Chasing a Dream

Based on the shaky premise that India is capable of catching up with China, this book will appeal to Indians if not the Chinese. 

This is a brave book. While it chronicles the spectacular rise of China as the world’s second largest economy, the book gets truly exciting when it hints that India can catch up with its neighbour. Given our robust entrepreneurial tradition and capital infusion, Bahl argues that to achieve this goal, we only need to have in place a committed political leadership and democracy attuned to delivery through rule of law.

This is a shaky premise. On almost every count, China is way ahead of India. Its economy is four times that of India; its exports, at more than $1 trillion, are bigger than India’s GDP.  It invests more and saves more than India, and its growth rate, despite the recent cooling of its economy, hovers at 9 per cent, above India’s headline-grabbing rate of 8.8 per cent last quarter. 

The principal merit of the book is in its ability to look at India’s economic and political challenges in the face. The author laments the fact that unlike China, whose leadership has shown the world that 350 million people can be pulled out of poverty in little over two decades, India has lacked a ‘transformational leadership’. This weakness is present at all levels of Indian politics. For example, the UPA’s NREGA pales in comparison with China’s agriculture bank, which hands out rural loans.  

The book also has an informative chapter on the geopolitical relationship of the two countries. The author points out correctly that the Chinese hold India, and especially the Indian military, in contempt. This is apparent most of all in the hardening of the Chinese position on the border issue over the last five years. India had hoped that recognising Tibet as an ‘autonomous part of China’ during former Prime Minister AB Vajpayee’s 2003 visit to Beijing would calm relations. If anything, China’s position has hardened. China has reportedly positioned troops in Gilgit last month, denied the Indian general in charge of Kashmir a visa, and worse, repeatedly stated that Arunachal Pradesh is part of its territory. Also, it has built two new nuclear plants for Pakistan. This is an aggressive and assertive China that is making South Block increasingly queasy.  

One contention that Bahl makes in favour of the long-term chance of India catching up with China’s finances comes from the so-called demographic dividend that India may reap over the next two decades. China will get old before it gets rich, while India will have the world’s largest working-age population. In reality, of course, India stares at a demographic nightmare. As argued by economist Shankar Acharya in a recent book, the large majority of this workforce that India is counting on will be under-educated, ill-fed and ill-trained. To employ these large numbers, India will need the type of industries that China dominates—low-skill, mass-employing factories of toys and socks. India, though, specialises in higher-end industrialisation, such as plants involved in the making of car parts, which needs a better-educated workforce. What is more, most of India’s growth prospects are in the services sector, where employment possibilities are fewer atill for the under-educated. 

This book is sure to be a bestseller in this country with its optimism about the Indian tiger’s chances of catching up with the dragon. But readers in China would likely await a book that weighs its chances against the US. Now, that would be a more realistic assessment of the shadow that the future casts on today’s world.

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