What does India need in order to be the world’s third biggest economy?
The importance of sustained growth, alleviating social differences
No one disputes the growing weight of the emerging Indian giant in the economic scene and global geopolitics. However, if
IN THE PAST WEEK, international media have been emphasizing the diplomatic problems generated by the French president, Nicolas Sarkozy’s, forthcoming visit to India on the 25th and 26th of January. The president, who is no longer brand-new, was hoping to travel to
However, due to the country’s convention,
“In spite of the significant improvement in its relations with Pakistan and China, India is still in the middle of a region plagued by multiple conflicts” This amorous anecdote hides a much more relevant reality for international politics: the growing weight of the emerging Indian giant in the economic and geopolitical scene.
As proof of this, not only Sarkozy, but all of the new breed of European leaders, including Gordon Brown, Angela Merkel, Romano Prodi and Spain’s own José Luis Rodríguez Zapatero, have incorporated New Delhi into their round of obligatory international visits during their first few months in office.
TAKEOFF IMPLIES POLITICAL POWER
India is the most populous democracy in the world, with a population that will surpass China’s around the year 2015 and a Gross Domestic Product (GDP) growth rate in the range of 9 percent for the past few years, which, in recent studies by economic institutions like Goldman Sachs and Deutsche Bank Research, has aroused great expectations for the Asian country. Some of these studies predict that, halfway through this current century, it will be the third biggest economy in the world.
“Aside from the habitual reference to the Kashmir region, there are numerous political problems” More than the stability of its democratic political system, the dynamism of its demographics and its atomic military strength, India’s new international relevance rests upon this expanding economic power. Its presence as a guest country at the G8’s last meeting, as well as its demand for a permanent seat on the United Nations Security Council, made within the reform process of this same body, are examples of this new, more relevant role that the Indian government is attempting to play in the international system. It has important allies to help achieve this: in his recent visit to
OBSTACLES FOR CONSOLIDATING A NEW ROLE
There are important internal challenges that must be met for this new political and economic international status to be consolidated. In spite of the significant improvement in its relations with
Aside from the habitual reference to the
PENDING ECONOMIC REFORMS
From the point of view of economic reforms, there are restraints (which are growing at a rapid and steady pace) on the necessary improvements in the educational system, the deficient infrastructure and the still limited capacity to generate a sufficient number of jobs for the new generations of young people who are entering the job market. “The government is launching ambitious infrastructural projects that facilitate broadband Internet connections for a large chunk of the 70 percent of the rural population, even though less than 5 percent of the population owns a PC”
The recent monograph dedicated to
However, there are challenges that are more significant than those connected to the consolidation of macroeconomic growth. The distribution of wealth is very unequal, at the population level in general as much as between its diverse regions.
According to the latest parameters of the United Nations Human Development Report,
THE CHALLENGE OF A JUST AND SUSTAINABLE GROWTH
Even in areas, such as technology, where India’s foreign image is one of a leading country, contradictory realities exist: on one hand, the government is launching ambitious infrastructural projects, such as the World Bank supported Rural Telecommunications Development Project, whose objective is to facilitate broadband Internet connections and cellular phone coverage for a large chunk of the 70 percent of the population that still lives in rural areas. On the other hand, the current reality is that less than 5 percent of the population has a PC to use for work.
The Indian writer and political activist Arundhati Roy refers to these contradictions, pointing out that India is living in several centuries at the same time, as proof of the image of how, night after night, working on end without labor rights, teams of emaciated workers dig trenches by candlelight so fiber-optic cables can be laid in them.
Along similar lines, the Indian economist Amartya Sen, winner of the Nobel Prize for Economics in 1998, defends his position that India’s potential journey from holding a peripheral position in the international system to a more influential and central role should be constructed upon a fortified democratic system, and a political class less fascinated by the sparkle of macroeconomic growth and more conscience of the need to confront the inequality and injustice of the current system with ambitious, long-term policies.
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