SHADES OF GROWTH

A his­tor­i­cal nar­ra­tive ex­plains why coun­tries like In­dia have a long way to go

India Today - - LEISURE - By Bibek De­broy

T his is an in­ter­est­ing book that leaves you dis­sat­is­fied. Other than a pro­logue and an epi­logue, there are two parts––one (two chap­ters) on de­vel­op­ing coun­tries fall­ing be­hind and a sec­ond (five chap­ters) on de­vel­op­ing coun­tries catch­ing up. The fall­ing-be­hind sec­tion is his­tor­i­cal and is dated to 1820, though us­ing the eco­nomic his­to­rian An­gus Mad­di­son’s work, data is also given for 1000 ACE. To state a fig­ure of­ten bandied around, in 1000 ACE, In­dia ac­counted for 28.1 per cent of the world’s pop­u­la­tion and 27.8 per cent of the world’s GDP. Note both sets of fig­ures. The share of world GDP is in­vari­ably men­tioned, share of pop­u­la­tion rarely so. In 1000 ACE, In­dia’s per capita GDP was $450, lower than the world av­er­age. To re­turn to Deepak Nay­yar, from 1820, North Amer­ica and West Europe in­dus­tri­alised and the de­vel­op­ing world (pri­mar­ily Asia) de-in­dus­tri­alised. Why was there this di­ver­gence? This is ground trod­den on ear­lier and Nay­yar men­tions cul­ture, ge­og­ra­phy and in­sti­tu­tions more as re­views of lit­er­a­ture rather than mono-causal ex­pla­na­tions. This is a less com­pelling ac­count than some­thing like Niall Fer­gu­son’s ( Civ­i­liza­tion: The West and the Rest, 2011).

One thus moves on to the con­ver­gence or catch­ing-up part, ex­pressed as shares of world GDP, per capita GDP, shares of world trade (ex­ports/im­ports), shares of global flows of cap­i­tal and labour. This kind of list­ing il­lus­trates one of the prob­lems with this book, again un­der­stand­able be­cause of the vol­ume’s lim­ited scope. Th­ese num­bers are man­i­fes­ta­tions. One would like to know what drove them. The only chap­ter which at­tempts to do this is the one on in­dus­tri­al­i­sa­tion. But this too doesn’t probe deep enough into what caused in­dus­tri­al­i­sa­tion in some de­vel­op­ing coun­tries. This leads to another rea­son for dis­sat­is­fac­tion. What is a “de­vel­op­ing” coun­try? It is an ex­pres­sion in­vari­ably used, but rarely de­fined. The World Bank no longer uses it and uses per capita in­come for clas­si­fi­ca­tion. In ad­di­tion to per capita in­come, some other cri­te­ria (di­ver­si­fi­ca­tion of econ­omy) can be used to de­fine LDCs. OECD coun­tries can be pre­sumed to be de­vel­oped. That leaves de­vel­op­ing coun­tries as an amor­phous and un­de­fined cat­e­gory. The point is this: De­vel­op­ing coun­tries are ex­tremely het­ero­ge­neous now, es­pe­cially since the 1950s. Does it help to ex­am­ine progress with the de­vel­oped/de­vel­op­ing prism?

This is recog­nised in Chap­ter 7, where the au­thor specif­i­cally fo­cuses on 14 de­vel­op­ing coun­tries that have been rel­a­tively more suc­cess­ful than oth­ers––Ar­gentina, Brazil, Chile, Mex­ico, China, In­dia, In­done­sia, Malaysia, South Korea, Tai­wan, Thai­land, Tur­key, Egypt and South Africa. This is one of the more in­ter­est­ing chap­ters, since it teases out some in­gre­di­ents for suc­cess––ini­tial con­di­tions, en­abling in­sti­tu­tions and sup­port­ive gov­ern­ments. There is some re­search not only on in­sti­tu­tions, ed­u­ca­tion and land mar­kets, but also on use of in­puts (cap­i­tal, labour) vis-à-vis pro­duc­tiv­ity but this too is a ten­ta­tive kind of teas­ing out. The fi­nal chap­ter is on ex­clu­sion, de­fined as global in­equal­ity and poverty. This raises sev­eral sta­tis­ti­cal prob­lems and ques­tions about the way data have been used. Some data (not just in­equal­ity/poverty) end in 2010. Post-2010 and post-global fi­nan­cial cri­sis, would Deepak Nay­yar have looked at the list­ing of coun­tries dif­fer­ently? How would he have looked at growth num­bers in Sub-Sa­ha­ran Africa? Would he still have been that op­ti­mistic about In­dia, and BRICS (other than China), as com­pared to sev­eral non- BRICS coun­tries that have per­formed well? How­ever, to re­turn to the core point, this is an in­ter­est­ing book, largely his­tor­i­cal. Even the catch­ing-up part is largely his­tor­i­cal. Since ex­pla­na­tions are not probed, or at least not probed suf­fi­ciently, there is rea­son for dis­sat­is­fac­tion.

“Yet, the be­gin­nings of a shift in the bal­ance of power are dis­cernible. And the past could be a pointer to the fu­ture.” Those are the clos­ing sen­tences. Who can con­test that state­ment? It is in­nocu­ous, with no great insight––a char­ac­ter­is­tic of the book in gen­eral.

INDIATODAYPHOTO AR­CHIVE

CATCH UP: DE­VEL­OP­ING COUN­TRIES IN THE WORLD ECON­OMY by Deepak Nay­yar Ox­ford Univer­sity Press Price: RS 695 Pages: 221

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