Till the Soviet Union collapsed in 1989, it was a simpler world. There were two superpowers. Militarily, it was clear that no country could challenge either of them and the superpowers were very wary of each other. Both the countries competed ceaselessly in space and their nuclear might was unassailable. Economically, the US’s strength was on display but till the early Eighties, the economic power of Soviet Union was largely assumed, till it imploded. The US had much greater soft power with Hollywood movies, sports dominance and terrific universities that accepted the best from other countries; the Soviet Union lagged in soft power other than in the Olympic medals tally.
In such a world, countries aligned with one or the other superpower to different degrees. Post World War II, Japan, Germany and the UK were closely aligned to the US and other western European nations were also in the US camp through NATO. India’s non-alignment post Indira Gandhi became Soviet Union-leaning and the US moved closer to Pakistan as a check on the Soviets who had taken control of Afghanistan. One could have argued India made a bad choice, but frankly, we were not very exciting to the US and strong Soviet backing to India after the 1971 war allowed the liberation of Bangladesh.
The Nineties were a tough time in India. The collapse of the Soviet Union left us weak internationally and our economic policies had taken us into a major balance of payments crisis in 1991. This was a blessing in disguise as it forced us to review both our economic policies and our global alignments. With an IMF assisted structural adjustment programme, many parts of the economy were liberalised. After the initial pain, we slowly moved away from the import substituting industry model we had followed and became a more market-friendly economy.
The complete collapse of Afghanistan post the Russian retreat destabilised the country not least because of the actions of Pakistan, Saudi Arabia and US to install a friendly regime. In this mess, the Taliban emerged, much to the detriment of the world. This unfettered meddling in Afghanistan converted an anti-Soviet sentiment into an anti US (or more broadly anti-foreign sentiment) and led to the creation of Osama Bin Laden. The 9/11 attacks followed and with it the reassessment of Pakistan as an ally by the US. The ISI’s activities with al Qaeda and Taliban isolated Pakistan substantially at a time when India was looking for new friends and its economy started to look interesting.
Two forces dominated the geopolitical context in the first decade of the 21 century — China and technology. China became the second-largest economy in the world with its GDP going from $1 trillion to $10 trillion dollars in 15 years. At the same time, the progress in technology was transformative on the back of massive computing power, ubiquitous high-speed connectivity, cheap and unlimited storage and the creation and capture of enough data to make machine learning intelligent and powerful. As a result, technological power and cyber capabilities also became a superpower compulsion. These two developments have led to a change in the basis of power and geopolitical alignment in today’s world. It has all happened in 15 years. Power now needs to be evaluated on four levels — military, economic, cyber and soft power.
Interestingly, now different countries lead in different areas, making alignment and geopolitics more complicated. Militarily, it is still the the US and Russia in the lead. China is a clear third. In terms of economic power, the US leads followed by China, and Russia does not figure. In the cyber domain, five countries have established positions – the US, China, Russia, Israel and Iran and others are lagging. Consider the Russian attack on the US elections, the purported cyber-attack by the US on Iran, the banning of Huawei, Iranian cyber-attacks on the Saudis and China’s great strength in digital and artificial intelligence. In soft power, the US leads but China and Russia don’t really feature. In fact, India has a play.
If we just observe India’s actions, it is comforting to note we are following a multilayered strategy, walking a complicated tightrope. We continue to ally with Russia on arms’ purchases with our purchase of the S-400 Air Missile System, despite the threat of American sanctions. Economically, though, we are trying to get closer to the US and are not fighting their unilateral sanctions against Iran on oil, despite the substantial impact on our balance of payments. It is both sad and ironic that despite our great capability in technology and our big presence in Silicon Valley, we lag in cyber preparedness at great risk to ourselves. India’s movement on data localisation is needed. Even Europe has imposed the GDPR. But overall, we need to act fast.
With soft power, India is doing better. We are advancing with our music, food and Bollywood and are going beyond West Asia into the affluent Indian diaspora in the US and UK. In a nightclub in Seattle in early June, I was surprised to see people dancing to Bollywood music. Getting the UN to recognise a World Yoga day has been a master stroke by Prime Minister Narendra Modi. We saw the whole world practising Yoga — at Times Square in New York, outside the Eiffel Tower in Paris, in many cities in China and on top of the Opera House in Sydney. This is a great first step but our inbound tourism still lags behind.
If we act, we are well positioned. Faster arms purchases, developing cyber capability and using technology to address major gaps in education and healthcare are needed. We have the opportunity but not the right to become a third major power. No one will give it to us. Can we work towards taking it?
The writer is chairman, BCG India. Views are personal