Published: 06-Jan-2021
When do you consider an economy advancing/advanced? Having international or luxury brands open shop is not a real marker of an economy advancing.
It is just an indicator that there exists a set of high income people in that economy - something that could be an effect of an economy advancing but not necessarily.
The real indicator of an economy advancing is infrastructure building.
- Hard infrastructure like roads, rail, robust logistics, power capacity, schools, hospitals
- Soft infrastructure like better education (curriculum, teachers, accessibility), accessible healthcare (doctors, R&D), clear taxation, transparent regulation, financial rails.
Infrastructure acts a multiplier. For eg, good roads/rail can lead to faster & more movement of people and goods. More commerce happens and prosperity (aka jobs) follows.
A simpler way to think about is building things that take care of the lower sections of Maslow's hierarchy of needs so they are not a headache in our lives anymore is a good sign of advancement. If I do not need to worry about how I will get from City A to City B or whether I will get a vaccine - I am in an advanced state. If I get excellent coffee or clothes but I need to worry about getting a hospital bed, there is still a lot of work to be done.
If infrastructure is well built, the number of well-earning households increase and luxury market obviously follows. But the reverse isn't always true - presence of a luxury market, malls (and other signs of consumerism) doesn't necessarily mean the economy is advanced/advancing.
You may guessed by now - this was written as a rant to Balaji Srinivasan saying India is developed now because we have Starbucks.
India is not advancing because we have Starbucks now. We are advancing because we are building good roads (still a lot of work to be done though). And as prosperity follows because of that, yes, we will have Starbucks.
Fin.
