Trends and major issues to watch for in 2019

That is the topic of my latest Bloomberg column, here is the fourth of the four major issues I list:

How will India’s intellectual space evolve?

Many Western outsiders used to root for a particular Indian brand of Anglo liberalism to assume increasing importance in the political and intellectual life of India. While this has always been a minority viewpoint, it has had prominent representatives, including Ramachandra Guha, who just published a major biography of Gandhi. But these days, this perspective is dwindling in influence, as is old-style Bengali Marxism and other ideas from the left. It’s not just Hindu nationalism on the rise, rather India seems to be evolving intellectually in a multiplicityof directions, few of them familiar to most Americans. In India, history ain’t over, and further ideological fragmentation seems to be the safest prediction. Note that ideas are very often a leading indicator for where a nation ends up.

Since India may become the world’s most populous country and biggest economy by mid-century, this one is a dark horse candidate for the most important issue of the year.

I also consider China, Ethiopia, Trump, Brexit, and the NBA title.

Comments

As I've said, I view China similarly. This seems a big historic crossroads. If they want the Chinese Century everyone has been talking about, they have to do it right.

Whatever that proves to be.

They are doing amazingly well with their brand of economics/ideology. They won't let you sabotage them like you did the west.

So long as they keep their eye on the ball, and ignore all of the west's failures they are guaranteed to lead the next century.

"avoid the west's failures" not "ignore the west's failures."

The bigger caution might be Putin's failures. Yes, ex-communists may regress toward internal repression and/or foreign adventures, but that may not such a great engine of wealth creation.

They are doing amazingly well with their brand of economics/ideology.

You, and perhaps some of the Chinese themselves, are using a western yardstick to measure their "progress", whatever that means. China is probably a rather confused place right now.

Nigeria v Ethiopia

One is cursed by natural resources.

soil and water are also natural resources and no one talks about the curse of fertile soil and gentle rainfall.

Sure, but were talkin' real natural resources. The kind that yield greed, war, and strife. Fertile soil and gentle rainfall isn't worth fighting for any more, though, if climate trends continue, such a simple set of resources will be well worth fighting over.

I think it might be more that without highly developed infrastructure, food excess is not a trade good, and without a substantial labor force under a peaceful stable regime, it doesn't get harvested at all. Crops are only modestly depletable which reduces the impetus to competition, and genocide in a bread basket eliminates the bread basket.

Ironically, I think Nigeria may be the only country that has significant Oil surplus and "fertile soil and gentle rainfall" ; not that they have used them to their best advantage so far.

Those were a big curse for North Native Americans, Maori etc! The peoples it was a curse for aren't here anymore, in big numbers....

I know very little about Ethiopia, it would be interesting to have a column just about that. Now, I do think that "these lead issues do not much involve the U.S. or Europe" is a bit of a fallacy. While I think Africa will one day become important, right now (and next year) they are pretty much a side show. I know it's cliche but the main thing to watch next year will be the trade wars.

"Since India may become the world’s most populous country and biggest economy by mid-century..." Big emphasis on may.

Having travelled and done business there extensively I have always viewed progress in India in the way many Indians (both native and expat) view it, 2 steps forward, 1.9 steps back. Additionally and not often talked about is their problem with retaining capital and talent, which I view to be almost as bad as China's. Turning may into will into is could prove to be miraculous.

As far as population , no doubt about may to will to is....
Agree about economy...though Plus 2 Minus 1.9 is better than the other way around.

"Since India may become the world’s most populous country and biggest economy by mid-century, this one is a dark horse candidate for the most important issue of the year."

It is almost impossible for India to have the largest economy in 2050.

China's GDP is $23 trillion compared to India's at $10 trillion. The populations are about the same (1.4 billion v. 1.3 billion), and neither population is growing fast (0.6% v. 1.1% and falling). China's growth rate has been 7% a year since 2008 and India's per capita growth rate has been 6% a year.

There is no realistic scenario where India's GDP rises from 43% of China's today to 5% larger by 2050.

Hmmm... "Realistic". USSR would've looked pretty good in per capita growth rate from 1946-1990, then really not so much for 10 years (GDP/cap, total not growth rate, goes to about 1/3), then better for the next 10 years then stagnating about there, about really what it was (at least nominally) in 1990. (Judging by Maddison data, where I'm not totally clear if there was a plateau 1980-1990).

Is that realistic for China? I dunno. Just underlining that ability for authoritarian states to keep growing is contingent on political stability and political stances on what type of economy is allowed. (Of course, so it is also for liberal states, but this far that has luckily not been so much of an issue!).

I think I'd certainly think you're correct if you were being a bit hyperbolic that this is all relatively low probability and not a "probably" position to be in, though.

It really is essentially impossible and the growth of the Soviet Union looked very little like what has happened in China. India could converge on China eventually, just not by 2050.

China GDP per capita $17,000
India GDP per capita $7,700

Maddison data for Soviet GDP per capia growth:

1950 to 1973 = 3.6%
1974 to 1984 = 1.0%
1985 to 1991 = -1.3%

China's nominal per capita GDP is $8,900. With 5% annual economic growth it will be $26,000 by 2050.

