Comment by Riaz Haq on October 18, 2020 at 6:20pm

The Next #China? #India Must First Beat #Bangladesh. India’s #COVID19 #economic gloom turned into despair this week, on news that its per capita gross domestic product (#GDP) may be lower for 2020 than in neighboring Bangladesh https://www.washingtonpost.com/business/the-next-china-india-must-f...

https://twitter.com/haqsmusings/status/1317991276583636993?s=20

Ever since it began opening up the economy in the 1990s, India’s dream has been to emulate China’s rapid expansion. After three decades of persevering with that campaign, slipping behind Bangladesh hurts its global image. The West wants a meaningful counterweight to China, but that partnership will be predicated on India not getting stuck in a lower-middle-income trap.

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Consider first the exceptionalism of India’s growth. Bangladesh is doing well because it’s following the path of previous Asian tigers. Its slice of low-skilled goods exports is in line with its share of poor-country working-age population. Vietnam is punching slightly above its weight. But basically, both are taking a leaf out of China’s playbook. The People’s Republic held on to high GDP growth for decades by carving out for itself a far bigger dominance of low-skilled goods manufacturing than warranted by the size of its labor pool.

India, however, has gone the other way, choosing not to produce the things that could have absorbed its working-age population of 1 billion into factory jobs. “India’s missing production in the key low-skill textiles and clothing sector amounts to $140 billion, which is about 5% of India’s GDP,” the authors say.

If half of India’s computer software exports in 2019 ceased to exist, there would be a furor. But that $60 billion loss would have been the same as the foregone exports annually from low-skill production. It’s real, and yet nobody wants to talk about it. Policymakers don’t want to acknowledge that the shoes and apparel factories that were never born — or were forced to close down — could also have earned dollars and created mass employment. They would have provided a pathway for permanent rural-to-urban migration in a way that jobs that require higher levels of education and training never can. Bangladesh has two out of five women of working age in the labor force, double India’s 21% participation rate.

Comment by Riaz Haq on December 5, 2020 at 7:50am

#India's #economy is shrinking, and tens of millions of Indians have lost jobs or sunk into poverty. But #Modi's friend Gautam Adani’s personal wealth has more than doubled to $32b. Mukesh Ambani’s fortune has grown 25% to $75b. #Inequality #COVID19 #BJP https://www.economist.com/asia/2020/12/05/indias-super-rich-are-get...

https://twitter.com/haqsmusings/status/1335247896480923648?s=20

Some of India’s tycoons have prospered because they have learned not just to weather unpredictability, but to game the system. That system, alas, is failing India’s poor. Measures of malnutrition and stunting reveal an alarming backward slide over the past year. The unemployment rate shows some recovery from the worst of the covid shock, but that fails to capture the astonishing bleakness of India’s labour market. Before covid hit, barely 40% of adults were in paid work, according to the Centre for Monitoring the Indian Economy, a research firm. Now only 36% are. The rest, including legions of housewives, see no point in even looking for a job.

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Some people have almost all the luck. Over the past year, as India’s economy has shrunk by around a tenth and tens of millions of Indians have lost jobs or sunk into poverty, the fortunes of the country’s two richest people have swollen. Gautam Adani, whose conglomerate sprawls from ports to coal mines to food, has seen his personal wealth more than double, to some $32bn. Mukesh Ambani’s riches, which derive from oil refining, telecoms and retail, among other things, have grown by just 25%, albeit to an intimidating $75bn or so.

The share of wealth and income going to the top 1% has been rising rapidly in recent years in India, as it has been in many countries. Last year they hoovered up 21.4% of earnings, just ahead of their counterparts in Russia, according to the World Inequality Database. Credit Suisse, a bank, puts their share of India’s wealth at 39%, well ahead of the richest 1% of Americans or Chinese. Most alarmingly, in India some of the rich have become super-rich by using their heft to crush smaller competitors and thus corner multiple chunks of the economy. The tilt in fortunes has rewarded not so much technical innovation or productivity growth or the opening of new markets as the wielding of political influence and privileged access to capital to capture and protect existing markets.

