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OpinionWhy India can learn from Asean to become a stronger economy than China or the US
- India must unleash the vibrant animal spirits of its 1.3 billion people by exposing them to global economic competition if it is to reach its potential and become the world’s largest economy
- Three steps are needed: join the RCEP; encourage an open South Asia region (and that means boosting trade with Pakistan); and welcome FDI, particularly US manufacturers seeking a ‘China Plus One’
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The country with the biggest gap between its economic potential and its economic performance today is India. India’s Gross National Product (GNP) today is US$2.6 trillion. It should be at least 10 or 20 times larger.
If we look at what ethnic Indians have achieved in the most competitive human laboratory in the world – the United States of America – and elsewhere, it is clear that Indians are naturally competitive economic animals and thrive in economic competition.
In this regard, they are very similar to the Chinese. The economic fortunes of the Chinese turned after the key reformist leader of China, Deng Xiaoping, opened up the Chinese economy in 1980 and allowed all Chinese, 1.4 billion of them, to compete.
In 1980, the size of the Chinese economy (US$191 billion) and the Indian economy (US$186 billion) were about the same. Today, the size of the Chinese economy is US$15 trillion, over five times the size of the Indian economy at US$2.6 trillion.
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