Summary and Conclusion

Abstract

The book began with an observation. South Asian economies fell behind the world between 1950 and 1980, and were catching up since then. How do we explain the falling behind, the catching up, and the turnaround? Drawing on elements of the argument advanced before, the chapter rejects a view popular in the literature that the falling-behind occurred because of too much state intervention or adverse class power. The alternative story offered in the book recognizes that South Asia began with certain endowments. These endowments the development policy did not utilize well, was at odds with, and partly destroyed, leading to a variety of crisis. In their eagerness to speed up industrialization, the states undermined accumulated capacity to trade and attract foreign capital. The repression of trade and cosmopolitanism caused a series of crises from which South Asia could emerge only after it exported labour and services in huge quantities from about 1980. This capacity to export labour revived its capacity to import commodities again. The chapter restates the story and offers some prognosis.