Thursday, January 10, 2008

let's not forget about india

With all the talk about China we sometimes forget that India too is growing at breakneck speed. And while that means good news for the world economy in the short term, it is bad news in the long run. Because, like China, India has a huge population. India is the "other" nation with a population in excess of 1 billion people. And that means that any minor change in the standard of living translates to huge amounts of extra consumption and waste. Keep in mind that standard of living primarily measures consumption.

Take the Indian car market for example. It is growing so fast, Western and Asian car makers are drooling like mad. Renault's chief executive was quoted as saying" "It offers significant potential for profit growth." That is an understatement to say the least. The Indian car market doubled since 2000 and it is set to double again in another 8 years. Today 7 out of every 1,000 Indians have a car. By 2010, the projected number is 11 in 1,000. And what is most frightening is that this explosive growth is nowhere near saturation. We are a long way from one car per person, as is common in the West.

More cars leads to more driving and more driving means more greenhouse gases. India is one of the nations rejecting pressure to cut greenhouse gases. Already in 2001, India ranked 5th in the world in terms of carbon emissions at 251 million metric tons of carbon. The number is expected to triple by 2020. India accounts for only 5% of the current global carbon emissions but its contribution to the emissions growth will be very significant. As a developing nation, India did not sign the Kyoto protocol.

More cars require more roads. And roads are being constructed at a rate of 14 km per day (almost 10 miles a day), double the rate of 2005. More roads not only destroy valuable forests and agricultural land, they also enable people to live bigger. More roads translates into more sprawl. And that means less land for food production. And for India that could translate into big time trouble.

India is a major food producer at nearly 3% of the world production. Slightly more than half the land is arable and there are considerable water resources. Many areas support year round irrigation and can produce two or three harvests a year. But India is one of the countries that is most severely threatened by climate change. A greater frequency of droughts and floods would have a devastating impact on India's agriculture. Experts have warned that the country is ill-prepared for such events. Effects of global warming will affect India more than China or the US. Any additional stresses from construction will only make matters worse.

India is risky for other reasons. It has a highly diverse population with large groups vying for power. Civil war is never far from the surface and when stresses mount, violence is common. Much of it is embedded in the country's religions, that are often at odds with one another. The crumbling caste system, India's public secret, is also adding significant tension and periodic uprisings by the untouchables or dalits are symptoms of larger ills. Additionally, India has a rocky relationship with its neighbor Pakistan, another nuclear power.

Like China, a furiously growing India could become a major world problem in the near future.

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