Education matters immensely when it comes to the health of an economy. There is a positive correlation between years of schooling and the GDP per capita. Let’s look at the numbers that are indicative of the generalization. In 2001, “school-life expectancy” and the ppp GDP per capita for Ethiopia were (4.3 years, and $675); for Indonesia (10, and $2,844), for China (12.4, and $4,065), for South Korea (14.6, and $17,048), Japan (14.3, and $25,559), and the US (15.2, and $32,764).
Moreover, there is a correlation between growth and educational attainment. Consider one measure of the educational level of an economy, the literacy rate of adults (defined as those above the age of 15 years). In 1970, adult literacy rate in China was 54 percent, compared to India’s 34 percent. The ppp GDP per capita income of India in 1970 was $1,034, nearly double that of China’s $571. Yet, twenty years later, China surpassed India’s annual per capita income: India $1,587, China $1,617. The adult literacy rates in 1990: China 78 percent, India 49 percent. By 2001, China had 86 percent adult literacy rate and a ppp GDP per capita of $4,065, and India languished at 58 percent and $2,319.
There are many reasons for modern China’s meteoritic rise from its humble beginnings. But one of the most important factors must be their youth literacy rate, which is defined for the population between 15 and 24 years of age. In 1970, China’s youth literacy rate was a whopping 83 percent, compared to India’s 46 percent. It is more than a little depressing to note that more than half of India’s youth were illiterate, leave alone educated, as late as 1970. By 2000, India was just at 73 percent, not even at the level at which China was 30 years before. Now China has achieved nearly universal youth literacy. The lesson is unavoidable: compared to China, India’s prospects are dim if education has anything to do with economic prosperity and potential.
It is important to note the sequence of development. Literacy preceded economic growth for China, as it does for every successful development story. Note that China was more literate than India in 1970 even though it was poorer than India. Thus poverty does not automatically condemn a population to illiteracy. It is a matter of choice: like individuals, countries can also choose to invest in education.
I deliberately chose China as a counterpoint to India in this narrative. I can tell the same story of how Singapore transformed itself from a mosquito infested swamp to a developed economy within a single generation. But then the usual objection is that Singapore is a tiny city-state and a behemoth like India cannot transform itself. It is a just-so argument, supposed to be compelling enough that no reason has to be advanced why Singapore’s tiny size in the context of development is relevant.
But another just-so argument is introduced when India and China are compared. It says that China cannot be compared to India because India is a democracy. Again, no reason is provided why democracy prevents policy makers from choosing to invest in education. However, one can argue that India’s political structure has something – naturally – to do with India’s dismal failure in educating its population. I describe India as a “pseudo-democracy,” something that has the superficial trappings of democracy but just below the surface it is anything but.
Democracy, if it means anything at all, is more than mere head-counting. It has something to do with informed choice of the population at large, which in turn depends on the population’s ability to understand the issues, which finally rests on the ability to read, write, and carefully consider the alternatives that confront them. As it happened, when India achieved political freedom from the British, the population was told that their emancipator knew best and all they had to do was vote for them, and the government so constituted would magically take care of their every wish. How that transformed India from being the darling candidate for becoming a developed economy in the 1950s to actually being a laggard in economic development we shall briefly note the next time.