FUTURE MAY BELONG TO THE EAST IF.......

FUTURE MAY BELONG TO THE EAST IF......

Slowing down of the growth in the West is being seen as the slowing down of the economy of the world as a whole. And this has some rational as well as the most of the productivity comes from the west and slowing down of the productivity in the West will generate slowing of growth process in the other parts of the world as well. However this assumption or conclusion ignores certain realities which are as below

1. Most of the human resources in absolute  number lives in the east.

2.Most of the productivity generating raw materials are not found in the West.

3.Most of the sources of conventional energy is in the east.

4.Because of the fast growth during the last eight decades,  barring a few years of recession growth and productivity may be considered to have achieved saturation point or something like this. But the east has still far more potential and appetite for growth .

5.Richness brings complacency and after achieving a certain point of richness coupled with luxury , societies show tendency of decay. The entire human history is just a grand  story of cyclic rise and decline of richness of empires and societies and in most of the cases the entire world had never suffered integrated decline. Fall of one civilization has been the gain of other civilization.

    If the east learns some lessons from the history next growth episode will belong to the east.

     First , the east has to understand the value of friendly cooperation and coordination. When, after the 2nd WW the US took the lead of the west she didn't coerce the west rather she cooperated with the west, formed alliances and fostered mutual trust and respect. But this phenomenon is still missing in the east and the most important eastern country at the moment , China is not following that way . China is adopting pre WWII strategy of intimidation and cheating.

      Second, the east has to learn the value of democracy. No autocratic nation can fuel innovation for long as there is no place for alternative thought system in autocracy. Most of the eastern countries are still unconvinced of the idea of democratic ideals. The world herself is the example of the importance of democracy. The west has registered fastest growth in all walks of life when she adopted democracy. Rise of democracy has not only helped in lessening the material miseries of the citizens but also helped in lessening in international conflicts. We see after the WWII there has been minimum conflicts between democratic countries. We have also witnessed that the people of the autocracies suffered a lot despite the growth registered by the autocratic countries.

    Third the east has to invest in secular knowledge which are the vehicles of growth and productivity. Theocracy has always opposed the process of mass growth as it's by nature discriminatory. Similarly investment in health or better say investment in human resources quality improvement project is a precondition for growth and the east has to get by heart this lesson .

       Fourth is the improvement of status of women and welfare of children and the old. Any society consists of roughly 50 percent of female population who is herself a productive agent and who is universally primarily responsible for better development of future generations . In this case discrimination against women is bound to cost heavily and is certain to pull back the society as a whole. So economic and social empowerment and gender parity in health, education and respect are of prime conditions for future growth. Almost the entire east has been culturally against the women and this barrier must be overtaken.

            Fifth is the similar attention to socially backward classes . Race , caste, region have been major sources of discrimination in the entire world. The west is still struggling against these discriminations and at least the dominant theoretical position after WWII is against such discriminations. The east must also adopt this non discrimatory posture in theory and practice.

          Sixth is the cooperation with the West. The West is no doubt repository of modern knowledge and practices and by ignoring the West and by taking position against the West is going to divest the East of the vast pool of knowledge gathered by the human societies in the East.

         Seventh is the sources of energy. We have witnessed that after the shift of sources of energy from manual to mechanical growth increased exponentially. Industrial Revolution was possible only after the advent of steam engines and soon the world shifted to the more efficient sources like nuclear and petroleum . Fortunately the East is still rich in these both sources. If the East succeeds in coordinating the energy sources a vast opportunity of growth is still possible. At the same time the East is very well geographically situated with the rich mineral resources which if harnessed prudently can do wonder in the fields of non conventional sources of energy or renewable sources of energy. If the East with coordinated efforts learn to use these non conventional sources the required energy will be available for fuelling the growth engine.

       Eighth is the vast pool of skills and ideas. The success story of the West is well written in the Silicon valley and there is no doubt that the silicon valley is mainly manned by skills of Asia. China and India are two main sources of supply of skills to the Silicon valley. Besides these two countries, Japan, South Korea, Hongkong and Singapore have also vast pools of skilled personnel.  If the individual countries of the East provide suitable economic and technological policies the East has potential to have many Silicon Valleys of their own. But there is a precondition and that is the policy of free flow of skilled people within and outside the boundaries of individual countries. The East has to shed its penchant for totalitarianism and restrictions. The East must remember that the West could become an economic and financial giant only after the fall of Hitler and the process of growth could be accelerated only after the fall of communism which enabled Europe to coordinate better . 

