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Why is India Poor

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Information about Why is India Poor
Education

Published on January 7, 2008

Author: Burnell

Source: authorstream.com

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Why is India Poor?:  Why is India Poor? Parth J Shah Centre for Civil Society parth@ccsindia.org Slide2:  Culture / Attitudes Lack of Capital Political Instability Too large to govern Colonial legacy Weather / climate Neo-colonization Globalization / WTO Population Explosion Lack of Education Corruption Slide3:  How is Wealth Created? through the division of labour and the division of knowledge. People: Wealth Creators:  People: Wealth Creators The extent of specialisation is limited by the SIZE of the market. Slide5:  But some are RICH Some densely populated countries are POOR Population Density and Poverty? Slide6:  Some sparsely populated countries are RICH But some are POOR Population Density and Poverty? Slide7:  India’s Population Are We Running Out of Resources?:  Are We Running Out of Resources? Slide9:  The Scarcity of COPPER as Measured by Its Prices Relative to Wages and the Consumer Price Index Slide10:  Julian Simon-Paul Ehlrich Bet Copper, tungsten, chrome, nickel and tin Basket Value in 1980: $ 1,000 Basket Value in 1990: $ 423 Paul Ehlrich sent Julian Simon a cheque for $ 577 Slide11:  Simon-Ehlrich Bet Details Slide12:  The battle to feed all of humanity is over. In 12-20 years hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate. Professor Paul Ehrlich, Stanford University, MacArthur Fellow 1990 The Population Bomb Slide13:  Per Capita Income = GDP Population Slide15:  Effects of Colonisation? Slide16:  Democracy vs Dictatorship? Success of Singapore, Malaysia, China, (Taiwan, S. Korea) But think about the Dictatorships that are POOR! How many Democracies are RICH? Superiority of dictatorship Slide17:  Democracy vs Dictatorship? Democracy also usually entails Civil rights Free press Protection of minorities Slide18:  Illiteracy and Wealth? Slide19:  Culture and Attitude Antimaterialistic Fatalistic (Karma) Lazy Slide21:  ECONOMIC FREEDOM! The most important attribute of these institutions and policies is Economic and political institutions and policies determine economic success. Population, illiteracy, corruption, culture, democracy, and colonisation are half-truths. Slide22:  Economic Freedom Index 2000 Slide23:  Economic Freedom Index 2000 Economic Freedom Index Components:  Economic Freedom Index Components Size of government; consumption, transfers and subsidies Structure of the economy and use of markets Monetary policy and price stability Freedom to use alternative currencies Legal structure and property rights International exchange: Freedom to trade with foreigners Freedom in Exchange of capital and financial markets Slide25:  $0 $4,000 $8,000 $12,000 $16,000 $20,000 Per Capita Income Bottom 20% 4th Quintile 3rd Quintile 2nd Quintile Top 20% Per Capita Income & Economic Freedom Least free Most free Slide26:  -1.00% 0.00% 1.00% 2.00% Growth Rate, 1990s Bottom 20% 4th Quintile 3rd Quintile 2nd Quintile Top 20% Real Growth in GDP & Economic Freedom Least free Most free Slide27:  Least free Most free Adult Illiteracy Rate (1995) Slide28:  0 0.2 0.4 0.6 0.8 1 Human Development Index (out of 1) Bottom 20% 4th Quintile 3rd Quintile 2nd Quintile Top 20% UN Human Development Index Least free Most free Slide29:  Economic Freedom versus Corruption 0 1 2 3 4 5 6 7 8 9 10 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Economic Freedom Rating Corruption Rating Slide30:  0 10 20 30 40 50 Bottom 20% 4th Quintile 3rd Quintile 2nd Quintile Top 20% Income Inequality Poorest 20% 2nd 20% 3rd 20% 4th 20% Richest 20% Percent of income accruing to the Least free Most free Slide31:  India Slide32:  India & Top Ten Average Slide33:  Judiciary independence Impartial courts Protection of intellectual property Law and Order 0 2 4 6 8 10 Score (out of 10) Average of Top Ten India India & Top Ten Legal System & Property Rights Slide34:  India & Top Ten Business Regulations Slide35:  India &Top Ten Credit Market Regulations Slide36:  India & Top Ten Tariffs Slide37:  Freedom to Trade with Foreigners No country with a persistently high economic freedom rating during the last two decades failed to achieve a high level of income. :  No country with a persistently high economic freedom rating during the last two decades failed to achieve a high level of income. Economic Freedom of the World 2002 Whose Economic Freedom?:  Whose Economic Freedom? Manufacturers Urban and rural labour Farmers, with or without land Traders, retail and wholesale Slide40:  If a high degree of economic freedom was permitted, then the rate of economic growth would have been higher the government would have focused on education, health, and infrastructure, instead of running bakeries, bicycle companies, or banks the corruption levels would have been low the overall governance would have been better. India would have been higher on economic freedom as well as human development index Why is India Poor? :  Why is India Poor? Lack of Economic Freedom Slide42:  United Kingdom 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 1890 1913 1929 1938 1950 1960 Years Growth rate population GDP Slide43:  Germany -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 1890 1913 1929 1938 1950 1960 Years Growth Rates GDP population Slide44:  France -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 1890 1913 1929 1938 1950 1960 Year Growth Rate population GDP How’s Wealth Created?:  How’s Wealth Created? Specialisation (Division of Labour) The extent of specialisation is limited by the SIZE of the market Slide47:  The Scarcity of COPPER as Measured by Its Prices Relative to Wages and the Consumer Price Index Slide48:  Julian Simon-Paul Ehlrich Bet Copper, tungsten, chrome, nickel and tin. Basket Value in 1980: $ 1,000 Paul Ehlrich sent Julian Simon a cheque for $ 382 Basket Value in 1990: $ 618 Slide49:  Simon-Ehlrich Bet Details

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