ASIA TIMES

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A stable and smart BRICS route to de-dollarization

BRICS basket or digital clearing unit backed by currencies and commodities could supplant the buck and fulfill Keynes’s bancor vision

by Bhim Bhurtel February 18, 2026

By any honest reading of history, the international monetary system was never neutral. It was a political settlement, forged in 1944 at Bretton Woods, that elevated one country’s currency to the status of global money.

That settlement—shaped by the ideas of Harry Dexter White and accepted despite the objections of John Maynard Keynes—served the world well for the post-World War II period. But its core asymmetry has outlived its legitimacy.

Today’s global economy is multipolar in production, consumption and distribution, but unipolar in its financial system. The dominance of the US dollar has created a structural imbalance: the issuer of the reserve currency can run persistent deficits, while the rest of the world must struggle to adjust through painful austerity, reserve accumulation or volatile capital flows.

This has created a persistent challenge for the global economy: dollars are American, but its problems are shared by developing countries. This is the very dilemma Keynes warned against when he proposed a neutral international currency, known as “bancor”, managed through a clearing union that disciplined both trade surplus and deficit countries.

Eighty years later, the case for a modern bancor has returned—not as a nostalgic revival, but as a practical necessity of the time. The most credible impetus for reform is emerging not from Washington or Brussels, but from the Global South, particularly the expanding BRICS grouping and its New Development Bank.

Beyond dollar hegemony

The debate is often caricatured as a geopolitical contest between the dollar and rival national currencies. That is the wrong frame.

Replacing one hegemonic currency with another would simply reproduce the instability of the current system. A Chinese renminbi-dominated order, for example, would raise the same concerns about asymmetry, external constraint and political leverage that now surround the greenback.

It seems that China, as the world’s largest exporter of manufactured goods and technology, does not want its currency to become a global reserve currency. Doing so would likely cause the renminbi to appreciate, making Chinese exports more expensive and potentially reducing global demand for its goods, services and technology.

The real alternative is not another national currency, but a non-national one. This is why both the Global South and Global North should consider a BRICS currency for settlement purposes rather than as a reserve currency.

A BRICS-led reserve asset, structured as a basket or digital clearing unit anchored in a diversified set of currencies and commodities, could approximate Keynes’s vision for bancor.

Its purpose would not be to displace national currencies, but to act as a neutral unit of account and settlement for international trade and finance. Crucially, it would be governed multilaterally, with no single country able to weaponize it for domestic or geopolitical ends, as the US has been doing with the dollar.

This is not a utopian idea. Elements already exist in bilateral currency swaps, local-currency settlement mechanisms and pooled reserve arrangements. What is missing is integration into a coherent clearing system with automatic stabilizers—precisely what Keynes proposed 80 years ago.

Restoring symmetry and stability

At the heart of Keynes’s design was a principle still absent from today’s system: symmetry of adjustment.

Under a modern clearing union, persistent surplus countries would face charges on excess reserves, incentivizing them to expand domestic demand or invest abroad. Deficient countries, meanwhile, would have access to overdraft facilities that prevent sudden contraction.

This is not merely a technical fix. It would rebalance the global economy away from chronic underconsumption and deflationary bias towards stable, demand-led economic growth. It would also reduce the need for developing countries to accumulate vast dollar reserves as self-insurance for payment of import and foreign debt service—a practice that diverts resources from the domestic investment and social development they desperately need.

For many countries in Africa, Asia and Latin America, such a system would offer what the current one does not: macroeconomic policy space for their economies. Governments could pursue job creation, industrialization and climate investment without the constant threat of currency crises, global North economic shocks or World Bank- and IMF-imposed austerity measures.

Critics of reform often argue that the dollar system underwrites global trade and financial openness.

Yet, in practice, it has increasingly been used as an instrument of coercion—through sanctions, financial exclusion and regulatory overreach. This erodes trust and fragments the very globalization it claims to support. It is imperative to respond to US policy instability every four years and recently to its rising protectionism.

A neutral clearing currency would delink trade from geopolitical leverage. It would make sanctions more targeted and legitimate rather than resort to system-wide disruptions. It would also encourage genuine free trade by lowering transaction costs and exchange-rate volatility across diverse currency zones.

This is not an argument against open markets. On the contrary, it is an argument for a fairer infrastructure for open global markets—one that does not privilege the domestic policy needs of a single country over the stability of the global financial system as a whole.

