Deep apologies! What a great discussion today in class. I haven't been able to seriously ponder all of the good points made over the past two days, but they keep me up, and I love what insight they are bringing. So, as Zizek says, let's "think". What is India's economy? Take any approach you want. Examine whatever you will. Just think! And if you do not post tonight, so be it. Sorry for the late work. You all are doing awesome! And congratulations, seniors. We really are proud of you. (Now post!!!)
:)
JMN
4 comments:
India's economy can be examined with keeping in mind the our previous discussions of institutions. In the link posted below (also on the Facebook AP World group) the New York contrasts the economies of India and China. The article "In India, Dynamism Wrestles With Dysfunction" Jim Yardley compares India's rising economy with China's. Jim Yardley makes the claim that India's economy has been transformed into an economic powerhouse despite its weak institutions. These week institutions are caused in part because of corruption and inefficiency.
In a video we watched a while back, Acemoglu and Robinson make the claim that China's government impeded the economy. However, after reading this article I would make the claim that China's government has driven the economy by building world class infrastructure to develop itself into a manufacturing powerhouse.
India is just the opposite. The city Gurgaon, a city that didn't exist three decades ago, but today "houses some of the worlds most respected corporations in the world" we can see an urban center that has risen rapidly despite not having functioning sewers, drainage system, reliable electricity, water, public sidewalks, adequate parking, decent roads or any citywide public transportation!
So how has Gurgaon, and other cities just like it arisen, despite government dysfunction? Yardley claims it is due to the private sector that has had to develop services for the city. Example? To prevent crime Gurgaon has almost four times as many private security guards as police officers.
Maybe India's economy is showing us a new world where private institutions serve public needs, thus replacing the old and ineffective government institutions like that in India.
http://www.nytimes.com/2011/06/09/world/asia/09gurgaon.html
Gurgaon also demonstrates the growing dominance of corporations compared to state institutions in India. The story of Gurgaon, is really a tale of two cities. In the 1970s Gurgaon and the city of Faradibad, were both located outside New Delhi. The two were very different areas.. Gurgaon was an "economic wasteland" with no railway, industrial base or local government and had only rocky soil to farm on, while Faradibad had an active municipal government, fertile farmland, direct railway access to the capital, and an industrial base.
Yet the article explains how Gurgaon was an ideal location for multinational corporations to use to take advantage of India's emerging outsourcing economy. And fast-forward to the present day, Gurgaon has won out. The lack of government institutions, which are inefficient in India, was an actual advantage to Gurgaon, who was instead supported by powerful corporations like GM who outsourced to Gurgaon. While Faridabad has struggled to modernize. Maybe Gurgaon shows a bigger theme that explains the state of India's economy. The ineffective political institutions of the state impeding the rapidly expanding economy of India.
Wow, this is really a deceptively complicated question. I think there are a lot of different angles to view India's economy (and economies in general) from. Economics is kind of like looking at organisms through a microscope- you get a different picture when you zoom in and out. I'll start with the most broad and work into more narrow approaches.
What is India's role in the world economy? How much value does India have in the world relative to other countries?
India is both a major exporter and importer, largely due to its size and population. It has a large manufacturing sector that accounts for 28% of the GDP and is largely dependent on foreign companies who outsource manufacturing to India. India is also a major hub for business outsourcing, particularly in information technology. India's trade is growing at a rapid pace; however, India has one of the world's highest national debts and has faced several problems with inflation in recent years.
What role does government play in the economy?
Ian's already gone into some detail on this, but I'll touch on a few of his points and add a few of my own. India relied on a mixed economy until about 1991. This mixed economy was mostly ineffective due to widespread corruption and poor implementation. India's political institutions following national independence were highly unstable and were often not truly democratic. Whether this is a correlation or a causation is definitely debatable, but for now, I'll stand by Why Nations Fail and say that it is a causation. In 1991, free market policies were adapted, there was a strong focus on developing national infrastructure, and India's economy grew. Corruption in the political scene still exists, but since the adaption of a free market economy, many of the old problems have been alleviated but not cured.
How is the money in India distributed? How do people make money?
India faces a massive poverty problem and also suffers from poor infrastructure in many places, as Ian describes, though in recent years, things have been getting slightly better. However, there is still a huge economic disparity between rich and poor, which is also related to geography. Unemployment and child labor are also major problems. Despite this, India's per capita GDP has been steadily increasing. A majority of Indians work either in agriculture, but the number who work in services is rapidly increasing.
I think I've given a pretty brief general overview- I tried to stay away from evaluation for now, but I guess that was the point (?) We're too focused on "doing," rather than "thinking," or outlining big problems and organizing them, as Zizek said.
http://www.nytimes.com/interactive/world/asia/IndiasWay.html This is a link to a database of articles written by the NYtimes about India's rising importance in the world economy.
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