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Protectionism also caused India to fall behind in most major sectors for the 60 years after independence. Protectionism generally juices an economy in the short

by edge17 10y ago

Protectionism also caused India to fall behind in most major sectors for the 60 years after independence. Protectionism generally juices an economy in the short term but leaves it behind in the long term when the trade barriers make it costly to import innovation. Trade barriers are a tool, protectionism is an ideology.

codegeek 10y ago
Exactly. India did not have any economic reforms until the 90s which is when industries such as telecom etc exploded. If you compare the economies of China vs India (I know it is a sensitive topic), they were very similar until the 80s. But India did not have "open" trade policies until the 90s which really hurt the overall economic growth. Look at India's growth after the 90s economic reforms and you can see the story.China took off and India has been far behind. I really think a country like india needs to open up to encourage foreign investments which will drive improvements in infrastructure which India severely lacks compared to other developing economies. TL;Dr: In case of India, protectionism has hurt it more than it helped. https://en.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.wikipedia.org/wiki/Economic_liberalisation_in_Ind... Look at the graph below and pay special attention to the GDP growth comparison. Notice the huge spike for India beginning the 90s. http://statisticstimes.com/economy/china-vs-india-gdp.php http://statisticstimes.com/economy/china-vs-india-gdp.php
- unexpected 10y ago
  Adding to your point, something I have thought about India: India really exploded after the development of new industries that basically moved too fast to fall under the "License Raj" mentality that exists. Infosys, Wipro, TCS, Flipkart - these companies simply would not exist if they had to go through the struggles that other companies have to go through.
dominotw 10y ago
>Protectionism also caused India to fall behind in most major sectors for the 60 years after independence. If they had an open economy right after the independence, wouldn't multinationals have completely taken over the industry given almost everyone in India was too poor to start their own business? Wouldn't this basically be "re-occupation " by the west in different garb. Is it fair to blame India's failure on 'protectionism' when it might as well have been rampant corruption, people divided into caste lines, choosing democracy for a poorly educated/unsophisticated/caste corrupted population? How do you explain china if protectionism is root of all evil. What about Hindu attitudes of meekness, non-violence that are contrary to aggression of capitalism .
- codegeek 10y ago
  You make some fair points even though I don't agree with you completely. Yes, the corruption and poverty has not helped but then your point about hindu attitue of non-violence being against aggression of capitalism is a bit over the top. There are plenty of aggressive Hindus, trust me :) The point is that you could blame some of it on corruption, poverty whatever but protectionism has been one of the greatest causes.
  - kamaal 10y ago
    Corruption is again an easy animal to flog in the Indian context. The real issue here is scarcity. May we should start looking at the population problem at some point in time.
    - guitarbill 10y ago
      > Corruption is again an easy animal to flog in the Indian context. The real issue here is scarcity. What does this even mean? That it's too easy to blame corruption? Corruption is exceedingly complex. In a large scale, it could result in policies that are bad for the majority of people, e.g. continued protectionism. Tackling the root cause will take generations until thinking changes. Scarcity on it's own makes no sense. Scarcity of what? Resources? Opportunities? Basic health care? People?
      - kamaal 10y ago
        Corruption is a side effect of scarcity not a cause. Scarcity of everything. You might want to take a break and stay in India for a few years to understand what I'm talking about.
- Manishearth 10y ago
  The whole "it is due to an accepting Hindu attitude" used to be a popular way of framing the situation that is no longer in use because experts have decided that it was indeed the protectionist policies causing this. It's also a bit offensive. It is an interesting point about what protectionism prevented. I agree. It did prevent something worse. But it didn't need to extend for as long as it did, and it still did cause harm -- as a "lesser of both evils" situation it still is not a good situation to be in (and the discussion is about whether it is a good policy to apply in absence of a "worse evil" like in the US)

by edge17 10y ago

codegeek 10y ago

Exactly. India did not have any economic reforms until the 90s which is when industries such as telecom etc exploded. If you compare the economies of China vs India (I know it is a sensitive topic), they were very similar until the 80s. But India did not have "open" trade policies until the 90s which really hurt the overall economic growth. Look at India's growth after the 90s economic reforms and you can see the story.China took off and India has been far behind. I really think a country like india needs to open up to encourage foreign investments which will drive improvements in infrastructure which India severely lacks compared to other developing economies. TL;Dr: In case of India, protectionism has hurt it more than it helped. https://en.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.wikipedia.org/wiki/Economic_liberalisation_in_Ind... Look at the graph below and pay special attention to the GDP growth comparison. Notice the huge spike for India beginning the 90s. http://statisticstimes.com/economy/china-vs-india-gdp.php http://statisticstimes.com/economy/china-vs-india-gdp.php

unexpected 10y ago
Adding to your point, something I have thought about India: India really exploded after the development of new industries that basically moved too fast to fall under the "License Raj" mentality that exists. Infosys, Wipro, TCS, Flipkart - these companies simply would not exist if they had to go through the struggles that other companies have to go through.

dominotw 10y ago

>Protectionism also caused India to fall behind in most major sectors for the 60 years after independence. If they had an open economy right after the independence, wouldn't multinationals have completely taken over the industry given almost everyone in India was too poor to start their own business? Wouldn't this basically be "re-occupation " by the west in different garb. Is it fair to blame India's failure on 'protectionism' when it might as well have been rampant corruption, people divided into caste lines, choosing democracy for a poorly educated/unsophisticated/caste corrupted population? How do you explain china if protectionism is root of all evil. What about Hindu attitudes of meekness, non-violence that are contrary to aggression of capitalism .

codegeek 10y ago
You make some fair points even though I don't agree with you completely. Yes, the corruption and poverty has not helped but then your point about hindu attitue of non-violence being against aggression of capitalism is a bit over the top. There are plenty of aggressive Hindus, trust me :) The point is that you could blame some of it on corruption, poverty whatever but protectionism has been one of the greatest causes.
- kamaal 10y ago
  Corruption is again an easy animal to flog in the Indian context. The real issue here is scarcity. May we should start looking at the population problem at some point in time.
  - guitarbill 10y ago
    > Corruption is again an easy animal to flog in the Indian context. The real issue here is scarcity. What does this even mean? That it's too easy to blame corruption? Corruption is exceedingly complex. In a large scale, it could result in policies that are bad for the majority of people, e.g. continued protectionism. Tackling the root cause will take generations until thinking changes. Scarcity on it's own makes no sense. Scarcity of what? Resources? Opportunities? Basic health care? People?
    - kamaal 10y ago
      Corruption is a side effect of scarcity not a cause. Scarcity of everything. You might want to take a break and stay in India for a few years to understand what I'm talking about.
Manishearth 10y ago
The whole "it is due to an accepting Hindu attitude" used to be a popular way of framing the situation that is no longer in use because experts have decided that it was indeed the protectionist policies causing this. It's also a bit offensive. It is an interesting point about what protectionism prevented. I agree. It did prevent something worse. But it didn't need to extend for as long as it did, and it still did cause harm -- as a "lesser of both evils" situation it still is not a good situation to be in (and the discussion is about whether it is a good policy to apply in absence of a "worse evil" like in the US)