IED Chapter 8: Comparative Development Experiences of India and its Neighbours PDF

# Chapter 8: Comparative Development Experiences of India and Its Neighbours ## Learning Objectives - **8.1** Introduction - **8.2** Comparative Study - India, China, and Pakistan - **8.3** Appraisal of Development Strategies ## 8.1 Introduction In the preceding chapters, we have studied in det...

# Chapter 8: Comparative Development Experiences of India and Its Neighbours ## Learning Objectives - **8.1** Introduction - **8.2** Comparative Study - India, China, and Pakistan - **8.3** Appraisal of Development Strategies ## 8.1 Introduction In the preceding chapters, we have studied in detail all the aspects of the Indian economy, its problems, policies, and development. We know that the economies of the world have been classified into developed and developing economies. In the post-Cold War world, nations have been primarily trying to adopt various means that will strengthen their own domestic economies. To this effect, they are also forming various regional and global economic groupings such as SAARC, European Union, ASEAN, G-8, G-7, G-20, BRICS, etc. Out of these, India is a member country of SAARC, G-20, and BRICS, while China is a member country of G-20 and BRICS, and Pakistan is a member country of SAARC only. **For Your Reference:** The Cold War (1947-1991) was a sustained state of political and military tension between the powers of the Western world (led by USA and its NATO allies) and the communist world (led by the Soviet Union, its satellite states and allies). Moreover, various nations are also trying to understand the developmental processes pursued by their neighbouring countries as it allows them to realize their own strengths and weaknesses in comparison to their neighbours. In the process of globalization, the developing countries are facing competition not only from developed nations but also from other developing nations. So, an understanding of the other economies in our neighbourhood is required. In this chapter, we will compare the trends in various economic and human development indicators of India (the largest democracy of the world with a Secular and liberal Constitution for over half a century) with its two principal neighbours: - **China:** which has recently started moving towards a more liberal restructuring of its command economy. - **Pakistan:** having an authoritarian militarist political power structure. ## 8.2 Indian Economic Development All the three countries (India, China, and Pakistan) have more than six decades of development experience behind them. We will also appraise the strategies adopted by these countries to reach their present state of development. ### Development Path of India, Pakistan and China India, Pakistan, and China have many similarities in their developmental strategies: - All three nations started their developmental path at the same time. - India and Pakistan got independence in 1947, and the People's Republic of China was established in 1949. - All three countries had started planning their development strategies in similar ways. India announced its first Five-Year Plan in 1951, Pakistan announced in 1956, and China in 1953. A Five-Year Plan is the medium-term development plan that focuses on multiple challenges on economic, security, and development fronts. - Since 2013, Pakistan is working on the basis of the 11th Five-Year Development Plan (2013–18), while China is working on the 13th Five-Year Plan (2016–20). Until March 2017, India has been following the Five-Year Plan-based development model. - Currently, Pakistan is following its 12th Five-Year Plan from 2018 to 2023, while China signaled a major strategic shift in the approach to economic and social development in its 14th Five-Year Plan (2021–25). In India, Five-Year Plans have been laid to rest by the government. - India and Pakistan adopted similar strategies, such as creating a large public sector and raising public expenditure on social development. - Till the 1980s, all three countries had similar growth rates and per capita incomes. All three countries have performed differently. India and Pakistan have made slow and irregular progress as compared to China, which has made a miraculous progress. But, before we make a comparative study of the three countries, let us first analyze the structure of economies of China and Pakistan. ### China #### Historical Background China has one of the world's oldest people and continuous civilizations, consisting of states and cultures dating back more than six millennia. The People's Republic of China (PRC), commonly known as China, was established in 1949. #### Geography China is situated in eastern Asia, bounded by the Pacific in the east. It is the third largest country in the world, next to Canada and Russia, with an area of 9.6 million square kilometers. #### Population