Sitting here in London, it is impossible not to be struck by the stark difference in economic tidings these days from the western world and India. While it has been in vogue for some time to talk of the divergent fortunes of India and China—the two countries inevitably inviting comparison as the rising powers from Asia—less is said of the decay in the developed world. Yet, China’s woes, by no means insignificant, seem trivial compared to the unravelling that is playing out in the Western Hemisphere.
To put it bluntly, the US, Europe and the UK are in shambles. The US, which most of the economic world takes its cues from, is staring at a recession. But that is the least of its travails. After all, recessions are not exactly uncommon in any part of the world. But this time, runaway inflation threatens to stall economic progress for an unknown length of time—for the first time in many decades. Years of fiscal and central bank profligacy has opened up cracks that are no longer easy to paper over. And the worst news is that all this is leading to a social divide and racial tensions on a scale the country has not seen, perhaps since the days of the civil war. From outside, the US has the distinct appearance of a nation coming apart, and therefore it is not just another bear phase of the stock market that is in question. The empire—and the US despite its democracy, such as it is these days, certainly qualifies as the equivalent of the most powerful modern-day empire—could well be in decline.
There is less ambiguity about the other empire’s—and one can safely call it that just on the evidence of the chest-beating on display this month over the demise of a 96-year-old queen—descent into terminal decline. I speak of the UK, of course, where a new Prime Minister is bumbling her way into somehow sorting out a cost-of-living crisis of a proportion not witnessed here since World War II. White skin may predictably have prevailed over brown at the hustings, but it may not be enough to pull back the country from self-inflicted economic disaster. Food banks are opening up across the nation and the British won’t have enough to keep the heating on at home this winter. Supermarket shelves are routinely empty and the difficulty in finding workers to get anything done in this Brexit-ravaged ecosystem makes susegad-loving Goa look like a functional paradise.
Finally, there is Europe. It is sad to see this beautiful continent slip into chaos. The Euro’s sharp declines of late embody the deep fissures in this bloc, exacerbated by the Ukraine conflict. This time, it is not a problem of peripheral European nations needing a bailout; even the mighty have stumbled. Germany, uncharacteristically, is talking about power cuts this winter, as Russia exposes its utter dependence on external energy. Inflation is sweeping across countries, crimping consumer demand. Recession is inevitable. Political turmoil may not be far behind.
Not too long ago, these were the shining beacons of the global economy. They are still mighty, the US and Europe particularly, but one cannot help feel that they are past their peaks. Economically speaking, strictly, India smells of roses. Yes, inflation is still running high and GDP growth may slow down to 6 per cent, but in a world that is staring at a crisis, this is an enviable position to be in. The Sensex has reflected this over the past few months, in outperforming most large markets, and India today finds mention in many more global fora than is customary. The country’s relative robustness has not gone unnoticed.
Some amount of basking in this is justifiable, but the slide into smugness—with politicians already claiming this is India’s century—can be swift. Using the GDP or the Sensex, after all, as reliable yardsticks of having upstaged bigger global powers, is fraught with peril. India still has a long way to go on various parameters before it can call itself a truly ‘developed’ country. Commentators who celebrate the country’s improvement on cherry-picked social parameters—and finally it is the quality of life of most citizens that makes a country great, or not—have probably never been to an Indian village. The recent ranking of India in the UN Human Development Index (HDI), 132 out of 191 countries and down over the last two years, is a timely reminder. A country with that low a human development rank cannot be called a developed nation, no matter what its GDP growth is. On the margin, some parameters may be improving, but the pace is glacial. And these small bits of progress are offset by the stark decline in social and communal cohesion that is visible in everyday life. It is all very good to talk about our remarkable strides in digital adoption, but the floods in Bengaluru and the (inevitably) looming pollution scare in Delhi in winter are a reminder that there are miles to go before India can claim to have the infrastructure of a truly great city. Jingoism aside, anyone who has ever been to London, New York or Singapore would be blind to assert that India has the equivalent of even one truly global capital, swank airports and the ‘spirit of Mumbai’ notwithstanding. The less said of our soft infrastructure—education, healthcare and general civic standards—the better.
India is a work in progress. Blessed as it is with a strong domestic economic base thanks to demographics, it still has to build on that to create a truly world-class economy and society. It is easy to gloat at the misfortunes of others and adopt an air of superiority, where what needs doing is to knuckle down on fixing our own flaws. Climbing the GDP charts may make India the toast of Davos, but till we succeed in making our society and economy more inclusive, civil and humane, at heart, we will always know that we are not there, yet.
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