Experts discussed the future of economic development in Brazil, China, and India at a seminar at the Frederick. S. Pardee Center for the Study of the Longer-Range Future on September 26.
Titled “Beyond GDP in Brazil, India, and China: Prospects for Long-Run Development,” the seminar featured Prof. Cornel Ban (International Relations), Prof. Min Ye (International Relations), and Pardee Post-Doctoral Fellow Suranjana Nabar-Bhaduri, who moderated the session.
Nabar-Bhaduri introduced the session by explaining that Brazil, India and China – part of the so-called BRICS countries, along with Russia and South Africa – in the past several years have been seen as positive examples of global economic growth as they had, until recently, experienced a steady increase in gross domestic product (GDP). The seminar was intended to explore the longer-term implications for policies and circumstances that led to the economic growth spurts.
Cornel Ban discussed Brazil’s past approach to economic and development policy, which focused on more conventional approaches as opposed to its more recent “hybrid” direction of the past decade, which emphasizes state intervention to accelerate economic growth and employment generation to reduce economic and social inequality. For example, he cited Brazil’s decision to implement income redistribution programs such as conditional cash transfers to economically disadvantaged citizens while simultaneously maintaining a strong state-owned development bank that focuses its lending to domestic corporations and industry.
Suranjana Nabar-Bhaduri discussed the impressive acceleration of GDP in India in the period between 2003-2007 due to the growth of the service sector and increased rates of investment. However, since the 2008 global recession, India’s trade deficits have been widening and its investment declining, she said , In 2012, there has been a more incipient slowdown with GDP growing at a nine-year low, the Indian rupee falling considerably in value and a contraction in industrial output. She cited other reasons for this as being the growing dependency on imports rather than exports in the manufacturing industry, a series of corruption scandals related to resource allocation, and the banking sector reducing its credit limits. Nabar-Bhaduri argued for more research and development to make manufacturing more competitive, and a shift in policy to be more inclusive through policies to accelerate the agricultural and industrial sectors as a way to achieve inclusive growth, strengthen the domestic market and address the growing trade deficit.
Min Ye focused on the strong economic ties between China and India, as well as the important role of the Chinese diaspora’s investments in China, which she noted constitutes a majority of country’s foreign direct investment inflows. She noted that former Chinese leader Deng Xiaoping was very open to policy contributions from Chinese outside the country, while China in recent years has more difficulty in engaging diaspora experiences in resolving imperative issues in governance and society. She noted that the small-scale societal level of diaspora investment is missing in Brazil and India, and that India’s overall diaspora investment is declining.