Thursday, November 4, 2010

Indian Economic Miracle is Deceptive!

Some urban middle class Indians often leave comments on this blog citing their country's ranking relative to Pakistan's on a contrived index called "Prosperity Index". This index is published by Legatum and reported by Forbes magazine, a publication of the rich for the rich and by the rich that focuses exclusively on the world's multi-millionaires and billionaires as its key audience.

The producers of this "prosperity index" are part of the elaborate deception being perpetrated about India that is hurting its largest population of poor and hungry who are faring worse than the poorest of the poor in Africa.



Here's a recent report titled "India: Economic Power House or Poor House?" by The Star's reporter 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 M ultidimensional 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.”

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.


A much better measure of the average Indians' situation is the multi-dimensional poverty index recently published by Oxford University researchers.

OPHI 2010 country briefings on India and Pakistan contain the following comparisons of multi-dimensional (MPI) and income poverty figures:

India
MPI= 55%,Under$1.25=42%,Under$2=76%,India_BPL=29%

Pakistan
MPI= 51%,Under$1.25=23%,Under$2=60%,Pakistan_BPL=33%

Lesotho MPI=48%,Under$1.25=43%,Under$2=62%,Lesotho_BPL=68%

Haiti MPI=57%,Under$1.25=55%,Under@2=72%,Haiti_BPL=NA

China
MPI=12%,Under$1.25=16%,Under$2=36%,China_BPL=3%

Among other South Asian nations, MPI index measures poverty in Bangladesh at 58 per cent and 65 per cent in Nepal.

While OPHI's MPI is a significant improvement over the simplistic income level criterion for assessing poverty, it appears that the MPI index gives nearly three quarters of the weight to child mortality and school enrollment, and just over a quarter of the weight to a combination of critical factors such as access to electricity, sanitation and clean drinking water which are essential for proper learning environment, increased human productivity and healthy living.

Here's a video of Jawaharlal Nehru University's economic professor Dr. Jayati Ghosh's debunking "The Indian Miracle":



Related Links:

Haq's Musings

BRIC, Chindia and the "Indian Miracle"

M ulti-dimensional Poverty Index Finds Indians Poorer than Africans

South Asia Slipping in Human Development
OPHI Country Briefing: Pakistan

OPHI Country Briefing: India

Slumdog Inspires India's "Big Switch"

Mumbai's Slumdog Millionaire
Poverty Tours in India, Brazil and South Africa
South Asia's War on Hunger Takes Back Seat

British TV Accused of Making "Poverty Porn"

Orangi is Not Dharavi
Bollywood and Hollywood Mix Up Combos
Grinding Poverty in Resurgent India

Slumdog Is No Hit in India

Pakistani Children's Plight

UNESCO Education For All Report 2010

India's Arms Build-up: Guns Versus Bread

South Asia Slipping in Human Development

World Hunger Index 2009

Ch allenges of 2010-2020 in South Asia

India and Pakistan Contrasted 2010

Food, Clothing and Shelter in India and Pakistan

32 comments:

Riaz Haq said...

Here is a news report on UNDP findings released today:

India lags behind its neighbours, Pakistan and Bangladesh, on human development indices like life expectancy at birth and mean or average years of schooling, a United Nations Development Programme (UNDP) report released Thursday said.

Titled "Real Wealth of Nations: Pathways to Human Development", the report had a global launch and was released at the UN in New York by UN secretary general Ban Ki-moon.

While India is ranked 119 on the Human Development Index (HDI) among 169 countries -- above Pakistan and Bangladesh which are ranked 125 and 129, respectively -- it lags behind the two on certain development indices.

According to the report, life expectancy at birth in India is 64.4 years, while in Pakistan it is 67.2 years. In Bangladesh, life expectancy is 66.9 years.

Similarly, mean years of schooling in India is 4.4 years while in Pakistan and Bangladesh it is 4.9 and 4.8 years respectively.

Sri Lanka, which is ranked above India on HDI at 91, also fares better than India on the two indices. Its life expectancy at birth is 74.4 years and mean years of schooling is 8.2 years.

On some positive note, in terms of growth of income, India is considered one of the top 10 countries. China is on the top position in this index.

