Indian devp durable and flexible than China

By Staff
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Google Oneindia News

New Delhi, July 30: Lord Meghnad Desai, Professor Emeritus London School of Economics, today said that India and China were confronted with the formidable problem of poverty amidst plenty and felt that the Bretton Woods institutions would need reform in view of the growing political and economic might of the two neigbouring Asian nations.

Delivering a lecture here, Lord Desai said both the United States and the European Union would be compelled to redraw the world's economic institutions, such as the World Bank and the IMF, for several reasons, but most of all because of the emergence of China and India as giant and the fastest growing economies.

''Emergence of the two Asian giants is bound to impact on the balance of power in the world and hence the politics of globalisation would require change of rules" governing the two Bretton Woods institutions - the World Bank and IMF.

The well-known economists was speaking on 'Emergence of India and China as Major Economic Powers'.

Lord Desai said notwithstanding the scorching pace of economic growth, both India and China are confronted with the problem of phenomenally large populations being poor and deprived and are sometimes haunted by the spectre of civil unrest.

Lord Desai spoke of the strengths and weaknesses of the two neighbouring economies, but was of the view that Indian economy offered the advantage of flexiblity, sustainablity and durability.

In this regard, he compared China to a vase, which was strong but brittle.

India, on other hand, was like a mud pie which changes shape but cannot be destroyed.

The economist noted that China had fuelled world growth in the last 15 years and now global equations would have to be re-written in view of the new found realities-- the rapid growth of India and China.

Lord Desai said China was firmly on the path of capitalistic growth, but remarked that capitalism develops in crisis but crashes when things are smooth.

He was of the opinion that the march of the capitalisist movement in China will somewhere crash, but said it was difficult to state when this could happen.

Lord Desai said it was after 400 years that China and India were marching towards cornering the share of the world's economic cake in proportion to their populations. This was the case in 1750 and would be repeated in 2025, given their current pace of growth rate. India, Lord Desai said, would soon get into the leage of double-digit growth rate and will be able to sustain it for at least for five years.

Lord Desai shifted his canvas to the Indo-US civil nuclear deal, comparing it to the purchase of an insurance policy for mutual benefit.

But warned that neither the United States nor India can afford to have an antagonistic relationship with China.

Talking about political reforms in China, Lord Desai said, it was not necessary for China to transit to a western-style democracy, despite widespread domestic unrest.

He said Communists in China will never contest elections, but could hold veto over who will do so. They would thus be able to control the levers of politics.

Expressing a controversial opinion, Lord Desai said India was using its capital more efficiently than China, Lord Desai, however, did not endorse the view that India would be able to reap the benefits by way of a demographic dividend, despite India's bulge of the youth population and China's huge ageing population.

He said India needs to educate and train its young people to enable them to become competitive in the world economy as well as be useful to the domestic economy.

He, however, lamented the poor quality of education in India, describing it as "a big scandal"."India does not have even a single university of world's standard.'' India, Lord Desai said, needs to be worried about the political problems on its boundaries.

He regretted that while South Asia had moved from being united to being divided now, Europe, on the other hand, had moved from being divided to being unified.

Describing himself as a great admirer of the role being played by the World Trade Organisation(WTO), Lord Desai described it as the "most equitable world body" with each member-state having a vote.

But, he cautioned that tough battles lie ahead relating to the Doha Development Round. Yet, it was examplary the manner in which India, China and Brazil were acting in concert in the world trade body, championing the cause of the developing countries. Lord Desai said he was not overtly worried over the consequences of economic growth on the value system of a nation, stating that value systems change with change in an economic paradigm. This has always been the story-- the world over and since time immemorial.

UNI

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