Penguin 2013. ISBN 978-0241957813
|Its difficult to exaggerate the
quality of this book. Ruchir Sharma searches for the real keys to national development
which are often not so obvious or easy to identify.
His whole analysis deals with probabilities rather than the pseudo-scientific economic "laws". If the situation is probabilistic then his "Rules of the Road" are perfect guides to policy, pointing countries in the right direction without claiming to understand exactly how the mechanisms work.
His detailed look at development by country quickly disposes of misleading generalizations like BRICS. For example, India and Brazil prove incapable of building infrastructure (unlike China), guaranteeing growth = inflation in both cases, and Russia has yet to manufacture anything that the world wants to buy.
Equally the book is very revealing of the qualitative differences between successful developing nations.
A good example is the contrast on P.166 between South Korea and Taiwan. He says, "Though South Korean has a significantly larger manufacturing sector than Taiwan, it employs a much smaller factory workforce (about 15% of total labour, compared to 25% in Taiwan). It also has one of the most dense robot populations in the world. That means South Korea is doing a lot more with fewer workers and is much more productive than Taiwan."
Unexpected countries such as Turkey, Sri Lanka and Indonesia are following successful development paths and Sharma is quite happy to evaluate the sociological background to their policies. (top)
|In 1948 Sri Lanka received a
British ex colonial favoured Tamil immigrant minority elite dominating the Sinhalese
majority. This divided country slid into civil war with the Sinhalese eventually
recovering power in their own country. Events such as these are ignored by approved
economic "science" but Sharma convincingly shows unity in national recovery
allowed Sri Lanka to exploit its long standing strengths of a highly literate population
and a location on the key shipping routes to India and China.
He quickly disposes of the orchestrated western media view that Turkey is sliding into militant Islam. As he says, "There is almost no support for this worldview in Turkey where - even under the AKP - the state enforces a single moderate interpretation of Islam in schools and through the Religious Affairs Directorate. The vast majority of Turks see religion as a strictly personal matter ..."
The last part of the book looks at the poorest countries and the rich world in an equally enlightening way. As he says, "The boundaries of the Fourth World are defined not by poverty but by the rule of law, or the lack of it", and he evaluates the way that the flood of liquidity into the rich world forces speculation through taxing savings (interest rates lower than inflation).
Even Rupert Sheldrake gets a mention although Sharma doesn't give this reviewer's favourite Sheldrake Sheep Rolling story.