The BRIC forecast

The Hindu has an interesting view on the The Goldman Sachs report on Brazil, Russia, India and China (BRIC).

“The co-author of the BRIC report, while presenting the same here, raised concerns over the levels of secondary education in India. This is an important variable in the model and in comparison to others in the report, it is an area where India stands weak”, the article states.

The article further says, “On applying the model to various economies as they stood in 1960 and comparing the current levels of these economies as against what the model would have projected, none of the Asian economies have shown parity. The actual GDPs are higher than that projected in Hong Kong and Korea and much lower in countries such as India.”

It is important to note that if India doesn’t get its act together fast, it may well under perform the expectations again. The crux of the matter lies with how the rural sector is addressed. Rural India still accounts for over 70% of the population. The real boost to the rural sector can come only through massive investment in rural infrastructure and enabling the rural population to participate in the gains of a modern economy. This will involve massive spending on rural irrigation, roads, rural education and rural marketing. These are not very glamorous areas and are not considered news worthy (or vote worthy). However, this is where the real multiplier will come from. It will create a new class of consumers for the industrial sector.

This is but one of the areas to address. There is actually no room for complacency. The old foe Murphy, is worth quoting:

• Anything that can go wrong will go wrong.
• If there is a possibility of several things going wrong, the one that will cause the most damage will be the one to go wrong. Corollary: If there is a worse time for something to go wrong, it will happen then.
• If anything simply cannot go wrong, it will anyway.
• If you perceive that there are four possible ways in which a procedure can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop.
• Left to themselves, things tend to go from bad to worse.
• If everything seems to be going well, you have obviously overlooked something.
• It is impossible to make anything foolproof because fools are so ingenious.
• Whenever you set out to do something, something else must be done first.
• Every solution breeds new problems