Economic Reform in Three Giants
IN THIS SUMMARY
China, India, and the USSR are the three most populous underdeveloped countries on earth. Presently, these Giants share the common predicament of how to compete in a demanding, rapidly changing, and increasingly intrusive global economy. Earlier in this century, when the three designed their economic development strategies, the size of their domestic markets prompted them to opt for socialism and/or self-reliant development. This provincialism dampened ethnic rivalries among diverse populations, generated high savings and investment rates, resulted in impressive industrialization drives, and leveled wealth inequities in the USSR and China.Economic successes have added to the reform pressures in each country. Additionally, the dynamic global changes of the 1970s and 1980s brought many irresistible external and internal pressures for reform: Technological changes and developments in transportation and communications technology have made the international environment overwhelmingly intrusive.In the past, the three Giants were considered to be threats to the West for ideological and geopolitical reasons. Now, fundamental shifts in the strategic outlooks of the three countries make it possible for the West to begin viewing them more as opportunities. The effectiveness of economic reform in the three Giants hinges on the expanding role of markets, as well as on forging new institutions and macroeconomic instruments that can regulate decentralized decision making.