Routledge Handbook of South Asian Economics

Citation

Jackson, K. (2013), "Routledge Handbook of South Asian Economics", South Asian Journal of Global Business Research, Vol. 2 No. 2, pp. 276-279. https://doi.org/10.1108/SAJGBR-02-2013-0011

This book is edited by Professor Raghbendra Jha, who holds the Rajiv Gandhi Chair of South Asian Economics and is Executive Director of the Australia South Asia Research Centre. It offers readers insights from 28 experts whose research concerns the major economic achievements and challenges across South Asia. The 20 chapters give fair attention to each national economy of the region (save Afghanistan), with emphasis on India and, by global implication, China along with more developed and currently challenged “western” economies.

In his introductory chapter Jha highlights how these economic achievements and challenges commonly emerge “as a consequence of external shocks and war” (p. 5). Setting the tone for the book overall, Jha (pp. 7‐11) highlights challenges such as: “rising regional and personal inequality, stubborn poverty and hunger” as population and investment shift from, e.g., agricultural to industrial production, from rural to urban areas; “infrastructural constraints” that hinder further economic development, including FDI; “environmental constraints” such as the mounting costs of managing pollution and waste. In tandem to these there are the “natural and external shocks” such as earthquakes, tsunami and other disasters whose impact and aftermath are complicated by incursions such as global market fluctuations in commodity prices along with the financial crises currently emanating from western economies. Here as in each subsequent chapter readers are drawn beyond discussion and analysis of trends toward considering clear policy positions on what political institutions and other regionally based organizations such as MNEs and SMEs might do to build on their considerable achievements hitherto and contribute towards shaping future pan‐Asian and global economies. This element of the book generates research topics relevant to readers of SAJGBR. Selecting narrowly from the wealth of insight offered, I develop this perspective in this review.

The three chapters of part 1 focus on “Economic growth,” notably in India. Of broader research relevance is the exploration into “India's two‐track economy” offered by Rimjhim Aggarwal, a professor of sustainability at Arizona State University. Building on established notions of “duality” (cf. Lewis, 1954), whereby the “traditional” (agricultural) and the “modern” (industrial) appear to “co‐exist,” she applies a framework of “complex adaptive systems” (CAS) to describe the enduringly complex duality of India's economic structure. As described by complexity scientists, CAS act as “a loose network of interconnected and interdependent ideas” (p. 45). Their research application challenges established notions of “linear cause‐effect relationships” embedded in western paradigms of social, economic and (indeed) business research. Taking Andhra Pradesh as a case study, Aggarwal uses elements of CAS to explore and explain how and why “neo‐liberal reforms” can serve to both promote rapid economic growth while simultaneously “widening inequalities within the economy” (Lewis, 1954). Invoking Prahalad's (2004) notion of the “bottom of the pyramid” potential for market and business growth applicable across both developing and emerging economies, Aggarwal urges policy makers “to see development as an open‐ended and unpredictable process which calls for the need of more reflexive rather than deterministic planning” (p. 56). Relevant to business research generally she encourages us to move beyond “top‐down control and one‐size fits all solutions derived from a linear mode of thinking based simple cause and effect relationships” (Prahalad, 2004).

Already we are moving into territory seldom covered by economic texts. The journey continues in part 2, with four chapters exploring “Human development issues.” The incremental development of international perspectives on South Asia is evident here: the book is indeed ably edited; the contributors drawn from premier business and economic research centers at Harvard, Hitotsubashi and locations in between. To illustrate, in their discussion of “The importance of education and literacy skills,” Bagala Biswal and Urvashi Dhawan‐Biswal – both of Queen's University, Canada – offer a comparative exploration of demographic and labor market trends across the “developed and developing worlds.” They do this from the premise that “with the recent growth in market globalization and competition, countries are taking a major interest in developing and maintaining workforces that are highly skilled, educated and healthy” (p. 76). Adopting a human capital perspective relevant toward developing and sustaining “knowledge‐based” economies, the authors remind us that “over two‐thirds of the world's 785 million illiterate adults are found in only eight countries: Bangladesh, China, Egypt, Ethiopia, India, Indonesia, Nigeria and Pakistan” (p. 85). Invoking the UN's (2000) “Millennium Declaration” Biswal and Dhawan‐Biswal identify a need to design and apply “appropriate competency‐based frameworks” (p. 92) in order to measure reliably any gains achieved by the recent and more equitable provision of vocational training along with investments targeting the improved literacy and health among adults/employees across South Asia.

