Conversation with Deepak Nayyar

Thank you, Dan.

My lifetime coincides almost exactly with that of independent India. What Salman Rushdie described as Midnight's Children. I was born in late 1946, in Batala, a small town in the Punjab, undivided then, close to Amritsar and not far from Lahore. My father was a civil engineer who worked for the Government of Punjab in Lahore. At partition on 15th August 1947, my father was transferred, not surprisingly, from Lahore to Jalandhar. I was not even a year old. Three years later, the family moved from Jalandhar to Shimla, the then capital of Punjab, and we moved often wherever my father was transferred from one place to another in conformity with what was established government practice. So much so that over 11 years I went to five different schools. I spent my first year, pre-school year at Nursery in Shimla. Over the next nine years, I went to Hindi medium government schools in different parts of India. The first of these was in Chandigarh. You might have heard of that, where my father worked on the Capital project as part of a team that constructed the city designed by Le Corbusier, the famous French architect. I was enrolled in a school. It did not have a building. It was in a tent. We sat on the floor because there was no furniture. From there, my father was transferred to Hissar, a place you probably have not heard of. Where I studied in school, in a brick and mortar building. But we were seated on the floor. The consolation was that we had coir mats. The family moved next to a place I'm sure you've not heard of, called Shahjahanpur in Uttar Pradesh, where the school did have benches and tables. In sum, I grew up in small town India, where poverty was widespread, where bicycles were the mode of transport, cooking used coal or wood fires. Refrigerators did not exist. Flushing toilets were a luxury and civic amenities were crumbling if they ever existed. This past that I have described studying in Hindi medium schools, which led me to think and to write in Hindi, was very different from what the future turned out to be. Yet it exercised, in retrospect, an enormous influence on my evolution as a person. My family then moved to Jaipur, the first city you might have heard of, the capital of the state of Rajasthan. Where I went to a Jesuit school. Saint Xavier's. The medium of instruction was English, and it was an extraordinarily difficult transition. I vividly remember, Father [inaudible] who taught me—I remember him with much affection and gratitude. He taught me English, mathematics, physics. So whether it was William Shakespeare, G.K. Chesterton, Differential Calculus, or Albert Einstein. I learnt much from him. Yet one day, almost in despair, he said to me, 'Son, you're incredibly bright, but you will never learn to speak or write English.' He was right in the short term, although he turned out to be wrong in the long term. We met three decades later when he had retired and he read a book of mine that was a bestseller and simply said how wrong I was. He was right. As I said in the short term in the school, leaving examination, I earned a distinction in every subject except in English, which I barely passed. Even so, to my surprise, I made it to Saint Stephen's College at the University of Delhi, an elite institution in the national capital competition for admissions where is absolutely fierce. On arrival, I felt like Alice in Wonderland. Yet it provided me not only with the educational opportunities I never had until then, but also with equal opportunities. And I'll come back to that later. Saint Stephen's College and the University of Delhi were my portal or gateway to the world. In my fifth year, I was selected as a Rhodes Scholar, or, as they say at Oxford, elected as a Rhodes Scholar, and on completion of my master's degree in 1967, I left for Oxford.

Well, like you, I also observed that India had a first woman prime minister. It had a first Muslim president about that time. I had turned 21, which was the age of majority, as it were. Independent India also turned 21, a little later, but it was a small time span in the life of a nation. Now, my hopes and the hopes of my generation, I think, were closely intertwined. We hoped that our post-colonial state that was born out of a nationalist movement, which was peaceful rather than violent, would find the autonomy to pursue national development objectives, that our democracy could or would transform us from subjects into citizens, that we would be able to eradicate poverty and discrimination, and that we would succeed in our quest for industrialization and development and begin to catch up with a world that had left us behind almost by a century. Yet that was an uncertain time. The Indian National Congress, which had been in political power for exactly 20 years, both in the federal government and in all the state governments, lost power in half the state governments. The question that people asked in the United States often was after Nehru whom or after Nehru, what? It was an uncertain period. We also lived through three successive droughts, so it was what some of us saw as a ship to mouth existence. India lived on wheat imports from the United States under public law 480. It was perhaps a very difficult time in the life of a young India. Yet we had hope and in many respects we turned out to be right. India has a democracy that has shown enormous resilience, even through difficult times. And perhaps the only post-colonial society in Asia and Africa where democracy has thus far, I say with my heart in my mouth, survived. For me, it was also a time I was leaving. So it was the desire to return and participate in the task of nation building. I knew not how at that time, but I was determined to come back.

