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Business Commentary/Dilip Thakore

New government must try to catch up with economic superpower China

The question needs to be posed and squarely confronted: Is democracy as propagated and practised in contemporary India inimical to economic growth and development?

Consider the bare facts. China was proclaimed a republic on October 1, 1949 when India was two years old as a wholly independent nation and widely regarded as a high-potential state most likely to succeed. Unlike India, China had suffered a monstrously cruel Japanese invasion and a protracted civil war. Moreover, unlike India which had built an industrial base and had a two per cent share of world trade at the time, China was an overwhelmingly illiterate peasant economy with no industrial base worth mentioning.

Cut to half a century later. According to the World Development Report 1999-2000 of the World Bank, China's gross national product was US $ 929 billion in 1998. China's economy is more than twice the size of the Indian economy (GNP: $421 billion). China's purchasing power parity (adjusted per capita income) of $ 3,220 per annum is much higher than India’s $ 1,770. Moreover, in China, 91 per cent of the adult male population and 75 per cent of the adult female population is literate against 67 per cent of males and 39 per cent of females in India.

Regretably, half a century after both of the world’s most populous nations entered the global development race, on almost every index of national development, China is leagues ahead of India. Percentage of population below national poverty line: China six per cent, India 35 per cent; per capita commercial energy (kg of oil equivalent) use: China 902, India 476; merchandise exports (1997): China $183 billion, India $ 33 billion; foreign direct investment (1997): China $44 billion, India $3.3 billion; gross international reserves (1998): China $ 153 billion, India $ 31 billion.

Quite clearly, in the great socio-economic development race that was triggered off in the post-colonial world of the fifties, India has proved to be a pathetic loser, in spite of this nation having jump-started its north-eastern neighbour.

Western and indigenous apologists for India argue that while China’s socio-economic development performance over the past half century is distinctly superior to India’s, India has remained a functional democracy characterised by the personal and electoral freedom of the people.

On the other hand, the lay population of China has had to suffer the cruel and often whimsical dictatorship of the leaders of the Chinese Communist Party. For instance, the Chinese people had to suffer the late Chairman Mao’s ‘Great Leap Forward’ diktat when he ordered household utensils to be melted down for scrap and fed into homestead backyard furnaces to produce steel. An estimated 30 million Chinese peasants died of starvation in the countrywide famine which followed this hare-brained socio-economic engineering experiment.

Similarly, another estimated 10 million people died when the whole nation was turned inside out during the Cultural Revolution led by ill-educated Red Guards let loose upon the nation by Chairman Mao in the sixties. And recently in the eighties a pro-democracy movement in China was dramatically crushed when Chinese soldiers were let loose upon demonstrators in Tiananmen Square in Beijing.

Apologists of the lacklustre Indian socio-economic development effort of the past half century admit that India is way behind China in the global development race. However, they argue that thanks to the commitment of all major political parties in this country to the democratic system of governance, post-Independence India has never suffered a famine nor have the people suffered on anywhere near the Chinese scale because of political upheavals and whimsical dictatorship. The price of the development benefits which the Chinese people enjoy today has been very high, they say. There is considerable substance in this argument and it needs to be carefully weighed.

Yet the pathetic living conditions and lifestyles of the great majority of the people of India -- 84 per cent of the population does not have access to sanitation facilities; 150 million people do not have access to safe water; 53 per cent of children under the age of five suffer malnutrition -- also indicate that post-Independence India may well be a sham democracy and that the personal and electoral freedom its people enjoy are illusory. The fundamental prerequisite of an effective democracy is that its people should have the living conditions which enable them to enjoy the personal freedoms which the system confers upon citzens.

However, while this anti-democracy argument is not conclusive, there are many dictatorships -- particularly in Africa and Latin America -- which have fared far worse in the global development race than India. Nevertheless, it is irrefutable that post-Independence India is a flawed democracy which has conspicuously failed to attain its potential.

As a new government assumes the seals of office in New Delhi, this is a good time to reflect on the flaws of Indian democracy and apply correctives to the system so that this nation can begin to catch up with its north-eastern neighbour in the yet unfinished global socio-economic development race.

It is important to understand that the foundation and plinth of an effective democracy are an educated population and the rule of law. A persuasive case can be made that post-Independence India’s poor socio-economic development performance is rooted in the twin failure to attain universal literacy and to build an effective law and order enforcement system.

It is axiomatic that a literate population will elect educated and values-driven leaders who will legislate intelligent policies in the national interest. But the failure to universalise literacy has created a vicious circle of poor quality leaders, faculty policies and widespread poverty.

Moreover, this conspicuous failure has been compounded by the calculated neglect of the judicial system. Recently, a writ petition filed by a public spirited citizen praying for a directive from the Supreme Court to the Union government to increase the ratio of judges to citizens from the current 1: 100,000 to 1:30,000 has been admitted. One hopes that the learned judges of the apex court don’t miss this opportunity to make the justice delivery system effective.

Democracies can succeed only if their institutional foundations are strong.

Dilip Thakore

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