Jamaica Gleaner
Published: Sunday | May 17, 2009
Home : In Focus
The Indian model

Robert Buddan, Contributor

As Indians in Jamaica and the Caribbean celebrate Indian Arrival Day in May, we might think about India arriving in the big economic league as well. In this era of economic gloom, most countries would envy India's economic performance.

The reputable journal, Foreign Affairs, reported of India in 2006 that, "the country's economy grew at six per cent a year from 1980 to 2002 and 7.5 per cent a year from 2002 to 2006 - making it one of the best performing economies for a quarter century". This growth has naturally started to transform the social structure. The article says, "In the past two decades, the size of the middle-class has quadrupled (to almost 250 million people), and one per cent of the country's poor have crossed the poverty line every year."

Fourth largest economy

In the early 1980s, Jamaica was being sold the 'Asian model', named after the so-called Asian Tigers led by Japan. Now, India is the fourth largest economy in the world and will soon overtake Japan to become the third largest. More recently, we have been talking about the Irish Model too. We should learn from all of these models and so we should be talking about the Indian Model as well.

What is the Indian Model? Rather than labour-intensive exports, the strategy adopted in the Asian Model and still being used by China and India has relied on its large domestic market, consumption more than investments, services more than industry, and high-tech more than low-skilled manufacturing.

This means that its economy has been better insulated from global downturns. But, there is an important social dimension to the Indian Model. It has been more directed at getting people out of poverty. As a result, its development has been more equitable than that of many others. The foreign affairs article points out that by the measure of inequality (the Gini Index) India scores 33, better than the United States' score of 41, China at 45 and Brazil at 59.

India is doing what no other country has ever done - growing fast, growing democratically, and growing equally. Jamaica has to find its own model, and we need one more than ever. We cannot repeat China's performance because we don't have the self-discipline and sense of collective obligation of China's Confucian culture and communist system. We can't follow Ireland because we don't have the advantages of membership in the European Union. We can't do it India's way because we don't have its large domestic market and high-tech skills.

Jamaica's must find its own way. The industries of the first modern economy (1950-1970), bauxite, tourism, sugar and bananas are doing badly, with little hope for the agricultural ones without a proper plan. We spent the 1970s and the 1980s trying to revive them to little avail. The second economy only began to emerge around 1990 with liberalisation and the industrial policy of 1995. Many of the industries of the second economy - ICT, tourism, financial services, port development and highways - came about in this period.

These still remain the main pillars of the economy. Jamaica, like India, also made social gains. The poverty rate was brought down from around 30 per cent to under 10 per cent; child malnutrition from just over eight per cent to just above two per cent; and unemployment to 8.6 per cent. All of these had been achieved by 2007. Considering that the United States now has an unemployment rate of 8.9 per cent, ours was not bad at all.

Sectoral debates

We have heard six speakers from the Government and Opposition in our Budget Debate between April 23 and May 7. We will hear another 60-80 from both sides in the sectoral debates between May 19 and July 22. We will be listening to hear what comes out that can be constructed into an ongoing revision of ideas and strategies to make Jamaica a First-World country.

The principal speakers have put some ideas on to the table. When we consider our strengths as a people, our nature-given competitive advantages, our location, the appeal of our culture, our friendly relations with other countries, the resources of our diaspora, and our global name brand - Jamaica - we should be interested in what our policy debates say about going forward.

I would be interested in what is said about our energy policy. The cost of energy is comparably high in production. Our ethanol industry is still only emerging. We have talked about coal, liquefied natural gas (LNG), and a new debate on nuclear energy is opening up. The coal issue seems to have gone out with former minister, Clive Mullings. The Government has come around to the LNG project of the previous administration. We need an update on oil exploration and we need to know more about the nuclear option.

I would also be interested in hearing how our international communications technology can make our young people more marketable around the world. How, for instance, they might be able to use ICT features to market their music, designs, literature, craft, and so on, under Brand Jamaica; and therefore, how youths can find a niche in these global markets. The leader of the Opposition said Jamaicans have never been intimidated by science and technology, and she is right. They need access to platforms and then they will be unstoppable.

Not only do we need to market new products, but we need a new class of enterprising entrepreneurs. Culture offers exciting products in which we are already globally recognised, from music to fashions. We need new entrepreneurs of an organised cultural industry who are products of the culture and the best representatives of it to be its entrepreneurs.

Emphasis on bio-technology

We need a new emphasis on bio-technology to boost agriculture. This is one way to lift the livelihoods of the rural population and make rural development work. This is obviously of great importance because of the heavy blow that the fall-out in bauxite, sugar and bananas has caused to rural livelihoods. Science and technology have to be complemented by collection and marketing systems, with sound environmental policies and a programme for replacing the past generation of farmers with a new generation.

I know that cultural industries can more than replace the lost earnings from sugar and bananas; and I hear that telemedicine can earn us more than bauxite. These are not commodity-based industries that suffer from the vagaries of the world trading system. They are services that are always in demand.

We have heard talk of getting India's help with a railway system, and the movie industry, and we need more progress on these fronts. India has helped Jamaica in a number of ways, such as with sugar, dairy, textiles, engineering and music. What India can help Jamaica with is how to grow fast, and grow equally.

Both countries have two of the longest democratic traditions among former colonies. What India has over us are economic and cultural leadership born of a vision that emanated largely from within the country and a model that makes the best of its own traditions. Jamaica is far too imitative, or is it that we are too quick to imitate the wrong things.

Robert Buddan lectures inthe Department of Government, UWI, Mona. Email: Robert.Buddan@uwimona.edu.jm or columns@gleanerjm.com

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