ARMENTIA | BALANO | ELIZON | ORENDAIN | SELIRIO | VISITACION | PS 402 | INDIA
FAR EASTERN UNIVERSITY
INSTITUTE OF ARTS AND SCIENCES
INTERNATIONAL STUDIES
Exceeds
Understanding Eloquently articulated
descriptions of studies, and
findings.
Analysis Complete analysis of each
concept/article is based on
expert understanding of
methodologies used.
Synthesis Analysis is based on the
‘woven’ conversation
between and amongst
articles
Originality The way you have
assembled themes is unique
and fills a gap in the
literature.
DEPARTMENT
Rubric for Essays
5 Meets 4- Aspires 2-0 Total
3
Clear description Basic descriptions, but may
of the studies and read more like an annotated
findings in own bibliography.
words.
Analysis clearly Incomplete analysis of
describes important concepts/articles. And/or
and relevant pieces studies are mentioned but not
of the adequately analyzed
concept/article.
Simple analysis A connection between and
that compares and amongst ideas/ articles is
contrasts ideas or unclear.
articles (between
and amongst).
The assembly of The lens through which we
themes is present should be seeing the issue is
and clearly made made by the literature, but not
by the author, but the author.
patterns much of
that which is
already published.
Total /20
ARMENTIA | BALANO | ELIZON | ORENDAIN | SELIRIO | VISITACION | PS 402 | INDIA

1. Do you think that the so-called new world order should drive the states more towards liberalism

(as suggested by the World Bank), or should states be more reliant on protectionism as a way to

improve world economy?

Introduction

According to the International Monetary Fund (2015) the world economic growth this year

will be the weakest since 2009. Russia and Brazil suffered recession due to the weak global

consumption and reducing commodity prices hence, their economic development and stability

became uncertain. Such commodity and export dependent emerging economies are prone to the

fall and rise of global demand which greatly affects their economy.

The IMF Chief Economist Maurice Obstfeld (2016) held that “Global financial conditions

are tightening, the emerging and developing markets are especially sensitive to the effects, given

other woes.” The easy-money era of these markets resulted to a total debt of 200% of gross

domestic product, for about $58 Trillion. Hence, the financial complications faced by the global

economy also contributed. Moreover, the BRICs countries also face problems on labor force. For

instance, China’s situation wherein the population became stagnant due to their policies which

weakened their labor force.

As a form of warning, the International Monetary Fund and World Bank warned that

authorities must take urgent actions to give remedy to their economies to make them productive

and competitive. Varying solutions may be applied depending on the country, one must realize the

fact that each economic system differs from another; and must consider factors such as greater

private sector investments, labor-market reforms, stronger protections for intellectual-property

rights and bolstering judicial systems.

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India’s Economy

In order to have an in-depth analysis on India, one must first look on the brief information

regarding its economy. Indian Finance Minister Arun Jaitley (2016) asserted that India has been

one of the few major economies to defy global slowdowns in 2001, 2008, and 2015. This due to

the few considerations such as:

First, India started from a lower base compared to other states. For instance, the average

income in India is $1,500 a year, therefore in the succeeding years, India has a room to grow

compared to the average income in China is $7,000 and in the U.S. it's $53,000.

Second, India has overflowing resources and labor force with 600 million people under the

age of 27 wherein most Indians are entering their prime earning years.

And lastly, India being the beneficiary of cheap oil prices, one of the world's largest and

fastest growing net importers of fuel. With oil trading at one-fifth its record highs -- below $30 a

barrel -- India has been able to curb its deficit, cut ruinous subsidies and contemplate the big

infrastructure projects it so badly needs.

India and Economic Liberalization

Since 1991, continuing economic liberalization has moved the country towards a market-

based economy. Liberalization refers to the slackening of government regulations. The economic

liberalization in India denotes the continuing financial reforms which began since July 24, 1991.

In Adams’ book Political Ideology Today (2001) he defined economic liberalization as a

perspective which believes in organizing the economy on individual or household lines, meaning

the greatest possible number of economic decisions are made by individuals or households and not

by collective institutions or organizations.

