Economic growth no fun and Games
There has been much loud wailing from India’s media about the country’s lack of success in the London Olympics – six medals compared to America’s 104, China’s 87, Russia’s 82 and GB’s 65.
The subject even arose in discussion with a senior Cambridge University contact in the UK over some upcoming Cambridge-India education and technology initiatives.
The Guardian then devoted major space at the weekend to a ‘view from Delhi’ mourning what it called India’s ‘flaccid’ performance in the Games.
Matters should be kept in perspective. If you drew up a league table of the world’s greatest economies, the US and China would still be one and two – but India would be number three in most analysts’ books.
Yet there was more gloom in the Indian media after Moody’s Analytics predicted that the pace of India’s economic expansion in the fiscal year to the end of March 2013 would be less than six per cent – the worst in a decade and lower than the government forecast of around 7.6 per cent.
The government insists growth won’t dip below 6.5 per cent. India also has the highest savings and investments rate in the world.
How nice to be able to fret over such margins as six-7.6 per cent GDP improvement, given that the UK economy is flatlining at zero growth, many EuroZone countries are struggling just for parity and even forecasts for US growth have been slashed to around 1.6 per cent. Analysts reckon China is suffering, with growth forecasts down to around eight per cent – poor lambs!
All the latest forecasts prove is that any nation needs its global trading partners to thrive in order to maintain healthy exports – and that Asia is not immune to financial ’flu. But now the last strains of a lively London Olympics’ closing ceremony have faded away whose shoes would you rather be standing in economically long-term? India’s and China’s I fancy.
So looking at the funereal coverage of India’s Olympic medals return, what does a tally of six gongs in a Games really tell you about the state of the nation?
That unlike the traditional superpowers of America, China and Russia, India doesn’t use sporting success as a phallus; for the Americans and Russians in the Cold War, of course, it was space exploration that acted as the viagra.
That India took the decision to build a knowledge-based economy through massive, unprecedented – and possibly unrivalled – investment in education rather than sporting prowess. That a burgeoning Indian corporate sector and middle class has long preferred to employ mind over muscle.
That strategy is evidenced by the fact that Indian software brilliance put Silicon Valley where it stands today; that the IT sector’s contribution to India’s GDP rose from 1.2 per cent in 1998 to 7.5 per cent in 2012. That what is known as the technologically inclined services sector in India accounted for 40 per cent of the country's GDP and 30 per cent of export earnings at the last time of counting – despite employing only a quarter of its workforce.
Britain can rightly be proud of the dazzlingly successful Games it has just staged. In sporting terms it produced some of the most stunning performances in Olympics history. In terms of global kudos, it left the UK dripping in gold. It most definitely produced a welcome boost to the nation’s collective morale.
Economically, however, the jury’s still out. It cost over £9 billion to stage, which in most analysts’ opinions is not likely to be clawed back. It also brought a backlash to British industry that economic observers believe could run into several more billions.
That net loss in financial terms follows a run of industry-sapping early-2012 bank holidays and the Queen’s Jubilee celebrations that saw flags raised and profits lowered at a time when the UK needed higher productivity and more investment in education and industry.
Sometimes the payback from events such as an Olympics or a World Cup take years to filter through to a nation’s economy; equally - sometimes they never do.
Governments often look for sops to public opinion when economies are failing. The distraction strategy used to involve sending gunships into foreign territories. Currently it is sporting glory being leveraged to raise pride in the red, white and blue.
In George Orwell’s ‘1984,’ Big Brother gave the proles the promise of winning the national lottery to maintain their spirits – which strikes me as a lot less illusory given recent mega-lottery wins than imagining a nation can turn the currency of Jingoism into improved manufacturing output and increased export sales overnight.
With thousands of capable people struggling to find or hold down jobs and youngsters’ dreams of university and career crashing around their ears we need something a tad more tangible to work with as a template for economic recovery. Investing in sports facilities and our athletes going forward is highly laudable but cannot be as key to economic growth as investment in education, technology and industry.
India has no need for recrimination over its chosen roadmap – and it is good to report from the UK’s perspective that the country’s economic growth strategy includes immersing itself in a number of new initiatives with Cambridge University. One of the most significant – the Bangalore-Cambridge Innovation Network – launches in September.
Mutual interest in education, knowledge transfer, biomedical technology, software and CleanTech promises a long and fruitful collaboration between the partners on a broad academic, technology and industrial front.
Olympic glory is all very laudable but sporting fame and its benefits are often transitory. Long after the anthems are silenced the world will need initiatives in place that further the cause of society and mankind – and they won’t be found wrapped in a Union Jack on a makeshift track.
It appears to me that with India a well-trusted ally of both Britain and America, this new Cambridge-India axis can help put in place technological and educational advancements that will leave a lasting legacy for the planet and its people.