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13 China’s Foreign Direct Investment Story: AnEvaluation

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16 Globalization: Vision and Reality

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18 The Stilettoization of Economic Progress

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World Bank (2005) ‘A Better Investment Climate for Everyone’, World DevelopmentReport, International Bank for Reconstruction and Development and World Bank,Washington, DC.

Index

Notes: b=box; f= figure; n=note; t= table; bold= extended discussion or headingemphasized in main text.

Abe, S. 274absorptive capacity 136, 195academia/academics 49, 155, 156accessibility 128, 133accountability 73, 273Aditya Birla group 180Adjustment with Human Face

(UNICEF) 2badvanced nations 230, 238, 271

Lewis’s model 53aeroplanes 101aerospace 149taffluence 40, 161, 237, 264affordability 140, 258Africa 6, 74, 76, 163–4, 237b, 240, 245,

268, 269‘biggest challenge’ 222comparison with East Asia 220–7GDP growth (1965–99) 220tinternational inequality (1960, 2000)

233t, 236tshare of industry in GDP 224

Africans 245, 246aggregate savings 51agrarian reform 172Agricultural Bank of China 109, 111tagricultural commodities/products 55,

73, 203agricultural intensity 63–4agricultural reform 178agricultural sector 35, 52, 54, 73, 77,

78, 81, 86, 95, 119, 121, 144, 204,205, 241

decentralization (PRC) 88labour-intensive 62Lewis’s model 53

‘primary sector’ 54–5, 73, 77–8, 175,180, 222, 242

agricultural tax (PRC) 125agriculture 17, 58, 63–7, 138, 142, 143,

176, 206b, 224, 240commercial 67, 75, 126, 174, 242‘crop diversification’ 69‘crop insurance’ 67decollectivization 124employment-absorption capacity 68growth rate (India, 1950–2004) 20t‘organic farming’ 67output 124–5price-related reforms 124public expenditure 128sectoral real GDP growth rates (India,

2003–6) 21tsee also farmers

Ahead of the Curve (UN, 2005) 4naid/foreign aid 221, 222n, 223, 226,

239, 253–4, 269‘international donors’ 32‘overseas development assistance’

222nAIDS 245air travel 84bairports 33, 34t, 144allocative inefficiency 122, 108, 184Alma Alta 132aluminium 21, 121America 172Andhra Pradesh 28tanti-dumping duties 143Argentina 74, 210, 237barmed forces (PRC) 95ASEAN 150t, 212t

289

290 Index

Asia 16t, 240, 254, 263Asian Development Bank 112Asian Development Bank Institute

214nAsian Development Outlook (2004) 26Asian financial crisis (1997) 75, 105,

164, 184, 195–8, 210, 217b, 219Assam 28tasset management companies (AMC)

99, 109assets 99, 101, 105, 112, 114, 197, 252audio and video (equipment) 149tauditors 111Australia 205, 214n, 237–8bauthoritarianism 15, 84, 92, 93, 94,

160, 182automobiles/automobile sector 25,

101, 105, 142, 148, 154, 180‘cars’ 84bprotectionism 152–3

autonomous regions (PRC) 90aviation 44, 105

baht 195balance of payments 31, 181, 268balance sheets 111Baltimore 213Bangladesh 38t, 233, 233n, 236n,

237b, 269, 276see also Bhutan

Bank of America 112Bank of China (BOC) 108, 109,

111t, 112recapitalization (2003) 111

Bank of Communications 112bank credit 87, 198bank finance 36, 145bank lending/loans 108, 114, 148, 198

see also lendingbanking 26, 35, 65, 164, 199, 200

commercial 109prudential norms 110

banking sector 108–14, 142, 184–5,194–5, 262

diversification (PRC, 1979–) 109global standards 112reform 94, 110, 111–12, 113, 184trends (PRC) 112two-tier (PRC, 1994–) 109

bankruptcy 115

banks 3, 107b, 183joint-stock, commercial 109, 112non-state-owned 183operating costs 113recapitalization (PRC) 111, 114, 184state-owned 109, 112, 183–4

‘barefoot doctors’ 133bargaining position 269bargaining power 33Basel II (capital accord) 110

see also capitalBeihai 90bBeijing 134benefits 115, 251–2Berlin Wall 14, 178best practice 94Betapharm 25Bharat Aluminium Company 42tBharat Forge 180Bhutan 38t, 276

see also IndiaBig Bang liberalization 76, 146, 160

‘quick-fix liberalism’ 161see also capital account liberalization

Big Bang privatization 92, 103Big Four (PRC banks) 109, 111

NPLs (2000–3) 111tBihar 27, 28tbio-medicine 178bio-technology 24, 27, 35Birdsall, N. 222Boeing Corporation 84bbonds 109, 113, 114–15, 198bonuses 98Boston Consulting Group 14, 180Bosworth, B.P. 198Botswana 199brand names 115branding 67Brazil 9, 10, 11, 205, 237b

see also BRIC economiesBretton Woods institutions 3, 4, 276bridges 144BRIC economies 10, 10b, 11, 14

see also Russian Federationbroadcasting 126budget constraints 104bureaucracy/civil service 44, 174, 211,

224, 271

Index 291

bureaucratic delays (red tape) 75, 79,104, 175, 185–6, 235

‘over-bureaucratised system’ 60–61bbureaucratic intervention 73bureaucratization 27, 235bureaucrats 92business [lobby] 219business environment 19, 114business interests 266business process outsourcing (BPO)

26, 36

call centres 14Canada 145Cancún 204capabilities 259, 272

domestic industrial 218innovative 260skill-intensive 166technical 155, 156, 157, 260

capacity utilization 50capital 58b, 59b, 80, 98, 99, 104, 115,

145, 148, 158, 176, 214, 224, 241foreign/international 144, 151, 200return on 43, 221see also GDCF

capital:labour ratio 119, 120capital:output ratio 120capital account convertibility 75,

164, 184capital account liberalization 7, 195,

197–8, 199–200see also economic liberalization

capital accumulation 118, 120–2,181–2, 186, 221–3, 229, 259, 275–6

inadequacy 268capital adequacy ratio 183capital allocation 76, 113capital base 183capital controls 159, 164, 210capital flight 164, 222, 270capital flows 195, 197–200, 223capital formation 37, 38

average gross fixed 66net (public sector) 48

capital goods 19, 21, 22, 58b, 60bcapital intensity 59b, 139capital markets 31, 102, 114, 183, 185,

199, 200, 213

capital mobility 197, 199, 210,271, 275

capital repatriation 212capitalism 8, 19, 80, 92–3, 98, 179, 161capitalist forces 179Carnegie Endowment for International

Peace 101caste 39–41caterers/catering 63, 64, 243cement 19, 21, 121, 174Central Asia 4t, 6t, 234central bank (PRC) 110, 114Central Committee Circular on

Agricultural Work (PRC) 87Central Europe 237b, 240central government 88, 95, 96, 102,

126, 129central planning 8, 12, 86, 92, 108,

156, 192, 193centralization 83, 89, 91, 94, 95, 106,

107, 163, 228–9, 230imperial China 173

Centre for Global Development203, 222

ceramics 19cereals 50, 66chaebols 217bcheap labour 89chemicals 19, 58b, 59b, 149t, 215children 47, 245Chile 114, 222, 237bChina (imperial)

centralized monarchy 173China, People’s Republic (PRC) 4n, 5,

6, 9–12, 15, 25, 26, 38, 74, 78, 80,134, 192–4, 199, 200, 202, 224, 233,233n, 236n, 237b, 240, 241, 244,248, 257, 261, 262, 265,267, 274

accession to WTO (2001) 141–4constitutional amendment (1999)

107beconomic growth 14exports, imports, trade balance (2004)

150tFDI 24FDI by USA 85b‘fundamental point of differentiation’

with India 77GERD: GDP ratio 135, 135t

292 Index

China, People’s Republic(PRC) – continued

gross domestic saving and investment(1971–96) 47t

political establishment (PRC) 168post-Mao 92R&D as percentage of GDP

(1995–2000) 136trising significance in global economy

(1989–2003) 16t‘ten co-operative regions’ 96trade strategy 91trade with USA 85btrade imbalance with USA 151, 154‘two distinct facets’ 159underpinnings of growth patterns

118–22weaknesses (economic, technological,

institutional) 122see also India and PRC

China (PRC): ascent as economicpowerhouse 83–96

appendix 95–6conclusion 94economic liberalization 86–94economic growth rates (1990–2001)

85tGDP growth (2002–6) 86tmarket potential 84–5bSEZs 90b

China (PRC): emerging superpower82–187

comparison with Indian economy170–87

economic reform: ‘ensuing phase’116–30

FDI 141–58human capital formation 131–40lessons 107–8, 161, 162, 165, 184lessons (fundamental) 169SOE restructuring: issues and

challenges 97–115China (PRC): Foreign Ministry 151China (PRC): Ministry of Science and

Technology 136China (PRC): poverty reduction

122–30‘general observation’ 124increasing inequality 129b‘mixed bag’ 127

‘nuanced view’ required 124‘recent strategies’ 125–7three phases (1978–) 123–4‘vicious circle’ 129

China (PRC): economic experience(insights, lessons, perspective)159–69

conclusion 168–9economic transformation: beyond

structural adjustment 165–8insights 167, 168, 169lessons 161, 162, 165lessons (fundamental) 169neo-liberalism: re-invention 160–5turning points (1978, 1985, 1989)

167China Banking Regulatory Commission

(CRBC, 2003–) 110China Construction Bank 109,

111t, 112recapitalization (2003) 111

China Daily 133China Economic Quarterly Special Report

(2003) 85nChina Human Development Report

(UNDP, 2005) 129bChina Investment Bank (PRC, 1981–)

109China Securities Commission 99China Securities Regulatory Commission

102China State Development Commission

157China Statistics Yearbook (2001) 128Chinese Academy of Sciences: Institute

of Economics 129bChinese Army 167Chinese Communist Party 87

11th Congress, third plenum (1978)86

14th Congress (1992) 93, 94Central Committee 135Economic and Finance Leading Group

93–4power struggles 92see also communism

cholera 245Chrysler 153CITIC Industrial Bank (PRC, 1987–) 109cities 90, 90b

Index 293

civil aviation 115civil service see bureaucracycivil society 49, 259, 266clinics 133clocks 60bclothing 58b, 59b, 60b, 147, 149tCMC 42tcoal 21, 22coal tar 64coke 58b, 59bCold War 8, 168, 239Colgate-Palmolive 27collectives 95, 98, 115

agricultural (PRC, 1955–) 86employment (PRC, 1978–99) 106turban 106–7

Collins, S.M. 198colonization 174, 239Columbus, C. 172Com-Cap, Cap-Com 80command economy 91, 103, 105–6commerce 205, 232, 233Commonwealth of Independent States

(CIS) 236tcommunes 86, 87, 95, 123, 133communication devices 58b, 60bcommunications 64, 126communism 80, 82, 83, 86, 88, 91,

