London-based prestigious magazine, The Economist, is known for its excellent research wing. Sometimes, it may appear economically or politically biased in the coverage of global events but it is totally objective so far as surveys and studies are concerned. Its issue, dated September 16, 2006, contains a survey of world economy, focused on the re-emerging economic giants, China and India. Giving historical data it analyses, "Until the late 19th century, China and India were the world's two biggest economies.

Before the steam engine and the powerloom gave Britain its industrial lead, today's emerging economies dominated the world output. Estimates by Angus Maddison, an economic historian, suggest that in the Eighteenth century, up to 1820, these economies produced, on an average, 80 per cent of the world GDP. But they were left behind by Europe's technological revolution and the first wave of globalisation. By1950, their share had fallen to 40 per cent. Now they are on the rebound. In the past five years, their annual growth has averaged almost 7 per cent, its fastest pace in recorded history and well above the 2.3 per cent growth in rich economies. The International Monetary Fund forecasts that in the next five years emerging economies will grow at an average of 6.8 per cent, whereas the developed economies will notch up only 2.7 per cent. If both the groups continued in this way, in 20 years' time, emerging economies would account for two-thirds of global output (purchasing-power parity)."

I am not fully aware of the reasons for China's poverty but so far as India is concerned, it may be said it has been a victim of British colonisation. Apart from fraudulent and dubious machinations designed to push their industrial products, the Britishers even resorted to amputation of limbs of excellent artisans. The story of exploitation is very long. Generally, economists and international bodies club China and India as re-emerging nations though India is far behind China. China started its reforms in the fag end of 1970s. We in India did not opt for it till the germs of socialism crippled Indian economy and rendered it bankrupt. It was fully exposed during Chandra Shekhar's regime at the Centre. However, the slow process of growth revved up with the advent of the BJP led-NDA the centre.

Take the example of Special Economic Zones (SEZs). These manufacturing and exporting zones have contributed a lot to China's rising manufacturing and exporting graph. The dazzling story attracted the attention of economists across the world. The NDA too followed China. The UPA Minister for Commerce, Kamal Nath is also a very enthusiastic supporter of SEZs. The corporate sector welcomed the move and came forward with several projects but the Marxists intervened.

Paradoxically, they have exempted their own state government on this front. The alibi offered by them is more of socialistic jingoism and less factual. Whereas China has freed its SEZs from the clutches of labour laws, Marxists of India have not only blocked labour reforms, they are even demanding formation of trade unions within SEZs. As I have said earlier India, though being clubbed with China, is far behind. The Economist survey gives the following comparison: "China joined the World Trade Organisation only in 2001. It is having a bigger global impact than other emerging economies because of its vast size and its unusual openness to trade and investment with the rest of the world. The sum of China's total exports and imports amounts to around 70 per cent of its GDP, against only 25-30 per cent in India or America. By next year, China is likely to account for 10 per cent of world trade, up from four per cent in 2000." India has not yet crossed one per cent. On export front, China and India are not comparable. This is the compelling reason for India to multiply SEZs, not at the cost of the farmers but for their benefit.

The dynamics of SEZ strategy is pregnant with many unforeseen benefits in the field of production and employment. If the CPI-M's "brake system" succeeds, this sector too will lose momentum. Looking into Congress president Sonia Gandhi's remarks at Dehradun, that prime agricultural land should not be normally diverted to non- agricultural uses, Commerce Minister Kamal Nath too yielded and sent a circulars to states to that effect. This has already dampened the enthusiasm of the entrepreneurs. Now it seems that socialist bugs in the UPA Cabinet are trying to beat the scientific socialism of the CPI-M. Rural Development Minister Raghuvansh Prasad Singh has said this is nothing but a real estate scam in the name of development and investment. He has also demanded inquiry into existing SEZs to find out its social impact and real contribution.

Courtesy: dailypioneer.com, October 01, 2006