Yesterday’s Failures are Today’s Successes

harimou#127:
I might have underplayed somewhat my plain MA degree. It actually was a degree in economics from India`s most prestigious economics institution at a time when anybody who could spell Keynes was deemed to know the answers to all of India`s problems. And I also had done some research with well-known people like V.K.R.V. Rao and Ashis Bose.
Having said that, it is also a fact that in those days most engineers ended up getting a job with a PSU or a govt. ministry and were paid at the none-too-generous govt. pay scales.

sadna#126:
``I am almost totally ignorant of what Nehru actually said or wrote on the subject, but, IMHO in his vision for modern India, Nehru forgot that regions constituting presentday India were strong trading powers for most of history. They could not have been so without being good producers of surplus and inclined towards enterprise.``

I think it would be unfair to attribute such ignorance to Nehru. After all, he had not only read Indian history but also wrote a book on it which is oftern used as a reference/text in some courses.
I think it was more a case of his being swept by the elitist thinking during the 30s and 40s, boosted by the apparent success of the soviet palanning model. He was quite willing to combine the central planning model with democracy and use India as a laboratory for testing unproven models.

re: Nehru and his legacy
I do not agree with Dost Mitterji at all in his analysis of Nehru`s achievements. I did not belong to the Nehru era and my impressions of him were formed from what i read about him and what my dad (who is a diehard admirer of Nehru) told me.
Two things that are being thrown at Nehru as criticism are : his lack of emphasis on Primary education and his socialistic leanings.

First of all, we all need to remember that Nehru was not ``cut out`` to be a good administrator or economic planner. Much of his life was spent in agitating against the British Rule, which he and Gandhiji rightly thought, was an evil. Many people on Chowk may have forgotten but Nehru spent more than 5000 days of his life in British jail. That is a long time off and saps one`s energy and drive. Yet, some kind of conviction drove people like him and Gandhi on and on towards their goal of achieving independence from the British.
In an astronishing revelation that I read in ``The Freedom at midnight`` by Lapierre, Nehru actually asked Mountbatten to take over the reins of administration to bring peace to riot-stricken areas of India after the British had just transferred power to India. This was a best kept secret until Nehru died. The fact is: he did not let his inexperience or ego come in the way of his country benefitting from Mountbatten`s experience of managing agitations and riiots. As Nehru told Mountbatten that day: ``I have spent much of my life in British jail and know how to agitate but not how to manage it!``. To me, that simple honesty is hallmark of a great man.

The great thing about Nehru is: his heart was in the right place. He strove for a democratic and secular India. Today`s India cannot hope to progress if it turns its back on secularism. I see a great threat to secularism today even as India is on its path towards material progress.
Nehru was no doubt impressed with Fabian Socialism that he came across in Cambridge and other academic circles in the early part of 20th century. He was much impressed by the progress made by Soviet Union, which, by 1950s, had achieved a high standard of literacy and health. He sought to emulate that model. Hence, the hightly centralized planning.
Few could have foreseen the unintended consequences of such a rigid control system viz corruption and lack of enterprise. If at all, i will blame the leaders who followed Nehru. Once it was clear that his economic policies were a failure, leaders like Indira Gandhi and the rest should have dismantled those policies. Nehru was a Giant in his lifetime. His ideas just took that long to wither away.
How about the Primary education? Hasn`t Kerala shown us how a communist state with rigid controls can achieve high literacy thr` primary education. This happened by people`s participation. Why has Rajasthan been unable to emulate the Kerala model? or for that matter other states? Govt can fund projects but cannot compel people to participate. No doubt Nehru was wrong in not going in for Universal Primary Education right at the beginning. He probably lacked that kind of vision. But, why did the leaders who followed him not make amends.? The whole point is: in a democracy, one person should never loom over political scenario larger than life as Nehru did. Like someone said, Nehru was like that big Banyan tree under which everyone slept in comfort and few complained. If some people are complaining today, even that is due to Nehru`s legacy of democracy and free speech!

In a good article, this author compares how South Korea overtook India. Primary education was just one factor. Prudent economic policies were what made South Korea an economic giant that it is today.
Much of what South Korea did 20 years ago, India is doing today. And, we are just beginning to see its effects.

http://www.hvk.org/articles/0197/0078.html (the article was written in late 90s when India had just started to liberalize its economy)

Excerpts:

``By the early eighties, Korea`s average tariff rate was seven per
cent, India`s 35 per cent; Korea`s exports were 32 per cent of her
GNP, India`s was five per cent; Korea`s investment was 28 per cent
of her GNP, India`s 22 per cent. And by 1994, India`s per capita
income was $ 330, Korea`s $ 10,330.

