Indian Prime Minister, Narendera Modi has successfully
wooed our Asian economic giants to invest in India. During his Japan visit a
fortnight back, Japan committed an investment of 35 billion USD over a period
of five years. If the third largest economy in the world can commit such an
amount, then how can a head of the second largest economy of the world, and one
of the most powerful persons on earth not commit more than the Japanese
investment? It has been revealed by the media that President Xi Jinping, would
be leading an extremely powerful business delegation to India between 17th
and 19th instant and sign business deals worth billions of dollars.
The Chinese prospective investment over a period of five years has been
estimated at over 100 billion dollars and even more. Is the foreign investment
alone the answer?
Can we overcome red tape?
Foreign investment alone is not the answer. Forget
about the Chinese business operations in India, which has been held hostage by
our ‘security’ ghost; many global investors including Honda’s global Chairman
Fumihiko Ike and British telecom giant Vodafone has expressed that doing
business in India is difficult. First and foremost, while Modi offering the
investor ‘red carpet in place of red tape’ is a welcome gesture, however, the
reality is different on ground. It would be a herculean task to eradicate the
red tape, which according to Akhil Gupta, the author of Red Tape (2012) is
a structural violence. Gupta calculates that poverty results in over 2 million
excess deaths per year in India. The inclusion of the poor in social
development through various welfare and poverty alleviation schemes systematically
produces arbitrary outcomes. Channelizing the files, reports, orders, and
complains through clerical levels to the highest levels has bred corruption,
delays, inefficiency, status quoits etc. approaches. If the people have to
receive public services, these have increasingly become ‘paid’ as a result of
rampant corruption. And imagine the plight of 400 million poor people – one
third of the population according to the World Bank that earns less than $ 1.25
per day paying for such services! If it is not the structural violence then
what is it?
We sincerely need to take a leaf out of the Chinese
experience in effectively managing the large population. Here, it has got
nothing to do with the forced ‘one child’ family planning, rather the way they
have benefitted from the globalisation. China, perhaps is the largest country
in the world that has benefitted its people in the shortest ever time whether
it is the question of alleviating over 300 million people from poverty in a
span of 30 years or the neck breaking speed of its modernisation. In present
day China, eradication of poverty is not the question; the question is how to
increase the present income levels of the peasants. Poverty eradication has
remained a question in India ever since we attained our independence.
Can we reap the population dividend?
Secondly, India takes pride in having the largest
young population in the world. According to 2011 census, nearly 50% of the
population in India is under 24% and about 64% is of working age. Around 12
million young Indians are entering the job market every month! These very young
voters, 150 million aged between 18 and 24 were instrumental in effecting a
Modi wave in 2014 general elections. In contrast, only 10% of the Indian work
force has completed secondary education!
We have been talking that India’s demographic dividend is at its peak!
According to Dipankar Gupta (Times of India September 14, 2014) there
are 14 million students who leave school annually in India; however, the
capacity of vocational institutes in India can only cater only to 3% of such
people. So much so, only 18% of those who have passed
out of these vocational schools have regular jobs, rest have no jobs! It has
been projected that within a decade, we would require 103 million skilled
workers in the infrastructure sector alone, about 35 million in the automobile
industry and 33 million in construction. Are we building such capacities?
Prime
Minister Modi has rightly identified ‘skill development’ as a major policy of
his government. It is the need of the hour that we build capacities and learn
from the Chinese and Korean experience. In the 1960s China was producing Hongqi
(Red Banner) cars and Jiefang (Liberation) trucks, so did India
(Hindustan Motors), China could built its 10,000 ton ship at the same time, but
Korea build nothing! Presently Korean cars are competing with the western and
Japanese cars all over the world, especially in India and China, 35% of world’s
diesel ship engines are now produced in Korea! China has caught up with the advanced
countries as far as skill development is concerned. It is owing to these
capacities and skills that China turned itself into the ‘factory of the world’.
If India dreams to reap the population dividend, it cannot afford to sit idle!
Can
we build capacities?
