With the unfolding of the globalisation process, developing countries are keen to understand the developmental processes pursued by their neighbours as they face competition from developed nations as also amongst themselves.
Investment It is much larger compared to India and Pakistan, and a much stronger driver of growth. SEZs (Special Economic Zones) policy of China is of central significance inducing FDI. SEZs are offering robust infrastructural facilities for FDI.
Both for India and China, large size of population is a hindrance in the process of growth, as it requires a huge amount of ‘maintenance investment’.
Human Development Some important parameters of human development are as these
With a view to accelerating the pace of growth, different countries are forming regional and global economic grouping based on common agreements of bilateral relations. e.g., SAARC, EU, ASEAN, G-8, G-20.
Common Success Story of India and Pakistan
Common Failures of India and Pakistan
Sex Ratio Sex ratio is found to be low in all three countries pointing to social backwardness, where people hold high preference for a son in the family.
This chapter will not be examined. Open Text Based Assessment (OTBA) will be based on this chapter.
Nations are also eager to know and understand about the developmental process pursued by their neighbouring nations. It allows them to comprehend their strengths and weaknesses. In the process of globalisation, it is essential for every nation to compete with developed countries.
In this chapter, we are comparing the developmental strategies pursued by India with its neighbouring economies-Pakistan and China. This will help in understanding where do we stand today in comparison to others.
India, China, Pakistan have many similarities in their development strategies which are as follows
Some of the prominent strategies of India are discussed below
After the establishment of People’s Republic of China under one party rule, all the critical sectors of the economy, enterprises and lands owned and operated by individuals were brought under government control.
At this stage, enterprises owned by government (known as State Board Enterprises – SOEs), in India we call them public sector enterprises were made to face competition. In reform, prices were fixed in two ways, i.e., farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices.
Over the years, as production increased, the proportion of goods or inputs transacted in the market also increased. The goal of Chinese economic reforms was to generate sufficient surplus to finance the modernisation of the mainland Chinese economy. In order to attract foreign investors, Special Economic Zones (SEZs) were set up.
The development strategies of Pakistan are summarised below:
During this period, Pakistan received financial support from Western. This helped the country in stimulating economic growth. Government also offered incentives to private sector. This had a created climate for new investments. And in 1988 certain reforms were also initiated in the country.
The development strategies brought structural reforms in China, India and Pakistan. Follow the description of their success and failure one by one.
Success of Structural Reforms in China
The success of structural reforms in China are:
Failures of Structural Reforms in China
The failures of structural reforms in China are:
The Chinese reform process began more comprehensively during the 80s, when India was in the mid-stream of slow growth process.
Rural poverty in China declined by 85% during the period 1978 to 1989. In India, it declined only by 50% during this period, Global exposure of the economy has been far more wider in China than in India. China’s export-driven manufacturing has recorded on exponential growth, while India continues to be only a marginal player in the international markets.
The common success of structural reforms in India and Pakistan are
The common failures of structural reforms in India and Pakistan are
Starting from almost the same level as India, Pakistan has achieved better results with regards to
There is little doubt that, in the area of skilled manpower and research and development institutions. India is better placed than Pakistan. Indian scientists excel in the areas of defence technology, space research, electronics and avionics, genetics, telecommunications, etc. The number of Ph.Ds produced by India in science and engineering every year (about 5000) is higher than the entire stock of Ph.Ds in Pakistan. Issues of health facilities in general and infant mortality in particular are better addressed in India.
With Respect to Demographic Indicators, GDP and HDI .
We shall compare some demographic indicators of India, China and Pakistan
According to the latest data available, we find
(i) China has the second largest GDP (PPP) of US$ 10.1 trillion whereas, India’s GDP (PPP) is US $ 4.2 trillion and Pakistan’s GDP (PPP) is 0.47 trillion US$; roughly about 10% of India’s GDP.
(ii) In 1980’s, Pakistan was ahead of India, China was having double digit growth and India was at the bottom.
Source Key indicators for Asia and Pacific 2011, Asian Development Bank, Phillipines
(iii) In 2000-10 there is a marginal decline in India and Chinas growth rates whereas Pakistan met with drastic decline in 4.7%. The reform processes introduced in 1988 in Pakistan and political instability are reasons behind this trend.
(iv) China and Pakistan have more proportion of urban people than India.
(v) In China, due to topographic and climatic conditions, the area suitable for cultivation is relatively small-only about 10% of its total land area. The total cultivable area in China accounts for 40% of the cultivable area in India.
(vi) Until the 1980s, more than 80% of the people in China were dependent on farming as their sole source of livelihood.
(vii) The government encouraged people to leave their fields and pursue other activities such as handicrafts, commerce and transport.
(viii) In 2008, with 40% of its workforce engaged in agriculture, its contribution to GDP in China is 10%.
(ix) In both India and Pakistan, the contribution of agriculture to GDP was at 19 and 21% respectively. But the proportion of workforce that works in this sector is more in India. In Pakistan, about 45% of people work in agriculture whereas in India it is 56%.
(x) The sectoral share of output and employment also shows that in all the three economies, the industry and service sectors have less proportion to workforce but contribute more in terms of output.
(xi) In China, manufacturing contributes the highest to GDP at 47% whereas in India and Pakistan, it is the service sector which contributes the highest. In both these countries, service sector accounts for more than 50% of GDP. In the normal course of development, countries first shift their employment and output from agriculture to manufacturing and then to services. This is what, is happening in China.
The proportion of workforce engaged in manufacturing in India and Pakistan were low at 49 and 20% respectively
(xii) The contribution of industries to GDP is also just equal to or marginally higher than the output from agriculture.
In India and Pakistan, the shift is taking place directly to the service sector.
(xiii) Thus, in both India and Pakistan, the service sector is emerging as a major player of development. It contributes more to GDP and, at the same time, emerges as a prospective employer.
(xiv) In the 1980s India, China and Pakistan employed 17, 12 and 27% of its workforce in the service sector respectively. In 2008-10 it has reached the level of 25, 33 and 35% respectively.
India, China and Pakistan have performed in some of the selected indicators of human development.
Some Selected Indicators of Human Development, 2009-10
Source Human Development Report 2011 and World Development Indicators (www.worldbank.org)
From the data we would be able to conclude
HDI includes quantitative aspects of per capital, GDP and the quality aspects of performance in. health and education. It is an average of life expectancy index, education index and GDP index.
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