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Economic Liberalization brought India the growth in their economy, from the fact that

foreign investment is now accepted through the different reforms done by the administrations, it

raised the level of India in the International Capital markets, from a $132Million in 1991, grew to

$5.3 billion in 1996, the service sector particularly the communications, transportation and asset

management, infrastructure, aviation, boosted by information technology provided the

phenomenal growth of India’s economy.

Prime Minster Narendra Modi enunciated to cultivate a better business climate and

strengthen the government’s balance sheets. Encouragement of possible investors and stabilization

of Indian markets contributed to the growth rate. However, the threat of the decreasing commodity

prices might greatly affect India’s economy. So, the question is how India will overhaul the global

issue?

India’s Economic Freedom

Table 2. Overall Score of India’s Economic Freedom

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The Heritage Foundation (1955) defined Economic Freedom as the fundamental right of

every person to control his or her own labor and property. In an economically free society,

individuals are free to work, produce, consume, and invest in any way they please, with that

freedom both protected by the state and unconstrained by the state.

Ambassador Terry Miller and Anthony B. Kim (2016) held that Economic Freedom is a

prerequisite for sustainable human and societal development. Historically, states with a higher

degree of economic freedom prospered economically and socially. Thus, a more free state will be

able to benefit from the system of free-market in responding to the decisions and desires of

individuals in constructive and efficient ways. Also, a more free state offers more diverse

opportunities for individuals and tends to create virtuous growth cycles characterized by efficient

resource allocation, high value creation, and innovation.

It is also contended that a higher degree of Economic Freedom alleviates Poverty and Food

Insecurity. Greater economic freedom has positive implication on the number of people in poverty.

Poverty intensity defined as the degree of deprivation at the individual level in education, health

outcomes, and standards of living, is much lower on average in countries with higher levels of

economic freedom.

However, the table 1 shows the overall score of India’s index regarding its Economic

Freedom (2016). It evidently indicates India being mostly unfree with a 56.2 percentage and no.

ranking 123 which implies under-development on people’s standards of living – poverty

alleviation, food insecurity, defamation of human development and downward mobility. Thus,

economic liberal perspective does not automatically equate a higher degree of economic

liberalism.
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Conclusion

The group’s stand regarding the phenomenon is towards a sustained and developed

Economic Liberalization for it affects economic freedom which implies a better standard living

that results to the prosperity and productivity of citizens.

The increasing poverty rate in India shows an unparalleled growth as to what the GDP

projects. Although, India has been able to restrained inflation, stabilized its Rupee and increased

its GDP at 7% a year, it is undeniably that the people in India are poor. It is safe to conclude that

a percentage of 56.2 in Economic Freedom indicates a poor development on people’s standards of

living.

The paradox in India’s economy manifests through the low degree of economic freedom

although they operate in an economic liberal perspective. Hence, economic freedom must be

strengthened and increased.

First, economic freedom empowers individuals through institutionalization of economic

policies which will let individuals to engage in entrepreneurial activities. Such entrepreneurial

activities result to job creation, business opportunities and new products and services. In the case

of India where people are labor force, economic policies must take form into protecting individuals

because they are one of the sources which contributes to the economy; the protection of individuals

will imply economic freedom. Second, economic freedom improves standard livings through

poverty and food insecurity alleviation. The growing awareness on poverty and food insecurity

alleviation results to achieving economic growth and social progress. Third, economic freedom

promotes human development through a more increased life expectancy, literacy, education and

overall quality of life. And lastly, economic freedom ensures upward mobility through
ARMENTIA | BALANO | ELIZON | ORENDAIN | SELIRIO | VISITACION | PS 402 | INDIA

Those countries that have adopted some version of free-market capitalism, with economies

supported by efficient regulations and open to the free flow of goods, services, and capital, have

participated in an era of globalization that has generated dramatic improvements in living

standards, including—and perhaps even especially—in poorer countries.

The global lesson is that economic freedom paves the way for rapid development. Through the

advancement of economic freedom, increasing numbers of people have gained access to

knowledge and opportunities unheard of even a generation ago. Not all start from the same place

in the competitive environment of the global economic system, but with economic freedom, all

have the opportunity to progress toward greater prosperity.