The Myth of the New India

theodp writes "An NYT op-ed on The Myth of the New India reports that only 1.3M Indians are participating in the so-called new economy of BPO, leaving 400M have-nots without a piece of the pie. Despite recent gains, nearly 380M Indians still live on less $1 a day, setting the stage for rural and urban conflict." From the article: "No labor-intensive manufacturing boom of the kind that powered the economic growth of almost every developed and developing country in the world has yet occurred in India. Unlike China, India still imports more than it exports. This means that as 70 million more people enter the work force in the next five years, most of them without the skills required for the new economy, unemployment and inequality could provoke even more social instability than they have already."

Comments

Cultural Problems

[Unlikely_Hero]

The problems go beyong economic to cultural. The problems stem from thousand years old caste systems, people being born into a status and being unable to leave, thereby restricting upward mobility in the most powerful sense. For any nation to really rise to what it can potentially be (The US included) we need to abandon our primitive thought processes (and we all have them, every country on this flying rock)
Note: This isn't racist, or culturist, or any thing else -ist. And if you think it is, I no longer care.

Re:Cultural Problems

[Ohreally_factor]

I think your posts pretty much shows that there is a functioning caste system in India, even if it has been greatly overhauled to help out the "lower" castes.

I mean, look at the language you use. "Backward caste" "Lower caste". I'm not saying that India hasn't made great strides; obviously it has. But just looking at your post gives one a sense of how deeply ingrained it is culturally.

Similar arguments can be made about race in the U.S. Many deny that racism exists, but from an outsider's point of view (as I am an outsider observing India), clearly there are major remnants of institutionalized racism in the US, despite the great strides that have been made.

India is changing in the face of thousands of years of culture. Clearly, the change is not going to happen overnight. As in the US, there are forces of resistance to such change, so those who want the culture to change must continue to work for it. The first step is to look within yourself and be aware of those old attitudes you might hold. (It's easier for me to advise you to do this than it is for me to do it myself. However, I think that to bring about the world we both want to live in, it's necessary for both of us to do this.)

Re:Cultural Problems

[heinousjay]

I am proud of belonging to the oldest surviving line of philosophers, mystics and poets. Does that make me a casteist?

Yes, because you're evincing pride in achievements you haven't made, by people you had no way of influencing. You've done nothing to deserve the pride you feel. It's this innate and undeserved feeling of superiority that makes you a casteist.

First let me say

[rolfwind]

that middle class is very important to any economy. Costco's CEO, who earns 200K a year, gets this. Wal-mart does not.

1.3M may not be much, but it is more than before, and these people spend money and so that money reaches more people than just them.

Unlike China, India still imports more than it exports.

http://www.cia.gov/cia/publications/factbook/geos/ us.html

USA
Exports:
$927.5 billion f.o.b. (2005 est.)

Imports:
$1.727 trillion f.o.b. (2005 est.)

From:

Re:First let me say

[arivanov]

Correct.

This is normal for a post-industrialised service economy. You import more than you export and your primary growth is in the services industry.

The important words here are "post-industrialiased". US was an agricultural economy all the way up to WW2. It became an industrial power as a result of WW2 and it is now moving towards a services driven economy. Most of Europe is quite similar.

India is trying to become post-industrialiased society before going through the industrialisation stage. That does not work. Every single attempt to jump-start a civilisation across an "age" in human history has finished with a failure. Either a social revolt or a regression back into the old state once the "jump the age" financial drip feed is withdrawn.

This is one thing Chinese got right. They are going for an industrialiased society first. Many other reasons aside, industrialiased society is also much better at equalising the overall living standard across a country. Service oriented society is going in the absolutely opposite direction by creating new living standards drifts and divides. Just compare the living standard differences across England at the height of industrialiasation and now. Now they are actually much higher.

And I agree with many posters. India is heading for social trouble full steam ahead. There will be no USSR to supply "assistance" this time, but things like this happen sooner or later without external assistance. And a social revolt in a nuclear power is not a scenario I would like to think of. Plenty of other depressive things around.

"Superpower" is over-rated...

[mi]

while China will be a superpower by the end of this century, at that time India will still be a third world country by far

USSR was a "superpower" for decades. Life in it sucked big time. Living in Italy, the UK, France, or even India, would've been much better — if only for the possibility to leave, if you wanted.

