Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | The geoeconomics of 1991 by Sanjaya Baru

The geoeconomics of 1991 by Sanjaya Baru

Share this article Share this article
published Published on Jun 27, 2011   modified Modified on Jun 27, 2011

In early 1993 the late Mahbub ul Haq, Pakistan’s finance minister in the first Benazir Bhutto government and by then the famous architect of the United Nations Development Programme’s (UNDP’s) Human Development Report, called me and asked me to defend the economic record of democracies in the developing world at a UNDP conference.

“Many in Asia argue,” he said to me, “that non-democratic countries have done better both in recording higher growth and in ensuring better human development outcomes. Even in south Asia it is often said that military rule ensured better economic performance in Pakistan than democracy was able to in India. Now China’s economic take-off is strengthening that argument. Sanjaya, your job is to defend democracy!”

I took up the challenge and had a go at it. The fact is that even in 1993 it was not an easy task. One of the speakers at the UNDP event was a Singaporean who put up just one chart showing Britain’s economic performance declining over the period 1950 to 1990 and that of Singapore improving year after year. QED, he told the audience, democracy does not deliver growth or human development.

Two decades later, the debate continues but the evidence in favour of democracy has become more robust, and the most important differentiator has been India.

Forget about east Asia versus south Asia, Mahbub ul Haq would say, and just look at our own two countries. “I can never win an argument for democracy in Pakistan on economic grounds, even though I am passionately committed to it.” Today, Dr Haq would win the argument hands down. Not because Pakistan has performed better as a democracy (regrettably, it has not) but because India’s example shows that democracy was not a constraint on growth.

Even Chinese interlocutors (and certainly an increasing number of Singaporeans) now concede that if China delivered two decades of 10 per cent growth without democracy and India has now delivered close to 8 per cent growth over two decades with its chaotic and contentious democracy, then it is a price worth paying.

Moving beyond the democracy argument, the acceleration of India’s economic growth, with greater external liberalisation that has re-integrated India into the global flows of goods, services and people, has altered the geopolitical and geoeconomic equations in south Asia.

Till 1990, both Pakistan and Sri Lanka performed better than India. Pakistan’s average annual economic growth rate between 1965 and 1980 was 5.8 per cent compared with India’s 3.2 per cent. The ratio of exports to GDP for Pakistan in 1990 was 15.5 per cent against India’s 7.1 per cent. By 2005, the trade ratio hadn’t changed much for Pakistan; for India it nearly tripled.

On almost every important economic indicator India’s performance since 1991 has been superior to that of most of her neighbours. While Bangladesh has recently shown an improvement in performance, ethnically divided Sri Lanka, which aspired to be the “Singapore of south Asia” as recently as in the 1970s, has slipped.

Pakistan has the potential to catch up with India, given its human and natural resources and its geostrategic location, but it cannot do so as a beleaguered and anarchic “island” cut off from its neighbourhood, now recording a growth rate of just about 2.0 per cent! Both Pakistan and India can record a higher rate of growth if south Asia is able to reconnect with the resource-rich economies of central and West Asia, to the west, and the prosperous and enterprising economies of east and south-east Asia, to the east.

India’s economic opening up in 1991 created the basis for India’s re-integration with not just the global economy but also its own wider Asian neighbourhood. That was the geopolitical and strategic consequence of India’s improved economic performance and greater openness since 1991. India’s “Look East” and “Look West” policies were logical consequences of her re-integration into the global economy.

The geoeconomic and geopolitical consequences of the reforms of 1991 were not an accident. They were well understood at the time based on an analysis of what had happened to the “closed” Soviet and Soviet-style economies in the 1970s and especially 1980s, and the “open” economies of east Asia, including Dengist China.

It was, therefore, no accident that when Dr Manmohan Singh presented his first Budget as finance minister in July 1991, he ended his speech with that now famous statement that directly linked the prospect of a more open and faster-growing Indian economy with India’s “rise” as a major power. The exact quote was: “No power on earth can stop an idea whose time has come. I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea.”

India’s economic rise and, equally importantly, her increased openness have altered the geoeconomics of Asia and the world, thanks to India’s “re-integration” with the world economy (and I pay tribute here to the late Suresh Tendulkar, who passed away last week, for focusing on “re-integration” in the book he co-authored with T N Srinivasan, Re-integrating India with the World Economy).

If the late Mahbub ul Haq were alive today, he would not only find it easier to defend the economic track record of a democracy, given India’s rise as a free market democracy and an “economic power house” in these past two decades, he would also have to concede that the India versus Pakistan debate among policy makers is dead and buried. Nobody in Pakistan or India, or anywhere in south Asia or Asia, or the world, would suggest any longer that military-ruled Pakistan is a better place to do business in than plural, secular and democratic India. India’s economic performance since 1991 has made that difference.

The Business Standard, 27 June, 2011, http://www.business-standard.com/india/news/sanjaya-barugeoeconomics1991/440471/

Tagged with: Human Development



Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

"Session 1: Scope of IDEA and AgriStack" in Exploring...

"Session 2: Farmer Centric Digitalisation in Agriculture" in Exploring...

"Session 3: Future of Digitalisation in Agriculture" in Exploring...

Objectives | About Us | Workshops | Disclaimer
share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close