Learning About and Enjoying India’s Natural Resources

I enjoyed my recent visit to New Delhi and Jarfour in India so much that I was excited to accept an invitation to the third Kautilya Economic Conclave in New Delhi in October 2024. I attended all three days of the Conclave and then visited Kerala in Southern India with my guide and friend Gajendra Nathgubey (+91 99100 35058).

The Economic Lessons (you can skip to the Tour section) 

The Conclave assembled about 80 economists and policymakers interested in India’s problems and followed the Chatham House Rule. We also had excellent presentations from President Modi, the Honorable Minister of Finance Nirmala Sitharaman, and the Honorable Minister of External Affairs S. Jaishankar. The discussion was profound and frank, and I encountered many creative and practical ideas. One take-home message was that India is growing faster than any other large country, and assuming the trend continues, it may have the largest GDP in the world by 2047, when it’s 100 years old. India has a lot going for it. It may benefit from a demographic dividend, a high share of young people in the population, a vibrant democracy, growing industries and increased use of solar energy, some excellent universities and research institutes, and it has produced excellent industry leaders. One of them, Ratan Tata, unfortunately, passed away last week, and the CEOs of both Microsoft and Facebook are Indian. However, the country faces many challenges as it aims to grow. GDP per capita is still low, and there are considerable regional differences. The bureaucracy is still suffocating, there is corruption, and the infrastructure, which has improved immensely, is still lacking. The country must upgrade its educational systems, develop a more substantial industrial base, and strengthen entrepreneurship and its safety net. 

This Conclave with policymakers provided me with some perspective. In economics, finance is one field. However, for policymakers, financial considerations are crucial. You may want to do a lot about climate change, but it will not be done if you cannot pay for it or incentivize people to do it. You need to raise revenues to implement policies- tax policy needs to raise money, be fair as possible, provide incentives to work, and create and be politically feasible. The intellectual creativity, knowledge, and strength required are immense. There is also a policy art in balancing industrial policies with free trade. It is impossible to grow and flourish without trade, and the world has benefitted overall from globalization. But, as Nobel laureate Paul Samuelson told us many years ago, there are trade losers who need help. Furthermore, countries must develop the capacity to compete and expand their resource base. This goes beyond education and developing skills. You need to build infrastructure and unique capabilities. Industrial policies aim to change countries’ production capabilities and trade opportunities. Almost every government engages in industrial policies, and they frequently fail. However, industrial policies can be successful. America has engaged in industrial policies: the Homestead Act, the Land Grant system, the Internet, the highway system, and water projects. The question is not whether governments should interfere in the economy but how to do it right. 

Efficient provision of public goods and infrastructure and initiatives to improve human capital and reduce barriers to trade and communication can do wonders.

More than 40% of the Indian population is employed in agriculture, which produces only 18% of India’s GDP. Increasing agriculture income and reducing rural poverty is a big challenge. My talk was about the potential of developing a circular bioeconomy in India that will use natural resources and modern technologies to produce various products and services. This vision suggests that agriculture will make much more than food.  It will produce energy, chemicals, pharmaceuticals and sequester carbon. This approach will allow a transition from a non-renewable economy to a renewable economy. Organisms like flies and bacteria can convert waste into valuable products like protein. However, the transition to a bioeconomy requires investment in research, training, and, most importantly, regulatory reform that allows the use of biotechnology. India has benefited from Bt cotton and has become the biggest cotton producer in the world, but it has still banned the use of golden rice, which costs thousands of lives. Agricultural biotechnology can potentially increase rice productivity by at least 20%, which allows, in principle, the reallocation of some rice land to produce sugarcane for biofuel with relatively low GHG emissions. Biotechnology can also accelerate and improve adaptation to climate change, and relying on advances in the life sciences and information technologies to use India’s natural resources can uplift the rural economy. 

Visiting Kerala

On my last visit, I learned that Southern India is more developed than the North and has unique natural beauty. So, I decided to travel for a week in Kerala, which has a tropical climate and shores on the Arabian Sea. We landed in Kochi, part of the Cochin region. I met some Jews from Cochin in Israel and asked about the Jewish community. There are only 15 Jews left, but the Jewish section of Kochi has become a tourist attraction, and it has a lovely synagogue, which I visited. Kerala was a source of precious stones, mainly from the ocean. It had a much more harmonious relationship between Hindu, Muslim, Christian, or Jewish communities than in Northern India. In some cities, you can see temples of different religions in the same area. One reason for the relative religious tolerance is that Kerala has the highest literacy rate in India and the highest GDP per capita. The tolerance also led to multiple art forms that represented the states’ diverse beliefs. I enjoyed walking to museums and antique shops, discovering beautiful and surprising art forms. 

  

Tourism is a big industry, and I enjoyed the waterfalls and animals (buffalos, monkeys, deer, and holy cows roaming everywhere). Kerala has an abundance of beautiful flowers and plants. They are the foundation of spices, herbs, and traditional medicine sectors. We spent hours traveling up and down mountains with magnificent tea gardens planted on terraces. Looking at the tea gardens, rivers, and wildlife from the top of the hills was spectacular. I also spent a memorable day in a houseboat, eating terrific fresh fish, Indian delicacies, and tropical fruits. The boat was moving along the river, and sitting on a rocking chair, enjoying the gentle wind and the natural beauty, is my definition of “chilling.”

I’m fortunate to have an occupation that allows me to travel for work and enjoy nature. As long as I can do this, why retire?