China versus South Asia

Published: February 18, 2016
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The writer is a former caretaker finance minister and served as vice-president at the World Bank

The writer is a former caretaker finance minister and served as vice-president at the World Bank

The historian Stanley Wolpert titled his book on the last days of the British Raj in India, Shameful Flight. Had the colonial masters not made a hurried exit, they may have managed to retain the political unity of the South Asian sub-continent. Ayesha Jalal, another historian, in her book on Jinnah’s strategy to safeguard the Muslims’ minority rights in what would have been a predominantly Hindu political entity, has taken a contrarian view to what is generally viewed by Pakistani historians. She maintains that the demand for the establishment of an independent Muslim state was a bargaining position used by Mohammad Ali Jinnah, the Pakistani founding father, who wanted to secure better political rights for the Muslim community in independent India. However, the Hindu leadership came to the conclusion that accepting the demand for Pakistan would be advantageous for it, as it would make it possible to develop political institutions unencumbered with Muslim rights.

Pakistan became independent but its division into two parts separated by thousands of miles of Indian territory, was found to be impractical for building one nation. After less than a quarter century, East Pakistan separated and became the independent state of Bangladesh. Had South Asia remained a unified political entity, would it have performed economically better than it did? This is one of those ‘what-if questions’ that are easier to ask but difficult to answer. One way of looking at South Asia’s economic performance is to compare it with China, another large Asian country with a landmass roughly comparable to that of South Asia. China has an area of 9.5 million square kilometers and a population in 2015 of 1.38 billion. China is much less densely populated than South Asia. It has 144 persons per square kilometer compared to South Asia’s 262 persons. As economists specialising in the study of urban conglomerations suggest, higher densities contribute to economic growth. That should have helped South Asia in growing its economy.

South Asia also had a better agricultural endowment. It had more cultivable and irrigated land per capita of the population than China. Much of the Chinese larger land mass was made up of mountains and deserts. South Asia had more water available for irrigation than China. Notwithstanding these advantages, China’s performance compared to that of South Asia was spectacular. In the period beginning with the opening of the economy in 1980 to 2010, the Chinese national income expanded 32-fold while that of South Asia increased only eight-fold. In today’s prices, China’s GDP was estimated at $325 billion in 1980 compared with South Asia’s $205 billion. China’s per capita income was then $356. It increased 20-fold in the 35-year period since then. South Asia’s income per capita increase was much more modest. China, in other words, has gone a great deal further than the South Asian sub-continent. Why is that the case?

I have a number of answers to the questions posed above. I will provide them briefly. China and South Asia followed very different economic models. Although China was a Communist state, it allowed a fair amount of space to the private sector. Private entrepreneurs were expected to work within the framework prescribed by the state. Beijing focused on the export sector identifying for the entrepreneurs, the areas of production and the markets they should focus on. South Asia, in its endeavour to put the state on the commanding heights of the economy, made massive amounts of investments in producing capital goods for the domestic economy. This may not be obvious but in many ways, the South Asian state was more intrusive than the state in China.

Another difference between China and South Asia was the former’s emphasis on developing its human resource. Mao Zedong, the founder of the Chinese Communist state, provided universal primary education and health care to all citizens. He also liberated women from years of servitude.

One other major difference between China and South Asia was the former’s willingness to work with its neighbours. This did not happen in South Asia in part because of the intense rivalry between India and Pakistan. In 1947, when the British left the subcontinent, most of Pakistani exports and most of its imports went to or came from India. Now in 2015, India is a very minor trading partner for Pakistan. For India, Pakistan is an even smaller player.

Also, China and South Asia have very different political systems. In China, decisions by a one-party dominated state can be taken quickly. By now the three major countries of South Asia have reasonably well established democratic systems where policymaking is slow and cumbersome. The suggestion is not that South Asia should move in China’s political direction. Instead, it should refine its political system so that important economic decisions can be taken quickly and do not get stuck in the quagmire of vested interests indulging in endless give and take.

By far, the most important area where South Asians need to move is in terms of closer economic cooperation. The aim should be regional economic integration. Only then will the South Asian sub-continent be able to take advantage of the enormous change taking place in the structure of the global economy. 

Published in The Express Tribune, February 19th,  2016.

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Reader Comments (14)

  • vinsin
    Feb 18, 2016 - 11:09PM

    China is highly secular and has very less Muslim population and that is the biggest difference and advantage. In both India and Pakistan Muslims are non-secular and oppose family planning.Recommend

  • Ahmed Wani
    Feb 19, 2016 - 12:27AM

    South Asia vs China….