Well, that's a difficult question, and I will try and make my answer as short as possible so that you are not bored. The evolution of my thinking and philosophy is a long and complex story about my intellectual journey. I will make it short. I will begin with Amartya Sen, who was an inspiring teacher at the Delhi School of Economics. I was captivated not only by his eloquence, but also by the analytical elegance of economic theory. Social choice and welfare economics, therefore, were my first love. Now it is only later that I discovered the futility of it all. I began life thinking about how we might aggregate individual preferences into social choice. For at that time, both Amartya Sen and Kenneth Arrow worked in this domain, and the Impossibility Theorem was a big splash news that even a majority rule would not work. Decades later, I met Kenneth Arrow at a small dinner in New York when I was teaching at New School, and I said to him, 'Have you ever wondered why you did this?' Because I think at that time I was captivated. But I am now convinced that individual preferences are shaped by social choices rather than the other way around. And it's not just about demonstration effects, it's how societies work. At Balliol College in Oxford, even as I was stimulated by conversations that I had with Christopher Hill, a remarkable historian, and that's where my interest in history began life in these conversations. He was then the master of Balliol, and I was also excited by the student protest movement in Europe. If you remember the summer of 1968, it was a brave new world that all of us young people looked at. My economics, I will be honest, remained orthodox. I just moved from one what I thought of as elegant to another, what I thought of as elegant, which was orthodox trade theory, which was fashionable economics at that time. Therefore, to be candid, I was brought up in the tradition of orthodox economic theory, particularly neoclassical economics, with which I have grown disillusioned beyond belief over the passage of a professional lifetime. Now it was something completely different. And that is personal, if I may, that led to a profound change in my thinking about economics. It was not my interrogative nature or rebellion at that time. Much as I wanted to be an academic while at Oxford, I wrote the civil services examination for India, even though I was most reluctant, essentially because my fiance, Rohini, we met each other as finally undergraduates whom I married in 1969, wanted to join the Indian Administrative Service in part to assert her independence as a woman in a patriarchal society and in part in pursuit of her passion for rural development. Because she spent all her life working for the poor. I did so in solidarity. Both of us were selected. We joined the IAS and we served in Uttar Pradesh, the erstwhile United Provinces, the most populous and perhaps the poorest states in India, both then and now. In 1970 it had a population of 85 million. In 2020 it has a population of 225 million. It is larger than most countries in the world. I was an urban, middle class Indian who knew little about political processes in districts even though I grew up in such small towns. It was my first exposure to poverty and inequality, deprivation and exclusion, corruption and injustice. Caste and discrimination or power and politics. This grassroots experience altogether unexpected, helped me understand the nature of our polity and society and the problems that confronted people, ordinary people in their daily lives, which exercise an enormous influence on my thinking as an economist. I returned to Oxford, a completely different person. You know, and three years later, when Rohini realised that this was not what I wanted to do in solidarity with me, she gave it up and we returned to Oxford, where she reinvented her life to do exactly what she had wanted to do. Now, at that point, I abandoned the world of esoteric economic theory, and almost as a reaction turned to empirical work in an endeavour to understand the real world. And as I watched Orthodox trade theory, the charm of its elegance was soon transformed into a frustration with its narrowness. It moved quickly to prescriptive purpose. Soon it bordered on dogma in policy, which disturbed me because it was based—it was not based either in theory or in history. It was a process where assumptions were concealed and conclusions were highlighted. Therefore, it was not long before I returned to analytical questions in theory and policy, situated in the wider context of macroeconomics, international economics and development economics, to which I have devoted much of my professional life. This time around, however, there was a difference. I began to question the conventional thinking embedded in Orthodox economics, particularly its analysis, diagnosis and prescription of real world problems. I recognised the importance of the heterodox and the unorthodox in thinking about problems in development, which runs through my work since then. Now the evolution of my thinking and philosophy in economics over time is reflected in my intellectual journey, mirrored in my research pursuits that have unfolded over a professional lifetime. My research interests have evolved primarily in the areas of international economics, macroeconomics and development economics. These domains have also been the focus of my teaching