November 15, 2002
Now that the Prime Minister has highlighted the reality of India competing with China, this nation must reflect on the nature of this competition. At no stage must we compete with our neighbour in a spirit of confrontation, but essentially on the basis of mutual respect and also with growing bilateral linkages between us.
The immediate arena for competition would, of course, relate to the growing markets of East and Southeast Asia, but the rest of the world also provides growing opportunities for trade and business for both countries.
For much too long have we been passive about developing economic linkages with ASEAN, and it is the result of our past inaction that China, which historically has been seen with some suspicion by the members of ASEAN, has actually stepped ahead of us in forging economic relations with this group.
This, however, raises some larger issues, which as we move further in the 21st century, we need to ponder as a large country and a progressive and successful democracy.
One of the tragic—and, therefore, surprising—aspects of the Indian polity today is the absence of any debate or discussion on the vision of India tomorrow. In a world that is changing rapidly and an economic and geopolitical order that is evolving in a manner very different from what we have seen in the past, it is incumbent on society at large and our political leaders in particular to stir a debate on what India’s place in the world should be.
At this juncture of world history, the aspirations of this society of over a billion people need to be defined in terms of our role as a player of some significance in regional and global affairs, which inevitably relate to our own economic strength as a nation. Sadly, today the world is passing us by, and we do not even seem to be aware.
The success of China as an economic powerhouse in recent decades, and the awe it inspires worldwide with its perceived future is an example of the changing world in which we live. Figures released for foreign direct investment (FDI) in China during September 2002 show that in this month alone, the country received $5.16 billion, indicating that China is well on target to receiving over $50 billion FDI during this year. The chief economist of the International Monetary Fund has stated that in the coming decades China is likely to match the US as the dominant driver of world economic growth.
Preparations for the Olympic games to be held in Beijing would bring about a massive expansion of the country’s infrastructure. China already attracts over 30 million tourists annually against which India receives one tenth this number, even though for decades the former was virtually off limits to any foreign traveller. India’s advantage in the software business, where our familiarity with the English language has been a major asset, could be wiped out rapidly with the frenetic efforts being made in China to learn English.
An insightful analysis of new players in the global power game was recently made by Jean-Pierre Lehmann of the International Institute for Management Development in Lausanne. He refers to Kenichi Ohmae’s publication Triad Power in the mid-1980s, in which it was envisaged that the world economy would be dominated by the US, Germany and Japan.
According to Lehmann, Japan has fallen into a coma and Germany is becoming a slow-coach rather than a locomotive. The Triad of the future, according to him would be Greater China, Greater Europe and Greater America. Within Greater China he accommodates Taiwan, Hong Kong and even Korea and Japan as part of an interdependent economic region, the driver of which would be China.
The emergence of Greater Europe and Greater America as major economic regions is already an established fact with the economic integration of Europe and countries surrounding the EU, and with the establishment of NAFTA in North America strongly linked with Latin America.
Lehman assesses India’s prospects thus: ‘‘Where does India fit in? It has neither the economic clout nor the regional climate or infrastructure to create a dynamic Greater India’’. India certainly can emerge as a major economic and global power, but we will not as long as our self-image is destroyed by petty politics of the mohalla variety.
Economic growth at around 8% is an imperative for India, and should be seen by our political leaders not merely as a goal for Vajpayee or the NDA but as a people’s goal.
The slap that we receive from Standards and Poor, whatever its disputed basis, is a slap on India’s face which only places us a notch lower in the estimation of the world. Blocking the process of liberalisation for petty political reasons only leads to a further decline in our standing. Torpedoing the privatisation of HPCL and BPCL or ITDC hotels for so called strategic reasons is essentially strategic shortsightedness. The time has surely come for all our political parties to sit together and work out an economic vision and arriving at a pathway for attaining it.
The debate on economic policies in the coming months has to emerge from the attainment of a broad political consensus. This should reduce, if not eliminate completely, the unsavoury surprises served up from time to time on disinvestment decisions, reforms on labour laws and freer trade, by leaders of the NDA itself and members of the Sangh Parivar. In the absence of a forward-looking consensus, we might as well withdraw from competing with any nation in the world, and most notably with China.
Yet, India has certain strengths which China will require another revolution of sorts to attain. A noted Japanese scholar who works on China and South Asia informed me recently that China is now directing several of its own researchers both in that country as well as overseas to focus on India and its neighbourhood. Perhaps, the Chinese leadership sees merit in studying an India that we ourselves are ignorant of. Perhaps, China has seen us emerging as a competitor too even before we announced this fact.
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