this article predicts the gnp of 5 major economic poers that will emerge.
The new Group of Six will be led by China with estimated gross domestic product of nearly US$45-trillion in 2050, followed by the United States at US$35-trillion and India at about US$30-trillion. Bringing up the rear with much smaller GDPs will be Japan at around US$6-trillion, followed by Brazil and Russia
http://www.nationalpost.com/financialpost/story.html?id=F12EC40E-E198-4893-B955-706359ED8537
As long as the percapita figures are improving it all good. What is this in today's $ terms?
Here is my take on the article:
1) It contains contradictions in its conclusions
2) Does not state the premises on which the results are based.
3) Is a product of a private investment firm with the creditability of an inebriated sailer!!
Therefore, i will advise against accepting it as a gospel truth.
Thank you
Can India be the next big thing?
It is said that the next century would be an Asian century. Will China or India dominate in the world economy?
Can India be the next big thing?
Is India really going to be the good news story for the next quarter century? So it would seem, if the recent Goldman Sachs report on the BRIC countries (Brazil, Russia, India and China) is to be believed.
The report has been perfectly timed, because three of those countries (the exception is Brazil) are headed for 7 per cent growth this year.
Also, optimism rides high when stock prices are soaring, and over the past year, it is India’s stock market that has under-performed! Brazilian stock prices have risen 97 per cent in dollar terms, and Russia’s by 75 per cent, compared to a measly 45 per cent in India.
The question is, is there more at work here than a happy combination of excess global liquidity and a good monsoon? Reports that have a half-century span, as the Goldman Sachs one does, need to get more than their timing right, they need to have a fundamental understanding of societies and economies.
For instance, Standard & Poor’s is believed to have said that bad loans by China’s banks total a staggering 50 per cent of gross domestic product.
Surely, then, the chickens must come home to roost – as they did in booming Japan over a decade ago when its banking system turned belly up.
What, for instance, is the risk of China becoming another Indonesia, which was seen as the safest among the South East Asian economies in 1997, long after Thailand and Malaysia were reeling, until its currency became suddenly unhinged and threw its political system into turmoil?
As for India, the macroeconomic numbers remain stubbornly reluctant to support the new boosterism. Industrial growth is tepid, exports are slowing, and the GDP growth number will climb past the 6 per cent mark only after the harvest.
The World Bank, in its annual report on India (released three months ago), warned that growth over the coming five years would not cross 5 per cent! And it is sobering to know that the US invests less in India than in Ireland, and does more trade with small Central American countries than with India. Is this really the economy that is going to blitz the world?
I have two interim hypotheses. First, if the stock market boom is feeding the new optimism, the Goldman Sachs story will keep finding new takers.
Because many stocks continue to trade at moderate price-earnings ratios even as profits continue to soar; so the prospective P:E ratios are positively modest.
For the Sensex stocks as a whole, the P:E ratio is just 17.5. In other words, there is still headroom for this rally. But since I am no stock market expert, let’s turn to the second, more important hypothesis.
This is that India is not about to become a tiger economy, which is one with a sustained GDP growth rate of more than 7 per cent (which India in fact managed in 1994-97).
There is, for instance, no reason to expect any acceleration in agricultural growth rates because nothing has changed: the investment famine of the past decade continues (stunting irrigation, for instance), there are no new technological breakthroughs and there is precious little reform.
That accounts for a quarter of GDP. For the second quarter of GDP, which is industry, there is change for the better as more companies achieve global competitiveness and as new sectors chip in; today it is automobile components, tomorrow it will be textiles, the day after it could be processed food.
In services too, which account for half of GDP, we are likely to see faster growth because of the telecom boom, new retail activity, accelerated growth of financial services, the sustained housing surge, the enormous potential in software and IT-enabled services, and the better road network.
The point is that the new momentum in industry and services is in fact enough to make India the good news story of the decade and beyond. Because the World Bank is wrong and India’s medium-term growth rate will cross the 6 per cent mark. And sustaining 6 or 6.5 per cent growth is actually good enough.