Part 3 comprises four chapters highlighting “Monetary and fiscal issues.” Here again, readers and researchers with perhaps limited knowledge or experience of the region are guided toward understanding why, e.g., South Asian economies have grown on average 6.8 percent per year over the past decade. As Rabin Hattari, Mohammad Shahidul Islam and Ramkishen Rajan remind us in their chapter on “South Asia and the global financial crisis,” the remarkable “spurts” in GDP growth in Bangladesh, Pakistan and Sri Lanka are commonly overlooked (p. 156). Despite enduring weaknesses in demand and deficit policy management by regional governments, private capital inflows have served to bolster and sustain GDP – the iconic measure of growth highlighted by the IMF and other global institutions. The focus in this chapter is on identifying and comparing “pass through” linkages between monetary policies and the retail banking rates that might support business growth, particularly among SMEs and new or micro‐business ventures. Interestingly, the authors’ data analysis supports the conclusion that “while the availability of credit was not as much an issue in India, of some concern has been the cost of credit” (p. 168) – a core weakness in the Indian economy recently highlighted by Das (2012) who claims the stubbornly high rate of inflation diminishes India's ability to rebalance its economy in the manner of China.

Part 4 highlights “Sectoral issues,” developing the focus on current and emerging patterns of public and private sector investment. In his discussion of “Infrastructure issues” Sanjay Singh illustrates how the bulk of such investment up to 2006 went to the energy sector, a pattern now increasingly replicated across the global economy. Less evident in the case of South Asia was investment in telecommunications, transport and water/sewerage – an insight that prompted Singh to envisage an increasingly diminished role for public regulation of both and private monopolies across the region. This discussion – although appearing rather dated now – connects suitably with the discussions presented in parts 5 and 6, where the focus is on “International trade and financial flows” and “Environmental issues,” respectively. In Chapter 15, Garry Pursell reminds us of how patterns of “inward‐looking” and “interventionist” international trade policy management among South Asian economies during the post‐independence era was first radically challenged by the trade liberalization policies initiated by Sri Lankan governments after 1977. The case of Nepal is highlighted, from its accession to the WTO in 2003 to the current and rather nebulous state of, e.g., import/export tariffs and other international trade restrictions. It is unclear how these might evolve in future – a situation Pursell (p. 233) attributes to “Nepal's close economic relationship to India, including especially its exchange rate, which is fixed to the Indian Rupee.”

This latter insight offers another indication of where SAJGBR readers might use this Handbook to identify relevant research topics. The incentive for doing so is made evident by Shandre Thangavelu and Sanja Pattnayak in their chapter (18) exploring the “Impact of South Asia on global institutions: economic and social perspectives” citing directly (p. 277):

The economic leadership importance of South Asia is rising as the centre of global economy is shifting towards Asia from the west. This growing importance provides an opportune cross‐roads for South Asia to meet the challenges of poverty, peace and environmental degradation that is facing the region and the world, and increase its economic and political standing in the global economy.

The authors go on to emphasize how further “economic integration” is vital if South Asian economies are to rival China and, over time, form one of the largest and most influential trading blocks in the world.

This conclusion appears both logical and – as far as complex transnational economic analysis allows – predictable. However, it is here we should adopt a critical stance. Overall, the contributions summarized in this review struggle to detach themselves from embedded paradigms of comparative economic analysis: the bias is evident in the focus on measures of “growth” in terms of, e.g., national GDP. This book gives too little attention to, e.g., notions of quality of life or social expectation that drive the economies described here – processes that give putative measures of “growth” both context and meaning at the human level. Predictably for academic texts claiming ground in the discipline of economics there is too little space given to the voices of groups defined by how people interact rather than of regions defined geographically by scholars and policy makers claiming global reach and insight. From this position the book overall maintains a predictable focus on India and (as highlighted above) the influence of “China” – itself a generalization in economic terms – in discussion of South Asian economies. As informed readers of SAJGBR recognize, comparing economic trends across South Asia to those initiated in so‐called “western” economies toward describing predictions of trends is a precarious undertaking in itself. Doing so without giving explicit and systematic attention to social, institutional and economic developments in Southern Hemisphere economies in Africa and South America represents a missed opportunity.

Such critique might be adjudged to ask too much of a book of this already impressive scope. For in his Preface, the editor Raghbendra Jha states how his goal with this book has been to “present focused analyses of the most pressing issues and to whet readers’ appetites for exploring the important literature in this area” (p. xv). He certainly succeeds in this endeavor. Overall, the presentation of the texts, end‐of‐chapter references and tables (of which there are around 120) is clear and well located: congratulations to Routledge's production team. Only two major obstacles appear to hinder practical use of this Handbook. One is the Index, which is disappointingly sparse in comparison to what is offered in the chapters: to illustrate, neither “sustainability” nor “demographic” are listed, while “water supplies” is linked to a mere two pages of one chapter. The second obstacle is the retail price: the book appears destined to reach only generously funded libraries. This book deserves a wider audience.

About the author

Keith Jackson (PhD, MBA, MA) is a tutor in international, cross‐cultural and public policy management at the School of Oriental and African Studies, University of London. He is currently working as a learning and development consultant at Kobe University in Japan. Keith Jackson can be contacted at: keith.jackson@soas.ac.uk