To measure Chinese power based on the tired rules of how many aircraft carriers she has or on per-capita GDP leads to devastating mis-measurement.â€™
Joshua Cooper Ramo, p.2Â Â
India is following the wrong measures. It becomes more evident every two years â€“ during the (Summer) Olympics and during the FIFA World Cup. The later is up and running, with millions of Indians watching it as football becomes another global religion, debating about likely favorites or discussing about the games played or outcomes expected.
Unfortunately for India and more so for its millions of illiterates, malnourished people; India has been on the wrong track of processes and their measurements. Unfortunately in India, itâ€™s not the economy; it should be education. Itâ€™s not the health of the economy as measured in GDP growth rates; it rather should be the health of Indian citizens. It should not be billionaires India produced; it should be how well India could meet with the Millennium Development Goals (MDGs) of the UN or how well India could reduce percent of people that goes hungry every day.
A natural outcome of the right measures gets visible to any man from the streets all over the world in every alternate years – during theÂ Olympics or during the FIFA World Cup. There are exceptions to it; but this untested hypothesis probably passes higher confidence levels than most economic hypotheses.
Measurement Gurus Kaplan and Norton, and even before that Porter is credited with the saying “What gets measured gets managed and what gets managed gets doneâ€, which many claim, is an old adage. There was another insightful principle that Texas Instruments followed on importance of business (of governance) processes that went by: How do you expect a different result if you donâ€™t change your business (governance) processes?
This article asks why India has not been getting a different result in terms of literacy, poverty reduction, reducing hunger or malnourishment or even participation in FIFA World Cup Finals or in terms of performance in the Olympics; Â in-spite of higher economic growths over more than a decade or nearly for two decades now (since liberalization).
In case of India, since the economic liberalization began in 1990s; growth rate as measured in terms of GDP might have changed for the better compared to the age-old â€˜Hinduâ€™ rate of growth; but there has not been significant change in illiteracy, poverty or in % of people that go hungry (as per latest UN report, same at 1990s level of 20-21%).
Do we learn anything from Texas Instruments? Are we following the wrong processes of economic growth measured in terms of GDP growth rates alone?
Is India, having a population in size similar to only China and a demography today that matched with Chinese demography few decades ago, focusing on the right processes and thereby on the right measures? One may argue thereâ€™s been enough historical evidence on how increase in GDP growth improves the lifestyle of the populace. Question is: how many of those evidences are relevant to an Indian situation, and for the 21st century world. Itâ€™s all about the â€˜trickle-down economicsâ€™.
In a country like India, the question that should be asked is: what should be an acceptable rate of reduction of illiteracy or poverty or hunger with every percent point increase of GDP. Most other nations globally have achieved higher growth rates after they had tackled the problems of illiteracy. In India, the growth rates have come irrespective of higher illiteracy; and so far the higher growth rates have done little to alleviate illiteracy any faster. Â It broadly goes true for poverty or hunger.
Lately, I have started admiring management professionals more than the economists because the former understand the context and then look for the solution; whereas the later Â look for models in one nation and imposes that on the other Â irrespective of how different or similar these two nations or economies Â are, on a comprehensive basis. The 1st principle of management, if thereâ€™s any, is everything depends on the situation. The economists are yet to grasp it. There are problems for which there may not be any models. Management professionals can face those, not the traditional economists.
In India, since the economic liberalizations, our many of the western-educated policy-makers and heads of Governments followed the west in GDP as a measure of well-being of people; and growth rate of GDP to beÂ the sole yardstick of natural choice of how well-being of people has been improving on a periodic basis. Itâ€™s the intoxicating shtick of Indian policy-makers to follow â€˜The Washington Consensus policiesâ€™ without ever realizing how suitable that might be for a country having an altogether different demography, by all measures. Since Indiaâ€™s freedom, policy-makers in India were mesmerized by the U.S. (in terms of the federal structure or the constitution India has) and the U.K. (structure of our parliament, indirect election to elect the PM/CM).
Had India structurally have anything in common with the U.S. or the U.K. back in 1947? Was it driven by the awe of a teenager as the over-enthusiast leaders of the newborn nation looked atÂ the superstars of the time,Â or by the logical thinking of an adult in what model suitsÂ India best?
Since liberalization, Indian policy-makers lacked the power of original thinking and blindly copied the West (or even before that, they tried partly to copy the USSR) in terms of economic policies where literacy is nearly 100% or â€˜have nothingâ€™ poverty (as per Indian standards) is nearly nil. China learnt from others, but innovated as its internal situation demanded.
Going before liberalization, India had a mix of Nehruvian economics. The transition over the years to the present model highlights the confusion Indian policy-makers faced, in understanding India-specific needs that economic policies should meet, presenting the mindset of a â€˜traditional economistâ€™ (without original thinking capabilities) with historically irrelevant models; than one that demands practical insights of a management professional.
So we have an India story today where the health of the economy is measured by louder noises of â€˜GDP cultâ€™ in government and media communications that would dwarf the â€˜vuvuzelasâ€™ of Â Africa in every 46 months out of every four years or so. The exceptions of those two months in every four years are during the FIFA World Cup and during the (Summer) Olympics. Sadly that â€˜noiseâ€™ of India story remains absent at the venues of both the FIFA World Cup and the Summer Olympics.
During these two months, the world also probably realizes that the Indian growth we have been talking about in India in economic terms isnâ€™t real; itâ€™s not reaching the majority of the citizens of this country and thereby not having any measurable impact of growth in the lifestyles of the majority people of this country, most important of that being physical health (indirect measure being capability in sports) followed by mental health of the citizens (education). Socio-economic measures are referred always on a comparative scale (monetary income, education or health of people of any country in comparison to other similar nations) as no economic measure on an absolute scale ever makes much socio-economic sense (barring exceptions like calorie intake, etc.).
In a country where (real) education for the mass (and not school enrolment) seems to be a luxury, no one has time to think about sports education. As a father of a school-going child; I sense it every day. Â Indian citizens and its policy-makers have taken it for granted that India is not likely to participate in FIFA World Cup Final in our lifetime or that of our next generation. It goes true for our performance in Olympics as well. Other than literacy and poverty, sports is another area where the â€˜Iâ€™ stands apart from the â€˜BRCâ€™ in the â€˜BRICâ€™ hype.
The concluding (Part II)Â of this article can be found here