Can India Keep Growing?

[M Ali Khan]

Can India Keep Growing?

It depends on which India you're talking about.


BY DANIEL ALTMAN | SEPTEMBER 23, 2013

Just a few years ago, it seemed the sky was the limit for India. Its budding high-tech industries were supplying software and services to countries around the world, its call centers were ubiquitous at the end of English-speakers' phone lines, and its pharmaceuticals industry was pumping out low-cost cures for hundreds of millions of customers in emerging economies. Now, skepticism about India's growth abounds. Is it justified?


India certainly doesn't lack potential. As I've written before, the main ways for a country to raise living standards are to put more capital within the reach of its workers and to adopt new technologies from abroad. India has room to do much more of both.


One way to bring workers and capital together is urbanization, which tends to track economic growth fairly closely. The graph below shows the strong relationship between urbanization and per capita incomes. Each point represents a country, and the green one is India. It's right on trend, and it has a good long way to go.

Other populous countries have trodden India's path already. Indonesia was at a similar point in the early 1990s, as was China in the late 1990s. Both continued to urbanize, with about 50 percent of their populations living in cities today. But China's per capita income is higher, and it also urbanized more quickly. There's room for plenty of variance around the trend line, so India's future is far from certain.


India, too, grew rapidly in the past two decades, but it was not the fastest mover. In 1993, its population was 26 percent urbanized; in 2012, it was 32 percent, with growth in GDP per capita, adjusted for inflation, of 5.2 percent per year. Yet during the same period, Vietnam reached 32 percent urbanization after starting at 21 percent, with growth in GDP per capita of 5.8 percent per year.


What slowed India down? After all, it was a capitalist democracy that had the good fortune to be a British (rather than a French or Belgian) colony, and British colonies have tended to do better than their counterparts during globalization. What about India was so retrograde that a supposedly communist country that was more corrupt and only joined the World Trade Organization in 2007 could perform better during the peak era of globalization?


One answer is that India lagged in human development. People need health care, education, access to opportunities, and a raft of other intangibles to realize their full potential in society and the economy. For the majority of Indians, these pillars of human development were and are still far below par.


According to the United Nations Development Program's most recent measure, India ranks 136th in the world for human development, with Vietnam 127th. When the figures are adjusted for inequality, India sits 21 places behind Vietnam. To understand why, consider that life expectancy in India was about 66 years in 2012, while in Vietnam it was over 75. Children in India can also expect a year less schooling than their Vietnamese counterparts.


Even though India's GDP per capita is similar to Vietnam's in dollar terms, the money is not making it down to the grassroots. A few elites pulling in hundreds of millions of dollars every year can boost average incomes, but their children still count as only one person each for life expectancy and schooling. By the same token, an urbanized population living in slums without decent shelter or basic services isn't necessarily a productive one. These disjoints may be at the heart of India's underperformance.


Nevertheless, there is one enormous caveat in any discussion of India's economic prospects: There are many Indias. India is made up of 35 states and territories that vary enormously along all of the axes I've mentioned so far. Generalizations about India make about as much sense as generalizations about Africa.


For example, consider India's much bemoaned corruption. In 2010, a survey by CMS India, an independent watchdog, found vast differences between Indian states in the likelihood that people would be asked for a bribe. In Andhra Pradesh, an eastern state of almost 85 million people, only 7.4 percent of respondents reported being asked for a bribe by a public official or civil servant. That's not a bad market for investment -- a relatively clean place that would rank among the top 20 countries in the world by population. By contrast, more than half the respondents in neighboring Chhattisgarh said they had been asked for a bribe, and more than three-quarters of them said they had paid.


The variation extends to human development, too. Life expectancy in Kerala, a state of 34 million people, was 74 years in 2010, but in Madhya Pradesh it was only 58. This is a stunning difference, equivalent to the gap between Romania -- a member of the European Union! -- and Djibouti.


Of course, there is a limit to these differences. State governments have little say in the regulation of foreign investment, capital controls, openness to trade, and competition. But to echo the Indian saying "yahan kuch nahi ho sakta" (essentially, "nothing works here") is to take a very narrow view of an enormous and complex country. Some things are clearly working in some parts of India, and those parts are sure to grow. The question is whether they will carry the other parts of India with them.



