M.V. Kamath
In July 1971, address-ing a group of media executives in his country, President Richard Nixon said at that point in time there existed five clusters of world economic power: Western Europe, the United States, the USSR, Japan and China. Western Europe then had not yet got transformed into the European Union. The Soviet Union had not broken up. By the late 1970s, the Japanese gross national product (GNP) was as large as the combined GNP of Britain and France and more than half the size of America?s. China was struggling to keep up. If, in 1953 it was responsible for only 2.3 per cent of world manufacturing production and had a ?total industrial potential? equal to only 71 per cent of Britain'sin 1900, by 1980 it had caught up.
By 1980 its steel output of 37 million tonnes was well in excess of that of both Britain and France and its consumption of energy from modern sources was twice that of any European state. And by that date, too, its share of world manufacturing production had risen to five per cent and was closing upon Western Germany?s. India was nowhere near the scene. Enter P.V.Narasimha Rao and Dr Manmohan Singh and the attempts at liberalisation of the economy. Equations change. As British Prime Minister Tony Blair briefly in India in early September told an Indian editor, ?people are now coming to terms with India as a major power?.
India, reiterated his stand that India ?is frankly going to be one of the major powers of the world in the years to come and it is important for Britain to have a modern, sensible relationship with it?. Britain is waking up to reality. So is the European Union. As Blair said : ?The trade between India and Europe is enormous. And as the Indian economy grows, there are going to be more and more opportunities for business?. Business, may it be said, not only with the European Union and Britain specifically, but with fellow Asian countries as well. India is on the march and nothing can stop it. Indeed it is most likely that India, along with China?with China leading most of the way?and Japan, will be world leaders in the 21st century. As a Chinese economist noted (Economic & Political Weekly,
As the Indian economy grows, there are going to be more and more opportunities for business. Business, may it be said, not only with the European Union and Britain specifically, but with fellow Asian countries as well.
(September 3) ?The 21st century, as is being claimed the world over, will belong to Asia?. Asian economic unification is in motion, said Yao Cho Cheng, the economist, adding that this could result in an Asian economic community?, considering that the rapid economic growth rate of around seven per cent in recent years in the Asian region has laid? a solid material foundation for Pan-Asian regional cooperation?.
It may be remembered that China and the ASEAN had signed an agreement in November 2002 to establish a free trade zone by 2010 and India, the largest economy in South Asia is also actively taking steps to join East Asia'seconomic integration movement. In September 2003, a free trade agreement plan (including 2.5 billion consumers and comprising 75 per cent of the total Asian population ) had been reached by the ASEAN, China, Japan and India, at Jakarta in Indonesia. An Asian economic union indeed had been foreseen as early as April 2002 by Nobel Laureate economist Robert A.Mundell when he said in his address to the Sun Yat-Sen University, Guangzhou, South China, that Asia would have a single currency in the near future. According to the Chinese economist, ?The on-going regional economic unification processes shall make Asia the fulcrum of economic activity in the world and contribute substantially to global security in the 21st century.?
This has also been admitted by The Economist (July 30) which said in an editorial that ?China, along with the other emerging giants, India, Brazil and the former Soviet Union has effectively doubled the global labour force, hugely boosting the world potential output and hence its future prosperity.? Western countries are frightened. They cannot imagine China being the world'sNumber One country, economy-wise, with India not far behind. Since 1985 China'sGDP has been growing annually by 9.7 per cent on an average and if it keeps growing at that rate, by the middle of this century China'seconomy will match that of the US. According to Angun Maddison in his book Reviewing the World for 200 Years, in 1820 China'sGDP was the highest, followed by India, and even if China'sgrowth rate stays at seven per cent, and that of the US at three per cent, China would once again be the largest economy in the world by the year 2020. Writes The Economist: ?Trying to halt China'sgrowth through protectionist measures, as many American Congressmen would like to do, would be a disaster, for it would close off a powerful source of future global prosperity. A better way to deal with China? growing power could be to give the country a higher stake in global economic stability?.
Much the same can be said of India, whose middle class is growing?It is now around 22 per cent of the country'spopulation or almost 220 million, which is as large as the population of the United States. And this is an Indian middle class fluent in English with, percentage-wise, professionally competent graduates who can compete with rivals any where in the world. The United States had a population of only about 30 to 40 million and Japan of 100 million when they rose to power. One can well imagine what India can do with a 220 million population of educated middle class with rising expectations. India is rapidly becoming the centre of attraction. No wonder it has been ranked among the top five ?most preferred tourist destinations? in the well-known Conde Nast Readers Travel Awards 2005.
The Government of India is expecting not less than five million foreign tourists in the year 2005. No wonder, too, that in just 55 days of trading, the Sensex jumped from its June 21 close of 7,076 points to a close of 8,052 points on September 8. It is a measure of the confidence that investors have in India'sgrowing capabilities. What India was in the 18th century it can?and surely will?be in the 21st century with a commendable share of the world trade. Significantly, unlike Britain, France, the Netherlands and Belgium of the 19th century, countries which went to set up their colonial empires, neither India nor China is a threat to anyone. Writes the Chinese economist Yao Chao Cheng: ?Learning from Europe, China should try to improve its relationship with the other two big Asian nations, Japan and India, with more tolerance and magnanimity. Japan is the second largest economic power in the world… And India is the largest economist power in South Asia and the second largest nation in Asia, economically growing almost as fast as China… If these three nations could get rid of the historical resentments and unite like Germany and France did, the Asian economic unification process will achieve velocity and gravity.? And no truer and wiser words have been said. It is a challenge to Beijing, Tokyo and Delhi. Together, they can usher in a peaceful and prosperous world.
