Not As Bad As It Looks

Shashi Tharoor

Since my college debating days, and as a writer, I have always preferred argument to data. Not that facts aren't essential to a good argument; reasoning, as any good lawyer will tell you, always requires evidence. It's just that a dry recitation of facts has always struck me as less tempting to write. And yet I am going to use this column to inflict data on my unaccustomed readers. Of course, there is the formulation, "lies, damned lies and statistics". Yet sometimes statistics can tell a remarkable story, pointing to larger truths hidden behind the data. I have been collecting some interesting new statistics about what I once called "my beloved and impossible country", and feel my readers might be as struck by them as I am.

Consider, for instance, the following:

• Despite a host of ill winds buffeting the Indian economy - from the 'Asian flue' of 1997 to the international sanctions that followed our nuclear tests at Pokharan in 1998 - the country's Gross Domestic Product (GDP) has been expanding steadily. Were it not for Kargil, we might already have hit the 7 percent growth figure; barring similar misfortunes, we should make that mark in 2000, and maintain it through the first decade of the new century. No wonder that, in October, the prestigious American firm Moody's Investors Service raised its estimation of India's credit outlook from 'stable' to 'positive'. One of the reasons India was not infected by the 'Asian flu' is that we have an unusually strong domestic economy and we are not as reliant as others on foreign capital and foreign markets. In fact, domestic consumption in India is almost 80 percent of the country's GDP, comparable to a highly developed country like the United States. By comparison, even China, with its vast population, has domestic consumption levels accounting for only 59 percent of its GDP. This makes India much less vulnerable than most to external shocks.
• We aren't doing badly in the global inflation stakes, either. The British news magazine The Economist recently estimated that Russia will experience 88 percent inflation in 1999. Turkey nearly 61 percent, Indonesia almost 25 percent - and India between 6 and 7 percent. That's one race we don't want to win, and as of now we seem to be managing the inflation challenge prudently.
  
• Official Development Assistance (ODA) - government to government aid - is now well below private capital flows. We are receiving only about US$ 1.6 billion in ODA, about Rs.65 (or not even $2) per Indian. By contrast, Nepal and Sri Lanka get $19 dollars per head in aid; Pakistan gets 5. Foreign Direct Investment targets, though, are aiming at $10 billion a year - $10 per Indian. That's where the money is - with private firms, not aid agencies.
  
• Foreign Direct Investment in India went from just about a $100 million in 1991 to a peak of nearly $3 billion in 1997. It has dropped since then, to under 2.5 billion last year (1999 numbers aren't in yet). But with international investors reassured by the country's post-election stability, and the Government making the right pro-reform noises, the auguries are good for a better performance in the first years of the next century than in the entire preceding half-century. Last month, the benchmark Mumbai Foreign Investors Exchange rose a new high. There's no obvious obstacle to it continuing to climb.
  
• If you examine the country's export of manufactured goods, India has an unusually high percentage of high-technology goods - 11 percent of our exports are high-technology, whereas Pakistan's for example, is only 3 percent. (China's is 21 percent, so we still have some catching up to do, and the US' is 44 percent). For a developing country, this is still a remarkable advertisement for our high-technology skills.
  
• Our electricity consumption, though, is poor, at 347 kilowatt hours per capita; the US' is 11,796 kWh per American, and even China, with a larger population than ours, consumes 687 kWh. Clearly there is room for improvement here, but our growth rate is high (though exceeded by Pakistan's).
  
• We keep talking about the pool of trained scientists and engineers in our country, but the number of research and development personnel in India are much lower, both in absolute terms and as a percentage of the population, than either China or Japan.
  
• Our population, now past the billion mark, is slated to overtake China's by the year 2020. But the news is not all bad:the birth rate (the number of births per thousand, currently two) is dropping and so is the fertility rate (the number of births per woman). Life expectancy has risen from 50 in the 1970s to 60 today and should reach 65 by 2010. Current projections suggest that India's population will stabilise at 1.3 billion around 2030 - unless AIDs and natural disaster confound the demographer's projections.
  
• The percentage of India's population living in the cities has grown from 25 percent in 1991 to 28 percent and is projected to reach 33 percent by 2016. This will take us from about 200 million city-dwellers at the next decade and a half, a truely appalling prospect for urban planners. The infrastructure development challenge is daunting; so is the challenge of urban governance.
  

Who says statistics aren't interesting? Here's one that encapsulates both the economic and population figures above. We have some 280 million Indians between the ages of 15 and 29. That's a rather large number of young people, who need to be absorbed into the economy if they are not to become disaffected and easy prey for militant movements. That statistic alone should underscore the case for pro-growth economic reform. I shall return with more numbers next fortnight.