India will grow in uneven manner, says US strategic think tank

By Arun Kumar, IANS,

Washington : Calling India “a country of endless unrealised potential,” a strategic think tank has suggested that in the 2010s it “will grow, but in a wildly unpredictable and uneven manner” leaving “fantastic expectations” unrealised.

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“India has always been a country of endless unrealised potential, and it will remain so in the 2010s,” said Stratfor, which calls itself a global intelligence agency, suggesting the decade ahead would not be a period of decisive change for the world.

India’s “diversity in terms of regulations and tensions, its lack of infrastructure and its talented population will give rise to pockets of surprising dynamism,” it said. “The country will grow, but in a wildly unpredictable and uneven manner; the fantastic expectations will not materialise.”

“Because the Himalayas protect India from China, New Delhi’s primary strategic interest is Pakistan,” Stratfor said.

“We expect Pakistan to muddle through,” the think tank said noting, “It is just important enough that outside powers will prevent its collapse, but it does not have the internal resources needed for stability.”

Economically, the next 10 years will mark the beginning of a massive reversal in the dominant trends of the past 500 years, Stratfor forecast suggesting, “For the entirety of that era, steadily rising populations have set the stage for the economic models used in every part of the world.”

Noting that the “entire fabric of human economic relations has been based on the precondition of continually enlarging populations,” the think tank said:

“The 2010-2020 decade will be the turning point in this rule as populations cease rising and rapidly age.”

“This shift is most pronounced in the developed world – with Japan and Europe the most dramatically affected – but it exists in the developing world as well. Turkey, Mexico, China and India are actually aging faster than Europe.”

As emerging demographic process surfaces as a major driver in the system, “The United States will remain at the heart of world power,” Startfor predicted noting “a country with 25 percent of the world’s economy and forces like the US military cannot be ignored.”

From the American point of view, the 2010s will continue the long-term increase in economic and military power that began more than a century ago, it said.

Noting that the United States is in the fourth economic crisis since World War II, Stratfor said,” “The magnitude of the problem of the early 2010s is debatable, but we see no reason to believe that this crisis will not work itself out as did the other three.”

The United States’ biggest demographic-related problem in the 2010s will be financial, it said noting “retiring baby boomers will generate a capital crunch that will have to be dealt with by not allowing them to retire, cutting retirement benefits sharply or both.”

“China’s economy, like the economies of Japan and other East Asian states before it, will reduce its rate of growth dramatically in order to calibrate growth with the rate of return on capital and to bring its financial system into balance,” Stratfor said. But “To do this, it will have to deal with the resulting social and political tensions.”

(Arun Kumar can be contacted at [email protected])