Sunday, April 29, 2012

Why China succeeded.

Everyone talks about double digit growths in China for decades making it the second richest country in the world today. They talk about an authoritarian government able to take instant decisions, a compliant population obeying party orders, a currency kept artificially low and low labor costs allowing manufacture and export of cheap products all over the world. No one listens to what the Chinese are saying. All of the above are true but the Chinese say that their one-child policy also played a great part in their astonishing growth story. China introduced its one-child policy in 1978 which applied to the first born of 1979. After introduction of the policy fertility per woman fell from 3 per woman in 1980 ( it was 5 per woman in the 1970s ) to 1.8 per woman in 2008 and then to 1.3 per woman in 2011. The government reckons that it prevented 400 million extra births and resulted in better health for women, greater individual savings, economic growth, fewer slums, fewer epidemics, less pressure on the environment, less waste production and less abuse of fertile land leading to less pressure on the ecosystem. It also allowed vast numbers of women to join the work force bringing down wages which made manufacturing more competitive as labor costs were very low. The policy covered only 40% of the population as minorities were exempt and rural people were allowed to have 2 children and yet led to the phenomenal growth which has pulled hundreds of millions out of poverty and raised the standard of living to western standards. Critics claim that the policy is against human rights and the preference for male children means social conflict in the future as men compete to find wives. As numbers of young people fall wage costs will rise, which is happening already, and a situation could arise where the number of retired elderly is more than the number of working young. However, when a country has built world class infrastructure and has more than $3 trillion in foreign reserves it can change policies to suit its people. The Pew Research Center has found that 76% of people support the policy. Sadly, pig-headed politicians in India refuse to learn. They prefer an illiterate poor population that can be bought with handouts and deceived with caste and religion to get votes. The poor need support to survive but this cannot go on infinitely for an infinite number of people. All we need to do is to pass a bill that anyone born after 1996, that is 16 year olds who are not yet married, will not get any social support if they have more than one child. This should be broadcast one radio, TV and by SMS on cell phones. The poor are not fools. Once they realise that fertility will not be rewarded they will automatically reduce families. The results will come within 4-5 years. Else we will be reduced to junk status and remain there.

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