I waited a whole month before opening my mouth on the issue of India-China ties. So, I am not going to shut up in a hurry 🙂
The other day, I said that India’s obvious strategy for success is to play for time. The core of my reasoning was this argument :
“If the Chinese cannot humiliate India in the next 10 years and cut it down to size, they might not have another opportunity for 1000 years.”
My point was that India will be the 5th largest economy by the end of either this year or the next year. In 5 years, it will be the 4th largest and in 10 years it will be the third largest economy.
So, all India needs to do is keep playing for time for another decade. The Chinese will likely get more and more hostile and provocative as they see the clock running out, so we will have to use all our wits to keep them in check.
Already, rhetoric like this sounds really touchy and insecure, coming from the world’s second largest economy.
It’s almost unreal that the mouthpiece of the Chinese Communist Party would feel the need to reassure its readers not to worry about India looking brighter than China on satellite images! ROFL!
Ok, but the key concern is this : How do we know that India will stay on the growth trajectory and rise continuously?
Well, of course the honest answer is that nobody can possibly read the future. But there are easy markers that we can use to predict whether India’s rise is for real or just a passing illusion?
To that I say : just look at our peers!
Remember BRICS? Actually, it started off as “BRIC” and then South Africa was added for reasons of political correctness and diplomatic niceties.
Remember when the world was about to be led by the four fastest growing nations : Brazil, Russia, India and China?
Now look at Brazil and Russia : Here is a list of the world’s 10 largest economies in the year of 2011.
See? Brazil used to be miles ahead of us, with a GDP well above $2 trillion. And Russia used to be ahead of us as well. In contrast, India was a bashful new entrant into the top table, coming in at No. 10, with a GDP somewhere around $1.7 trillion.
Now see the fun 5 years later :
Huh? What happened to Brazil? It’s GDP is way down… below the $2 trillion mark, now hovering around $1.7-1.8 trillion. It has dropped 3 ranks as well, from 6th to 9th.
However India has made steady progress up the table, going from No. 10 to No. 7.
And Russia? Where is Russia? Found it!
I have to chuckle at Russia. From close to $2 trillion, Russia’s GDP has dropped steeply to a point where it seems they are headed below even $1 trillion. They have also been kicked out of the top 10.
The term BRIC was coined in the year 2001. This was the situation then:
As you can see, India and China are the only two countries that managed to rise continuously through the ranks in the last 15 years. Brazil and Russia were just bubbles … they ballooned when commodity prices rose and they got deflated as soon as commodity prices fell. There was no underlying strength in their growth, just a few years that looked good on paper.
This is how you tell a passing fad from a long term trend. The fads run their course and fade out, while the real trend stays.
So, BRIC was really a failure. The only two serious countries in there were India and China.
A real trend always outlives the fads.
And BRIC was only the most famous of all the various “economic miracle countries” that were identified over the course of the last 15 years.
There was something called MINT (Mexico, Indonesia, Nigeria and Turkey) that was identified as an upcoming miracle 🙂
LOL! Incidentally, “MINT” was coined by the same Jim O’Neill of Goldman Sachs who came up with “BRIC”.
Even something called MENA (Middle East & North Africa). Those economies have been in real bad shape since oil prices fell. That’s because there was nothing real underlying their economies…just a few years of good luck here and there.
If you are really in a mood to laugh, there is something called “Next Eleven” which, in all seriousness, identifies Pakistan, Bangladesh and Afghanistan as “next” economic miracles 🙂
I am NOT kidding. They really came up with this in all seriousness…
So, that’s really my point. We have seen numerous acronyms listing countries that are going to become economic powerhouses : BRICS, MITACS, MENA, Next Eleven, MINT, Pan Parag, etc.
To be fair, I just made the last one up … but who’s to say we can’t find some countries with those initials that might be “next” economic miracles?
These acronyms and alphabet soups come and go. Venkaiah Naidu can himself make up 10 of these per hour.
So, these don’t really matter. The only thing that matters is “IC”, i.e., India and China. I know that’s just two letters, but that’s the reality.