Thursday, 9 July 2009

Asia Rising- Only half the story

A recent blog entry in the Harvard Business web site ( spoke of Asia rising as a key trend. Sure nothing wrong in that. But it did beg the question, is the West sleeping? and if so , why?

It is clear that India and China (and Africa as well) will grow fast...why not, they are the poorest parts of the world. Especially in the case of India, poor government policies of the first 50 years of independence condemned large parts of the population to stagnation.

Now, these two countries are trying to make up for lost time and opportunity. 1 billion people in these two countries are still poor...i.e. not even in the middle class. The per capita GDP in India is USD 1000 and in China about USD 2000. About 15 times lower than Western Europe.

But this is still half the story of the world. The slowdown in western europe and the US made me ask a question to my colleagues there.

At 30,000 USD of per capita GDP, have you achieved all that you want?
Is there really no further aspiration?
Why is it that space travel is still not affordable and aspired for by your country?
Have you reached the end of research into AIDS and cancer treatment?
Have you given up on green technologies- and alternate fuels?

The world has too many unsolved problems. India and China can solve a few, but only those that don't require expensive research.

Why the West gave up on the idea of "renewing and re-educating" itself, i cannot say. The world has more than enough room to grow at more than 4% over a very long period. It needs productive investments. Both in Asia and in the West. Our leaders fail us when they allow us to get complacent. Both business leaders and government leaders in the west are responsible for the slowdown there.

One day Asia and China may also begin to bask in the glow of "contentment"- to their own peril.

India was a very rich country 500 years ago, but the kings spent the money on luxury goods- building palaces and generally decorating themselves. Sounds familiar?

Ritu and Venkatesh

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