Introduction

Comparing your own development with that of neighbouring countries is a way of understanding your strengths and weaknesses more clearly. Over the past two decades globalisation has reshaped economies everywhere, and every nation, including India, feels its short- and long-term effects. To protect and strengthen their domestic economies, countries have joined regional and global groupings such as SAARC, the European Union, ASEAN, G-8, G-20 and BRICS.

Why look at the neighbours

• Studying how nearby nations pursue development helps a country judge where it stands relative to them.
• This matters most to developing countries, because they compete not only against the developed world but also against one another for the limited economic space open to them.
• Neighbours also share a common environment, so major economic activity in the region affects human development across all of it.

The three economies compared in this chapter

The chapter sets India beside its two largest neighbours, Pakistan and China. Though all three are rich in natural resources, their political systems are very different: India is the world's largest democracy with a secular, liberal Constitution stretching back more than half a century; Pakistan has had a largely militarist power structure; and China has been a command economy that only recently began moving towards a more democratic system and a more liberal, restructured economy.

With that comparison in view, the chapter works through the comparative trends in economic and human-development indicators across the three countries, and asks what each has actually done — which strategies each has pursued — to reach the level of development it has reached today.