Development Path of India, Pakistan and China
India, Pakistan and China have many similarities in their developmental strategies.’
• All the three nations started their developmental path at the same time.
• ‘ India and Pakistan got independence in 1947 and People’s Republic of China was established in 1949
• All the three countries had started planning their development strategies in similar ways. India announced its first Five Year Plan in 1951, Pakistan announced in 1956 and China in 1953.
• Since 2013, Pakistan is working on the basis of 11th Five Year Development Plan (2013-18), while China is working on 13th Five Year Plan (2016-20). Until March 2017, India has been following Five Year Plan-based development model.
• India and Pakistan adopted similar strategies, such as creating a large public sector and raising public expenditure on social development.
• Till 1980s, all the three countries had similar growth rates and per capital incomes.
All the three countries have performed differently. India and Pakistan have made slow and irregular progress as compared to China, which has made a miraculous progress. But, before we make a comparative study of the three countries, let us first analyse the structure of economies of China and Pakistan.
CHINA
Historical Background
China has one of the world’s oldest people and continuous civilizations, consisting of states and cultures dating back more than six millennia. The People’s Republic Of China (PRC), commonly known as China, was established in 1949.
Geography China is situated in eastern Asia, bounded by the Pacific in the east. It is the third largest country in the world, next to Canada and Russia, with an area of 9.6 million square kilometers.
Population and Language
China is the most populous country in the world with 1,371 million people (as per 2015 estimates) and a growth rate of 0.5% per annum. Most languages in China belong to the SinoTibetan language family, spoken by 29 ethnicities. There are also several major dialects within the Chinese language itself.
Economy
Being one of the oldest civilizations in the world, China has been the world’s largest economy. After the establishment of People’s Republic of China under one-party rule, all the critical sectors of the economy, enterprises and lands owned and operated by individuals, were brought under government control.
1. Great Leap Forward GLF campaign
In 1958, a programme named ‘The Great Leap Forward (GLF)’ campaign was initiated by Mao to modernise China’s economy.
• The aim of this campaign was to transform agrarian economy into a modern economy through the process of rapid industrialisation.
• Under this programme, people were encouraged to set up industries in their backyards.
• In rural areas, communes were started. Under the Commune system, people collectively cultivated lands.
• 1958, there were 26,000 communes, covering almost all the farm population.
• GLF campaign met with many problems. A severe drought caused havoc in China killing about 30 million people.
2, Great Proletarian Cultural Revolution:
In 1965, Mao introduced the Great Proletarian Cultural Revolution (1966-76), under which students and professionals were sent to work and learn from the countryside. However, when Russia had conflicts with China, it withdrew its professionals, who had earlier been sent to China to help in the industrialisation process.
3. Reforms Introduced in China:
The present day fast industrial growth in China can be traced back to the reforms introduced in 1978. China introduced reforms in phases.
• In the initial phase, reforms were initiated in agriculture, foreign trade and investment sectors.
- In agriculture, commune lands were divided into small plots which were allocated(only for use and not as ownership) to the individual households.
- They were allowed to keep all income from the land after paying stipulated taxes.
• In the later phase, reforms were initiated in the industrial sector.
- Private sector firms and township and village enterprises (enterprises which were owned and operated by local collectives) were allowed to produce goods.
- At this stage, enterprises owned by government (known as State Owned Enterprises or SOES), were made to face competition.
4. For dual Pricing in the Reforms Process:
The reform process also involved dual pricing. This means fixing the prices in two ways:
‘ Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government. For other transactions, the inputs and outputs were purchased and sold at market prices.
5. Special Economic Zones (SEZ):
In order to attract foreign investors, special economic zones Were set up.
Pakistan
Historical Background
Pakistan, officially the Islamic Republic of Pakistan, gained independence on 14 August, 1947. In 1971, a
civil war in East Pakistan resulted in the independence of Bangladesh. Pakistan’s history has been
characterized by periods of economic growth, military rule and political instability.
Geography
Pakistan is located in South Asia and borders Central Asia and the Middle East. Its borders are with China
in the North and towards West and Northwest are Iran and Afghanistan and towards East and South
East, its borders are with India. The country has an area of 7,96,095 square kilometers. The total
cultivated area is 2,21,300 square kilometers, whereas the area under forest is 42,300 square
kilometers.
Population and Language Pakistan is the sixth most populous country in the world with 188 million
people (as per 2015 estimates) with a growth rate of 2.1% per annum. One third of total population lives
below the official poverty line. It has the second largest Muslim population in the world after Indonesia.
