The Hindu Business Line : Developed nations

The article “If all nations are developed, who will save and lend to US” (Business Line, November 30) makes interesting reading. The author points out that “while savers in developing countries are ‘forced’ to save for their rainy day, the consumers in the US are forcibly ‘taxed’ to pay for their social security — read rainy day — which substitutes coercive tax for compulsive savings.” With due respect to the author, I would like to point out that we are also forcibly taxed — income-tax, excise duties, service tax and VAT, without the benefit of any social security.

Besides, the reference to Alan Greenspan’s observation in his book seems quoted out of context. Greenspan writes in the introduction to The Age of Turbulence: “Developing countries typically have higher savings rates than do industrialised nations - in part because developing nations’ social safety nets are weaker, so households naturally set aside more money for times of need and retirement (Other factors also play a part...)”

Whatever be the motivation for Japanese to save a good part of their income the fact is that most of us save for retirement and old age as there is an absence of any safety net or social security in India for the majority of its citizens.

T. S. Balaraman Chennai

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