*Highlighted parts are important from exam perspective,especially analysis portion of this editorial, historical and political details sets the background and gives holistic understanding but not be of much use in exam.Kindly bear that in mind while reading.
Background :-
Prime Minister Narendra Modi’s visit to the United Arab Emirates (UAE) had the potential to be remembered like Prime Minister P.V. Narasimha Rao’s visit to Singapore in September 1994. Through his famous Singapore Lecture, Narasimha Rao unveiled India’s “Look East” Policy. Through the joint statement that he signed with UAE’s leadership, Mr. Modi has unveiled India’ Look West Policy
Historic Contours:-
Narasimha Rao’s “Look East” Policy succeeded because South-East Asia began to “look West” to India, seeking a balancer to China. Mr. Modi’s “Look West” Policy will succeed because West Asia is “looking East” worried about the emerging strategic instability in its own neighbourhood and the structural shift in the global energy market.
Political Contours:-
The foundation for Mr. Modi’s successful outreach to West Asia was in fact laid by his predecessor when India invited the King of Saudi Arabia to be the chief guest at the Republic Day Parade, in 2006.
This was followed by Prime Minister Manmohan Singh’s visit to Riyadh and the India-Saudi defence cooperation agreement signed in 2014.
Growing India-Saudi cooperation in the field of terrorism may have also contributed to India’s relatively mild response to Saudi aggression in Yemen, but it did set the stage for wider engagement at a strategic level with the other states of the Gulf Cooperation Council (GCC).
Mr. Modi’s visit to the UAE was preceded by significant visits to other GCC states by External Affairs Minister Sushma Swaraj. That Ms. Swaraj made Bahrain her first stop in the region, last September, was welcomed by Bahrain’s India-friendly leadership and showed growing sophistication in Indian thinking about the region.
With a minority Sunni leadership and a majority Shia population, Bahrain has tried hard not to get drawn into the wider sectarian conflicts in West Asia.
Moreover, with half of the island kingdom’s working population hailing from India, mostly Kerala, and given the very cordial people-to-people relations between Bahrainis and Indians, the visit showed that India had a special relationship to the region that few other major powers can ever lay claim to.
Finally, over the last year, the Modi government has put forward a nuanced view of the region openly declaring friendship with Israel, seeking better relations with Iran and, at the same time, cementing a thriving relationship with the GCC states.
It is expected that Mr. Modi may follow up his successful visit to the UAE with a productive visit to Iran and a “historic” one to Israel, being the first Indian Prime Minister to visit Tel Aviv.
Transformational visit
While all this fits into a pattern, one should not underestimate the transformational significance of the UAE visit and the Dubai declaration.
The Joint Statement between the United Arab Emirates and India is an important articulation of a significant shift in the Arab world’s view of India. The statement is truly comprehensive and wide-ranging. It talks of historic ties of “commerce, culture and kinship”, drawing attention to the unique history of Arab interaction with Indian communities of the west coast, from Gujarat to Kerala.
The joint statement, outlining closer government-to-government (G2G) relations, draws attention to the vibrant business-to-business (B2B) and people-to-people (P2P) relationships and commits the UAE to a sharp increase in its investment in India. What is striking to an observer of India-West Asia relations is the assertion of not just a “shared” past but of shared challenges in the present and a shared future. It then proceeds to state: “A shared endeavour to address these challenges, based on common ideals and convergent interests, is vital for the future of the two countries and their region.” The statement expresses the hope that: “Proximity, history, cultural affinity, strong links between people, natural synergies, shared aspirations and common challenges create boundless potential for a natural strategic partnership between India and UAE.”
That these are not just words but the expression of new thinking in both capitals is demonstrated both by the visuals of the visit and the follow-up action both governments have committed themselves to. More to the point, it makes pointed reference to the growing congruence of thinking on vital security issues, especially cross-border terrorism.
GCC looks West
What is significant about the new strategic partnership outlined by the UAE and India is the fact that it is defined not just by India’s “Look West” policy, based on its energy and financial needs, but that it is equally defined by the GCC’s “Look East” policy, soliciting greater Indian engagement with West Asia. Several factors have contributed to this fundamental shift in West Asian strategic thinking.
First, the structural change in the global energy market with West Asian oil and gas increasingly heading to South and East Asian markets rather than to the Trans-Atlantic markets.
