>From my very macro view, I think that over time India will grow stronger relative to China. I have a greater faith in India's form of governance and that it will foster a better long-term business environment.
From: [email protected] [mailto:[email protected]] On Behalf Of Dr. Ernest Prabhakar Sent: Monday, January 21, 2013 11:29 AM To: [email protected] Cc: [email protected] Subject: Re: [RC] India vs China Hi Billy, On Jan 21, 2013, at 8:59 AM, [email protected] wrote: Yet Morgan Stanley stands resolutely behind its 2010 prediction that India will be growing faster than China by the middle of this decade. It isn't going to happen, India's better demographics notwithstanding. Depends on how you define middle. I agree 2015 seems likely. But I'd take an even-money bet that by 2018, India will be surging and China will be in crisis. -- Ernie P. For one thing, many of India's youths are unskilled and work as peddlers or not at all. For another, despite all the reforms instituted by India since its move away from socialism in 1991, much more would have to change. Corruption, inefficiency, restrictive trade practices and labor laws have to be addressed. Democratic it may be, but India's ability to govern is compromised by suffocating bureaucracy, regular arm-wrestling with states over prerogatives like taxation and deeply embedded property rights that make implementing China-scale development projects impossible. Unable to modernize its horribly congested cities, India's population has remained more rural than China's, further depressing growth. "China" and "corruption" may be almost synonymous to many, but India was ranked even worse in corruption in Transparency International's annualCorruption Perceptions Index <http://www.transparency.org/cpi2012/results> . At its best, the Indian justice system - a British legacy - grinds exceptionally slowly. To be sure, summary executions don't occur in India, and its legal system is more transparent and rule-based than China's. But a recent visit coincided with the tragic gang rape of a young Indian woman that led to her death; the government's ham-handed initial response was to ban protesters from assembling and impound vans with tinted windows like the one in which she was abducted. India's rigid social structure limits intergenerational economic mobility and fosters acceptance of vast wealth disparities. In Mumbai, where more than half the population lives in slums often devoid of electricity or running water, Mukesh Ambani spent a reported $1 billion to construct a 27-story home <http://www.businessinsider.com/antilia-mumbai-most-expensive-house-mukesh-a mbani-2012-5?op=1> in a residential neighborhood. Don't get me wrong - I am hardly advocating totalitarian government. But we need to recognize that success for developing countries is about more than free elections. While India may not have the same "eye on the prize" so evident in China, it should finish a respectable second in the developing world sweepstakes. It just won't beat China. -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
