This Guy, That Guy: India v/s Europe

Introducing This Guy, That Guy (TGTG) series: The aim is to provide a sense of perspective by comparing two entities (countries, players, companies... anything). As they say, the best way to learn is to "learn by comparison". This is the first article in the series. 

Source: Goldman Sachs
There has been a lot of talk about how India and China will shape the world going forward. It was projected by Goldman Sachs (before the economic crisis) that the Indian economy will overtake that of the US in 2050 and China will do that in the next 15 years. In fact, by 2050 India and China will be far ahead of most countries in the world (in terms of GDP). This is the first time in the modern era that the biggest economies in the world, will be of developing countries. Click on the image to view a larger size. 

The balance of power will shift and it will have a big impact on the negotiating power wielded by  these developing countries. In the recent times there has been a lot of criticism of the "GDP chat". Maybe it's time to see how things stand right now in factors beyond GDP. Comparisons between US, India, China are common. Let us compare India and the continent of Europe, including the world's biggest country - Russia (all figures are approximate). 

Crowded Space
In India 17% of the world population resides in 2% of global land space available. In Europe  7% people reside in 11% of land space. As a result 363 people reside in every 1 sq-km as compared to 70 people in Europe (more than 5 times higher). This also means there are 5 times more people vying for 1 bag of resource - food, water, electricity...

Low valued Production
Before you take out your swords - I know it's not perfect. But lets not be academic here and deny the measurement. This is a statistic and it does provide a perspective. Per-capita GDP (using PPP) for Europe is $30K and for India it is $3300. What it means is -the market value of the goods India produces per person is worth almost 10 times less (using the uniform PPP scale). 

Stunning Poverty
This where things get really tricky. No matter on what scale you measure, India has about 20-40% of its population understandably poor. The numbers are bad whether you try to measure absolute or relative poverty. No matter by what scale you measure, Europe has less than 10% poverty. In absolute terms - it is less than 2% (which is not useful since it is a developed continent). But we can assume India's poverty is 3-4 times higher

Low Human Development
Again, you can argue about the merits of this scale but it's not a bad indicator to look at. Whether you consider the old HDI or the new "inequality adjusted" HDI, India ranks pretty low (119) for all the talk about progress and shine. Use this interactive map to see the history of rankings in the last 20 yrs (By the way, China ranks as one of the highest among the developing countries). Most of the European countries do well on this scale. 


Gravity Defying Corruption
India stands midway in the ranking of countries by Transparency International. Despite the economic expansion India has maintained a rank of 85-90 among 150-180 countries in the last 7 years. Again, European countries have traditionally done well on this scale. 


We can talk about tons of other factors but I would like to stop here. I agree, population is a major problem and pushes the indicators down, but there are a lot of areas which are clearly in the red (and have been the same for the last 2 decades). Its not just India - China doesn't score remarkably well either. I am not trying to paint a gloomy picture here (ok, maybe I did) but we seem to forget the real problems in the wake of impressive 'top' growth. What's the point in being big and having bigger problems? 


Being bigger is better, but its not as important as it's made out to be. 

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