive rise in investments over the last 10 years. This is PRECISELY what all the East-Asian miracle economies did during their take-off stages. The choice is between giving a man a fish (“equality” = redistribution = lower savings = Dr. Ghosh loves) or teaching him how to fish (“inequality” = higher savings = higher investment = Dr. Ghosh hates).
~~~~~~~~~~~~~~~

Summary: You are correct that there are a MILLION things wrong with India’s economy. But you should find a better source of economic criticism than outdated Marxists like Dr. Ghosh who just can’t seem to move beyond their disproven left-wing ideas of “surplus extraction”.

Riaz Haq said...

Here's Wall Street Journal quoting BRIC coiner Jim O'Neill as saying “If I were to change it, I would just leave the ‘C’:


SAO PAULO–Former Goldman Sachs Asset Management Chairman Jim O’Neill, who coined the BRIC acronym describing four burgeoning emerging market countries, stands by the term he invented more than a decade ago, but admits that three of the countries have disappointed him in recent years.

The acronym created in 2001 groups Brazil, Russia, India and China, and has become a reference for a perceived shift in economic power toward developing economies.

“If I were to change it, I would just leave the ‘C,’” Mr. O’Neill said in an interview. “But then, I don’t think it would be much of an acronym.”

Economic growth in other BRIC countries has been disappointing, and the economic outlook for developing economies in general has changed in the last few years amid the end of a commodities boom and a slowdown in Chinese growth–which nevertheless remains high compared with that of its counterparts.

Meanwhile, signs of a recovery in the U.S and expectations the Federal Reserve will soon reduce its bond-buying program have helped strengthen the U.S. dollar, sucking money out of emerging markets and putting even more pressure on their less developed economies.

It has become “fashionable” to say the developed world is recovering while emerging markets are all slowing down, Mr. O’Neill said. “But what people don’t understand is the size of China,” he added.

The economist said that if China’s economy grows 7.5% this year, as he expects, that would create an additional $1 trillion in wealth, in U.S. dollar terms. “For the U.S. to contribute at the same level, it would have to grow around 3.75%,” Mr. O’Neill said.

Economists currently expect the U.S. economy to expand 1.5% in 2013, down from 2% projected in May, according to a recent survey by the Federal Reserve Bank of Philadelphia.

From 2011 to 2020, Mr. O’Neill said he has assumed average growth for the BRIC countries of 6.6% a year, less than the 8.5% average in the previous decade. Most of it up to now has come from China.

India has been the biggest disappointment among the BRIC countries, while Brazil has been the most volatile in terms of investor perceptions, the economist said.

“Between 2001 and 2004, many people told me I should never have included Brazil. Then, from 2008 to 2010, people told me I was a genius for including Brazil and now, again, people say Brazil doesn’t deserve to be there,” he said.

Brazil’s economic growth, which reached 7.5% in 2010, has been weak since then in spite of multiple government stimulus measures. The country seems doomed to growth of 2% or so in both 2013 and 2014, according to economists’ forecasts.

Brazil’s rapid growth in 2010 raised expectations, but many people forgot that the country is vulnerable to big moves in commodities prices, Mr. O’Neill said.

Another problem, he said, is that private investment remains a small share of the country’s gross domestic product. Brazil’s investment rate has been stuck at around 18% of GDP, the lowest level of any BRIC country, for a decade.

---

“They should only worry if there’s a pickup in inflation expectations; otherwise, they should relax,” he said, before the central bank late Thursday unveiled a massive intervention program to provide relief for the currency.

Brazilian inflation is currently 6.15%, close to the 6.5% ceiling of the central bank’s target range for 2013.

Even in the face of weak growth, Mr. O’Neill says he doesn’t plan to add or subtract letters from his famous acronym.

“If, by the end of 2015, there is persistent weak growth in Brazil, India or Russia, then I might,” he said, noting, however, that he expects Brazil to surprise positively in 2015, possibly even in 2014.


http://blogs.wsj.com/moneybeat/2013/08/23/china-only-bric-country-currently-worthy-of-the-title-oneill/

Riaz Haq said...

Even though it is illegal to discriminate on the basis of caste, creed, religion, or gender, developers and realtors often advertise apartments for rent/sale for certain religious groups or certain castes.

Superstitious parents in India are known to have c-sections, or to plan ahead and induce labor at times that are considered auspicious. Some Hindus believe that being born at a certain time will better a child's future.

India's Delhi metro hired a monkey handler or langurwallah, to chase monkeys off the city's metro trains. Monkey handlers have also been used on the grounds of parliament and in some government buildings to scare off wild monkeys.

A woman named Shaheen Dhada posted a status on Facebook questioning a Mumbai "bandh," or shutdown, after the death of politician Bal Thackeray, known for using various forms of intimidation to achieve political ends. Her friend Renu Srinivasan liked the post. Both were arrested for their actions and the incident sparked a furor about the lack of freedom of speech in India.

Farmers with massive debt burdens have been committing suicide since 1995. Over 250,000 farmers have reportedly committed suicide. Many accuse foreign companies like Monsanto of selling farmers overpriced seeds that are forced on them by the government. The low cost of produce along with poor harvests have often caused farmers to take their own lives as they see it as the only way out of their tremendous debt.

Santosh Kumar Singh fought for nine years to prove that he was alive. His brothers declared him dead and stole his land after he married a woman of a lower caste. False death certificates are frequently issued in land grabs.


http://www.sfgate.com/technology/businessinsider/article/26-Crazy-Things-That-Only-Happen-In-India-4814600.php