Finance Ministrys chief economic advisor Kaushik Basu, who was present at the India launch of the report, said: "India has a lot of catching up to do. There is scope to do so much better."

Riaz Haq said...

Here's a Times of India report on UNDP gender gap report indicating Bangladesh and Pakistan doing better than India:

NEW DELHI: Believe it or not when it comes to gender inequities India fares worse than Pakistan. In fact, the country fares lower than all other countries in South Asia save Afghanistan. These are the findings of the 2010 Human Development Report released by the United Nations Development Programme on Thursday as per its Gender Inequality Index.

So while Pakistan may be in the news for its treatment of women and might have become a hot bed for international women's activism, it certainly seems to know how to take care of its mothers better. On maternal mortality, India -- with its abysmal record -- trails Pakistan.

Reproductive health is the largest contributor to the inequality index. The other indicators, based on which it is calculated, include women's participation in the labour force, their level of empowerment based on educational attainment and parliamentary representation.

For maternal mortality, the figure for Pakistan is 320 deaths per 100,000 live births. In India, the corresponding figure stands at 450. The country also falters on adolescent fertility rate, another indicator of reproductive health.

As per this data, in India the adolescent fertility rate is 68 births per 1,000 live births as compared to 45 births per 1,000 live births in Pakistan. The figures illustrate that Pakistan have fewer younger mothers.

India, however, does better in female participation in the labour force, with the figure being 36% for the nation as opposed to 23% for Pakistan.

However, the country has been really found wanting on the health front.

India ranks 122 among 138 countries for which the gender inequality measure has been calculated. Pakistan is at 116, and Bangladesh is a notch higher at 112.

The other area, where India needs to do better is at the level of Parliamentary participation. India, the reports states, stands out as an exception where 30% local government seats are reserved for women. However, participation at this level has not been incorporated in the report. If India wants to fare better on this front, then Congress President Sonia Gandhi will have to keep her promise of ensuring reservation for women in Parliament and the legislative assemblies.

After all, most countries where women have found more places in Parliament are those where affirmative action has been put in place like Pakistan, Nepal, Bangladesh and even Rwanda.

gunam said...

http://lite.epaper.timesofindia.com/getpage.aspx?pageid=11&pagesize=&edid=&edlabel=ETM&mydateHid=05-11-2010&pubname=&edname=&publabel=ET

India in 119 position and Pakistan at 125 position in human resource development

Anonymous said...

'While India is ranked 119 on the Human Development Index (HDI) among 169 countries -- above Pakistan and Bangladesh which are ranked 125 and 129, respectively -- it lags behind the two on certain development indices'

'On some positive note, in terms of growth of income, India is considered one of the top 10 countries. China is on the top position in this index.'


So what we can infer is India is overall superior to Pakistan in the human development index as seen by the higher rankings.

Pakistan is ahead in two indices of the many which constitute HDI which India due to its high growth rate is almost sure to overtake given pakistan's political instability and economic stagnation.

Pavan said...

This does not surprise me. There has been little effort to improve health indicators. Federal spending is at 0.3% of GDP so naturally life expectancy will go down. Yes income has improved but only for the upper/middle classes. Child and maternal mortality rates is where Bangladesh seems to have done well. Pavan

anjan288 said...

It is true that India with its democratic system of painfully slow decision making and legal system, could not match the big strides that China made, with its authoritarian system of governance.

None the less, India is on a roll. It is not if but when things will change for the poor and deprived in India. And as far as Pakistan is concerned, it is fast losing its relative strength to bargain with India on all issues, and a few decades down the road, will be totally irrelevant.

Therefore, I see no reason for the Pakistanis to seek satisfaction out of the statistical data of what India is achieving or not achieving.

Riaz Haq said...

The latest HDR 2010 reminds us of the whole reason why Dr. Mabhub ul-Haq argued for using social indicators, not just the GDP, as a measure of a nation's well-being.

There is a description of Mahbub ul-Haq's thinking on page 12 of the Human Development Report 2010. It is titled "From Karachi to Sorbonne--Mahbub ul-Haq and the idea of human development".

