Appraisal of Development Strategies of India, China, and Pakistan

Development strategies of a country act as a model to others for lessons and guidance for their development. To learn from the economic performance of our neighboring countries, it is necessary to understand the roots of their success and failures and the different phases of their strategies. China introduced reforms in 1978, Pakistan introduced reforms in 1988, and India introduced reforms in 1991.

India

Policies of close trade were first considered during the development path of India. To reduce the dependence on foreign products and services, India decided to give a thrust to closed trade. Till 1991, India remained restricted in foreign trade, and then it decided to do international transactions freely, for which Liberalisation of the economy took place. Foreign companies entered the Indian market, and free trade of products and services took place. Some of the Indian reforms are:

• Poverty alleviation was the center of focus concerning rural development and a part of the development of the whole of India.
• Generation of Five Year Plans took place for employment generation. Lack of jobs due to rising population was also one of the major concerns under the Five Year Plans.
• The public sector was given importance. Private companies and industries were made to follow all the rules and regulations strictly.

China

India and Pakistan were made to follow some of the reforms stated by the World Bank and International Monetary Fund, but China was not subjected to follow those. However, some adverse situations in the economy before 1978, forced China to go for reforms.

Pre-Reforms Period

• There has been a massive extension of essential health services in rural areas.
• The commune system created a more equitable distribution of food grains.
• Despite land reforms, collectivisation, the Great Leap Forward, and other initiatives; the per capita grain output in 1978 was the same as it was in the mid-1950s.

In 1978, the Government of China was not satisfied with the low pace of the economy and lack of modernisation under Maoist rule. As a result, several reform measures were introduced in 1978.

Post-Reforms Period

• First, the reforms were implemented to be followed on a smaller level, and after some time, it was made compulsory at a larger scale.
• Development of infrastructural facilities in the areas of Education and health, land reforms, the long existence of decentralised planning, and the existence of small enterprises helped positively in improving the social and income indicators.
• Agricultural reforms brought prosperity to a vast number of poor people. It created growth opportunities for rural areas and thus formed a strong base for the implementation of more reforms.

Pakistan

In Pakistan, the reform process led to the worsening of all the economic indicators. As compared to the 1980s, the growth rate of GDP and its sectoral constituents decreased in the 1990s. The proportion of poor in the 1960s was 40%, which declined to 25% in the 1980s and started rising again in the 1990s. The reasons for the slow down of growth and re-emergence of poverty in Pakistan’s economy are:

• Agricultural growth and food supply situation was based on good harvest and not on the institutionalised process of technical change. A good harvest showed a sign of a good economy, and a bad/less harvest showed a sign of a negative economy.
• As foreign exchange is an essential component for any country, and it is always preferred to build foreign exchange reserves through exports of manufactured goods.
• There was growing dependence on foreign loans on one hand and increasing difficulty in paying back the loans on the other.

Conclusion

India, China, and Pakistan have travelled more than seven decades of developmental paths with varied results. Till the late 1970s, all of them were maintaining the same level of low development. The last three decades have taken these countries to different levels.

India

Indian economy performed moderately, but the majority of its people still depend on agriculture. India has taken many initiatives to develop the infrastructure and improve the standard of living. It has yet to raise the standard of living of more than one-fourth of its population that lives below the poverty line.

Pakistan

Political instability, over-dependence on remittances and foreign aid along with the volatile performance of the agriculture sector are the reasons for the slowdown of the Pakistan economy. In the recent past, it is hoping to improve the situation by maintaining a high rate of GDP growth.

China

In China, the lack of political freedom and its implications for human rights are major concerns. However, in the last four decades, it used the market system without losing political commitment and succeeded in raising the level of growth along with alleviation of poverty. China has used the market mechanism to create additional social and economic opportunities.