Thirdly,
hope we are thinking of building the capacities in the infrastructure sector
too, for these are crucial for attracting investment one the one hand and
facilitating exports on the other. China boasts of 86,000 kilometers, of which
over 11000 kilometers are high-speed. Comparing China, India has 64,000
kilometers, mostly built by the British, and there are no high speed rails. If
the reports are to be believed, India added a meager 11,000 kilometer in 67
years comparing China’s 14,000 in recent five years! In Tibet alone, China
plans to build 1,300 kilometers of rail lines and 110, 000 kilometers of roads
by 2020. It just completed Lhasa-Shigatse line which is 251 kilometers and less
than 100 kilometers from Indian borders. Our border provinces such as
Uttrakhand, Jammu and Kashmir, Himachal and northeastern states do not even
have good roads forget about railways! Since these states do not have much
representation in the parliament, the infrastructural development has been held
hostage to seat calculations.
India’s
roadways that according to 2013 figure stood at 4, 689,842 kilometers may not
look bad comparing China’s 4, 106, 337 kilometers. However, the condition of
our roads is extremely poor and expressways are invisible. Most of the freight
in India is dependent on the truckers, who in turn are subjected to dual
taxation and harassed at various transit points across the states. In contrast,
China boasts of having 104,500 kilometers of expressways, largest in the world.
Capacity
of India’s waterways and port system is also limited. It just has 14,500
kilometers of waterways comparing China’s 110,000 kilometer strong navigable
waterway! India’s largest deep water port, Jawaharlal Nehru Port also known as Nhava Sheva, is the largest container port with a capacity of 4,307,622; China’s largest port Shanghai has the capacity
of 31,739,000, almost 7.5 times bigger than the Indian port. Besides, other
ports such as Qingdao, Guangzhou, Shenzhen and Tianjin are also 4 to 6 times bigger
than our largest port.
Can we integrate
our economy with neighboring countries?
China’s
aggressive economic engagement with the ASEAN has greatly benefitted its adjoining
regions of Yunnan and Guangxi. Yunnan has a border line of 4061 kilometers, bordering
on Vietnam, Laos, Burma, Southeast Asia and South Asia. A Free Trade Area (FTA)
between China and the ASEAN has prompted China to invest heavily in Yunnan and
Guangxi and connect these provinces with the ASEAN and turn these into
logistical and trade centers. A 179.2-kilometer expressway between Nanning, the
capital city of Guangxi and Youyiguan (Friendship Pass) connected China
with Hanoi in 2006. There are over hundred flight routes originating from
Yunnan to ASEAN and South Asian cities. A network of railways, highways and
waterways to Vietnam is already in place, and construction of Kunming-Bangkok
highway and Kunming-Singapore railway is under way. Do we have the same resolve?
Why China is important to India?
If Modi’s top 10
priorities for India, pronounced soon after becoming the Prime Minister is any
pointer, then definitely China is the country we need to focus on. India could
universalize mobile phone connectivity in India with such an affordable rates is
not because of Nokia and Ericson, but because of the tough competition these
companies received from Chinese telecom giants Huawei and ZTE. Similarly, if
India would like to build state of the art high speed railways and expressways,
it could be built in tandem with China with latter’s expertise, capital and
competitive prices not with the exorbitantly high western technology. Prime
Minister Modi perhaps understands it better than any other political leaders in
India, for he has been to China and Taiwan many times. In 2011 while addressing
a crowd of 200 Chinese investors at a Beijing five-star
hotel, he told them that Gujarat offered them ‘governance, transparency and
stability. If Gujarat has attracted much of
the 900 million dollars of Chinese investment in India, India could attract
billions from China in infrastructural development and manufacturing sector.
Finally,
greater economic and political engagement between India and China demands that constructive and
cooperative partnership transcends bilateral and regional configurations and
has global implications. As the 21st century is tipped to be an
Asian Century, and India and China twin engines of Asian and world economic
growth, it is imperative for both to realize the dream of a resurgent Asia
together. China has been vigorously following this dream for the last 30 years,
it is time for India to set its house in order as Modi rightly says and be a
strong and equal partner in the realization of this dream. Initiatives such as
BCIM, Silk Route, Sea Silk Route that link the countries and regions by a
network of roads, railways and markets are welcome steps. Active participation
from India in these projects including the BRICS Development Bank and
Infrastructure Development Bank will render the ‘string of pearls’ and ‘China’s
containment of India’ etc. theories meaningless, and prepare India for a bigger
role not only in the bilateral and regional economic development, but also in
the security architecture of the world. Will Modi-Xi meet prove a game changer,
we will have to wait and see!
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