Indian Prime Minister Narendra Modi’s ascension to power in 2014 could be the beginning of his country’s rise towards becoming an economic superpower equal to China, according to Woo Wing Thye, president of the Jeffrey Cheah Institute on Southeast Asia.
Woo said he expected this to happen by 2050, when China would have overtaken the United States in economic strength.
“By 2050, there will be a new giant,” he said. “But let’s not forget India. I think the election of Mr Modi is very good confirmation that India has now galvanised itself to join the world in economic prosperity.”
He said India would, by 2050, have a population that would be about 20% larger than China’s.
“So we are, from this point onwards, moving to a duopoly or oligopoly, which means there is no more monopoly of political power. This is the new international economy.”
The financial and economic expert was speaking at the forum at Sunway University, entitled “Globalisation Enters a New Phase: How Is Southeast Asia to Adapt?” at Sunway University, where the Jeffrey Cheah Instiute is based.
Woo made reference to Charles Kindleberger’s hegemonic stability hypothesis, which states that for there to be stability, “there has to be a leader who can lead, who can punish those who do not participate in the solution of problems.”
Woo said this was evident before 1914, when the United Kingdom was the global power setting the tone for other governments and keeping them in line.
However, in the years immediately following the end of World War II, the United States rose to become another global power, resulting in a leaderless world where every country acted for its own narrow interests.
“It is only after a true hegemon appeared once more, which was the US in the 1950s, that we had stability of the economic system again. So if you have more than one giant, the system becomes unstable,” he said.
But in the new form of globalisation that has seen China’s purchasing power grow to be as large as that of the US, there are now two giants in the economic market, added Woo.
“The bad news is, we will never go back to a time of one hegemon,” he said. “So we have to find a way to make collective leadership work. In other words, we have to go beyond having a big brother deciding how to keep us in line. We have to now keep ourselves in line.”