Why India Trails China

A New York Times Op-Ed by Indian Nobel laureate Amartya Sen published on June 19, 2013 attempts to explain "Why India Trails China." Unfortunately the author totally misses the point as my annotated reading of the essay illustrates

CAMBRIDGE, Mass. — MODERN India is, in many ways, a success. Its claim to be the world’s largest democracy is not hollow. Its media is vibrant and free; Indians buy more newspapers every day than any other nation. (Read this article, "Police State India", by Andre Vltchek for a deconstruction of Indian democracy and its “free media.” There is very little else to be said.)

Since independence in 1947, life expectancy at birth has more than doubled, to 66 years from 32 (China: 73.6 from 43.9), and per-capita income (adjusted for inflation) has grown fivefold (300 fold in China since 1962). In recent decades, reforms pushed up the country’s once sluggish growth rate to around 8 percent per year, before it fell back a couple of percentage points over the last two years. For years, India’s economic growth rate ranked second among the world’s large economies, after China, which it has consistently trailed by at least one percentage point. (If India's growth rate has for years been nearly equal to China's it is even more of an indictment of their socio-economic and political systems that the wealth so created has done so little to alleviate the plight of so vast a number of India's poor.)

The hope that India might overtake China one day in economic growth now seems a distant one. But that comparison is not what should worry Indians most. The far greater gap between India and China is in the provision of essential public services — a failing that depresses living standards and is a persistent drag on growth. (And why is that the case? Perhaps it has to do with the divergent developmental paths India and China have taken? China is concerned with improving its peoples livelihood and cultural level. Although the coastal cities and provinces have developed more quickly the whole country has been pulled up. India by contrast has seen little development accruing to the bottom 2/3 of society.)

Inequality is high in both countries, but China has done far more than India to raise life expectancy, expand general education and secure health care for its people. India has elite schools of varying degrees of excellence for the privileged, but among all Indians 7 or older, nearly one in every five males and one in every three females are illiterate. And most schools are of low quality; less than half the children can divide 20 by 5, even after four years of schooling. (Consult the UN Human Development Index which documents the immense gap between India and China in terms of human development indicators. The failure of “Indian Democracy” and the success of China's “market socialism with Chinese characteristics” is there for all to see.)

India may be the world’s largest producer of generic medicine, but its health care system is an unregulated mess. The poor have to rely on low-quality — and sometimes exploitative — private medical care, because there isn’t enough decent public care. While China devotes 2.7 percent of its gross domestic product to government spending on health care, India allots 1.2 percent. (Read this article comparing the vital labour and social statistics of India and China, to see how far behind India is in relation to China in all social indicators.)

India’s underperformance can be traced to a failure to learn from the examples of so-called Asian economic development, in which rapid expansion of human capability is both a goal in itself and an integral element in achieving rapid growth. Japan pioneered that approach, starting after the Meiji Restoration in 1868, when it resolved to achieve a fully literate society within a few decades. As Kido Takayoshi, a leader of that reform, explained: “Our people are no different from the Americans or Europeans of today; it is all a matter of education or lack of education.” Through investments in education and health care, Japan simultaneously enhanced living standards and labor productivity — the government collaborating with the market. (Could the fact that Japan practised a form of state capitalism be part of the reason? China has openly proclaimed that it is using market mechanisms (i.e. state capitalism) to accelerate its economic rise. The question is who is utilizing these techniques and for what purpose? In Japan it was the militarists of the imperial court who wanted to expand Japan's "co-prosperity sphere" through aggression and conquest, in China "state capitalism" is employed by the Communist Party in order to allow China to peacefully rise and become a prosperous, modern country.)

Despite the catastrophe of Japan’s war years, the lessons of its development experience remained and were followed, in the postwar period, by South Korea, Taiwan, Singapore and other economies in East Asia. China, which during the Mao era made advances in land reform and basic education and health care, embarked on market reforms in the early 1980s; its huge success changed the shape of the world economy. India has paid inadequate attention to these lessons. (And why is this the case? Could the differences in the sociopolitical systems of India and China have something to do with it? Perhaps the Chinese Revolution and Socialist Construction explains the difference. The land reform, investments in basic infrastructure and industrialization, advances in education and health care were primary objectives of Mao's developmental program. Apparently not so in India. The Chinese economic reforms of the last 3 decades implemented and guided by the central government have unleashed the entrepreneurial spirit of the Chinese nation and spurred its growth. How come India with its British tutelage hasn't succeeded where China has? As regards the other "hothouse" economies of East Asia, even South Korea has a population considerably smaller than a small sized Chinese province such as Jiangsu or Anhui)

