India No. 1 GDP in 2050

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The Righteous Hacksaw's picture

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

itera's picture

CNN no

WSJ had a big report on China, saying China would be #1 by 2050, which has far more credibility than CNN

Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.

bchad's picture

A lot can happen in 40 years.  Will India even be one single country?  Will China?  The answer is “probably yes,” (esp. China), but definitely not “certainly.”

40 years ago (i.e. 1970), who thought China would be within striking distance of the largest economy on the planet?  It seems obvious in retrospect, but at the time they were just coming out of the Great Proletarian Cultural Revolution.  It was definitely not obvious back then.

You want a quote?  Haven’t I written enough already???

Palantir's picture

I’m skeptical. But JAI HO!!!!

I think No 3 is more like it.

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

ohai's picture

I don’t think anyone can accurately predict something like 2050 GDP. But we can probably assume that India’s economy will be much bigger than it is now, and that they will be buying lots of cars, TVs, fossil fuels, metals, and stuff like that. 

“I’m a CPA! I got money b***h!”

Palantir's picture

Speaking of India, anyone think that the major runup in Gold over the past 5  years has been primarily due to Indian consumption and not inflation/money printing as the US media would have you believe?

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

The Righteous Hacksaw's picture

^ I’m sure that has something to do with it.  Indians will win the game once they have all the gold in the world. 

Then, everyone will realize Gold doesnt do much of anything and the price will drop through the floor. 

I’m shocked by India’s growth since I have lived here.  It’s really come a long way.  However, it is not sustainable.  The economist this week has a cover story, written by a friend of mine, saying, “India Losing It’s Magic.”  This place was starting at such a low bar that it literally leaped ahead about 50 years in the past five years. 

My problem with India and China is that the last time a country like China invented something was gunpowder.  Technological innovation seems to really mostly come from the West.  I believe this is just because of our superior governmnents. China, had everything it need for an industrial revolution centuries before the West and blew it by letting their government completely mess them up.

India can keep making more babies (and it will) to grow their GDP but they really need to start to innovate to be #1.  When I think of Classical growth theory this makes a lot of sense as being India’s shortcoming.  India will take all this new money convert it to rice and dal and then babies until food prices go up and people stop having babies.

Right now India and China can only really poach innovation from the West.  Every new restaurant, new company, new business model, I see in India is essentially a low-cost and low quality version of something we already have in the West. 

In addition to this, even when we have really talented Chinese and Indians innovating, they do it overseas because India is just a terrible place to do business unless you are cronies with the leaders.  That’s gotta change. 

Can India do what this article expects?  Absolutely, but I think it is really anybodies ballgame at this point.  No time to get cocky. 

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

ohai's picture

But copying more developed countries is a great strategy! Look at South Korea - they are basically a copy of Japan/USA, and now they are one of the best countries in Asia. Let’s say USA is 9/10 in technology and India is 3/10. India doesn’t care if it never gets past 9/10 in the next 100 years. If they can poach every single US technology and become 9/10, that’s still a great improvement. Ordinal ranking of countries doesn’t matter. 

“I’m a CPA! I got money b***h!”

bchad's picture

Copying developed countries (products, as opposed to policies) is more feasible if you have a smaller population than the countries you are copying, because this means that you can have the design and consumption done in the developed countries, and you simply become an exporter to that system.

If your own population is bigger than the population of the countries you are copying, it is not as effective, because you can saturate the consumer market’s demand without employing your own population fully.  You still get more benefits than by not copying, but you can’t grow past a certain point without engaging your own population, and that population needs to have its own purchasing power.

You want a quote?  Haven’t I written enough already???

The Righteous Hacksaw's picture

I thought that too, but then I thought a little bit more about it. 

If India is just poaching other technology they can never really grow larger.  India is dependant on everyone else in order to grow past a certain point. 

Also, while India was perhaps early in this trend to poach other countries have gotten wise to it and they are now fiercely competing to do the same thing.  This will also limit India’s ability to grow big poaching.

Will it help India grow?  Yes, and it will be a big improvement.  But to do be the biggest GDP I really think the tech needs to originate in India and stay there.  That doesn’t happen unless India cleans up its corruption, bureacracy, and starts to reward people for hard work and skill rather than simply being the son of somebody important.

America, on the other hand, doesn’t really need to work anymore, but just incentivize someone like apple to make a smart phone that Asians will work an entire year to save up enough money to buy.  A funny twist on this is that these same Asians actually make the damn smart phone.

I’m no economist, I’m embarrassed to even talk about this subject because I know a lot of people on here know way more about it than me. 

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

The Righteous Hacksaw's picture

Another thing to consider is military.  Ultimately when push comes to shove people fight. It comes down to superior technology .  From what I understand the US has an extraordinary advantage when push comes to shove here. 

India depends on foreign contractors to build their planes and jets for them cause they can’t make anything decent themselves.  And it’s got terrible neighbors who buy the same equipment from the same foreign contractors.

