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    India at center stage

    India at center stage - NEWSWEEK editorial

    If only its economy could equal the success of its democracy

    One of the greatest events of our times is taking place, and the world
    barely notices. The largest democracy in history–India–is counting the
    votes of close on 370 million of its citizens, roughly the number of
    voters in the United States, Canada, and Europe combined. It is a fair
    bet that the final results on October 10 will also receive scant
    attention. We have, it seems, eyes only for China. This is shortsighted.


    Both China and India are vast commercial markets, each with about a
    billion people or more, growing at about 6 percent per year. India is a
    working democracy, with the kind of decentralized federal system
    necessary to govern large market economies, along with a highly evolved
    system of law and widespread use of a language–English–that the West
    understands. China, by contrast, is increasingly unreliable politically
    and may well be spinning out of control. Yet China receives 20 times
    more foreign direct investment than India– and far more political
    attention.


    Pride of place. As Mahatma Gandhi once put it, India is "a house with
    all the doors and windows open." It is pluralistic and diverse, with 35
    different languages each spoken by more than a million people, yet in
    the years since independence it has managed to create a sense of
    national identity. It is an ancient civilization, and it is right to be
    proud of its democracy. It would be formidable indeed if it could match
    its political success with a similar achievement in its economic
    policies. In fact, it has regressed: Its share of world gross domestic
    product has fallen from 2 percent to 1.4 percent in the past 50 years.
    It has mass illiteracy, poverty, disease, and hunger.


    Its defense of these failures is the democratic system that attracts
    such admiration. A democracy, the argument goes, cannot push through
    economic reforms with the speed and zeal of the more authoritarian East
    Asia tigers. But it was not really democracy that delayed India's
    advance. It was the hangover from the nostrums of state socialism that
    became so fashionable in the wake of the Great (capitalist) Depression,
    the apparent success of the Soviet five-year plans, and the genuine
    success of the government-directed Marshall Plan in Europe. India
    adopted an economic system that limited the growth of the private
    sector. It was allowed to expand only with government permission,
    rarely granted. Competition and rational business practices were
    frustrated by labor laws and job protection. Incompetence was masked by
    subsidies. Trade was stunted by quotas and high tariffs. These policies
    rewarded failure and punished success, permitted the politicians and
    bureaucrats to become parasites, and depressed the energy, resilience,
    and talent of the Indian people.


    Only the threat of bankruptcy in 1991 made possible limited reforms and
    pushed the "Hindu rate of growth" from 3.5 percent a year to 6 percent.
    Should the Indians extend reforms and deregulate the economy, they
    could well grow at about 8 or 9 percent a year.


    They will need support and encouragement to do this. The sad truth is
    that the world began to pay more attention to India only after it
    exploded the nuclear bomb last year. The United States reflexively
    imposed sanctions, despite the fact that India is prepared to join the
    nonproliferation regimes. India's record of responsible international
    conduct should separate it from rogue states such as Iraq and North
    Korea. The rationale for sanctions–hurting the innocent as the only way
    to punish the guilty–makes no sense when a country is contending with
    threats from Pakistan and China.

    The expansion of U.S. involvement with India is long overdue. It would
    serve our common interests in controlling the Islamic terrorism that
    now stretches from the Caucasus through Afghanistan and Pakistan and in
    influencing a more constructive policy from Iran. India, for its part,
    must continue to liberate the energies of its remarkable people. The
    new government will have the political stability necessary to disabuse
    the notion that Indians are incapable of greater control over their
    future. They well know Mahatma Gandhi's great notion that there is no
    easy walk to freedom.

    #2
    I think this is the editorial of US News and not Newsweek. Can someone confirm?

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