In roughly three decades of 6 per cent growth, the US transformed itself from an essentially rural economy at the time of the American civil war, into the most powerful economy in the world. So I would bet that Goldman Sachs is right, at least about India.
The pie is big enough. When people talk about the big things it has to be in perspective. Even 50 years from now, when China will be th ebiggest economyh in the world, it doesn;t mean they will be th emost inluencial or the strongest. India can take cue from that too. I read somewhere that when Chinese GDP percapita is around to what US's is now..roughly $33K/yr, US would be at $84K. So all this hooplah, needs to be taken with a grain of salt. It is good that CHina and INdia will become powers. Frankly, looking at the leadership provided by the eunuchs in Europe, a power shift is definitely needed.
As we are finding, a single point of domination is not good for the dominated or for the dominator. So by natural course of events and the power of good over bad, India will gain and perhaps China. And that wouldn't be at the cost of each other or the US. But just like the US had to face and overcome tough internal issues such as slavery, both India and China have to face and overcome theirs. The pakistan issue leading to Hindu-Muslim rifts in India and the communistic control of personal freedon in China have to be resolved.
With increasing IT dominance by India, I dont see anyone raise this question...
Who was the person behind this success?
I mean its obvious that the country has talent, but then again, other countries have talent too, why has India been so successful? I remember someone from India giving credit to Rajiv Gandhi's policies and visions for the present fruit. What do you Indians here at GS think about this?
I will even give you an exact time frame. It was seven hrs on Feb 10 1991, when P.V. Rao, Manmohan Singh, P Chidambram and Montek singh Ahluwalia did away with 44 yrs of handcuffing license Raj and reformed the countries economic direction from a socialist one to a market driven one.
In those seven hrs, these leaders gave India the hope that the previous 44 yrs had been bottled under by the ridiculous protectionist and license driven properties.
In "India Unbound" by Gurcharan Das (Ex-CEO Proctor and Gamble, India and COO Global) wrote that for him to make a new soap, It took him 8 months to get a license. It was this kind of onerous policy making and bureaucracy that kept the people and country from advancing.
[QUOTE]
*Originally posted by Matsui: *
I will even give you an exact time frame. It was seven hrs on Feb 10 1991, when P.V. Rao, Manmohan Singh, P Chidambram and Montek singh Ahluwalia did away with 44 yrs of handcuffing license Raj and reformed the countries economic direction from a socialist one to a market driven one.
In those seven hrs, these leaders gave India the hope that the previous 44 yrs had been bottled under by the ridiculous protectionist and license driven properties.
In "India Unbound" by Gurcharan Das (Ex-CEO Proctor and Gamble, India and COO Global) wrote that for him to make a new soap, It took him 8 months to get a license. It was this kind of onerous policy making and bureaucracy that kept the people and country from advancing.
[/QUOTE]
So the credit mainly goes to PV Rao (since he was the premier, amongst the three ppl you mentioned). Im surprised as you mentioned all of this was a result of a quick move on his part, and had such positive reprecussions, as I always thought all of that was due to some consistent long term policy that had only begun to bear fruit.
Actually, PV Rao had no choice. India had a balance of payment crises looming. The credit goes to Manmohan Singh.
Some critics have argued that the reforms have been a lot slower than they should have been. It is based on which development model you follow.
This was a watershed moment not a long term sustained policy.
That is great…India is doing amazingly well. I see great things in the short and long term..way to go!!! :k:
CNBC is doing a INDIA special.
http://msnbc.com/news/982745.asp?0dm=B11IB#BODY
Business in India a trend, but not new
As today’s big firms invest, they learn they aren’t the first
By Sue Herera
CNBC
Oct. 20 — The headlines tell the story: Lehman Brothers, Goldman Sachs, EDS and Microsoft have all announced recently that they were investing in India, joining the rush to take advantage of cheaper costs and educated work force. But they will find that others got their first.
http://msnbc.com/news/982766.asp?0dm=B12IB
India’s Hyderabad a high-tech haven
Ancient city is a
model of economic transformation
American companies have benefited greatly from Hyderabad’s fiscal and administrative reforms that has raised the standard of living for the city’s 5.5 million people.