Multipolar order

If Bretton Woods reflected the power realities of 1945, a new settlement must reflect those of 2026. Emerging economies now account for the majority of global growth and a rising share of trade, savings and investment. Yet they remain underrepresented in the governance of Western-dominated legacy institutions such as the IMF and World Bank.

A BRICS-anchored clearing union would not replace these institutions overnight. But it would create a parallel pillar, one that is more representative, more development-oriented and less loan-conditionality-driven. Over time, it could catalyze reform within older institutions, forcing them to become more inclusive and responsive to the concerns of Global South nations.

To succeed, any new system must avoid becoming a vehicle for the dominance of its largest member. That requires transparent rules, rotating leadership and voting structures that balance economic weight with regional representation.

The principle must be clear: no country, however large, can monopolize or weaponize the global financial system. That only levels the playing field for the Global South countries.

Bottom of Form

Skeptics will note that global financial orders do not change easily. They are embedded in legal contracts, financial markets and political alliances. But history shows that they do change, often in response to crisis. The breakdown of the gold standard, the creation of Bretton Woods and the shift to floating exchange rates were all once deemed improbable before 1944. Now we are at the same moment.

The transition to a 21st-century bancor need not be abrupt. It can begin with incremental steps of expanding local-currency trade within BRICS and partner countries; issuing bonds and development loans denominated in a common unit; creating a digital clearing platform for cross-border payments; and gradually widening membership to include other emerging and advanced economies willing to participate in the system.

What matters is the direction of the trajectory: away from a system defined by a powerful nation’s privilege and towards one grounded in multilateral balance.

New Keynesian moment

At the end of day, the choice is not between the status quo and chaos in the global financial system. It is between an aging system that generates recurrent instability and a reformed one that internalizes the lessons Keynes taught eight decades ago.

To be sure, a neutral, rules-based, symmetric financial order would not eliminate crises. But it would make them less frequent, less contagious and less unjust for every country. It would allow countries to trade more freely, invest more productively and grow more inclusively together in ways that best serve their nationals.

For too long, the architecture of global financial system has been written in the language of power. It is time to rewrite it in the language of justice, fairness and inclusivity.

The Global South, through BRICS+ and beyond, now has both the incentive and the capacity to lead that effort. The question is no longer whether a new bancor is desirable. It is whether the world can afford to wait any longer to create it.

Top of Form

Bhim Bhurtel teaches Development Economics and Global Political Economy in the Master’s program at Nepal Open University. He was the executive director of the Nepal South Asia Center (2009-14), a Kathmandu-based South Asian development think-tank.

EVs and renewables are best way for South Africa to loosen oils grip

CHINA

The long shadow of the one-child policy: China pays for its biggest social experiment with a demographic crisis

The low birth rate is one of the greatest headaches for Beijing, which in just 10 years has moved from the one-child policy was perhaps the greatest social experiment in human history. With the goal of curbing population growth at all costs, for just over 35 years China only allowed families to have one child. Communist leaders outlined the measures with a slogan in 1978: “One is better, two at most, leaving a three-year gap.” In 1980 it became state policy. By 1982, 96% of families in cities were having only one child, according to the Urban Household Survey.

Through a system of fines and penalties for non-compliance, the birth rate of what was then the world’s most-populous country was brought to a screeching halt. Until the policy itself became a problem. With the population pyramid inverting, Beijing put an end to the one-child policy in 2016, allowing couples to have two children to “balance demographic development and address the challenge of an aging population.” It hasn’t succeeded. Ten years later, the declining birth rate is one of the biggest headaches for the Chinese government.

The shadow cast is long. During its implementation, the one-child policy gave rise to horrific stories of abortions, abandonment, and children who grew up unregistered. It particularly targeted girls, whom many families rejected. At the same time, a new kind of only-child society was shaped, known as “little emperors” — hyper-developed, pampered children who have grown into adults while China’s GDP grew at an average rate of 10% and the country ascended to the pantheon of superpowers.

Ma Li, 53, raised her only daughter (now 24) hoping she would have “the same rights and opportunities as a boy.” “I raised her to be brave and know how to stand up for herself,” she says over the phone. After giving birth, she had an intrauterine device (IUD) inserted, as millions of women did during the years when birth control was widely available. She maintains that in her case it was a voluntary decision, although human rights organizations have documented that it was a widespread medical practice and, in many cases, subject to administrative pressure.

