How To Be A Wealthy Nation

Covid reminds us that national strength needs massive, non-farm, formal job creation

- Manish Sabharwal

Ten rich countries got the first 80% of Covid vaccines, American disposable income per person is 27% higher than February 2020, and rich country company capital spending will soon be 20% higher than pre-pandemic. We will need decades to filter out the noise and bias in explaining which countries handled Covid better – small vs big, democracies vs autocracies, presidents vs prime ministers, men vs women leaders, urban vs rural, decentralised vs centralised – but the intuition that wealthy and powerful countries made the crisis less painful for their citizens is hardly original; poet Ramdhari Singh Dinkar wrote, “Kshma shobhti us bhujang ko jis ke paas garal ho” (Snakes without venom cannot be kind, generous or benevolent). Covid reminds us that the only sustainable solution for our healthcare, education, sanitation, and nutrition challenges is raising India’s per capita GDP via massive, non-farm, private, formal job creation.

Raising India’s wealth and power – our 148th country ranking in hospital beds per capita closely tracks our 142nd country ranking in per capita GDP – needs recognising that economic development is what psychologist Robin Hogarth called a “wicked learning environment”; the rules are not fixed, patterns change, the goals are multiple, and feedback is often delayed or inaccurate. This contrasts with the “fatal conceit” embedded in the 1955 Congress party resolution that assumed development was a “kind learning environment” where rules are fixed, patterns recur, goals are finite, and feedback is immediate and accurate. Change began in 1991 when China and India had the same GDP per capita; the average Chinese is now five times more prosperous. Our reforms have been impactful but incomplete.