By Sue Herera
CNBC
HYDERABAD, India, Oct. 20 — Just as the Internet boom was exploding in the United States in the mid-1990s, another tech epicenter was emerging 8000 miles away in Hyderabad, India.
History repeating itself ?
The flight to India
The jobs Britain stole from the Asian subcontinent 200 years ago are now being returned
George Monbiot
Tuesday October 21, 2003
The Guardian
If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don’t expect to have a job in five years’ time. Almost every large company which relies upon remote transactions is starting to dump its workers and hire a cheaper labour force overseas. All those concerned about economic justice and the distribution of wealth at home should despair. All those concerned about global justice and the distribution of wealth around the world should rejoice. As we are, by and large, the same people, we have a problem.
Britain’s industrialisation was secured by destroying the manufacturing capacity of India. In 1699, the British government banned the import of woollen cloth from Ireland, and in 1700 the import of cotton cloth (or calico) from India. Both products were forbidden because they were superior to our own. As the industrial revolution was built on the textiles industry, we could not have achieved our global economic dominance if we had let them in. Throughout the late 18th and 19th centuries, India was forced to supply raw materials to Britain’s manufacturers, but forbidden to produce competing finished products. We are rich because the Indians are poor.
Now the jobs we stole 200 years ago are returning to India. Last week the Guardian revealed that the National Rail Enquiries service is likely to move to Bangalore, in south-west India. Two days later, the HSBC bank announced that it was cutting 4,000 customer service jobs in Britain and shifting them to Asia. BT, British Airways, Lloyds TSB, Prudential, Standard Chartered, Norwich Union, Bupa, Reuters, Abbey National and Powergen have already begun to move their call centres to India. The British workers at the end of the line are approaching the end of the line.
There is a profound historical irony here. Indian workers can outcompete British workers today because Britain smashed their ability to compete in the past. Having destroyed India’s own industries, the East India Company and the colonial authorities obliged its people to speak our language, adopt our working practices and surrender their labour to multinational corporations. Workers in call centres in Germany and Holland are less vulnerable than ours, as Germany and Holland were less successful colonists, with the result that fewer people in the poor world now speak their languages.
The impact on British workers will be devastating. Service jobs of the kind now being exported were supposed to make up for the loss of employment in the manufacturing industries which disappeared overseas in the 1980s and 1990s. The government handed out grants for cybersweatshops in places whose industrial workforce had been crushed by the closure of mines, shipyards and steelworks. But the companies running the call centres appear to have been testing their systems at government expense before exporting them somewhere cheaper.
It is not hard to see why most of them have chosen India. The wages of workers in the service and technology industries there are roughly one tenth of those of workers in the same sectors over here. Standards of education are high, and almost all educated Indians speak English. While British workers will take call-centre jobs only when they have no choice, Indian workers see them as glamorous. One technical support company in Bangalore recently advertised 800 jobs. It received 87,000 applications. British call centres moving to India can choose the most charming, patient, biddable, intelligent workers the labour market has to offer.
There is nothing new about multinational corporations forcing workers in distant parts of the world to undercut each other. What is new is the extent to which the labour forces of the poor nations are also beginning to threaten the security of our middle classes. In August, the Evening Standard came across some leaked consultancy documents suggesting that at least 30,000 executive positions in Britain’s finance and insurance industries are likely to be transferred to India over the next five years. In the same month, the American consultants Forrester Research predicted that the US will lose 3.3 million white-collar jobs between now and 2015. Most of them will go to India.
