Poor adaptability may hit India story

Ranks 23 Out Of 60 Nations In Change Readiness, Experts Say It's Key To Sustained Growth

If India seems to be struggling to manage inflationary pressures and facing a policy paralysis of sorts, blame it on the country's poor preparedness to absorb change. The country's future prospects, too, look gloomy if a newly-devised index is any indication. 

    The Change Readiness Index captures the capability of individual governments, the privatesector andcivilsocieties in 60 developing countries to respond effectively to change. It ranks India at a low 23, way behind neighbouring China at 13. 

    The index has been devised by Overseas Development Institute, a UK-based development think tank, and KPMG International. It weighs countries on their economic, governance and social capabilities to handle change, tracking key parameters such as investment climate, labour markets, public administration, risk management and active civil society participation. 

    The ability to cope with change, analysts believe, is a good indicator to determine whether a country would have "sustained growth in the long run". India is on its most shaky ground as far as social capability is concerned, with a ranking of 39. That puts it behind all other BRICS nations—Brazil, Russia, China and South Africa. This puts to question the country's investment in human capital—education, skill training and safety nets to reduce citizens' burden arising from labour market volatility, crime and social disruptions. 

    The index throws up a few surprises with countries that have seen recent upheavals being ranked higher. Tunisia, for instance, stands at No. 2 and Syria at 14. "Syria's ranking is unexpected, given its current state," admits the report, pointing outthatthiscould mean that it is equipped for sustainable development once peace is re-established. 

    The index also shows that better outcome measures may not necessarily translate into better change adaptability. This is best brought out through the disparity between Brazil and Chile in South America. While Brazil may seem like the more robust economy, Chile, with its efficient financial market and investment attractiveness, leads the 60 nations in the index and has better mechanisms to adapt to change than Brazil, ranked at 31. 

    The report points out that adaptability to change has emerged as an important facet, given the recent impact of the food, fuel and financial crises.