Indian-origin economist Tharman Shanmugaratnam has won the Singapore presidential election, marking the country’s first presidential campaign since 2011. He secured his victory by defeating two opponents of Chinese descent.
At the 1st NITI Lecture on ‘Transforming India’ held on August 26, 2016, Mr. Thurman Shanmugaratnam spoke about India and said that India faces two critical challenges. emphasized. One relates to demographics and the other to the rise of intelligent machines.
He pointed out that it is imperative for India’s domestic demand to achieve sustained economic growth of over 8% over the next 20 years. This growth is necessary to create employment opportunities for young people, address widespread underemployment, and promote inclusive economic development.
Ultimately, India aims to emulate China’s success in moving a significant portion of its population from low-income to middle-income status.
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Essentially, Thurman Shanmugaratnam pointed out that India’s approach to the economy has been characterized by excessive government intervention and inadequate investment in social and human development. Governments have been overly involved in regulating economic activity and have paid insufficient attention to building social and human capital.
“We must retreat from the state’s old roles of economic regulation, corporate ownership and control. These roles stifle private investment and job creation. They also come at the cost of allowing new players to grow. We will pay and retain the existing players, the existing players,” he added.
About the economic disparity between China and India
He emphasized that achieving a growth rate of over 8% over 20 years is not a luxury, but a necessity. In the mid-1970s, India and China had similar per capita incomes, but today India is far behind, with per capita incomes less than half of China’s.
Shanmugaratnam said that even if China’s growth slows and India catches up and continues to grow consistently at 8% to 10%, India will still account for about 70% of China’s per capita income in 20 years. He emphasized that this could only be achieved.
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He further added that there is no fundamental reason why India cannot address its past social and economic disparities. India has the greatest untapped potential of all countries. “But for India to realize this potential, it needs to create a sense of urgency in its politics and society, its government and its people,” he added.
Integration of India, China and ASEAN
In a speech in 2016, Mr. Shanmugaratnam said there was a stark contrast in the level of interaction between ASEAN and China compared to India. The level of engagement between India and China is quite low. Specifically, the total trade between India and China is only 3% of their respective global trade volumes. Similarly, if we look at India’s trade with Southeast Asia, it accounts for only 4% of the total trade that both countries have with the rest of the world.
There is therefore an opportunity to develop stronger links between India and Southeast Asia, and between India and China, through increased exports and imports, and two-way FDI flows.
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And let’s not forget that Asia is very likely to be the greatest source of future growth for the global economy. We need to take advantage of that and foster growth through the supply-side dynamics brought about by economic integration.
But Thurman Shanmugaratnam said India’s biggest deficit lies above all in education and the unrealized potential of its people. “India has the largest gap I know of between top talent and the unrealized potential of the rest of society.”
Mr. Shanmugaratnam emphasized on improving the school system and said that in 2009, when India participated in the OECD’s PISA survey, which tests mathematics, science and problem-solving skills, India ranked 73rd out of 74 countries. Stated. India subsequently chose not to participate.
Regarding the reason why India’s per capita income lags behind, Mr. Shanmugaratnam said, “India does not aim to export to the world.Compared to some countries in East Asia, this is a huge India has 18 percent of the world’s population, but accounts for less than 2 percent of global exports, and its per capita exports are only one-fifth of China and Vietnam.
Shanmugaratnam said India’s employment and land acquisition laws prevent companies from hiring more people and expanding their size. “Ultimately, it amounts to an anti-employment law. It protects the 10 to 20 percent of people in the formal economy at the expense of the 80 percent of people who don’t have formal jobs.”
Mr. Shanmugaratnam said India’s presence in the global export market is limited at less than 2% of the total, but it offers significant opportunities for expansion through competitive market participation. Emerging countries such as Vietnam have succeeded in increasing their market share by attracting labor-intensive manufacturing industries to relocate from China.