Daniel Altman teaches economics at New York University's Stern School of Business and is chief economist of Big Think.

http://www.foreignpolicy.com/articles/2013/09/23/can_indias_economy_keep_growing

 

[Imranpak]

A small amount of Bharatis will continue making money. A much larger population will get even poorer, yes growth will continue in every way. Next year on August 15 the new prime minister will make the same promises of poverty eradication and how Bharat is the place to be:lol:. Even a few years ago when the Bharati economy was so-called leaving everyone behind hundreds of millions were even then living in sub human conditions. For these people nothing ever did or will grow. That my friends is the truth ......nothing but the truth.

 

[M Ali Khan]

'Indian Nukes have Failed to Guarantee its Security'

India's Nuclear Weapons Folly

Zachary Keck | September 18, 2013

Several weeks ago,I penned an article for The National Interest arguing that, in hindsight, Indias decision to acquire nuclear weapons has proven to be a strategic blunder. I based this argument on the grounds that, while domestic and ideational factors are needed to explain the precise trajectory of Indias nuclear program, the original impetus for pursuing them was to address the threat that China posed to Delhi in the aftermath of the 1962 border war and Beijings nuclear test two years later.


I argued that this was a strategic miscalculation. While nuclear weapons are the strongest deterrent ever invented for strategic and existential threats, China only posed a limited threat to India, primarily along their shared border. Nuclear weapons are ill-suited to deterring low-level threats, and they have unsurprisingly not stopped China from continuing to challenge India in the border region.


On the other hand, Indias nuclear acquisition prompted Pakistan to pursue its own arsenal, negating Delhis massive conventional superiority over Islamabad. Consequently, India has found it difficult to respond to Pakistans support of proxy terrorist attacks against Delhi. In the final estimation then, Indias nuclear arsenal has done little to address the China threat, while it has weakened its position vis--vis Pakistan.


Earlier this month, Dhruva Jaishankar, an India and South Asia expert at the German Marshall Fund in Washington, DC, responded with his own piece for The National Interest ostensibly refuting my thesis. Jaishankar is a top-notch analyst (see his work inTheIndian Express,India Ink, and The Diplomat). Surprisingly, Jaishankars piece mostly provided additional examples that reinforced my argument. To be sure, that wasnt his intention. After summarizing my thesis, Jaishankar argues that this assessment stems from a fundamental misreading of Indias threat environment and strategic intent, the absence of certain key facts, and the obscuring of context.


However, to demonstrate this he begins by conceding my point that Indias nuclear weapons have failed to address Chinese threats along the border. Indeed, as he points out, Chinas claims to the border region have if anything expanded at various times since India demonstrated a nascent nuclear capability in 1974. For instance, China became more forceful in asserting its interests in 1985 as its conflict with the Soviet Union began to thaw and, subsequently, Chinese border excursions have become both more frequent and more brazen, in the context of Beijings growing conventional superiority. In fact, Delhis arsenalhas apparently failed to prevent China from seizing 640 kilometers of the border region from India.


Jaishankar next criticizes my failure to discuss Chinas nuclear assistance to Pakistan in my piece, which he characterizes as a glaring omission. While this grossly overstates the magnitude of this error, there is no denying that including a discussion of Chinas assistance to Pakistan would have enhanced the piece, given how well it illustrates Indias strategic blunder.


As declassified U.S. government documents show, Washington became concerned with Pakistan and Chinas growing security ties in the mid-to-late 1960s, during the Johnson administration. Notably, during this period the U.S. governmentwas only concerned about conventional military weaponry cooperation such as China selling Type 59 medium tanks and MIG-19 jets to Pakistan. It wasnt until themiddle to late 1970s, under the Carter administration, that U.S. officials first began expressing concern that the Chinese were assisting Pakistans nuclear program, which was confirmed in the 1980s under the Reagan administration. This timelineis consistent with independent analyses.


