The Indian Tortoise Makes Its Move

March 18, 1994|By JONATHAN POWER

LONDON — London. -- In Aesop's fable of the tortoise and the hare, we read one of life's repeating stories: ''Slow and steady wins the race.'' By the year 2000 we'll learn this lesson once again. It will be India, not China, that will be on its way to becoming the giant of Asia, and before long, the largest economy in the world.

My own eyes were opened in 1981 when, for the first time since Mao Zedong revolutionized Chinese agriculture with the introduction of the commune, there were reports of widespread food shortages. (Now we know there were many other bad years when news didn't get out.) It totally contradicted what Mao had said, time and time again, that whatever else he had done or failed to do, he had conquered China's ancient legacy of famine.

Neville Maxwell of Oxford University was among the legion of Western intellectuals who, in the 1960s and '70s, thought China had found the answer to underdevelopment. In 1974 he wrote, ''Mao and his party triumphed where Stalin cruelly failed, basically because Mao understood and trusted the peasantry.''

It was hogwash. As George Watson said, ''the intellectuals were duped.'' The same romantic gullibility that informed Beatrice and Sydney Webb, Stephen Spender and Andre Gide and their glowing reports of the Soviet economy in the 1930s infected the China seers of the '60s and '70s.

In the 1980s, with Mao dead and Deng Xiaoping in the ascendancy, the Chinese party line was turned on its head. We were told that it was Mao's own policies that had upset the rural apple cart, that the communes were, in the main, ineffectual agents of economic advance, and that there were too many parts of China where rural progress was lethargic and hunger a common condition.

A different story unfolded in India. As China basked in accolades during the '60s and '70s, India's economic planners were widely abused. Critics warned that if India didn't emulate China's experience it would sink under the weight of its own population. ''A wounded civilization,'' V.S. Naipaul wrote. China's people were fed, housed, clean and tidy, while India's were hungry, ragged and sinking into a trough of dependency.

Yet, while China had to beg around the world for grain in 1981, India survived the savage drought of 1979 without having to import a sack. From then on, there was no doubt which country had the better famine-reserve system. India's tortoise had overtaken China's hare.

We are living to see the story repeat itself in the industrial economy. In growth terms, China's capitalist progress has been nothing less than spectacular. But over-rapid growth may become economically dangerous and socially and politically -Z counter-productive.

Last week Prime Minister Li Peng warned, in a keynote address to the National People's Congress, that China must combat rising inflation, growing crime and rampant corruption to ensure political and economic stability. As Lena Sun reported in the Washington Post, ''Mr. Li acknowledged, to a greater extent than in the past, the depths of the problems that are rapidly spinning beyond the control of central government.'' Corruption, said Mr. Li, was ''a matter of life and death'' for the regime.

Tortoise-like, the Indian economy has been plodding upward since independence in 1947. So slow, steady and unchanging was the pace that critics mocked India for its ''Hindu growth rate.'' Then, with the introduction of a faster pace of economic liberalization under Rajiv Gandhi, growth began to accelerate. Today, under Prime Minister Narashimha Rao and his sophisticated finance minister, Manmohan Singh, it seems assured of sustained, well-paced economic growth, even if it never quite makes the stratospheric rates that the Chinese reached, and now regret.

Investors who are becoming distinctly nervous about China are finding India a safer place. Foreign money is pouring into India. Businessmen are starting to appreciate India's supreme virtue -- it has the political and legal infrastructure to contain dangerous capitalism.

It has an independent judiciary, a code of private property rights, a banking system and bankruptcy laws, an effective central bank -- all things that cannot be found in China.

Above all, it has democracy that provides a safety valve for the incoherent changes that modern-day economic growth brings. India has its religious riots, secessionist movements, urban squalor and bitter rural poverty. But the voters know they can throw the rascals out, as Indira Gandhi one learned to her cost when she went too far with a mass sterilization campaign.

Criticism does feed into the system, if erratically. Justice can be achieved, albeit slowly. This is much more than can be said for China.

Watch the tortoise continue its course as the hare starts to lose its breath. It's going to be a fascinating finish.

Jonathan Power writes a column on the Third World.

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