It is time for the neighbouring countries to realize that if India’s GDP grows at 9% in the next 20 to 30 years, then the per capita income will also rise, from US$ 1500 to US$ 7000 per annum, according to the report by PriceWaterhouseCoopers, which will significantly enable them to reach a higher income level, write Srimal Fernando and Megha Gupta for South Asia Monitor.
India’s Economic Vision 2022 is an upcoming economic model which can change the social and economic status of the eight South Asian nations which are members of the South Asian Association for Regional Cooperation (SAARC). With an economy of US$ 2.6 trillion, India is proposing to invest in twelve major sectors to achieve its target of a US$ 5 trillion economy forecast for 2025.
This economic push by India is set to double the inter-state trade between the neighbouring South Asian countries and, for these policies to get successfully implemented, a stable neighborhood is essential for India and the region.
It has been 30 years since SAARC was formed yet improvements seen in the region are marginal. Most of India’s neighboring countries are either at low or middle income status and, with India’s economic growth at a faster pace of 7% GDP, the 2025 Vision Plan will not only help India, but also lift the economic standard of living of all other SAARC nations.
Currently, India’s bilateral trade with Pakistan is US$ 5 billion, with Bangladesh is US$ 6.6 billion, with Nepal is US$ 6.35 billion, and with Sri Lanka it is US$ 5.2 billion. If this Vision plan is implemented and India’s economy is to grow, then India’s bilateral trade with these countries will also majorly increase and, in turn, raise the other South Asian nations.
India has a strong interest in the maintenance of a more stable balance of power in this region. On a more fundamental level, profound changes in India’s policy initiatives over the next few years will impact its seven neighbours.
Underlying this positive transformation, however, India’s role in South Asia is bound to be limited because of its bilateral disputes with Pakistan. Also, countries like Sri Lanka, Maldives, Nepal and Bangladesh tend to be more cautious in freely trading with their neighbouring countries.
It is time for the neighbouring countries to realize that if India’s GDP grows at 9% in the next 20 to 30 years, then the per capita income will also rise, from US$ 1500 to US$ 7000 per annum, according to the report by PriceWaterhouseCoopers, which will significantly enable them to reach a higher income level.
In recent years, a new line of thinking called ‘New inclusive India for the poor and the middle class’ has also emerged under the Vision 2022, which will be instrumental in developing the wellbeing of over 20,000 villages across the country. The new job creation in the industrial, tourism and service sectors will largely form the backbone of the Indian economy that is evolving from the Vision 2022 policy document.
Economic Policy visions of the neighboring countries are also linked to the domestic economic and political interest. In the Sri Lankan Vision of 2025 policy document, Sri Lanka is planning to raise the per capita income to US$ 5000 per year and create one million jobs by doubling the current exports to US$12 billion per year. These economic initiatives will push people to the upper income category.
The Indian Blue Economy Vision of 2025 will also harness business potential to the Indian coastal belt and to nearby countries such as Maldives, Bangladesh, Sri Lanka and Pakistan, which depend on the Indian Ocean.
The changing global geopolitical and geo-economic landscape is likely to influence India and other South Asian nations. These shifts will particularly impact the people-centred policies especially in South Asian countries, where democracy has an instrumental value in enabling the people to express and support their claims to political attention, including claims of economic requirements.
All the eight countries are conscious of their responsibilities to contribute towards the economic and political stability of the region. This new 2022 economic vision of India will focus on economic prosperity, well-being for the middle class and the poor and on increasing bilateral and multilateral trade with its neighbouring countries. Therefore, these policies will have a direct effect on the 1.5 billion citizens of South Asia.
(Fernando and Gupta are scholars associated with the Jindal School of International Affairs. They can be contacted at firstname.lastname@example.org)