“The problem is not with knowing what’s to be done a lot to do it. Until we do sensible economic policies, half-hearted globalization will continue to field half-baked result, warms…” – Shankar Acharya
image source: veteransnewsnow.com/wp-content/uploads/2013/05/Globalization.jpg
As with many other topics we Indian have done a lot more talking on globalization than action. You wouldn’t think so from the fuss that’s made of ‘WTO’ detects and IMF policies. But the facts are pretty clear. Let’s take a look at them and compare to the growing economic super power to our north, china, picking china as a comparator is obvious for many reasons. These are the only two countries which will have a billion plus population throughout the 21st century (nobody else will be close. A growing number of analyses have linked the fate of globalization to its impact on these two populous giants. Most importantly, China has (for the last quarter century) decisively embraced global economic integration as a crucial plant of her dash to super power status, while we have hummed and hawed. Yes, there was a brief interlude 1991-97. When we also seemed to clearly signal a similar desire to engage the world economy. But subsequent events suggest that we soon relapsed to dithering and ‘Chalta hai’
Four decades ago, in 1970, both China and India were rather closed economics with the share of exports (goods and services) accounting for less than 4% of GDP, compared to 12% of developing countries as a whole interestingly, India’s share at 3.5% was almost double that of China’s at 1.8%. But that was back then. When China opened up her economy in the late seventies, she did so with remarkable strategy decisiveness and determination. But 1982, the merchandise exports at $21 billion were already more than double India’s at about $9 billion. By 1990 the gap had widened as China’s goods exports almost tripled to $62 billion while India’s increased sedately to $18 billion. But China’s truly astonishing export surge has come in the nineties with merchandise exports touching $ 250 billion in 2000, compared to India’s $ 43 billion. As players in international trade, the two countries are now in difference leagues.
ADVERTISEMENTS:
Through her hugely successful domestic and international polices china win growing import shares in the major markets of the world. Professor T.N. Srinivasan of Yale University has compiled date for eight 3-digit SITC product categories, including toys, sporting, goods, textiles garments, foot wear, telecom equipment and accessories plastic articles and certain categories of electrical machinery. By this estimate these product categories account for about half of India’s manufactured exports and almost 40% of her total merchandise exports. The difference in evolving market shares of China and India in these selected product imports into EEC and North American is striking. Between 1990 and 2000 India’s share in EEC imports actually declined from a meager 0.8% to 0.7% at time when China expanded her share from 3.4% to 9.2%! It was the same story in the North American market. India’s shares estimated at a low 10% over the decade, while China grew her share from 11.8 to 25.3%. No wonder western shopping malls are full of made in China products, while you have to search quite hard to find goods of Indian provenance.