Last year was the 20th year since market reforms began for the Indian economy. These reforms are now in a critical stage. The most compelling issue is whether the door of the Indian economy can swing further open.
A recent report from New Delhi shows that the retail business of India has become more open. Many chain enterprises, such as IKEA and Starbucks, have been permitted to operate in the country without an Indian partner.
Last year, a proposal that would have affected the opening of large foreign chain supermarkets was rejected by the Parliament of India.
India's stock market is also open to individual foreign investors, which is obviously meant to revitalize the declining stock market and motivate the reform of the capital market.
The degree of openness in the Indian market is decided by the competition of interest groups. It is very hard for India to become a more open economy under the current political system. In fact, the Indian government has recognized the importance of opening, and encouraged it over the past 20 years of reform.
However, the interest groups have not reached a consensus over the reforms and every group puts its own interests first. This clash of interests delays the process of reform.
It is a simple principle that opening up results in improvement and vigor.
Opening is no doubt an important part of Indian economic development. It is hard to imagine that a country can improve its competitive power with a closed economy in a time of economic globalization. Opening is an inevitable trend now.
Opening not only needs courage, but also wisdom, foresight and the ability to control society. A dynamic system can synchronize different interests to a common view, instead of insisting on each interest and achieving nothing in the end.
There are usually two factors restricting opening. One is the culture. A conservative culture forms a kind of traditional inertia. We can see this situation in India, where a conservative version of Hinduism hampers reform.
The second factor is that different powerful interest groups appear in the special stage of economic development and the reform of political system gives more rights to the lower classes, which results in government policies being influenced by several forces. This is an inevitable phenomenon for developing countries in such periods. The experiences show that domestic reform and opening interact.
One of the most important goals for reform is to improve the ability of decision-making and execution.
The India's economy is now at a key break point. If it can take a difficult step forward, it will achieve new heights, but if it takes the easy step backwards, it will bring great losses to the country.
Time magazine published a cover story, "A Tale of Three Cities," 10 years ago. The author created a new word: Nylonkong, a combination of the names of New York, London and Hong Kong. Some Chinese translators render this as niu lun gang, with the last part being the Chinese character for "port," representing the trading character of all three cities.
The three cities are the most successful cities under globalization, and they are also the motive power behind globalization.
Due to their openness, they stand at the top position of the world, and get the most benefits. Other countries can learn from the experience of the three cities.
The author is a senior editor with the People's Daily. dinggang@globaltimes.com.cn