92–3, 117, 141, 143, 148, 159, 160,165, 173, 174, 178, 179, 180, 192–3

disintegration (Eastern Europe) 168see also Chinese Communist Party

communist countries 6, 8community health workers 133companies/firms

domestic/local 101, 148, 151, 152,154, 156

‘enterprises’ 88–9, 90b, 145, 150–2,155, 243

foreign 90b, 145, 146, 148, 150–2foreign affiliates in PRC 145–6high-technology 138industrial 157‘joint ventures’ 145–6‘joint-stock companies’ 100, 101large/larger 155, 157, 158, 243limited liability 99loss-making, profit-making 42tmanufacturing 243, 273medium-sized 155, 157, 243

miscellaneous 25, 98, 261modest-sized 259non-state 144, 157parent 99private 101, 145, 180private, limited-liability 99private-sector 19, 148small 145, 243smaller 157, 158‘SMEs’ 106, 113, 142, 145, 151, 217b‘spin-off’ 99subsidiary 99world-class 180, 185–6see also MNCs

companies with limited liability (CLL)98

Company Law of the People’s Republicof China 101

comparative advantage 8, 26, 72, 106,116, 125, 135, 147, 149, 186,203, 215

‘competitive advantage’ 37, 150, 166‘competitive edge’ 77, 91, 151, 175‘competitor advantage’ 180

competition 22, 44, 58, 73, 113, 142,154, 155, 183, 233, 235

fair 213competitiveness 18, 22, 56, 59b, 64,

113, 114, 115, 132, 142, 152, 153,171, 178, 180, 217b, 225, 226,261, 275

renminbi (against major currencies)164

components/parts 147, 153computers/computing 35, 64, 148, 149tconditionalities 19, 74Confederation of Indian Industry 34‘Congo’ 268construction 21t, 64, 109, 126, 156,

183, 243consulting 25, 157consumer dissatisfaction 44consumer electronics 148consumer goods 22, 58b, 59b, 166, 176

labour-intensive 175protectionism (India) 60b

consumer spending 187consumption 15, 51, 128, 138,

181t, 204food expenditure 54

294 Index

context 159, 163, 174, 238national 159

contract responsibility system 88, 89contracts 88–9convertibility 195core competences 36–7, 39, 63, 71,

78–9, 80, 135, 136, 151, 152, 167,171, 186, 215, 218, 225, 259, 275

core competencesknowledge-intensive 69, 70f, 77, 217skill-intensive 37, 217

corporate bond markets 114–15corporate debt 114corporate elite 11corporate governance 100, 101, 105,

111, 112, 115, 259Corporate India 25corporatization 94, 98, 99, 101, 107corruption 77, 228, 229, 262, 266,

273, 276Corus 25cost-competitiveness (India) 27cost-minimization 261costs 272

inpatient and outpatient 133cotton 125, 127, 203counties (PRC) 87, 126, 133county governments (PRC) 129credit 61b

see also micro-creditcredit co-operatives 109–10, 112credit pricing 109credit quality 111credit risk-rating system 110creditworthiness 129crony capitalism 104–5, 194, 218,

219–20, 263cronyism 266Cultural Revolution (PRC) 83, 95,

123, 177culture 131, 173, 212currency 147

foreign 109overvalued 146

currency convertibility (PRC) 164currency markets 105current account deficits 3

Daewoo Electronics 25Daimler Chrysler 27

Dalian 90bdata deficiencies 68de minimis level (WTO) 206–7b, 208bdebt 9, 99, 203, 226, 239

external 199, 221short-term 199, 198

debt crises 3, 195, 196, 221debt-equity swap 99, 99debt-servicing 3, 222decentralization 83–4, 86–9, 91, 94, 95,

98, 116, 161Decision on Issues concerning

Establishment of Socialist MarketEconomics Structure (PRC, 1993)94

Decision on Reform of Economic System(1984) 86

decision-making 22, 75, 87, 88, 92, 98,100, 105, 162, 175, 192, 232, 238

defence 26deflation 273deforestation 252demand 22, 53, 54, 61

agricultural products 66compressed 55domestic 35, 224food 55

democracy 15, 76, 77, 80, 159, 160,161, 167–8, 173, 174, 232–3

‘not always precursor to liberalization’179

‘democraticauthoritarianism’(PRC) 118demographics 11Deng Xiaoping 83, 84, 88, 94, 167,

178, 179assumed reins of government

(1976), 177‘tour of South China’ (1992) 86,

92–3, 144, 168, 174dependency ratio 51dependency spiral 223dependency syndrome 221, 222f, 239deprivation 1, 17, 29, 123, 128, 232,

257, 268, 269, 270‘startling facts’ 245–6see also poverty

deregulation 4, 27, 31, 109‘derived innovation’ 225design 153deskilling 174

Index 295

developed countries 8, 11, 54, 76, 113,135, 142, 159, 185, 193, 197, 203–5,208b, 208, 227, 236, 237–8b, 239,241, 249, 274

Indian aspirations 51international inequality (1960, 2000)

233t, 236tdeveloped countries (synonyms)

‘advanced countries’ 3, 12‘affluent nations’ 237‘high-income countries’ 4t‘industrialized nations’ 17‘OECD countries’/’OECD region’

148, 203, 215‘rich countries’ 204, 245see also newly industrialized

economiesDeveloping the Western Region strategy

(PRC, 1999–) 126developing world, 3, 5, 6, 10, 11, 14, 15,

17, 19, 20, 23, 25, 36–8, 41, 45,52–4, 56, 66, 70, 72, 74–9, 82, 89,105, 114, 121, 127, 128, 130–2, 136,138, 139, 145, 154–5, 159–64, 170,171, 179, 184, 185, 191–3, 198,202–5, 207b, 208, 210, 212, 213,217, 219, 223–5, 227, 228, 230–45,248, 257, 258, 261, 265, 274

insights from Singapore 271‘special and differential agreement’

206btransformation to ‘developed’ status

165developing world (synonyms)

‘emerging’ markets/economies 11,113, 114

‘least developed countries (LDCs)’2–3b, 8, 203, 208b, 270, 275

‘less-developed nations’ 15, 203, 205,236, 239

‘poor countries’ 204, 237, 251‘poorest countries’ 234‘under-developed countries’ 76, 200,

221, 231, 238–40, 249, 253,266–9, 275

see also LDCsdevelopment 6, 30, 31, 38, 46, 76, 80,

81, 107, 171, 187, 197, 209, 220,223–7, 231, 232, 241

empirical evidence 5

global 276growth elasticity 254higher levels 168multi-dimensional process 252national 225, 239pace 169, 172, 264, 272, 276prerequisites 210, 221production function 249–55scorecard 2–3bsocio-economic 209see also economic development

development accounting 252development agencies 266,

270, 275development assistance 204development ‘booms’ 1development economics 15,

80, 169first-generation 6, 7

development finance 198development goals 206bdevelopment and growth: bridging the

gap 247–76development paradigm (evolution and

importance) 256–76introduction 248production function of development)

249–55see also economic growth

development inertia 18development models 15

‘competing’/’complementary’(India/PRC) 182–3

development paradigm/s 9, 12,244, 255

development paradigm (chapter twenty)256–76

‘crux’ (sustaining prosperity) 274curative 269–71economic reform (third constituent)

272–6insights 271Singapore: exemplification of EEM

271–2South Asia 276three constituents/fundamentals

256–7transition from resource mobilization

to resource management 269–71

296 Index

development paradigm: evolution256–69

development trajectory (four phases)263–4

diagram 265feffective economic management

(EEM) 259–69P-EPP principle 257–9strategy formulation 267

development planning 73development priorities 267, 269development process 9development quotient of growth 254–5development strategies 2, 11–12, 78,

228, 248third-generation 7

development trajectory: four phases263–4

development zones 90development–efficiency trade-off 225developmental targets 33, 246diarrhoea 245disease 9, 134, 245disparities see inequalitiesdistribution 21, 97dividends 99, 100division of labour, international 90Doha 204Doha Ministerial Declaration (WTO,

2004) 205, 206–8bBlue Box payments 207bde minimis level 206–7b, 208bFinal Bound Total AMS 206b, 207bimplementation periods 206bparagraph-13 206b‘special and differential treatment’

206btiered formula 208b

downstream industries 216Dr Reddy’s 25drought 227drugs 19, 134Dupont 27

East Asia 5, 6, 24, 26, 38, 74, 75, 84,120, 152, 157, 168, 195–6, 234, 240,257, 270, 271, 276

economic growth rates (1980–94)214t

exports 212t

FDI–trade linkage 147–8GDP (1970–98) 4tindustrial policy 137international inequality (1960, 2000)

233t, 236tlessons for Africa 222population below poverty line

(1990–2001) 6tEast Asian miracle (EAM) 7, 48, 170,

194, 209–30analysis 211–20‘classic lessons’ 210comparison with Africa 220–7conclusion 227–30‘critical question’ 213–14‘four keys’ 210–11lessons 210, 222‘three basic factors’ 210

East Asian model 211, 227, 230East Coast (PRC) 89, 90, 126, 144East Liaoning Peninsula 90bEast Shandong Peninsula 90bEasternEurope 4,6,45,76,92,97,109,

146,160,165,178,179,192,237b,240disintegration of communism 168GDP (1970–98) 4tinternational inequality (1960, 2000)

233t, 236tpopulation below poverty line

(1990–2001), 6tecological development 126ecology 197econometrics 20–1, 251economic convergence 249economic democracy 269economic development 2, 32, 79, 117,

138–9, 161, 190, 200, 220, 228, 229,235, 252–3, 273

balanced 63see also human development

Economic Development in Africa(UNCTAD, 2001), 221

economic diversification 273economic dualism 17, 53, 78, 241,

242, 244economic growth 5, 6, 18, 81, 82, 91,

113, 131, 134–5, 139, 144, 162, 170,187, 201, 202, 211, 212, 225–6, 231,244, 261

broad-based 62

Index 297

consistent trajectory 224‘driving force’ (PRC) 121employment-intensive 176export-led 194‘growth–development trade-off’

204, 266impact on poverty 227Indian trajectory 20jobless (’not an option’, India) 56‘leakage’ 114maximization 239, 253myopic approach 249, 250nature 258, 249–55potential 57, 79pro-poor 227PRC (1990–2001) 85tsine qua non for development 80, 256slackened employment growth 53–6targets 35transmission mechanisms 122, 223,

224, 227, 253, 262, 266underpinnings (PRC) 118–22see also GDP growth

economic growth: multi-sectoral pattern(chapter six) 63–71

‘challenge confronting India’ 69skill development paradigm 69–71

economic growth rates 19, 28, 30, 34,50, 52, 53, 56, 108, 118, 139, 166,169, 171, 172, 180, 181, 185, 193,195, 198, 199, 202, 210, 214, 214t,220, 221, 223, 227, 228, 230,239–40, 249, 250–1, 253, 254, 267,270, 271, 272

India 20, 20tPRC 84

economic history 8, 213lessons 192–7

economic integration 79, 163, 190,197, 201, 204–5, 231, 241–4

external 240incomplete 189–246

economic liberalism 15, 24, 91, 179,190, 230, 240, 248, 261

see also financial liberalismeconomic liberalization 15, 23, 24, 93,

86–94, 141, 146, 160–3, 171, 230, 275India (1991–) 172PRC (1978–late 1990s) 172see also financial liberalization

economic performance 61, 102, 105,116, 120, 152, 219, 250–1

Economic and Political Weekly 20economic potential 51, 163economic progress 5, 74, 78, 80, 81,

