Economics versus politics

Apropos on of article in The Jakarta Post dated April 19, Suns in the East will outshine the West, I would like to share my views.

China and India are the world's most populous countries, representing continuity of civilization and the ability to develop in qualitative and quantitative terms the biggest pools of talent in the world. At the present rate, India is set to fulfill Goldman Sach's prediction "of a possible Indian economic eclipse of China in the next half century".

China has advantages over India in:

1. Manufacturing ability and literacy1. Manufacturing

2. Disciplined workforce

3. More investor-friendly licensing policy

But India has an edge over China in:

1. Entrepreneurship and IT

2. Large English-speaking population

3. Democratic practices leading to innovativeness, research and development

4. Future demography (China's one-child policy will exact penalties in two to three decades when the ratio of working to non-working population will tilt in favor of India)

5. A huge middle class -- unlike China, India is a big market in itself

As for their being a paradigm shift in U.S. foreign policy, the U.S. pays attention to India because American politicians look to 200,000 Indian millionaires in the U.S. for funding their elections (figure from Merrill-Lynch). One-hundred-and-twenty Senators are members of the Indian Caucus on Capitol Hill and Indians are on the donor list of all major charities.

India's foreign reserves have crossed US$79 billion -- this may not encourage exports but will definitely boost foreign investment at a time when Europe is suffering from sclerosis, Japan is stuck in deflation and the U.S. is in recession.

China has already stolen the U.S.'s blue-collar jobs, India is giving its white-collar professionals sleepless nights.

Economics definitely prevails over politics.

PAYAL BAJAJ, Jakarta