and Language China is the most populous country in the world with 1,393 million people (as per World Development Indicators 2019) and a growth rate of 0.5% per annum. Most languages in China belong to the Sino-Tibetan language family, spoken by 29 ethnicities. There are also several major dialects within the Chinese language itself. #### Economy Being one of the oldest civilizations in the world, China has been the world's largest economy. After the establishment of the People's Republic of China under one-party rule, all the critical sectors of the economy, enterprises, and lands owned and operated by individuals, were brought under government control. - **Great Leap Forward (GLF) Campaign:** In 1958, a program named ‘The Great Leap Forward (GLF)' campaign was initiated by Mao Zedong to modernize China’s economy. - The aim of this campaign was to transform agrarian economy into a modern economy through the process of rapid industrialization. - Under this program, people were encouraged to set up industries in their backyards. - In rural areas, ‘Communes’ were started. A Commune is a system of collective farming under which people were made to cultivate farm land in China, i.e., people collectively cultivated lands. - In 1958, there were 26,000 communes, covering almost all the farm population. - This campaign met with many problems: - A severe drought caused havoc in China, killing about 30 million people. - When Russia had conflicts with China, it withdrew its professionals, who had earlier been sent to China to help in the industrialization process. - **Great Proletarian Cultural Revolution:** In 1965, Mao Zedong introduced the Great Proletarian Cultural Revolution (1966-76), under which students and professionals were sent to work and learn from the countryside. - **Reforms Introduced in China:** The present-day fast industrial growth in China can be traced back to the reforms introduced in 1978. China introduced reforms in phases: - In the initial phase, reforms were initiated in agriculture, foreign trade and investment sectors: - In agriculture, commune lands were divided into small plots which were allocated (only for use and not as ownership) to the individual households. They were allowed to keep all income from the land after paying stipulated taxes. - In the later phase, reforms were initiated in the industrial sector: - Private sector firms and township and village enterprises (enterprises which were owned and operated by local collectives) were allowed to produce goods. - At this stage, enterprises owned by government (known as State Owned Enterprises or SOEs), were made to face competition. - The Chinese government began to pursue an ‘Open-Door Policy’, in which it planned to achieve economic growth through active introduction of foreign capital and technology, while maintaining its commitment to socialism. - **Dual Pricing in the Reforms Process:** The reform process also involved dual pricing. This means fixing the prices in two ways: - Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government. - For other transactions, the inputs and outputs were purchased and sold at market prices. - **Special Economic Zones (SEZ):** In order to attract foreign investors, special economic zones were set up: - A Special Economic Zone is an area in a country in which the business and trade laws are different from other regions within the same country. - SEZs are located within a country’s national borders and they aim to increase foreign investments. - In 1980, the first four SEZs were established in proximity to Hong Kong (Shenzhen), Macau (Zhuhai), and Taiwan (Shantou and Xiamen). ### Pakistan #### Historical Background Pakistan, officially the Islamic Republic of Pakistan, gained independence on 14th August, 1947. In 1971, a civil war in East Pakistan resulted in the independence of Bangladesh. Pakistan’s history has been characterized by periods of economic growth, military rule and political instability. #### Geography Pakistan is located in South Asia and borders Central Asia and the Middle East. Its borders are with China in the North and towards West and Northwest are Iran and Afghanistan and towards East and South East, its borders are with India. The country has an area of 7,96,095 square kilometers. The total cultivated area is 2,21,300 square kilometers, whereas the area under forest is 42,300 square kilometers. #### Population and Language Pakistan is the sixth most populous country in the world with 212 million people (as per World Development Indicators 2019) with a growth rate of 2.1% per annum. One third of total population lives below the official poverty line. It has the second largest Muslim population in the world after Indonesia. The national language is Urdu and English is the official language. #### Economy - **Mixed Economic System:** Pakistan follows the mixed economy