84, 91, 92, 105, 111, 160, 165, 210,227, 228, 250, 252, 254, 262–4, 266,268, 270, 272, 274

dynamics 27–9patterns 29sustainable 62

economic progress: stilettoization231–46

crux of under-development 244economic integration 241–4political economy of

under-development: macroview232–40

poverty and human deprivation(startling facts) 245–6

economic reform 24, 51, 77, 79, 92,161, 183, 264, 265f, 265

development paradigm 257India (1991–) 57pace 265PRC (1978–) 86‘third constituent of development

paradigm’ 272–6see also reform

economic reform (India): movingbeyond liberalization (chapter four)30–50

conclusion 48–9gross domestic saving and investment

(various countries, 1971–96)47t

infrastructure: investmentrequirement (2000–11) 34t

infrastructure and human capital34–41

‘most fundamental input’ 36–7political economy of

underdevelopment (ramifications)32–3

privatization 41–8public expenditure and infant

mortality (1990–2001) 38tquestion 36savings and investment (India,

2000–6) 46t

298 Index

economic reform (India) – continuedsupply-side constraints 50sustainable growth 31–2

economic reform (PRC): ‘ensuing phase’116–30

‘central objective’ 118conclusion 130‘important fact’ 119inadequacy of employment provision

121new countryside agenda (2006) 125poverty reduction 122–30sustainability issues and imperatives

118–22underpinnings of growth patterns

118–22economic strategy 91–2, 213

influence in determining 72‘should be determined by national

context’ 159Economic Survey of India

(2005–6) 67(2006–7) 50

economic take-off 263–4, 265f, 276economic theory 235

estimates of poverty 233economic thinking

‘flawed assumptions’ 5predominant concern 3

economic thought 248economic transformation: beyond

structural adjustment (PRC) 165–8economics 8, 37, 100, 193, 231, 233,

238, 254classical 240conventional belief 170neo-classical 6, 210, 275

economies, national 262economies of scale 216economists 72, 93–4, 118, 163,

209, 271education 9, 26, 35, 36, 38–41, 45, 48,

65, 68, 88, 122, 128, 129–30, 131,137, 151, 222, 234, 236, 243,244, 266

access (caste-based reservations)39–41

enrolment ratios (India and PRC,2002–3) 177t

political interference (India) 39

public expenditure 125public expenditure (India) 47USA 272see also primary education

educational attainment 132, 136,138, 177t, 177, 180, 215, 219,224, 228

educational institutions 37educational reform 139–140effective economic management (EEM)

258, 259–69, 270, 274–6development paradigm 257exemplified by Singapore 271–2

effectiveness 80, 161–2, 187, 201, 213,252, 253, 260

efficiency 22, 31, 33, 42, 43, 44, 64, 73,87, 97, 100, 102, 103–4, 152, 154,178, 184, 217, 224, 225, 226, 240,252, 261, 271

efficiency-employment trade-off 56egalitarian society 2358–7 plan/programme (1994–) 123, 127

explained 126elasticity of demand 54elderly people 103, 127elections 237electorate 32, 49electrical goods/machinery 34,

59b, 147electricity 21t, 64, 183, 237Electricity Act (India, 2003) 34electricity boards 44electronic components 149telectronic products 34electronics 22, 90, 156, 157, 215,

217b, 218elephants 231Eli-Lily 27elite, rural 44‘embedded autonomy’ 212embezzlement 104emerging economic powers 10bempiricism

capital flows 198centralized systems (resilience,

flexibility) 179development 1, 171, 248East Asian Miracle 211, 214economic growth 1, 12, 77, 161,

248, 257

Index 299

economic liberalization 23economic policy 275economic progress (PRC) 166economic reform (generalmodel) 274economic take-off versus EEM and

reform 263economics of transition 160foreign exchange reserves 184GDP growth 253–4global trends (growth and

development) 256globalization 6government role 79–80impact of interventionist policies and

economic liberalization ondevelopment 230

impact of liberalization ondevelopment 5

impact of WTO provisions 142–3India’s economic experience 17inefficiency 8inter-sectoral linkages 63irreversible economic scenario (’no

such thing’) 267liberalization 74‘magic wand’ approach to trade

liberalization 201pace of liberalization 194poverty-reduction 78protectionism 41–2, 73protectionism (link with industrial

capabilities) 152resource constraints 270SOE reform 107–8structural deficiencies (removal) 197sustainability 78sustained economic progress 131transition (from communism to

market economy) 178world economy 11

employability 37, 132employees 115employment 11, 37, 45, 51, 53–6, 58,

58–60b, 62, 65, 67–8, 77, 82, 87, 91,101, 106, 107, 118, 119, 123, 126,129, 131, 137, 147, 175, 241, 242–3,257, 269, 275

access (caste discrimination) 40growth rate (India, 1973–2002) 56tincome (average) 128

inadequate provision (PRC) 121non-agricultural (elasticity) 103non-farm 68–9skill-intensive 64‘sluggish growth’ 51–2see also full employment

employment absorption 61bemployment creation 54, 61, 142,

229, 261critical point 65technology intensity (manufacturing)

276trends (India) 56–8slow pace 52

employment elasticity 59–60b, 62employment generation 67employment growth 55, 61b, 61, 119,

120, 143slackened 53–6

employment hierarchy 33employment intensity 139employment losses 97, 99, 100employment opportunities 132,

240, 243employment revolution 68employment security/insecurity 33, 122empowerment 130‘enabling structures’ 9energy 11, 101energy conservation 275energy intensity of production 118energy requirements 34Engel’s Law 54–5engineering 34, 35, 37, 174, 218engineers 35, 136, 137t, 137enterprise autonomy 88, 89enterprise contract responsibility system

98enterprise groups 101enterprises see companiesentrepreneurs 31, 136–7, 145, 154, 241entrepreneurship 52, 73, 117, 136,

211, 235entry of new firms 97environment 9, 118

commercial 26P-EPP principle 257–9

environmental degradation 252environmental protection 126, 249equipment 144, 149t, 157

300 Index

equity [shares] 102, 112, 113,114–15, 198

government-owned 42tstate-owned (PRC) 115

equity [fairness] 63Ernst & Young report (2006) 111error correction mechanism 211ethics 235European Union 150t, 203, 204, 205eurodollar market 195Europe 15, 153, 172, 195, 234examinations 139exchange control 147exchange rates 164–5, 195, 268, 275executives 115

‘chief executives’ 101‘senior corporate executives’ 101

exit policy 33expediency 42, 73, 75, 182, 201,

240, 253export ceilings 153export earnings (PRC) 145export incentives 21export-led growth 212export markets 215export-orientation 185export performance 215export-processing 147export-promotion 7, 213, 216, 224, 228export-promotion zones 89export revenue 36export subsidies 208b, 228export tax 21exporters 147, 215exports 85b, 90b, 91, 146, 148–9,

181t, 203, 211, 219, 222f,226–7, 245

import-intensity 142manufactured goods 170service sector 25, 26US to PRC (2000–4) 149tworld 11

extension services 67external borrowings 253–4external financing 223, 226

undue reliance on 222fexternal indebtedness 269

factionalism 31factories 59b

factors of production 119, 253family budgets 54family welfare 47famine 95, 245

‘hunger’ 9, 234, 245‘malnourishment’ 245, 263‘malnutrition’ 2b, 234, 245‘starvation’ 234, 245

Fangcheng 90bfarmers 246, 266

electric-pump-using 44income 126large-scale 66poor 208resource-poor 208bricher 204small 66, 204, 225see also subsistence farming

farms 227‘state farms’ 95

FDI see foreign direct investmentfenzao chifan (fiscal contracting

system) 88ferro-alloys 217bfertilizers 45, 217b, 246feudalism 173Final Bound Total Aggregate

Measure of Support (AMS)206b, 207b

finance (funding) 104, 137, 223access to 35

finance (sector) 63, 65, 101, 200, 215financial crises 4, 199financial deregulation 195financial instability 195, 196financial institutions 105, 110financial integration 197–8, 199,

200, 202financial liberalism 210

see also liberalismfinancial liberalization 8, 184, 191,

204, 210, 239, 275impact (overview) 197–200pace 229–30timing, sequence, extent 195see also investment liberalization

financial market liberalization 231financial markets 27, 31, 105,

114–15, 195financial products 276

Index 301

financial reform 275financial regulation 200financial sector 86, 142, 143, 180, 183,

194–5, 229, 273financial sector reform 58, 166financial services 21t, 24, 26, 35, 178,

199, 276financial sphere 200, 262financial systems 258financial-sector reform: issues and

concerns 108–14‘crux of effective reform’ 114objective (1994–) 109political considerations ‘override

economic rationale’ 114firewood 245firms see companiesfiscal decentralization 88fiscal deficits 41, 45, 46, 47, 182, 266,

267, 276‘budget deficits’ 22, 92

fiscal discipline 3fiscal federalism 94fiscal reform 88Fiscal Responsibility and Budget

Management Act (India,2004) 47

Fischer, S. 199–200five-year plans

India (ninth) 65India (tenth) 49, 52, 65–6, 69PRC 156PRC (fourth) 96PRC (tenth) 126

fixed exchange rates 228food 226–7, 245–6food aid 227food expenditure 55–6

Engel’s Law 54–5food production 246food security 206bFood for Work programme (PRC,

1984–) 127food-processing 67, 126footwear 26, 147, 149tFord 153Foreign Affairs 157foreign direct investment (FDI) 85b,

112, 135, 136, 185, 198, 218‘critical role’ (PRC) 163

export-oriented 25‘foreign investment’ 20, 23, 52,

98, 116, 159, 161, 162–3, 168,171, 178, 181, 220, 221, 222n,270, 271

influence on growth process 162quantitative and qualitative

aspects 163role in Indian economy 24–7sector-specific policies 24share in total fixed investment (PRC,

1991–2002) 144tforeign direct investment: export-led

model (PRC) 141–58conclusion 158data inconsistencies 150nevaluation 147–51PRC: top five trading partners (2004)

150tPRC: WTO accession (2001) 141–4protectionism: impact on

technological upgrading 151–4technology transfer: trickle-down

effect 154–8trends (FDI) 144–6trends (trade) 146–7US trade with PRC (2000–4) 149t

foreign exchange 19, 22, 107b, 147foreign exchange reserves 23, 31, 76,

92, 111forests 252France 10b, 145, 172fraud 104free markets 76, 82, 240free trade 201free-market policies 160Fuji Heavy Industries 153Fujian 90bfull employment 30–1, 241full employment output 30–1funds 246Fuzhou 90b

G6 economies 10b, 11G7 203Gandhi, R. 21, 173Gangshou 90bGao Qiang 133gaps see inequalitiesgarments 26

302 Index

gas 21t, 64gender 9, 49, 197, 234, 252General Motors 153genetic engineering 67geopolitics 11, 14, 17, 72, 73, 91, 92,

116, 155, 159, 169, 171, 177, 231,235, 276

global economy 238–40Germany 10b, 25, 145getihu (individually owned enterprises)

