Not Pre-Ordained

I like Arvind Subramanian’s piece because it does not pretend that economics offers solutions to all problems in the world. He is also right to worry that corruption could stop India’s onward march. Part of the explanation for the seemingly big rise in corruption in India is that those who are engaging in it seem to think that the monies they steal would be mere drops in the ocean as the ocean itself would keep growing for the next 40 years! 

He asks the Indian Prime Minister to invest his political capital (is there anything left still?) in tackling corruption and he calls for bipartisanship on tackling the problem of land acquisition. It was a masterstroke by the former Finance Minister Yashwant Sinha to get Asim Dasgupta (Communist Party of India – Marxist) to chair the steering committee on the introduction of a nation-wide Goods and Services Tax in India. One doubts very much if there would be an encore on that.

That the rise of India and that of Asia is not pre-ordained and that they have to work for it is the burden of the song in the latest Asia Development Bank report titled, ‘Asia 2050′. I like the fact that the report is not overly sanguine on Asia. If anything, the report is a reminder of issues that need to be tackled. Some are rather serious: water and potential for conflicts, to name just two. On energy efficiency and the need to find alternatives to hydrocarbons, the report is forthright but not dire enough. Let me fill that void:

There is simply no way India and China can grow to high-income status aping the Western model of resource-intensive growth. Not a chance.

On rural-urban divide, the report notes with hope that the recent boom in commodities could be positive for rural incomes. May be so in Thailand. But, if policies such as this are the norm, the urban bias in policy is well and truly alive and that, of course, reminds us of the biggest need and gap of all: sound governance in national interest.

Thus, one of the unstated hurdles standing in the way of the rise of Asia is the phenomenal hypocrisy in public life and in public policy.


This post originally appeared at The Gold Standard and is reproduced here with permission.