Merely a decade ago, according to data compiled by Marcellus, an investment-advice firm, among listed firms in India the 20 most profitable generated less than a third of profits. They now account for 70%. A study by Krishna Kant, a journalist, reveals that between 2014 and 2018 competition within ten different industries, from aviation to tyres, deteriorated markedly.

Across Indian markets, only the shares of giant firms have gained consistently over the past decade, says Rohit Chandra of iit Delhi, a university. International investors have noticed, and now bet increasingly not on promising new firms but on big old ones, which they expect to get even bigger. The government boasts that the five months from April to August saw a record $36bn in foreign investment, suggesting that its wise policies have sustained confidence during the covid-19 epidemic. What it trumpets less loudly is that more than half of that money, including hefty investments from Facebook and Google, poured into Mr Ambani’s hands alone.

Comment by Riaz Haq on May 5, 2021 at 7:49pm

#Aid pours into #India from around the world as #Covid cases soar. Flights from #UK, #US, #EU, #Taiwan and #Uzbekistan have delivered hundreds of tonnes of supplies, with more expected in the coming days from Israel and elsewhere. #Modi
https://www.ft.com/content/3da16e0d-bc3e-4e8e-a4b3-fa88427f2f7a via @financialtimes

India had in the recent past refused to accept international relief, which it felt was not in keeping with its own self-image as an emerging global power.

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Emergency medical aid is pouring into pandemic-stricken India from around the world as the government seeks to fend off criticism about the slow pace of dispatching supplies to hospitals and states in desperate need.

Dedicated relief flights from countries including the UK, the US, EU member states, Taiwan and Uzbekistan have delivered hundreds of tonnes of supplies, with more expected in the coming days from Israel and elsewhere.

The inflow of oxygen generators, concentrators and cylinders, as well as life-saving drugs and other medical equipment marks the first time India has accepted large-scale international humanitarian aid since the 2004 Boxing Day tsunami, reflecting the magnitude of the crisis.


In a statement on Tuesday, the central government said the authorities were working “24 x 7 to fast track and clear the goods on arrival”.

Comment by Riaz Haq on March 13, 2023 at 5:27pm

#UK #aid to #India does little for #humanrights and #democracy, watchdog finds. Aid Program spent £2.7bn between 2016 and 2021 but is fragmented and lacks a clear rationale. There's no programming related to democratic space, free media or human rights https://www.theguardian.com/global-development/2023/mar/14/uk-aid-i...

Britain’s aid programme to India is fragmented, lacks a clear rationale and does little to counter the negative trends in human rights and democracy in the country, the government’s aid watchdog has found.

The findings are likely to be used by those who claim the UK government risks using its aid programme to deepen its relationship with India, including seeking free trade deals, rather than attempting to reduce poverty, which is the statutory purpose of UK aid.

The review by the Independent Commission for Aid Impact said the government spent £2.7bn on aid to India between 2016 and 2021, including the provision of loans by the government-run British International Investment to mainly smaller companies. In total, loans to India represent 28% of the BII global loan portfolio.

The review finds “the overall programme is fragmented across activities and spending channels and lacks a compelling development rationale”, particularly since India already has relatively developed financial markets.

The UK does not use its aid programme, enshrined in a joint roadmap signed by India and the UK in 2021, to support Indian democracy and human rights, despite backsliding in this area under the premiership of Narendra Modi, the review says.

The ICAI review group reported: “To explain the limited activity on democracy and human rights, Foreign Office officials noted India’s acute sensitivity to any external influence in its political affairs, particularly from the UK. They acknowledged that the UK and India have different perspectives in this area and described the roadmap as being based on shared interests, rather than shared values. They informed us that the UK engages in ‘quiet diplomacy’ on issues such as freedom of speech.”

On human rights the report finds the 2021 roadmap setting out India and the UK’s joint cooperation goals “does not include any objectives related to the promotion of democracy or human rights in India” and adds that “the UK has not been particularly active in India in this area in recent years, either in its aid programme or in its public diplomacy”.

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