98Gilboy, G. 157Gini coefficient 134, 237–8b

PRC 129brural/urban 124

Global Economic Prospects Report(2005) 203

global economy 9, 17, 76, 79, 82, 84,92, 141, 143, 159, 163, 172, 249,257, 258, 264, 271

geopolitics 238–40‘international economy’ 26rising significance of India and PRC

(1989–2003) 16tunipolar 239‘world economy’ 10, 15

globalism 190, 274, 275globalization 3b, 6, 10, 11, 72, 79, 80,

170, 186, 248, 249, 258, 260,274, 276

India’s tryst 18–29ineffectively managed process 275

globalization: process of incompleteeconomic integration (Part II)189–246

East Asian miracle 209–30economic progress: stilettoization

231–46globalization: vision and reality

191–208introduction 190lessons 210, 222lessons (economic history) 192–7

globalization: vision and reality191–208

appendix 205–8conclusion 204–5economic history: lessons 192–7financial and trade liberalization:

overview of impact 197–200

globalization and economicintegration: dichotomy 197

trade liberalization (free or fetteredtrade) 201–4

WTO Agriculture Agreement 208WTO Ministerial Declaration (2004)

206–8bGlobalization and its Discontents (Stiglitz,

2002) 196Goh Keng Swee 209Goldar, B. 57Goldman Sachs 120–1Goldman Sachs report 51

(2004) 10, 11(2006) 57

goods and services 43, 65, 201, 252basic 237‘basic goods’ 174, 176technology-intensive 77

Goswani, O. 34tgovernance 29, 44, 74, 80, 118, 163,

173, 179, 212, 220, 223–4, 227–9,239, 252–3, 259–62, 268, 271

global functions 276provincial 88socialism-communist model 192tiers (PRC) 161

government/s 7, 75, 88–9, 92, 101,102, 106, 111, 151, 164, 184, 216,219, 222, 230, 239, 260, 273

centralized 163Indian 22, 38, 41, 44, 71, 176municipality 96‘overriding focus’ 268PRC 84b, 90b, 90, 134, 139–40, 146,

147, 155, 156provincial 96, 129state (India) 29see also local government

government agencies 253government consumption 47government intervention 6, 27, 211,

212–13, 227–30efficacy 219

government policy 211government revenues 268gradualism 92, 161, 164, 178grain 50, 68, 72, 127, 245

procurement prices (PRC) 125surpluses 66–7

Index 303

grants 126, 223Great Britain see United KingdomGreat Leap Forward (1958–60) 83, 96,

123, 177death toll 95

‘green’ revolution (India) 68gross domestic capital formation (GDCF)

46tgross domestic fixed capital formation

(GFK) 181tsee also human capital

gross domestic product (GDP) 4, 4t,16t, 30, 45, 51, 58, 77, 85n, 109,111, 114, 121, 122, 146, 214, 215

contribution of services sector(India) 55

at factor cost (India, 2003–6) 21tper capita 202–3, 252–3

gross domestic product: growth 15, 28,29, 66, 131, 181, 181t

‘costs more since 2001’ (PRC) 113employment intensity 62PRC (2002–6) 86tsee also growth accounting 272

gross domestic product: growth rates21, 252–3, 261, 263, 265f

development paradigm 257India (1950–2004) 20t

gross domestic savingsIndia (2000–6) 46tvarious countries (1971–96) 47t

gross expenditures on research anddevelopment (GERD) 135, 135t

gross investment: GDP ratiogrowth rate (India, 1950–2004) 20t

gross national product (GNP) 125,252–3, 263

gross output 63, 64growth accounting 251, 272

see also development andgrowth

growth barrier 30growth ‘booms’ 1, 78growth economics

second-generation 6growth outcomes 7growth patterns 30growth strategies 1, 78, 124

multi-dimensional 259see also new age paradox

Guangdong province 90b, 91, 92gufenzi companies 98Gujarat 27, 28t, 29

Hainan 90bhandicrafts 26Hansda, S. 63hardware 35–6, 157Haryana 28t‘have money will spend’

principle 108HDI (human development index)

177, 251health 2b, 26, 45, 48, 64, 88, 122

co-operative medical scheme (PRC)126

public expenditure 47, 125‘public health’ 240

health care 24, 65, 114, 129–31, 234,236, 243, 244, 266

access 139affordable 134commercialization 134reform (PRC) 132–4‘three-tiered network’ (PRC) 133

health facilities 133heavy chemical industry 219heavy industry 26, 60b, 174, 175, 176,

215, 217heavy machinery 101hedonism 84high technology 154, 155, 215, 217b

see also technologyHigh-Performing Asian Economies

(HPAEs) 209–13, 217–18high-technology industries 135, 215high-technology products 149,

150, 151higher-income groups 55, 138, 202Himachal Pradesh 28tHindu rate of growth 21, 51, 177Hindustan Zinc 42thistory 172–3HIV/AIDS 245, 246Honda 153Hong Kong/Hong Kong SAR 89–92,

145, 147, 148, 168, 170, 209, 212n,233n, 236n

economic growth rates (1971–96)214t

304 Index

Hong Kong/Hong Kong SAR – continuedforeign direct inflows: gross fixed

capital ratio (1971–93) 215tone of PRC’s top five trading partners

(2004) 150tHongkong and Shanghai Banking

Corporation (HSBC) 165horticulture 67hospital costs 134hospitalization 134hospitals 133hotels 25, 42t, 63, 64household responsibility system

(HRS) 87households 45, 46t, 86–7, 228houses/housing 88, 91How Financial System Reform Could

Benefit China (McKinsey,2006) 113

HPAEs (High-Performing AsianEconomies) 209–13, 217–18

HTL 42tHu Yaobang 93Hugo, V. 256human capital 26, 118, 121, 122, 130,

134, 148, 177, 198, 209, 215, 227,232, 242, 243, 254, 262, 269,271, 276

‘unaffordable paucity’ (India) 34–41see also knowledge capital

human capital formation: implicationsand prospects (PRC) 131–40

educational reform 139–140health care reform: instrument of

inequity 132–4link with technological advancement

134–8versus poverty-reduction 138–9

human development 1, 6, 29, 35, 38,172, 197, 257, 269, 276

see also new age paradoxhuman development index (HDI)

177, 251human development indicators 123,

177, 193, 261, 263Human Development Report (UNDP)

(2003) 2b(2004) 38t

human resources 259

IBP Company 42tidealism 83ideas ‘whose time has come’ (Hugo)

256ideology 8, 15, 19, 24, 27, 29, 72, 79,

80, 82, 84, 91–4, 117, 118, 158, 161,162, 169–71, 173, 177, 178, 192–3,194, 211, 228

‘relegated into background’ 168imperial authority (China) 173imperialism 174import boom 92import duties (rebates) 147import liberalization (partial) 20import surges 143import-substitution 157, 192, 193, 202,

213, 216, 224importers 147imports 59b, 60b, 73, 76, 85b, 107b,

142, 146, 149, 153, 181t, 204,205, 245

capital goods 19, 22technical 225technology 156, 157, 158, 225US (from PRC, 2000–4) 149t

incentives 21, 87, 90b, 98, 157, 175,213, 216, 218, 225

income/s 9, 56, 232, 234, 237, 240Engel’s Law 54–5low 237poorest/richest 20 per cent (Eurasia)

237brural 123, 125

income distribution 3, 122, 138, 244income elasticity of demand 55

food (Engel’s Law) 54income per capita 11, 12, 29, 38, 55,

66, 116, 125, 128, 132, 159, 166,177, 180, 191, 242

disposable (urban versus rural, PRC,2003) 129b

growth 257–8income tax 21, 36India

affluent versus poorer states 27–9‘ascent in global economy’ 36‘began with head start over China’

177budget (1983–4) 19challenges 72

Index 305

demographic dividend 51economic ascent 72–81economic comparison with PRC

170–87economic dualism 17economic growth 14economic growth rates

(1980–2004) 28teconomic survey (2006–7) 264‘fundamental point of differentiation’

with China 77gross domestic saving and investment

(1971–96) 47t‘highly industrialized country’ 53issues and challenges 17lessons 72–3, 76, 78, 79loan agreement with IMF 19miscellaneous 4n, 5, 6, 9–12, 192,

194, 199, 200, 205, 211, 222, 224,233, 233n, 236n, 237b, 240, 241,243, 244, 248, 257, 261, 263–5,267, 269, 271, 272, 274

‘nation of contrasts’ 17political disunity (historical) 172–3public expenditure (child

development) 47public expenditure and infant

mortality (1990–2001) 38tpursuit of liberalization 23R&D as percentage of GDP

(1995–2000) 136trising significance in global economy

(1989–2003) 16tstory (as it rolls on) 17turning points (1980, 1987, 1991) 23unattained goals 30variant of liberalism 74see also Maldives

India: Department of FamilyWelfare 48

India: Department of Health 48India: rising superpower (issues,

implications, future) 13–81economic ascent: insights and issues

72–81economic reform: moving beyond

liberalization 30–50introduction 14–16lessons 15, 19, 72–3, 76, 78, 79

multi-sectoral pattern of economicgrowth 63–71

story ‘as it rolls on’ 17unleashing opportunity creation

51–62India: tryst with globalization (chapter

three) 18–29GDP growth (1900–47) 20growth rates: basic trends (1950–2004)

20tlessons 19liberalization and dynamics of

economic progress 27–9overview 29partialliberalization(post-1987) 21–2role of FDI 24–7sectoral real GDP growth rates

(2003–6) 21tturning point (1991) 18–24

India and PRC: economic comparison170–87

‘competing’ versus ‘complementary’models of development 182–3

conclusion 185–7consumption, investment, trade

(contribution to GDP growth)181t

educational attainment (2002–3)177t, 177

growth strategy 180insights 171lessons 184liberalization: India and China’s

variant 178–82liberalization: initial stage

173–7, 178overview of recent history 172–3reform imperatives 182–5search for common

denominator 171‘three distinct phases’ 172

India and PRC: globalizationbook objectives 9bridging gap between growth and

development: evolving aparadigm (Part III) 247–76

globalization: process of incompleteeconomic integration (Part II)189–246

insights, 167, 168, 169, 171, 271

306 Index

India and PRC: globalization – continuedlessons 15, 19, 72–3, 76, 78, 79,

107–8, 161, 162, 165, 184,210, 222

lessons (economic history) 192–7lessons (fundamental) 169new age paradox 1–12PRC: emerging superpower 82–187rising superpowers: issues,

implications, and future (Part I)13–81

way ahead 8–12India Tourism Development

Corporation 42tIndian Institute of Management

Singapore campus 39Indian Institute of Technology 35Indian Petrochemicals Corporation 42tindigenization 156, 157, 158individuals 235Indonesia 38, 105, 164, 195, 212n,

218, 233n, 236n, 236n, 237beconomic growth rates (1980–94)

214tforeign direct inflows: gross fixed

capital ratio (1971–93) 215tgross domestic saving and investment

(1971–96) 47tindustrial base 73, 224industrial capabilities 152Industrial and Commercial Bank of

China (1984–) 108, 109, 111tindustrial development law (South

Korea, 1986) 217bindustrial economy 12, 138industrial enterprises 127industrial evolution

sequential pattern 217industrial expansion 116industrial goods 73, 224industrial growth 22, 27industrial intensity 64industrial output 88, 101industrial policy 22, 35, 213, 215, 216,

