KISHORE MAHBUBANI Dean, Lee Kuan Yew School of Public Policy, National University of Singapore, and author, The Great Convergence: Asia, the West and the logic of One World (PublicAffairs, 2013)
No! The world is not in danger of contracting Japan disease. Instead, it will be infected by an India fever. It is a fundamental mistake to view the world through a Japanese lens. Japan has seen its heyday. The Japanese people will continue to enjoy a wonderful quality of life, the envy of many. But Japan represents the past.
India represents the future. At least three forces will continue to propel India forward. The first is the removal of obvious bureaucratic inefficiencies which blocked growth. With a single electronic ID (the Aadhaar), a billion Indians can now access all kinds of services. The demonetization exercise slowed Indian growth in the short term, but also gave a massive boost to mobile payments. With a billion cell phones, India is leapfrogging over conventional banking systems. The massive introduction of harmonized GST rates will also cause short-term disruptions and promote long-term growth. Indian planners were known for caution, not boldness. Now their courage will become infectious.
Second, India is at an inflexion point in the growth of its middle classes, from 5.4 million in 1990 to 50 million in 2013. The number is expected to reach 475 million by 2030. This is part of a larger explosion of the Asian middle-class population, which will grow four-fold in a decade, from 500 million in 2010 to two billion in 2020. These new Asian consuming classes don’t understand contemporary Western pessimism on globalization. They want more of it, not less.
Third, all this optimism is triggering a vital psychological change in Asian societies that has gone largely unnoticed in the West: a revival of the strong animal spirits of many Asian societies. While Japan may not be experiencing this, most of the rest of Asia is. There are risks. All these power shifts could lead to new geopolitical competition in Asia. But not all geopolitical competition is zero-sum. Some of it will be positive-sum. China could win the race to build new infrastructure in Southeast Asia, while Japan could win in India. This explosion of infrastructure spending will provide another positive boost to the virtuous circle of development which many Asian societies are already experiencing. Incomes will rise sharply. Between 1980 and 2014, India’s per capita income in PPP terms jumped 10.3 times, while China’s jumped an astonishing 42 times. What China accomplished yesterday, India will accomplish tomorrow. And an India fever will envelop the world.
Link to full PDF article: Is the World at Risk of the ‘Japan Disease?’