In this episode, Matt sits down with Shruti Rajagopalan (Mercatus Center) to talk about what the future holds for India.
We often have a tendency to think of the current economic and geopolitical situation as simply the way things are. Especially for people who grew up in the United States over the past 50 years, the fact that it is an economic and military superpower sorta feels set in stone. But in this episode, Shruti Rajagopalan encourages us to take the long view, regarding the current state of the US as just one phase in a decades or possibly centuries-long economic development life cycle. First, the country logs a certain number of decades as a manufacturing hub, under conditions of minimal top-down interference from regulatory bodies. This enables it to build wealth, which eventually pushes it away from being a manufacturing economy, but it’s a race against the clock. With economic growth comes a rise in average life expectancy, plus a lower birth rate, which together can lead to large aging population. Once the aging population increases, the country’s economy needs to be strong in order to accommodate all the caregiving that an aging population makes necessary.
Interestingly, it’s starting to look like some other countries—particularly India—are currently poised to undergo a similar trajectory of economic development that the US did. What makes India stand out is that among the countries in the world with a large young population, they have an unusually high GDP per capita. They also have a pretty sizeable early-career, STEM-savvy middle class that is ready to move anywhere in the world, build a life wherever they end up, and culturally assimilate.
Our esteemed guest argues a) that the relaxation of economic restrictions which took place in India in 1991 made this siutation possible, and that b) a few conditions still need to be met for the future to unfold in the optimal way. One is that India needs to build up its manufacturing sector that the country can get richer before the population gets too old. Another is that other countries need to take advantage of the fact that India’s young workforce is ready to emigrate. She even suggests that wealthier countries with a rising elderly population, low birthrate, or declining heritage language could perhaps address those issues by welcoming an incoming population of young workers from India.
Join us as our guest outlines the (hopefully) upcoming rise of India on the world stage!
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