217b, 217, 220East Asia 137India 175

industrial production 88, 119industrial reform 178

industrial sector 23, 54, 56–7, 61b, 77,86, 91, 98, 119, 121, 122, 126,149–52, 156, 166, 182, 185, 199,213, 224, 241–4

capital-intensive 138diversified 78Lewis’s model 53small-scale 175state-controlled 89technological upgrading 151

industrial strategy 154industrialization 20, 72, 77, 78, 95,

152, 170, 172, 175, 176, 209, 211,216, 218, 224

effective strategy 217export-oriented 125rural 123state-controlled 174

industries 58blabour-intensive 59b, 147non-pillar (private sector) 142small-scale 61b

industry 25, 31, 56, 58, 59b, 156,176, 224

capital-intensive, small-scale 176domestic 216export-oriented 148growth rate (India, 1950–2004) 20tIndian 64rural 124sectoral real GDP growth rates (India,

2003–6) 21tinefficiency/inefficiencies 48–9, 73,

103, 104, 105, 113, 152, 183, 192,213, 216, 228, 230, 262

inequalities (’disparities’; ‘gaps’) 3b,264, 275

assets 202‘central problem of our times’ 2bdeveloped versus developing countries

2bglobal 236income 4, 29, 76, 79, 119, 122, 131,

139, 172, 190, 202, 228, 235, 236,237, 237b, 238, 250, 267

income (eastern versus western PRC)126

income (global) 240income and opportunity 235‘increasing’ (PRC) 129b

Index 307

international 233tnon-income 4, 122, 130, 131, 138,

139, 172, 228, 240, 250opportunity 190regional 29, 79rural–urban (PRC) 128socio-economic 29, 41trends 237–8bUSA 272

inequityhealth care reform (PRC) 132–4politics of perpetuation 232–8socio-economic 29

infant industries 229infant mortality 29, 38t, 49, 123, 139,

177, 226–7infants 245inflation 50, 195, 209, 233, 251,

264, 267informal economy/informal sector 33,

55, 131, 243, 252information 126information and communication

technology (ICT) 25, 191information gap 49information technology (IT) 22, 26, 35,

37, 58, 63, 175, 178, 180IT goods 148, 150IT industry 36IT sector 22, 24, 25

Infosys, 180infrastructural bottlenecks 22, 242infrastructural constraints 24, 60binfrastructural goods 272infrastructure

bottlenecks 181income (average) 128investment requirement (India,

2000–2011) 34tlocal 88‘major impediment’ 78, 79miscellaneous 25, 27, 28, 43, 44, 47,

58, 61, 62, 66, 70f, 77, 89, 114,126, 127, 139, 144, 193, 195, 209,222, 224, 236, 262, 276

physical 68, 70, 76, 182, 183,226, 252–3

rural 65, 67, 69, 125

social, 38, 45, 49, 68, 70, 76, 122, 128,130, 131, 132, 172, 182, 215, 226,240, 243, 244, 252–3, 263

technological 154–5transport 35‘unaffordable paucity’ (India) 34–41

initial public offering (IPO) 100, 108inland provinces (PRC) 90innovation 70, 70f, 138, 180, 225,

252–3, 259, 272non-technical 137

inputs 70, 80, 85b, 149, 176, 271‘intangible’ 262technical 150

instability (averted) 107institution-building 228institutional framework 180, 219,

224, 261–2institutional reform 116, 117, 118,

167, 183, 187, 193, 253, 260institutional structures 135, 163institutional weaknesses 194, 196, 262institutions 70, 70f, 74, 94, 108, 122,

219, 223, 228, 229, 235, 239, 252,259, 266, 268

export-oriented 229North’s definition 260pragmatic 227pro-development 262

instruments (medical, precision,optical) 58b

insurance 33, 243crops 67life 273medical 130, 133, 134, 244‘negligible cover’ 122

Insurance Regulatory Commission ofChina 110

integrated circuit industry 155integrity 73intellectual property rights 115

see also private property rightsintellectuals 91interest groups 44, 74, 201interest payments 223, 227interest rates 50

net margin 113–14interest-rate determination 109intermediate goods 58b, 216intermediate inputs 60b

308 Index

international financial institutions 74,203, 239, 269

International Labour Organization 276International Labour Seminar

(Singapore, 1965) 209International Monetary Fund (IMF) 7,

23, 74, 194, 201, 227, 230, 234,238, 276

‘blatant misjudgment’ 196conditionalities 19loan agreement with India 19see also MDGs

international trade and monetaryregimes 197

internet usage 213interventionist policies 229invasion 172, 173investment

contribution to GDP growth (Indiaand PRC), 181t

corporate 18domestic 198, 210, 218, 223efficiency 22, 121fixed-asset 144high rates 227manufacturing 219miscellaneous 52, 67, 80, 89, 92, 95,

98, 108, 115, 116, 118, 130, 139,145, 148, 168, 187, 213–14, 217,221, 226, 228, 233, 241, 246, 260,267, 270–1

private 18, 22, 28, 29, 65, 79, 210,219, 222, 268

public 18, 19, 22, 27, 28, 29, 47–8,65, 182, 268, 276

quantitative aspect 121various countries (1971–96) 47tsee also foreign direct investment

investment barriers 162investment climate 27–8, 229,

230, 261–2investment in/efficiency 113,

122, 223investment liberalization 27, 125, 141,

158, 177see also liberalization

investment opportunities 24investment patterns 27investment rates 215, 219, 220investment strategies 192

investment: GDP ratios 119, 120,121, 276

investors 91external 182foreign 85b, 89, 180, 210international 32Japanese 154strategic 180

inward orientation 74iron 95, 101, 105irrigation 65, 66Isuzu 153Italy 10b

Japan 10b, 14, 84b, 153, 170,174, 209, 215, 216, 218, 225, 272

economic slowdown and recovery273–4

foreign direct inflows: gross fixedcapital ratio (1971–93) 215t

one of PRC’s top five trading partners(2004) 150t

R&D as percentage of GDP(1995–2000) 136t

Japan Post 273Jessop and Company 42tJiang Yu 151Jiang Zemin 93–4Jiangsu 134jituan (enterprise group) 100judicial reform 222

Karnataka 28t, 28Keidel, A. 85nKerala 27, 28t, 29Keynesian theory 47knowledge capital 260

see also physical capitalknowledge spillovers 26Koizumi, J. 273Korea, Republic of (South Korea) 11,

25, 38, 114, 170, 209, 212n, 215–18,222, 225, 233n, 236n

economic growth rates (1971–96)214t

foreign direct inflows:gross fixedcapital ratio (1971–93) 215t

gross domestic saving and investment(1971–96) 47t

Kumari, A. 57

Index 309

labour 33, 82, 126, 222, 241non-agricultural 121relocation to more productive sectors

119–20, 121sectoral 131skilled 35, 37, 55, 99, 132, 242unskilled 68, 242

labour absorption 59blabour costs 90, 145, 149, 168labour intensity 120, 138, 148labour laws/legislation 32–3, 59blabour productivity 118–19, 183labour reform 52labour unrest 59bLagan Jute Machinery Corporation 42tLai Pingyao 104nlaissez-faire principle 7land 87, 95, 101, 227, 246landless labourers 54, 75language 173large enterprise groups (PRC) 115Latin America 3, 4, 6, 45, 74, 76, 161,

163, 194, 195, 196, 199, 210, 234,237b, 240, 269, 271

international inequality (1960, 2000)233t, 236t

Latin America and Caribbean (LAC) 4t,6t, 7

law 32–3, 52, 59b, 101, 110, 217b,222, 229

leases 87leather goods 147Lee Kuan Yew 14Lee Kuan Yew School of Public Policy

14, 34tlegal system 26, 183lending 108, 113–14, 148, 198

black-market 164see also bank lending

Lenovo 180lessons 15, 72–3, 76, 78, 79, 107–8,

161, 162, 165, 184for Africa 222East Asian Miracle 210, 222economic history 192–7fundamental 169growth and development 1–2poverty and growth 19

Lewis, A. 240–1, 243‘central assumptions’ 241–2

economic dualism 53two-sector model 53

Lewis model 240–4modified 244sector-specific application 242

Li Peng 156Lianyungang 90bLiberal Democratic Party (LDP, Japan)

274liberalism 5, 79, 84, 93, 116–17, 159,

161, 167, 194, 275see also neo-liberalism

liberalization 3b, 3, 4, 7, 12, 19–20, 64,74–7, 79, 87, 91, 92, 116, 124,143–5, 148, 151, 159, 164, 166, 168,169, 193, 224, 240, 261, 275

agricultural 75–6, 225, 226beyond 30–50dynamics of economic progress 27–9economic 24, 93, 160–3, 171effectiveness 27–9empirical evidence 5first phase (1889–1995) 59–60bimpact on manufacturing 56–8initial stage 173–7India (1980s) 19India (1991–) 18, 49, 58India and China’s variant 178–82nature 178pace 178, 194partial 36, 57partial (India, 1984–90) 58–9bpartial (India, 1987–) 22second phase (1994–2001) 60–1bselective 178selective or managed 210‘shock therapy’ variant 194success factor 178timing 178uneven benefits 62see also post-liberalization era

licence Raj 27, 31, 73licensing 19, 157, 225life expectancy 177, 180, 193light industries/goods 72–3, 89, 147,

216, 217, 215linkages (inter-sectoral) 64, 65, 243liquidity 195–6literacy/illiteracy 26, 38, 49, 123,

193, 245

310 Index

livelihood 29, 206b, 272living standards 10, 68, 93, 159, 193,

264, 272loan disbursement 110loan quotas 109loan-equities swap 99loans 19, 74, 105, 223

informal 114subsidized 129

local government 87, 88, 95, 100, 126,131, 193

lower-income groups 46, 54, 55, 81,122, 131, 133, 138, 200, 204, 226,243, 254, 261, 263, 265, 266–7,269, 275–6

‘lowest-income groups’ 202‘poorer-income groups’ 240

Luo Ping 110Luthra, S. 34–5

Macau 90b, 92, 145, 148, 168machinery 19, 105, 156, 217b

industrial 157machinery sector 150macro-business environment 147macro-skill development paradigm 69macroeconomic environment 19, 22,

23, 27, 28–9, 42, 52, 57, 61, 116,161, 162, 169, 178, 214, 223,224, 268

liberal 21macroeconomic level 260macroeconomic management 227macroeconomic policy 201, 211, 227–8macroeconomic stability 3, 200, 210macroeconomic standpoint 58Maddison, A. 20Madhya Pradesh 28tMaharashtra 28t, 28Mahtaney, P 268

‘production function of development’proposed 251

maize 227malaria 245Malaysia 38, 105, 114, 164, 196, 212n,

218, 219–20, 233n, 236n, 237beconomic growth rates (1980–94)

214tforeign direct inflows: gross fixed

capital ratio (1971–93) 215t

gross domestic saving and investment(1971–96) 47t

Maldives 38t, 276see also Nepal

managed floating exchange rate regime(PRC, 2005–) 164–5

management 37, 137management system 115managerial capability 98managerial expertise 68, 89managers 35, 88, 98, 100Mangaleswaran, R. 34–5manpower

skilled and management-level 26‘manpower, manufacturing, market’

(3Ms) 82manufactured goods 55

high-technology 149Japanese 153–4labour-intensive 62, 147

manufacturers 273manufactures

low-skill, labour-intensive 215low-skill-based 222fresource-based 224

manufacturing 18, 26, 55, 63, 69, 70,91, 120, 136, 145, 150, 168, 203,215, 219, 242

export-led boom 180export-oriented 164high-technology 151labour-intensive 128, 149, 166large-scale 176low-cost 166sectoral real GDP growth rates (India,

