India: Hungry for global power, or just plain hungry?

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Since 2001, Goldman Sachs (GS) has been touting the wonders of the rapidly advancing BRIC countries -- Brazil, Russia, India, and China -- as the global economic powerhouses of the coming decades. Citigroup (C) recently jumped on the bandwagon with a report that noted the growing economic influence of China and India and highlighted stocks poised to take advantage of their newfound prosperity.

The growing excitement over BRIC obscures a key problem in India. Although the country is enjoying more prosperity than ever, it continues to have severe problems with feeding its population. In India, 46 percent of children up to age three are malnourished, according to a report from the Institute of Development Studies, and an average of 2,000 to 3,000 children die of starvation every day. Overall, 25 percent of India's citizens don't get enough to eat on a daily basis; this is a higher percentage than sub-Saharan Africa.
Starvation offers an interesting glimpse into the demographics of India's economic boom of the last five years. While the ranks of the country's middle class have swollen, the benefits of this advancement have fallen on a narrow segment of the population: 400 million Indians have moved out of relative poverty since 1985 -- they now make at least $5 per day -- but 880 million Indians still live on less than $2 per day.

Many analysts claim that the country's economic woes lie in traditional notions of caste, community, religion, and region, which encourage a fractured, divisive cultural perspective. The malnutrition study noted that women and those of lower castes were routinely excluded from programs designed to decrease hunger; other studies have determined that India's 150 million Muslims are given reduced access to education and government employment. In various Indian regions, issues of violence, population growth, and political power also affect the citizens' ability to enter the middle class.

While part of India's failure to feed its citizens is a function of traditional prejudices, it also reflects a lack of combined political will: India's various cultural and geographical groups vie with the country's centralized government for resources, power, and cultural identification. For many Indians, this fracturing has led to an exaggerated self-reliance and a lack of political involvement.

Contrast that with China, where a centralized totalitarian government has effectively dealt with hunger. In 2001, both countries committed to halve the number of their malnourished citizens by 2015. China has reached its target, but India, at its current rate of progress, won't achieve this goal before 2043.

India's lower castes aren't the only group to be undermined by the boom years. Even its middle class, ostensibly the beneficiaries of the country's economic surge, finds itself done in by the country's shifting fortunes. Reporting on a rise in suicide among middle-class Indians, The Times of India notes that upwardly mobile professionals often lose touch with their traditional communities while still lacking the upper classes' financial cushion in tough times. The same government that fails to guarantee food to its poorest citizens is not effectively reaching out to some of its wealthiest.

India's malnutrition woes offer an important warning. Early childhood malnutrition is directly connected to a host of lifelong problems, including low IQ and antisocial behavior, studies have shown. That means that India's next generation of workers -- today's children -- may become a drain on the economy. Can India sustain its impressive year-over-year economic growth if its children are going hungry?

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