John Jose
In a recent BBC radio broadcast on the development race between China and India, commentator James Cameron stated that he would “bet on Vijay,” his computer support specialist in Bangalore, India. When asked by Cameron why he thinks India will win the development race, Vijay said that India speaks the two languages of the international economy: English and computers.
True enough. India, being a former British colony, does have the advantage in being able to relate better to the Western world and has an information infrastructure that is impressive for an emerging economy. Yet the caste system is still a burden on the country, and its schools are nearly worthless, jeopardizing the future economic outlook of the youth. China, on the other hand, is rapidly training its future workforce in English and is churning out top-notch engineers and entrepreneurs from its massive state universities, yet remains vulnerable to repercussions from its volatile and unstable mix of communism and capitalism.
So which has the advantage? Will one of these rising Asian giants overtake the other in the race to the top? It all depends on how they disburse the economic gains made in the large commercial centers to the much-poorer rural citizens.
China and India are saddled with huge rural populations who have seen none of the benefits that globalization has brought to their shores. In the case of India, this development has been centered in the city of Bangalore, freshly adorned with gleaming office buildings and huge corporate complexes. China’s economic boom is centered around coastal SEZs, or Special Economic Zones, such as Shanghai and Hong Kong, where state economic control has been largely relinquished to natural market forces. The result in both cases is foreign capital-funded growth, which accumulates almost exclusively in these commercial centers. This leads to a feeling amongst rural inhabitants that the policymakers, mesmerized by the double-digit GDP growth coming out of the big cities, ignore the countryside and plow more money into these golden egg geese.
Their fears are well founded. Continued investment in SEZs and the like and ignorance of rural areas creates extreme economic imbalances that have wider repercussions. Wealthier areas have better education systems, more employment opportunities, higher wages and higher standards of living, all of which combine to create even more wealth, leaving poor areas trapped in a cycle of economic stagnation, the only escape from which is migration to the cities.
Which is exactly what many are choosing to do. Anthropologists have described China’s massive population shift from the countryside to coastal SEZs and Beijing as the largest mass migration in history. The same is happening in India, though on a somewhat smaller scale. These new city dwellers pose huge infrastructure problems, such as sewage and water, but also are the reason why the explosive economic growth of these two countries is occurring at such a rapid pace. These people are willing to take low-paying and dangerous jobs in manufacturing plants creating goods for Western multi-national corporations, and thus fuel the economic growth. But for those who stay behind, the opportunities are very limited, and many are demanding that their governments do something about it. This is where it gets interesting.
India is, for all intents and purposes, the world’s largest democracy, while China is the world’s largest totalitarian state.
Poor Indians, in theory, have a voice in their government. Poor Chinese do not. Both states are subject to violent protests by the marginalized who threaten the stability of the governments. Increasing numbers of protests in both countries have therefore made disbursement of wealth a key priority. The difference is in the approaches. India, shackled by innumerable political parties and lacking a coherent political will, other than chasing stellar GDP figures, has been slow to address the complaints of its rural citizens. China, though, remembering the catastrophe that was Tianmen Square, has realized that these protests represent a credible threat to the Communist Party, but rather than crush them and bring international condemnation and likely economic sanctions, has decided to spread investment inland. They are able to do this because of their unquestionable power and authority. At the most recent session of the Chinese Congress, addressing the economic problems of rural inhabitants was made priority number one after the Communist Party witnessed mass farmer protests aimed at the economic imbalances.
India, meanwhile, might be in an even worse position than doing nothing to actively spread the wealth to the countryside. The Indian government has shamefully tolerated the legacy of the caste system that is very much active in rural areas. Virtually no economic opportunities are available to those at the bottom of the ladder; few manufacturers offer jobs to them and entrepreneurial opportunities are nil as they are unable to obtain bank loans and credit lines. By allowing this legacy to continue, the Indian government is ensuring further income disparities, which, in the future, will not only harm India’s economy but its political system as well.
The important lesson here is to continue to break down barriers to economic success for all people. The Economist puts it best: “Making such adjustments will no doubt be awkward. But these are the problems of success. A world in which most people enjoy prosperity and opportunity is surely better than one in which 80 percent are mired in economic stagnation. Celebrate the riches that globalization has brought-and be prepared to defend the economic liberalization that underpins it.”
About the writer:
John is a first-year Accounting, International Studies, and Chinese triple major. He can be contacted at [email protected].
