Time for India and Russia to Follow the China Model
As BRICS leaders meet in New Delhi, there is a much bigger possibility before India, Russia and China than simply expanding trade among themselves. It is time for India and Russia to learn from China - and build their own economies at the scale China has built its economy
Not copy China's political system.
Not copy its economic institutions.
Not try to reproduce its particular model.
There is really only one thing to learn from China: total focus on development.
China has demonstrated what happens when a country systematically builds infrastructure and productive capacity across the country — roads, railways, ports, power, cities, industrial capacity, logistics, agriculture and manufacturing.
And crucially, development does not have to stop at a few prosperous centres.
It can reach the nook and corner of the country.
Two developments make this possibility particularly important today.
First, financial resources need no longer be treated as a fundamental constraint on development. Under the modern monetary system, sovereign monetary systems are not constrained by the availability reserves. The real constraint is the availability of real resources — people, skills, land, materials, energy, technology and productive capacity. Even otherwise, finance primarily bridges the timing mismatches between the different stages of production.
Second, China has demonstrated that development on a truly massive scale is possible for a country. It has shown what can happen when infrastructure and productive capacity are pursued with sustained, comprehensive focus across an enormous geographical area.
India can do this.
Russia can do this.
Each has the resources, people, territory, capabilities and sovereign capacity to build an enormous productive economy of its own.
And then consider what happens when three such economies exist next to one another.
India + Russia + China.
Not as three countries dependent on one another because each possesses something the others lack.
But as three massive economies, each with its own infrastructure, productive capacity, industries, markets and resources — helping one another wherever it is advantageous or necessary.
A contiguous economic space of this geographical scale, containing billions of people and enormous productive capacity, would be something the modern world has never seen.
The implications would go far beyond BRICS.
Because this would demonstrate something even more important.
Development on this scale is possible.
And it does not require every country to follow the Western model of development, in which economic activity is largely expected to emerge from private investment responding to market opportunities and profit incentives.
There is another possibility:
A country can deliberately mobilise its human and material resources to build productive capacity across the entire nation.
Not merely stimulate demand.
Not merely redistribute income.
Build the economy itself.
If India, Russia and China were each to pursue such comprehensive development, the result could be the lifting of billions of people toward high-income living standards through the creation of real productive capacity on an unprecedented scale.
And if the experiment succeeds, the lesson would belong to the whole world.
The world could finally see, in practice, that there is an alternative to development being driven predominantly by private interests and the search for profitable markets.
A model in which the deliberate development of the nation's resources and productive capacity comes first — and finance is mobilised to make that development possible.
That is the real opportunity before BRICS.
Don't merely build a trading bloc.
Build a civilisation-scale productive bloc.
And let the world learn from the result.
Rajendra Rasu
The author writes on monetary systems and political economy
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