    I mean what kind of Growth has pakistan pumped in south Asian Engine…Its plane simple…Sri Lanka,Bangladesh and India are leading growth engine with Bhutan and Nepal Doing pretty well and Afghanistan also on bandwagen of trade once trade route opens through Iran….Pakistan will be a chinese dumpyard….Mark my words…if conflict happens between India,China USA than China and India will jointly developed Chahbaar port of Iran and will do all kind of trade…pakistan will than be some other country dumpyard…may be mongolia….Recommend

  • gebde
    Feb 19, 2016 - 1:25AM

    “Instead, it should refine its political system so that important economic decisions can be taken quickly and do not get stuck in the quagmire of vested interests indulging in endless give and take.”
    Pakistan had a dictatorship where important economic decisions could be taken quickly: What happened ?Recommend

  • vasan
    Feb 19, 2016 - 1:38AM

    Sorry the author has missed many points. Authoritative system in China has allowed it to take tough political decisions with a long term view but short term pains, decisions against the public wish but national good etc. These kind of things were and are not possible in India, Pakistan could have taken such decisions during the army rule but they shied away from that and engaged in rearing non state actors and provoking India all the time.
    Economic integration within South Asia alone does not provide for the economic ills of the region, Unlimited population growth, madressahs, poor educational budgets, poor healthcare etc have far more denting effect on economies.Recommend

  • cbing
    Feb 19, 2016 - 2:00AM

    Man, I can say it is the dumbest what-if question ever. The author decided to compare China and south Asia, okay with that. But instead of explaining the advantages and disadvantages of being undivided India, he turned a complete 180 degrees and started comparing a single country China to number of different countries rather explaining as south Asia. The context is its a useless article. Even changing the title will not make sense with the content. Recommend

  • Amused Infidel
    Feb 19, 2016 - 2:09AM

    South Asian sub-continent? Mr. Burki, you seem to be twisting yourself into a pretzel to avoid any mention of the subcontinent as Indian.Recommend

  • Hella
    Feb 19, 2016 - 4:13AM

    China’s greatest advantage is it gives no importance to religion and the after life. Rather it has focussed on the here and now. Most denizens of South Asia especially Muslims are interested in the after life. Added to this most in Pakistan are more interested in the imaginary Ummah rather then the prosperity and well being of Pakistan.Recommend

  • An Indian
    Feb 19, 2016 - 5:38AM

    “By far, the most important area where South Asians need to move is in terms of closer economic cooperation. The aim should be regional economic integration. Only then will the South Asian sub-continent be able to take advantage of the enormous change taking place in the structure of the global economy. ”

    Why would Pakistanis cooperate with inferior Indians. They would only cooperate with iron brother ‘China’ and big brother ‘Saudi Arabia’

    I also agree with Vinsin that Muslims of India are largely responsible for huge population growth. Most Indians (even in remote rural areas) are now aware of the benefits of family planning, but Muslims are strictly opposed to it. India’s misfortune.Recommend

  • Feroz
    Feb 19, 2016 - 8:57AM

    You must be really crazy to compare economic prospects of an imagined unified South Asia with China. One is a totalitarian regime where citizens have no FREEDOM — no Free Press, no Independent Judiciary, no civil rights.
    Thousands in South Asia gave their lives for FREEDOM from the British, not to become slaves of any other government. The political structure of single party system in China will not survive beyond a couple of decades in an information age, no matter how much China tries to control the Internet. The seeds you plant will determine how fast the tree grows and the number of years over which it will produce fruit. The days of slavery are over, Man today wants to be the master of his own destiny. People can never be expected to remain servile and nodding forever.Recommend

  • Ahmad
    Feb 19, 2016 - 10:45AM

    One point i would like to add is that china institutionalises its system,while south Asia is still more inclined towards charismatic leadersRecommend

  • Ahmad
    Feb 19, 2016 - 10:56AM

    @Hella:
    Religion, after life and day of jugdement create morality. It does not have any relation with economic development . It may create sense of responsibility in mankind to do good for humanity and subvert corrupted traditions that have been prevailed in our societies .Recommend

  • Abdul Shakoor Narejo
    Feb 19, 2016 - 12:14PM

    The world has shrunk in the shape of global village. The South Asian States i.e. Pakistan , India and Bangladesh learn economic and political lessons from Association of South Asian Nations and European Union. There is a huge potential in the region for economic development and elimination of poverty through South Asian Association for Regional Cooperation in the region if the hegemony is shunned. Recommend

  • HZR
    Feb 19, 2016 - 9:52PM

    China is politically dictatorial with absolute power in the hands of the Communist party and business wise capitalist following the American model..Recommend

  • Shah ali
    Feb 19, 2016 - 9:57PM

    It is pretty clear that seperation of India was done to the benefit of Hindus and it was Hindus who wanted to get rid of the Muslims rather then the other way
    In any event Muslims in Pakistan should have worked hard and should even now work a lot harder to grow and advance in technologies sciences and economy
    Unfortunately they are lazy and getting lazier and that s a bad news
    Pakistan should develop its links w Muslims in Malaysia Indonesia Mid East and do starts ups for them in e commerce and various technical works including soft ware industry for themRecommend

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