Dr. Haq was Pakistan's planning commission's chief in 1960s which was seen as a time of great progress because of rapid GDP growth in Pakistan, and every one expected Dr. Mahbub ul-Haq to crow about it and pat himself on the back.

But, as the report puts it, "The young economist shocked his audience by delivering a stinging indictment of Pakistan's development strategy" for favoring the elite at the expense of the poor. A few years later, late economist Mahbub ul-Haq persuaded UNDP to push for research reports and indicators as an alternative to single-minded focus on GDP.

Anonymous said...

So by this article's logic The United States of America is worse off than Paraguay as there are in absolute numbers more poor people in US ghettos leading miserables lives than the entire population of Paraguay?


China is worse off than Pakistan because with 1.4 billion as the base it has more people living on less $2/day than Pakistan...


Brilliant analysis but wasn't expecting much more from a tabloid,but it seems to have impressed Pakistanis anything that is anti India is good :)

Riaz Haq said...

anon: "China is worse off than Pakistan because with 1.4 billion as the base it has more people living on less $2/day than Pakistan...Brilliant analysis but wasn't expecting much more from a tabloid"

India has more poor people in absolute numbers and as percentage of its population than either Pakistan or China, acccording to UNDP and Oxford reseachers data.

OPHI 2010 country briefings on India and Pakistan contain the following comparisons of multi-dimensional (MPI) and income poverty figures:

India
MPI= 55%,Under$1.25=42%,Under$2=76%,India_BPL=29%

Pakistan
MPI=51%,Under$1.25=23%,Under$2=60%,Pakistan_BPL=33%

Lesotho MPI=48%,Under$1.25=43%,Under$2=62%,Lesotho_BPL=68%

Haiti MPI=57%,Under$1.25=55%,Under@2=72%,Haiti_BPL=NA

China
MPI=12%,Under$1.25=16%,Under$2=36%,China_BPL=3%

Among other South Asian nations, MPI index measures poverty in Bangladesh at 58 per cent and 65 per cent in Nepal.

Anonymous said...

India has more poor people in absolute numbers and as percentage of its population than either Pakistan or China, acccording to UNDP and Oxford reseachers data.

Read the article again...
It says something about being concerned about absolute number of poor people blah blah

Anonymous said...

india's economic miracle is real enough for the US to consider it a source of jobs in 2010.

Riaz Haq said...

Here is an excerpt fom an interesting Op Ed by a Korean commentator Ha-Joon Chang published in the Guadian that exposes the hypocisy of "Washington Consensus" pushed by the West and IFIs like the IMF on developing nations:

An obvious place to look for inspiration is the recent history of the host country. In my lifetime Korea has lived through one of the greatest development miracles – half a century ago, its annual per capita income was around £50, less than half that of Ghana at the time. Today, it stands at £12,000, putting it on a par with Portugal and Slovenia. How was this possible?

Korea of course did things that most people agree are important for economic development, such as investment in infrastructure, health and education. But on top of that, it also practised many policies that are now supposed to be bad for economic development: extensive use of selective industrial policy, combining protectionism with export subsidies; tough regulations on foreign direct investment; active, if not particularly extensive, use of state-owned enterprises; lax protection of patents and other intellectual property rights; heavy regulation of both domestic and international finance.

The G7 was always remarkably reluctant to recommend these "heterodox" policies and insisted that the "Washington consensus" package of opening up, deregulation and privatisation was the right recipe for everyone. When confronted with the Korean case, Washington consensus supporters tried to brush it off as an exception. However, the history of take-offs in most of the G7 countries – especially Britain, the US, Germany, France and Japan – is far closer to the Korean model than is commonly thought. The "unorthodox" policies used by Korea and almost all of today's rich countries need to be seriously considered in any discussion on development options.

Will things change with the launch of the G20 development agenda? An examination of the Korean government's proposals suggests we can only muster cautious optimism. Korea today wants the G20 to focus on a lengthy shopping list of development issues: infrastructure; private investment and job creation; education; greater access to rich country markets by poor countries; more inclusive finance; building resilience to financial or weather shocks; food security; governance. That is a pretty good start. The Koreans reject the "one size fits all" approach of previous decades in favour of what they call a "dynamic iPhone model" – a set of development apps for every occasion, drawn from successful approaches in different countries.

