Why did socialism fail in India

: Farewell to the spinning wheel The Indian version of socialism has failed. The government relies on reforms, but not on shock therapy - a visit to a country on the move India: For decades, the world's second largest nation relied on self-sufficiency. Now it faces competition on the world market


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New Delhi

The Indian elephant slept a long time. The little tigers of northeastern and southeastern Asia stormed ahead into the modern age; thirteen years earlier, the Chinese dragon embarked on the adventure of economic reform and opening up to the world. The Indians, the largest democracy in the world and the second largest people on earth with more than 900 million inhabitants, did not give themselves a jolt until 1991 - after a severe economic crisis that had brought the country to the brink of insolvency. But since then they have made a huge leap forward.

The country's leap into reform was ultimately a consequence of the global political change of 1989/90. When the Soviet Union collapsed after the end of the Cold War, India not only lost a great friend - it also lost a huge market. With Soviet communism, the Indian version of socialism was also stripped of its aura. Four decades of planned economy suddenly turned out to be the wrong path. The insistence on self-sufficiency was no longer of any use. The government could no longer resist the trend towards globalization if it really wanted to lead the country out of backwardness. All she could do was flee forward.

But the breakthrough came. And progressive-minded people for the first time have the feeling that a prominent scientist summed up as follows: "The present is no longer an extension of the past, but a launching pad into the future." Five years ago the Indian currency reserves were sufficient for just under a fortnight; today they are back at twenty billion dollars. The inflation rate has fallen from 17 percent at the time to eight percent. The growth rate climbed from one percent to around six percent, in industrial production even to thirteen percent; the export volume increased annually by a fifth. Finance Minister Manmohan Singh, the "Ludwig Erhard of India", turned his back on the socialist central administration economy for forty years, allowed private investments in almost all sectors, removed import restrictions, lowered customs duties and welcomed foreign capital. The result: India is hardly recognizable today.

Products from the West are suddenly available everywhere. Reebok trainers and Lacoste shirts, Suzuki and Mercedes limousines are made in the country; Levi and Benetton let work for them there. The garden city of Bangalore has become the "Silicon Plateau" of India, where Siemens, Bosch and Deutsche Bank, Motorola, IBM, Microsoft and Hewlett-Packard produce software; the export volume of this sector - in 1990 just under one hundred million dollars - is expected to exceed the billion mark in two years. Joint ventures were formed everywhere. There are 388 German-Indian companies alone. Everything is represented that has a reputation for being in the industry of the Federal Republic of Germany.

None of the German managers would afford to lose sight of China. Recently, however, many have been looking at India with remarkable benevolence. Almost as many people live there as in the Middle Kingdom. The country is subject to the vulnerabilities and hesitations of all democracies, but not to the abrupt fluctuations of the Chinese Communist Party dictatorship; Compared to the underdeveloped Chinese system, the Indian legal system is highly reliable and predictable; the common English language makes business easier; Nor do the Indians shamelessly copy the products of their foreign partners.

Of course, the reforms still leave a lot to be desired. The economic infrastructure - roads, railways, ports, airports - is as inadequate as the social infrastructure - education and training, health care and social welfare. The energy supply is absolutely inadequate, and power outages are a constant phenomenon; no foreign company does without generators and battery chambers to prevent the worst crashes.