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Current General Studies Magazine: "India’s options in a changing Geopolitical Scenario" January 2015

Current General Studies Magazine (January 2015)

General Studies - III: Security Based Article (India’s options in a changing Geopolitical Scenario)

Jawaharlal Nehru, the first Prime Minister, used to write regularly to Chief Ministers on international developments and India’s approach to the complex issues facing the world. Perhaps, it is time to revive that practice.

It is a matter of some concern that we as a nation have failed to articulate a broad national consensus on foreign policy. Why should foreign policy divide us? I am of the view that we have not tried hard enough to seek a consensus to be agreed to by the political parties. If the voters tell the parties of the importance of reaching such a consensus, I believe that the parties will start working towards building up a consensus.

Secondly, the increasing personal popularity of Prime Minister Modi is good for India. Recently, the Singapore-based Straight Times selected him as the Asian of the Year.

This month India hosts President Putin from Russia. Next month President Obama from United States will be coming to be the Chief Guest on the Republic Day. US and Russia with their differences over Ukraine have not been fully engaging each other. But, India is in a position to engage with both of them in full measure.

Thirdly, geopolitics , including geo-economics, is changing significantly. Structural changes are causing changes in correlation of forces. In this context some scholars focus attention exclusively on China’s rise and the relative decline of US power. I emphasize the adjective "relative”. It is my view that the geopolitical changes other than China’s rise are also important.

Broadly speaking, there was the Cold War from 1945 to 1991.Most scholars date the beginning of the Cold War in 1947 or 1946. I have mentioned 1945 for a reason. As the Preamble to UNESCO’s Constitution says wars begin in men’s minds first. Even before Germany surrendered some policy planners in US Government had identified USSR as a potential enemy. Hitler committed suicide on April 30, 1945 and Germany surrendered a few days later. USSR Foreign Minister Ribbentrop called on the new US President Truman on April 23. Truman was harsh and virtually insulted his visitor. This marks the beginning of the Cold War.

The Cold War did not remain cold. It may be true that no soldier of US or USSR died of a bullet fired by the other side. But, the two super powers fought wars by proxy in Korea, Vietnam and elsewhere causing millions of deaths. Henry Kissinger has correctly described the two protagonists as two heavily armed blind men, each believing that the other has full eye sight, chasing each other in a small room, running the risk of causing enormous harm to each other, not to speak of the room. India under Nehru refused to follow the lead of either blind man. India wanted the blind to regain sight. But, sadly India was accused of preaching morality. The accusation is misplaced. If President Truman had listened to Prime Minister Nehru urging him to talk to China the Korean War would have ended much earlier saving thousands of lives including those of US.

With the collapse of the Cold War there was a window of opportunity to lay the foundations of a cooperative security order. But, that opportunity was not availed of because the military-industrial complex came in the way. In 1961,President Eisenhower warned his compatriots of the danger of that complex, renamed subsequently as the military-industrial-congressional complex for good and sufficient reasons. The warning fell on deaf years and the complex has grown in power over the years. It did not want any ‘peace dividend’ that could have been used for development.

The Cold War ran its course and ended in 1991. There was a brief unipolar moment and a much longer unipolar illusion. When Iraq invaded Kuwait in 1990, no serious effort was made by US to get Iraq out of Kuwait through negotiations as those who did not want the peace dividend wanted a war. They got the war they wanted in 1991. The 2003 war on Iraq is perhaps the most unnecessary war in our times. That war and the disastrous occupation that followed marked the beginning of the end of unipolarity, an end that was swiftly reached. My book Commonsense on War on Iraq published in 2003 has argued that the correct expansion of WMD, used as an excuse for the war, was weapons of mass deception.

Though unipolarity has ended some relics remain. The international banking system is to an extent still unipolar. This needs to be remedied as early as possible.

Is the world moving towards a sound multi-polar system? Not yet. A sound multi-polar system requires four or five states of roughly equal comprehensive national power.

Turning to geo-economics, the global economy is ailing and we do not know when it will recover. In January 2014, the IMF estimated this year’s rate of growth of the global economy at 3.7%; by July, it was brought down to 3.4%; and the latest estimate is 3.3%. The rate was 3.8% in 2011, 3.1% in 2012, and 3 % in 2013. There is some risk that 2014 might be the fourth consecutive year of falling growth.

The Euro area is in serious trouble having had a growth of -0.7% in 2012, and barely improving to -0.4% in 2013. The expected growth in 2014 is only 0.8%.