model with co-existence of public and private sectors. - **Introduction of Various Polices:** In the late 1950s and 1960s, Pakistan introduced a variety of regulated policy frameworks for growth of domestic industries. The policy combined tariff protection for manufacturing of consumer goods, together with direct import controls on competing imports, i.e. Pakistan also introduced Import Substitution Policy (like India) in order to protect the domestic industries from foreign competition. - **Green Revolution:** In case of agriculture, the introduction of the Green Revolution and increase in public investment in infrastructure led to a rise in the production of foodgrains. This changed the agrarian structure dramatically. - **Importance to Role of Public Sector in early 1970s:** In the early 1970s, nationalisation of capital goods industries took place. - **Importance to Role of Private Sector in late 1970s:** In the late 1970s, there was a shift in the government policy, when it adopted the policy of denationalisation. Government encouraged the private sector and also offered various incentives to them. All this created a conducive climate for new investments. - **Financial Support during late 1970s:** During this period, Pakistan also received financial support from: (i) Western nations; and (ii) Remittances from emigrants to the Middle-east. This helped the country in stimulating economic growth. - **Reforms:** In 1988, reforms were initiated in the country. ## 8.2 Comparative Study – India, China and Pakistan Having studied a brief outline of the developmental strategies of China and Pakistan, let us now make a comparative study of the three countries, in terms of population, growth, sectoral development, and other developmental indicators. ### Demographic Indicators Let us compare some demographic indicators of India, China, and Pakistan with the help of the following table: | Country | Estimated Population (in million) | Annual Growth of Population | Density (per sq. km) | Sex Ratio | Fertility Rate | Urbanisation | | :--------- | :------------------------------- | :--------------------------- | :-------------------- | :-------- | :-------------- | :----------- | | India | 1,352 | 1.03 | 455 | 924 | 2.2 | 34 | | China | 1,393 | 0.46 | 148 | 949 | 1.7 | 59 | | Pakistan | 212 | 2.05 | 275 | 943 | 3.6 | 37 | **Source:** World Development Indicators 2019, www.worldbank.org - **Population:** China is the most populous country in the world with 1,393 million people (as per World Development Indicators 2019) and India is the second-most populated country with 1,352 million people. As compared to China or India, Pakistan's población is very less (212 million people). - **Growth rate of population**: Though China is the most populated country, its annual growth rate of population is the lowest (0.46%) as compared to India (1.03%) and Pakistan (2.05%). The reason for the low growth of the population is the **One-Child Policy** introduced in China in the late 1970s. The One-Child Policy had the following consequences: - It led to a reduction in the growth rate of the population. - It increased the proportion of elderly people in comparison to younger ones. - It led to a decline in sex ratio. Due to more preference of a male child, having a girl was considered highly undesirable and it increased the abortions of female fetuses. - This policy was launched in the year 1979 (after a decade-long two-child policy) to control the size and growth rate of population of China. It was modified at the beginning of the mid-1980s to allow rural parents a second child if the first was a daughter. The One-Child Policy lasted for around 35 years, when in late 2015, government announced a reversal to two-child limit. To avoid the demographic crisis, China allowed all married couples to have three children in 2021 and ended the two-child policy as it has failed to raise the country's declining birth rate. - **Density of population**: China is the third largest country in the world and the growth rate of population is lowest in China as compared to India and Pakistan. As a result, the density of population of China is the lowest (148 people per sq. km) as compared to India (455 people per sq. km) and Pakistan (275 people per sq. km). - **Sex Ratio:** Due to the preference of sons, the sex ratio is low and biased against females in all three countries. The sex ratio is the lowest in India with 924 females per 1,000 males. In China and Pakistan, the corresponding figures are 949 and 943. - **Fertility Rate: ** The fertility rate is calculated as the number of children borne by a woman in the reproductive age (15-45 years) on an average, over 3 births per woman in 1980 to approximately 1.7 births. The fertility rate has fallen from over 3 births per woman in 1980 to approximately 1.7 births. The fertility rate is the highest in Pakistan