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Jewish World Review July 21, 2005 / 14 Tammuz, 5765 Look out, world: Here comes booming India By Dick Morris
http://www.JewishWorldReview.com |
China has replaced the Soviet Union in our lexicon of villains, and the age-old American preoccupation with the growth of this Asian giant has metastasized into full-fledged paranoia. But the truth is much more sanguine.
India, not China, is the coming giant of the 21st century. And India, unlike China, has no history of imperialism or inclination to global domination.
This year, for the first time, India passed China in economic growth. Its gross domestic product (GDP) shot up by more than 8 percent and now amounts to more than $3,000 per capita, on a purchasing-power-parity basis. China's GDP, about $5,000 per capita, is still larger, but not for long.
The key to China's coming failure and India's growing success is Bejing's dependence on manufacturing exports for its wealth and New Delhi's focus on its service sector. China exports more than $500 billion of products to the rest of the world, including more than $125 billion to the United States (we sell China only $25 billion each year — this is not a typo). Because of its low-wage economy and massive manpower, China can undercut the rest of the world in labor costs and produce goods for less than anybody else can.
China's impoverished workers will lose out to American and Japanese robots, and the source of its economic growth with likely wither in the coming decades.
India assured its future power by switching away from the socialist economic model in the early '90s and has moved closer to a free-market system each year since. With the fall of the state-oriented Congress Party, the government has pushed free-market economics ever more forcefully.
India's economy is firmly rooted in the service sector. Almost half of its GDP comes from services, spurred by almost $4 billion of investment by American companies. Because of its English fluency, India is in a position to tap into the growth of the U.S. and U.K. economies and to provide low-cost, high-quality services, particularly to the high-tech market. Try calling any computer help line and listen to the accent on the other end of the phone.
English will trump Chinese as the language of the global economy, and services will exceed manufacturing in the information age. India, not China, is equipped to exploit both of these developments to fuel its rapid progress. India's middle class, now numbering more than 300 million people, will develop purchasing power to sustain rapid growth from its internal market in the near future.
And India is not imperialistic. It has never focused on aggrandizement or gaining regional power. With the visit of India's prime minister to the White House, we should focus on its increasing ascendancy and celebrate the fact that we will, indeed, have to deal with an Asian giant, but it won't be China. The huge state sector that weighs down the Chinese economy, the lack of English fluency and the communist aversion to permitting free access to the flow of global information all militate against its following the Indian model.
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© 2005, Dick Morris
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Mitch Albom | |||||||||||||||||
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