The future motor of the world economy: India

Richard W. Carlson (Ambassador to the Seychelles, 1991-1992)

Cross-posted from Ambassador Carlson’s November 16, 2013 op-ed in The Tribune-Review.

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Growth in India has averaged about 8 percent a year for the past decade. Millions of Indians have moved to big cities from towns and villages and, by dint of intelligence, hard work and education, have joined the middle class.

After independence from Britain in 1947, India embraced socialism with its stultifying bureaucratic regulations, wasteful inefficiencies and interventionist policies.

In 1991, the year the USSR, its longtime ally and supporter, collapsed and died, it threw off its planned economy and adopted the principles of the free market, including expanded international trade. India tried to slow down its waste of capital and labor and get out of the way of small manufacturers. The economy took off like the recent Indian space shot to Mars.

Much like that of its idol in America, India’s economy is now sputtering in a broad slowdown. Pools of capital for elaborate city apartment building projects, many of them multi-bedroom, middle-class complexes loaded with amenities, have evaporated. Construction has slowed and, in some cases, been abandoned.

Indian labor law continues to be the most complex and turgid in the world, constraining the growth of the formal manufacturing sector. The government expects 80 million new people to be joining the workforce in the next decade and an intelligent mitigation of those laws would enhance their prospects for a decent job.

Still, India has come so very far and faces such a bright future. I am surprised that more Western visitors are not attracted to its vibrancy, to its rich history and colorful cultures. I found it by far the most interesting country in which I have ever traveled.

Most tourists to India are from the United States and Britain, though tourism continues to be a very small part of the economy — a little more than 6 percent of the GDP. This is bound to change.

I have hosted a radio show on British Sky Radio, Sirius/XM and the World Radio Network from London for almost 10 years. My longtime co-host, retired U.S. Marine Col. Bill Cowan (the terrorism and military analyst from Fox News), is currently traveling by car from Delhi to Bangladesh and the border with Burma, more than 2,000 miles round trip, with two sophisticated in-country friends, meeting with people from every walk of life and preparing us for a regular radio broadcast we plan for a dozen major Indian cities at the end of this year.

Goldman Sachs has predicted that India’s GDP will have grown by 400 percent by 2020. It believes that the Indian economy will surpass that of the United States by 2043 and could “become a motor for the world economy.”

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