for a lifetime. The interest in India and the global South or the developing world has been almost a natural corollary in this. Now over time, it may surprise you. You might think of me not as versatile, but somewhat adventurous. My work has spanned trade theory, trade policy, international economics, transnational corporations, the multilateral trading system, macroeconomic theory, macro policies, industrialization strategies, industrial policy, international migration, international finance, globalization, economic history and the world economy. Now, this diversity. It would confound and anger most economists. It is the opposite of the narrow specialisation that now characterizes economics is most unusual. As I said, possibly adventurous. It has led me to work at the intersections of economics with other social sciences, particularly history, politics and sociology, sometimes extending to philosophy, law and geography. Now, to be honest, the institutions that I have been associated with in my professional life, particularly from my students whom I have always learnt much more than I think I have taught them, have also influenced the shape of my thinking in economics. So for me, it has been a journey in discovery where the stopovers and the detours have been just as important as the destinations.

Well, I worked in the Ministry of Finance and in the government of India for a little over two years. I arrived in late '89, and that was the beginning of the era of coalition governments in India, which ended only in 2014 25 years later, when Narendra Modi was elected with a majority. So we had coalition governments throughout that, and it was the beginning of our experiment with coalition politics. The economy was a mess. Simply put. The government had lived beyond its means, year after year, for a decade. The country had lived beyond its means, year after year for a decade. A macroeconomic crisis was not a matter of if, but when. Now, the irony of my life is that I wrote about it on the outside, that we were at the edge of a precipice. But the irony is that when it's imploded, I was in the midst of it managing it. It was far and away the deepest macroeconomic crisis in independent India. It was probably just as acute, if not worse, than most such macroeconomic crises in Latin America during the 1980s and sub-Saharan Africa during the '80s and the 1990s. And all those countries emerged from that with terrible bruises that left long lasting impacts. It was also juxtaposed with a period of political instability. Democracy was perfectly stable. Governments were unstable. So you would see that I came from the outside, from academia, and I worked as chief economic adviser to three successive governments, which did manage this crisis at the end of the day, in retrospect, exceedingly well. Now, you know, all macroeconomic crises are about accelerating inflation, about fiscal deficits, about current account deficits. But at the end of the day, it was also an acute foreign exchange crisis. We had a short term debt that had built up to 5 billion. We were borrowing $2 billion overnight, every night in international capital markets, borrowing from Peter to pay Paul. So it was essentially for a time about crisis management, which looked very close for about a year and a half to a default on international debt obligations. Now... In this, I mean, we can choose to talk about just a couple of things because, you know, both time and patience are exhaustible resources. First, I might talk about, you know, I think for me and this is something I impressed on three successive prime ministers and they were persuaded that the only chance we had and by the way, I was known as a critic of the IMF to all of them. One of them even said to me, 'Why do you propose this?' I said, 'Well, I have been a critic, but we are in very difficult times. We need the IMF not as a lender of last resort, because the money it will give us is modest. We need the IMF for its imprimatur to restore confidence in its natural capital markets. So our short term debt is not called in. We continue to have access, despite the downgrading that credit rating agencies is.' Now in this, I guess there were two things I should mention. One was negotiating with the IMF as also with the World Bank. The IMF had been my bete noire for long, so it was a fascinating experience in terms of bargaining and learning. And interestingly enough, I found the IMF, although more doctrinaire, more open in discussion. Then the World Bank less doctrinaire, more liberal in principle, but much more orthodox in its practice. I'll just tell you one story. You know, I don't know how many of you remember, but Saddam Hussein and Iraq invaded Kuwait in September 1990 and occupied Kuwait. Oil prices went to $60 a barrel, but our economy was in such bad shape that it was almost enough to push us over the edge of the precipice. And almost we had reserves that would last ten days. So the only option that was possible was something called the contingency and compensating financing facility that the IMF had introduced, that if a country suffered a balance of payments crisis because its export prices of commodities collapsed or import prices of food rose, you could borrow from the fund. It was much easier, much less conditionality than going for a standard standby arrangement, which in any case takes six months. We didn't have the