It's True

[jarhead55]

Being an Indian American and having been to the region often I agree with this article. The many wealthy which reside mostly in the cities are extremely snobby and will go to great lengths to show off their wealth all alongside with children who beg in the streets struggling to find clothes and food to simply stay alive (oh but then i'd be getting into the whole thing about the rich not caring about the poor yada yada yada...its still sickening). The Chinese have dealt with the issue of painful hunger and the Indian government must tackle this issue as well. I do believe that it will be a rough route to go even if the government goes through with such a plan simply because of the diversity that exists in India. Despite the general pride that the country shows, at some level it is undeniable that there is fragmentation with the many cultures that India encapsulates. Some parts of the country, as stated in the article, have also elected communist governments which undoubtedly impede progress as they threated to break a very delicate coalition every time their demands are not met. I believe progress will be slow, but there will be progress as a new highway system that is sweeping the nation will bring economic opportunities to the regions which are not so "software proficient." At least there will be a shiny new road, one that is not made of cheap construction substitutes, to economic opportunity.

Ya gotta start somewhere

[maelstrom]

You can't take hundreds of millions of people from a state of impoverishment to the land of overflowing McDonalds (and bellies) overnight.

Indian way vs American way

[ma_sivakumar]

American century was made not by the people of USA imitating any other country but defining their own principles and working on it. Every other nation wants to become what USA is today - rich, powerful and dictating to the world.

If that is the way New India is going to emerge, it is not going to be. We have a saying, a cat should not brand itself to become a leoperd. India can not mindlessly follow the American success story and carry all the Indians along. We need a unique Indian way which is not capitalist, not communist, not socialist but Indian.

We have a rich tradition and had tall leaders leading us. We try to substitute everything with western values as in China. There is a better way. India can show to the world how to solve the problems of consumption driven economies of the west. We can evolve systems, practices to build a new type of economic development and social order. That would be the contribution of India to the world, not trying to be another China or USA.

Re:So in other words

[Duhavid]

You are forgetting something.

The executives making the decisions are making
lots on inflated stock prices.

See? It is OK. And those executives will need
lots of servants around the house, and those cant
be outsourced.

Never mind in 10 or 20 years, the companies in the
countries being outsourced to will have all the
expertise they need, and the American partners will
be told to pound sand. And the weakened American
middle class will not have what it take to float
things along.

Re:Scaremongering

[Harmonious Botch]

"It has always been the poor. Usually rallied by educated youth."

Sorry, but it is not a matter of education or age that makes leaders. It is class and belief that make the difference. In almost all successful revolutions the leaders have been middle class or higher up the social scale, even up to the #2 guy in the country. They are people who have spare time and money.
Once you have those, leading a revolution requires two beliefs: 1) that you have the ability/skills to do the job better than the guy at the top, and 2) that you are likely to lose what you have if you do nothing.

The poor often are the victims of manipulation by both sides, and are usually tricked into doing something that is really not in their own long-term interests.

Educated youth usually just succeed in getting a bunch of people killed.

Re:Predictable Responses

[mano_k]

We saved you in World War II, so go to hell! If it weren't for us, you'd all be speaking German now!

But I *am* speaking german?!?

The author is right, and pessimistic.

[univgeek]

The facts that the author of the article presents are absolutely true. There can be no question that life in India is miserable for a vast number of people, in cities, towns, and villages. Communal and caste-based tensions do exist in many places.

There is also no easy way out. Every $ or Rs. that is spent in India helps. Every cent of Investment or export by India helps. Much of it trickles down to the poorest in the cities and villages.

What's needed is an increase in literacy and increase in jobs. Neither of these are short-term, easily achievable goals.

Manufacturing must increase - providing opportunities to semi-skilled workers. Efficiency must increase, allowing for cheaper goods and trickling down to more profits for the millions of small businesses. Farm efficiencies must increase - through better processes or crops. Farmers must get a bigger share of the final price.

While all these are very important issues, the sheer size of India prevents easy action on any of them. We will get out of this mess, it will take time and money.

The author seems to know a lot of Indians who have settled abroad. I know a lot of Indians who've come back or are planning to do so very soon. They're bringing investment with them, they're bringing the contacts and business knowledge that will help them serve customers in the US or Europe. And they will each bring jobs for a few more people.