2003–6) 21tmanufacturing: trends (India,

1984–2001) 58–61b1984–1990 (partial liberalization)

58–9b1889–1995 (liberalization: first phase)

59–60b1994–2001 60–1b

manufacturing sector 25, 34, 52, 54,56, 61b, 61, 64, 78,171, 243

competitive and low-cost 82growth rate in employment (India,

1973–2002) 56timpact of liberalization 56–8

Index 311

‘secondary sector’ 242trade-led expansion 178

Mao Zedong 95, 96on centralization 83on modernization 83–4on ‘ten important relationships’

(1956) 83Maoist era 84, 92, 174, 179

economic transition (1950s) 123‘pre-liberalization era’ 134, 147

Maoist–Stalinist economic model 91marginalization 3b, 190market access 115, 126, 138, 143,

203, 205market-based economy 82, 88, 89, 92,

102, 106, 133, 159, 161, 167, 168market-based socialism 82, 86, 107–8,

118, 161, 169market economics 240market economy 7, 92, 93–4, 97, 98,

103, 193, 211, 213market failure 230, 240market forces 8, 19, 89, 92, 95, 101,

152, 161, 165, 178, 194, 213, 228,229, 240, 275

‘always get it right’ 52–3market orientation 179Market-Oriented Sector Selective (MOSS)

153market potential (PRC) 84–5bmarket reforms 93, 193, 226market share 112market size 168market surveys 53marketing 66, 67, 137, 151, 259marketization 89, 116markets 7, 14, 15, 23, 78, 82, 88,

99, 137, 144, 191, 204,211, 258

domestic 85b, 142, 146, 157external 216global/world 24, 72, 145international 66, 216liberalized 28open 203, 230

Maruti Udoyog 42tmaternal mortality 49, 129b, 139Mauritius 199Mazda 153McKinsey Quarterly Report (2006) 113

McKinsey Report: When to Make India aManufacturing Base (2005)34–5

Measures for Economic Development ofUnderdeveloped Countries(UN, 1951) 2b

media 49, 141, 161mergers (and acquisitions) 99, 145metal 101metal products 59bmetros 33Mexico 136t, 152, 195, 199, 210micro-credit/micro-finance 65,

200, 269microeconomic level 260micronutrient deficiency 245middle class 23Middle East 4t, 6t, 234middle-income countries 4tmigration 35military sector 156Millennium Development Goals (MDGs)

9, 234see also United Nations

minimum support prices 66–7mining and quarrying 21tminority shareholdings 45Mitsubishi 153mixed economy 79–80, 211mobile phone network 84bmode of production 191Modern Enterprise System (MES) 98,

99, 101, 115Modern Food Industries 42tmodernism 159modernization 20, 89, 152, 156, 173–5,

177, 209, 224, 225monarchy 173monetary authorities 184monetary policy 196monitoring 105, 108, 111, 208monopolies 42, 44, 73Monopolies Restrictive Trade Practices

(MRTP) Act 19, 21Morgan Stanley 85b, 183mortality rates 234mosquito control 133motor vehicles 21, 59bMozambique (cashew sector) 225

312 Index

multi-sectoral pattern: economic growth63–71

multinational corporations (MNCs)135, 136, 163, 168

multinational enterprises (MNEs) 26–7‘multinationals’ 34see also PSEs

multiple micro-skill paradigms 69, 71multiplier effect (Keynesian) 48Myanmar 233n, 236n

NAFTA 152Nantong 90bNational Association of Software and

Services Company (India) 36National Common Minimum

Programme (NCMP, India, 2004–)48–9

national enterprise groups (NEG) 99‘National Household Survey’ 237bNational Household Survey (PRC, 2002)

129bnational income 2b

growth rates 260, 266National Investment Fund (India,

2006–) 45National People’s Congress (PRC)

tenth (third session) 115National Policy of Education (India,

1968, 1986) 38National Sample Survey (India) 30, 54nationalism 7natural resources 193, 211, 271Nehru, J. 18, 19neo-Leninism 82neo-liberalism 4, 5, 6, 60b, 74, 77, 94,

159, 178, 185, 192, 229, 235,239–40, 275

re-invention 160–5see also economic liberalism

Nepal 233n, 236n, 276see also Pakistan

Netherlands 25, 145, 172new age paradox (chapter one) 1–12

emerging economic powers 10bgap between ‘growth strategies’ and

‘human development’ 1inevitability and implications 1–8scorecard on development 2–3btrends 9–10

way ahead 8–12world GDP (1970–98) 4tworld population below poverty line

(1990–2001) 6tsee also socio-economic indicators

new countryside agenda (PRC, 2006)125

New Delhi 110‘new poor’ (PRC) 127New World Order 7New Zealand 237–8bnewly industrialized economies (NIEs)

14, 218exports 212tfirst-tier 212t

nexusbanker–politician 194–5business–political 219, 220government–business 217bmanager–politician 41political–institutional 193

Nigeria 221, 233Ningbo 90bNissan 153non-farm sector 65, 68non-ferrous metals 217bnon-fuel goods 224non-government organizations

(NGOs) 49non-performing loans (NPLs) 99,

108, 109, 111, 113, 114, 182,183, 184

Big Four (PLC banks, 2000–3) 111tnon-state-owned sector 97, 98non-subsidy support 208non-tax concessions 90bNorth, D. 260North Africa 4t, 6t, 6tNorth-East Asia 219Northern Europe 77Northern Hemisphere 3

obsolescence 152OECD 121, 135, 148, 203, 215offshoring 34, 155oil/petroleum 11, 58b, 195

‘oil price’ 19, 50, 268‘petroleum companies’ 43

oil crops 125oil seeds and grains 149t

Index 313

oligarchy 168‘one country, two systems’ (PRC)

82, 92openness 5, 22, 23–4, 126, 142, 201opportunity creation 11, 31, 35, 68,

70, 70f, 113, 128, 204, 236, 241,250, 258, 259, 261–2, 265, 266,270, 272

opportunity creation: unleashed (India)(chapter five) 51–62

conclusions 56, 61–2employment: trend growth rate

(1973–2002) 56tgrowth creation and slackened

employment growth 53–6manufacturing: impact of

liberalization 56–8manufacturing: trends (1984–2001)

58–61b‘myopic view’ 52productivity, output

expansion, employmentcreation 56–8

TFP (manufacturing, 2003) 57torganized sector 55, 58b, 60b, 61bOrissa 28tOuinhuandao 90boutput 30, 103, 105, 241

agricultural 123, 124–5full employment 30–1industrial 95, 211supply-determined 31trends (India) 56–8

outsourcing 14, 26, 70, 210overall trade restrictive index (OTRI)

203overseas Chinese 92, 145overseas transactions (PRC) 107b

P-EPP (pro-environment, people,prosperity) principle 257–9,260, 275

Padhi, A. 34–5Pakistan 233, 233n, 236n, 237b, 276

see also South Asiapaper 58bParadeep Phosphates 42tparliament 31party secretaries 98patients: visits to doctor 133–4

pay-offs 214Pearl River Delta 90bpeasants 67, 87, 91, 95, 126Pei Minxin 101pensions/pensioners 45, 46, 97, 122people: P-EPP principle 257–9People’s Bank of China (PBC) 102,

110, 121People’s Republic Bank of China

164–5, 169personal computers 84bpersonal services 64, 68pesticides 67petrochemicals 156, 217bpharmaceuticals 27, 180Philippines 47t, 214t, 215t, 233n,

236nphysical capital 118, 120, 121, 182,

209see also recapitalization

pillar industries 156–7planned economy 92planning (India) 38plastic products 58b, 59bpluralism 173pneumonia 245policy-makers/policy-making 219, 259political economy 52, 219, 226

centralization 105development 49, 74, 228, 266,

269, 275inequity 237liberalization 167poverty 235protectionism 218reform 167rent-seeking 73under-development 29, 47, 51, 182,

186, 266–7, 268–9, 275; Indianramifications 32–3; ‘rut’(Mahtaney) 268

political economy ofunder-development: macroview232–40

geopolitics of global economy238–40

international inequality by region(1960, 2000) 233t, 2336t

trends in inequality 237–8bpolitical parties 75, 237

314 Index

political patronage 44, 220, 273political scientists 118political systems 171politicians 67politics 18, 74, 100, 105, 186, 205,

238, 268perpetuation of poverty and inequity

232–8‘took precedence over economics’

193, 226vote-chasing 44see also power

politics of control 102, 107–8, 182politics of lending 108population 14, 79, 83, 220, 258

rural 127working-age 11, 51

populism 32, 237portfolio bond flows 198portfolio equity flows 198ports 34t, 144Portugal 172post-colonization era 3, 5, 228post-independence era (1947–) 72–3,

79, 80, 81, 173, 174–5growth trajectory (1950–) 19, 20

post-liberalization era (India) 34, 38,46, 63, 211

‘post-1991 era’ 18–24, 26‘post-reform era’ 46see also pre-liberalization era

post-liberalization era (PRC) 127post-war era (1945–) 273postal system 115poverty 1, 3b, 3, 8, 9, 12, 19, 100, 165,

180, 190, 222, 228, 237b, 263, 264,268, 272, 275

Africa 163–4amidst plenty 67erroneous assumptions 267estimates 233extreme 30incidence (India) 30income 124link with trade 202non-income 124politics of perpetuation 232–8regional 124rural 54, 124, 138‘startling facts’ 245–6

‘stokes itself’ 267urban 124see also deprivation

poverty lines 6t, 15, 123–4, 139, 169,233

US$1 per day 2b, 123–4, 245US$2 per day 233, 245US$4 per day 193

poverty-reduction 5–6, 10, 30, 49, 67,75, 77, 78, 116, 119, 122, 132, 139,169, 172, 186, 187, 193, 201, 202,204, 206b, 209, 223, 224, 226, 227,235, 238, 246, 250, 252–3, 254, 257,261, 269, 270, 276

estimates 233urban programmes (India) 47

poverty trap 233, 234, 270‘misleading concept’ 267

power [energy] 22, 25, 34, 34t, 44, 45,115, 144

power [political] 233, 239pragmatism 83, 168, 211, 226, 227, 271PRC see China, People’s Republicpre-liberalization era

India (1947–91) 34, 59b, 172, 224PRC (1949–78) 131, 172see also trade liberalization

price controls 21, 228prices 98, 149, 229, 261

agricultural 123, 124–5commodity 125, 203public-sector (India) 43

pricing 73, 75primary education 35, 38, 68, 177t,

234, 245see also secondary education

primary goods/products 72, 203,222f, 224

private enterprise 80, 106t, 135private property rights 87, 94, 154

see also property rightsprivate sector 19, 21, 22, 73, 79, 87, 98,

101, 106, 107, 109, 113, 115, 117,142, 145, 154, 155

easing of controls 107bprivatization 4, 31, 92, 103, 104, 105,

133, 193impact in India (overview) 41–8India 32–3Japan Post 273

Index 315

Malaysia 219–20partial 103, 104strategic partners (1999–2005) 42t

pro-environment, people, prosperity(P-EPP) principle 257–9, 260, 275

process development 136processing trade 85bprocrastination 45product development 136product imitation 156product quality 153production 87, 92, 97, 98, 150

agrarian/agricultural 95, 126capital-intensive 52, 59bdomestic 226industrial 95labour-intensive 61b, 62

production costs 168, 261production function of development

(chapter nineteen) 249–55formula 252–3proposed by Mahtaney 251

production function for development256, 257

production hub 161production processes 25–6productive capacities 223productivity 22, 26, 33, 34, 35, 38, 41,

