sep 1, 2006
this is absolutely the wrong path to take.
http://www.nytimes.com/2006/09/01/business/worldbusiness/01rupee.html?_r=1&th&emc=th&oref=slogin
all well and good for yanks to talk about india becoming another heavily-polluted china type country making heavy-industrial goods for the benefit of white guys. this of course is the nehruvian soviet-knockoff model, which has brought russia to its knees, and will bring china to its knees as it fouls the land. no thanks, white guys, you pollute your own land.
traditionally india's strength has been in agriculture and light manufacture. as is not widely known, india was the world's most prosperous nation -- and i have the word of angus maddison, a rather obnoxious but apparently heavyweight limey economic historian to support me on this -- throughout history. maddison says this was true from 0 CE to 15th century CE. (true to white guy myopia, he started his analysis only from the time of the alleged jesus). i bet it was true throughout recorded history, way back to the time of the mehrgarh city-state (circa 9000 years ago) at the foot of the bolan pass in (hmm.... interesting) baluchistan, near quetta. see the wikipedia entry.
india's light engineering exports were fueled by its agricultural surplus in particular in the kaveri and brahmaputra deltas. in truth, india's riches were basically derived from its agricultural prowess. this we need to regain.
2 comments:
San,
I agree that production in itself is not evil - in some cases such as defence, infrastructure etc. it is indeed a pre-requisite and India can afoord to ignor this only at her own peril. That aside the economics boils down to the following
1- What natural resource is in most abundance, renewable and provides the most employement per capital rupee spent?
You will not have to look very far to see that it is agriculture ... secondary only to as Rajeev says lite manufacturing. India has more arable land than nearly any other country in the world and the goodness of agriculture is that
1- it provides non-polluting, sustainable, long-term wealth and employement
2- it provides food security - very essential - and I would say a huge, huge "ace in the hole" when it comes to the People's Republic - knowing that they only have half the arable land that we do. Dont fool yourself, all that land mass is either Gobi desert, Taklamakan desert or vast arid unfertile regions of Tibet.
This is the biggest lever we have over the Hans. Imagine they have to feed as many people as us, but with only half the arable land as us. Someone - do an analysis of their agirculture resources (damns, water reservoirs etc.) we should target for tactical nuking in case of war. The best way to deal with them is to show them they will starve
san, i'm afraid i disagree with you and agree with ghostwriter's contention about agricultural surplus being the basic foundation of prosperity.
two points: 1. agriculture does not mean low value-added subsistence farming alone. 2. the competitive advantage of having locally-produced food adds up to real cost reduction
1. dont persist with an outmoded idea that agriculture is some skinny farmer ploughing his tired field with a skeletal bullock. those days are history. it is biotechnology, fermentation, refrigeration, processing, horticulture, boutique crops, ayurvedic medicinal plants, ready-to-eat products, etc. these are huge employment generation opportunities. including for the indian customer who will start migrating towards a more "high-class" (ie. high protein, high-wheat) diet with prosperity (this is inevitable though a bad thing: the local coarse grains and vegetables are usually your best bet for health).
2. each 1 pound of agricultural product that has been shipped from afar consumes 1 gallon of oil for shipping and processing (or something along those lines. there was a US magazine article i posted on this blog some time ago.) thus the real cost of locally-grown food is always lower. as michael porter will tell you, cost leadership is a good way to be a market leader. and since we have not yet invented ways to direct injest energy from the sun, for the foreseeable future we will all have to eat. don't knock having food made locally. i have seen this happen: if tamil nadu trucks strike for one day, kerala food prices shoot through the roof. kerala experiences food insecurity.
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