Thirty years ago China was on the cusp of enormous economic expansion. In 1994, at the time of the transition to democracy in SA, China’s GDP per capita stood at $1,384. It has since grown nine-fold, now standing at $12,781.
This is especially astonishing because it is a per capita measurement, and has occurred despite a 51% increase in China’s population over that period. This expansion has pulled millions of people out of poverty and transformed China into a global powerhouse.
As China’s economy begins to plateau, its starring role in the firmament of economic development has been taken by India. In 1994 India’s per capita GDP was $588. In 2023, despite a 52% increase in population, India’s per capita GDP stood at $2,236. India has grown faster than China in the post-Covid period, achieving GDP growth of 8.2% in 2023/24.
Contrast this with SA. In 1994 our per capita GDP was three times that of China. It is now less than half. While China and India’s economies have grown exponentially in the past 30 years, ours has stagnated.
I have just returned from a fascinating visit to India. We have so much to learn from this economic powerhouse. SA and India have similar histories and face many common challenges. We share a British colonial legacy, a history of racism and division, high levels of inequality and ongoing problems of sexual violence.
We are both vigorous democracies. We also share political and cultural history. Mohandas Gandhi cut his political teeth in Johannesburg. More than 1-million South Africans have their origins in India and our culture has been enormously enriched by Indian heritage. We also have strong trade ties.
Yet our economic trajectories could not be more different. India is dynamic and fast growing. It has become a leader in key manufacturing sectors, including pharmaceuticals, automotives, textiles and steel. And yet it has a strong informal sector and supports vast numbers of small businesses. It has far better educational outcomes than SA.
There are many areas where we could learn from India’s example, and I plan to explore those through a series of columns over the next few months. For now two key issues stand out, both related to the leadership of Manmohan Singh, India’s finance minister in 1991-96 and prime minister in 2004-14. Singh died a few weeks ago and has been remembered with affection and respect, in India and around the world.
India’s fortune is largely credited to Singh’s decisive leadership. Initially he lacked a strong political base, having been brought in as a technocrat and later catapulted into the leadership by Sonia Gandhi. Despite this Singh mobilised every ounce of political support to drive fundamental change.
Some of these — such as opening India to international trade and privatising state companies — were at odds with his own party, the Indian National Congress. Other initiatives, such as the Rural Employment Guarantee Scheme, took party traditions forward in new and exciting ways. In both cases he led from the front and built the necessary political alliances.
Though best know for reforming the economy, one of Singh’s lasting legacies is his reorganisation of the Indian state. He dismantled outdated regulations, attacked corruption and modernised public services. He was an early proponent of digitalising public services and introduced a single identification system. Today India leads the world in digital public infrastructure, has a reasonably low burden of corruption and has strong public service institutions.
SA now sits where China was 30 years ago and India was 20 years ago. We too could launch ourselves into a new era of rapid economic growth and development. To do that we need decisive leadership that drives fundamental reforms, attacks corruption, modernises the public sector and fixes the education system.
These are difficult things to do. But the prize is exceedingly large.
• Bethlehem is an economic development specialist and partner at Genesis Analytics. She has worked in the forestry, renewable energy, housing and property sectors as well as in local and national government.
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