The Foreign Service Journal, May 2008

Next door, the Indian economy would remain a lumbering elephant until 1991. When Rajiv Gandhi, the ruling Congress Party’s candidate for prime minister, was assassinated, the party selected 70-year-old P.V. Nara- simha Rao to run in his place. Upon taking office, Rao’s administration ini- tiated broad changes that truly opened India to international economics and trade for the first time since its inde- pendence. Meredith competently catalogs the benefits globalization has brought the two Asian giants, such as lifting 200 million Indians and Chinese out of poverty during the 1990s alone. China doubled its per capita GDP in just nine years starting in 1978, and then doubled it again by 1996. Yet, as she acknowledges, it has been a mixed blessing. Both countries suffer from poor infrastructure and massive envi- ronmental pollution, with associated health problems. Meredith suggests both countries would be ideal markets for U.S. environmental companies, especially those with experience in massive cleanup operations. Challenging a common misconcep- tion, she also asserts that U.S. compa- nies are currently drawn to India and China not to exploit cheap labor, but because they want to establish their products and services in two countries that each have a billion people. They know that as Chinese and Indians become wealthier, they will have the economic means and the desire to buy the products and services they can now ill afford. “Chinese factory workers, whether making light bulbs, talking toys or ten- nis shoes, earn each day about what Americans pay for a latte at Star- bucks,” Meredith writes. And Star- bucks is already doing very well, even in a nation where tea has long been favored over coffee. Indeed, it has become a status symbol, not despite but because of its extravagant prices: A tall latte costs 22 renminbi, about $2.75, enough money to buy a sub- stantial lunch for an entire Chinese family. As American factories have relocat- ed to China and customer call centers and IT centers have moved to India, unprecedented job losses in the U.S. have stirred angry workers to push Washington to take protectionist mea- sures. Fortunately, recognizing economic reality, U.S. politicians have done little more than offer retraining programs for workers who have lost jobs to the international labor market. Meredith agrees that protectionism and unre- strained free trade are undesirable policy choices, arguing that Ameri- cans must become more innovative and better educated to enjoy the ben- efits of globalization. This is a reader-friendly book because the author doesn’t overuse statistics to make her points and draws on considerable reporting experience in both countries. Her analysis is bal- anced throughout, though she does put slightly more emphasis on China 64 F O R E I G N S E R V I C E J O U R N A L / M A Y 2 0 0 8 B O O K S To her credit, Meredith doesn’t overuse statistics to make her points and draws on considerable reporting experience in both countries.