Globalization and Economic Development
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Globalization and Economic Development

Essays in Honour of J. George Waardenburg

Edited by Servaas Storm and C. W.M. Naastepad

Globalization is widely regarded as a means not only of ensuring efficiency and growth, but also of achieving equity and development for those countries operating in the global economy. The book argues that this perception of globalization as the road to development has lost its lustre. The experience of the 1990s belied expectation of the gains, such as faster growth and reduced poverty, which could be achieved through closer integration in the world economy.
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Chapter 15: Small is big, but it it still beautiful? Small-scale industries: An India-China dialogue

Ashwani Saith


15. Small is big, but is it still beautiful? Small-scale industries: An India–China dialogue Ashwani Saith 1. SMALL-SCALE INDUSTRIES: A GOOD PRESS There are many virtues, imagined or real, ascribed to small-scale industrialization. Some of these are admitted by default on the assumption that small enterprises would inherently be different and have characteristics opposite to large-scale enterprises. Chernobyl, the Bhopal gas tragedy and the giant oil-spills all tend to affirm such a reading. Small has thus been conflated with being employment-friendly, environment-friendly and hinterland-friendly, or simply people-friendly. Small is big, but is small still beautiful? There are indications, in the case of small-scale industries in Asia, that small has grown to be strong, and not so pretty. The small-scale sector has been a major contributor to Asian economic growth, and nowhere more so than in China, where township and village enterprises (TVEs) have posted the highest sectoral growth rates ever since the reforms initiated in 1978, and probably even before then. While macroeconomic performance in India has lagged behind China by far, here as well the smallscale sector has generally outstripped the large-scale organized formal manufacturing sector in the matter of growth, employment and exports. This chapter offers a comparative assessment of the factors underlying the contrasting performances of the two emerging Asian economic giants, and highlights key outstanding policy issues that are likely to occupy the foreground. The main focus is on the Indian case, with the Chinese experience introduced selectively for comparison. 2....

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