Cerebral Shangrila

Sunday, December 14, 2008

Economic giants in trouble?

Now that the once popular decoupling theory has been comprehensively debunked, its worthwhile to examine the seriousness of the trouble brewing in the economic giants of the future - China & India.

The Economist has a special report on India & China and the uncertainty facing these markets. For India, the medicine it has prescribed are in four key areas :

"If India is to sustain a growth rate of 8% or higher, as it aims to do, it will need to manage four potential constraints. The most pressing, its rotten infrastructure and the dreadful quality of its education, are, alas, not new. But the government’s response has long been inadequate, and with India’s burst of high growth these two problems have become more urgent than ever. India’s current rulers, the mahouts to an elephantine state, seem at least to understand this. But their efforts to end these troubles remain unconvincing. India’s other big constraints, its cumbersome labour and land laws, should be easier to fix. But there is depressingly little sign that this will happen soon".

Labels: , ,


Post a Comment

<< Home