THIS IS A TRANSCRIPT OF A TALK GIVEN AT A CONFERENCE ON CENTRAL ASIA AT JAMIA MILLIA SPONSORED BY THE MEA.
Is India going to be the new China? If I had to terminate this discussion I would say no because the gap is huge and open now. It might be very difficult because the kind of political consensus in the last few years that we have and the way we conduct our internal affairs and manage our economy. China is the world’s largest GDP now in terms of PPP terms. It is almost 19 trillion dollars which is astounding. If you project this to 2050 you would be looking at over 60 trillion and an Indian GDP would be 45 trillion.
We are entering a period of exponential growth. It is another thing that wealth does not get distributed in China and India. It is concentrated in a few hands. China has slowed down and I will discuss it later. It has posted per Capita GDP of almost below 8000. This is India here. 8 trillion dollars in PPP terms. That is where a little controversy when PM Modi suddenly started quoting PPP figures. It always sounds much bigger then the normal GDP which is. In GDP terms we are now third in terms of PPP just below USA. China is first. This is how we strike up in the world. China is almost three times our size and United States and this how the world is going to transit.
This is what excites people, excites people who are looking for investment opportunities in India, excites people like me who are not going to be around 2050 to see if we have made the tryst to destiny. What is being projected is our GDP of 3.7 billion of 2009 will move on to 43 trillion in 2050. US becomes smaller than India. The complete ranking in the world will change. If you look at United Kingdom it will be no. 10, Italy will be no. 15, Saudi Arabia 19, Russia is no. 6. The top two countries will be Asian countries. This is the projected growth on the other side. Vietnam will be no. 1, India will be no. 2, Nigeria will be no. 3. It is all unbelievable.
When I was doing my dissertation in 1984 I had proposed to my supervisor that I would do my work on future projection on economies. Lotus had just introduced spreadsheets and you could put in numbers and have different growth rates and come out with astounding figures. One day I was playing around in the computation lab in the Kennedy School of government at Harvard and I was putting in the figures in the computer. I was getting astounding results for 25 years, 30 years, 50 years. Some of it looked like real at that time. So when I proposed it to my supervisor who was a famous economist, he asked me not to do this and do something practical. You think India and China will actually reach the top , dominating the world and making the big noise? Forget it.... it is not going to happen or going to happen in my lifetime. So I did my dissertation on the Presidential decision making which is a totally different subject. I wish I had done it then. I would have been a famous man....
13. Exports are critical to China’s economy, accounting
for more than a quarter of economic activity,
compared with a little more than a tenth in the
United States.
To maintain overall growth rates, China has hoped
to keep exports growing at about 10 percent per
year, and for much of this year it has succeeded.
But the US has declared its intention to close its
CAD by 2020.
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Is the Chinese economy is losing steam?
14. Oil is now the single most important driver of world economics,
politics and technology.
The rise in importance was due to the invention of the internal
combustion engine, huge expansion of private and public
transportation and the rise in commercial aviation.
And the importance of petroleum to industrial organic
chemistry, particularly the synthesis of plastics, fertilizers,
solvents, adhesives and pesticides.
Oil is now the basis of about half the
World GDP of over $85 trillion.
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23. rade = F(income, policy, cultural
affinity, transport costs)
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24. About 15 000–10 000 years before present (ybp), when agriculture developed
in the Fertile Crescent region that extended from Israel through Northern
Syria to Western Iran, there was an eastward wave of human migration
(Renfrew 1989; Cavalli-Sforza et al. 1994). It has been postulated that this
wave brought the Dravidian language into India (Renfrew 1989).
Subsequently, the Indo-European (Aryan) language was introduced into India
from the Iranian plateau approximately 4000–3000 ybp, where this language
was probably brought by pastoral nomads from Central Asia (Renfrew 1989).
Therefore, linguistic evidence suggests that West Asia and Central Asia were
two major geographical sources contributing to the Indian gene pool.
The results revealed that a substantial part of today’s North Indian paternal
gene pool was contributed by Central Asian lineages who are Indo-European
speakers, suggesting that extant Indian caste groups are primarily the
descendants of Indo-European migrants.
Hum aapke hain kaun?
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46. South Asia: An expensive place to do business!
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47. Transport costs have significant impacts on the structure of
economic activities as well as on international trade.
Empirical evidence underlines that raising transport costs by 10%
reduces trade volumes by more than 20% and that the general
quality of transport infrastructure can account for half of the
variation in transport costs.
In a competitive environment where transportation is a service
that can be bided on, transport costs are influenced by the
respective rates of transport companies, the portion of the
transport costs charged to users.
Transport costs have significant impacts on the structure of
economic activities as well as on international trade.
Empirical evidence underlines that raising transport costs by 10%
reduces trade volumes by more than 20% and that the general
quality of transport infrastructure can account for half of the
variation in transport costs.
In a competitive environment where transportation is a service
that can be bided on, transport costs are influenced by the
respective rates of transport companies, the portion of the
transport costs charged to users.
India’s inherent un-competitiveness.
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Mohan Guruswamy
48. India enjoys close ethnic, historical, cultural,
traditional and political relationships with
the Central Asian nations.
India is now geographically isolated from
Central Asia.
India has few relatively economic linkages
with Central Asia.
Central Asia presents a very small economic
opportunity for India.
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