She acknowledges that, had she had the option, she would have wanted more children. But she maintains the policy “freed women from having a permanent reproductive function.” “Each era has its own logic,” she reflects. “Now many don’t want to have them. Some don’t even want to get married.”

In rural areas, the rule was not always followed with the same rigor. Distance from centers of power, the need for labor, and the demographic realities themselves meant that its application was uneven and, at times, more lax. In many villages, informal exceptions, delays in registration, or births that went unnoticed by the bureaucracy were tolerated.

Some families made decisions outside the system, like that of Ms. Mei, a 49-year-old from Sichuan. “We rural people didn’t understand the reason for the controls,” she explains in a message. She describes how almost every house in her area had several children. So, when her second child was born (her firstborn was a girl), she registered him in her sister’s family registry. She regularized the situation in 2015 — the year the policy was abolished — and paid the corresponding fine, which, she says, “was no longer comparable” to what she would have had to pay in 2003. For 12 years, in the eyes of the authorities, the child was his aunt’s son.

In Ms. Mei’s opinion, raising children used to be “simple.” “Having something to eat was enough.” She attributes the low birth rate to “enormous current demands” and a combination of factors: stagnant wages, high stress levels, and a lack of shared domestic responsibility.

In China, the fertility rate continues its freefall, despite the fact that in 2021 married couples were allowed to have up to three children. According to the World Bank, only one child is born to every woman, one of the lowest replacement rates on the planet (for the population not to decline, 2.1 children must be born per woman). In 2022, the country’s population decreased for the first time since the 1960s. In 2023, it was surpassed by India as the most populous country. China is aging rapidly, and society is sustained by a shrinking number of working-age citizens. The birth rate and the number of newborns declined for seven consecutive years before experiencing a slight rebound in 2024. The United Nations projects that China’s population will shrink from its current 1.4 billion to 633 million by 2100, a change that could hinder growth.

Thus, these issues have become a “national security” priority. “The rise and fall of major powers are often profoundly affected by population conditions,” Chinese President Xi Jinping said in a 2023 speech. “Therefore, demographic security must be incorporated into the broader framework of national security and carefully planned.” The leader advocated “shifting from primarily regulating quantity to focusing on improving quality, stabilizing the total population, optimizing the demographic structure, and enhancing population mobility.” Analysts interpreted this as a shift in approach: from control to incentives.

Authorities are now promoting what they call a “new culture of marriage and parenthood.” Policies are being rolled out on numerous fronts, from longer parental leave to tax breaks. Local governments are holding mass ceremonies to encourage marriage. Since May, couples have been able to marry anywhere in the country without needing to register the union in their home district (the so-called hukou). Officials are even available to register unions at tourist resorts, nightclubs, and music festivals.

This year, for the first time, the Government Work Report, an annual document that reviews policies and sets goals, mentioned the need to “provide childcare subsidies” and develop daycare services. In July, a nationwide aid program of 3,600 yuan (around $515) per child under three was approved. And last week, the National Health Security Administration pledged to “basically achieve” that by 2026 citizens will not have to pay out of pocket for hospital childbirth expenses, which amount to about 5,000 yuan for a vaginal delivery and 10,000 yuan for a cesarean section (around $715 and $1,430, respectively), according to the Shanghai Observer. Currently, most provinces have a co-payment system for medical expenses, including those related to childbirth.

In another sign of the changing times, starting in 2026, condoms will be more expensive: 13% VAT will be applied to condoms and other contraceptives, which had been exempt since 1993 as part of the one-child policy.

“The decline in the fertility rate is inevitable, like a giant boulder rolling downhill,” says Yi Fuxian, a researcher at the University of Wisconsin-Madison. It is a consequence of developed societies, and Asia is a prime example, with plummeting rates in Japan and South Korea. “China’s one-child policy accelerated the process,” adds the author of Big Country with an Empty Nest (2007). He believes that, despite the Chinese government’s efforts, it will be very difficult to roll that boulder back uphill.

Yi believes the one-child policy has changed attitudes toward motherhood and fatherhood and “distorted moral values about life,” he writes in an email. “Having only one child or no children at all has become the social norm.” He predicts that marriages will continue to decline (despite brief upticks in 2023 and 2025) and couples will postpone having children. He doesn’t think the policies introduced will achieve much. “What China is trying to do, Japan has already done.” And unsuccessfully. The country “is aging before it gets rich,” he concludes. And “doesn’t have the financial resources to fully follow Japan’s path.”

