Updated: May 29, 2015 1:14:36 pm
With Xi Jinping in charge, we now know what the new strong China looks like. With Narendra Modi in charge, we are finally getting glimpses of what the new strong India will look like. It will be a radically different India from the one that the world has got used to. Three new points stand out.
The first transformation is paradoxical. For decades, India has aspired to be a leader of the non-aligned movement. But it is only now that India is becoming genuinely non-aligned. This observation is shocking. It deserves an explanation. What does “genuine non-alignment” mean? At the NAM summit in Cuba in 1979, at the height of the Cold War, then Sri Lankan President J.R. Jayewardene shrewdly observed that there were only two non-aligned countries: the United States and the Soviet Union. He added that all other countries were in one way or another aligned with these two powers. With Modi’s arrival, the list of “genuinely non-aligned” powers has grown from two to four. It now includes America, Russia, China and India. Modi has given birth to a truly multipolar world.
There is no doubt that the world is now full of sharp differences between key world leaders; for example, between US President Barack Obama and Russian President Vladimir Putin, Xi and Japanese Prime Minister Shinzo Abe, German Chancellor Angela Merkel and Putin, and, most sharply, between Benjamin Netanyahu of Israel and Ayatollah Khamenei of Iran. It takes great political and psychological confidence to maintain equally good relations with such sharply divided leaders. Modi has it. Hence, he can sign deals worth $35 billion with Abe and then follow up with signing deals worth $22 billion with Xi. If Modi is shrewd, he can use China-Japan competition to benefit India. For example, he can encourage China and Japan to compete in delivering the badly needed bullet train services to India. Similarly, under Modi, India will move even closer to Israel, especially in defence technology. Yet, Modi has also just signed an agreement to build a port in Chabahar, Iran, which will provide India a much-needed logistical lifeline to Afghanistan. Only a new strong India under Modi can get away with such bold moves.
The second transformation was expected. Modi has moved India to the right. But he has done it in surprising fashion. He has no interest in moving towards the Ronald Reagan-Margaret Thatcher consensus. Instead, he would rather move towards the Lee Kuan Yew-Deng Xiaoping consensus. The intellectual output from the Washington DC think-tanks and even the IMF and World Bank means little to him. Instead, the extraordinary performances of the East Asian economies mean a lot to him.
Certainly he believes that the private sector has a critical role to play. However, he also believes that like the other East Asian countries, the government has a key role to play in economic development. Modi has been criticised for not introducing “big bang” economic reforms. But his hands are tied politically by his lack of control of the Rajya Sabha. Modi should, therefore, shrewdly try to implement some of the economic reforms predecessor Manmohan Singh launched. He has passed the insurance bill. He should now push for the implementation of the goods and services tax (GST) that the Congress party had proposed. A national GST would make a massive difference and boost GDP growth by at least 1 per cent a year. Now trucks delivering goods in India take circuitous routes to maximise tax avoidance. With a unified GST, they would take the shortest possible routes. The Indian economy would become vastly more efficient. In short, there remain many significant economic reforms within Modi’s grasp. This is why India now enjoys a bubbly new economic confidence. And double-digit growth rates could become the hallmark of the new strong India.
The third transformation was unexpected. India could never really emerge as an independent global power if it could not clean up its act in its regional backyard. Modi understands this. In the past, India was perceived as a regional bully by its smaller neighbours. Now Modi is taking a leaf from China’s book and trying to share India’s prosperity with its neighbours. There has been a major psychological breakthrough with Bangladesh. Forty-one years ago, the Congress-led government signed a border agreement with Bangladesh with unilateral border concessions to the latter. Yet, no subsequent Indian government dared to ratify it. Modi has had the political courage to do so. This has created a new psychological dynamic with the BBIN (Bangladesh, Bhutan, India and Nepal) countries pushing for new levels of connectivity, including in electricity and transportation grids. Taking a leaf from Asean’s famous Asean-x formula, Modi has implemented a Saarc-x formula to boost South Asian regional cooperation.
Still, challenges remain. Ultimately, Modi will succeed if he can build a broad church in India to support his reforms. In 1984, the newly elected rightwing government of Brian Mulroney bought a lot of political capital in Canada by appointing a leftwing ambassador to the UN, Stephen Lewis. Modi can be equally Machiavellian. A few shrewd appointments from the opposite end of the political spectrum will buy him a lot of domestic political space. With strong domestic support, he can become even more adventurous on the global stage. The world will happily welcome this new strong India.
Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is the author of ‘The Great Convergence: Asia, the West and the Logic of One World’.
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