No monsoon? Not to worry

The rains come, and go, or never come at all. So what? India's economy shrugs its shoulders

By Andrew Leonard

Published June 1, 2007 9:20PM (EDT)

All literature, music, everything is the monsoon. All the folk songs are monsoon. All the lovemaking is monsoon."

-- Khushwant Singh

Maybe so. But according to the Indian Express, India's overall well being is no longer as dependent on the monsoon as it once was. In the past, if the rains failed to arrive, the entire economy could be driven into recession. Now, say Indian economists, the country's dramatic economic growth, symbolized by its global prowess in software and pharmaceuticals, has decoupled the overall vigor of the economy from the health of its agricultural sector.

Agriculture is still a large part of the economy and with two-thirds of India's population of more than one billion living off farming-related activities, rural incomes are a major source of demand for everything from soaps to compact cars.

Yet farming's contribution to economic growth is dwindling.

The sector's share of the trillion dollar economy has fallen steadily to about 22 per cent from 38 per cent in 1980 -- a trend that appears to be accelerating.

"The broader impact of a poor monsoon on growth is definitely coming off," said Rajeev Malik, Singapore-based economist with JP Morgan Chase.

"In case of a severe drought it will take a toll, but not as bad as it used to be as in the past," he said.

The severing of the link between the monsoon and overall economic growth is provocative when considered in the context of global warming. The rich, industrial nations that have contributed the lion's share of greenhouse gas emissions are also, by virtue of their advanced, non-agriculturally dependent economies, the most well-positioned to adapt to climate change. While those who did the least, and are still largely agriculturally-based, stand to get hammered by adverse weather disruptions. And that poses a paradox: does it make sense to help the developing world cope with climate change by encouraging the kind of economic development that by its very industrial nature generates even more greenhouse gases?

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Agriculture Environment Global Warming Globalization How The World Works India U.s. Economy