Economist Keyu Jin, born in 1982 and an only child like the vast majority of her generation, believes that the implementation of the one-child policy led to “numerous horror stories” and has profoundly marked the country. But not only for the worse: “It can help explain the high savings rate of urban Chinese households [and] the extraordinary increase in the level of higher education,” notes this professor at the Hong Kong University of Science and Technology in The New China Playbook (2023). “In a surprising twist, having fewer children dramatically raised the status of women,” she adds.

Statistics show that there are about 30 million more men than women in China, an anomaly stemming from the preference for sons during the one-child policy. But those like Jin herself haven’t had to compete with siblings for resources, particularly in education. Numerous studies prove that women have, on average, received more years of schooling than men, she writes. And this has contributed to giving their peers greater social and professional standing.

It has also given rise to a generation of more independent women, both economically and personally, and more self-assured. “Now there are more ‘sisters’ who are raising their voices and showing others that we have to fight for more rights and autonomy,” says Winnie Tang, 27, founder of Spring Reel, a series production company, in an exchange of messages. For her, women’s “liberation” means “having the right to refuse and not accept imposed demands.” In her mother’s time, “starting a family was the highest destiny a woman could aspire to.” Her generation, however, prioritizes other goals, such as developing “a career we are passionate about” or enjoying “the pleasure of doing the things we love.”

 

Zimeng Yan contributed to the preparation of this report.

EL PAÍS USA Edition

 

South Africa’s economy collapsing one domino at a time
Shaun Jacobs • 7 September 2025

South Africa’s economy is imploding, with key industries falling one by one like a set of dominoes after 15 years of mismanagement and poor government policy.
The job cuts taking place at industrial giants such as ArcelorMittal, Goodyear South Africa, and several mining giants have resulted in the government being deeply concerned about the impact on the economy.
However, the government has failed to make meaningful changes to its approach to economic policy in South Africa and create an environment conducive to investment and growth.
The country’s economy has grown at an average annual rate of 1.1% for the past fifteen years and is now beginning to feel the consequences, with a looming financial crisis and an unemployment disaster.
All the while, the government has failed to grasp how a modern economy functions and what incentivises heavy industry to be created.
This is feedback from former Standard Bank chief economist Dr Iraj Abedian, who said the country should not be surprised by the thousands of job cuts being announced recently.
“It is an unfortunate and depressing conversation to have. It is nothing new and should have been expected over the past 15 years,” Abedian told Newzroom Afrika.
“Our industrial sector has been contracting consistently, and despite all the expressions of concern and government statements, the state has not dealt with the root causes.”
“This is not a recent issue. It is a 15-year consistent lack of attention to what makes an economy favourable for and conducive to industrialisation and the creation of high-value jobs.”
Abedian explained that the thousands of job cuts are almost the end of a 15-year process of economic mismanagement from the government.
South Africa’s key industries, such as steel manufacturing, smelting, mining, and automotive manufacturing are now collapsing under the weight of a stagnant economy and a difficult operating environment.
“All of these are now rapidly, one after the other, like a domino, falling down and imploding with thousands of job cuts,” Abedian said.

Government failures
Chief Executive of Pan-African Investment and Research Services Dr Iraj Abedian –
South Africa’s government has failed to address the root causes of the country’s economic and industrial decline, with its focus being elsewhere.
It has consistently issued statements declaring its grave concern and has appointed various committees to investigate the decline, with little policy changes occurring.
In this sense, Abedian explained that the government has failed to grasp what encourages investment and expansion from businesses in an economy.
“All that we hear from the government is an expression of concern. What is an expression of concern? A minister is not paid to be concerned,” Abedian said.
“A minister or a director-general is paid by the taxpayers to do something about it, or to prevent it, or to come up with solutions. All of us, including my granny, can express concern.”
“The minister and the Cabinet are responsible for doing things as opposed to sitting there and kicking the can down the road.”
Apart from the lack of policy changes or solutions, Abedian highlighted the collapse of infrastructure as one of the key reasons for the decline of South African industry.
South Africa’s infrastructure has collapsed to the point where it is now given a D rating by the South African Institute for Civil Engineers.
This means the country’s infrastructure is at risk of failure and cannot cope with normal demand, with the public being subject to severe inconvenience and danger.
Ten years ago, the country’s infrastructure was rated a C, which meant it was adequate for the immediate future.
Collapsed infrastructure effectively prevents the economy from experiencing any meaningful growth, as the basic resources needed for that cannot be supplied to businesses.
Stanlib chief economist Kevin Lings explained that you simply cannot grow the economy with South Africa’s poor infrastructure.
“Here is the question: Can you grow the economy at 4%? Can you grow South Africa’s economy at 4%? Could we achieve that? No,” Lings said.
“As you try and grow faster, at any rate, you will run out of things. You will run out of electricity. You will run out of water. Run out of rail capacity. Run out of port capacity.”

