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Razeen Sally

GLOBALISATION AND INDIA SHINING. India at 60From Gandhian mysticism, economic isolation and social backwardness to globalisation and India Shining. GLOBALISATION AND INDIA SHINING. Snapshot-- Macroeconomic conditions-- Trade and foreign investment (FDI)-- Financial markets-- Domestic business climate-- Politics and the state-- Comparisons with China.

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Razeen Sally

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    1. Razeen Sally European Centre for International Political Economy (ECIPE) London School of Economics (LSE)

    2. GLOBALISATION AND INDIA SHINING India at 60 From Gandhian mysticism, economic isolation and social backwardness to globalisation and India Shining

    3. GLOBALISATION AND INDIA SHINING Snapshot -- Macroeconomic conditions -- Trade and foreign investment (FDI) -- Financial markets -- Domestic business climate -- Politics and the state -- Comparisons with China

    4. GLOBALISATION AND INDIA SHINING b) Prospects -- Politics, economic policy, the business climate -- Comparisons with China c) Focus -- States and cities -- Higher education

    5. GLOBALISATION AND INDIA SHINING History (1947-91) -- From Fabian socialism to Soviet-style central planning and the ‘license raj’ -- Foreign policy: nationalism, non-alignment and the Soviet Union as First Friend -- The economy: a ‘Hindu equilibrium’

    6. GLOBALISATION AND INDIA SHINING Market reforms, 1991- -- Half measures in the 1980s -- The 1991 crisis and ‘big-bang’ reforms (1991-93) -- Gradual, stop-go reforms (1993 to present) -- The state of play

    7. Figure 1: Aggregate GDP

    8. Figure 2: Per-capita GDP

    9. Figure 3: Poverty as % of Population

    10. Figure 4: Inequality India (GINI)

    11. Figure 5: Savings/ GDP

    12. Figure 6: Investment / GDP

    13. Figure 7: Foreign Exchange Reserves

    14. Figure 8 (i): Share Agriculture in GDP

    15. Figure 8 (ii): Share of Manufacturing in GDP

    16. Figure 8 (iii): Share of Services in GDP

    17. Figure 9: Total Trade (Goods & Services)

    18. Figure 10: Trade/ GDP

    19. Figure 11: Current Account Balance

    20. Figure 12: Current Account Balance (% of GDP)

    21. Pie 1 (i): Share of Global Trade (Goods)

    22. Pie 1 (ii): Share of Global Trade (Service)

    23. Figure 13: Exports of Goods and Service

    24. Figure 14: Growth in IT Services/ GDP

    25. Figure 15: Inward FDI Flows

    26. Pie 2: Share of Global Inward FDI Stock

    27. Figure 16: Outward FDI Flows

    28. Figure 17: Stock Market Capitalisation

    29. Figure 18: Inward Portfolio Capital Flow

    30. GLOBALISATION AND INDIA SHINING Reform results -- Massive changes: opening to the world, transformed business landscape, IT powerhouse, emerging world-class firms -- But lopsided growth: benefits urban middle classes but not the vast majority of the poor – unlike China

    31. GLOBALISATION AND INDIA SHINING Reform gaps -- Unreformed agriculture -- Lack of labour-intensive manufacturing and throttled labour markets -- Overregulated, underperforming services sectors -- Remaining trade and FDI barriers -- Remaining capital controls -- The unreformed Indian state

    32. Table 1: Ease of Doing Business

    33. Table 2: Trading Across the Border

    34. Table 3: Governance Indicators

    35. GLOBALISATION AND INDIA SHINING Politics -- The most difficult country to govern: vast, hugely diverse, split so many different ways -- Messy democratic politics: multi-party coalitions at the centre; kaleidoscope of musical-chair politics in the states -- But advantages (compared with China): unity and stability; checks and balances; British-endowed liberal institutions; the English language; political and civic freedoms

    36. GLOBALISATION AND INDIA SHINING Focus (1) -- The states in a federal system -- Growth engines in the south and west (with outliers) -- Policy reforms and business transformation: e.g. Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Punjab, Haryana -- Key sectors, NRIs and FDI -- Transformation of India: a bottom-up, not a top-down story

    37. GLOBALISATION AND INDIA SHINING Focus (2) -- India’s expanding demand for higher (and lower) education: insufficient, low-quality supply; foreign investment prospects; reform hurdles

    38. GLOBALISATION AND INDIA SHINING Prospects -- The big picture: the new Asian Drama -- Asia’s transformation of the world economy: much more competition; gains for the West and the Rest; but more difficult adaptation required; wider inequalities; the middle-class squeeze; the middle-income trap -- Role of India in the new Asian Drama

    39. Figure 19: Share of Global GDP (i)

    40. Figure 19: Share of Global GDP (ii)

    41. GLOBALISATION AND INDIA SHINING Prospects (cont.) -- Lou Dobbs is wrong: stupid economics; bad business logic; noxious politics -- Lessons for policy: contain protectionism; constructive economic engagement; strategic foreign-policy partnership

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