The June issue is worth a read, as it covers many of the broad policy challenges that Malaysia must overcome: from financial sector regulation, to the shift to domestic demand/services-led growth, to national debt reduction.
I was struck by this passage however in the article on the services sector (which, by the way, is highly relevant to Malaysia and our 2020 goal):
“ARCHANA NANANCHERLA attributes India’s economic success to her compatriots’ appetite for hard work. 'We work harder than others . . . it is a trait of Indians,' she declares. But perhaps it is Nanancherla herself and people like her—educated, working in the service sector, with growing disposable income—who are the real secret behind India’s domestic-led growth."
There’s more than an echo here in the first part of the quote above, of the hubris coming out of parts of East Asia (including ourselves) in the mid-1990s – the “East Asian Miracle”, and the superiority of “Asian culture” and “Asian values”. Nor is this an isolated opinion, as I see similar attitudes online, especially among younger Indian and Chinese nationals.
I hope India (and China) never have to go through what we experienced a decade ago, though in India’s case I’m not too optimistic.
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I wonder how much of the growth is due to increased labor participation rate. I bet they're in for a shock once that rate cannot go up anymore.
ReplyDeleteHaven't seen you online very much lately - how've you been?
ReplyDeleteFor your comment, plenty I think, and China's going to hit the wall sooner than people think, due to the past one-child policy.
Plus there's the productivity factor of switching from rural-based labour-intensive agriculture to urban-based capital-intensive industrialisation.
I think India is the more vulnerable of the two, though - both have semi-closed capital accounts, but China has a relatively undervalue currency, while India has a relatively overvalued currency. Any financial sector liberalisation is going to expose India far more than China.