time. And this was about late December, early January, when we had started the process or, sorry, mid-December 1990. And at that time I was in Washington. I said to Mr. Camdessus one to one meetings that I had a few of, saying that, look, you know, you have a compensatory and contingency financing facility which compensates countries in difficult times for rises in prices of food or fall in prices of commodities. But what about the price of oil? You know, we are in a soup because of that. So he did take that for approval. There was an exception made for India. But in our last meeting before I left for Delhi, I said to him that, look, I have not much to bargain with. We have a minority government which could fall any time. We may or may not be able to present the budget as it was. We could not because Rajiv Gandhi withdrew support from the government and anything I say to you is not worth the paper it's written on. So I have nothing going for me. The only thing I have going for me is that I represent the Republic of India. And I can say to you that if you don't come up with this help, I will bring the shutters down and we will not default. We had already compressed imports by imposing brutal import margins. So if you wanted to import $100 worth of goods, you had to deposit $100 in the bank for no interest for 12 months. So it had strangled imports anyway. But he delivered. Nobody believed that I would be able to do it, not even my colleagues. But and Camdessus writes about it in his—I don't read French, but he writes about it in his memoirs this conversation. So we did get $2 billion. The government fell. It didn't last long. And what is more, as the election was due in May, was postponed because Rajiv Gandhi was assassinated halfway through the election. And so we had to manage till end June. And that meant essentially in a government, in a caretaker government, we shipped our gold confiscated from smugglers 20 tons worth $200 million, not much, but it brought us breathing time. And we then had a—Narasimha Rao became Prime minister and that happened on the 24th of June, 1991. In that month, between 24th June 1991 and 24, July 1991, I think I must have worked 20 hours a day. But we did many, many things that included shipping gold, this time not of the smugglers, but Reserve Bank of India's reserve assets. We were allowed under the Act to keep 15% outside. My colleagues went—the governor of the central bank went to the Bank of Japan and I went to London to talk to the governor of the Bank of England. Both were very polite, but they said, 'We'll give you the money if you ship the gold to the vaults of the Bank of England.' It was a difficult decision. You know, political processes were very resentful. We managed to do the first one in complete secret. No one knew. The second one was out in the newspapers two days later. But that was just, as I said, buying time. But the real decisions we made then were a devaluation of the rupee that was as much as 45%. I wrote a note for the Cabinet Committee on Political Affairs because the Prime Minister and the finance minister did not have a right to do it. It was the cabinet committee that approved. It was done. We did the budget. We did all the economic reforms that people now laud in 1991. All that was telescoped in literally 30 days. Now, this is not because that government was particularly decisive. This is because nobody had any choices. We had in fact, if the budget had been presented in February, it would have been roughly the same. The blueprint was there. All the ideas were there. And it's not as if there was no political consensus. There was. Most political parties in their manifestos in 1989 had talked about roughly similar things that needed to be done. So it's very hard for me to describe in this short span of time. I could write a whole book about it. I haven't yet. But for me, as someone who has done macroeconomics for a whole lifetime, it was an experience of three lifetimes. I put macroeconomics to use that I could never have imagined, because when I was asked by the Prime Minister, how much do you think we should value the rupee, devalue the rupee? I had to come up with an answer and explain that, you know, we do need to devalue the Rupee not just because it will correct the balance of trade situation in a while, but also we need to stem destabilising expectations. And out-basing financial markets is a major task. We did. What we did, stabilised expectations and it worked. But it was a very, very difficult period. The only thing I would say is I would give credit to those coalition governments. And the third one, Narasimha Rao's government was a minority government, had not even established its majority in parliament when all these decisions were made and all of it was done through the process. I briefed the Cabinet secretary and I briefed the President of India continuously because these were minority governments. So it was an exceedingly difficult period, but in retrospect, a great deal of satisfaction. We are the only country in Asia, Latin America and Africa that avoided default and came through the stabilisation worked. Everything that we did worked. Two difficult years followed, but inflation came down. The current account deficit came down, the fiscal deficit came down, the foreign exchange reserves built up. And now we have $600 billion worth of foreign exchange reserves.

