Very true. Ideally countries should not behave as corporates do. Their motive should not only be profits and a return on capital. They must also uplift the masses, and plan for a future whiich is good for all.
But lately, thanks to other charts displaying rankings of countries worldwide, like the MSCI, countries try to do both — show a return on capital and also plan for the greater good for its citizens. Some countries like Vietnam manage to do both exceedingly well. Others falter.
That is where good governance, and vision, come in. Singapore has done well because it could ensure that both the above qualities were in full play. Other countries need to emulate that.
Well written and interesting! In my view, the elephant in the room is centralization. But China has recently been making moves towards deep political and economic centralization, if that actually happens, then it may be good for India by default, but it would be best for both if it went the other way around, and China stays where it has been and India instead moved towards where China has been.
Many thanks. It does not really matter much whether a country is centralised or not. What matters is governance. With good governance, even centralisation bring out desired outcomes. With bad governance the opposite happens. China, it must be remembered, has done amazingly well. It has pulled almost all its people out of poverty — last figure I recall was over 98%. It has provided 100% literacy. Its education levels are amazing, and the number of Chinese universities in the world’s top 100 has been growing. If you have good education at reasonable costs, the chances are that the graduating students will become productive. If the country’s governance is poor, such students will seek employment in other lands. That is why governance (which includes vision) matters above everything else.
And China has been thoroughly decentralized from between the early 1980s until at least a few years ago (but possibly still and the Chinese national center’s centralization drive may yet still fail), as we can see from the proclamations of the results of the recent Third Plenum, China has had local trade protectionism and partial local capital market fragmentations, this USA also had these things for every single day of its existence until the the 1970s, the arguments being made to justify political and economic centralization in China today are strikingly similar to the arguments that were made to justify the same program in the USA back in the 1970s, and even according to their own oversimplified metrics (real gdp growth rates, real productivity growth rates, etc., all declined and are far lower than they were) the people who made those arguments have been proven wrong…
You are right. But that is what one would expect. Nations have to look at social upliftment of the people as well, and have to ensure that income disparities are evened out to the best level possible. But lately, with country rankings on the MSCI and other stock market indices, there is a rush show better returns even for the short term. Some countries, like Vietnam manage to combine both long term objectives and yet deliver excellent short term returns. Other cannot do this. That is where sagacious management has a big role to play.
Nations don’t compete with each other like firms. They gain when the other prospers. This used to be a basic insight but now seems forgotten.
Very true. Ideally countries should not behave as corporates do. Their motive should not only be profits and a return on capital. They must also uplift the masses, and plan for a future whiich is good for all.
But lately, thanks to other charts displaying rankings of countries worldwide, like the MSCI, countries try to do both — show a return on capital and also plan for the greater good for its citizens. Some countries like Vietnam manage to do both exceedingly well. Others falter.
That is where good governance, and vision, come in. Singapore has done well because it could ensure that both the above qualities were in full play. Other countries need to emulate that.
Very well researched article 👌
Well written and interesting! In my view, the elephant in the room is centralization. But China has recently been making moves towards deep political and economic centralization, if that actually happens, then it may be good for India by default, but it would be best for both if it went the other way around, and China stays where it has been and India instead moved towards where China has been.
Many thanks. It does not really matter much whether a country is centralised or not. What matters is governance. With good governance, even centralisation bring out desired outcomes. With bad governance the opposite happens. China, it must be remembered, has done amazingly well. It has pulled almost all its people out of poverty — last figure I recall was over 98%. It has provided 100% literacy. Its education levels are amazing, and the number of Chinese universities in the world’s top 100 has been growing. If you have good education at reasonable costs, the chances are that the graduating students will become productive. If the country’s governance is poor, such students will seek employment in other lands. That is why governance (which includes vision) matters above everything else.
And China has been thoroughly decentralized from between the early 1980s until at least a few years ago (but possibly still and the Chinese national center’s centralization drive may yet still fail), as we can see from the proclamations of the results of the recent Third Plenum, China has had local trade protectionism and partial local capital market fragmentations, this USA also had these things for every single day of its existence until the the 1970s, the arguments being made to justify political and economic centralization in China today are strikingly similar to the arguments that were made to justify the same program in the USA back in the 1970s, and even according to their own oversimplified metrics (real gdp growth rates, real productivity growth rates, etc., all declined and are far lower than they were) the people who made those arguments have been proven wrong…
You are right. But that is what one would expect. Nations have to look at social upliftment of the people as well, and have to ensure that income disparities are evened out to the best level possible. But lately, with country rankings on the MSCI and other stock market indices, there is a rush show better returns even for the short term. Some countries, like Vietnam manage to combine both long term objectives and yet deliver excellent short term returns. Other cannot do this. That is where sagacious management has a big role to play.
But thanks for your insights. My pleasure