Today, China´s GDP is the second biggest in the world, with India in ninth place. Professor Emeritus Lord Desai, who with his wife Kishwar Desai is a regular at Hay Festivals worldwide, gave a packed auditorium a masterclass on the two Asian giant economies during the last Festival in Segovia. In conversation with the LSE Enterprise Director of Spanish Projects, Adam Austerfield, he commented on the fundamental differences between the two countries. India is politically a federal country with significant regional autonomy, while China is a highly centralised country with central political control.
Lord Desai noted that it was in fact Europe that had to struggle to redefine itself and its model of capitalism, and while the Chinese and Indian models were indeed very different, they were no more removed from classical economics – from Keynes to Marx – than other economic models when it came to growth and prosperity in the last 20 years.
The shift of global economic power to the east has left some significant imbalances in major institutions in the world, and thus leadership of and influence on such international financial institutions as the World Bank, IMF and others should be addressed as soon as possible. However he said that in the meantime the Chinese and Indian economies were just getting on with it, with major success. While political risk elements remain in both countries, these concerns are perhaps balanced by the wealth creation that has occurred in both countries, aiding stability – as long as growth remains strong.
Lord Desai has published books on everything from the film star Dilip Kumar to applied econometrics. He is Chairman of the Official Monetary and Financial Institutions Forum and has been the front bench spokesman for the Labour Party on education. He is also Chairman of the iXXi series, LSE´s flagship forum for high level debate on current affairs and has been known to say that once you have been made Professor of Economics at LSE, all other movements in life are sideways.
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