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Infrastructure

India in My Rear-View Mirror

By PETER WONACOTT in the Wall Street Journal

In China’s Southwest Sichuan province, the road to enlightenment is a superhighway.

In about 90 minutes, the highway zips travelers 180 kilometers from the provincial capital of Chengdu to the former farming hamlet of Leshan, home to a sitting Buddha that is more than 230-feet tall and 1,200 years old. Luxury busses, new model Buicks and Toyota sedans disgorge Chinese and foreign tourists into a city that has popped up in a matter of years, thanks largely to a road system that links Leshan to refurbished rail stations and international airports now just hours away.

Two decades ago, on my first visit to Leshan, the Big Buddha looked out across a river to rice paddies. The same view today is glass, steel and concrete of high rise buildings. Leshan’s economy is now both light and heavy industry, in addition to tourism.Not as idyllic as it once was, to be sure. But Leshan represents a small part of what has been Chinese government’s ambitious road build-out, a bet that massive state spending will yield greater returns in private investment, new jobs and stronger consumer demand. The bet has paid off so far.

 

Goldman Sachs predicts that, by 2041, China’s economy will be the largest in the world, out-sizing even the U.S. Similarly, Goldman forecasts India’s economy to surpass Japan by 2032.

But there’s a crucial difference that’s surfaced between the two imminent economic superpowers, China and India. China has shown that its central and local governments are capable of building road infrastructure to deliver current and future economic growth. India’s drive to do the same has sputtered, and the consequences of this torpid pace are clear for those who have recently spent time outside the big cities of both countries.

“Some new highways aren’t on the latest Chinese maps or GPS-aided Google maps.”

Although India’s rural areas have been resilient during the global economic crisis, the relatively fast growth has come mainly from a very low base – by virtue of being poor for so long. Shoddy infrastructure has sealed India’s rural communities and constrained investment and consumer demand. Even with the nascent development taking place now, swaths of India remain beholden to benign weather and welfare handouts, such as the National Rural Employment Guarantee Scheme, which offers 100 days of paid work to supplement farm incomes.

India’s total investment in infrastructure in 2006-2007 was estimated to be around 5% of gross domestic product, according to the latest figures from the Planning Commission.

By comparison, China’s infrastructure spending has been about 12-13% of GDP in the last few years.

If it’s to develop the same strong economic arteries, India must close this gap quickly. The Indian government appears to realize this, and on Monday, announced that its budget contained a 23% increase for highway construction. Foreign investors have been cautious about entering India’s infrastructure sector, so a previously announced $500 billion road revamp has been slow to materialize.

It’s sorely needed, as veterans of Indian road travel can attest.

A recent 300-kilometer trip from Delhi to the lakeside tourist town of Nainital in Uttarakhand was a full-day affair. We dodged large craters in the road and rattled over smaller holes; We swerved around cars going the wrong way and meandered by squatter villages built around half-constructed flyovers; We braked to avoid cows, goats, limping dogs, and one large, dead pig.

In China, road travel presents a different set of challenges. Superhighways spin out from the main cities, delivering one into a bewildering web of freshly-constructed roads crisscrossing the country. Some new highways aren’t on the latest Chinese maps or GPS-aided Google maps. The best navigational advice frequently comes from the tollbooth operator.

China’s road building has even outpaced the service infrastructure. On the newest highways, rest-stops advertised on billboards often weren’t there yet; many exits are sealed from unfinished off-ramps; petrol pumps are few and far between. On one pristine stretch of asphalt running beside acres of corn, five hours from Beijing, we ran out of gas. A police jeep buzzed past our pleading waves. My brother scooted down the flyover and hitched a short ride to a gas station and returned with enough fuel to get us to the next city.

One hundred kilometers and an hour later, the port city of Qingdao came into view. The four-lane highway delivered us to the heart of city, a former down-at-the-heels German colony transformed from my last visit a decade ago.

—Peter Wonacott is a WSJ reporter based in New Delhi

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