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? ..

Anonymous said...

'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.'


yeah yeah yeah

more impotent rage from citizens of an erstwhile great power (UK).

The British can't stomach the fact that their one time colony now as a bigger navy than the once mighty Royal Navy and will surpass them economically this decade and matter a lot lot more in the world than they will so they keep printing this sort of rubbish.

As for Kashmir?What about Northern Ireland the British have much less of a right to be there than we do in Kashmir.It is a catholic majority region which according to most opinion polls want to rejoin their kin in the rest of Ireland.Why no referendum in N Ireland ?

Two Indias? What about the british class system(the only one in the first world)?

Atrocities?Human rights?What about the late victorian holocausts which killed about 40 million colonial subjects.I somehow don't recall an official apology?

But anyway the British aren't of much use to India anyway I mean seriously what can they offer that US/Russia/Israel/Japan can't?

Infact there are serious proposals of merging UK and France's seats into a single EU seat and offer the vacant seat to India.Unlikely but would more accurately refer to the emerging world order than the one in 1945.

Giant with feet of clay??
That probably explains 10% growth.

Anonymous said...

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? ..


Duh! Agni 3 is a 3500km range single warhead missile can only cover most of China from near the border.

Agni 5 on the other hand is a 5000km MIRV(6-10 warheads)missile which can cover most of China from deep inside India.

Obviously range is inverse to payload so Agni 5 with one single warhead will effectively be an ICBM.


And what rage in the muslim world??Except Pakistan I can't find any muslim country upset over the nuclear deal a very wise and productive move by the US.

Anonymous said...

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.

Yes 'British Medical Journal' and 'estimated'.It is also estimated that upto 50,000 married british women are in abusive relationships and are regularly assaulted by their husbands.

Anonymous said...

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.

This is true of all developing nations first the top layer develops then the rest of society follows...
Big deal!

Anonymous said...

The poor miserable Indian has hope. None for the Pakistani. What are they going to do?

Riaz Haq said...

anon: "The poor miserable Indian has hope. None for the Pakistani. What are they going to do? "

You want to talk about hope?

The 7000 Indians who have aleady died evey day of this year have no hope.

The 46% of Indian children growing up undernouished with a heavy disease burden are being condemned to a miserable life with an underdeveloped or damaged brain.

In fact, a child in a poor country in Africa has more hope than a poor child in "Shining" India.

Why?

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, and gets little help from her own government or the intenationhal aid donors.

One is “poor” and gets help from intenational donors, while the other represents a “declining poverty rate” and gets less help and attention of the world.

Due to the fake ‘India Shining’ propaganda, foreign donors are reluctant to help the poor people in India. According to figures provided by Britain’s aid agency, the total aid to India, from all sources, is only $1.50 a head, compared with an average of $17 per head for low-income countries. And aid to India is being reduced as we speak with the British budget cuts.

Riaz Haq said...

India tops the world in TB cases, according to a recent WHO report:

With 2 million new tuberculosis cases in 2009, India carries the highest tuberculosis disease burden in the world, though the country’s NGOs and government have improved their intervention, according to a World Health Organization report.

In 2009, 1.3 million people died from TB in the world, Bernama.com reports. India’s TB deaths accounted for 280,000 lives. The mortality rate was higher in patients who had TB related to HIV/AIDS.

The WHO comprehensive report, dubbed the Global Tuberculosis Control 2010, says that while significant improvements were made in tackling the curable and deadly disease, multi-resistant TB strains are leading to more infections in countries like China, Russia and India.

“India has the highest TB burden in the world and despite spectacular interventions there were 2 million new cases in India,” Dr. Mario Raviglione, director of the Stop TB Department at the WHO, said, according to Bernama.com. “The government and the private sector have remarkably scaled up their intervention to tackle TB and there have been significant advances in India.”

Raviglione said that 43 Indian labs have been strengthened for diagnosis of TB, but major challenges lie ahead for counteracting multi-resistant TB, especially in unhealthy and poor environments.

The report concludes that while the private sector of India is close to the biggest private source of TB medicines in the world, management of TB patients in the private sector may be of uneven quality.