If the only way we can earn the money is through taking the high-tech jobs of Western countries we're not going to say no. If we can earn money by designing and launching satellites for small developing countries, we're going to do that too. If we can earn money by taking every service job in the US or Europe that's up for grabs, well, we're going to do that too.

India may become the back-office for the rest of the world, we'll still have people left to do other things. India may end up doing most of the unwanted service jobs for the rest of the world. India may do very high-technology services for other countries. That's fine too, because a billion people need a billion different things to do.

The West has drained an incredible amount of wealth from India/China/Africa/America and used it to kick-start their own economies. Two hundred years of plundering cannot be undone in a few dozen years. We're on our way back up, and we'll get there.

All of us have not fallen to the myth of Western superiority in economics due to any inherent advantages. We know what the Western economies owe the rest of world. We don't have the option of plundering other countries' natural resources or enslaving millions of Africans, Indians or Chinese people. We have to get out of this hole with only our own resources. And if it's going to take a century, then we're going to take a century. You can either help us, or hinder us.

Re:English?

[net_bh]

Your statements are incorrect at so many levels that I don't even know where to begin. Let's try though:

Official National Language: Hindi Other National Languages: 25 Religions: Everything religion ever practised on Earth because even a minority here is in millions. Ofcourse Hinduism is the dominant religion.

http://en.wikipedia.org/wiki/List_of_national_lang uages_of_India

English is a language used only in cities and in some parts of the government. To my European colleagues I explain it thus: Think of the EU as a single country with all your languages, cultures, religions(though they are all based on Christianity), etc. Now mulptiply that problem by 100 and the population by 9 or 10 and that is India.

And its almost funny when you say that a nation with over 5000 years of _written_ history would be eager as a puppy to 'absorb' a 300 year old country's culture and stored-up 'ideas'. Sure, the US media has managed to reach global audiences and create a homogeneous MTV generation. And some of that can be seen in Indian cities. But that is probably India has assimilated foreign influences over the millenia, not just by copying them, but by choosing what they like in them. That is the only way to survive as a people if you don't want revolution every few hundred years. But the western world may disagree...

West chooses dictatorship over democracy

[Anonymous Bullard]

India is a democratic nation where its citizens enjoy certain unalienable human rights. Its people have full rights to form labour unions. Its political parties must not only appeal to the electorate but they also need to compromise their policies with those of other government parties, follow the rule of law and last but not least perform well enough to earn re-election.

In China the ruling Communist Party (CCP; with policies closer to a capitalist fasist party) does exactly what it wants in order for China to become the greatest power on earth under their rule. Sacrificing their people and even swallowing up neighbouring nations to reach that aim doesn't bother the CCP dictatorship one bit.

Case in point: The CCP recently finished the building of the massive Three Gorges Dam. Millions of locals had to be relocated with much if not most of the meager compensation stolen by opportunistic party officials. People attempting to report facts about it face arrest, suspicious muggings or worse.

In India far smaller dam projects face long delays or even cancellation because the locals have various means of defending their rights.

In China, business people with the right guanxi (political connections) can take over anyone's land and if the locals riot as their last recourse, the Party's paramilitary police will quickly take care of it.

If democracy and basic human rights meant anything to Western business people and Western politicians who are responsible for the "rules of engagement", the West would choose to invest in and trade with democratic developing nations (like India) instead of expansionist totalitarian regimes (like China).

As long as democracy and basic human rights are only paid superficial lip-service by the West, free countries will lag behind the dictatorships. Beside the West losing (selling out) its fundamental moral foundations, such policies will also encourage developing countries to adopt the more dictatorial forms of government since they are proving to be more beneficial in terms of foreign investment. In fact China is increasingly channeling its own foreign investments into Central Asia, Africa and South America, further undermining the West's half-assed efforts at encouraging democracy and human rights in those countries.

Democracy and human rights certainly incur some financial costs but are we surrendering it all up just to help global corporations rake in short-term profits? It wasn't the corporations who suffered when the Stalins, Hitlers, Maos and Hirohitos went on a rampage; no, it was people who took the bullets in the name of their continued freedom.

If today's people still value those ideals, then global trade could easily be harnessed as a force for good. If countries like India were to be given preferential trade treatment over expansionist dictatorships like China, it would force the Chinese people to rethink their system and policies instead of giving them an edge over free societies.