Tuesday, February 24, 2009

China & India: Catching Up With the West?China & India: Catching Up With the West?

India and China are the world's fastest growing economies. The multinationals of the developing world are challenging the dominance of Western firms.

China's oil companies and mining firms are spreading throughout the developing world, while India's hi-tech firms are more than a match for many in the developed world. The world's tallest buildings, largest airports, fastest trains, and biggest dams are now all to be found in the developing world.

Despite the rapid growth of the emerging economies, however, all reasonable projections point to a continued gap for decades to come between the West and the rest. China and India may soon become the world’s largest economies, but it is not certain they will ever be the richest. Does this matter?

'Good enough' technology such as Tata's Nano, only a tenth the price of a Mercedes Smart Car, may allow people to enjoy some of the benefits of development without having to catch up in dollar terms. Similarly, the rapid adoption of mobile telephony seems to have bypassed the need for landlines.

But without roads, an electricity grid and the provision of water and sewage systems to the majority of the population, how developed can a country really become?

Can the emerging economies jump a stage in development to become fully modern, or is their growth limited to dynamic pockets that lack the economic might to transform whole countries?

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