The International Monetary Fund has revised its 2009 forecast to project the first global economic contraction in 60 years. The revised IMF figures estimate the world economy will shrink by as much as a full percentage point this year. Advanced economies alone are set to decline by more than 3 percent. The deep recession in developed countries is expected to continue throughout the year despite the enormous sums that have been spent on fiscal stimulus efforts.
The IMF was predicting just this January that the global economy would grow by 0.5 percent. The sharp revision reflects the speed with which the meltdown has caught capitalist economists by surprise. The IMF is a champion of imperialist globalization. It is quite possible that the estimates of a 1 percent decline continue to understate the severity of the crisis.
While developing economies are projected to experience continued growth for 2009, their growth rates have been impacted by the global recession. The World Bank recently cut its 2009 projections for China’s economic growth from 7.5 percent to 6.5 percent. Most economists have also significantly cut expected growth rates for India.
The Economist Intelligence Unit has estimated that China and India are two of just four Asian countries expected to expand in 2009. Japan’s economy, by contrast, is expected to decline by as much as 5.8 percent.
Different paths in good times and bad
An article by Somini Sengupta, titled “As Indian Growth Soars, Child Hunger Persists,” recently examined the divergent results economic growth has had in India and China. (New York Times, March 13) Even after a decade of spectacular economic growth, Indian child malnutrition rates are worse than in many sub-Saharan African countries. Indicators such as these begin to paint a picture of growth in India that is strikingly different than that of neighboring China.
More than 42 percent of Indian children under five suffer from malnutrition, as measured by their weight. India is a low-income country where 80 percent of its population struggles to survive on less than $2 a day. Thirty-nine percent of the population cannot read or write and India’s infant mortality rate rests at 32 deaths per 1,000 live births.
In China just 7 percent of its children younger than five are underweight. The proportion of its population surviving on less than $2 a day has been cut to 35 percent. The country has almost achieved universal literacy. Its infant mortality rate is 21 deaths per 1,000 live births.
What accounts for this difference in popular welfare in two of Asia’s emerging powerhouse economies?
Conditions reflect history
China and India share a lot in common. The two countries have a long history, are separated by a common border, and have populations that exceed one billion.
The countries have different political histories, however, and their current political leadership and method of economic organization are fundamentally different. The New York Times hints at this, even as it peppers its examination of China with the usual allegations and innuendo that the U.S. media reserves for left-wing and anti-imperialist governments of any type.
China has been more successful in reducing child poverty and hunger because of the efficiency of its centralized state and the firm leadership of the Communist Party of China. The leadership of the CPC has allowed China to utilize the socialist features of the Chinese state to lift children up, even after three decades of risky experimentation with market reforms.
The power of the CPC is rooted in the People’s War of Liberation led by the party and its Red Army. The CPC took power after first driving out the Japanese occupation forces and then decisively defeating the U.S.-allied armies of Chiang Kai-shek.
CPC Chairman Mao Tse-tung declared at the founding of the People’s Republic of China in 1949 that “the Chinese people, comprising one quarter of humanity, have now stood up.” China put the humiliation of colonialism behind it as it embarked on an independent path of workers’ power. China’s revolutionary history is evident today as it strides against the poverty and suffering of its past.
India, by contrast, is plagued by an inefficient and corrupt bureaucracy that in recent history has been led by either the bourgeois Indian National Congress or the ultra-nationalist Bharatiya Janata Party. Both parties represent the bosses and landlords who oppress India’s workers and peasants. Both are strategic allies of U.S. and British imperialism.
India emerged from almost a century of direct British Crown rule in 1947 when Britain handed the reins of power to the Indian bourgeoisie. This transition came after a long period of struggle led in large part by the Indian National Congress.
The INC had become India’s main vehicle for social reform and agitation for independence. It was a bourgeois party whose leader, Mahatma Gandhi, was against arming the people in the struggle to free the country from Britain’s grip. Gandhi propagated a cult of non-violence that limited the independence struggle and prevented India’s workers and peasants from conquering state power. India’s communist movement was unable at the time to lead the independence struggle to its logical conclusion of socialist revolution. The consequence can still be seen as the vast Indian masses suffer while a few profit from the country’s economic boom.
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