I had the
wonderful opportunity to listen to my former professor Amartya Sen at the World Bank who attempted
to answer this very pertinent question in the minds of many today. The fundamental question at the core is
why is it that while we rate democracy as the better form of government, it is
single party ruled China that has been more successful at bringing more people
out of poverty than democratic India? The implications for India are clear; investing in education and health for all its citizens is the best solution for long term growth.
Professor
Sen argues that it is not the nature of government that is the main factor in
China’s success but its investment in health and education that provided fuel
to its explosive growth. India he said has under-invested in these key areas
and hence its economic growth is poorly supported by quality human capital. Professor
Sen was critical of the suggestion that countries could grow economically first
and then invest in education later saying that it was the reverse that is true.
He supported his claim bringing historical evidence of Japan’s rapid growth since the
second decade of the
20st century being driven by its investment in health and
education after the Meiji restoration on the 1868. More recently, similar
investment by Korea and the South East Asian countries provided impetus to
economic growth in these countries.
I wanted to see the evidence first hand and looked at the data.
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The case of health is no different. In the case of life expectancy, once again India’s life expectancy in 2011 is below what it was in China’s in 1990 (fig-2). Today India’s life expectancy is 11 years below that of China.
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These data supports Amartya Sen’s
basic premise that India’s low literacy rates and poor health outcomes as
compared to China’s may explain a big part of the disparity in development
between the two countries.
You can see the entire talk on the
World Bank website http://live.worldbank.org/china-ahead-india-amartya-sen.
The message for policy makers to India is clear. There are no
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Interestingly, another of Harvard’s economists Dani Rodrik has a different take on this issue which he has explained on his blog, but that is a discussion for another day.
There is nothing new in what Prof Sen says. Hear this talk by another Prof Yasheng Huang from 2011, which very elegantly has highlighted these points.
ReplyDeletehttp://www.ted.com/talks/yasheng_huang.html
Thanks Deepak. I shall take a look at this presentation. Amartya and Jean Dreaze are coming out with a new book on the subject "An uncertain glory - India and its contradictions", which I am looking forward to read.
DeleteJames. Amratya is not always right. Why China has pegged its currency @6RMB/USD as against India's so called floating currency. These Economists and libearls are making our country poorer day by day. Prof Sen also should have talked about rampant siphoning of wealfare and development funds in India. Democracy simply does not work with Billion of people and mostly illiterate. China has proved that for a country with billion of peple, capitalism simply does not work, where few guys alongwith tacit government concessions exploit all resources and let other millions continue to serve them. Does not Prof Sen thinks that Capitalism in India was early, so early. we could have waited till per capita income reached a threshold. There is a complete democratization of coruption in the country and Prof Sen continue to support the failed Man mohan Singh economist Government. Sorry to say that with these economists none of the vital parameters of the country are nomrmal.Economists have not risen above law of demand and supply. Nothing else in Economics appear to be true except this.
ReplyDeleteAnother erason for India's failure is over dependence on service economy(whcih is white collar and need education investment by individulas)unlike China whcih has taken route of manufacturing and mass production based on unskilled and semi skilled population. Remember The IT minister Maran(young Maran)wanted to set up huge semiconductor hubs in India which was shot down by Chidambaram as FM(may be due to political reasons).It apppears we are made for service:service to riches-Service to developed countries and service to feudal class.
Thanks for your comments Krishna. Corruption is indeed a serious issue and an important factor in impeding economic growth in India. On democracy, I understand that decisions in a democratic setting are tedious, and there may be as one call it, an 'optimum level of democracy' (which unfortunately is a slippery slope, because then one could justify repression in the name of democracy). Running a democracy requires a certain level of discipline to accept decisions that one may not normally agree with. It requires strong leaders (which we lack currently)to take us through a rocky path that may lead us to a better future in the long term rather than a short cut that may be good for us only in the short term.
DeleteThat being aid, I cannot but agree that democracy works better and economic growth is more likely with an educated and a healthy population than an uneducated one and ailing one. We need to fix that problem sooner than later.
The point raised by you on Services vs Manufacturing is bang on target and is what Dani Rodrik talks about in his blog. You may follow the link to his blog. I shall write about it in my next blog.
People like Amartya Sen are irrelevant for India (had they been relevant , they would have listened to (sic)). He discussed same issues with then PM Mr. Vajpaee & his colleagues, none heeded him then too. Unfortunately, today's democracy listens only what could make Vote sense.
ReplyDeleteThanks for your comments Kajal. Are you saying that investment in education and health do not get you votes ? In my opinion they are not easy issues to solve (education and health), so politicians tend to work on short term wins. However, improvement in health and education benefits the poor greatly who in turn could return that government to office.
DeleteNice one.
ReplyDeleteFaraz