     Ninth, the East has to recognize the role of investment in planning and execution for creation of suitable infrastructure with proper emphasis on urbanization with all urban structures. Most of the East has vast potential for urbanization and if properly planned and executed will definitely produce very encouraging results. But care must be taken that the process of urbanization must not accelerate the pauperization of rural settings. Urbanization  will have to be accompanied with the growth of production and service centers in order to enable the migrating population to be adjusted significantly and at the same time increasing mechanisation of agriculture and allied activities to encourage commercial farming in place of subsistence farming.

     Tenth is the policy. As the prosperity is increasing in the East both intra country and inter country inequality are increasing. Some small groups of people and nations are growing much faster than others. Inequality has not only economic consequences but it has social, politics and cultural consequences as well and because of inequality economies feel economic shocks, sociological tremors, cultural depressions and  political instabilty. So in order to arrest the inequality policy intervention is  the urgent call.

      Eleventh is the environment for innovation and new ideas. Innovations lead to technology. Western tech may not suit local needs of the countries of the East and so indigenous technology must be encouraged . At the same time adoption of new suitable tech must also be encouraged. Eastern countries are very much rooted to their culture and they hesitate in adapting new technologies in the beginning. During  COVID 19 pandemic there had been strong initial  aversion for adoption of COVID vaccination. Similarly when India started computerization and electronic revolution during 1980s there were strong opposition both at socio-cultural level and political level. This aversion for technology must be overcome by spread of awareness. Indian business class at mass level is still not very enthusiastic for adoption of technology for the business purpose and this must be eradicated for the sake of growth.

   Next, that is twelfth is related to means of communication. Communication provides knowledge and fast and accurate information. This enables enterprises to select best possible course of action.

     Poor allocation or misallocation of resources is the other problem in the Eastern countries. Availability of resources, both living and non living is not sufficient. Resources are capital only when they are used in the most productive ways. So resources misallocation must be removed and this can be done by reforms in policies. 

      Fourteenth area is the reform in capital market. In this area a lot has to be done , particularly in banking sector. Banking in many Eastern countries still live in the parochial mindset and marred by political interference. Political connections and not entrepreneurship is the prime consideration for lending by banks. Banking sector has also so many internal and structural issues which require urgent attention and policy intervention.

      Fifteenth is the related to the laws and practices related to land. Land is one of the primary resources for any development project but in the East land laws and land records are so old, parochial and complex that so many projects die before their birth only due to non availability of land or due to almost incurable land disputes.

        Next, that is sixteenth area is the area of management where the East is very poor. Many businesses and other enterprises are family ventures which are difficult to be run by the principles of modern management. Family run small businesses are grown with a specific mindset where getting richness is not the objective. Rather , like subsistence agriculture most businesses and enterprises are subsistence enterprises whose owners have no special appetite for more and more growth. Such small family managed enterprises have very limited scope and future. Small MSMEs or small shops are being run as a family venture and so their productivity is very low. They are also not in a position to provide more earning to their employees either. This can be altered by introducing suitable changes in the structure of economy and at the same time cultural shift is also necessary.

       Seventeenth is the correlation and connection between growth and job market. Jobs are essential for growth as jobs are the major source, besides self employment for income generation. And jobs fulfill the need of labour essential for running the growth. There is close interrelation among education, employment, jobs, labour market, income, savings and expenditure. But job creation is a very serious task. The East has a typical attraction for government jobs, but governments are pulling back and  private economy has been rising. In this situation need for skilling the youthful labour is essential and the economies of the East have to accept  and  learn that despite being labour abundant this abundance will be a dividend only when the labour force is trained as per the needs and requirements of the modern economic structure.

   

    (Data protection, integration with international trade, shift to service sector)

      

    These are only a few highlights among many which can enable the east to lead the future story of growth. And the last but not the least is that the east has to remember that the ultimate objective is not growth or productivity but development.