at 3.6 births per woman and India comes second with 2.2 births per woman. - **Urbanisation:** The urbanisation rate is the highest in China (59%). In India and Pakistan, the corresponding figures are 34% and 37%. ### Growth Indicators Let us have a comparative study of the three countries in terms of growth of GDP and sector growth. #### Growth Rates of Gross Domestic Product (GDP) The GDP growth rate is considered as the single most important indicator of an economy during the period. China, with the second-largest GDP in the world, as measured by purchasing power parity (PPP), is estimated to be $22.5 trillion. India's GDP (PPP) is $9.03 trillion, which is about 41% of China's GDP. Pakistan’s GDP (PPP) is $0.94 trillion, which is about 11% of India’s GDP. When many developed countries were finding it difficult to maintain a growth rate of even 5%, China was able to maintain near double-digit growth for more than two decades. | Country | 1980-90 | 2015-17 | | :--------- | :------- | :------- | | India | 5.7 | 7.3 | | China | 10.3 | 6.8 | | Pakistan | 6.3 | 5.3 | **Source:** Key Indicators for Asia & Pacific 2016, Asian Development Bank, Philippines; World Development Indicators 2018 - **During 1980-90:** - China was having a double-digit growth rate of 10.3% - Pakistan's growth rate was 6.3% - India was at the bottom with just 5.7% growth rate. - **During 2015-17:** - There was a drastic fall in China’s growth rate from 10.3% to 6.8%. - Pakistan also met with a decline in the annual growth of GDP from 6.3% to 5.3%. As per some scholars, the probable reasons for slower growth in Pakistan were political instability, overdependence on remittance and foreign aid along with volatile performance of the agricultural sector. - India recorded an increase from 5.7% to 7.3% owing to efficient economic planning, and better implementation as compared to Pakistan. **Explore More:** **PPP (Purchasing Power Parity)** PPP shows the equality of purchasing power among countries, i.e. the quantity of goods and services that can be bought with a unit of money: - At the international level, the unit of money of India, Pakistan, and China are Indian Rupee, Pakistani Rupee, and Yuan, respectively. - The value of each domestic currency is différent in different countries. For example, one Indian Rupee cannot buy the same quantity of goods and services in Pakistan or China as it can buy in India. Similar is the case with Pakistani Rupee and China's Yuan. - The US Dollar ($) is the universally accepted currency. Therefore, the GDPs of different countries are expressed in US Dollars and called ‘PPP US $’. #### Sectoral Contribution In all three economies, the industry and service sectors have a less proportion of the workforce, but they contribute more in terms of output. Let us have a brief review f the proportion of the workforce engaged in each sector and its contribution to the Gross Value Added (GVA). | Sector | Contribution to GVA | Distribution of Workforce | | :--------- | :----------------- | :------------------------- | | Agriculture | 16 | 43 | | Industry | 30 | 28 | | Services | 54 | 46 | | **Total** | **100** | **100** | **Source:** Human Development Report 2019, Key Indicators of Asia and Pacific 2019. ### Agriculture (Primary Sector) - **In China:** - Due to topographic and climatic conditions, the area suitable for cultivation is just 10% of its total land area. - The total cultivable area in China accounts for 40% of the cultivable area in India. - Till 1980, more than 80% of its population was dependent on farming as their sole source of livelihood. - Since then, the government encouraged people to leave their fields and pursue other activities, such as handicrafts, commerce, and transport. - As a result, the proportion of the workforce engaged in agriculture reduced to 26% in 2018-19, with a contribution to GVA at 7%. - **In India:** The contribution of agriculture to GVA was 16%. The proportion of the workforce engaged in agriculture was 43%. - **In Pakistan:** The contribution of agriculture to GVA was 24%, but the proportion of the workforce engaged in agriculture was 41% as compared to 43% of India. ### Industry (Secondary Sector) - **Contribution to GVA:** - In China, the secondary sector contributed 41% to China’s GVA, whereas, in India and Pakistan, the share of the secondary sector was 30% and 19%, respectively. - **Proportion of Workforce:** - In the normal course of development, China has been shifting employment and output from agriculture to manufacturing, and then to services. In India and Pakistan, the shift is taking place directly to the service sector. - In India and Pakistan, the proportion of the workforce engaged in the manufacturing sector in 2018-19 was low at 25% and 24%, respectively, whereas, 28% of the population was engaged in China. ### Service (Tertiary Sector) - **Contribution to