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Editorial
Global Economic Crisis and India's Geopolitical Concerns
By R Balashankar
The world order seems distinctly moving towards multi-polarity. This possibility was discounted for long. It was granted that the centre of gravity was shifting from where it traditionally was for the last 500 years?from Europe to Asia?but it was predicted, encouraged by the success of globalisation, that the world will remain uni-polar at least for another three decades, with the US remaining the sun around which like satellites all other countries will revolve. It is interesting that the evolution of this new universe of multiple poles began from the US which so far used every power at its command? economic, military and technological ? to keep the world uni-polar.
The dramatic onslaught of deepening global economic crisis shattered the implicit faith in globalisation which the US and its allies promoted as a tool of diplomatic hegemony. Now the wave of protectionism, the anti-thesis of globalisation, has become a core philosophy with the West. The US is leading the charge. According to the Newsweek (March 11, 2009), as one of the most dramatic effects of global recession US which was the main destination of international migration to pursue a dream of better living has ceased to be so; rather the trend is even starting to reverse itself. Reports talk of at least six million job losses in that country in the last four months.
How does India cope with the new situation? Has our geopolitical vulnerabilities increased in the last five years? Without undermining our economic growth and prosperity can we make a departure from past follies? Wise men of diplomacy say that maximization of power and plenty in a globalised world is impossible. These experts say that to maintain high rate of economic growth we have to sacrifice our strategic importance. That is, under US hegemony, or call it globalisation, the foreign policy is subservient to market economy?there is no sovereign strategic dimension. Countries can have no legitimate interests of their own. The only interest for a country to serve is US interest and all other interests are subject to the big power dictate. And this is not the way India wants to see itself as a great country. The UPA?s failure on the diplomatic front is so monumental that India, which considers itself a world power, is today not even recognised a regional power. Surrounded by hostile neighbours, ever-threatening influx of subversive illegal migration from all the four sides, India is increasingly becoming exposed to internal sabotage and external aggression. China has no qualms about weaponising and nuclearising Pakistan. The US is arming and funding Pakistan like an infatuated lover. The terror workshop of Pakistan has brought Taliban so close to the national capital that it will take only a few hours drive for them to reach India. The borders are porous, the nation is being deliberately weakened. We do not even have a full-time Foreign Minister for the last three months.
The Indo-US Nuclear Deal which its supporters claimed would change the entire paradigm of Indian Foreign Policy got stuck in the economic meltdown. It resulted in India?s traditional allies getting suspicious and nervous in dealing with India but not helping it make new friends. The initiative also did not ensure the country a share in the prosperity booty of the developed world.
These are the issues our experts are discussing in this special Varsh Pratipada volume. It is often said that the 21st century is India?s century. There is no dearth of literature in the wake of globalisation, mostly authored by western scholars, enthusiastically supportive of the new architecture of world economic order and their Indian chums predicting India?s emergence as a major economic power by the end of the first half of this century. Emergent India as a world economic power but a poor second-rate strategic partner of the west. Indians will get part of the leftover jobs of the west, great Indian idols will be those whom the Americans will certify as great managers of BPOs, imported US manual labour and second-rate software whiz kids. And Indians will speak, dress, live and perish like Americans. Indian languages, culture and lifestyle?even art and literature will be preserved in digitized form funded lavishly by Western NGOs. It is all very encouraging. There are millions of educated English-speaking disciples to the incredible unfolding drama. Because where else do you get the kind of money? The magic of derivative manipulation? There was no other preferred destination for Indian graduates for study and Wall Street jobs. Celebrated Indian educational institutions were like higher secondary schools for Western universities which thrived on Indian students. Diplomats have not been able to solve the problem where countries in their efforts to protect security ended up undermining economic growth or in their effort to protect prosperity ended up increasing geopolitical vulnerabilities.
Experts say that in the current international system, to borrow a definition from Ashley J. Tellis, all bilateral relations between the great powers are going to be ?in a state of continuous, reflective and omni-directional re-equilibration?. Without attempting to make any self-fulfilling prophecies, this debate is being taken up at a time when the country is preparing to elect its next government. The Indo-US treaty has unfortunately created a clientelism mindset in the Indian establishment, as The Indian Express (March 18, 2009) editorially commented. It said that the Foreign Secretary Shiv Shankar Menon during his recent visit to the US justified not taking up the issue of denying Indians HI-B visa on the plea that it was a ?sovereign function? of the US.
The problem here is that after the mega bailout to stimulate its economy, the US does not want its own money leaking to other economies. So the government is enforcing ?Buy American? clauses and restrictions on job outsourcing on companies availing the bailout benefits. Simultaneously, as the daily pointed out, the US administration cleared a $2 billion sale of maritime jets to the Indian Navy?something that was needed to keep the troubled airplane giant Boeing?s books looking good. Boeing, General Electric, McDonnell Douglas and General Dynamics will soon need to renew Indian contracts. Indian government has levers to apply on all these deals. But it will need political will. And India has to apply them because globalisation is not a one-way street.
