This is the advice of AI board member (and therefore, full disclosure, WRM colleague) in the New York Times. Cowen points out that the economic slowdown in India will have more effect on the well being of more people than anything that happens in Europe. Hundreds of millions of people in India and in nearby South Asian countries will be condemned to the kind of absolute poverty that Americans can scarcely conceive for decades to come if India’s growth slide can’t be stopped.As Cowen notes, India’s slowdown is not alone; the BRICs generally have slumped.
India may not be alone in this slowdown. There is a more general worry that the grouping of disparate giants known as the BRIC nations — Brazil, Russia, India and China — has, for some reason, lost much of its previous momentum. Last year Brazil grew at only a 2.7 percent rate, down from 7.5 percent, and Chinese and Russian G.D.P. growth are slowing too, to an unknown extent and duration. In the past, many countries engaged in catch-up growth have suddenly slowed and hit plateaus, although economists do not have firmly established theories as to when and why this happened. In any case it remains a real danger.
Watching Europe remains important for those of us worried that a crisis in the eurozone could spread into a worldwide panic. India’s troubles don’t have the potential for that kind of impact in the short term.But looking forward, Cowen is right: the economic story unfolding in India is, for better or worse, one of the most consequential things happening on this planet. Via Meadia advises readers to keep their eyes on the Indian economy, and we will do our best to help.