de-Dollarisation

First quarter 2025 – Client letter

 

Buying a Toyota Corolla instead of a BMW X3 can make you R1.2 million richer

Drikus Greyling • 31 January 2025

An analysis by Daily Investor showed buying an affordable car, like a Toyota Corolla Quest, instead of a luxury BMW X3, can make you R1.2 million richer.

In South Africa, a car is seen as an important status symbol, and many people cannot wait to buy their first luxury car.

Showing off your new BMW or Mercedes-Benz portraits that you are financially secure and have achieved career success.

However, buying an expensive luxury vehicle comes at a tremendous cost. It is a poor investment which destroys wealth.

Daily Investor compared the difference between buying a luxury vehicle and opting for a cheaper alternative and investing the savings in the S&P 500.

For this comparison, we selected two of the most popular vehicles in their respective categories and considered their financial impact over six years.

• BMW X3 xDrive 20d
• Toyota Corolla Quest Plus

We assumed that the two buyers had the same budget. The first one spent his full budget on a car, and the second selected a cheaper car and invested the rest of the money.

Both vehicles were purchased in 2019 with loans covering 100% of the purchase price at an interest rate of 13%, repayable over a 6-year term.

Both cars were insured using a constant insurance profile to make the insurance premiums comparable.

It should be noted that insurance is subjectively applied to individuals and will differ from person to person.

In this case, the insurance profile was kept the same for both vehicles, which means the insurance premiums can be compared.

Insurance quotes were obtained from Naked Insurance for brand-new models of the same vehicle and proportionally applied to their 2019 prices.

We assumed the insurer’s risk profile remained constant over the 6 years, and the premium was adjusted for inflation to cover the vehicle’s replacement value.

For the sake of simplicity, it was assumed that both vehicles were sold with a complete service plan covering all maintenance expenses over their 6-year financing period.

Only the fixed costs of the vehicles were compared. This means that costs such as fuel and tyre wear were not included.

In 2019, a new BMW X3 xDrive 20d cost R789,000 and could be comprehensively insured for R2,001 per month.

To own this car, the monthly repayment would be R15,668, paid from January 2019 to December 2024.

This brought the total fixed costs of the BMW to R17,669 per month, which gradually increased to R18,161 over the repayment period due to rising insurance.

In 2019, a new Toyota Corolla Quest Plus cost R277,000 and could be comprehensively insured for R1,109 monthly.

The monthly repayment on the vehicle for six years was R5,501 over the same period as the BMW.

This brought the total fixed costs of the Toyota Corolla to R6,610 per month, which gradually increased to R6,883 per month due to rising insurance costs.

This means that the owner of the Corolla saved R11,059 per month from the first month by not buying a BMW.

Every month, the Toyota Corolla owner invested his savings in the S&P 500, which helped him accumulate wealth while driving a cheaper car.

After six years, when both cars were paid off, the BMW X3 xDrive 20d owner can sell his car for R468,900. The car was his entire investment over the period.

The owner of the Toyota Corolla can sell his car for R209,900. However, his S&P 500 investment with the excess cash grew to R1,423,942.

This means the Toyota Corolla Quest Plus had assets of R1,633,842 after six years, much more than the BMW owner’s R468,900.

It shows that buying a more affordable car and investing the rest created an additional nest egg of R1.164 million over six years.

The table below summarises the difference between buying a luxury and a more affordable car over six years.

Measure	BMW X3 xDrive 20d	Corolla Quest Plus
Car Value after 6 years	R468,900	R209,900
S&P500	Zero	R1,423,942
Total Wealth	R468,900	R1,633,842

Articles and other information on Daily Investor is for information purposes only and is not financial or investment advice. It should not be seen as a recommendation to buy shares in any company. Our content is produced without considering the objectives, financial situation, or needs of individuals. Before making any investment decision, prospective investors should consider the appropriateness of the information to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction.