Yeah. Okay. Let me try and answer that. I hope I can give you a clear enough answer. I have always thought of freedom, knowledge, reason, fearlessness, autonomy as core individual values for myself. I have thought of pluralism and diversity, compassion and empathy and democracy and peace as essential social values. I've written about it. You've seen some of it. Now. How were these used? I can try and give you a precise answer. During my periods in government, my values as an individual were an anchor. They really were the anchor because it was such a difficult and such a fluid and such an uncertain situation. Knowledge, which incorporated experience, imparted a voice that was heard. Reason combined with persuasion was essential to argue for tough decisions in difficult times. Independent thinking, reinforced by a courage of conviction, was a necessity in a crisis situation that needed innovative, unconventional ideas to find solutions. Now, let me say this to you. I was asked this by three prime ministers that Deepak, if you get an agreement with the IMF, will it save us? I said, no, it's the best chance we have. I'm not sure we'll get an agreement. And even if we do, it cannot be certain. I really had to be honest. Do you think if we ship the gold, it will solve our problem? I said it will help us restore international confidence. If people recognise that we are willing to ship our central bank's gold reserves out simply not to default on international obligations. That will give a sense of confidence that we mean business. And every time, devaluation, Mr. Narasimha Rao asked him, asked me, he says, 'Deepak, do you think it will work?' I said, look, if I said to you I was certain it would work, I would be bluffing. No economists could tell you it would work. How much will stem adverse destabilisation expectations in the market is anyone's guess. So in that sense, you know, the meaning of stabilisation in economics is almost the same as it is in medicine, where we wish to stabilise the health of a patient in a critical condition, you wish to stabilise the economy in critical condition. And I think that my social values also were just as much of a bedrock as individual values in this process. You know, you asked me how did these values enter. Now, my driving force in an endeavour to ensure that India did not default on its international debt obligations was a concern that if we did, the Paris Club, the donors would impose hardships for which our poor will pay. And not the elite. Justice had elsewhere. In Latin America and sub-Saharan Africa. Similarly in negotiations with the IMF, Mr. Camdessus, as I said, I have nothing to bargain with except I represent the Republic of India. Protecting the national interests was the underlying objective in the bargaining process. And if any conditionality could affect human well-being, emphasizing the compulsions of political democracy became a powerful argument. And I think that is what went through to Michel Camdessus. And that's why, despite what he was advised by his staff, he actually pleaded for approval for the Indian request for this arrangement. So those values were important, and I believe they are important in any public domain.

Yeah, you know, the University of Delhi, as Dan has said, is among the five largest universities in the world. The size even then was gargantuan. It had 250,000 students, 20,000 faculty members, 80 undergraduate colleges, 85 university departments and multiple schools, professional schools in engineering, medicine and law. It was, you know, it's my favorite epithet that it is a miniature Republic of India and it is almost as difficult to govern. Now, you ask me a typical day, let me describe to you five little snapshots of my first day as Vice-Chancellor at the University of Delhi. I had a meeting with ten students. They represented a course called the BA Pass Course program, and they said to me that Vice-Chancellor, you are a distinguished academic. We would urge you to place this course in a mummy and bury it in a tomb. So I said, 'Why do you say that?' They said, because two thirds of the students who enrolled for this course either drop out or fail. They do not complete the course. Teachers do not teach. Students do not learn. That became for me a mission. It took me three years, but I restructured that program into a major minor languages structure. And it is now, even if I say so, a much sought after program at the University of Delhi 20 years later. I had a meeting with Deans of faculties and heads of departments and asked them three questions. I said, how many of you will retire in the next five years? And all except one hand stayed down. All other hands went up. That was the age composition. I said, how many faculty members do you have in your department who are less than 30 years old? Only one hand was raised in this massive university. And I said, when was the last time you appointed someone from outside your own student body to a faculty position? The closest we came was 22 years ago. Native son and native daughter policies. I changed that with a sense of mission in terms of the sanctity of academic appointments and brought young people in. And we are meeting with young faculty members. They said when we arrive, if we are scientists, we don't get laboratory space, we don't get laboratory equipment, we are not given any decent course to teach. It was a sort of meritocratic system and I set out on that also as a mission over five years and transformed it. I had a meeting with office bearers of unions. That's an interesting story. The teachers, the students. And when they came, they said, 'I am so-and-so. I'm Deepak. I'm in the Congress Party. I'm Dan, I'm in the BJP. I am Poornima. I am in the CPM. Communist Party.' So I said, please tell me what you teach and where you teach. I don't want to know your party affiliations. It was the same story. Now—or protesters outside my office who were saying 'he chased Hindi.' I will translate. 