46, 48–9, 52, 61, 64, 80, 87, 94, 102,105, 113, 118, 120, 152, 175, 181,213, 214, 215 222, 223, 224, 233,261, 268, 269–70, 271

agricultural 217industrial 56manufacturing 57marginal 275non-agricultural labour 121reasons for increases (PRC) 121trends (India) 56–8

professionals 23, 35, 37, 39, 136, 243profit remittances 223profitability 41, 43, 89, 97, 100,

102, 103, 105, 184, 218, 219,232, 259

profits 21, 88, 98, 192, 241, 261pre-tax 99

propensity to save 223property rights 100, 103, 107b,

229, 260see also intellectual property rights

prosperity 30, 80, 266, 268P-EPP principle 257–9sustainable 274

protectionism 7, 192, 194, 216, 224impact on technological upgrading

(PRC) 151–4‘import barriers’ (reduction) 21‘import quotas’ 228‘import restrictions’ 19‘import tariffs’ 35–6India 18, 20, 35–6, 58b, 60b, 73, 76India (1983–4 budget) 19–20minimized 22near-universality 152‘non-tariff barriers’ 142, 203, 204PRC 157‘tariff barriers’ 141, 202, 203, 205‘trade barriers’ 8, 20, 76, 162, 213‘trade-distorting measures’ 205,

206b, 207b, 208, 213, 230provinces 117, 269PSEs (public sector enterprises)

43–5, 52see also SOEs

public awareness 49public debt 108, 273public expenditure 3, 19, 122, 128,

131, 273capital 47education 40health sector (PRC) 134non-developmental 45, 46, 47non-planned 47percentage that should be devoted to

education 38primary and capital 46social sector 37–8, 46–7South Asia (1990–2001) 38t

public policy 213, 215public sector 5, 21, 22, 33, 43, 46, 73,

79, 103, 175net capital formation 48

public sector enterprises (PSEs)43–5, 52

public sector units (PSUs) 41–5public services 130, 131, 133public utilities 42, 102, 115

state-run (India) 43–4public works 273pulses 50

316 Index

Punjab 27, 28tpurchasing power 53, 55–6, 134, 144

Qianzhou 90bqualitative changes 251quality of life 130quasi-government agencies 101quasi-socialism 22Quibria, M.G. 214nquick-fix policies 231, 235, 238, 249

radios 58b, 60brailways 22, 34t, 64, 115, 144, 174Rajasthan 27, 28trationing 95rats 66–7raw materials 60b, 147Reagan administration 153Reaganomics 4real estate 183realism 258recapitalization 84, 95, 111, 111n, 114

see also social capitalreciprocity 8, 249red tape see bureaucratic delaysredistribution measures 130reform 89, 167, 201

pace 27political 160stalled (India) 49see also economic reform

reform imperatives 182–5‘Reform of Science and Technology

Management System’ (1985) 135regions 138

PRC 132SEZ status (PRC) 90b

regulatory authorities 108regulatory framework 261remote areas 134renminbi 184

convertibility 164de-pegged from dollar (2005) 164devaluation 147managed floating exchange rate

regime (2005–) 164–5rent [economic] 219rent [on leases] 87rent-seeking 44, 49, 73, 74, 92, 104,

193, 212, 216, 229

research 151, 230, 235, 236applied/basic 136

research and development (R&D) 69,137, 155

gross expenditures (GERD) 135, 135tnational census (PRC, 2000) 157R&D base 26R&D centres 27R&D institutions 135, 138R&D intensity 136R&D programmes 156

research institutes 155, 156reservation policy, caste-based 39–41resource accessibility 190resource allocation 35, 60b, 73, 101,

109, 114, 228, 240, 262, 263,270, 272

‘resource misallocation’ 104, 192resourceconstraints 72,89,196,270,276resource crunch (Africa) 223resource endowments 259resource management 265, 272, 274

transition from resource mobilization269–71

upgrading 274resource mobilization 80, 175, 176,

180, 221, 232, 268, 272sub-optimal 103transition to resource management

269–71resource utilization 262restructuring 103

economic 3fiscal 45, 46public sector enterprises 32–3see also SOE restructuring

retail/retailing 24, 68revenue:cost ratio 43rice 50, 66–7Rich World, Poor World Guide to Global

Development 203rising superpowers: issues, implications,

future (Part I) 13–187economic comparison (India and PRC)

170–87India 17–81insights 167, 168, 169, 171introduction 14–16lessons 15, 19, 72–3, 76, 78, 79,

107–8, 161, 162, 165, 184

Index 317

lessons (fundamental) 169PRC 82–187

risk-assessment procedures 108,112, 114

risk-evaluation 110risk-management 111, 112risks 261road construction 125road transport corporations 43roads 34t, 144Rodrik, D. 51, 201Royal Bank of Scotland 112rubber 58b, 59brule of law 222, 229rural areas/regions 32, 35, 65, 123, 128,

241, 242–3disposable income per capita 129bincome (average) 128unrest 117

rural development 47, 127rural economy 62, 65, 67–8, 69, 78, 87,

91, 133, 142, 242Lewis’s model 53

rural enterprises 88rural expansion 125rural reform 87, 88rural residents 126Russian Federation (1991–) 4, 9–11, 76,

136t, 178, 193–5, 199, 210, 229, 271see also USSR

S&T indicators report (PRC, 2000) 136Sachs, J.D. 202salaries 37, 46sales revenue 99, 136salespersons 243sanctions 168, 260sanitation 245SARS (Severe Acute Respiratory

Syndrome) 134savings 45, 48, 233, 267, 268, 270, 273

domestic 122, 221, 223household 46t, 113, 122low return 113non-financial enterprises 122private (India, 2000–6) 46tpublic (India, 2000–6) 46tuntapped 222

savings and investment gap 46tsavings rates 181, 186, 219

savings:GDP ratio 108scheduled castes and tribes 39school enrolments 2b, 234schooling 35, 49schools 40science and technology (S&T) 76, 135

budgets 157personnel (PRC, 1991–9) 137tprogrammes 156, 158

scientists 136, 137tSeattle 204SEBI (Stock Exchange Board of India)

185Second World War 72secondary education 177t, 234, 245

‘high-school education’ 139see also tertiary education

Securities Regulatory Commission ofChina 110

seeds 67‘selective liberalism’, 12semi-conductors 148, 149t, 150, 217self-employment 106t, 107, 130,

243, 269semi-finished goods 147self-sufficiency 67, 72, 96, 174Sen, A. 272service intensity 64‘service-led growth’, 63services 18, 68, 242

community, social, personal 21tknowledge-related 157sectoral real GDP growth rates (India,

2003–6) 21tservices sector 24–6, 35, 54, 58, 63–5,

68–70, 119, 120, 132, 138, 144, 171,178, 244

‘contributes 48% of GDP’(PRC) 131

‘tertiary sector’ 25, 77, 242, 243transition to 55

Severe Acute Respiratory Syndrome(SARS) 134

SEZs (special economic zones) 89–91,167, 178

Shanghai 90b, 91, 134Shanghai: Pudong New Zone 90bShanghai Stock Exchange 102, 185Shantou 90bshareholders 98, 99, 101, 180

318 Index

shares 99, 100, 102shelter 9Sheng Huaren 99, 103Shenzhen 90b, 91Shenzhen Development Bank 112Shenzhen Stock Exchange 102Shiozaki, Y. 274ships/shipping 64, 217bshort-termism 226Sichuan province 88sick people 127Singapore 14, 39, 114, 170, 212n, 215,

218, 219, 233n, 236neconomic growth rates (1980–94)

214texemplification of EEM 271–2foreign direct inflows:gross fixed

capital ratio (1971–93) 215tgross domestic saving and investment

(1971–96) 47tSingapore: Ministry of Defence 209Singapore: Ministry of Finance 209Single Undertaking (WTO) 206bskill development paradigm 69–71

‘challenge confronting India’ 69diagrammatic depiction 70f

skill intensity 243skill shortages 50skill upgrading 163, 222skills 55, 64, 91, 112, 126, 130, 132,

148, 166, 175, 180, 199, 240,250, 272

‘foreign expertise’ 144technical and managerial 136see also technical expertise

skills gap 228‘smart policy’ 29social capital 68, 182

see also Basel IIsocial development 139social exclusion 3bsocial indicators 139social safety net 55, 94social sector 48–9, 272social security 87, 103, 122, 243, 244social services 131social welfare 123, 134, 252socialism 18, 19, 79–80, 97, 179, 192–3

‘leftist leanings’ 27socialism-liberalism combination 180

socialist countries 6, 8socio-cultural patterns 242socio-economic backwardness 17socio-economic categories 54, 56, 272socio-economic goals 264socio-economic groups 240socio-economic hierarchy 75, 186, 266socio-economic indicators 5, 195,

201, 226–7see also sustainable development

socio-economic objectives 33socio-economic strata 32, 242soft budget constraints 87soft technology 157software 25, 26, 35–6, 155soil 69, 118, 246, 252South Africa (RSA) 221, 233South Asia 202, 234, 237, 262, 263,

270, 276GDP (1970–98) 4tpopulation below poverty line

(1990–2001) 6tsee also Sri Lanka

South ChinaDeng’s tour (1992) 86, 92–3, 144,

168, 174South Korea see ‘Korea, Republic of’South-East Asia 5, 38, 75, 92, 105, 147,

164, 170, 196, 209, 210, 212, 213,214, 218, 219, 220, 226, 228,234, 240

banker–politician nexus 194–5economic growth rates (1980–94)

214tlessons for Africa 222

Soviet Union see USSRspace 101, 156special economic zones (SEZs) 89–91,

167, 178specialization 132, 166, 216speculation 105spillovers 26, 91Sri Lanka 38t, 38, 192, 233n, 236n,

237b, 276see also Bangladesh

SSA see Sub-Saharan Africastagflation 209stagnation 8, 18stakeholders 100state, the 211, 266

Index 319

State Council (PRC) 147Document No 4 (1991) 133

State Economic and Trade Commission(PRC) 99

state electricity boards (SEB) 43State Planning Commission (PRC) 102state role 3, 7, 8

‘government role’ 5, 18, 19, 79state-owned enterprises (SOEs) 5, 8,

87–9, 92, 94–9, 114, 115, 121, 135,148, 156, 157, 180, 182

balance sheets 102employment in terms of ownership

patten (PRC, 1978–99) 106tlarge 99, 101, 102loss-making 89, 94, 97, 99, 100, 101,

108, 113, 186medium-sized 100, 101mounting debts 142preferential status 103‘public sector enterprises’ 32–3transformation into modern

enterprises 94see also stockholding companies with

limited liabilitystate-owned enterprises:

restructuring/reform (PRC)142, 166

‘crucial purpose’ 104‘crux’ 105‘fundamental weakness’ 104impact 100–8lessons 107–8objective 100outcome 102unemployment (urban, 1993–8)

