All entries for Tuesday 13 September 2005
September 13, 2005
I am rather disturbed by certain fundamental errors – both in content [and] in methodology – in Ramtanu Maitra's article China's shadow over India's US lobby [Sep 13]. First, he conveniently mentions that China is the world's second-largest economy – even larger than Japan – but fails to point out that those calculations are based on purchasing power parity (PPP) terms. In real terms, China is the world's seventh-largest economy, with Japan nearly three times as large. This tends to confuse the non-economic-minded reader, just as the statement "India is a larger economy than Germany" would (true in PPP terms). Second, while correctly mentioning that India receives very little foreign direct investment, it is curious how the author forgets to point out the role of foreign institutional investors in the Indian economy. By some estimates, the Bombay Stock Exchange holds around [US]$50 billion of FII. Third, he has made a plain judgmental error when he argues that foreign perception of Indian development is marred by the visible poverty in Indian towns and villages. Pick up any reputable international newspaper – The Economist, Wall Street Journal or anything else – it is positive press all the way. Sometimes it is even possible to argue that India is getting more good press than it deserves.