An economist’s tale of two journeys
“Ten years ago, one wondered why Beijing needed six ring roads. Now you know,’’ said Herd, who heads the India and China desks at the Organisation for Economic Cooperation and Development (OECD), reports Reshma Patil.world Updated: Feb 05, 2010 00:40 IST
As we discussed Bangalore traffic, Paris-based economist Richard Herd pointed at the hotel's view of jammed multilane roads leading to Tiananmen Square.
“Ten years ago, one wondered why Beijing needed six ring roads. Now you know,’’ said Herd, who heads the India and China desks at the Organisation for Economic Cooperation and Development (OECD).
Herd was in Beijing to release the OECD’s latest China economic survey. He chatted with HT about his comparative eye on both economies and the need for stronger social spending to boost their growth prospects. While India overspends on subsidies, he said, China is building infrastructure like subway systems for 20 cities.
But economists like Herd also increasingly point out that India’s fascination with China's growth should go beyond the Chinese building boom to study ongoing social reforms in education, healthcare and pension schemes.
He described how his team’s taxi drive last year in New Delhi ended in the capital’s north instead of their destination in the south because of a miscommunication with the driver who probably couldn’t read the address.
China enjoys a higher literacy rate and foreigners who don’t speak Mandarin carry printed Chinese addresses to communicate with taxi drivers. Elderly drivers are often spotted peering at the intricate script through large magnifying glasses.
The report was out at a time when the Chinese media released photographs of 10 migrants who cook, sleep and live inside a public toilet in boomtown Hangzhou near Shanghai. Premier Wen Jiabao was touring a village for a first-hand look at rural income problems.
Despite the urban-rural contradictions in the fastest-growing economy, the OECD said reforms have helped income disparities across Chinese provinces decline slightly in recent years, and a stronger emphasis on senior secondary school education could further reduce the gap.
On the hopeful side, Herd said India’s economy is more ‘balanced’ despite lagging a decade behind Beijing in starting reforms. Chinese banks are making news for record-breaking loans.
But the Indian banking and finance sector, he said, is more developed. There’s also an ‘opportunity for India’ to attract large-scale manufacturing as Chinese labour costs rise.
As he works on the India review, he notices a lack of ‘basic high-frequency economic data,’ but better national accounts than those maintained by Chinese civil servants originally trained in Marxist methods.
And next time he’s in Delhi to study what drives the economy, he plans to hire a chauffeur-driven car.