In a FB comment one of fellow FB-ians posted a frustrated note that "Can we outsource our country's governance to some other country ? Will there be takers ?" I read the blog and my view is this another blogger who has done a very basic piece of analysis and concluded that China has won the race and India will be end up second as opposed to Morgan Stanley's view that India will take lead by 2050's.
Surprisingly
the blog article is from a regular writer (meant to say not a novice) - Steven Rattner, he led the Obama administration's auto task force, was one of the executives involved with payments under scrutiny in a probe of an alleged kickback scheme at New York state's pension fund, according to a person familiar with the matter. (
Link,
Link2). But this has got nothing to do with his write-up. I wanted to spice it up and found this allegation.
Anyway I responded to the FB post that The writer misses quite a lot of context and compares a banana and a jack-fruit (!). Like an under-grad student in an analyst intern role, he has blindly compared the statistics.
So why did I say that? Steven himself starts and finishes the blog about the choice of vehicle for development between both countries, In fact to make sure he doesn't get a kick from his elitist club, has dismissed Chinese autocratic regime and puts the disclaimer that he doesn't support it(!)
India has opted for a slow moving, let us call it a "bullock cart" to reach its destination, where as China took a "Maglev". By the very fact that two countries have taken two different mechanisms to deliver its objective, direct comparison is going to give a lopsided view. But still if you insist a comparison, leveling up those mechanisms and reviewing the outputs can help. So how do you level up?
I do these all time in my work when i review IT contracts, procurement, solutions etc. The mechanism can be different, but make sure the inputs to mechanisms that are in comparison are same. i.e. if you are comparing 3 different mechanisms, one should first make sure the inputs to those 3 mechanisms are same, if these are still same and one mechanism provides better result then there is a winner (May be). I would still investigate any hidden assumptions on the winning mechanism to understand why this is different. This basic science lab stuff.
Hence I say Steven's analysis is intern stuff! He is not calling out the inputs before comparing democracy and autocracy. First the context: Did both countries start development at the same time - answer NO! They lag by 15 years. The economic policies and financial management - are the same? i.e. the amount of investment that both countries deploy. Macro-economic situations for both countries may be similar, but by the time China had started its Phase 1 development, Bangladesh war had just finished in India's context, Also China had just screwed up India and not to forget the constant nonsense from the neighbor supported by China. (In fact Chin as it grows, keeps tripping India - bad sportsmanship in a race) The resources as inputs to the mechanism is something that can be contentious i.e. how much raw materials were available to both countries, human power, Industry knowledge, etc. In my view there are lots of lagging factors between the two countries; so with that, comparing these two models are going to be incredibly difficult and most likely are to be subjective. (Same with my blog)
Steven's blog has been reviewed by another blogger - (
Fernando Salazar), this guy he adds a simple variant like education. This insight is better and informative in contrast to the bland statistics that Steven has put together. Steven calls himself an economist and God Bless USA. In any field and more particular to economics, when you review macro-models like China and India, it imperative to level the inputs and then get into a study.
But he has just put together measures like GDP, Inflation, Budget deficit etc. and these are current day figures and does not go pack to starting point to show the trace-ability. Reviewing such measures over a time period is a basic requirement to trace the nature of economic levers and this so-called economist has just used a point in time. Also, We all know how % can be misleading. To give an example using his own statistics, the 6% difference in Investment proportion between China and India is roughly $3000/person. That's a whopping big number! i.e China potentially invests $3T more than India. (assumption both countries have a ~1B people). Just as a side note - please look at this study and refer to slide 7. (
Link to India start-up report)
Now to the title of this blog, In my view Development is a mirage. I myself have used the word USA is fully developed and i am happy to recall it. Growth always is a cycle of ups and downs. The question I often ask, why do you even need to be in a race? Why shouldn't India take its own time to grow? Another analogy: One could eat well and go to gym and build his/her body alternatively could buy a protein from H&B and pump weights to build quickly - we all know the disadvantages of the artificial growth. Hence I say development is a mirage. In fact Fernando, the Techie sums-up in his blog that "India is a peculiar mix of social democracy" I like his blog better than the so-called economist Steven. I meant to quote in FB that USA has reached its 'developed' country tag and it took them almost 250 years. So the US we say today was not the same as recently as in 1930 i.e. prior to the big depression.
Sometime the path is important for a few, sometimes the results are important for a few but the path is not. I am not suggesting that India has taken a noble path, but India's vehicle of growth is a long drawn one. In such a race, the Hare will always seem to run faster to a set distance, retard for a while, then run faster again, but the Tortoise will keep moving at its own pace, and the Race never Ends!
Post-Script: The writer fails miserably in his writing style as well. First the title that India is losing the race, then ends up saying India will be second... Also he does dilly dally between India's state of affairs in legal, corruption, summary execution and confuses throughout... He is unable to identify a clear state of difference between both countries, but ends up saying India is losing, however doesn't support the autocratic Chinese regime? Sorry Steven a shoddy write-up - change the ghost-blogger, this person is damaging your reputation!
