India is quietly doing great

Résumé détaillé

My last post was about how for the first time, I’m becoming bearish on China’s continued economic and technological outperformance. A number of people asked me whether I was…

My last post was about how for the first time, I’m becoming bearish on China’s continued economic and technological outperformance. A number of people asked me whether I was similarly bearish about India.

The answer is no — I’m actually more bullish on India than I have been in a while. In fact, I had been meaning to write a post about that, so this gives me a good opportunity to do so.

The reason I’m bullish on India and bearish on China is that we’re asking the two countries to do two different things. When we think of China’s future success, we think of whether it’ll eclipse the combined economies of the US and its allies, seize the lead in artificial intelligence, reach Taiwan or Korea’s level of income, or dominate Asia.

I’m increasingly skeptical about its ability to do all of those things. But India’s job right now is a lot simpler — it just has to escape poverty and become an upper-middle-income country. And this I think it can do.

In both GDP terms and in terms of the Human Development Index (which combines GDP with education and health), India is around where China was in the late 2000s.

It’s easy to forget, but in the 2000s, people still thought of China as a basically developing country — its cities choked with smog, its rural areas still mired in poverty, its economy driven by cheap labor and lax environmental protections, and so forth.

The challenge now for India is to make the leap that China made in the 2010s — to build abundant high-quality roads, trains, housing, and energy, provide decent jobs and livelihoods to the majority of its people, and catch up to the frontier of technology.

A lot of people don’t seem to realize how good of a start India has made. For one thing, extreme poverty in India has mostly been conquered over the last two decades:

This is an incredible accomplishment — a full tenth of humanity saved from deprivation. And what’s remarkable is that — unlike China — India managed to do this incredible poverty reduction while also reducing…

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