Whilst India and China have seen substantial rates of economic growth in the past decade, regional disparity remains an issue that affects them both. Tridivesh Singh Mani explores what the two countries might be able to learn from each other.
One of the aspects of the 19th National Congress Communist Party of China (CPC), which did not get sufficient attention, but was nevertheless important, was the panel discussion between President Xi Jinping and officials of the Guizhou Province, from where Xi was elected as a delegate in April 2017. The meeting was significant because the Guizhou connection has been politically important – one of Xi’s close associates, Chen Miner worked as Governor of Guizhou, while Mr. Xi was the party chief there. President Xi’s predecessor Hu Jintao, also hailed from the Guizhou – leading to descriptions of the province as a ‘Political Kingmaker’. Whilst Guizhou is one of the poorest provinces, it also has an impressive track record in the fight against poverty.
Disparities between Provinces
In spite of China’s rapid growth in recent years, some provinces still have to deal with the scourge of poverty. During the economic boom of the 2000’s, inland provinces had managed to reduce the income gap with coastal provinces. This was attributed to a worldwide commodity boom, which resulted in an increasing demand for raw materials produced inland provinces. In recent years however, growth in inland provinces has witnessed a significant decline, while provinces like Shanghai and Guangzhou have been able to retain stellar growth rates.
Strategies employed to counter poverty
A number of strategies have been devised to deal with skewed growth and ensure that the backward regions in the inland region, as well as border provinces can be put on the high growth trajectory. The most-high profile of these was the One Belt One Road which seeks to enhance connectivity with South East Asia and Central Asia, and benefit provinces sharing borders with these countries. Coastal provinces have also been financially assisting inland provinces, apart from providing advice to inland provinces to improve their situation.
In 2016, well over 12 million people had been brought above the poverty level in China, a whopping 230 billion Yuan had been specifically earmarked for this purpose – to send an unequivocal message – that the fight against poverty is not an empty slogan and the goal of attaining a ‘moderately affluent society’ of the Communist Party by 2021 is on course.
During the CPC, President Xi made it clear that poverty reduction and equitable growth between regions was attained. X said:
“We must ensure that by the year 2020, all rural residents living below the current poverty line will have been out of poverty, and poverty is eliminated in all poor counties and regions. Poverty alleviation should reach those who truly need it and deliver genuine outcomes”.
It would be pertinent to point out, that Guizhou, China’s poorest province has pulled 8 million people from poverty in the past five years. Still a significant number are still below the poverty level. In the last few years, Miner as governor of Guizhou was implementing President Xi’s anti-poverty programs and recently, cloud technology has been deployed to make publically available village level statistics and data in the battle to alleviate poverty.
Prime Minister Modi with President Xi in New Delhi, September 2014. Photo credit: Flickr
Similar problems faced by India
Skewed economic growth is not just a problem of China, but India led by a leader with a strong majority, Narendra Modi faces a similar problem. While some states like and done well in drawing FDI, others have improved their economic indicators but are still lagging behind.
This is something which the Indian PM has drawn attention to as well – on more than one occasion Modi has spoken about the need for the greater growth of Eastern India – namely Bihar, Odisha and West Bengal. The PM who hails from the more prosperous province of Gujarat, but fought the Parliamentary election from the city of Varanasi (Uttar Pradesh) stated:
“If we have to develop India, the chariot of development needs to run on two wheels- eastern and western India,”
Some of the poorer states in Eastern India (Odisha, Bihar and West Bengal) are led by strong regional leaders. While Odisha is led by Naveen Patnaik (Biju Janata Dal), Bihar is led by Nitish Kumar (Janata Dal United) who is an ally of the BJP, and West Bengal by Mamata Banerjee Supremo of the Trinamool Congress. Some of the other states which have made efforts to develop, but still have a long way to go — Uttar Pradesh, Chhatisgarh, Jharkhand, Madhya Pradesh and Rajasthan, are led by BJP governments.
A number of the above states have improved their position in Ease of Doing Business Rankings. In the 2016 rankings for instance, low income states which improved their position were: Chhattisgarh: The state had 97.32 per cent implementation rate in 340 reform measures, and fourth rank); Madhya Pradesh (97.01 per cent-implementation, fifth rank); Jharkhand (96.57 per cent implementation, rank seven; Rajasthan (96.43 per cent – implementation, rank eight); Odisha (92.73- implementation, rank 11); Uttar Pradesh (84.52 per cent -implementation, rank 14) and Bihar (75.82 per cent-implementation, rank 16).
Chief Ministers from all these states have also sought to reach out to foreign investors. Only recently for instance, the Madhya Pradesh Chief Minister visited the US, while last year in June 2016, he visited China to draw in foreign investment.
Results of the Public Affairs Index
However, if one were to go by the Public Affairs Index a survey brought out by the Public Affairs Centre (Bengaluru) some of these states in spite of having made rapid strides have a long way to go. While Bihar was ranked (18th), Jharkhand (17th), Odisha (16th) and Assam (15th).
The criterion for the ranking are; essential infrastructure, human development, social protection, issues pertaining to women and children, crime, law and order, delivery of justice, environment, transparency and accountability, fiscal management and economic freedom.
First, the PM has spoken about Cooperative Federalism. The centre and the state need to work together jointly irrespective of the political party in power. Bitter campaigning in state elections has a negative impact. Apart from this, the central government’s relations have also worsened with leaders of two states which are crucial for an economic turnaround of Eastern India.
Second, state governments need not focus only on manufacturing, and emulating the already well-developed states. They can work on their strengths, and even improvement in areas like tourism can play a significant role in an economic turnaround.
Third, there needs to be a formal mechanism whereby states interact with each other and learn from their policy experiences and emulate best practices well. No such mechanism exists as yet, though some states do hastily replicate welfare policies without going into the nuances. As in the Chinese case, it is important that the more developed states work with the less developed ones and share their experiences.
Fourth, big ticket infrastructure projects need to be focused on lesser developed regions. India can not afford regional disparities, to reduce these New Delhi will have to take some risks, and the results may not show instantly but with the immense economic potential of the country, and even some of the lesser developed regions heavy infrastructural investments are bound to yield results.
Finally, scholars, policy makers and members of civil society from both countries should interact. India should seek to learn from the welfare policies, as well as approach towards lesser developed regions in China. Currently, the interactions between Indian and Chinese Provinces are restricted to a few, academic and civil society interactions too have not sufficiently focused on expanding province-state exchanges, even though a dialogue – the India-China Forum of State-Provincial Leaders was initiated in May 2015 during the Indian Prime Minister, Narendra Modi’s visit to China. These need to be expanded.
This article was republished with the permission of the author and the IAPS and was first published in the South Asia Monitor. This article gives the views of the author, and not the position of the South Asia @ LSE blog, nor of the London School of Economics. Please read our comments policy before posting.
This article gives the views of the author, and not the position of the South Asia @ LSE blog, nor of the London School of Economics. Please read our comments policy before posting.
About the Author
Tridivesh Singh Maini is a senior research associate with the Jindal Global University. He can be contacted at firstname.lastname@example.org This article was first published on The South Asia Monitor and can be found here.