“It is a fact that TB is not a disease exclusively of the poor as anyone, rich or poor, can get infected with active TB disease, but there is a well established and widespread association between poverty and TB” said Dr LS Chauhan, who is the National TB Program (NTP) Manager in India. India’s TB programme is called Revised National TB Control Programme (RNTCP). “A vicious cycle exists between TB and poverty” said Dr Chauhan, according to media reports.

Anonymous said...

'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.'


By that logic Riaz since Pakistan is economically in a far more precarious state,it should stop its we are equal if not better than India rhetoric and portray itself as an international basket case to garner more international support and much needed aid.

Anonymous said...

^^

The problem is international basket case image scares away fdi/FII proven time and time again to be a much better cure to economic deprivation than aid and charity which usually is little more than cross subsidizing local industry...

As a UK national based in India,my assesment is this:

The upper caste Indians are among the most capable in the world particularly Brahmins who I observe to be disproportionately more represented in white collar jobs to their 3-4% demographic they are kind of like the Jews of India.The trouble is the Upper caste make up only 15-20% of the Indian population.After this the capability falls off a cliff.

I think India is headed towards becoming another Brazil with 20-25% living I world lives and producing I world goods like Embraer aircraft(Brazil's biggest export item) and the 75% essentially unemployable...

Riaz Haq said...

Here are excerpts from a recent NY Times report on persistently high levels of poverty in India:

In Mumbai on Nov. 7, President Barack Obama told a group of students that India was no longer a “rising power,” but rather an “already risen” power. He celebrated an economy that “has risen at a breathtaking rate.”

Three days earlier, in New York, the United Nations released the 20th edition of its Human Development Report, a publication that has in many ways become the authoritative measure of poverty and deprivation.

India ranked 119th of 169 countries. The nation’s eight poorest states contain as many poor as the 26 poorest African countries combined. In terms of life expectancy and even gender inequality, India rates below its neighbors of Bangladesh and Pakistan.
-------------

After nearly two decades of economic changes that were to have ushered in an era of prosperity, it is clear that in some ways the nation has been naïve: high growth rates alone cannot cure poverty.

The problem, as Anirudh Krishna, a political scientist at Duke University in North Carolina, and the author of a remarkable new study on poverty, put it to me, is that “poverty in India has become very resilient. The numbers hardly budge.”

Indeed, while official estimates suggest that poverty has declined since the advent of reforms, other recent studies suggest that it is in fact far more widespread than had been thought.

At least three government committees have been formed to count the poor in India. The variance in their findings — ranging from 37.2 percent to 77 percent — suggests not only the prevalence of poverty, but also that its very nature is misunderstood. For all the attention directed at the issue, poverty remains something of a mystery.

Mr. Krishna’s study, published in September as “One Illness Away: Why People Become Poor and How They Escape Poverty,” is in large part an effort to peel away the layers of this mystery. The outcome of a decade of work in five countries, and the result of conversations and surveys with more than 35,000 families, one of its chief goals — and accomplishments — is to flesh out our understanding of economic deprivation.

There are several insights in this book, but one of Mr. Krishna’s more important is that, as he writes, “poverty is not an undifferentiated mass living beneath some theoretical or statistical line.” It is, rather, a constantly churning pool of deprivation, with those who escape being replenished by a new population that has fallen from relative prosperity.

In a 25-year study he conducted in Andhra Pradesh State, for example, Mr. Krishna found that while 14 percent of households escaped poverty, another 12 percent became poor. Overall, there was a 2 percent reduction in the poverty rate, but 26 percent of households had seen their status change.

This understanding of poverty as nonstatic, always in flux, has policy implications. It suggests that welfare programs need to be designed not just to raise people out of poverty, but also to prevent those who are not poor — and thus perhaps off the radar of such programs — from descending into poverty.

In particular, Mr. Krishna’s research highlights the major role played by illness in pushing people over the edge. He writes about “chains of negative events” that lead, through costly hospital bills, unemployment and debt, into economic hardship.

“I am fully convinced that we can’t reduce poverty in India without first doing something about health care,” he said.