Has the world fully recovered from the 2007-08 financial crisis? No. In this context, it is important to look not only at GDP but also at employment. Before the crisis hit hard, the unemployment rate in US in January 2009 was 4% and it shot up to 10.2% by October 2009. The current rate is 5.8%.

Globally, the job losses from the financial crisis rose to 62 million by 2013 and it is estimated that it might go up to 81 million by 2017.It follows that given the low growth rate of the global economy, India cannot expect much by following an export-led growth. In fact, it is high time to look critically at the benefits and losses from globalization.

In this context, I wish to draw attention to the rather scientific approach adopted by South Korea when it decided to open up its market. The Government prepared three lists: List 1 of industries South Korea had a clear competitive advantage over the rest of the world; List 2 of industries with a clear disadvantage and no hope of gaining advantage in the future; and List 3 of industries not in the other two lists, and the manufacturers of industries in that list were exhorted to do their utmost to gain an edge over the rest of the world in three to five years. The Government decided to open up industries in the first two lists straightaway and to look at the third list after five years giving the manufacturers a chance to improve. It was clearly understood that industries in the third list also would be facing global competition after five years.

India did not follow a similar procedure and the manufacturing sector has suffered from indiscriminate imports from China and elsewhere. Without a vigorous manufacturing sector the 12 million young who seek jobs every year will not find them. Unless imports are rationalized manufacturing will not pick up. The recently announced Make-in-India Policy makes good sense.

The falling crude oil prices, if the trend continues, will change geopolitics. The slowing down of China’s growth, the virtual stagnation in EU, and the increasing shale oil production in US have increased supply against decreasing demand. The top producers are: Saudi Arabia, US, Russia, and China. The projected demand for 2014 is 91.95 million barrels a day out of which the OPEC exports one-third.

Theoretically, Saudi Arabia as the "swing producer” can reverse the fall in prices as it has done in the past. It does not seem to want to do it, possibly because it wants to drive out the shale oil from the market as its production might become unviable if the prices continue to fall.

In any case, it is clear that the law of supply and demand does not entirely determine the price of oil. It is influenced by speculation mixed with politics. In this context, I want to draw attention to the difference between Chresmatics and Economics first made by Aristotle in Nichomachean Ethics. Briefly, if you buy a piece of land and sell it later for profit without having added any improvement such as a house or trees, that is a chresmatic activity as the society has not benefitted in any way. On the other hand, if you sell it after building a house or planting trees and make a profit, both you and the society gain and that is an economic activity. As a matter of fact, these days a good many of the chresmatic activities are treated as economic activities. Take the trade in derivatives taken to absurd lengths. There is no reliable estimate of the derivatives market. An estimate puts it at $ 1000 trillion, say 14 times the world GDP. The trade in derivatives needs to be regulated.

The fall in oil prices has impacted adversely on the Russian economy coming as it did on top of the sanctions over the crisis in Ukraine. But, we do not know whether Russia will shift its policy towards Ukraine owing to economic pressures. Russia has moved closer to China by entering into a $ 400 billion energy contract. It is primarily the US policy towards Russia that made Russia turn to China. In 1971 , US played the China card against USSR. Now, it is Russia’s turn.

Some IR scholars speak of an emerging global order forgetting the spreading disorder. The real world is a mixture of order and disorder. The toll of the civil war in Syria has exceeded 200,000. Over 10 million Syrians have been displaced out of which 3.5 million are refugees, not too welcome, in other countries. IS (Islamic State) holds an area as large as Belgium. IS has virtually redrawn the Sykes-Picot boundaries imposed in 1916. IS has got thousands of recruits from the West also.

In retrospect, the Arab Spring has been a disaster. When it started in Tunisia with the fall of President Ben Ali in January 2011, followed by the fall of President Mubarak in Egypt the following month, many people expected democracy to replace the fallen dictatorship. Except in Tunisia, in other countries the transition towards democracy has been hindered by powerful interest groups.

Huntington spoke of the clash of civilizations. Was he right? No. Civilizations do not fight, it is states that fight. There is no clash between Islam and the West. Saudi Arabia embodies Islamic values. It and other Islamic states have been fighting IS under the leadership of US along with France, UK, and others from the West.

The Global War on Terrorism (GWOT) proclaimed by President Bush following 9/11 has only globalized terrorism, providing a sobering study in unintended consequences, a running theme in history.