Just over half of these are menial “back office” jobs, such as taking calls and typing up data. The rest belong to managers, accountants, underwriters, computer programmers, IT consultants, biotechnicians, architects, designers and corporate lawyers. For the first time in history, the professional classes of Britain and America find themselves in direct competition with the professional classes of another nation. Over the next few years, we can expect to encounter a lot less enthusiasm for free trade and globalisation in the parties and the newspapers which represent them. Free trade is fine, as long as it affects someone else’s job.
So a historical restitution appears to be taking place, as hundreds of thousands of jobs, many of them good ones, flee to the economy we ruined. Low as the wages for these positions are by comparison to our own, they are generally much higher than those offered by domestic employers. A new middle class is developing in cities previously dominated by caste. Its spending will stimulate the economy, which in turn may lead to higher wages and improved conditions of employment. The corporations, of course, will then flee to a cheaper country, but not before they have left some of their money behind. According to the consultants Nasscom and McKinsey, India - which is always short of foreign exchange - will be earning some $17bn a year from outsourced jobs by 2008.
On the other hand, the most vulnerable communities in Britain are losing the jobs which were supposed to have rescued them. Almost two-thirds of call-centre workers are women, so the disadvantaged sex will slip still further behind. As jobs become less secure, multinational corporations will be able to demand ever harsher conditions of employment in an industry which is already one of the most exploitative in Britain. At the same time, extending the practices of their colonial predecessors, they will oblige their Indian workers to mimic not only our working methods, but also our accents, our tastes and our enthusiasms, in order to persuade customers in Britain that they are talking to someone down the road. The most marketable skill in India today is the ability to abandon your identity and slip into someone else’s.
So is the flight to India a good thing or a bad thing? The only reasonable answer is both. The benefits do not cancel out the harm. They exist, and have to exist, side by side. This is the reality of the world order Britain established, and which is sustained by the heirs to the East India Company, the multinational corporations. The corporations operate only in their own interests. Sometimes these interests will coincide with those of a disadvantaged group, but only by disadvantaging another.
**For centuries, we have permitted ourselves to ignore the extent to which our welfare is dependent on the denial of other people’s. We begin to understand the implications of the system we have created only when it turns against ourselves. **
Mods - I dont think I am attempting to promote India’s image on a Pakistani forum. However If you think posting this article is a cheap propaganda then please feel free to delete this thread.
chal issi bahanay tu khush hoja bachay!
Manmohan Singh - we've had a lot of 'good' finance ministers but Manmohan Singh brought excitement to the economy. A lot of other stars lined up too.
I expected a lot out of Chidambaram too but he didn't deliver to potential.
Yes the Indian version of middle class is eating garbage from the shores of the ganges with the pinky raised :hehe:
http://www.indiaonestop.com/povertyindia.htm
India still has the world’s largest number of poor people in a single country. Of its 1 billion inhabitants, an estimated 350-400 million are below the poverty line…
This is all you could come up with?
Now compare the percentage of poor people in Pak/India and do a timeline series for the last 20 yrs. While India is moving the way of china, Pak is moving the way of N. Korea. 
Moving the way of mighty booming China? I’m glad India has high aspirations.
However,
[thumb=D]Indian_extreme_poverty.JPG[/thumb]
http://www.undp.org/hdr2003/
a few things to take care of first.
Let’s see. Page one of the indicators has Pakistan on a low development grade yet a country with 300 million poor is in the medium development grade. GDP percapita on PPP, Pak=$1,890-India $2840. I believe bangladesh is higher than Pakistan. 
Pak 1970 HDI trend .344 2001 .499
India 1970 HDI trend .416 2001 .590
Quality of life is a lot better for Indians than Pak. Isn;t that why their daughters come to India to get treament. 
National Rail in the UK just announced it is moving 1000 jobs to India.
I think Pakistan should take lessons from Bangladesh and Nepal, where HDI is higher than Pak. 
I'd hold out on the ticker tape parade until the 400 million number living in 'extreme' poverty is reduced. :(