Good Reads: How India failed to live up to its hype

The Great Indian Hype Machine

Hype is a powerful thing. It prompts us to pick up “great” novels, download “earthshaking” albums, or buy shares in a company destined to “change the world.”

Hype is also used to sell countries like India as “emerging regional players” or “economic tigers,” and according to this week’s Economist magazine, India has failed to live up to its billing.

India's growth of only 6 percent, down from it's goal of 8 percent growth, shows India has failed “to live up to rising expectations,” says Jim O’Neill, the Goldman Sachs analyst who coined the term “BRIC” for the quartet of emerging nations Brazil, Russia, India, and China. And it’s a growth level that could prevent India from lifting more of its citizens out of poverty.

This week’s Economist magazine says that hype may have been the problem all along. India seems to have believed its own hype – that it was “destined for fast growth” – when, in fact, there was still a great deal of hard work to be done to loosen up governmental controls on the economy so that it could actually grow. Now that the economy has slowed down to 6 percent, foreign investors and Indian citizens alike are starting to lose faith.

India, unlike the other BRIC countries, is still desperately poor. One businessman and guru interviewed by your correspondent recently declared that "the next fifteen years will be India's worst since independence" and that there was a one-in-10 chance of a revolution. If India's economic miracle turns out to have been a mirage, it will not be so easy to dismiss that kind of talk as cranky.

Germany’s nuclear crunch

When Japan’s Fukushima nuclear reactor shut down, overheated, and then leaked radiation following the March 2011 earthquake and tsunami, a number of countries decided that maybe nuclear power was not worth the risk. Germany was one of those countries, and soon after Fukushima, German Chancellor Angela Merkel became an unlikely darling of environmentalists as she announced the phase-out of nuclear power plants by the end of 2012.

But here’s the problem, Der Spiegel’s Alexander Neubacher and Catalina Schroeder write: Nuclear power is cheap. Switching to alternative industries, such as solar and wind, is expensive, and German consumers are having to pay higher costs for their energy. Electricity rates have gone up 10 percent and it is Germany’s working class and poor who are going into debt, they write. Worse: Higher rates are on the way.

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