Mr. Krishna’s ideas for alleviating poverty are generally convincing. But what is most persuasive about this book is less the policy prescriptions than the nuanced and rich portrait of poverty that informs those prescriptions.
-----------

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 some excerpts from BBC.com's Soutik Biswas's blog about Azim Premji's $2 billion donation for rural education and development in his native India:

Mr Premji remains an exception in the world of Indian business. India has some 60 billionaires. The wealth of its top 10 billionaires equals 12% of its GDP, compared to just 1% in China, 5% in Brazil and 9% in Russia. The combined net worth of India's 100 wealthiest people is about a quarter of its GDP. But the philanthropic record of India's rich is spotty.

A few like the Tatas - who built and run the city of Jamshedpur and have a decent record in what is called corporate social responsibility - appear to have been more generous than the others. In recent years, India's billionaires have given away money to their alma mater, mostly foreign universities. A mobile phone giant has set up a foundation for underprivileged children; a tyre company has invested in containing HIV/Aids. The chairman of a leading software company has said he would set aside 10% of his wealth for philanthropy. A tea company has adopted several hundred villages. But one suspects that it all does not add up to much, considering the enormous concentration of wealth in the hands of India's rich and the power they wield.

Are Indians then too greedy to be philanthropic? Americans, for example, are known to be generous, giving away some $300bn - or 2% of the nation's GDP - to charity. There are no figures available for India - a much poorer country - but I am sure they will not be anywhere close.

I don't think some people are hardwired for altruism and others aren't - an act of charity is often spurred by an incentive of publicity and media coverage. Readers always responded handsomely whenever a magazine I used to work with launched a donation drive following a devastating flood or an earthquake. "You give not only because you want to help but because it makes you look good, or feel good, or perhaps feel less bad," write economist Steven Levitt and journalist Stephen Dubner in SuperFreakonomics. So, traditionally, India's businessmen have felt that they have contributed enough to society by giving away a lot of money towards building of temples.

Many believe that India's rich are not generous enough and flaunt their wealth vulgarly in a country where the majority are poor. One reason could be that most Indian businesses are run by families and have mercantile origins. Prime Minister Manmohan Singh once appealed to businessmen to share their profits with the common man, maximise profits "within levels of decency" and refrain from ostentatious display of wealth because such "vulgarity insults the poor". Gurcharan Das, a writer and management guru who has worked with some of India's top companies, believes that Indian capitalism has begun to flower in the past few decades and wealth is "now being created" in plenty. He believes that the rich will begin to contribute to social causes in a big way soon, and Mr Premji's $2bn charity for education sets an "important" precedent. Time will tell whether Mr Das is being too optimistic.

Anonymous said...

^^

Funny the above mention the US because the US is by far the most unequal developed country on the planet with the top 1% owning 30% of the nation's capital stock and third world levels of inequality as reflected in the gini coefficient of 46.8 much much higher than India.

http://en.wikipedia.org/wiki/Gini_coefficient#US_income_Gini_indices_over_time

Riaz Haq said...

anon: "Funny the above mention the US because the US is by far the most unequal developed country on the planet with the top 1% owning 30% of the nation's capital stock and third world levels of inequality as reflected in the gini coefficient of 46.8 much much higher than India"

But the US has a very good basic social safety net that protects people from the kind of deprivation and starvation that claims 7000 Indian lives every day, and makes India home to the world's largest population of poor, hungry and illiterate people.

Riaz Haq said...

Indian Bank targets up to 28% credit growth

Inquiring minds are reading Indian Bank targets up to 28% credit growth

According to a top official working with the Indian Bank, the bank has the plans to target the credit growth to around 28 per cent during the current fiscal year as the demand for the credit this year seems to have risen quite a bit.

"We expect a credit growth of 27-28 per cent this year," the Chennai-based bank's Chairman and Managing Director, T M Bhasin, said.

"RBI has always been judicious and its decision to decrease the statutory liquidity ratio by 1 per cent will definitely infuse more liquidity in the system," he said.
The sustained growth assumptions of India and China at about 10% each are simply not going to happen. Both countries are overheating and there is a not so little constraint called peak oil that will get in the way. Should India maintain its rate of growth, do not expect to see any containment in price inflation. The same holds true for China.

