It’s Peter, not Richard, Drucker.

Oops. Thank you.

Off hand, without doing the slightest fact-checking, it all seems a little strange.

Japan’s foreign debt might be denominated in dollars, but that seems a bit irrelevant given Japn has a huge foreign surplus. If the dollar is devalued Japan’s net position will presumably worsen (in yen terms).

Also he seems to believe that only 1% of americans are in further education. Surely it is higher than this?

As many as “150 million [indians] for whom English is their main language.” is hard to believe, as is only 1, 5 million chinese college students. Should google some numbers.

Yes, the numbers look rather implausible. I think the points are still valid, though; the point about America’s debt is crucial, and has been getting more and more coverage of late.

Also implausible are China’s official economic growth statistics, or at least that seems to be the consensus among China-watchers.

In which sense Vaara, they’re too high or too low? Both arguments are made.

It’s not the consensus, and not the majority opinion either I would say. May well be right anyway of course.

Uff, a lot of issues here.

Firstly thanks David for the kind mention.

Funnily enough I have been posting about this very same topic earlier today on Living in India:

http://www.livinginindia.com/archives/000112.html

I’m writing a series of posts around India’s future, which I’m calling An Area of Darkness after the Naipaul book, although the darkness I have in mind is a little different from Naipaul’s: it is to do with our lack of clarity about what exactly is going to happen next.

In general I am sympathetic to Drucker’s argument. I do think India will be the new ’brainy’ superpower, and that China will become the manufacturing hub, but not the global leader. Day to day contact with young bloggers in each of these two fascinating countries makes me even more convinced.

Druker, however, does seem to have an incredible amount of difficulty with detail.

Matthew is cleary right about Japan, they mainly stand to lose by a continuing dollar slide, as do many of the world’s central banks including the ECB.Also a massive devaluation in the dollar, by making US debts worth a lot less,could be positive for the debt, although perhaps not so much so for the US standard of living.

In fact Drucker doesn’t seem to understand much economics.

He is also rather weak on fact. The number of 150 million for competent English speakers is clearly ridiculous. No-one really seems to know for sure, but mother tongue English Indians talk of between 5 and 10 million. Of course many many more understand English, so if you move up the value chain into things like biotech and software development, and away from call centres, which could easily move out to Bangladesh, Pakistan etc as Indian costs rise, then speaking a clear version of the queens English may not be so important.

He is also off target with his numbers for rural India, which are normally put at 700 million or around 70% and possibly rising as the birth rate in the cities declines. He even gets it wrong on IITs: Bangalore is one of the places where there isn’t an Indian Institute of Technology, although, there is an Indian Institute of Science there.

So when you look at it, it may be hard to find a single fact which you can corroborate here.

Having said all that, I still broadly agree with his point.

I think Drucker does get it broadly correct. But India has a lot of problems too. Agreed IITs churn out excellent minds, but the majority of Indians do not go to the IITs. The presence of heartless politicians and mindless voters who get influenced by the pro-hindu or anti- or pro-lower castes (dalits) campaigns is a major cause of worry. India is, in a sense, hanging by a thread.

Majority of the middle class people have reached the level of upper-middle class through their sons and daughters in U.S and through their own savings (the interest rates used to be extremely high before the tech boom hit India).

English is a major unifying factor and I believe that will still remain so for years to come. Given that majority of the schools teach english in one form or the other, India will have an advantage in possessing a large number of citizens capable of understanding english.

The people to watch out for are the those who belong to the ’middle class’. I think many people are rising above poverty levels and now joining the bulging category called the ’middle class’.