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    India may beat China in long run: Niall Ferguson

    China in many ways is the hare and India is the tortoise in that old nursery tale, says Ferguson.Historian Niall Ferguson fields questions from the unrest in Libya, to the crisis ahead in Japan, to how it's not "end of days" so much as the end of the West's dominance, after 500 years. He also explains why his latest book "Civilization: The West and the Rest" is the history book to read.Amrita Tripathi: Your thoughts on the situation in Libya...Niall Ferguson: Well I think it's fair to say that the US hesitated, flipped and flopped on what it wanted to do. It took ages to decide whether it wanted President Mubarak to stay or go, almost as long if it wants Col Gaddafi to stay or go, and I think this reflected a lack of any strategic concept on the part of President Obama's administration in the region. Now that military intervention has been decided upon, the stakes are quite high. President Obama must now overthrow Gaddafi, and must do it with airpower, not the easiest thing.It's richly ironic when you think of how much Obama criticised his predecessor George W Bush, on Saddam Hussein, another middle eastern dictator...What goes around comes around, now we find him in almost the exact situation in LIbya.Amrita Tripathi: Now the analysis is that it's going to be very difficult to win this without boots on the ground, against which there'd be a huge backlash in the US.Niall Ferguson: My view is there was an optty to tip the balance in favour of the rebels against the Gaddafi regime but it was missed, now it's much harder to do only using airpower. It's impossible to imagine an easy ouster of Gaddafi. Even if he were to take to his heels and run, which doesn't strike me to be in his character there's always the problem of what comes next. We know from the experience of Iraq, that getting rid of a bad guy is usually followed by a period of anarchy. The US has got to be very careful indeed at this point, as do its allies who have pressed for intervention, that it doesn't produce an entirely unintended outcome.There is only one law in history and that is the law of unitendted consequences. and if the net result of all these flips and flops of foreign policy is that we end up with an islamist regime in Egypt or Libya people will look back and say this was a debacle of American foreign policy, comparable with the loss of Iran in 1979.Amrita Tripathi: There's also a lot being read into inaction when it comes to Bahrain...How do you read what we've been seeing over the past few months - from Tunisia to Egypt?Niall Ferguson: I think one should think of this as a region-wide revolution, and look back in history to see analogies, one has to look back much further than 89 in east Europe, which is what many journalists drew when events began in Egypt and Tunisia. I thought that was wrong, and the reason is by comparison west Poland or Czechoslovakia, Egypt and Tunisia, Libya are relatively poorer countries with higher literacy rates, they're also very youthful societies with 20 per cent or more of the population aged between 15 and 24. And these were fundamentally economically-driven crises. it was a spike in the price of food that drove people into the streets in n Africa, more than it was a clear aspiration for democracy or other fundamental pol change. There's been a remarkable lack of leadership in each case -- we still can't point to anybody who is a convincing alternative to Hosni Mubarak. and I think I am more reminded of the 1848 revolutions, than the 1989 revolutions - great revolutions change swept across Europe, beginning in Paris. Within a year most had failed, or in the French case had given rise to a new dictatorship in the form of napoleon the III. I think we can see something very 1848 like here, where we get maybe restoration of military rule in Egypt and who knows what will emerge in Libya. I’m pretty sure the status quo will survive in Saudi Arabi and probably west Saudi help in Bahrain.But there is a NON ZERO probabliity that a much larger conflict may emerge from all of this - between sunni and shia muslims. The real battle for power now is between Iran which would like to take advantage of this instability and the Saudi Arabian royal family, which is terrified they may be victims of it. That could produce a much bigger upheaval and possibly even full-scale war. Right now most people don't see that coming, but I think it's a real issue.Amrita Tripathi: Now switching to Japan - the crisis being seen as the worst since WWII. How do you read their economy, how they'll restructure the economy.Niall Ferguson: The damage caused by the quake and tsunami is comparable with the damage caused by the atomic bombs dropped on Hiroshima and Nagasaki. this is a vastly large earthy than the 1995 Kobe earthquake and the tsunami has hit a relatively densely populated and economically advanced part of the world, unlike previous tsunamis. It will be disruptive in the short term, not only for Japan's economy but also all those countries tat depend on Japanese companies for components or trade on a large scale Japan. It will be disruptive in international currency markets, we've seen a huge surge in the yen, as funds were repatriated to Japan to cope w the aftermath of the crisis. we're going to see a quite significant de-stablilising of Japan public finance - revenues going down and expenditure is going to soar. However you have to look ahead a little further than a month or two, and ask yourself what the effect will be of large-scale reconstruction of the damaged areas. And that I think is not entirely a bad outlook. There’s going to be in other words a kind of stimulus to Japan’s economy and Japanese trading partners as the damage is repaired. The big q is whether Japan as a society has the capabilities to undertake that re-construction work. it is an aged society, you've probe noticed as I have how many of the people in the pictures of the disaster are elderly people. Japan needs a lot of construction workers right now, a lot of people who are going to do basic stuff to clean up this mess. Not clear Japan itself will be able to provide that labour. Ironically there are lots of places in the