Whereas China and Pakistans substantial cooperation didnt extend to the nuclear realm in the late 1960s or early 1970s, it did begin in this area during the late 1970s and expanded in the 1980s and early 1990s. One reason for this was that Pakistans interest and pursuit of nuclear weapons had begun in the first half of the 1970s, and Western nations began instituting stricter export controls over nuclear technology in the late 1970s. Still, the crucial event that gave rise to Sino-Pakistani nuclear cooperation was Indias own peaceful nuclear test in 1974.

This peaceful nuclear test was particularly crucial in shaping Chinese attitudes towards assisting Pakistan in the nuclear realm.As the U.S. embassy in Beijing would reflect in a cable, The Chinese do not want to see the Pakistani program provoke a full-scale nuclear arms race with New Delhi. That being said, Beijing views the Pakistani program as primarily defensive in nature, a logical response to India's 1974 explosion of a peaceful nuclear device and perhaps a check to what the Chinese perceive to be Indian hegemonism in South Asia.


Curiously, Jaishankar argues, In fact, Pakistans acquisition of nuclear weapons with Chinese assistance proved an impetus for Indias nuclear-weapon pursuit, not the other way around. This seems odd, to the say the least, given that Indian officials were openly debating nuclear weapons in the aftermath of Chinas nuclear test in 1964, and at that time authorized what would be a decade long project that culminated in a peaceful nuclear test in 1974, years before Chinas nuclear assistance to Pakistan had even been discussed.


Next, Jaishankar takes offense to my gross oversimplication that Pakistans nuclear arsenal has frustrated Indias attempts to retaliate or respond to the numerous large-scale terrorist attacks conducted against India by Pakistani proxies. As he notes, Pakistani adventurism directed at India was not enabled by a nuclear deterrent, but in fact predated it. As proof, he cites Pakistans use of irregular forces in Kashmir immediately after independence, in 1965 and in 1989.


Admittedly, in my piece I did not spell out that Pakistan had used proxy attacks before Indias nuclear acquisition, and instead assumed that the reader would have a basic understanding of recent South Asian history. At the same time, I most certainly did not say that Pakistan hadnt used proxy forces against India before a situation of Mutual Assured Destruction developed between Delhi and Islamabad.


My argument in the piece was that before MAD gripped the subcontinent, Delhi had a viable means of retaliating against such incidents, and it indeed often utilized it. Pakistans nuclear arsenal has, thus far at least, largely eliminated Indias ability to retaliate to these attacks.


Consider that, in response to Pakistans Operation Gibraltar in Kashmir in 1965, India not only repelled the infiltrators but also invaded Pakistan. Although Indias military was in a sorry state at that time, its inherent numerical superiority allowed it to seize more than three times the amount of territory in Pakistan that Islamabad seized in India. While taking notable losses of its own, it inflicted heavy losses against a much smaller Pakistani force that could ill afford it. In any case, by the time a UN ceasefire was agreed toPakistan had jumped at the opportunity to get out of the war but India wasnt quite so keen at first the Indian military had Lahore completely encircled.


In contrast to its past record of invading Pakistan when Islamabad stirred up trouble in Kashmir, India has not mounted a military response to much more brazen attacks against it in recent years, such as the 2001 bombing of the Indian parliamentary building in Delhi, and Pakistan proxies holding the entire city of Mumbai hostage for days in 2008. Its difficult to explain this discrepancy in Indias responses by anything other than Pakistans nuclear arsenal.


Furthermore, even though India bested Pakistan in their previous engagements during the Cold War, Indias conventional superiority over Pakistan is many times greater than it was during the second half the 20[SUP]th[/SUP] century. Consider thatin 1965, Pakistans economy (including Bangladesh) was about one-fifth the size of Indias; by 2011 it was about 9 percent. Furthermore,as late as 1988, Pakistan was spending $4.21 billion (in constant 2011 USD) on defense each year, while India was spending $18.2 billion. By 2012, Pakistan was spending $6.9 billion a year on defense while India was spending nearly $50 billion. Moreover, in the 1965 war, Islamabads alliance with the U.S. meant its military forces were qualitatively superior to their Indian counterparts. Given the technology gap today, the idea of Pakistan maintaining a qualitative edge over India is laughable.