While in some ways this is a sad story for India, it is also one of
hope. The Korean example shows how quickly a country can transform
itself. India also has not done too badly since the early
eighties. It has grown reasonably well, and especially during the
last three years, it has grown by more than six per cent per annum.
Through the eighties, India`s poverty has fallen steadily. If we
are to improve on this performance so that poverty is finally
overcome, it is essential that we stay on course with the reforms.`
Sridhar

Dost mitter

Taiwan and korea,

It is interesting that no one mentioned about the role played by the investment incentives and preferential trade offered by the uS to Korea and taiwan in early years, just to create a siccess model of the capitalism. Taiwan and korea were helped simply because there is a china and north korea.

It would be improper to compare their success to that of any other countries because of the special circumstances and the role played by the US for demonstration purpose.

harimau #128
Thanks.

correction #114
That was Tiberius not Nero.

Layman #92 . . . you are correct, computerised tickets are not available from all the small hamlets, but the Indian Railways are getting there.

Let me put it this way, just yesterday, at New Delhi, I had the option of buying a platform ticket for 3/- rupees from a human being, for which I got the standard spec card ticket, or from a machine, for which I got a small printout receipt. There is also a soon-to-be introduced platform ticket cum weighing machine weight + fortune deal for all of 5/-.

Likewise, you can log in right now to the IR website from anywhere in the world and buy your train ticket. You can go to increasing numbers of stations, where there are terminals, at last count about 9000 of them, and buy unreserved or reserved journey tickets.

These two methods cover about 98% of long distance tickets.

On the commuter trains, you can buy self-validating coupons, smart cards, token . . . and card tickets too.

What I am saying is that this is one arena where the rules of the game have really changed FOR the elusive common man Indian.

That`a all.

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Another thing to keep in mind is that a lot of investment in SE Asia was the ``bad`` kind, short-term portfolio investment (mutual fund managers need a place to park a few tens of millions of dollars for a short time). This is in contrast to the ``good`` kind of FDI, investment in factories, etc. So with bad FDI, as soon as there is a hiccup in the market, it runs away and since these are very primitive and undeveloped markets with no depth to them, this can cause a complete collapse very quickly.

Many proponents of financial market liberalization did not distinguish between good and bad FDI (but Stiglitz, e.g, did) and saw all FDI as good. Stopping capital account convertibility may temporarily stop the panicked outflow BUT it does mean that the next time something looks as if it might go wrong, the smart money will leave ASAP in case Mahatir`s successor stops convertability again. After all, the govt`s credibility is pretty much nil.

So there are pros and cons to every solution!

it is the Religion that will fall -- not the Science --

Natural will truimph over the Supernatural -- Skepticism will defeat dogma -- Disbelief will conquer Belief -- -- Reason will destroy irrationality

the Left brain WILL dominate the Right

the Pan Religiosity and the Faith Fervor of the present day world -- among the the Muslims, the Hindus, the Jewish, the Buddhists, the Sikhs and the Christians -- is the Last Hurrah before the Final Fall...

Science WILL close that Theater of Absurd called Religion -- for good ...one day!

I beg to differ with Dost that these three policies have failed. As a matter of fact I see those initiatives have brought intended social change successfully in all respect. Some of the results may be un-intended but those policies never failed. But since this article is directly comming from horses mouth (i.e. former policy analyst, what am I to say anything)

Ref sadna #114

[Re banking and other Asian economies, weren`t the S.East Asian tigers economies` near-catastrophic meltdowns some years ago and Japan`s economic troubles precipitated by poor banking practices? Didn` t something similar happen in Russia, too - too much FDI too fast?

China and India escaped the worst effects of those times. The point is there has to be a balance between too much government oversight and too little, esp when life savings or jobs of millions of people are at stake.]

The reason the Asian Tiger economies collapsed is that they permitted free inflow and outflow of capital. So when the Western investors didn`t see the returns they wanted, they pulled out their capital.

China and India have restrictions on convertibility of capital accounts. Thus both escaped runs on their currencies as happened to the Malaysian ringgit till Mahathir had enough and pegged the ringgit at Rg. 3.75 to a dollar and stopped capital account convertibility.

Another difference is how the Chinese managed FDI. By guaranteeing no labor strife, good infrastructure (electricity, transportation, ports, etc.) they got FDI. In India we have the babus of the bureaucracy deciding how many pennies a foreign investor can bring in. Add to that bad ports, unreliable electric supply, poor roads, you got the worst of the third world. China also pegged their renminbi whereas India lets the rupee float. This worked when the Indian rupee depreciated against the dollar and Indian (IT) companies were able to report huge profits in rupees but now that the rupee has gone up from 49 to a dollar to 45-and-change to a dollar, these guys are crying buckets.

It is just that India has way too many LSE graduates running the economy whereas China has the equivalent of the Marwaris running their economy. You can see the difference.

Ref dost-mittar #121

[In fact, IIT engineers could be hired for a few hundred rupees a month during late sixties and seventies. I got my first job in 1964 in India after doing a simple M.A and was getting paid more than an IIT graduate did.]