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

bchad's picture

Well, the stimulation of the Indian economy from domestic sources is the key to growth.  But it’s also true that the local economy doesn’t have as much purchasing power as the US consumer in recent years.

That’s changing.  Even if only 1 in 10 Indians lives a middle class lifestyle, thats 110 million people, or 1/3 of the US population.  That’s sizeable, so it can be a source of growth.  And it is an increasingly important source of growth as the US consumer delevers and looks for profitable employment.

But notice now, the growth model is different:  it isn’t “copy US products and sell to US consumers.”  For a while it will be “copy US products and sell to Indian consumers.”  But what it really needs to be is “Develop Indian products and sell to Indian consumers.”  And that requires “developing” rather than “copying.”

I think India can get there, but it requires more than “just copy US products like South Korea did.”

You want a quote?  Haven’t I written enough already???

bchad's picture

As for the military issue, I think that is one of the big macroeconomic and political issues of the next 10-20 years.  Great power rotations are seldom peaceful.  Even the UK->US transition was punctuated by WWII (The US first refusing to get involved and then deciding it had no choice as the UK declined and had to go mano-a-mano with Germany).

At some point, China will need to start shouldering some of the burdens on maintaining the International system.  How that will work is a big big question mark, because - unlike the UK->US transition - we don’t operate on a similar philosophical tradition.

You want a quote?  Haven’t I written enough already???

itera's picture

ChickenTikka wrote:

the West.  I believe this is just because of our superior governmnents.  

I read this, and just started to laugh. 

Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.

The Righteous Hacksaw's picture

Yeah, the West does have shitty politicians but they don’t get to run the country into the ground the same way that the people in charge of Pakistan and India have.  I believe this is because we have a superior system.

How bout the 250 billion dollar coal scam?

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

Mobius Striptease's picture

ChickenTikka wrote:

Take that, Whities!  JAI HO!

what! no way. DIL DIL pakistan!

Palantir's picture

Mobius Striptease wrote:

ChickenTikka wrote:

Take that, Whities!  JAI HO!

what! no way. DIL DIL pakistan!

ISI agint.

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

FrankArabia's picture

India won’t be……….Canada will……

The Righteous Hacksaw's picture

Agreed, because half of India has a Canadian passport and they are the only decent country with a lot of natural resources. 

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

Palantir's picture

Actually regarding military, this should be very much an Indian strength going into the future. India has all manners of weapons programs to develop tanks, jets, jet engines, A/Cs, ICBMS, Missile defense, nuclear subs etc etc. By the end of this decade these programs will start maturing and over the next 40 years to 2050 India will have the capability to do all of this stuff.

If anything, India hasn’t really copied western military technology unlike China which flat out copied Russian jets, instead they’ve tried to reinvent everything from scratch, which takes forever.

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

bchad's picture

It’s not just about having a military.  China and India can muster strength and technology for that if they want to, although the US military budget is larger than the next 10 largest military budgets in the world combined.  The issue is when will that military be used and for what purposes.  National defense is one thing, but when your economy is a primary driver of the world economy, all of a sudden, things going on in foreign places become a lot more important to you.  Yet the rest of the world can also feel threatened.

That kind of integration and how it’s managed and what the principles of engagement or disengagement are is what’s up for grabs here.  China is happy to let the US be the policeman for now, but the moment their commodity supplies are threatened by some foreign conflict, we may see them want to get more involved.  Or eventually they may decide that they want to reunite with their “renegade province,” Taiwan.

You want a quote?  Haven’t I written enough already???

The Righteous Hacksaw's picture

Palantir wrote:

Actually regarding military, this should be very much an Indian strength going into the future. India has all manners of weapons programs to develop tanks, jets, jet engines, A/Cs, ICBMS, Missile defense, nuclear subs etc etc. By the end of this decade these programs will start maturing and over the next 40 years to 2050 India will have the capability to do all of this stuff.

If anything, India hasn’t really copied western military technology unlike China which flat out copied Russian jets, instead they’ve tried to reinvent everything from scratch, which takes forever.

I live near a naval base in Mumbai.  Most Indian soldiers are walking around with rifles that look like they belong in the Boer War.  When a group of rag tag teenage Pakistanis attacked Mumbai  let me tell you the Indian military had nothing - nada.  It took them days to even show up.  The police were a complete embarrassment.  When the miliatry did show up they succeeded in landing on top of the rabbis house but everyone was already dead inside.  Well done. 

I don’t really see your opinion happening, but would be curious to hear more.  I go to Kashmir often.  From what I can see, India’s military defense program is essentially a large population of expendable young men.  They are led by fat middleaged babus with mustaches with zero ambition to really do anything aside from collect a pension. 

While this large population of expendable men will prevent an invasion I do not believe it will lead to India dominating global military affairs. 

Although if we can start outsourcing our wars to Indian soldiers that could be a very nice cost saver for the US military.   It seems like this would be the best way to fight our inevitable conflict with Pakistan.

