Mumbai Consensus

The Mumbai Consensus is a term used to suggest the potential for the spread in global influence of India, with a unique and people-centric approach to managing its economy which may be taken up continually by other developing nations in time.^[1] The term is used to suggest that India has a unique model of economic growth, where domestic consumer demand plays an intricate role with a continued trend of exporting, with a balance between internal demand and exports as the driving force of economic development. ^[2] This model of economic development remains destinct from the Beijing Consensus with an export-led growth economy, and the Washington Consensus focused instead on encouraging the spread of democracy and free trade throughout the world.

Larry Summers

The term is not an official one but was coined by Larry Summers, an American economist and a key advisor and decision-maker for the White House in the Obama Administration, speaking at the U.S-India Business in mid-2010. Summers pointed out that India has a model that should be increasingly watched and could potentially be used as an example for other developing nations, suggesting that as time goes on the "majority of the world’s people (will be) following a Mumbai Consensus".^[3] Summers also suggested that India's model may become increasingly viable for other nations because it does not fail the middle class but instead allows this group to prosper, whilst not deviating from the traditional capitalist approach to running the economy.^[4] Summers also points out that such a Mumbai Consensus is imagined for a time far in the future like 2040, saying that: “Perhaps in 2040, discussions will be less about the Washington consensus or the Beijing consensus than about the Mumbai consensus”.^[5] However, Summers doesn't ignore the fact that even with India's current state of economic prosperity, there still are a number of challenges that would hurt the viability of a Mumbai Consensus, with a need of continued assurance of efficiency of government whilst also having continued faith in the public sector and action which means that continued economic prosperity does not just lead to the success of a select few.^[4] Summers also does not see a Mumbai Consensus like he describes as confrontational with the United States and its own global interests, saying that: "The world that the United States wants to see, the world that India wants to see, is a world of increasing integration, is a world of increasing prosperity, is a world of tolerance, is a world at peace, is a world where prosperity comes from the bottom up, is a world where respect for individuals is the paramount value".^[2]

See also

• Washington Consensus
• Developmental economics
• Globalism
• Potential Superpowers
• Asian Century
• Beijing Consensus

References

1. ^ Chrystia Freeland. The Mumbai consensus. 22 October 2010.
2. ^ ^{a b} The Mumbai Consensus - NYTimes.com
3. ^ Andrew Quinn. Time-traveling Larry Summers envisions “Mumbai Consensus”. 2 June 2010.
4. ^ ^{a b} India and the Global Economy | The White House
5. ^ ‘In 2040, discussions will be about Mumbai consensus’ - Money - DNA

External links

• India and the Global Economy by Lawrence H. Summers. Remarks at The Asia Society, Mumbai, India. 15 October 2010.
• The Mumbai Consensus by Chrystia Freeland. 22 October 2010.