Monday, September 20, 2010

To Be Great Indian Cities Cannot Rely on Evolution; They Need Intelligent Design

The Commonwealth Games should have been an opportunity to transform Delhi into a world-class city. But that remains only an aspiration, despite the huge amount of money already spent. The city's alphabet soup of agencies looking after land, municipal services, public works and electricity-DDA, MCD, PWD, DUAC, NDMC, DJB etc.-have often worked at cross purposes. There are allegations of corruption and evidence of incompetence.

Now turn to what China did with Shanghai-it was a display of national resolve seldom seen in India. While Manhattan's skyline evolved over more than a century, Shanghai's was transformed in a decade. It has over 4,000 skyscrapers, twice as many as New York. For fifteen years it has grown at an annual clip of over 9 per cent, faster than the mother country. Its per capita income has grown fourfold even as its population has more than doubled. It is set to emerge as a global financial and shipping centre-its Yang Shan deepwater port will be the world's number one.

Wednesday, September 15, 2010

Young Or Old: There's No Sure Formula For Gold

Today, propelled by Deng's 'one child' policy of the 1970s, China is growing old very fast. Two forces are at work. One is making people live longer, creating more old people in the population; but at the same time, the one-child norm is reducing the number of young people in the country. China's demographic tailwind could rapidly become a headwind. The growth of China's labour force could end by 2030, beginning a decline of the kind seen in today's slower western economies. The demographic bonus could vanish.

Such a rapid ageing is usually seen in mature, urbanized, industrialized economies that have grown over centuries. By the time these countries had grown old, they had also grown rich, like the US and Japan. BRICs estimates suggest that by 2030, China's best case would be a per capita income of $22,000 against the US's $61,000, Japan's $60,000 and Germany's $51,000.

Friday, September 10, 2010

A Nation of Cautious Consumers

Too many people, including Chinese leaders, concede that China invests too much but consumes too little. Today, it invests nearly half its GDP, but consumes 35 percent - the lowest share for any robust economy of comparable size. China's household income and consumption have fallen by 16 and 11 percentage points over the last decade. It's truly an unprecedented situation, unknown and unfathomed by mankind. But while it is low in percentage terms, consumer expenditure is sprinting closer to $2 trillion-nobody can sneeze at that number. India's economy suffers from no such conundrum. It's classically- almost boringly-balanced, with nearly 58 per cent of GDP getting consumed by ordinary Indians. There's no question that India's large consumption base gives the economy a far more stable foundation.

Monday, September 6, 2010

A Melon That Wants to Speak The Language of Cherries

China and India are neighbours thrown apart by history.

The British East India Company set up its first trading post at Surat on India's west coast in the early seventeenth century. Over the next century, the loose federation of tiny monarchies built by the Mughals crumbled into a fractious bunch of local 'kingdoms'. The Company seized this opportunity to wield political power and control the terms of trade with native Indians.

In China, one dynasty was ruling over the entire country, and several colonial powers vied to carve the 'single' melon on offer. India's situation was a mirror image of this: