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Beware of the side-effects

Rather than envy China’s economic success, India must carve its own path, writes Manoranjan Mohanty.

india Updated: Mar 06, 2011 18:14 IST
Manoranjan Mohanty
Manoranjan Mohanty
Hindustan Times

Reactions in India to the news that China recently became the second largest economy in the world surpassing Japan’s $5 trillion-mark and that according to the World Bank estimate it might exceed that of the US in 2025 varied from nationalist competitiveness to open resignation. While most editorials in national dailies asserted India’s capacity to effectively compete with China, some thought India lacked the discipline of the Chinese political system and the leadership which triggered the economic reforms that produced the spectacular growth during the past three decades. Everyone, however, celebrated the arrival of the Indian middle class on the world scene and the global role that Indian business houses were playing. Only a few brought into the discussion issues such as the value of India’s democratic experience and the issues of justice, equity and sustainability which are being debated today in India, China and the world over. Fewer still put them in any historical, let alone civilisational, perspective.

It is interesting to note that even the news did not come as a statement of celebration by the Chinese government. Yi Gang, chief of China’s Foreign Exchange Regulatory Authority (FERA) mentioned this in passing in an interview posted on FERA’s website where he affirmed that China was a developing country with a low per capita income that ranked 81 (India 134) in the Human Development Index and as low as 134 in per capita income with $3,677 in PPP terms (India 152 with $900). Chinese people have reasons to celebrate as the People’s Republic achieved much over the past 60 years. The rise in living standards, reduction of poverty, progress in education and health, development of infrastructure and above all the rapid increase in foreign trade and the consistently high growth rate of about 9 to 10 per cent for over 20 years have given a new world status to China.

In fact, one of the running themes of the Hu Jintao-Wen Jiabao regime since 2002 has been to connect issues of growth to social justice and environmental sustainability. China’s 11th plan prescribed limits to consumption of energy and ensured regular ecological audits of production units. Despite the Hu-Wen regime’s many programmes to build a ‘harmonious society’, the structural logic of China’s market economy has continued to frustrate their objectives. The rising trend of protests in China by labour losing jobs, landless peasants, migrant workers asking for housing, health and education facilities in cities has to be kept in mind together with the report of the success story of China’s growth.

Yet, Indian leaders continue to cite the Chinese example of high rate of economic growth to impose their agenda of reforms. Western agencies chide India for lagging behind China in reforms. Investors assert that the Chinese economy is more open and their capital is safer in China from labour unrest, bureaucratic red tape and the pressures of multiple political parties in contrast to India. Even if much of it is true, we saw during the financial crisis how important it was for the State to have regulatory control over capital. Even the US has now passed new laws to resume State control over banking and capital markets.

However, China has many reasons to be in a sombre mood even amidst the success. India with its problems of poverty and unrest has its reasons for maintaining sobriety even though the world gives accolades to its middle class, the entrepreneurs and its liberal democratic system. But the thinking Indian must ponder over the purpose of economic growth. There were many Indian capitalists who had joined Mahatma Gandhi in his satyagraha. The present-day capitalist shows no interest in the issues that Gandhi had raised. The Federation of Indian Chambers of Commerce and Industry committee wants the central India tribal belt to be cleared of rebellious elements so as to create a peaceful environment for mining and industrialisation.

Swaraj for Gandhi was a continuous struggle towards self-realisation. The same issues are being raised today by people’s movements in India, China and elsewhere. Similar concerns permeated China’s struggle against colonialism and feudalism as well where liberation was a continuous process. Thus rather than envy China’s economic progress India should reaffirm its commitment to its own ‘Swaraj’ path of development.

Manoranjan Mohanty is Chairperson, Institute of Chinese Studies, Delhi. The views expressed by the author are personal

First Published: Aug 12, 2010 23:57 IST