The BRICS-BIMSTEC meeting in Goa this month, that immediately followed the annual India-Russia Summit (also in Goa), capped months of hectic diplomatic activity, during which India pursued a robust, even aggressive, foreign policy. By and large, such activism has served India well — the most evident being the furthering of relations between India and the United States. Given the several changes in direction — and departures from past policies and practices — taking place, there is perhaps scope to debate whether this amounts to a redefining of India’s foreign policy.
International diplomacy is hardly a ‘zero-sum game’. It has become even more complicated with the passage of time. Hence, giving a new direction to the country’s foreign policy demands careful consideration and assessment of all relevant aspects. Systemic, national and decision-making factors must determine foreign policy choices. Maintaining coherence and balance is also a vital aspect. It would seem, however, that this kind of exercise has yet to be undertaken, even as shifts in policy have been effected.
Among the acronyms
One indication of this would seem to be India’s current approach towards different multilateral organisations and plurilateral groupings. Many are better known by their acronyms such as NAM, SAARC, BRICS, BIMSTEC, etc.
Multilateral fora have today become indispensable to the conduct of international diplomacy, and how a nation deals with, or adjusts to, the alphabetic soup of organisations that exist is important. This is so even if a case exists that some of the older ones have lost much of their relevance.
Since Independence, India has played a leading role in multilateral fora. It was a founder member of NAM (Non Aligned Movement), SAARC (South Asian Association for Regional Cooperation), BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), BRICS (Brazil, Russia, India, China and South Africa), and BCIM (Bangladesh, China, India and Myanmar).
India has sought membership of the NSG (Nuclear Suppliers Group) and the Wassenaar Arrangement (on Export Controls for Conventional Arms and Dual-use Goods and Technologies) and also full membership of ASEAN (Association of Southeast Asian Nations), the SCO (Shanghai Cooperation Organisation), etc, recognising the potential of being inside rather than outside such bodies.
Even granting that the world is increasingly tilting towards the post-modern phenomenon of transactional politics, and that older institutions such as NAM are increasingly out of sync with this, a proper study of the utility of participation in such fora — prior to treating many of them as of little consequence — would have been useful. To optimise its many advantages, India clearly needs to play on as many geopolitical chessboards as possible.
NAM may be a pale shadow of what it was during an earlier period when towering personalities such as Nehru, Tito, Nasser and Castro dominated its proceedings. With non-alignment giving way to strategic alignment, organisations such as NAM may seem anachronistic, but it should not be lost sight of that it still resonates with many Third World countries.
It also offers an alternative platform for putting forward a different viewpoint. It would, hence, be premature to pronounce the death of NAM.
SAARC is still relevant
India’s stakes in SAARC are, if anything, higher. It is the most important country in South Asia, and India was the progenitor of the idea of a primarily economic grouping of countries of South Asia.
Admittedly, SAARC has been on ‘life-support’ for much of the period, but had begun to display a new vigour and dynamism of late. India had also shown a willingness to adopt an asymmetrical and non-reciprocal approach towards other SAARC members which had gone down well with these countries. To undermine SAARC due to the ongoing conflict between India and Pakistan may well be an instance of ‘throwing the baby out with the bathwater’.
Propping up bodies such as BIMSTEC and BCIM in place of SAARC is hardly the answer, and could even prove counterproductive. The China factor is all too predominant here, with almost every country (other than India) under China’s thrall, having been assiduously wooed with financial and other inducements. China is hoping to further consolidate its position through its One Belt, One Road initiative which has been warmly welcomed by all these countries, the sole exception again being India.
In the case of BRICS, the weakening of the so-called strategic triangle between Russia, China and India does affect its image. The diminishing economic fortunes of Russia, Brazil and South Africa, of late, have also dented its image as a flag-bearer of newly emerging economies. Still, the idea of BRICS remains valid though it will require hard work and skilful diplomacy to reproduce the previous elan, and avert a pincer move against India by Russia and China as they move closer strategically and economically.
Changing ties
Undoubtedly, India’s foreign policy has to evolve in keeping with the changes and shifts taking place across the globe. Permanence in relations, and consistency in alignments, is not a signal virtue in the world of the 21st century. Not all relationships can or should be regarded as cast in stone, and impervious to change. This applies equally to ideologies. Nevertheless changes, if any, must not take place in an episodic manner, or as a series of isolated steps.
For instance, India-U.S. relations today are at an all-time high. This was hardly the case a decade and a half ago. On the other hand, the ‘all weather’ India-Russia relationship is today nowhere at the same level as it was even a few years back. Notwithstanding the rhetoric from Goa, Russia can hardly be viewed as a strategic ally as of now. Russia may have been restored to the position of ‘the most favoured defence supplier’, but this is a far cry from being a strategic ally. India may be only partly to blame for this, as Russia has been looking at diversifying its options for some time. It had moved closer to China and has achieved a degree of strategic congruence to counter U.S. moves in Asia.
The China, Russia and India triangle thus heralds a situation where two sides, China and Russia, have grown much closer to each other, with India in danger of losing out in this process. The China-Russia Comprehensive Strategic Partnership of Coordination, as also the recent Russia-Pakistan military exercises, even though on a limited scale and a subtext of this, only demonstrate the growing strategic ambiguity in our neighbourhood and in Asia as a whole.
On the sidelines of the March
It is China that will demand India’s wholehearted attention. Chinese President Xi Jinping’s recent reference to a ‘new Long March’ is not without significance. China’s ‘not so peaceful rise’, alongside its growing economic and military muscle, its growing strategic congruence with Russia, and a further tightening of its links with Pakistan pose a pre-eminent challenge for India in the competition of influence in the region and beyond. It may have other graver implications as well. The One Belt, One Road initiative and the new Maritime Silk Route/Road also have the potential to bottle up India and Indian initiatives in Asia.
As India aspires to become a leading power, these are real matters for contemplation and action. Most important would be highlighting India’s capabilities to accelerate economic growth during a period which marks the demise of globalisation (not literally though). India could also bring to the attention of the rest of the world its tremendous ‘human assets’ that can power the country as the world transits to an incredible future, viz., the era of the Fourth Industrial Revolution.
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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.