India's nominal per capita GDP is $2,000. With 10% annual economic growth it will be $16,000 by 2050.

So, lots of light between them in 2050 even if one way outperforms the other.

Yes, though I am being quite literal in proposing a USSR like Chinese scenario of a decade of stagnation then quite sharp recession here, though possibly less extreme than the USSR, as a possible (if not the expected) scenario. Not 5% growth per year, more like no or negative growth.

Some analysts think that China will have the structural problems that Communist authoritarian systems that don't have the way "out" of liberalising will face after doing state managed authoritarian catch up growth, others believe China to be a different beast. This is the "They'll liberalise and be allies, or they won't and they'll stagnate per capita, a big but relatively unproductive opponent" point of view (not a totally uncommon view, as expressed by at least a couple commentators on the previous China threads on here).

Unfortunately, a middle income trap does seem a real possibility for China. Fingers crossed they avoid it.

The shift in Chinese fortunes since Deng and the the temporary/unstable nature of some of the managed financial interventions that they have performed means anything's possible, given three solid decades.

Cowen: "Will China succeed in helping to develop this part of the world and also bringing it into the Chinese sphere of influence? I say yes and no, respectively." Recall Truman's preference for one-handed economists. But I digress. China's one belt, one road initiative assumes all roads will lead to China. Can China's "western flank" be helped by China's initiative if the "western flank" refuses to accept that all roads lead to China. Cowen indicates there's already a "backlash" against Chinese influence (especially from those countries that have realized China's helping hand with development comes with a very large IOU). Cowen's prediction (another soothsayer moment) is likely correct, but there are so many variables (can you say "Trump" and "trade war") that it's impossible to be confident. As I have stated many times, China is moving into a new phase of development, from one in which China firms made goods for western firms to one in which China firms makes goods for China firms to compete with goods made by and for western firms. Guess which China firm is the number 1 producer/seller by volume of smart phones in China. That's right, Huawei. A coincidence that the Trump administration arrested the CFO and daughter of the founder of Huawei. The Chinese can be nationalists too. Like I said, lots of variables.

Suggesting that India can overtake China in GDP by mid-century is a huge stretch and would require a significant phenomenon such as political turmoil in China.

Even if China only grows at 4% per year. India will have to grow at 10% annually to catch up

That piece on Indian politics being fragmented is pretty old. Dates to 2013

BJP is a much stronger force today than in 2013. Though perhaps a tad weaker than it was in 2014 -16

It is quite fragmented. think of how many states where regional (or non-national) parties are or were in power :
Telengana, Andhra pradesh, tamil nadu, West bengal,Orissa, Karnataka . (though in coalition), UT Delhi. far more than in Congress' heyday. Recent results point towards a certainly more chaotic electoral future

I cannot imagine China's treatment of its Uyghur minority is doing much for its reputation among the Turkic countries in Central Asia. Seems like a big own goal to start the Silk Road. Oh well, maybe someday theyll get a better grasp of soft power.

Why would they want to get a grasp of that bullshit concept?

They are doing amazingly well ignoring your useless ideology. All of your attempts to sabotage them, like you did the west, will fall on deaf ears.

It is sad to see that, apparently, the fact that Brazil is implementing neck-breaking free market reforms and overhauling its political-legal system to free the potential of its people deserves not a single word whatsoever.

Apparently, the the total reformation of the eighth biggest economy in the world, which occupies an area bigger than the Roman Empire at its height, is not among "trends and major issues to watch for in 2019". It is incredibly of America's elitists to try to boycott Brazil and downplay the enormous realizations of the Brazilian people in the last few months. This kind of childish, petulant behavior from America's coastal elites, more than anything else, is what accounts for Trump's surprising rise.

This is probably the best-written parody of narcissistic injury I've ever seen. Kudos.

It is not a parody of anything. It is a sober look into America`s elite`s complacency and out-of-touchness.

Yes, yes, I'm sure that with these changes, now Brazil is the country of the future.

How is an old article about the demise of the Congress party at all related to India's intellectual space?

The linked article by Guha may be better but again just back to politics (caste vs religion) and probably doesn't explain intellectual views much better.

"Nigeria has incredible energy and talent, but it still has poor governance and rampant corruption. Can that combination drive significant economic growth?"

Sounds like America!!!!

It also sounds like the underlying issue is America will no longer be number one. And all the power games will change. Maybe in a few more years, overseas companies will start to bring factories to America to exploit our cheap labor.

LOL

hmmm....i agree with Tyler on his points about China and the increasing importance of India but it feels like a more 21st century kinda thing than specifically 2019. 2019 I think will be about Brexit (and the EU in general if France's deficit go beyond 3% and emboldens Italy to be more profligate) and Dems trying to impeach Trump, and their effects on financial markets

The Al-Jezeera piece that TC points to as evidence about India's "intellectual space" is almost entirely about the regionalisation of power-politics in a federation where the centre hold a lot of formal power but where the individual states have strong cultures and their own languages.

This is article tells us more about Brexit than it does about India's intellectual development.

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