The national language is Urdu and English is the official language.
Economy
■ Mixed Economic System: Pakistan follows the mixed economy model with co-existence of public and private sectors.
■ Introduction of Various Policies: In the late 1950’s and 1960’s, Pakistan introduced a variety of regulated policy framework for growth of domestic industries. The policy combined tariff protection for manufacturing of consumer goods, together with direct import controls on competing imports.
■ Green Revolution: In case of agriculture, the introduction of Green Revolution and increase in
public investment in infrastructure led to a rise in the production of food grains. This changed the agrarian structure dramatically.
■ Importance to Role of Public Sector in early 1970’s: In the early 1970’s, nationalisation of capital goods industries took place.
■ Importance to Role of Private Sector in late 1970’s: In the late 1970’s, there was a shift in the government policy, when it adopted the policy of denationalisation. Government encouraged the private sector and also offered various incentives to them. All this created a conducive climate for new investments.
■ Financial Support during late 19705: During this period, Pakistan also received financial support from:
(i) Western nations; and
(ii) Remittances from emigrants to the Middle-east’ This helped the country in stimulating economic growth.
■ Reforms: In 1988, reforms were initiated in the country.
Comparative study India, China And Pakistan
Having studied a brief outline of the developmental strategies of China and Pakistan, let us now make a comparative study of the three countries, in terms of population, growth, sectoral development and other developmental indicators.
Population:
China is the most populous country in the world with 1,371 million people and India is the second most populated country with 1,311 million people. As compared to China or India, population of Pakistan is very less (188 million people). If we look at the global population, out of every six persons living in this world, one is an Indian and another Chinese. The population of Pakistan is very small and accounts for roughly about one-tenth of China or India.
Growth Rate of Population:
Though, China is the most populated country, but its annual growth rate of population is the lowest (0.5%) as compared to India (1.2% ) and Pakistan(2.1%). The reason for the low growth of population is the ‘One-Child policy introduced in China in the late 1970s.
“One-Child Policy” of China has successfully reduced the growth rate of population and provides a better health service for women and has reduced the risk of death and injury associated with pregnancy. However, this policy has some other implications also. For instance, after a few decades there will be more elderly people in proportion to young people in China. This will force China to take steps to provide social security measures with fewer workers
Density of Population:
China is the third largest country in the world and growth rate of population is lowest in China as compared to India and Pakistan. As a result, density of population of China is the lowest (146 persons per sq. km) as compared to India (441persons per sq. km) and Pakistan (245 persons per sq. km)
Sex Ratio:
Due to preference of son, sex ratio is low and biased against females in all the three countries. Sex ratio is the lowest in India with 929 females per 1,000 males. In China and Pakistan, the corresponding figures are 941 and 947.
In the recent times, all the three countries are adopting various measures to improve the situation,
Fertility Rate:
Fertility Rate is calculated as the number of children borne by a woman in there productive age (15-45 years) on an average. Since the introduction of the one-child policy, the fertility rate in China has fallen from over 3 births per woman in 1980 to approximately 1.6 births. Fertility rate is the highest in Pakistan at 3.7 births per woman and India comes second with 2.3 births per woman.
• Urbanization:
Urbanization is the highest in China (56%). In India and Pakistan, the corresponding figures are 33% and 39%
Growth Indicators
Let us have a comparative study of the three countries in terms of growth of GDP and sector growth.
Growth Rate of Gross Domestic Product (GDP)
GDP growth rate is considered as the single most important indicator of an economy during the period. China with second largest GDP, as measured by purchasing power parity (PPP),is estimated to be of $ 19.8 trillion. India’s GDP (PPP) is $ 8.07 trillion and Pakistan’s GDP is roughly about 12% of India’s GDP.
When many developed countries were finding it difficult to maintain a growth rate of even 5%, China was able to maintain near double digit growth for more than two decade
During 1980-90
China was having double-digit growth of 10.3%;
Pakistan’s growth rate was 6.3%;
India was at the bottom with just 5.7% growth rate.
During 2011-15:
There was a drastic fall in China’s growth rate from 10.3% to 7.9%.
Pakistan also met with a drastic decline in growth rate from 6.3% to 5.3%. As per some scholars, reform processes introduced in 1988 and political instability were the main reasons behind this decline.
India recorded an increase from 5.7% to 7.3 %
Agriculture (Primary Sector)
In China
• Due to topographic and climatic conditions, the area suitable for cultivation is just 10%of its total land area.