'Deepak Nayyar, get back to your senses or go back to JNU.' He said a nice rhyme in Hindi. So I went out to play a megaphone and said, 'Look, I'm here. I'm here for five years. Not a day more, not a day less. You have to learn to live with me.' And it did not take long to discover that the preceding 25 years had witnessed a discernible decline in the institution. And that's what the President of India, who is the visitor and was my statutory boss, said to me, 'The University of Delhi is in decline. It was the best university we had. Do something, go there now.' And it cried out for reform and change. This perception was shared by most stakeholders. Yet laws of inertia, entrenched vested interests had held back necessary change. Now, obviously the task was difficult. You know, the problems were accentuated by three factors. It was a world of governance without hierarchies. That is what makes universities special. They are different. There are no hierarchies. And this is what I said to Larry Summers when he came to see me at the time he was having difficulties in Harvard. We also had a system in which there was no reward for performance and no penalty for non-performance, and resources were desperately scarce. Now this was juxtaposed with the generic problem of universities. I'm being honest. I am an academic and I said this to Larry Summers. He says, you're absolutely right that, you know, everyone has rights, but no one has obligations. There are Republican citizens. It's not, as Kennedy said, ask not what you can do for the country or the other way around. Everybody wanted to know what we could do for them at the university, but nobody ever wanted to think of what they can do for the university. Now, I recognize that in this milieu, no change was sustainable unless it had ownership among stakeholders. Okay? And therefore, my endeavor was an exercise in persuasion, to inculcate an espirit de corps among those who cared, and their number grew at a surprisingly rapid pace. So a growing circle of people who came committed to the idea of changing the university, and our focus was on curriculum change. Courses had not changed for half a century, on faculty appointments you got a sense of what things had become and on infrastructure, developing infrastructure which was crumbling. You know, and I'll tell you, Amartya Sen came to see me soon after I became Vice-Chancellor. He said, 'Deepak, why do you do this? You have so much talent, don't waste your time.' So I said, 'Dada, please remember, I came to this. The University of Delhi was my portal to the world. It's payback time. I owe it a debt of gratitude.' And that's really what drove me in a sense of mission to try and introduce that change that was sustainable and it was sustainable if and only if it had stakeholders going for it. Now, this did lead to a transformation which validated my belief that a better world is possible. I left the University of Delhi on completing my tenure of five years without any rancour and with a lot of goodwill. It doesn't happen often, not at the University of Delhi. Now, my individual values, you ask? They were a great asset in this transformation. The knowledge and my reputation as a scholar gave it academic credibility, reason and persuasion, combined with integrity and impartiality, provided a moral stature. I had no authority apart from that moral stature, fearlessness in the face of intimidation from vested interests that were hurt and a fierce independence from governments. All of them in India are in the habit of intervention, micromanagement and a staunch commitment to preserve the autonomy of the university as an institution created trust. And I did one more thing apart from pluralism, diversity, tolerance and empathy, gender sensitivity and equality. I had of—in undergraduate colleges, I appointed 35 principals in my tenure, 33 were women. My team, the vice chancellors team, the president's team had never had a woman. I had half of them were women. And they really did help transform the institution. Now, you know, of course institutions should be and always are larger than individuals. But I think it's possible for individuals to make a difference. The only problem in life is that it takes years to build institutions. It takes months to destroy them. And I'm beginning to see some of that happen in India. And one last line, you know, the American Association of University Presidents invited me to speak at their annual conference in Los Angeles during my tenure in and the title of my opening talk was 'Why Can't University Presidents Sleep at Night?' And it was loved because all of them shared that sentiment.

