India Rural/Urban growth, education & prosperity trend?

[grammafreddy]

I found this comment from a poster (named Ashatru) on an article, dated May 5th 2011, at The Economist titled "World Population Projections: Growing pains" http://www.economist.com/blogs/dailycha ... rojections and it got me to thinking. I was aware that India is becoming a major player in industrialization and "feeding goods to the west", but I never considered the cycle of how an impoverished population is, in itself, a catalyst for helping itself.

We saw it before with Europe and Great Britain coming to The New World - escaping famine and disease and corruption, becoming farmers and then great industrialists which provided good wages and economic growth - the comfortable middle income strength of the post-war period of the Fifties, Sixties and Seventies.

Mexico was next - with the massive influx of migrant farm workers to the US and now to Canada. They number in the millions and, while the US recession has seen a number of them return to Mexico, their numbers are not greatly diminished.

Then we saw it again with China most recently, with hungry, uneducated farming people leaving the land to go to the cities to find jobs in the new factories. We now see the Chinese people, who were poor before, starting to demand education, better living conditions, better wages and benefits - and material goods just like they are producing for other countries and peoples in their factories. The workers have new wealth and they want to spend.

Now India appears to be poised to enter the same game - according to this comment.

And where, and in what position, does that leave Canada and the US - and does it make us more or less vulnerable? Will we become the new poor and will that mean the factories will cycle once again back this way in a generation or two - or longer?

Your thoughts?

1. FOOD PRODUCTION/URBANIZATION: India is a much more productive land than most places, including China. There are multiple growing seasons and fisheries. Over the last 50 years India has gone from famine/starving to having a surplus of food through better agriculture, global and national trade to offset bad years and migrating from a feudal system to private land ownership. That’s up to today. But in one way India is behind and that is land consolidation and urbanization. India can’t get more productivity through a French system; it needs to follow America and China by consolidating land which allows the introduction of better technology, crop and water management. Unlike the West or China, India's rural/urban ratio is very high (60-70%). But the good news is that in the last ten years its changing very fast and people are migrating. This has the impact of freeing up land to be used more efficiently. It also has the side impact of making cities and towns look crazy - mass migration is always messy and dirty. And in a purely market/capitalist street environment it hurts to see the bottom of the ladder; but its good for the economy. 50 years ago Delhi was clean and the country was dirt poor. As a corollary, look at our village near the Nepal border. It has 30 homes of which 28 are empty. Companies are coming in to consolidate the land and industrialize sugarcane. The net impact is a 100 acres that used to support 200 people will now be able to provide sugar for 1,000's. This is not speculation - the urbanization trend in India is in high gear. Keep in mind that countries like Japan and the Netherlands are much more efficient in food production and that’s why their population densities are higher than India's would be even if there were 2 billion people. 1.7 billion in India is not a problem.

POPULATION GROWTH: There are many ways to impact natural population growth. One is strict government policy like China - that won’t happen in India - Indians don’t listen to orders on personal matters. Another factor which impacts population is (counter-intuitively) war - if you have long term war your population will spiral up the point where you reach the food ceiling. That’s why some countries in Africa, Palestinians or Afghanistan will have a population boom. No jobs, fighting means no schools and lots of kids. (unless its an old fashioned war where you kill everyone). India has been at relative peace for a long time and that’s allowed it to work the bottom up. The most important metric for population growth is female literacy which corresponds to reproductive control. Urban India is at %100 female literacy and family size is 1-3 kids. That’s replacement level. Rural India is semi literate so you've seen family sizes come down from 8-12 kids (like my grandparents) down to 5-8 kids. And literacy continues to rise. Every notch up for women means a smaller family size. That’s why it will take 40 more years to peak - this will take two more generations. Forget about slum-dog millionaire. I've worked as a volunteer in disgusting urban slums and guess what - the family saves some money and most little girls learn ABC and 123 and a bit more; enough to where they will make sure their daughters read. For all the child exploitation stories (and there are many) the big picture is a slum is a great environment to push people to learn faster and work harder to get to the next rung in the city. Both London and New York had these engines 100 years ago. I've also worked in rural Indian villages. All nice, happy and clean and guess what - the girls work all day in the field and never learn to read unless there’s a charity forcing them too. They are happy and pregnant. The ugly urbanization everyone sees is part of the solution.

FINAL POINT: For all of you thinking India is a ticking time bomb, its not; its got the three mega trends of higher food production, mass rural/urban migration and rising literacy firmly on correct course - In fact all three of these trends are not only positive but strong (10%+). Now I will accept that India is running on a very thin margin as far as environment, religious strife and society pressures and any little bump could result in a short term catastrophe but on the whole it’s a positive but very messy picture – that’s India.

[Homeownertoo]

Why do you think we (Canada, etc.) will become the new poor. Yes, India is developing, but lordy lordy it has such a long way to go to get even within shouting distance of us. Yes, in aggregate numbers such as industrial output, food production, etc., it is posting impressive numbers (compared with a generation ago), and will continue to do so, but again, the needs there are almost overwhelming.

My two visits to India and readings on the country suggest a growing middle class with a consumer mentality, but don't let that term fool you. India's middle class is in no way, except perhaps education levels, comparable to Canada's middle class. Standards of living are not remotely comparable, and won't be for the forseeable future. While in India recently, I read an article in the Hindustan Times which stated that, over the next 50 years the country's growth is expected to ouptace most of the world yet leave standards of living lower than all but one unnamed nation.

India's growth is wonderful news for millions of Indians and poses little or no threat to us.