104tsee also restructuring

state-owned enterprises: restructuring(issues and challenges) 97–115

conclusion 114–15employment in terms of ownership

patten (PRC, 1978–99) 106tenterprise restructuring 100–8financial-sector reform (issues and

concerns) 108–14lessons 107–8private sector (easing of controls)

107bunemployment (urban, 1993–8) 104t

state-owned managementcompanies 99

Statistical Yearbook (PRC, 2002) 85tsteel 21, 25, 95, 96, 101, 105, 121,

174, 217bStiglitz, J. 196, 228stilettoization of economic progress

231–46‘quick-fix growth package’ 231

Stock Exchange Board of India (SEBI)185

stock companies 115stock exchanges 113, 185, 275

‘appendage of socialistic pattern’(PRC) 102

stockholding companies with limitedliability(SCLL) 98

see also TNCsstockmarket listings 100, 101,

107b, 108storage 64, 65, 66structural adjustment 2b, 3, 4, 19, 160,

220, 235, 254, 269beyond (PRC) 165–8

structural transformation 161, 165,169, 209

Sub-Saharan Africa (SSA) 3, 4, 220, 221,223, 233, 234

GDP (1970–98) 4tGDP growth (1965–99) 220tlow-income countries 267–8middle-income countries 267population below poverty line

(1990–2001) 6tSubramaniam, A. 51subsidies 8, 44, 45, 46, 49, 67, 73, 97,

129b, 129, 203, 204, 205, 208,212–13, 216, 220

subsistence 54, 55, 208b, 242subsistence farmers/farming 244,

204, 208see also WTO Agreement on

Agriculturesubsistence sector

Lewis’s model 53sugar 21, 125suppliers 23, 34, 151supply and demand 164

mismatches 37

320 Index

supply-side constraints 22, 50surplus labour 58, 119, 125, 241, 242,

243, 244Lewis’s model 53PRC (’200 million’) 128

sustainability 30, 81, 97, 159, 161,162, 232

economic progress 251, 260issues and imperatives (PRC) 118–22

sustainable development 10, 51, 79,118, 132, 169, 172, 181, 211, 249,258, 259, 263, 264, 265f, 265,272, 274

see also developmentsustainable economic growth 31–2, 37,

48, 107–8, 116, 118, 139, 142, 166,209, 211, 214, 221, 222, 226

Suzuki, Z. 153

Taiwan 38, 89, 90b, 92, 145, 147, 148,168, 170, 209, 212n, 215, 216, 218,225, 233n, 236n

economic growth rates (1971–96)214t

foreign direct inflows:gross fixedcapital ratio (1971–93) 215t

Tamil Nadu 28t, 28, 29Tanzania 233tariff-reduction/s 61b, 142, 202, 208btariffs 58b, 203–4Tata Services 57, 57tTata Steel 25tax advantages 216tax base 23, 229, 261tax burden 48tax concessions/exemptions 21, 22, 89,

90b, 175tax holiday 89tax rates 89tax reductions 125, 126, 128tax reform 45tax revenue 45taxes 126

indirect 147teachers 35technical development centres 156technical expertise 36, 68, 174–5, 193,

243, 271see also skills

technical/technological obsolescence73, 175

technical progress/upgrading 38, 135,138, 147, 152, 155–6, 175, 215, 218,219, 224–5, 228

impact of protectionism (PRC) 151–4‘main driver’ (PRC) 137

technological advancement 122,152, 271

link with human capital formation134–8

R&D as percentage of GDP (variouscountries, 1995–2000) 136t

R&D statistics 135tscience and technology personnel

(PRC, 1991–9) 137ttechnological diffusion/dissemination

26, 38, 50, 157technological transfer 135, 136,

151, 163technology 1, 15, 19, 89, 98, 126, 140,

150, 242advanced 148‘apparently modern’ 225capital-intensive 121domestic 157dual-use 155foreign 156, 225imported 156, 158indigenous 158labour-saving 61–2markets 138modern 224obsolete 99state-of-art 219see also high technology

technology transfer 60b, 112, 147, 148,218, 219

trickle-down effect 154–8turnkey 225

technology-intensive spheres 166telecommunications 34t, 44, 101,

105, 115, 142, 144, 157, 180,183, 213

telegraph 213television [sets] 58b, 60bTemasek 112‘ten important relationships’ (Mao,

1956) 83

Index 321

terms of trade 8, 9, 73, 203,222f, 223

rural–urban (PRC) 123terrorism 249tertiary education 35, 177t

‘four million graduates annually’(PRC) 128

‘higher education’ 76see also education

textiles 59b, 68, 89, 143, 216world-class industry (India)

174, 175TFP see total factor productivityThailand 47t, 105, 164, 195,

212n, 214t, 215t, 218, 233n,236n, 237b

Thatcherism 43Is skill development paradigm 70Tiananmen Massacre (1989) 86, 93,

167, 168Tianjin 90btiered formula (WTO) 208btime 73, 263timing 178, 195, 199, 217–18total factor productivity (TFP) 27, 56,

57, 58, 120, 121, 181, 214growth 119manufacturing (India, 2003) 57t

totalitarianism 93, 160, 174, 235tourism 25, 64, 126towns 133, 134township and village enterprises (TVEs)

87, 98, 119–20, 124, 125, 145employment (PRC, 1978–99) 106t

Toyota 153toys 26, 89, 147, 149t, 149ntrade 82, 92, 116, 148, 163, 172, 204,

215, 239, 272contribution to GDP growth (India

and PRC) 181tfree or fettered 201–4impact on growth 201link with poverty 202role 201trends (PRC, 1978–2004) 146–7unfair practices 143world 170

trade, hotels, transport &communication 21t

trade liberalization 7, 8, 23, 27, 78,125, 141, 147, 158, 162, 177, 201–4,205, 213, 219, 226, 231, 249,266, 275

impact (overview) 197–200‘magic wand’ approach 201see also Big Bang liberalization

trade openness 203, 225, 229‘open trading regime’ 202

trade policy 194, 212, 225trade reform 201trade: GDP ratio (PRC, 1978–2004) 146ttraditional sector 241, 243training 35, 36, 61b, 126, 130, 132,

136, 137vocational 219

transition economy (from communismto capitalism) 4, 76, 77, 80, 86, 92,97, 106, 133, 159, 162, 165, 167,178, 193–4

Eastern Europe 160, 161‘transitional losses’ 5transmission mechanisms (of growth)

122, 223, 224, 227, 253, 262, 266transnational corporations (TNCs) 135,

136, 145, 168, 218see also companies

transparency 33, 73, 185, 229, 270transport/transportation 25, 59b, 64,

68, 126, 183trauma 171trickle-down effect 196tuberculosis 245TVEs see township and village

enterprisestwo-sector models 241tyranny 173

uncertainty 269under-development 1, 3, 4, 7,

9, 27, 29, 39, 73, 74, 80, 169,171, 187, 196, 210, 220, 221,223, 241, 242, 246, 250, 253,254, 258, 260, 261, 262, 266,267, 269, 275

crux 244macroview 232–40see also developing countries

Unel, B. 57, 61

322 Index

unemployment 37, 50, 52, 54–5, 100,125, 132, 209, 225, 226, 241,258, 275

‘registered’ versus ‘actual’ (PRC) 104turban 104, 127urban (PRC, 1993–8) 104t

Union Bank of Switzerland 112Union of Soviet Socialist Republics

(USSR, 1922–91) 95,192, 233t

‘former Soviet Union’ 234,237b, 240

‘Soviet model’ 91–2, 95, 155–6‘Soviet Union’ 83, 96

United Kingdom 10b, 25, 145, 159,174, 237–8b

‘the British’ 172–3United Malays National Organization

220United Nations 2, 2b, 4, 275, 276

first development decade(1961–70) 2b

UN History Project (2005) 4nUN Millennium Declaration 9UN system 238UNCTAD 2b, 25, 214–15, 215n,

220n, 221, 223UNCTAD report (2002) 143UNDP 38t, 129b, 202UNDP report 125UNICEF 2bWHO 132see also World Bank

United States 10b, 11, 15, 35, 77, 84b,135, 145, 148–54, 159, 203, 205,213, 237–8b, 257, 272

cotton subsidies 203defence industry 155FDI in PRC 85bimposition of sanctions on PRC

168monetary policy 195one of PRC’s top five trading partners

(2004) 150tR&D as percentage of GDP

(1995–2000) 136ttariffs 203–4technological leadership ‘eroding’

155trade with PRC 85b

trade imbalance with PRC 151, 154US: Department of Commerce

143–4, 273US: National Intelligence

Council 170US: Security Review Commission

143, 154US: Senate Committee on Foreign

Relations 222US dollar 164, 203US farm bill 204US Trade Representative 143

universities 37, 40, 135, 139–40unorganized sector 33, 59b, 61b, 130,

131, 200, 243unrest 59b, 117, 264, 269urban areas 32, 144

consumption expenditure 54disposable income per capita 129bincome (average) 128‘new poor’ (PRC) 127public expenditure (India) 47residency regulation 126

urban community (India) 32Uruguay Round 205utopian egalitarianism 83Uttar Pradesh 27, 28t

value added 58b, 59b, 60b, 61b, 61,119, 132, 180

value chain 148, 149, 151, 215Venezuela 237bvested interests 32, 46, 74,

75, 117, 205, 212, 238,240, 267

‘lobbies’ 24, 218, 219, 232, 238,266, 273

‘pressure groups’ 49, 266vicious circles 268Videocon 25Videsh Sanchar Nigam 42tVietnam 214tvillages 65, 68, 133, 134, 269virtuous circles 221, 223–4Voluntary Export Restraints system

(1981) 153

wage costs 275wage rates (Lewis’s model) 53

Index 323

wages 45, 46, 54–5, 226, 232, 242,243, 244

low 91real 4, 241

warehousing 65Warner, A. 202Washington 213Washington Consensus 4, 7, 194waste and scrap 149twater 21t, 45, 64, 67, 118, 126,

133, 245wealth creation 274Weiss, J. 219welfare 97, 98, 100Wenzhiu 90bWest Asia 234West Bengal 27, 28t, 29Western Asia 233t, 236twestern region (PRC) 126, 127wheat 50, 66–7wholly state-owned commercial banks

(WSCBs)109, 112

Williamson, J. 7Wipro 180women 47wood products 68workers 100, 130, 242

unskilled 232workers’ councils 98World Bank 34, 34t, 120, 123, 139,

196, 202, 209, 210, 212, 238,261, 276

report on global development finance(2001) 198

see also WTOWorld Bank: China Office 119World Development Report

(2005) 229, 261(2006) 238

world economy see global economyWorld Institute for Development

Economics 237World Resources report (2005) 252World Trade Organization

(WTO) 75, 191, 203, 204,210, 238

Agreement on Agriculture (Doha,2004) 205, 206b, 208b, 208

PRC accession (2001) 108, 141–4see also agriculture; IMF

Xi’an City Commercial Bank 112Xiamen 90b, 90–1

Yangtze River 90bYantai Quingdao 90byields 50, 67, 87

Zanjiang 90bZhangzhou 90bZhao Ziyang 93, 168Zhejiang 134Zhou Xiaochuan 164–5, 169Zhuhai 90b, 90–1Zimbabwe 226–7