Economic Health and Factors Impinging on South Asian Security

1
Economic Health and Factors Impinging on South
Asian Security
Mohan Guruswamy Ronald Joseph Abraham
Centre for Policy Alternatives, New
Delhi www.cpasind.com cpasind_at_yahoo.co.in
2
Definition of Economic Security

• Economic trends and indicators that reflect the
  state of economic wellbeing of a nation OR its
  citizens.

3
South Asia, China and ASEAN
4
Demographic cum Economic Indicators of South Asia
5
Socio-economic Indicators of South Asia, China
and ASEAN
6
Current account situation of South Asia, China
and ASEAN (US billion)
7
Indias Trade with South Asia (for 2002-03, in
Rs. crore)
8
Prima-facie conclusions

• In economic and socio-economic indicators,
  nothing to choose from South Asian countries.
• India stands out only because of its size in
  population and GDP.
• China and ASEAN clearly outshine South Asia in
  all indicators.
• Current account situation in South Asia becoming
  unsustainable.
• India has 80 of South Asias population and GDP.
  
• In intra-SAARC trade, India is the dominant
  exporter.

9
Indias Economic Security
10
Income Situation (real terms)

• India is the 12th largest economy in the world,
  but 159th in per capita terms

11
Income Situation (PPP terms)

• In PPP terms, India is the fourth largest economy
  in the world.
• However, India is 146th in per capita income
  terms.

12
Growth

• Indias average economic growth over the last ten
  years (from 1993-94 to 2003-04) has been 6.23.
• This is one of the fastest growth rates amongst
  the biggest twenty economies in the world.
• Only China with a growth rate of 9.3 is faster.
• Considering Japans growth rate is only 2.7, we
  are set to move into the third place soon.

13
However, sectoral trends are not encouraging
14
Employment by Sector
15
Employment in Organised and Unorganised Sector
16
Government Commitment to Rural Sector (Rs. crore)
17
No sustained increase in Yield
18
Sources of Irrigation
19
Distribution Of Operational Holdings
20
Cost of Government
21
Decreasing Capital Expenditure
22
Increasing Fiscal and Revenue Deficit
23
Current Account Balance Sustained Through
Remittances (US Mn.)
24
Crude oil imports and production(in million
metric tonnes, 1999 to 2005)
25
Power Sector, major source for worry
26
Regional Imbalance (per capita income in Rs. of
2003-04)
Source Central Statistical Organisation,
Government of India
27
Socio-economic Indicators (Poverty)

• Real rate of decline of poor only 0.81 per
  annum

28
Poverty Based on Basic Norms

• The current poverty line is based on norms of
  2400 calories in rural areas and 2100 in urban
  areas.
• It stands at only Rs. 368 and Rs 559 pm
  respectively.
• However, if you include norms of complete
  nutrition, healthcare, clothing and basic energy
  consumption, the line stands at Rs. 840 per month
  per head.
• As per this norm, 68.5 of Indias total
  population and 84.6 of the rural population is
  below this poverty line.
• Moreover,
• 38 of households do not have access to water
  within 15 minutes
• 49 do not have a pucca shelter
• 70 do not have access to a toilet
• 85 of villages do not have a secondary school
• 43 of villages do not have a all-weather roads
  connecting them

29
Concluding Remarks

• Indias most important advantage is its size in
  population and GDP
• Therefore growth is important to maintain
• However, for this growth Agriculture cannot be
  ignored
• Increased govt. commitment is needed
• Transformation of economy to an industrial one is
  required
• Cost of government is mounting
• Current account situation is unsustainable
• Energy security needs to be accounted for
• Poverty is still rampant

30
Thank you