I recently met a retired Indian gentleman in the US. He is an early IIT-Kharagpur graduate and in those days they either stayed on In India or, if they went for higher studies to the US, returned to India. All I can say is while he was happy for his son`s financial success in the US, he seemed rather amused by the big deal being made about the whole thing. He seemed quite at peace with himself and the way his career had shaped up.

dost-mittar
I am almost totally ignorant of what Nehru actually said or wrote on the subject, but, IMHO in his vision for modern India, Nehru forgot that regions constituting presentday India were strong trading powers for most of history. They could not have been so without being good producers of surplus and inclined towards enterprise.

He missed taking into account the fact that economic lethargy, poverty and illiteracy didnot necessarily constitute the natural state of his countrymen. ( Eg, in a recent NYT writeup on excavations on the Red Sea coast which unearthed quantities of peppercorns and cotton cloth, the Emperor Nero was quoted as complaining of balance of payments crisis with India 2000 years ago :)).

Nehru`s oversight was like that of many modern Arabs, for example, who have forgotten that Arabs were great seafarers and traders in the past but now consider `globalization` or increased interaction with outside world and its ideas as inherently wrong or unnatural.

Ref fuzair #97

[Thanks for the post but I fear logic and facts will be of no use. IIRC, macgupta and I have had that discussion before (on just how evil was the British Raj) and there is no point in trying.]

The Raj was evil as were its political agents. The policy of the Raj was to turn India into a country from which they could extract raw materials at low cost and dump British manufactures to the exclusion of most others (I recall my folks telling me inexpensive Japanese cloth used to be available in India). The political agents and Residents were there to control independent tribals and rajas.

The average civil servant -- all the way I would think up to the Chief Secretary level in the Provinces -- had a great deal of autonomy in how they ran the administration. While racism played a part in British-Indian relations, even that happened after the Mutiny of 1857. Before that quite a few Englishment ``went Native`` in their dress and eating habits and had Indian wives and concubines. The Civil Service was impartial in its arbitration of disputes amomgst Indians which was important to the people who had been treated so high-handedly by the Rajas, Maharajas, Ranas, Sultans and Nawabs. The British also brought in the concept of a professional full-time army, the railways (privately owned and thus subject to the charge that profit was the motive), built several roads (no tolls were collected so one would have to say this was for administrative convenience if not for public convenience), irrigation projects, etc. Where they failed was in public health and immunizations.

As to education, under the British, Indians earned 3 Nobel Prizes for work done in India. (Sir Ronald Ross born in Almora in 1857 for Medicine, Rabindranath Tagore and CV Raman.) Under our new Nawabs, all talent has to leave the country in order to do good work because anywhere from 50% to 88% of colege admissions and jobs are reserved for the Retards.

Ref Cranberry-sauce-stuffed-Turkey #102

[The power of IITs is a myth. We haven`t had breakthrough technological or scientific innovations coming out of IITs. The smart ones from IIT would be smart even without an IIT education and IITs merely act as a selection filter. For what it`s worth, two of Microsoft`s VPs are alumni of guindy engineering college/anna university, madras.]

So right. Who can forget the new TVs based on the RGY phosphors?

By the way, would these two be any of the Quota Candidates?

I remember a scientist (a former Deputy Director of the Central Electronics Research Institute) who was an adjunct professor at Anna University. When he was approached by the faculty to also become an advisor to PhD students, he refused. His reasoning, as told to me, was: ``at some point somebody wearing a towel on his shoulders will show up at my doors and gently suggest that I should a) admit so-and-so to the doctoral program and b) I should approve XYZ`s thesis. None of this is compatible with good academic work and so I refused.``

The Man with the Towel on His Shoulders, for those who are unfamiliar with Tamil Nadu, are the political leaders and their hangers-on who normally wear a white dhoti, white kurta and a very long white towel whose borders would be red and black signifying their affiliation with the DMK/DK.

This is of course the reason why the Chennai Mathematical Institute is affiliated with Bhoj University in Madhya Pradesh and not with Perarignar Anna University or with the University of Madras. We already see a bunch of high schools offering the Cambridge Examinations as an alternative to your Plus Two (no quota candidates are studying there), several other high schools offering the Central Board curriculum (no Maasanamuthus here either, no surprise) as an alternative to the State Board.

We in Tamil Nadu know exactly where Anna University ranks. The IIT Madras is right across from Anna and you guys are not fit to carry the sh!t of the IIT students. At least the IIT students have demonstrated their ability to study hard and pass an exam to get into their institution whereas you have produced a caste certificate and usually a bogus one at that to get into Anna University.

Ref dost-mittar #111

[soysauce:
``I`m not knocking you, mind you, but you might as well make the title read Yesterday`s (successes/failures) are today`s (successes/failures) and all four combinations would be valid.``
I do not disagree with this at all! In fact, I stated at the beginning of the article that ``One of the lessons learned from these analyses is that the unintended consequences of government programs and policies are SOMETIMES stronger and quite different from their intended effects.``]

Dear Dost-Mittarji,

You need to use words of one syllable when writing to Maasanamuthu. Or colloquial Tamil.