The essence of uni-polar diplomacy is increased economic interdependence. Economics became the tool for both co-operation and conflict management. Global tensions were brushed under the carpet in the fa?ade of ?engaging? for mutual economic prosperity. So the developed world coined a new mantra that the way to deal with rising powers is either to democratise them or increase economic inter- dependence. This strategy however did not work in Iran, Afghanistan, Pakistan or even when Russia attacked Georgia.
Still, globalisation is a strategy of containing emerging powers. The US has been efficiently practicing it with China, India, Russia and other G-20 countries. The core of this strategy is to make the economic interaction so deep that it increases the cost of conflict to a point where war becomes impractical. The idea, they will explain, is not to push some country down, but to engage it. India as a new friend of the US, under George W Bush was bent on reaching out. Thus managing potential rivalry is an integral part of US diplomacy.
Compare this with the manner in which Dr Manmohan Singh managed India?s foreign policy. India is practically friendless in the region. Even the gruesome
26/11 Mumbai terror attack which shocked the entire world could not be turned into a diplomatic offensive against Pakistan. A weak, waffling, rogue state like Pakistan has more friends in the region than India. So much so that visiting foreign dignitaries have the audacity to warn India that terrorism will not end as long as Kashmir is not settled. ?Out of the box? dialogue, the UPA started with the hostile neighbour, in the early days of its tenure, has now turned out supine diplomacy and a huge joke.
In international politics, relations between states will always remain competitive. It is the agility and vision of the national leadership that make enduring and fruitful relationship.
The G-20 economic summit in London on April 2 is also billed as the new US President?s first diplomatic offensive outside his country to regain the lost international space for his country. His priority is to win the confidence of the Islamic world. How will it affect India?
As Kautilya states in the Arthshastra, all states respond to international competition through a combination of internal balancing, increasing their own resources from within and external balancing, i.e. creating alliances to deal with the emerging threat. From essentially self-sufficient economic pattern of the pre-globalisation era the world had progressed to a stage of absolute inter-dependence. This analysts called the third wave of globalisation. Here, purely competitive strategies gave way to subtle arm-twisting. All this dramatically changed on September 25, 2008, when the US faced the bust of its celebrated investment institutions. With economy, diplomacy too took a crash. Many assumptions have changed about the US continuing as the dominant power in the international system.
True. Dollar still continues as the most important global reserve currency. The world continues to see the US?despite the loudly spelled Chinese doubts on US debts?as a desirable destination to park its resources. US sustained its dominant position by its disproportionate access to the resources of others. Its ability to sustain labour force growth was another advantage which it has started losing if the latest reports are to be believed. The US could sustain its growth through immigration of high value labour and excessive input capital from abroad. The situation is changing. The other big advantage it boasted of was its highly effective national innovation system, a consequence of its market economy. Observers of US economy point out one of the reasons for the decline of the economy was that after internet, the US did not make any big innovation. Touted as very effective, highly flexible, the venture capital system, another instrument of its glory, has failed. The US confidence has shaken, along with it faith in the infallibility of globalisation is also shaken. This is a new challenge facing Indian foreign policy. Possibly the repeal of ban on Stem Cell Research would propel another wave of innovation and growth. It has very large investment and service potential. US military capabilities are still unmatched. The gap in the technical sophistication between the US and Europe is actually widening in terms of conventional precision strike capabilities and the ability to deploy. The US, according to AshleyTellis (India in Asian geopolitics), maintains these capabilities through a defence budget that is larger than the defence budgets of at least the next 15 countries in the international system put together and yet those defence burdens are only about three per cent of US GNP. (Rising India: Friends and Foes)
Most western analysts have painted India both as a challenge and an opportunity to the US. The world is not really eager to see India emerge a great power. Perhaps that is the reason for the Chinese arming and the US aiding Pakistan, a natural rival of India. The foreign hand in the growing social and religious tensions within the country is not a chimera. The petro-dollar and evangelical funding have for long disturbed peace in the country. Foreign money and mercenaries have kept Kashmir a pestering sore. Is the world afraid of or conspiring against India? India is a large and continental size country with advantages that no other country can claim. A latent great power. It is steadily developing technical and social organisational capacities. China like Japan is excessively dependent on international market both for resources and revenue generation. The world recession will hit it harder and longer. This is likely to limit its ability to play the big challenger. Its self-created contradictions of market economy and command polity, according to many analysts, can stymie its high growth in the long term. This is where India stands out. We are only short of a visionary political class.
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