• The total cultivable area in China accounts for 40% of the cultivable area in India.
• Till 1980, more than 80% of its population was dependent on farming as their sole source of livelihood
• Since then, the government encouraged people to leave their fields and pursue other activities, such as handicrafts, commerce and transport.
• As a result, proportion of workforce engaged in agriculture reduced to 28% in 2014-15,with contribution to GDP at 9%.
In India
The contribution of agriculture to GDP was 17%. The proportion of workforce engaged in agriculture was
50%.
In Pakistan
The contribution of agriculture to GDP was same at 25%, but proportion of workforce engaged in agriculture was 43% as compared to 50% of India.
Industry (Secondary Sector)
Contribution to GDP
In China manufacturing and service sectors contribute the highest to GDP at 43 and 48 percent, respectively whereas in India and Pakistan, it is the service sector which contributes the highest by more than 50 per cent of GDP.
In China, secondary sector contributed 43% to China’s GDP, whereas in India and Pakistan, the share of secondary sector was 30% and 21% respectively.
Proportion of Workforce
• In the normal course of development, China has been shifting employment and output from
agriculture to manufacturing and then to services. In India and Pakistan, the shift is taking place
directly to the service sector.
• The proportion of workforce engaged in manufacturing sector, in India and Pakistan in 2014-15,
was low at 21% and 23% respectively, whereas 29% of population was engaged in China
Service (Tertiary Sector)
Contribution to GDP
• In both India and Pakistan, the service sector is emerging as a major player of development. Service sector contributes the highest to their GDP, with contribution of 53% in case of India and 54% for Pakistan.
• The contribution of service sector to the GDP in China was 32%.
Proportion of Workforce
• In the 1980s, Pakistan was faster in shifting its workforce to service sector than India and China
• The proportion of workforce engaged in service sector in 1980 for India, China and Pakistan were 17%, 12% and 27%. It reached the level of 29%, 43% and 34% respectively in 2014.
Conclusions
In the last two decades, the contribution of agriculture sector to GDP, which employs the largest proportion of workforce in all the three countries, has declined.
In the industrial sector, China has maintained a double-digit growth rate, whereas for India and Pakistan, growth rate has declined.
In case of service sector, China was able to raise its rate of growth during 19802015 while India and Pakistan stagnated with its service sector growth.
So, China’s growth is mainly contributed by the manufacturing sector and India’s growth by service sector. During this period, Pakistan has shown deceleration in all the three sectors
Human Development Index (HDI):
HDI is an important indicator to study the human development. Higher value of HDI shows the higher level of growth and development of a country.
• In 2016, HDI for India, China and Pakistan was estimated to be 0.64 0.752 and 0.562 respectively.
• According to their HDI, Global ranks accorded were found to be 130, 86 and 150 respectively.
Life Expectancy at Birth:
Life expectancy refers to the average number of years for which people are expected to live. A higher life expectancy indicates longer and a more active average lifespan. China has the highest life expectancy of 76.4 years. India and Pakistan have the life expectancy of 68.8 and 66.6 years respectively.
Mean years of Schooling: It is in case of China with 7.8%, while the corresponding figures for India and Pakistan are 6.4% and 8.6% respectively.
Infant Mortality Rate (IMR):
Infant mortality rate refers to number of infants dying before reaching one year of age per 1,000 live births in a year. Low IMR shows better health and sanitation facilities as most of the infants died due to unhygienic and insanitary environment. It is lowest in China with 8.5 infants and highest in Pakistan with 64.2 infants. IMR in India is 34.6
People below Poverty Line:
People below the poverty line are the people who do not even have that level of income and expenditure, which is necessary to meet specified minimum levels of calorieintake. For the proportion of people below the international poverty rate of $ 3.20 a day, people below poverty line are 60.4%, 23.5% and 46.4% for India, China and Pakistan respectively
Maternal Mortality Rate:
Both India and Pakistan have not been able to save women from maternal mortality. In China, for one Iakh births, only 27 women die, whereas in India and Pakistan, maternal mortality rate is 174 and 178 respectively.
GDP Per Capital (PPP US $):
Higher ranking of China in HDI is mainly clue to higher GDP per capita. In 2016, China’s GDP per capita was estimated to be US $ 15,309 while it was just US $ 6,427 for India and US $5,035 for Pakistan.