GVA:** - In all three countries, the service sector contributes the highest share of GVA. In both India and Pakistan, the service sector is emerging as a major player of development. - The service sector contributes the highest to their GVA, with a contribution of 54% in the case of India and 57% for Pakistan. - The contribution of the service sector to the GVA in China was 52%. - **Proportion of Workforce:** - In the 1980s, Pakistan was faster in shifting its workforce to the service sector than India and China. - The proportion of the workforce engaged in the service sector in 1980 for India, China, and Pakistan was 17%, 12%, and 27%, respectively. It reached the level of 32%, 46%, and 35%, respectively, in 2018-19. ### Conclusions - In the last five decades, the contribution of agriculture sector to GVA in all three countries has declined. - In the industrial sector, China has maintained a double-digit growth rate in the 1980s, but began showing a decline in recent years. For India and Pakistan, the growth rate has declined, but the service sector has grown rapidly. - In the case of the service sector, China was able to maintain its rate of growth during 1980-1990, while there was a positive growth of India's service sector output. - China’s growth is contributed by the manufacturing and service sectors and India’s growth by the service sector. During this period, Pakistan has shown a deceleration in all three sectors. The following table shows growth of output in different sectors during 1980–2018. | Country | 1980-90 | 2014-18 | | :--------- | :-------- | :-------- | | India | 3.1 | 3.1 | | China | 5.9 | 5.3 | | Pakistan | 4 | 4.8 | **Source: NCERT** ## Human Development Indicators Let us now discuss the performance of India, China, and Pakistan in some of the selected indicators of human development. | Items | India | China | Pakistan | | :---------------------------------------------- | :---- | :----- | :------- | | Human Development Index (Value) | 0.645 | 0.761 | 0.557 | | Rank (Based on HDI) | 130 | 87 | 154 | | Life Expectancy at Birth (Years) | 69.7 | 76.9 | 67.3 | | Mean years of Schooling (% aged 15 and above) | 6.5 | 8.1 | 5.2 | | Gross National Income Per Capita (PPP US$) | 6,681 | 16,057 | 5,005 | | Percentage of People living Below Poverty Line (National) | 21.9* | 1.7** | 24.3* | | Infant Mortality Rate (per 1,000 live births) | 29.9 | 7.4 | 57.2 | | Maternal Mortality Rate (per 1 lakh births) | 133 | 29 | 140 | | Population using at least Basic Sanitation (%) | 60 | 75 | 60 | | Population using at least Basic Drinking Water Source (%) | 93 | 96 | 91 | | Percentage of Undernourished Children | 37.9 | 8.1 | 37.6 | **Note:** * for the year 2011; ** for the year 2015. **Sources:** Human Development Report 2019 and 2020, World Development Indicators (www.worldbank.org); Key indicators for Asia and the Pacific 2019, Asian Development Bank (ADB). - **Human Development Index (HDI):** The HDI is an important indicator of socio-economic development. Higher values of HDI show the higher level of growth and development of *a country. In 2019, HDI for India, China, and Pakistan was estimated to be 0.645, 0.761, and 0.557, respectively. HDI values are used to create rankings of different countries. China is placed at 87th position in the world, whereas, India stands at 130th position and Pakistan at 154th position. A higher rank indicates lower socio-economic development. - **Life Expectancy at Birth:** Life expectancy refers to the "average number of years for which people are expected to live". A country that provides better health and civic facilities, secures a higher life expectancy for its citizens. A higher life expectancy indicates a longer and a more active average life span. China has the highest life expectancy of 76.9 years. India and Pakistan have the life expectancy of 69.7 and 67.3 years, respectively. - **Mean years of schooling**: This rate is highest in the case of China with 8.1%, while the corresponding figures for India and Pakistan are 6.5% and 5.2%, respectively. - **Gross National Income Per Capita (PPP US$):** The higher ranking of China in HDI is mainly due to higher Gross National Income per capita. A higher level of income of people in the country is the direct result of greater economic activities in the country. In 2019, China's Gross National Income per capita was estimated to be US $ 16,057, while it was just US $ 6,681 for India and US $ 5,005 for Pakistan. - **People below Poverty Line:** People below the poverty line are the people who do not even have that level of income and expenditure, which is necessary to meet specified minimum levels of calorie intake. Pakistan has the largest number of poor people among the three countries, and China has the smallest share of poor among the three countries. - **Infant Mortality Rate (IMR):** Infant mortality rate refers to the