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

Ruu's picture

I enjoyed George Friedman’s geo-poli book The Next Hundred Years, not becuase
of the outrageous title, but he did make me think hard about his point that America has the best naval force second to none. And he who controls the water controls international trade if push came to shove ie War. Its quite true, remember those Somalian pirates jacking all those oil tankers last year. Haha

The Righteous Hacksaw's picture

The US also apparently has major air superiority as well.

One thing that is very crucial is that the US has lots of friends and allies: the UK, Europe (when push comes to shove), Australia, Canada, and Japan (which still amazes me).   If you sum up these powers you have something that is pretty unbeatable. 

You look at Chindia and Russia.  These guys have lots of enemies and really no real allies.  I don’t think they could ever agree enough to actually form a proper coalition (although they are meeting this week to show that they potentially could).  The best Chindia and Russia can do is really just try and veto the above powers in the UN. 

I’d argue that India actually wants to lean closer to the West because they have zero love for their neighbors Pakistan and China.  They are being wooed by Russia and China now, but I think their hearts and minds already belongs to the West thanks to their historical routes with GB.  For that reason as India rises in importance I bet they’ll take a seat at the table with the winning team, which is likely to be the European group, rather than the Russo-Chinese one. 

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

Blake McCallister's picture

ChickenTikka wrote:

Take that, Whities!  JAI HO!

http://business.blogs.cnn.com/2012/03/29/report-india-to-be-worlds-bigge...

George E. P. Box wrote:

Essentially, all models are wrong, but some are useful.

And then on top of that widely quoted piece of research you have a 2 inch cock.  LMAO.

~~~~~Live. Laugh. Love.~~~~~

The Righteous Hacksaw's picture

Haha, low blow! 

http://news.bbc.co.uk/2/hi/6161691.stm

This piece came out about a month after I arrived in India. We had a good laugh about it.

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

ohai's picture

Is it just me, or are the condoms in that picture really big? Seriously, they’re like half as big as the girl’s head. 

“I’m a CPA! I got money b***h!”

Palantir's picture

I’m kind of a military buff and I’ve followed the Indian military for many years in a lot of detail. I disagree with a lot of what you say here. Can’t go into too much detail right now, but briefly: Unlike in the US, in India the media/general population has little appreciation for the nation’s military, and you’ve basically bought into what they say.

ChickenTikka wrote:

I live near a naval base in Mumbai.  Most Indian soldiers are walking around with rifles that look like they belong in the Boer War.  When a group of rag tag teenage Pakistanis attacked Mumbai  let me tell you the Indian military had nothing - nada.  It took them days to even show up.  The police were a complete embarrassment.  When the miliatry did show up they succeeded in landing on top of the rabbis house but everyone was already dead inside.  Well done.

 

I don’t know what rifles you’ve seen, but the standard issue rifles are INSAS which are a relatively new assault rifle. Anyways they are not designed to look good. The group of Pakistanis that attacked Mumbai weren’t a ragtag group of teenagers. It was a unit that was trained by the ISI that had trained for a year for this attack. (They went 60 hrs without sleep). Nor did they arrive at Nariman house few days later, and no, everybody was not dead inside. Flatly untrue. The police is not there to handle terrorist attacks, units responsible for HRT/CT ops are Marcos and NSG. Keep in mind that this was a hostage rescue situation, not just a kill mission where you want to bump off a few terrorists. Most outside observers think the indian military acted too fast in going in for the kill instead of waiting longer.  In the context of the situaton, I think the operation was well done.

ChickenTikka wrote:

I don’t really see your opinion happening, but would be curious to hear more.  I go to Kashmir often.  From what I can see, India’s military defense program is essentially a large population of expendable young men.  They are led by fat middleaged babus with mustaches with zero ambition to really do anything aside from collect a pension.

Not sure why you feel that way. The military is one of the few things that GoI runs really well.

ChickenTikka wrote:

Although if we can start outsourcing our wars to Indian soldiers that could be a very nice cost saver for the US military.   It seems like this would be the best way to fight our inevitable conflict with Pakistan.

Your comment on India siding with the West against China+Russia is wrong on so many levels. India and the US have directly opposing interests in South Asia and worldwide. India would NEVER turn to the US against China or Russia. The only people who think India should side with the US are NRI’s living in the US dreaming about visiting India without visas.  Also, China and Russia are not on one side. If anything, I see a lot more conflict with the US in the coming future. The only complication is India’s close ties to Israel and Iran.

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

Palantir's picture

India has bungled hostage rescue situations before - Bluestar, but this was not one of them.

Cities teem with evil and decay, let’s give it a good shake and see what falls out!!

ohai's picture

Maybe it’s because ChickenTikka is comparing India’s military to the US military, which probably has 20x more funding. Even if India’s military is good by world standards, it will look pretty bad next to the US. 

“I’m a CPA! I got money b***h!”

The Righteous Hacksaw's picture

You reckon the Paskistani teenagers were trained by ISI?
 

I meant the US and India could team up against Pakistan. 

Formerly ChickenTikka - Member of the Order of the Righteous Rusty Hacksaw

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