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Even if they get stuck at middle income for awhile, that's still like $10k nominal GDP per capita which would put them right around where China is today.

by sct202 7y ago

JumpCrisscross 7y ago
> Even if they get stuck at middle income for awhile That isn’t the downside scenario. Countries that fail to ascend amidst population growth have a habit of collapsing and regressing, economically and politically. India has been doing a terrific job of traversing this terrain, a fact I largely ascribe to its democratic institutions. But continued progress is far from a given. Ironically, one of the greatest risk factors is complacency from believing growth is inevitable. (This seems to be happening in China.)
- Robotbeat 7y ago
  Not certain, but it is the most likely possibility. India doesn’t have an oil-dominated economy, so they aren’t in danger of the “resource curse.” Continued catch-up growth seems the most likely possibility. And as others have said, even a “middle income” outcome would make India an incredibly powerful nation due to the size of their population alone. EDIT: and there’s empirical support for my supposition that not being dependent on primary commodities (ie not having the “resource curse”) improves the odds of escaping the middle income trap: https://ideas.repec.org/p/jet/dpaper/dpaper482.html https://ideas.repec.org/p/jet/dpaper/dpaper482.html “The results of our analyses suggest that the middle-income trap is a form of Dutch disease or a 'resource curse' in the middle-income stage.”
  - JumpCrisscross 7y ago
    > Continued catch-up growth seems the most likely possibility Statistically speaking, this is unlikely. Not having concentrated natural resources helps. But the base odds around development economics are precarious. The most likely outcome is populist collapse, mass emigration and developmental reversal. Only vigilance can guard against that. If India’s populace starts believing growth or stable stagnation are the most likely outcomes, that itself almost assured a negative outcome. (The latter claim based on weaker statistics than the former around the base odds of development.)
    - Robotbeat 7y ago
      This is incorrect. Most likely, India will continue to grow. Most countries not in the resource curse (and even many with it) have continued to grow.
      - adventured 7y ago
        > Most countries not in the resource curse (and even many with it) have continued to grow. Britain has seen zero net economic growth since 2006 (that's before any inflation adjustment). That's true of most of developed Europe. France's GDP is not much higher than it was in 2007, without an inflation adjustment (in real terms they've seen at least 20% contraction, plausibly worse given the currency debasement that has gone on since then). Finland and Denmark, two of the nicest, most highly educated countries in world history, have seen zero net economic expansion since 2008. Austria, Belgium and the Netherlands also fall into that box (the Netherlands economy is smaller in nominal terms than it was in 2008; in real terms it's at least 20-25% smaller). Germany, the engine of Europe, has seen somewhere between very little and zero real net economic expansion since 2008 ($3.75t economy in 2008, $4t economy in 2018). Japan has seen zero net economic growth since 1994, a quarter century. Japan is a highly advanced, low crime, high education, high standard of living, high skill nation. Indonesia was a boom economy and is generally consider a high growth potential economy. Yet their economy is not much larger today than it was in 2011 (~$900b in 2011, $1t today). With even a small inflation adjustment it has seen close to zero net growth. Russia has seen zero net economic growth for a decade. The same is true for Belarus. Many other middle income countries in Europe, like Czech or Hungary, have seen close to zero net economic growth for a decade. The Greek economy has been reset back to where it was around 2003. Ukraine has seen zero net economic growth since ~1989 approximately. Egypt's economy is approximately where it was in 2011. Nigeria's economy hasn't net expanded since 2011 ($411b in 2011, $397b in 2018; and it has considerably contracted since 2014; they partially fall under resource curse though). Brazil has seen zero net economic growth since 2009-2010. Mexico has seen almost zero net economic growth since 2007 (all population expansion, zero per capita growth); on an inflation adjusted basis, it is zero or negative. Turkey has seen zero net economic growth since 2007 ($764b economy in 2007; $766b in 2018). South Africa has seen zero net economic growth since 2010. Growth is anything but a given.