number of infants dying before reaching one year of age per 1,000 live births in a year. A low IMR shows better health and sanitation facilities as most infants die due to unhygienic and insanitary environments. It is lowest in China and highest in Pakistan. - **Maternal Mortality Rate:** Maternal mortality rate is defined as the number of maternal deaths per 1,00,000 live births due to pregnancy or termination of pregnancy. Both India and Pakistan have not been able to save women from maternal mortality. In China, for one lakh births, only 29 women die, whereas, in India and Pakistan, maternal mortality rate is 133 and 140 respectively. ### Access to Basic Sanitation China's performance in providing sanitation is better than India and Pakistan. China has provided basic sanitation to 75% of the population, whereas, Pakistan and India have been able to provide basic sanitation to just 60% of the population. ### Access to Basic Drinking Water Source This refers to the percentage of the population which has a reasonable access to basic drinking water sources. China (96%) is ahead of India (93%) and Pakistan (91%) in providing basic drinking water sources. ### Population Undernourished The percentage of the population, which is not able to obtain adequate diet, is termed as undernourished population. China has the lowest percentage of the population (8.1%) which is being undernourished. In India, 37.9% and in Pakistan, 37.6% of the population was undernourished. ### Liberty Indicators Human development indicators are all extremely important, but not sufficient. Along with these, we also need liberty indicators: Liberty Indicator: This is defined as the measure of the extent of the demographic participation in the social and political decision making. Examples of Liberty Indicators: (i) Measures of the extent of the Constitutional Protection Rights given to the citizens; (ii) Extent of the Constitutional Protection of the independence of the Judiciary and Rule of Law. It is important to include the liberty indicators. Without these, the construction of a Human Development Index may be said to be incomplete. ## 8.3 Appraisal of Development Strategies Development strategies of a country act as a model to others for lessons and guidance for their own development. In order to learn from economic performance of our neighbouring countries, it is necessary to understand the roots of their success and failures and different phases of their strategies. Though different countries go through their development phases differently, let us take the initiation of reforms as a point of reference. Reforms were initiated in China in 1978, Pakistan in 1988, and India in 1991. Let us briefly assess their achievements and failures in pre and post-reform periods. ### China China did not have any compulsion to introduce reforms as dictated by the World Bank and International Monetary Fund to India and Pakistan, i.e. both India and Pakistan introduced economic reforms under external pressure. But, some adverse situations of the economy prior to 1978, forced China to go for reforms. #### Pre-Reform Period - There had been massive extension of basic health services in rural areas. - Through the commune system, there was more equitable distribution of food grains. - Despite extensive land reforms, collectivisation, the Great Leap Forward and other initiatives, the per capita grain output in 1978 was the same as it was in the mid-1950s. - In 1978, the then Government of China was not satisfied with the slow pace of the economy and lack of modernization under the Maoist rule. They felt that Maoist vision of economic development had failed. As a result, a number of reform measures were introduced in 1978. #### Post-Reform Period The various reform measures led to rapid growth in China: - Each reform measure was first implemented at a smaller level and then extended on a massive scale. - Development of infrastructural facilities in the areas of education and health, land reforms, long existence of decentralized planning and existence of small enterprises helped positively in improving the social and income indicators. - Agricultural reforms (handing over plots of land to individuals for cultivation) brought prosperity to a vast number of poor people. It created conditions for the subsequent phenomenal growth in rural industries and built up a strong support base for more reforms. ### Pakistan In Pakistan, the reform process led to worsening of all the economic indicators. As compared to the 1980s, the growth rate of GDP and its sectoral constituents decreased in the 1990s. The proportion of poor in the 1960s was more than 40 per cent which declined to 25 per cent in the 1980s, and started rising again in the 1990s. The reasons for the slowdown of growth and re-emergence of poverty in Pakistan's economy are: - Agricultural growth and food supply