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Will Corruption Wreck India?

Most geopolitical and economic thought today is based on the belief that India, if not exactly equal to China, is a rising world power.  American grand strategy posits that the two Asian superpowers will rise together, ensuring that with the help of other Asian countries and the US, an Asian power balance can be maintained.

But that is a projection and a prediction, not a fact.  Both countries could rise together; one could rise and the other could fall into decades of stagnation and/or chaos; or both could fail to master the challenges of coming decades and both could face problems of stagnation, instability and civil unrest.  Nuclear war with Pakistan could also change India’s outlook.

This perceptive article by a well respected Indian scholar in the Financial Times makes a strong case for India skepticism.  The endemic corruption of India’s political and business classes, he says, will limit India’s growth.  An incompetent state, venal politicians and bureaucrats, and a rent-seeking business class lack the capacity, vision and legitimacy needed to make India work.  Instead of expanding outward to enter world competition, India needs to look within, clean house, and build the foundations of a successful country.

Ramachandra Guha, the author of the piece, is pointing to very real problems.  The case for India’s rise is not airtight, and the conventional wisdom’s rush to anoint both India and China as the superpowers of the future is both overdone and premature.  The political leadership in both Europe and the US is struggling to manage the challenges of our time; Indian and Chinese leaders face much tougher and more complex problems than we have in the west.

Western news coverage of India is catastrophically bad; few decision makers and investors in Europe and the US have any real idea of Indian dynamics.  Guha’s point of view isn’t infallible, and the Indian jeremiad of intellectuals lamenting the fallen state of national politics is a well known genre with its own limits, but unless you understand his critique and the facts that give it strength you have not completed India 101.

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  • John Minehah

    Not a great location: India is in a rough geo-political neighborhood.

    Also, the de-centralized usually beat the centralized, but the unorganized lose to everyone.

  • Jim.

    Look at India’s per-capita electricity consumption vs. China’s, if you want a good reality check on whether India’s rise is as real as China’s.

    A lot of people are trying to fluff up India to make it look like an effective counterweight; I suspect that until the corruption issues are addressed, simply talking it up will not be nearly enough.

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