economics project by ramandeep malhotra

8/8/2019 ECOnomics ProJECT by Ramandeep Malhotra

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India ,Pakistan and China are nieghbouring countries .

All the 3 countries have treaded the path of growth and development for nearly 60 years.

But the successes and failures are diverse and there have been differences in thestrategies of growth pursued by the 3 countries .

The following presentation focuses on a set of indicators of comparativedevelopment

GDP Growth

Structure of growth in terms of sectoral share in output and employment

Demographic parameters of change

Parameters of human development



The recent resurgence of GDP growth in India after aprolonged period of stagnation in its growth rate of around 3.5percent, often referred as the Hindu growth rate, has raisedconsiderable hopes in India that it may soon approach, if notoutstrip, Chinese growth.

Pakistan, whose growth performance was substantially betterthan India's GDP growth rate (although much less so in termsof per capita income growth) before the 1990s, has beenrecording a much lower growth rate in some years, even adecline in per capita incomes in the 1990s which some

government analysts have termed a lost decade, has undergonea series of adjustment and stabilization measures and has forthe first time this year achieved a growth rate of around 5percent.



Moreover, Pakistan's better economic performance vis-a-vis India isalso counterbalanced by a generally much poorer performance insocial and human development record, especially in terms of poverty alleviation.

Both countries suffer significantly on that score in comparison withChina. The trajectories of growth of the three countries are markedly

different. Pakistan's growth has mainly been in spurts, rather thanfollowing a steady path.

The Indian GDP per capita growth rate, though low, was fairly steady around 3 per cent, with the exception of 1970s when it fell below 1 percent. The Chinese per capita growth rate, which was already averaging

4 per cent in the 1970s, rose to 7.8 per cent in 1980s and 9.0 per cent%in the 1990s.

China has thus consistently stayed in a higher growth trajectory, wellabove those of either India or Pakistan.



The jettisoning of Mao's communism in China and Nehru's socialism (and its alter egotheMahalanobis model) are credited with the faster pace of growth in recent years

In fact, however, without the incubating effect of these periods, neither of these economies would

have been in a position to perform as well as they are doing now.



This is much more valid in the case of China, as Amartya Sen, the Nobel laureatepoints out: "China's relative advantage over India is a product of its pre-reform (pre1979) groundwork rather than its post-reform redirection."

Pakistan's predicament is far more serious than of India's, as it has failed to pay attention to the basic fundamentals of growth in the past five decades and hasonly sporadically responded to the challenges facing it.

Its greater dependence on external flows has greatly diminished its domesticcapacity to deal with its domestic problems. Its hare-like obsession with fastergrowth and leapfrogging has ironically resulted in its recent lack lustreperformance.

It needs a sustained period of attention and diversion of resources to sectors which have been neglected in the past and a greater effort to tax those who have

benefited from the rent-seeking policies of the past.

It also needs to pay heed to the unfinished agenda of development, especially landreforms and mobilization of domestic savings, as well as the nagging andunresolved issue of civilian supremacy over defence and security issues



South Asia's developmental past has not been entirely bleak, despite the many

opportunities missed and squandered along the way, in the past half-century.

In the wake of the success of the SAARC summit in Islamabad and the initiation of an Indo-

Pakistan dialogue on its sidelines, there is considerable optimism in the region that the

South Asian tortoise will finally catch-up with, if not outdistance, the East Asian hare in the

foreseeable future.

At least the air of resignation on the fate of such a race which prevailed a decade ago has

been lifted and some light at the end of the tunnel is becoming visible even to the cynic.

What is even more significant is that the two major South Asian countries of the region now

seem to be inclined to travel on a parallel path rather than on a collision course.

However, the journey for both of them on the development path ahead is going to be long

and tortuous, although it could become considerably less strenuous once they begin torebuild the bilateral and multilateral avenues of peaceful interdependence.

Both India and Pakistan badly need a peace dividend from a diminution in the level of

military confrontation between them. This would help them in their ambitions to level up

with China's growth.

economics project by ramandeep malhotra

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