The Asian Square Dance – Part III

India is the world’s largest democracy, and one of the few legitimate democracies in Asia showing that, contrary to statements of certain pundits, that democratic concepts can be successfully applied outside the West.

Contrary to what is happening in China, its population of 1.2 billion, according to the latest census, continues to grow in spite of the fact that it has the world’s highest infant mortality rates. Its working age population is expected to add another 125 million in the next 10 years. This translates in large capital needs for additional infrastructure, making it dependent on foreign investments to a much larger extent than China. Unless it invests massively in infrastructure, its development will be very much hindered.

There is a large imbalance between the genders with a ratio at birth of 914 girls for 100 boys. Life expectancy at birth is of 65 years. Half the population is younger than 18, a quarter is rural and a third lives in extreme poverty.

A large proportion of the population is poor, with 50% having no access to electricity. Poverty is not evenly distriuted geographically, with some states considerably poorer than others – a gap widening ever more thus creating the threat of social movements.  A Maoist insurgency has already taken hold.

Nevertheless, the middle and upper class is forecast to grow from its present figure of 200 million to 1 billion by 2050.

Its economy, the world’s third largest and second-fastest growing, should reach USD 25 to 30 trillion by 2050 and could be the world’s third largest after that of the US and China. Some analysts even believe it will be the world’s largest on a PPP basis, reaching USD 86 trillion, in that time horizon.
In as much as, contrary to China, its economy is not geared to exports, it is less sensitive to global economic crises. However, it does rely on foreign direct investments to fund its large trade deficit.

India’s development hinges on its ability to carry out a number of reforms, and in particular improve its infrastructure and the educational level of its citizens with a concomitant evolution of the population’s mentality away from a mindset embedded in traditions that forbid it from developing into a modern country, and clean up the environmental damage created by an unruly development.

The country’s interaction with the other Asian countries remains, however, weak as Pakistan acts as an effective geographical barrier. It fears the strengthening of the China-Pakistan alliance; has no direct access to Central Asian energy producers and mistrusts the US. One of its main oil suppliers is Iran.

In spite of these shortcomings, it has been successful in attracting businesses, particularly from Europe, to outsource their manufacturing and services or even to acquire Indian corporations.

The country became a nuclear power in the 1990s and is continuing to develop its delivery capacity. Its agreement with the Atomic Energy Agency has created a precedent of allowing the country to have access to nuclear technology without signing the Nuclear Non-Proliferation Treaty. It is thus able to divert uranium from civilian to military programs.

Military spending makes it the world’s largest buyer of weapons, with Russia as its main supplier. It is believed to have budgeted USD 100 billion for purchases over the next 10 years. It is expanding its naval power, acquiring aircraft carriers and planes to secure shipping lanes for hydrocarbons, just as China is doing.

Michael Akerib
Michael Akerib
Michael Akerib, Vice-Rector, SWISS UMEF UNIVERSITY