world that have it, but historically Japan has been very reluctant to import labour. It’s going to be a big question how far the Japanese have the manpower to reconstruct...they certainly have the money. Huge stockpile of international reserves to pay for this kind of reconstruction, there's a real q mark over whether they have the muscle power they're going to need.Amrita Tripathi: I can ask you anything! at this point - one last question before we talk about your book - you have spoken about India and China...Niall Ferguson: I would argue china in many ways is the hare and India is the tortoise in that old nursery tale ... for the next 10-20 years china is going to look like the hare, running faster, well ahead of India in the economic race, but the tortoise may yet win the race over a longer time horizon ...if you look ahead the next 30 years. two major problem china will have to grapple w in the next generation, number one demographic imbalances form the one child policy. Number two a transition to a more democratic political system. I'm in no doubt that the rise of the Chinese middle class, the growth of a free market economy implies a change in china's political system away from one party rule and towards some kind of representative govt. hard to have that kind of transition smoothly. India has got none of those problems -it's already a democracy, not a perfect democracy but is netter than none in that sense I’m relatively optimistic about India’s future.In my new book civilisation i argue that there are six killer applications, six magical institutions that put the west ahead of the rest after 1500. And of these six, china does not have the full complement - India does. India’s got economic competition, it's got science to a pretty high level, and it’s got the rule of law and representative govt which is also crucial, as well as modern medicine, consumer society and the work ethic. These were things that 100 years ago you couldn't really say about it. China has downloaded many of these, but not democracy not the rule of law. Those things are hugely imp for societies to be innovative or for the long run. Freedom - of speech, of press, of association - very important if you compare India and china - I travel to both a lot- the most striking thing is the lack of freedom in china compared to the freedom in India.Amrita Tripathi: You talk about the killer apps, how do you go about doing this in the book - take us through how you set it up...Niall Ferguson: The idea of the book was to write 600 years of world history in a single volume...so if you only read one history book in the next ten years, it should be this one. this will give you a lot of bang for your buck. What I wanted to do was compare the great civilisations of the world, and ask a very simple q. why after 1500 did the warring little kingdoms of west Europe take over the world, including of course India? and why did the big oriental civilisations, mughal India, the ottoman middle east, Ming china - why did they under-perform both economically and ultimately geo-politically. and i can't think of a better way of answering that question than listing these six institutions that developed in the west that didn't develop anywhere else. Once you were equipped with economy competing on, the scientific revolution, the idea of property rights as the basis for the rule of law, once you had these things, even if you were a little country like England you were suddenly able to punch far above your weight and ultimately even conquer and rule the vastly more populous Indian sub-continent.Central to the book is this q - how on earth did this happen? how did a bunch of people like me - I’m a Scotsman -- how did people like me end up ruling so much of the rest of the world, to the extent by 1913, people like me ruled 60 per cent of the world in terms of pop, 80 per cent in terms of economy. There’s another part, a sting in the tail - if it was these six killer apps that enabled the west to rule the rest, is it over? I think we are... the things I’m discussing are freely avail to all civiliasations of the world. the first non- w civilisation to download these west applications was Japan...India was a late-comer, didn't really embark on reform of institutions till 90s. But even if you come late to the party, you can have a lot of fun. That’s why this book is such an exciting book...I think we're living through the end of the 500 years of western predominance, it's happening now!Amrita Tripathi: What happens next?Niall Ferguson: I wouldn't be me if i didn't look ahead a little bit. What futures lie in store for us? I think there's a very real possibility that we will see within 10 years china overtaking the US economically, w India not that far behind. Conceivably both China and India could be bigger than the US by 2050 -- and I hope still to be around to see that. We’re going to see the west shrink demographically between now and 2050 to the point which the west will account for only 10 per cent of humanity.In the shorter term, we're going to see the rest of Asia trying to handle the rise of china as a superpower, we're going to see continued instability arising from Islamic fundamentalism, an ongoing force in the world. we're also going to see a major problem arising of successful Asian economies relative w the finite natural resources the world has to offer. Rising commodity prices not just this year, next year and as far as the eye can see. It's not going to boring- I can't guarantee stability and tranquility, I can certainly guarantee excitement.Amrita Tripathi: What about end of days - any take on that?Niall Ferguson: Human beings are always attracted to the idea of the entire world sharing the same fate that happens to us as individuals...we're all going to die as individuals, it's kind of comforting to imagine everyone’s going to go down at once. that's part of the fascination of apocalyptic visions. Our latest version of this is total evil disseat - the al gore vision of climate catastrophe. We’re attracted to this in a ghoulish way. The world is going to continue, longer than I will continue as an individual and many of your viewers - the big question is whether western predominance is going to end, and that is going to happen pretty soon.