{"id":107904,"date":"2018-03-26T12:00:55","date_gmt":"2018-03-26T11:00:55","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=107904"},"modified":"2018-03-21T12:54:06","modified_gmt":"2018-03-21T12:54:06","slug":"krugman-india-has-emerged-as-a-superpower","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2018\/03\/krugman-india-has-emerged-as-a-superpower\/","title":{"rendered":"Krugman: India Has Emerged as a Superpower"},"content":{"rendered":"

Paul Krugman at News18\u2019s Rising India Summit says nation has emerged as a superpower, but govt shouldn\u2019t have heavy hand on economy.<\/em><\/p><\/blockquote>\n

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19 Mar 2018 – <\/em>Nobel Prize-winning economist Paul Krugman on Saturday [17 Mar] said India has marched ahead of\u00a0countries like Japan and the progress it has achieved is 30 years is extraordinary. However, the government should not have a \u2018heavy hand\u2019 on economy, Krugman said, implying that the economy should open more in favour of private sector.\u00a0The Nobel laureate was\u00a0speaking at the\u00a0News18\u00a0Rising India Summit\u00a0about \u201cRising India, the view from afar\u201d.<\/p>\n

Touching upon government control, Paul Krugman said: \u201cIndia was famous for License Raj, where bureaucratic obstacles were immense. I\u2019m on the centre-left, but I don\u2019t think the government should have a heavy hand on economy. India has become a much easier place to do business. The prime minister said India moved from 148 to 100 in the rankings. That\u2019s not a badge of distinction, but it\u2019s better. The transformation of policy came at a good time. India opened up at the right time. It was witnessing changes on policy elsewhere. And policymakers were aware of opportunities, and that the world was becoming a friendly place for development.\u201d<\/p>\n

Krugman noted that the nature of India\u2019s export boom has been less conspicuous in its disruption, which is good for the country. \u201cWhat\u2019s responsible and can it continue\u2013 clearly a dramatic change in inward looking policy. A large share of GDP has moved to becoming an open economy. Tariffs reduced dramatically. Liberalisation within the domestic market,\u201d Krugman said.<\/p>\n

Making comparison between the economies of China and India, the Nobel Laureate said that people often talk about China, but India is part of this story as well. \u201cIndia is still poor, but not in the same level at all. Indian GDP per capita is 12 percent of the US now, which sounds low but is up from 4 percent. India has the same per capita income that Japan did in the 1960s. And that country made a full transformation,\u201d he says. Krugman was hopeful that in a few decades India would be counted among developed countries like Japan. He, however, pointed out to the high income inequality in India.<\/p>\n

Krugman made a comparison between the Indian growth story and that of Great Britain, which colonized India for around 200 years. \u201cWhat Great Britain achieved in 150 years, India managed in just 30. The progress is extraordinary. This is a very big country, which people at some level have not fully noticed. It has overtaken Japan and is only behind US and China, and is far ahead of any European country. This is a superpower.\u201d<\/p>\n

Elaborating his concerns on the Indian economy, the economist said there was a widely observed concern of the middle income track. Calling it the limit of successes, Krugman said, \u201cIt\u2019s not hard to see that India needs institutional progress. India is potentially susceptible to this middle income track,\u201d adding that advanced countries are troubled economies and a mess.<\/p>\n

He also said that while the US has overcome recession, Europe has not fully recovered. \u201cThis open world trading system is now a threat. Populism is on the rise globally, and there is a backlash against the global system,\u201d he added.<\/p>\n

The Nobel laureate also listed out three reasons why he is optimistic about India\u2019s growth. He first\u00a0mentioned India\u2019s large population and their qualifications. \u201cIndia does have a lot of smart people. There is a clearly a cultural reservoir of creativity and entrepreneurship. The widespread fluency of English is important. It matters a lot how many people of working age you have. Japan couldn\u2019t become an economic superpower because of demography. China is starting to look like that. Its working age population has peaked and will go down. It cannot continue to grow at the pace it did,\u201d he said, adding that India\u2019s working age population is projected to grow substantially and surpass China in a few years. However, he also noted that it is\u00a0crucial\u00a0for India to generate enough jobs for the workforce.<\/p>\n

The second reason Krugman provided is that India is still quite poor and far behind cutting edge technology. \u201cThat\u2019s not a good thing, but that gives the opportunity to catch up,\u201d he said.<\/p>\n

Third, the economist outlined India\u2019s distinct role in the global trade. \u201cUp till India\u2019s rise, all success stories were based on manufacturing. India does need to do more of that, but showed large-scale export of services,\u201d he said while adding that the technology to set up manufacturing have been exploited. He also said that the globalisation of service trade is perhaps the future. \u201cIndia has the first mover advantage here. We don\u2019t know if this can provide employment on the scale India needs, but India has the advantage of those returning from the Silicon Valley to set up business here,\u201d Krugman elaborated.<\/p>\n

Asked about protectionism in US under President Donald Trump, Krugman said he was less optimistic as there are greater chances for a riskier year. \u201cUntil two weeks ago, I was optimistic because US businesses are invested in the global economy. There is an enormous amount of fiscal capital and jobs are dependent on these value chains. I had assumed the influence of these business communities would work. I am less optimistic now. There are more chances now of a riskier year,\u201d he said at the summit.<\/p>\n

Commenting on\u00a0China, Krugman said that Xi Jinping\u2019s reappointed as president is a huge disappointment for global optimists. \u201cChina is moving backwards to strong man rule. It is a financial crisis waiting to happen,\u201d he said. He explained that the Chinese economy was \u201cwildly unbalanced\u201d with \u201csharply diminishing returns to investments and a credit bubble\u201d and that it was all going to crash someday. \u201cChina is sustaining itself with a credit bubble that is waiting to burst, however long it takes,\u201d he said.<\/p>\n

Before the session closed, Krugman\u00a0shared that he felt Trump as US president didn\u2019t take his job seriously. \u201cHe doesn\u2019t do his homework. He hires people who make him feel good and that\u2019s a frightening prospect,\u201d he said.<\/p>\n

Krugman also added that Trump was trying to make America a heavy industrial economy like it was when he was young, which could have disastrous effects on the US economy. \u201cIn doing so now, will prove destructive for the US economy,\u201d he said.<\/p>\n

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Paul Krugman<\/em> received the 2008 Nobel Prize in Economics. He joined <\/em>The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University. He has taught at Yale, MIT and Stanford. He is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. <\/em><\/p>\n

Go to Original \u2013 other-news.info<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

19 Mar 2018 – Nobel Prize-winning economist Paul Krugman on Saturday [17 Mar] said, \u201cWhat Great Britain achieved in 150 years, India managed in just 30. The progress is extraordinary. This is a very big country, which people at some level have not fully noticed. It has overtaken Japan and is only behind US and China, and is far ahead of any European country. This is a superpower.\u201d<\/p>\n","protected":false},"author":4,"featured_media":59198,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[180],"tags":[],"class_list":["post-107904","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/107904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=107904"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/107904\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/59198"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=107904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=107904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=107904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}