India used to be the world's second-fastest growing economy, bested only by China. Before that, the story put out was that India was among the half-dozen fastest growing countries. But if you switch from pure economic growth to per capita incomes, to see which country has done best by its citizens, the picture begins to offer some surprises. You could even question the generally accepted narrative that the poor countries as a group have been doing better than the advanced economies - the "catching up" story. And if you ask who really shines when you look at the long-term record, the answers are both predictable and surprising.
The World Bank has modified national income data, using current US dollars (what it calls the Atlas method), that goes back to 1980 for most of some 213 countries. The latest multi-country data is for 2011. Over these 31 years, the runaway winner in terms of growth in per capita income is of course China, which multiplied incomes a staggering 22.5 times. No prizes for guessing the runner-up either: South Korea, which in 1979 had a much higher income base than India has today, and still multiplied incomes more than 11-fold. The dark horse that gets the bronze medal is from our neighbourhood - Sri Lanka, which despite a prolonged civil war grew incomes more than 9-fold.
These three winners are followed by a clutch of seven countries, which grew per capita incomes 5- or 6-fold, led by two of the Asian Tigers - Thailand which multiplied incomes 6.2 times over 31 years, and Indonesia (6-fold). The best performers from three other continents come next: Europe's Turkey, South America's Chile and Africa's Egypt. The last two countries that make up the Top Ten are India, which multiplied per capita income 5.26 times, and Spain (5.1 times). No data is presented for Taiwan, while the city-states of Singapore and Hong Kong (also part of the original "Tigers") have of course done very well. Count them all and India ranks a respectable 12th. Crucially, though, a match between China and India is like Roger Federer vs Somdev Devvarman.
The interesting discovery is that the advanced economies, supposedly slow-growing, have done well by quadrupling per capita incomes. Australia and Britain are the best performers (multiplying about 4.5 times), followed closely by Italy, Japan (surprise!) and Canada. The big economies that are traditionally seen as more successful - the US, Germany and France - grew incomes somewhat slower, but did better than a host of poor economies that are supposed to have been "catching up". Within South Asia, the ordering is equally instructive: after Sri Lanka and India, it is Nepal, Bangladesh and Pakistan (3.3 multiple), but all of them have grown incomes more slowly than the rich bunch. Not much evidence of any "catch-up" here.
Many of these scenarios could change in the troubled second decade of the new century. China is slowing down, India is searching for the growth elixir again, Europe has long-term problems and the US has its challenges too. Brazil (which did well in 1980-2011, with an income multiple of 4.9) and Russia (which had a terrible 90s and then a spectacular 'noughties' decade) are both down to a crawl. Japan may offer new hope while more than a dozen African countries, laggards till now, are beginning to do much better. So are places like unpretentious Philippines, which is second to China in current Asian growth listings. If India can get back up to a 7 per cent rate of growth, it could continue to feature in the top dozen. If not, it risks becoming one of the also-rans.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
