South Asian Laggard

BY VIVIENNE KHOO
Sep 01, 2010
*Special to asia!

London School of Economics professor Lord Meghnad Desai discusses India’s slow growth.

 

In a 2000 interview Lord Desai gave to PBS, he explained why India did not experience a boom even though it started level with countries like Taiwan and South Korea. He said then, “India was the seventh largest industrial country in terms of total volume output at independence. People don't remember this. ... One of the largest entrepreneurial classes [was] already used to modern manufacturing.

“But the ambition to create a self-sufficient economy, independent of foreign capital, independent of foreign technology led to very low growth rate [in comparison with] countries which came later --Taiwan and South Korea, who [were] more or less as poor as India in the 1950s. Korea had also been ruined by the war, so in 1960 India and Korea were at the same level of income. Within the next 40 years, Korea became 25 times richer than India not by avoiding a state role in the economy, but by having a smart state, a state which gave its capitalists chances to make profit, chances to make profit out of efficiency, out of exporting.

“India suspected capitalists, it suspected the profit motive, and it tried to nail it down, block it, and thought that all growth would come from government planning. These contrasting models basically showed that by the late 1980s Korea was a miracle economy and India was a stagnant, slow-trot economy. That was very telling. Here was an Asian country, not a Western country, an Asian country, recently independent, [that] had a colonial experience, had a war experience, and even they could beat India at the game of growth. That really was very telling for Indian intellectuals.”

These comments shed light on what Lord Desai said about India during his lecture "The Re-emergence of Asia: The West and Asia in the Post-Vasco Da Gama Era" which he gave this August. A report on this can be read in the related story below.

 

Related Story:

Asian Tiger Economies Beware

 

vivienne khooOnce a lifestyle editor at a website, a newspaper journalist and a food editor, Vivienne Khoo writes about luxury hotels, food and travel whenever she is not sub-editing. The perfume industry and essential oils are her pet topics at the moment.

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