For more on China, please see China Hikes Rates, Ponders Capital Controls to Halt Currency Inflows; Eight Reasons China Faces Hard Landing

India and China are going to overheat and crash, or their economic growth is going to slow dramatically, quite possibly both.

http://globaleconomicanalysis.blogspot.com/2010/12/food-fuel-inflation-hits-india-primary.html

Riaz Haq said...

Indian Bank targets up to 28% credit growth

Inquiring minds are reading Indian Bank targets up to 28% credit growth

According to a top official working with the Indian Bank, the bank has the plans to target the credit growth to around 28 per cent during the current fiscal year as the demand for the credit this year seems to have risen quite a bit.

"We expect a credit growth of 27-28 per cent this year," the Chennai-based bank's Chairman and Managing Director, T M Bhasin, said.

"RBI has always been judicious and its decision to decrease the statutory liquidity ratio by 1 per cent will definitely infuse more liquidity in the system," he said.
The sustained growth assumptions of India and China at about 10% each are simply not going to happen. Both countries are overheating and there is a not so little constraint called peak oil that will get in the way. Should India maintain its rate of growth, do not expect to see any containment in price inflation. The same holds true for China.

For more on China, please see China Hikes Rates, Ponders Capital Controls to Halt Currency Inflows; Eight Reasons China Faces Hard Landing

India and China are going to overheat and crash, or their economic growth is going to slow dramatically, quite possibly both.


http://globaleconomicanalysis.blogspot.com/2010/12/food-fuel-inflation-hits-india-primary.html

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...

Here are some excepts from a recent Wall Street Journal story titled "In India, Doubts Gather Over Rising Giant's Course":

These days, India often is held up as an example of how a democracy in Asia can mirror the spectacular growth of authoritarian China. In the year ending March 31, India's economy is expected to expand by about 8.5%.

Other important gauges of national well-being paint a more troubling picture. "What has globalization and industrialization done for India?" asks Mr. Venkatesan, Microsoft's former India chairman. "About 400 million people have seen benefits, and 800 million haven't."
-----
Calorie consumption by the bottom 50% of the population has been declining since 1987, according to the 2009-10 economic survey conducted by India's Ministry of Finance, even as those at the top of society struggle with rising obesity. Mainly because of malnutrition, around 46% of children younger than 3 years old are too small for their age, according to UNICEF.

Infrastructure in cities and the countryside remains woefully inadequate: In recent years, China has added, on average, more than 10 times as much power as India to its electricity grid each year.

Data from McKinsey & Co. show that the number of households in the highest-earning income bracket, making more than $34,000 a year, has risen to 2.5 million, from 1 million in 2005. But the ranks of those at the bottom, making less than $3,000 a year, also have grown, to 111 million, from 101 million in 2005.
-------
India's modernization was expected to prompt a mass movement of workers from farms to factory floors—a critical component in the transformation of China, South Korea and other Asian nations. But manufacturing as a share of India's economy stood at 16% in 2009, the same as in 1991, according to the World Bank.

Services have increased dramatically as a proportion of gross domestic product, rising to 55% in 2009, from 45% in 1991, according to the World Bank, becoming the chief engine of India's economic strength. But many of the fastest-growing areas, such as finance and technology, employ relatively few and rely heavily on skilled employees. The entire software and technology-services sector, including call centers and outsourcing, directly employs just 2.5 million workers, a tiny fraction of the overall work force.
--------
Agriculture's share of the economy, meanwhile, has declined to about 17% in 2009, from 30% in 1991. But the number of people working in agriculture hasn't dropped commensurately, according to Arvind Panagariya, a professor of Indian political economy at Columbia University in New York. "The dependence on agriculture remains incredibly high when you compare India's high-growth phase with others," he says. "The potential of the country is to grow at 11% to 12%, and it's growing only at 8% to 9%."

Frustration over the economic miracle's limited trickle-down is fueling political movements around the country. Most base their appeal, in part, on the idea that the poor are being ill-served in the new India.


http://online.wsj.com/article/SB10001424052748703313304576131792120382006.html?KEYWORDS=india

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.