By William Pesek
Modern economics has few better examples of a one-time star losing his shine than Manmohan Singh.
As India's finance minister in the 1990s, he introduced free-market measures that cut red tape, removed state-enforced caps on steel and cement makers and allowed overseas companies, such as Ford Motor Co., to do business locally. Singh gets as much credit for India's 7.8 percent growth as anyone.
Yet as prime minister, Singh lost focus on something painfully obvious: Giving young people hope for the future means creating enough good-paying jobs. Now he faces what pundits can't resist calling "India's Arab Spring."
There’s an under-appreciated element of this dynamic. India’s dreamy demographics are suddenly looking a bit nightmarish. Officials in Beijing, Seoul and Tokyo can only fantasize about 30 percent of their populations being under 15. Economists call it a demographic dividend, the idea that youthful human capital will drive long-term growth. The trouble is that you have to create jobs not only to harness such a demographic bonus, but also to keep the peace.
India is now a case in point. Driving the movement is anti-corruption campaigner Anna Hazare, whose ongoing hunger strike has captivated the nation of 1.2 billion people. It’s challenging a government that has done little to curb graft. And ironically, it risks putting Singh's legacy in uncomfortably close proximity to that of his predecessor Atal Bihari Vajpayee.
In 2004, Prime Minister Vajpayee was riding high with a re-election slogan: ``India Shining.'' The hundreds of millions who didn't feel part of the magic retorted with their own: ``We won't be ignored.'' Indians turned to Singh's party to spread the benefits of growth in a nation in which the World Bank estimates 76 percent of people live on less than $2 a day.
At the very core of that effort is reducing corruption, which hoards growth and wealth among the rich and politically connected. No reasonably objective observer can say Singh has done enough to attack this toxic phenomenon. The economy can't race ahead with politics so dangerously stuck in the past.
Hazare, 74, hardly makes for an obvious leader for an Indian Spring. The self-styled Gandhian activist staged a hunger strike to force a new anticorruption bill to include the judiciary and prime minister in its purview, as it should be. Efforts to dismiss him as a mere publicity seeker miss the point.
(William Pesek is a Bloomberg View columnist.)-0- Aug/22/2011 20:14 GMT