Jaishankar next tries to demonstrate that I ignored the context in which Indias nuclear decisions were made. As a corrective, Jaishankar argues that Given its adverse security environment in the early 1990s, Indias pursuit of nuclear weapons as a deterrent against Chinese and Pakistani adventurism would have appeared not only wise but necessary given the relatively low costs of a nuclear program, a multilateral order that threatened to recognize Chinas nuclear status in perpetuity while denying India entry, and an enablingdomestic political environment.


Most of these specific claims are either logically unsoundhow did an enabling domestic political environment make it strategically wise to test nuclear weapons?or just highly questionable on their merits. The bigger issue here is that, paradoxically, Jaishankar ignores the context in which Indias nuclear decisions were made.


Like many academics who seek to undermine realisms explanatory value for nuclear proliferation, Jaishankar is essentially asking us to evaluate Indias nuclear calculus solely on basis of its decision to test the nuclear weapons it already built in 1998. But this would require ignoring the thirty-five years prior to 1998, when Indian policymakers made the hundreds if not thousands of consequential decisions that are required to build nuclear weapons. In other words, it would be trying to explain the strategic rationale behind the program through a single tactical decision.


The fallacy in this approach is best demonstrated in other contexts. For example, when analyzing why Apple decided to produce a cheaper iPhone, we would learn little from examining its decision to release the phone in the third week of September. Similarly, that the Nazis invaded Russia on June 22, 1941 tells us little about why Hitler sought to conquer Russia in the first place. And Indian policymakers decision to test the Agni-V in April 2012 does not adequately explain why the missile was developed in the first place.

Indeed, Sino-Indian relations were quite good at the time of the test following Indias hosting the fourth BRICS Summit in Delhi only days earlier. Does this mean that the so-called China killer missile was not developed with China in mind?


Thus, it might have been relatively cheap to test nuclear weapons in 1998, given that they had already been built, and an enabling domestic political environment might explain the timing of the tests. But there were many domestic political environments throughout Indias decades-long pursuit of nuclear weapons which, like other nations nuclear programs, was an immensely expensive undertaking.


Failing to distinguish the tactical from the strategic, Jaishankar next proposes evaluating the success of Indias nuclear deterrent through the purpose spelled out in the nuclear doctrine Indian cobbled together in the year following its nuclear tests. Specifically, he notes that the draft document calls for using Indias new nuclear deterrent to preserve an environment of durable peace and insurance against potential risks to peace and stability.


Jaishankars use of the word preserve is telling. Essentially, Jaishankar is proposing that the barometer we use in evaluating the value India derived from its nuclear deterrent was that the situation that existed before the 1998 nuclear tests continued to exist after them. Not surprisingly, based on that standard, Jaishankar concludes that having a nuclear deterrent has been a stunning success.


Well, sort of. Jaishankar notes that since India conducted its second nuclear tests, Sino-Indian bilateral trade has skyrocketed. As Jaishankar later acknowledges and weakly tries to explain away, this logic violates one of the most basic principles of scientific inquiry; namely, that correlation doesnt equal causation. In fact, this case is a textbook example of why one should avoid equating correlation with causation. After all, why would nuclear weapons be more likely to have caused the Sino-Indo trade boom thanthe fact that both China and Indias trade openness ratios nearly doubled between the nuclear tests and 2007? Furthermore, Chinas trade volumesgrew at an annualized rate of over 18 percent between 1988 and 2008. Was Indias nuclear deterrent also behind this trade expansion?


But even if, somehow, Indias nuclear deterrent did in fact facilitate greater trade between China and India, then acquiring nuclear weapons has most certainly been a strategic blunder of the first order. Indeed, as Jaishankar mentions in passing, while Sino-Indian trade has grown substantially over the previous 15 years, this growth hasnt been completely balanced.


This seems like a considerable understatement. During 2012-2013, bilateral trade between India and China was $67.83 billion; meanwhile, Indias trade deficit was $40.77 billion. This is all the more strikingwhen one considers that during the 1990s India just as often maintained annual trade surpluses with China as vice-versa. Since international relations are organized around anarchy, states have to prioritize relative gains over absolute ones. As a result, India should hardly be celebrating its trading ties with China. Nor does it seem likely that subsidizing Chinas unbalanced economy was one of the goals Indian policymakers had in mind when deciding to build nuclear weapons.


