The grim spectre of mass unemployment is beginning to haunt the Indian economy. Belatedly, mainstream media and the political establishment have woken up to the reality that the prime purpose of encouraging investment — foreign and domestic — in the Indian economy, is to create jobs for the huge army of youth entering the jobs market every year. With the country’s institutions of tertiary education churning out an estimated 5 million good, bad and indifferent quality graduates, including 1.5 million certified engineers, with illiterates and school dropouts contributing another 10 million, the Indian economy needs to create at least 20 million new jobs annually. And globally, even if not in India, it’s well known that well-paid, meaningful jobs can only be created in the manufacturing sector or industry.

Currently the manufacturing sector/industry contributes only 15 percent of India’s GDP against 20 percent in the developed OECD countries and over 30 percent in China. And with the annual GDP growth rate plunging from 9 percent in 2007-08 to below 5 percent in 2012-13, the prospect of the economy having generated anywhere near 20 million new jobs in the recently concluded fiscal year is fanciful. According to the authoritative London-based weekly The Economist (May 11), between 2004-05 and 2009-10, no net new jobs were created in the Indian economy against 60 million in the previous five years. On the other hand, communist China generated 130 million new jobs in services and industry in the decade 2002-12.

If the number of unemployed citizens including 40 million registered unemployed is set to cross 100 million, the fault for this sorry situation is primarily of the Congress party which has ruled at the Centre for over 52 of independent India’s 65 years. First under prime minister Jawaharlal Nehru, it imposed the capital — rather than labour-intensive — heavy industry development model upon Indian society. Secondly, during the Emergency of 1975-77 it comprehensively sabotaged the country’s birth control programme. Since then, the national population has grown by over 400 million. Furthermore by imposing a regime of licence-permit-quota raj and tolerating official corruption as an “international phenomenon”, it slowed down investment in labour-intensive medium and small-scale industry, which would have been able to generate mass employment. And even though the then Congress government liberalised and deregulated Indian industry in 1991, corruption has become so firmly implanted in Central, state and municipal government, that India is ranked #132 on the World Bank’s transnational Ease of Doing Business Index.

With the country’s 15-64 age group population set to rise by 125 million within the next decade, and annual GDP and industry growth at decadal lows, the solution is to stimulate manufacturing and industrial growth sufficiently to create 30 million living wage — rather than subsistence level — jobs in manufacturing and agro-industry. But the prerequisite of economic development is to flush out the corruption which is hardwired into mainstream political parties — particularly Congress — and government at all levels, and is blocking industrial growth and employment.

Time to renew ancient links with Myanmar

Until very recently, the neighbouring Republic of Myanmar (pop. 60 million), formerly Burma, existed as an isolated, almost hermit-like country for half a century. Its venal and unaccountable golf-loving military junta followed the “Burmese road to socialism”, which inevitably plunged this resource-rich, high-potential nation deep into misgovernance, widespread corruption and economic disaster.

Economic sanctions imposed by Western nations against the military dictatorship made matters worse. Myanmar’s only major trading partner was — and still is — China, which has been eyeing its abundant mineral and hydrocarbon reserves. However two years ago, the country’s military leader, President Thein Sein, unexpectedly ended Myanmar’s economic isolation and liberalised and deregulated its economy. Undoubtedly, the liberalisation initiative was also influenced by the moral pressure exerted on the junta by Aung San Suu Kyi, Nobel Peace Prize awardee and daughter of Gen Aung San, who led Burma’s freedom struggle against British rule. Suu Kyi has been leading a non-violent struggle against the junta, suffering house arrest for almost two decades. In late 2010, Thein Sein released her and since then, she has been a moderating force in Myanmar politics.

India has ancient ties, cultural and economic, with Myanmar. In fact, before independence, Myanmar (then Burma) was part of the Indian subcontinent under British rule. Now India needs to renew its trade and economic links with its eastern neighbour nation. Currently bilateral trade between the two countries is a modest $1.8 billion (Rs.10,794 crore) per year, heavily in Myanmar’s favour. A target of $3 billion by 2015 has already been set and New Delhi has extended a $500 million (Rs.3,000 crore) line of credit.

The earlier inhibitions that India and some other democratic nations like the USA had of dealing with a repressive military regime, are fast disappearing. Political rights are being restored in the country, labour unions are permitted, and a free press is in full cry with several independent newspapers having mushroomed. Many political prisoners have also been released. These democratic initiatives have been widely welcomed in Myanmar and beyond. There is now greater respect for the country, brightening its future prospects.

New Delhi needs to accelerate its efforts to strengthen bilateral ties with Myanmar, whom China is wooing aggressively. Several Indo-Myanmar joint projects are reportedly entangled in red tape. They need to be untangled. India has also offered to set up a special economic zone (SEZ) in Myanmar and establish branches of Indian banks in the country. These initiatives should be pursued vigorously.

In the India-educated national icon Suu Kyi, we have an invaluable friend. She has already announced she will be running for the presidency of Myanmar in 2015. And with the World Economic Forum staged in Myanmar recently, all indications are that this nascent democracy has come in from the cold and is open for business.