Yeah, these books are about the big picture sketched with bold strokes on a wide canvas, which span a wide spectrum across centuries and time and continents in space. The narrative is not about joining the little dots. Now, both books endeavor to understand outcomes in economic development in the wider context of social and political factors in which history matters at the intersection of the social sciences. The books also illustrate how the whole is different from, if not greater, than the sum total of the parts. Now, you might ask what prompted me. One. For far too long, the economic history of the world has been written largely in the West from an essentially European perspective. It's a Eurocentric worldview. To such history often begins with the rise of Europe after the voyages of discovery or the Industrial Revolution. The three. There is hardly any reference ever to the overwhelming significance of Asia in the world economy until 1970. Because in 1750, Europe and Asia were roughly comparable in terms of demography, technology and institutions. Or even 1820, when China and India together accounted for half of world income and half of world population. Never mention. Now, you know, Myrdal's celebrated book, 'Asian Drama,' believe it or not, he was a very remarkable scholar, citizen, politician. But his inquiry into the poverty of nations begins in the '20s and '30s to look at what happens in Asia after 1950. And he's writing in the mid '60s without any recognition of the fact that the state of Asia, the underdevelopment of Asia in 1950 was a consequence of European imperialism and colonialism over the preceding 150 years, which he ignores altogether. Now the perspective in my books from the other side is different. I view the evolution of the world economy through the lens of the global South, and I think time has come to redress the balance. I hope more scholars from the South will do this. Now 'Catch Up' analyzes the evolution of developing countries, Latin America, Africa and Asia and the world economy in a long term historical perspective from the beginning of the second millennium. But with the focus on the period 1820-1950 and 1950-2010, in doing so, it highlights the overwhelming significance of Asia and traces the decline and fall during 1820-1950 and explores the factors responsible for that decline and fall as also the factors responsible for the subsequent rise in particular of Asia. It recognizes that this catch up is concentrated in a few countries. Growth has not been transformed into development as the well being of people, and developing countries can sustain this if and only if they transform themselves into inclusive societies where economic growth, human development and social progress move in tandem. Now, resurgent Asia is, in a sense, a sequel. Why did Asia do well and Latin America stagnated and Africa do badly? Now you know—I provided an analytical narrative of this remarkable story of economic development because according to Myrdal, Asia was doomed. It had no future. And I situated in the wider context of historical, political and social factors while providing an economic analysis of the underlying factors. Now, in 1970, some of you might not be conscious of this. Asia was the poorest continent in the world, poorer than Africa. Marginal except for its large population. By 2020, it accounted for one third of world income, 2/5 of world manufacturing and more than one third of world trade. While its per capita income converged towards the world average. Once again, this growth has been very unequal and very uneven. Now there is a third dimension to my big picture work. Since it is not a book, it's written in journals or shorter pieces. I want to mention it. That is about globalization in a historical perspective. This work began three decades ago and has evolved exploring the intersections of economics, politics and history from beginning with Pax Mongolica 1242-1350. The Age of Mercantilism, 1500 to 1780, the more recent Pax Britannica and Pax Americana. Now, during the second millennium, there were waves of globalization and deglobalization that straddled continents and geographies driven by trade and flag, war and peace or technology and politics. For people who lived in those times, at every juncture, the process seemed unstoppable. But history suggests that globalization has always been a fragile process. In fact, it has come to an abrupt or unexpected end not once, but many times in the past, and almost always because of its own consequences. The process has also been reversible as globalization has been followed by deglobalization. And the factors range from the spread of disease, pandemics, you know, the Black Death, the political and economic strains between winners and losers, whether countries or people. When the first phase of globalization, 1870 to 1914 came to an end. Thus, I argue that globalization has never been either the end of history or the end of geography.