situations was based on good harvest and not on the institutionalised process of technical change. When there was a good harvest, the economy was in good condition, when it was not, the economic indicators showed stagnation or negative trends. - Foreign exchange is an essential component for any country and it is always preferred to build foreign exchange reserves through exports of manufactured goods. However, in Pakistan, most of the foreign exchange earnings came from remittances from Pakistani workers in the Middle-east and the exports of highly volatile agricultural products. - There was growing dependence on foreign loans on the one hand and increasing difficulty in repaying back the loans on the other. However, during the last few years, Pakistan has recovered its economic growth and has been sustaining. As per the Annual Plan of 2019-20, GDP registered a growth of 5.5% in 2017-18, highest when compared to the previous decade. While agriculture recorded a growth rate far from satisfactory level, industrial and service sectors grew at 4.9% and 6.2% respectively. Many macroeconomic indicators also began to show stable and positive trends. ### Conclusions India, China, and Pakistan have travelled more than seven decades of developmental paths with varied results. Till the late 1970s, all of them were maintaining the same level of low development. The last three decades have taken these countries to different levels. ### India - The Indian economy performed moderately, but the majority of its people still depend on agriculture. - India has taken many initiatives to develop the infrastructure and improve the standard of living. - It is yet to raise the standard of living of more than one-fourth of its population that lives below the poverty line. ### Pakistan - Political instability, over-dependence on remittances and foreign aid, along with volatile performance of the agricultural sector are the reasons for the slowdown of the Pakistani economy. - In the recent past, it is hoping to improve the situation and maintain higher growth rates of GDP growth. ### China - In China, the lack of political freedom and its implications for human rights are major concerns. - However, in the last four decades, it used the ‘market system without losing political commitment’ and succeeded in raising the level of growth along with alleviation of poverty. - China has used the market mechanism to create additional social and economic opportunities. - By retaining collective ownership of land and allowing individuals to cultivate lands, China has ensured social security in rural areas. - Public intervention in providing social infrastructure brought positive results in human development indicators in China. ## Revision of Key Points ### Development Path of India, Pakistan, and China: - All three countries have many similarities in their developmental strategies. - All of them started their developmental path at the same time. All of them started planning their development strategies in similar ways. India announced its first Five-Year Plan in 1951, Pakistan announced in 1956, and China in 1953. - India and Pakistan adopted similar strategies, such as adopting Mixed Economic Structures, introducing Import Substitution Policies, and raising public expenditure on social development. - Till the 1980s, all three countries had similar growth rates and per capita incomes. ### China: - The **People's Republic of China (PRC)**, commonly known as China, was established in 1949. - **Geography**: China is situated in eastern Asia and is the third-largest country in the world. - **Language**: Most languages in China belong to the Sino-Tibetan language family. - **Economy**: Being one of the oldest civilizations, China has been the world's largest economy. - **Great Leap Forward (GLF) Campaign:** Its aim was to transform agrarian economy into a modern economy through the process of rapid industrialization. - **Great Proletarian Cultural Revolution:** Under this Revolution, students and professionals were sent to work and learn from the countryside. - **Reforms Introduced in China**: In the initial phase, reforms were initiated in agriculture, foreign trade, and investment sectors. In the later phase, reforms were initiated in the industrial sector. - **Dual Pricing in the Reforms Process**: Prices were fixed in two ways: (i) Farmers and industrial units were required to buy and sell on the basis of prices fixed by the government; and (ii) For other transactions, inputs and outputs were purchased and sold at market prices. - **Special Economic Zones (SEZ)**: To attract foreign investors, SEZs were set up. ### Pakistan: - Pakistan, officially the Islamic Republic of Pakistan, gained independence on 14th August, 1947. - **Geography**: Pakistan is located in South Asia and borders Central Asia and the Middle East. - **Language**: The national