At the same time, Jaishankar maintains that acquiring nuclear weapons improved Indias position vis--vis Pakistan. As he put it, despite regular terrorist attacks and military provocations on the border, conflict with Pakistan has remained limited since 1998. And that stability has been largely to Indias benefit, given that Delhis economic growth relative to Pakistans has widened during that time. Once again, however, Jaishankar quickly concedes that nuclear weapons again cannot be credited or blamed for these differing economic growth rates.


Still, he is right to argue that conflict with Pakistan has remained limited since 1998, and this can be attributed to their situation of mutually assured destruction. However, this is only beneficial to the extent that one places the avoidance of war above all other goals states pursueincluding national security.


As noted above, the lack of war between Pakistan and India since 1998 is almost entirely attributable to Indias restraint in responding to Pakistans provocations, which have grown far more brazen since 1998. Whereas Islamabad stirred up trouble along their shared borders when the two sides didnt have nuclear weapons, Pakistan now holds Indias largest city hostage.

Coupled with the fact that Indias conventional superiority over Pakistan is many times greater than it was during the Cold War, its hard to argue that Delhi would be less secure if it could punish the Pakistani army severely for supporting terrorist attacks on India. Indeed, by badly embarrassing Pakistans generals a couple of times in a conventional conflict, its nearly certain that they would desist supporting another attack on Indialest the national humiliation they continued bringing to bear on the Pakistani nation lead to their downfall. In either case, Indias terrorist problem from Pakistan would cease to exist.


Finally, Jaishankar points out that Americas nuclear arsenal hasnt deterred North Korean provocations against South Korea, just as Israels nuclear deterrent doesnt prevent Hamas from launching rocket attacks. Why should we hold India to a double standard, he asks?


I agree that India should be held to the same standards as every other country. Thus, if the U.S. had developed nuclear weapons to deter North Korea, or Israel developed nuclear weapons to deter Hamas, I would also concede that they had made a strategic blunder. But in reality this is not the case. The U.S., of course, first acquired nuclear weapons to bring a quick and satisfactory conclusion to WWII, and its hard to imagine Japan would have surrendered as fast and that the U.S. would have been the sole occupier of Japanese territory after the war had it not had the atomic bomb. Washington then built up its nuclear arsenal to prevent the massive Red Army from overrunning Western Europe. To this very day, they dont speak Russian in Bonn or Paris.


Similarly, Israel developed a small nuclear arsenal to offset the inherent and inescapable latent conventional superiority of its adversaries.As Ive explained elsewhere, Egypt alone is 55 times larger than Israel and, in 1967, had about eleven times its population. By this measure, Israels acquisition of a nuclear weapon was an unambiguous success. Following 1973, it has never had to fight a conventional conflict with a state-armed military that posed a potentially existential threat to Israel. And Israel today enjoys a degree of security that would have been unheard of before it acquired the bomb, Hamas occasional rocket attacks notwithstanding.

None of this can be said of India, which continues to experience the same security threats from China and Pakistan that it did before acquiring a nuclear weapon.

Indeed, as Jaishankar readily admits in relation to China, in some cases Indias security situation has actually deteriorated further. And despite his denials, this is even more true of Pakistan.


Zachary Keck is associate editor of The Diplomat. Follow him on Twitter @ZacharyKeck.



http://nationalinterest.org/commentary/indias-nuclear-weapons-folly-9095?page=show

 

[Imranpak]

Re: 'Indian Nukes have Failed to Guarantee its Security'

Indian nukes are mostly located in insurgency infested area's. In any conflict they will be in great danger possibly ending up in the hands of insurgents. Funny thing is how their media questions the safety of our nukes. Then again according to many reports India may not be a nuclear power at all:lol::lol:.

 

[BHAAI]

انڈیا کی مصال یوں ہے کہ گاؤں کا ایک چودھری بھی پیسے والا ہے تو پورا گاؤں کہتا ہے کہ ہم سب پیسے والے ہیں ، کھانے کو ایک وقت کی روٹی نہیں اور سب خود کو ٹاٹا برلا سمجھتے ہیں