Okay, a last word. Now, Thomas Carlyle probably describes economics as a dismal science in the mid 19th century, essentially because of Thomas Malthus and his pessimism. Now, that proved to be entirely wrong. The world has 7 billion people. We have enough food to feed everyone. The problem is that the people who need the food do not have the incomes with which to buy it. Just as in famines, people die not because there is not enough food, because they do not have sufficient incomes to buy the food with. Yet if I might use a Churchillian epithet, I don't like Winston Churchill, but his epithets are wonderful. Never have so few received so much attention for so little reason as economists have since the middle of the 20th century. And they are blissfully unconscious of the dismal world around them today. You know, in the early 21st century, the World Bank estimates that at least 1 billion people, possibly 2 billion people, live in absolute poverty. It depends. That is a critical minimum needed to survive in terms of food. It depends on where you draw the poverty line. Even as poverty persists, economic inequalities have risen at an exponential pace to reach awesome levels. You know, the World Inequality Report for 2022, which Thomas Piketty runs and organizes, but there's a big team that does it shows that in 2021, the share of the richest 10% of the world's population in world income was more than 50%. The share of the richest 1% among them, the super rich was 20%, whereas the share of the bottom 50% was a mere 8.5%. Okay. The distribution of wealth is even more unequal. You know, the richest 10% have 76% of the world's wealth. And the richest 1% among them have 38% of the world's wealth. The poorest 50% have less than 2% of the world's wealth. These are just numbers, but they represent a dismal reality. Now, you ask about economics, and I will give you a short answer and I'll shut up. In my view, the essential problem with the economics is that it concerns have become much narrower with the passage of time as analytical abstraction and a technique fetishism has captured the imagination of those in the profession. Where, not surprisingly, reward systems shape belief systems. It might do better economics that is, if it recognizes the important legacy of its intellectual origins as moral philosophy or political economy. I will be an optimist about economics and its future if economists recognize that knowledge is developing at the intersection of disciplines, whether we consider physical sciences, natural sciences, life sciences or humanities and social sciences are no exception. After all, economy, politics, society, history and geography are closely intertwined and interdependent. I believe it is time to rethink the orthodox worldview of economics. We think of other social sciences as soft disciplines. Indeed, even heterodox or unorthodox economists like myself or even Joseph Stiglitz are now being dismissed a non economists by the orthodoxy in the profession. It is time, perhaps, as some scholars say, in anger or in anguish, for economics to abandon its imperialism in the wider context of social sciences. The chances are that I am and will remain a voice in the wilderness. But I hope the unfolding reality of the world, which is dismal, will read economics and economists to thinking a little bit differently about the world. Now, the challenges of the 21st century, just four bullets. The obvious challenge for the 21st century, not just for economists but for humankind, is climate change. But everybody knows everything about that. There are three challenges that I wish to place before you in closing for you to think about. First. Inequality. Economic inequality is a huge economic, social and political challenge. It will not be possible for governments to sustain this level of inequality that we have reached. And that will need some, you know, political sagacity, wisdom to think about. Second, unemployment, you know, for one, the obsession of governments and central banks in managing inflation to raise interest rates. They have forgotten that full employment was also an important objective in terms of well-being. Now, unemployment levels, except in the United States, which is a wonderful miracle story, it's an economy that's humming. Labor markets are very tight. Economic growth and productivity increases are its highest, much better than elsewhere. But everywhere else, the problem of unemployment is huge. Europe, Asia, Latin America, Africa. And last but not least, I think we need to worry about our world economic and political order. In many ways, to me, just think of the world around us. It's in a state of flux. Economies are going through difficult times, if not crisis. Politics within countries is contentious, if not polarized. It is in mine. It is in yours. The geopolitical divides are visible and sharper than they have ever been for decades. International relations are strained and there are several potential flashpoints. Ukraine is only one. It would seem to me that our world in the third decade of the 21st century represents a picture that is not very different from the picture of the 1920s and 1930s. So there are some hard lessons that we need to learn from history. And what this is going to need is really a kind of enlightened political leadership combined with the imagination of some in creating an architecture for international cooperation. At this moment, both looked like distant dreams. Thank you.