Access to improved Water Sources:
It refers to the percentage of population which has a reasonable access to water (from tap, hand pump or protected well) and is able to obtain atleast 20 liters per person per day. China (96%) is ahead of India (94%) and Pakistan (91%),in providing improved water sources.
Access to improved Sanitation:
Pakistan’s performance in providing sanitation is better than India and China. China has provided improved sanitation to75% of population, whereas corresponding figures for Pakistan and India are 44.2% and 58.3% respectively.
Population undernourished:
The percentage of population, which is not able to obtain adequate diet, is termed as undernourished population. China has the lowest percentage of population (8.1%), which is being undernourished. In India,37.9% and in Pakistan46.4% of the population was undernourished.
REFORMS AND THEIR IMPACT
China
China did not have any compulsion to introduce reforms as dictated by the World Bank and International Monetary Fund to India and Pakistan. But some adverse situations of the economy prior to 1978, forced China to go for reforms.
Pre Reforms Period
There had been massive extension of basic health services in rural areas. Through the commune system, there was more equitable distribution of food grains.
Despite extensive land reforms, collectivization, the Great Leap Forward and other initiatives, the per capital grain output in 1978 was the same as it was in the mid 1950s.
In 1978, the then Government of China was not satisfied with the slow pace of economy and lack of modernisation under the Maoist rule. They felt that Maoist vision of economic development had failed. As a result, a number of reform measures were introduced in 1978
China did not have any compulsion to introduce reforms as dictated by the World Bank and International Monetary Fund to India and Pakistan. But some adverse situations of the economy prior to 1978, forced China to go for reforms.
Post Reforms Period
The various reform measures led to rapid growth in China.
Each reform measure was first implemented at a smaller level and then extended on a massive scale
Development of infrastructural facilities in the areas of education and health, land reforms, long existence of decentralized planning and existence of small enterprises helped positively in improving the social and income indicators.
Agricultural reforms (handing over plots of land to individuals for cultivation) brought prosperity to a vast number of poor people. It created conditions for the subsequent phenomenal growth in rural industries and built up a strong support base for more reforms.
Pakistan
In Pakistan, the reform process led to worsening of all the economic indicators. As compared to 1980s, the growth rate of GDP and its sectoral constituents decreased in the 1990s. The proportion of poor in 1960s was more than 40 per cent which declined to 25 per cent in 1980sand started rising again in 1990s.
The reasons for the slow-down of growth and re-emergence of poverty in Pakistan’s economy are Agricultural growth and food supply situation was based on good harvest and not on institutionalized process of technical change. When there was a good harvest, the economy was in good condition, wher it was not, the economic indicators showed stagnation or negative trends.
Foreign exchange is an essential component for any country and it is always preferred to build foreign exchange reserves through exports of manufactured goods. However, in Pakistan, most of the foreign
exchange earnings came from remittances from Pakistani workers in the Middle-east and the exports of highly volatile agricultural products There was growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other.
However, during the last few years, Pakistan has recovered its economic growth and has been sustaining. As per Annual Plan of 2016-17, GDP registered a growth of 4.7% in 2015-16, highest when compared to the previous eight years. While agriculture recorded growth rate far from satisfactory level, industrial and service sectors grew at 6.8% and 5.7% respectively. Many macroeconomic indicators also began to show stable and positive trends.
Conclusions
India, China and Pakistan have travelled more than five decades of developmental path with varied results. Till the late 1970s, all of them were maintaining the same level of low development. The last three decades have taken these countries to different levels.
INDIA
. Indian economy performed moderately, but majority of its people still depend on agriculture.
• Infrastructure is lacking in many parts of the country It is yet to raise the standard of living of more than one-fourth of its population that lives below the poverty line. PAKISTAN
• Political instability, over-dependence on remittances and foreign aid along with volatile performancE of agriculture sector are the reasons for the slowdown of the Pakistan economy
In the recent past, it is hoping to improve the situation by maintaining high rates of GDP growth.
• Many macroeconomic indicators began showing positive and higher growth rates reflecting the economic recovery.
CHINA
In China, the lack of political freedom and its implications for human rights are major concerns.
• However, in the last three decades, it used the ‘market system without losing political commitment and succeeded in raising the level of growth along with alleviation of poverty.
• China has used the market mechanism to create additional social and economic opportunities.
• By retaining collective ownership of land and allowing individuals to cultivate lands, China has ensured social security in rural areas.
• . Public intervention in providing social infrastructure brought positive results in human development indicators in China.