Second quarter 2024 client letter

India’s economy can overtake China’s if it can stay on track

But complacency toward reform and trade links could haunt New Delhi

Alicia Garcia-Herrero

April 12, 2024 17:00 JST

 

Alicia Garcia-Herrero is chief economist for Asia-Pacific at investment bank Natixis in Hong Kong and an adjunct professor in the economics department of the Hong Kong University of Science and Technology.

Will India’s gross domestic product ever surpass that of China?

Ten years ago, no one would have given this question much thought. But times are changing. The Chinese economy may now be more than five times larger than India’s, but India is growing much faster than China, and no one expects that to change anytime soon.

Already, since 2010, India’s economy has overtaken those of the U.K., France, Italy and Brazil in size. Japan, which last year slid behind Germany to become the world’s fourth-largest economy, is set to be the next to fall behind India, sometime in the next few years.

Unless there is a major shock then, the Indian economy is on track to converge in size with that of China over the coming decades. Whether Indian output will actually overtake that of China is hard to predict, since that will depend on how swiftly Chinese output decelerates and how long India continues to benefit from conditions favorable to its growth momentum, including an expanding, urbanizing population and Western investment interest in the country as a hedge against dependence on China.

China’s growth rate has been coming down from its previous double-digit pace since 2010, with the government this year aiming simply for a rate of “around 5%.” But for an economy with a per capita GDP above $10,000, 5% growth would already be exceptionally good. South Korea is the only country to have reached that income milestone and then sustained average GDP growth above 5% for another decade.

Chinese growth will likely have its ups and downs in the coming years, but its structural deceleration is a fact of life. Every factor behind China’s potential economic growth is slowing, including potential contributions from labor, labor productivity and investment. Returns on investment have been coming down for the past decade and are now similar to those of developed economies.

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Without major structural reforms, China’s growth rate will subside to about 2.4% by 2035. It will then continue to slow as China’s urbanization rate, currently at 60%, approaches the 75% of developed economies. As the country’s overall population declines , the pace of annual growth may hover around 1%, like that of Japan today.

India is at a very different point in its development. Over the last decade, its average growth rate has been about 7%, which should be sustainable given that even with recent urbanization, only about 35% of its population lives in cities.

India can also be expected to draw significantly more foreign direct investment into its manufacturing sector. Such flows provided a significant lift to China in past decades, but now foreign companies and government are looking for alternative production bases amid the great power competition between Washington and Beijing.

India’s central role in the Indo-Pacific region, anchored by the world’s largest population and the country’s rising economy, will lock in U.S. interest. The European Union, too, is keen for India’s momentum to continue as it battles over export markets with China.

One key uncertainty with this picture involves Chinese innovation. China has been increasing spending on research and development to levels similar to those of developed economies, though the amounts remain much lower than those of South Korea or the U.S. This investment has already been paying off, with China moving quickly up the ladder in many industrial sectors and making breakthroughs in a number of scientific fields.

However, this innovation drive does not seem to be generating any productivity gains in terms of China’s total factor productivity. This phenomenon, which bodes ill for reviving China’s growth momentum, appears related to the lack of substantial economic reform over the last two decades.

It can also be traced to the increasingly difficult environment facing the most vibrant part of China’s economy, the private sector. Adding in headwinds from Washington’s tightening technological containment measures, it is difficult to be optimistic about Chinese growth.

At the same time, it is worth asking whether India might fail to sustain its current momentum. It would not be the first time. Do not forget that India’s economy was not much smaller than China’s as of 1990. But excessive planning and government-led industrial policies, and a lack of agricultural reform, held India back as Chinese growth exploded.

Reflecting on China’s experience, India will need to work harder on its own “reform and opening up” agenda.

Reform moves by the government of Prime Minister Narendra Modi during his second term, which is about to come to an end, suggest that he had gotten the message. But it is an open question about what direction he will take should he win a third term, as expected, when Indians go to the polls later this month.

Modi’s “India First” agenda, which carries a clear tone of self-reliance, especially as far as the industrial sector is concerned, is worrying. His divisive social agenda also could bring headwinds.

Yet, all in all, India seems set to have an economy as large as that of China by around the middle of the century, as well as a much larger population. Crucially, whether India manages this feat will be in its own hands. Complacency about reform and openness will be just as problematic for New Delhi as it is now for Beijing.