Even if they get stuck at middle income for awhile, that's still like $10k nominal GDP per capita which would put them right around where China is today.

by sct202 7y ago

Even if they get stuck at middle income for awhile, that's still like $10k nominal GDP per capita which would put them right around where China is today.

JumpCrisscross 7y ago

> Even if they get stuck at middle income for awhile That isn’t the downside scenario. Countries that fail to ascend amidst population growth have a habit of collapsing and regressing, economically and politically. India has been doing a terrific job of traversing this terrain, a fact I largely ascribe to its democratic institutions. But continued progress is far from a given. Ironically, one of the greatest risk factors is complacency from believing growth is inevitable. (This seems to be happening in China.)

Robotbeat 7y ago
Not certain, but it is the most likely possibility. India doesn’t have an oil-dominated economy, so they aren’t in danger of the “resource curse.” Continued catch-up growth seems the most likely possibility. And as others have said, even a “middle income” outcome would make India an incredibly powerful nation due to the size of their population alone. EDIT: and there’s empirical support for my supposition that not being dependent on primary commodities (ie not having the “resource curse”) improves the odds of escaping the middle income trap: https://ideas.repec.org/p/jet/dpaper/dpaper482.html https://ideas.repec.org/p/jet/dpaper/dpaper482.html “The results of our analyses suggest that the middle-income trap is a form of Dutch disease or a 'resource curse' in the middle-income stage.”
- JumpCrisscross 7y ago
  > Continued catch-up growth seems the most likely possibility Statistically speaking, this is unlikely. Not having concentrated natural resources helps. But the base odds around development economics are precarious. The most likely outcome is populist collapse, mass emigration and developmental reversal. Only vigilance can guard against that. If India’s populace starts believing growth or stable stagnation are the most likely outcomes, that itself almost assured a negative outcome. (The latter claim based on weaker statistics than the former around the base odds of development.)
  - Robotbeat 7y ago
    This is incorrect. Most likely, India will continue to grow. Most countries not in the resource curse (and even many with it) have continued to grow.
    - adventured 7y ago
      > Most countries not in the resource curse (and even many with it) have continued to grow. Britain has seen zero net economic growth since 2006 (that's before any inflation adjustment). That's true of most of developed Europe. France's GDP is not much higher than it was in 2007, without an inflation adjustment (in real terms they've seen at least 20% contraction, plausibly worse given the currency debasement that has gone on since then). Finland and Denmark, two of the nicest, most highly educated countries in world history, have seen zero net economic expansion since 2008. Austria, Belgium and the Netherlands also fall into that box (the Netherlands economy is smaller in nominal terms than it was in 2008; in real terms it's at least 20-25% smaller). Germany, the engine of Europe, has seen somewhere between very little and zero real net economic expansion since 2008 ($3.75t economy in 2008, $4t economy in 2018). Japan has seen zero net economic growth since 1994, a quarter century. Japan is a highly advanced, low crime, high education, high standard of living, high skill nation. Indonesia was a boom economy and is generally consider a high growth potential economy. Yet their economy is not much larger today than it was in 2011 (~$900b in 2011, $1t today). With even a small inflation adjustment it has seen close to zero net growth. Russia has seen zero net economic growth for a decade. The same is true for Belarus. Many other middle income countries in Europe, like Czech or Hungary, have seen close to zero net economic growth for a decade. The Greek economy has been reset back to where it was around 2003. Ukraine has seen zero net economic growth since ~1989 approximately. Egypt's economy is approximately where it was in 2011. Nigeria's economy hasn't net expanded since 2011 ($411b in 2011, $397b in 2018; and it has considerably contracted since 2014; they partially fall under resource curse though). Brazil has seen zero net economic growth since 2009-2010. Mexico has seen almost zero net economic growth since 2007 (all population expansion, zero per capita growth); on an inflation adjusted basis, it is zero or negative. Turkey has seen zero net economic growth since 2007 ($764b economy in 2007; $766b in 2018). South Africa has seen zero net economic growth since 2010. Growth is anything but a given.