Second, partly as a consequence of this change in flows and partly owing to the fiscal stress faced by the trans-Atlantic economies, West Asia is looking to India and other Asian powers to step in and offer security guarantees to the region. Many GCC states have welcomed defence cooperation agreements with India.
Third, in the wake of the Arab Spring and the mess in Egypt and Iraq, the Gulf states find India to be a more reliable interlocutors than many western states.
Fourth, under pressure from radical and extremist political forces within West Asia, most states in the region have come to value the Indian principle of seeking and securing regional stability as an over-riding principle of regional security.
In the specific case of India-UAE relations, it appears the Emirati have come to appreciate India’s view that state-sponsored or supported cross-border terrorism poses a grave threat to regional security and so must be curtailed and stopped.
In short, it would seem, the India-UAE strategic engagement is the product of a mutual “look-at-each-other” policy.
If China’s rise offered the backdrop for South-East Asia’s “look at India” policy, the West’s failures and weaknesses, and a weakening of the strategic trust between the West and West Asia may have contributed to the GCC’s “look at India” policy.
Analysis
A ‘Look West Policy’ (LWP) like India’s famed ‘Look East Policy’ has often been spoken about, but there has not been a formal institutionalisation of the same.
This will need a concentrated focus – like the LEP – for the region, to formulate effective policies.
While trade is a significant component of this relationship, the essence of the LWP will be the multi-dimensionality of its character.
As much as India trades with the region, also important are the issues of security, culture, people-to-people linkages, and those of a wider geopolitical and geostrategic nature.
Look West Policy: Primary Rationales for Induction
Diaspora & remittances: The West Asian region is home to millions of non-resident Indians; and they were responsible for approximately half of the US$69 billion worth of remittances that flowed into India in 2012.
However, the introduction of the Nitaqat laws in many Gulf countries has resulted in several thousands of these workers having to return to India.
While it is unfair to view the returnees as a liability, one cannot ignore the economic and social impact of this mass re-migration.
India is not prepared to assimilate all these people into its own economy just yet. Already, unemployment rates are high, and the economy is not doing well. Job creation will take a while, and until then, there will be some strain on the economy.
Energy: India, being a growing economy, is perpetually energy-hungry. West Asian nations are among the primary suppliers of oil and gas that keep the Indian economy running.
Stable and more improved relations between India and the region are key to securing and expanding on these sources.
Projects such as the Iran-Pakistan-India pipeline lay suspended due to several other reasons. However, proposed projects such as the Oman-India Pipeline, an undersea gas pipeline – that Iran too has expressed interest in – look promising. India’s attempts at ensuring energy security therefore cannot bypass engagements with the region.
Maritime security: Be it trade or energy supply routes, or even national security, the significance of an effective maritime security infrastructure in the Indian Ocean – the maritime link connecting India with several of its key West Asian partners – is pivotal to ensuring safety, stability, and disaster-management for the region.
The Indian Ocean Region is a major geographical stretch through which a large chunk of the world’s business is conducted.
Already, there is a constant threat of piracy in the western Indian Ocean. A concentrated policy will be needed to identify specific issues and areas of cooperation between India and West Asia, in order to ensure smooth and secure movement.
Furthermore, in recent times, there have been many debates on the concept of the ‘Indo-Pacific’ to boost connectivities between the Indian Ocean and the Pacific Ocean. The two regions already have robust connectivities, but more can be done.
However, if this concept of the Indo-Pacific has to become a reality, there is a need for enhanced cooperation in various areas among the key players in each region, before connecting the regions.
Eventually, the LWP and the LEP can lay the foundations for the realisation of the ‘Indo-Pacific’.
National and regional security: Any form of tumult in the West Asian region invariably has an impact on India and South Asia as a whole.
For strategic reasons, India seeks peace and political stability and security in the West Asian region – sentiments reciprocated by the countries of the region in their assessments towards West Asia as well as South Asia.
So far, India has been pragmatic in its policies towards the West Asian region –excellent examples of which are balancing its relationships with Palestine and Israel; and Saudi Arabia and Iran, among others.
However, there is more that needs to be done, and for that, there needs to be better, more polished and astute understanding of the region in our country – especially in the light of the impending US withdrawal from Afghanistan; the thawing in the US-Iran bilateral; the ongoing civil war in Syria and its implications; implementation of the Nitaqat policies in the Gulf countries; and the rising fundamentalism, especially in the franchisee-ing nature of terror networks, among others.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.