Having read so many puff pieces about the “growth story” of China and
India, on how these economies will be the saviours of Asean in case the Western
hemisphere goes for a spin, I get the message. But lately the on-the-ground
realities in these two huge countries are making me doubt what the truth is.
China, which is undergoing its
once-in-a-decade leadership change, is engineering a “controlled” slowing of
its economy, which has major implications not just in this region but across
the world.
The outgoing and incoming
political leadership in Beijing, meanwhile, has been distracted by the
sensational show trial and suspended death sentence given Gu Kailai, the wife
of fallen Politburo member Bo Xilai. These leaders are doing everything
possible to downplay talk of a possible rift in the Chinese Communist Party,
which nonetheless has to prepare for further fallout from possible moves by
supporters of the ambitious Mr Bo.
Vice President Xi Jinping, who is
to succeed President Hu Jintao in October, might be wondering what kind of mess
he’s walking into.
Businesses across the region,
meanwhile, are complaining about China’s managed slowdown and how it is
affecting their trade volumes, margins and the overall business environment.
No one ever said China owed the
rest of the world a living, though, and policymakers in Beijing are much more
focused on preserving stability in a country of 1.3 billion people. An economic
shock is the last thing China or Asia need.
If China can’t come to the
rescue, then it will be up to India, or so we keep reading.
Well, think again, for India
itself is not in the best shape at the moment. There’s been little progress by
the corrupt government led by the Congress Party, beyond efforts by individual
members to stack up cash reserves in Singapore and Switzerland.
Not a week goes by without a new
scandal being reported, only the size of the corruption just keeps getting
bigger.
Most recently, India’s
Comptroller and Auditor General (CAG) estimated that the exchequer lost
billions of dollars by failing to auction valuable coal mining rights, the
responsibility of a ministry controlled by Prime Minister Manmohan Singh
himself.
Two other CAG reports accused the
government of allocating power projects and land for Delhi’s flagship airport
at a fraction of market prices rather than through bidding.
Since mid-2004, private operators who won coal
blocks without competition may have enjoyed “financial gains to the tune of
1.86 trillion rupees ($33.4 billion)”, said the CAG.
Splashed across newspapers were
headlines such as “Our likely loss: Rs 3,800,000,000,000 ($69 billion),”
referring to the revenue Indian taxpayers may have lost in the three sectors.
This comes on top of the nearly
$40 billion that taxpayers lost from the 2008 corruption scandal in the telecom
industry, which the Supreme Court voided the 122 mobile licences this year.
Put all that together and that’s
nearly 10% of India’s entire GDP of $1 trillion — now that’s a number worth considering.
India, which sees itself as the
future of Asia and is even preparing to send a manned mission in space, seems
to be forgetting that it needs to clean up its own house first. That starts
with rooting out dirty ministers, some of whom make Thailand’s politicians look
like amateurs.
Some Indian politicians
reportedly own massive mansions across the region from Singapore to Phuket as
they “invest” their ill-gotten wealth.
India should be thankful that it
has a robust private sector that’s keeping its economy humming, for if it was
up to the politicians the economy would have gone south long ago.
And here is something that
Indians (mark my words, not the Indian government) should think about when they
go to polls (hopefully soon): China, a country the Indians like to smugly say
is “not a democracy”, has decided to clean up corruption in a major way.
The Beijing government is said to
be preparing to implement a five-year plan to eliminate corruption once the
Communist Party Congress ends in October, top official He Guoqiang was quoted
as saying by India’s Business Standard.
Mr He, a member of the Standing
Committee of the Political Bureau of the Central Committee of the CPC,
described the improvements as a “dynamic and long-term strategic project”.
That is the commitment of a ‘not
democratic’ country to weed out the problem, but politicians in “democratic”
India seem more focused on hoarding funds.
It’s time for the Indian premier
to assess himself and gracefully exit, for he was concurrently holding the coal
portfolio for five of the eight years in which auditors said the taxpayers were
cheated.
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