Adoption of Chinese mode SEZ movement may spell doom for India as it did to China
China's phenomenal growth has been attributed to its single minded pursuit of export driven SEZ policies and the success story has driven Indian think tank towards this mad rush .This is just one side of the story and Indians so far failed to read the fine prints .
It is true that export-driven policy for economic growth has helped China touch record growth figures but the fall out is equally alarming as the income gap is widening and rapidly approaching the levels of some Latin American countries. As per the recent report by the Chinese Academy of Social Sciences, China's Gini coefficient – a measure of income distribution where zero means perfect equality and 1 is maximum inequality – touched 0.496 in the year 2006 where figure for India is 0.33 , for US is 0.41 and for Brazil is 0.54 in Brazil. And even the rural-urban income divide is staggering .The annual income of city dwellers in China is around US $1,000 which is more than three times that of their rural counterparts.
China has started the process as early as 1980s and implemented a series of measures and policies with the sole purpose of achieving rapid economic growth but the fall out is not all that good . The single-minded pursuit of growth has lowered the efficiency and effectiveness of economic policies, besides incurring huge resource and environmental costs. The Chinese experience offers a valuable lesson for India.
Chinese path to land grab exercise has not been rosy at all and it has taken its toll on the millions of its rural folks .It is surprising to see that though China has to feed 22 percent of the world's population on only 7 percent of land it can afford to embark on such an aggressive pursuit of land garb. In July 2005, according to Chinese Minister Li Xuju quoted in the People’s Daily China's countryside had over 26.1 million people living in absolute poverty and was home to 18 percent of the world's poor and every year, an additional 10 million people have to be fed. With this daunting target, between 1996-2005, "development" caused diversion of more than 21 percent of arable land to non-agricultural uses, chiefly highways, industries and SEZs. Per capita land holding now stands at a meager 0.094 hectares. In short span of time from 1992 to 2005, twenty million farmers were laid off agriculture due to land acquisition.
It is not that people did not raise their voice but those had been dealt with iron hands .There have been rampant protests against land acquisition especially in the provinces of Guangdong (south), Sichuan, Hebei (north), and Henan province. Guangdong has been worst affected. Social instability has become an issue of concern. In 2004, the government admitted to 74,000 riots in the countryside.
Apart from this there has been an environmental mess up too. Shenzen, Chinese dream model of economic growth, after growing at a phenomenal rate of around 28 percent for the last 25 years, is now paying a huge cost in terms of environment destruction, soaring crime rate and exploitation of its working class, mainly migrants. Foreign investors were lured to Shenzen by cheap land, compliant labour laws and lax or ineffective environmental rules. In 2006, the United Nations Environment Programme designated Shenzen as a 'global environmental hotspot', meaning a region that had suffered rapid environmental destruction.
If we look at the some of the reports presented to the world by the Taipei Times the actual picture will loom larger. China consumed 4.3 times as much coal and electricity as the United States and 11.5 times as much as Japan to generate each US$1 worth of GNP, according to the As reported by Science in Society and People’s Daily some 20 per cent of the population lives in severely polluted areas and 70 percent of the rivers and lakes are in a grim shape . Around 60 per cent of companies that have set up industries in the country violate emission rules. According to the World Bank, environmental problems are the cause of some 300,000 people dying each year. The Chinese government has admitted that pollution costs the country a staggering $200 billion a year - about 10 per cent of its GDP.
Time to think once again . Can India afford to risk such fall out of this stature ?
http://www.indiantaxsolutions.com
It is true that export-driven policy for economic growth has helped China touch record growth figures but the fall out is equally alarming as the income gap is widening and rapidly approaching the levels of some Latin American countries. As per the recent report by the Chinese Academy of Social Sciences, China's Gini coefficient – a measure of income distribution where zero means perfect equality and 1 is maximum inequality – touched 0.496 in the year 2006 where figure for India is 0.33 , for US is 0.41 and for Brazil is 0.54 in Brazil. And even the rural-urban income divide is staggering .The annual income of city dwellers in China is around US $1,000 which is more than three times that of their rural counterparts.
China has started the process as early as 1980s and implemented a series of measures and policies with the sole purpose of achieving rapid economic growth but the fall out is not all that good . The single-minded pursuit of growth has lowered the efficiency and effectiveness of economic policies, besides incurring huge resource and environmental costs. The Chinese experience offers a valuable lesson for India.
Chinese path to land grab exercise has not been rosy at all and it has taken its toll on the millions of its rural folks .It is surprising to see that though China has to feed 22 percent of the world's population on only 7 percent of land it can afford to embark on such an aggressive pursuit of land garb. In July 2005, according to Chinese Minister Li Xuju quoted in the People’s Daily China's countryside had over 26.1 million people living in absolute poverty and was home to 18 percent of the world's poor and every year, an additional 10 million people have to be fed. With this daunting target, between 1996-2005, "development" caused diversion of more than 21 percent of arable land to non-agricultural uses, chiefly highways, industries and SEZs. Per capita land holding now stands at a meager 0.094 hectares. In short span of time from 1992 to 2005, twenty million farmers were laid off agriculture due to land acquisition.
It is not that people did not raise their voice but those had been dealt with iron hands .There have been rampant protests against land acquisition especially in the provinces of Guangdong (south), Sichuan, Hebei (north), and Henan province. Guangdong has been worst affected. Social instability has become an issue of concern. In 2004, the government admitted to 74,000 riots in the countryside.
Apart from this there has been an environmental mess up too. Shenzen, Chinese dream model of economic growth, after growing at a phenomenal rate of around 28 percent for the last 25 years, is now paying a huge cost in terms of environment destruction, soaring crime rate and exploitation of its working class, mainly migrants. Foreign investors were lured to Shenzen by cheap land, compliant labour laws and lax or ineffective environmental rules. In 2006, the United Nations Environment Programme designated Shenzen as a 'global environmental hotspot', meaning a region that had suffered rapid environmental destruction.
If we look at the some of the reports presented to the world by the Taipei Times the actual picture will loom larger. China consumed 4.3 times as much coal and electricity as the United States and 11.5 times as much as Japan to generate each US$1 worth of GNP, according to the As reported by Science in Society and People’s Daily some 20 per cent of the population lives in severely polluted areas and 70 percent of the rivers and lakes are in a grim shape . Around 60 per cent of companies that have set up industries in the country violate emission rules. According to the World Bank, environmental problems are the cause of some 300,000 people dying each year. The Chinese government has admitted that pollution costs the country a staggering $200 billion a year - about 10 per cent of its GDP.
Time to think once again . Can India afford to risk such fall out of this stature ?
http://www.indiantaxsolutions.com
posted by TARUN MAJUMDER @ 11:47 PM
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