Team Blitz India
NEW DELHI: Ricardo Hausmann, Professor of Economic Development at Harvard University and Founder and Director of Harvard’s Growth Lab, who developed the ‘Economic Complexity Index’ (ECI) that projects a country’s growth potential based on the progress made by it in expanding and diversifying its export basket over the years, has predicted that India has the highest potential for growth in the coming years compared to any other country in the world.
The economist, who was here last week to speak at the Global Economic Policy Forum 2023 organised by the Confederation of Indian Industry (CII), warned that India’s petroleum exports, which have been on the rise, may not be sustainable.
Hausmann also said that India was witnessing remarkable success in the service sector that primarily employed high-skilled workers but the country continued to have a “surprisingly small” presence in global goods market compared to the size of the economy that needed jobs for everyone.
He, however, believed that India was right in making major investments in infrastructure which had accelerated growth rates in some parts of the country such as Uttar Pradesh, where connectivity had improved enormously.
But Hausmann said India “hasn’t been exploiting” that potential. Goods have been hurt relative to services because goods are relatively intensive in inputs that India has been very bad at providing and those inputs are things like mainly the infrastructure side, transportation, infrastructure, logistics, energy, water, etc,” Hausmann said in an interview to The Indian Express on the sidelines of the policy forum.
The economic complexity index (ECI) shows a stagnation over the last two decades as India could barely move from 43 in 2000 to 42 in 2021. During the comparable duration, China managed to move from 39 to 18, Vietnam from 93 to 61 and UAE from 81 to 56. ECI measures the current state of a country’s productive knowledge.
Countries improve their ECI ranking by increasing the number and complexity of the products they successfully export.
