Given all the chatter about what’s happening to the Indian economy, I thought I’d post the slides and speaking points of a talk I gave to a class of graduate students — a mix of ’national security and foreign policy suits’ and ‘liberal humanities hippies’ – about a year ago.
Updates over the fold: 5 July 1222 BDT
A few weeks ago, when its stocks went public, I quipped in facebook that the company’s valuation was about the same size as Bangladesh’s economy.* A friend commented something to the effect that Bangladeshi economy would be much larger if only it was integrated with India. Now, this friend of mine is a PhD student in a major western university, and has worked in positions that can affect policy and politics in Bangladesh. When people like him believe Bangladesh is missing out on some magic GDP by not being sufficiently integrated with India, one has to think seriously.
One doesn’t have to look very hard for the source of this belief. People like Farooq Sobhan of BEI or Mustafizur Rahman of CPD have claimed publicly in the past that economic integration with India would raise growth rate to 8% or more. Sobhan was actually quoted in the Economist thus. The thing is, I’ve never seen any economic modelling that shows exactly how growth rate would jump by ‘full economic integration’ with India.
In fact, I’ve never seen any proper, academic work that explains what the full economic integration actually means when it comes to India and Bangladesh. Of course, I don’t presume to know everything that has been written about the subject. I shall be much obliged if someone can point me to some literature on this. And as a card carrying (neo)liberal economist, I am fully signed up to the idea of free trade and factor mobility — so if economic integration means open borders, then I am all for it even if growth remains at 6-7% rather than 8%.
But I am quite sceptic about economic integration with India raising the growth rate.
I don’t know whether the West has anything like the ‘social drama’ (সামাজিক in Bangla) genre of Desi films. Hrishikesh Mukherjee’s Abhimaan is a very good example of this genre. There is great music — composed by SD Burman, sung by Lata Mungeshkar and Mohammed Rafi: arguably two of the greatest voices of the 20th century. Jaya Bachchan gives one of the best performances of her life, while a young Amitabh Bachchan does not play an angry man. There is no dhishum dhishum. But there is some poignant social commentary. Nothing too radical or risque mind you. And all ends happily, just as any great Desi movie should — we don’t believe in sequels, it’s always happily everafter for us.
Oh, did I mention great music? This song is hardly the best in the movie. But this post is not about music. Not directly anyhow. Rather, this song captures an interesting point about how we live.