Is there a conundrum here that democratic India has done worse than China in educating its citizens and improving their health? Perhaps, but the puzzle need not be a brainteaser. Democratic participation, free expression and rule of law are largely realities in India, and still largely aspirations in China. (This is absurd. What is the use of democratic participation, free expression and rule of law if they do not improve people's livelihood? Does "democratic participation, free expression and rule of law" mean anything to the vast rural and urban masses living in abject poverty in India? And having lived and travelled in China the idea that Chinese citizens do not participate in their own governance, cannot express themselves and have no rule of law is ludicrous.) India has not had a famine since independence, while China had the largest famine in recorded history, from 1958 to 1961, when Mao’s disastrous Great Leap Forward killed some 30 million people.(Given the differences in life expectancy between India and China it could be said that India has had a perpetual famine since independence. The famine in China, over 50 years ago, is ancient history and the 30 million figure is based on the number of premature deaths above and beyond what would be expected as normal. How many excess deaths have there been in India relative to China over the last 60 years? The Indian premature death toll due to perpetual famine is probably in the hundreds of millions. Also should be mentioned is the wave of rural suicides amongst Indian farmers due to insurmountable indebtedness) Nevertheless, using democratic means to remedy endemic problems — chronic undernourishment, a disorganized medical system or dysfunctional school systems — demands sustained deliberation, political engagement, media coverage, popular pressure. In short, more democratic process, not less. (As the India economy has grown social indicators have stagnated and rest near the bottom of the scale in all recent surveys. Why should more of India's supposed "superior" democracy be expected to perform any better than it has?)+

In China, decision making takes place at the top. (This is a very simplistic statement. There are many level of governance in China and quite frequently innovations and experiments are carried out at local and provincial levels.) The country’s leaders are skeptical, if not hostile, with regard to the value of multiparty democracy, but they have been strongly committed to eliminating hunger, illiteracy and medical neglect, and that is enormously to their credit. (Multiparty democracy as a thing in and of itself has no value if it does not produce results that better the people's livelihood and cultural level. There are many other forms of democratic governance that China is utilizing, including consultative and deliberative democracy.)

There are inevitable fragilities in a nondemocratic system because mistakes are hard to correct. (China has been self-correcting its economic developmental strategy since the founding of the PRC. Many mistakes have been made, been acknowledged, analyzed and corrected. This process is still ongoing. The author even states it is India that persists in its mistakes not China.) Dissent is dangerous. (Dissent is more tolerated in China than in most other developing countries as long as the system of governance (Communist Party rule) and state authority is not challenged.) There is little recourse for victims of injustice. (The World Justice Project shows that India and China rank close to one another in most indicators except that India is characterized by more limited government and China by greater order and stability which are flip sides of the same coin. Corruption (the main source of injustice in developing countries)  as documented by the Global Corruption Barometer is significantly more severe in India than China) Edicts like the one-child policy can be very harsh. (The vast majority of Chinese recognize the necessity of that policy and there are myriad exceptions to the rule.) Still, China’s present leaders have used the basic approach of accelerating development by expanding human capability with great decisiveness and skill.

The case for combating debilitating inequality in India is not only a matter of social justice. Unlike India, China did not miss the huge lesson of Asian economic development, about the economic returns that come from bettering human lives, especially at the bottom of the socioeconomic pyramid. (The question still is, why did India miss the boat?) India’s growth and its earnings from exports have tended to depend narrowly on a few sectors, like information technology, pharmaceuticals and specialized auto parts, many of which rely on the role of highly trained personnel from the well-educated classes. (again, why?) For India to match China in its range of manufacturing capacity — its ability to produce gadgets of almost every kind, with increasing use of technology and better quality control — it needs a better-educated and healthier labour force at all levels of society. What it needs most is more knowledge and public discussion about the nature and the huge extent of inequality and its damaging consequences, including for economic growth. (The main lesson to be learned is that the Communist Party has performed an economic and developmental miracle in transforming China in a few decades from the Sick Man of Asia into an economic powerhouse, while India building on the legacy of British bourgeois parliamentary democracy has fallen far behind.)

Amartya Sen, a Nobel laureate, is a professor of economics and philosophy at Harvard. He is the author, with Jean Drèze, of “An Uncertain Glory: India and its Contradictions.”