Coming to the rise of China, let us start with 1980 when India and China had roughly equal GDP. It follows that India had a slightly higher per capita GDP. Between 1980 and 2010, China grew at an astonishingly high rate of 10%, leaving India far behind. China’s GDP at $10.335 trillion (2013) is five times India’s GDP of 2.048 trillion. In PPP (Purchasing Power Parity) the comparison between $17.632 trillion and $ 7.277 trillion is better for India.

China has overtaken US in PPP terms and might overtake in nominal terms in the near future. Even when China and US have equal nominal GDP, the per capita income in China will be one fourth of that in US.

I want to say a word about sinolatry, a new word meaning worship of China just as idolatry is worship of idols. A prime example is a book by Martin Jacques titled " When China rules the world: The end of the Western world and the birth of a new global order”. The title sums it up well. Briefly, the author argues as follows:

China is a civilizational state; China will replace US as the dominant power; China has historically maintained a tributary system; that system will be renewed for the good of the rest of the world; and the Chinese worship their state.

45 million Chinese , according to Professor Frank Dikotter who had access to archives, were worked, starved or beaten to death during the Great Leap Forward of 1958-62. The Independent of December 7, 2014 carries the story. Dikotter’s book is titled "Mao’s Great Famine: China’s Devastating Catastrophe”. Punishment for stealing a potato ,for a child even, was being tied up and thrown into a pond. People were forced to work naked in the winter. Any one who reads Jacques and Dikotter will wonder whether the 45 million that died worshipped the state as they died.

Another book to mention is Arvind Subramanian’s "Eclipse: Living in the Shadow of China’s Economic Dominance”. There is less sinolatry here. The book starts with a description of what might happen in February 2021: The newly elected President of US rushes to see the Managing Director of IMF, a Chinese to seek a loan of $ 3 trillion.

I do not wish to argue with the Chief Economic Advisor and I am not an economist. But, I do feel that there is something wrong with these prophesies about China. China is unlikely to overtake US militarily or to reach a MAD (Mutually Assured Destruction) level with US as USSR did and as Russia does . In terms of soft power , China will lag behind US. Would Japan and Vietnam play the tributary roles assigned to them? How will the confrontation in the South China Sea and the East China Sea work out? I find it difficult to share the certitude of sinolators.

Turning to EU, apart from its economic troubles we spoke about, it has serious political troubles. There are calls in UK to leave EU. If EU is serious about a Common Security and Foreign Policy, France and UK should leave the Security Council to be replaced by EU. The integration in EU has peaked and might be reversed.

Let us turn to Japan. Its GDP in 2014 is $ 4.9 trillion as against $5 trillion in 2011. One might raise the question whether Japan and other advanced countries need a bigger GDP or a better GDP.

We briefly referred to the tension between China and its neighbors( Japan, Vietnam, Philippines, Malaysia, and Brunei). Will these states be able to stand up to China without US support? No. Has US seriously followed up with its ‘ pivot to Asia’ announced in 2010 with much fanfare? No. Will there be a G2 between US and China? I do not know, but I doubt it.

After this brief and incomplete sketch of the geopolitical situation, let us look at India’s options. But, before that we need to have a clear vision of India. Unless we decide where we want to go we cannot figure out how to get there. Please permit me to share my vision of India:

I want an India, at peace within and with the rest of the world, an India where poverty has been eliminated and all citizens irrespective of caste, creed, language or region enjoy equal rights and protection under law.

I want an India strong economically and militarily with vast soft power such that India’s comprehensive power will deter aggression; should there be aggression nevertheless,India should be able to respond in a fitting manner, if need be with assistance from other powers.

I do not want India to be a super power. I want a world without any super power.

I want an India that will make significant contribution to the building of a peaceful and just global order.

I believe that a primary purpose of foreign policy is to support India’s economic growth .

Now coming to options:

1)With its neighbors in South Asia other than Pakistan India should show generosity without seeking reciprocity in a mechanical manner so long as they are sensitive to India’s security concerns and cooperate in that regard.

2) With Pakistan there is need to talk frankly, but discreetly and in confidence. The charade of discussing the Kashmir issue in order to find a ‘ final settlement’ as provided for in the 1972 Shimla Accord should be ended. That Accord was a mistake that needs correction and not compliance.

The Line of Control should be declared as international boundary. This would imply that India concedes that Pakistan-occupied Kashmir including what was ceded to China will not come back to India. But, that is a fact of life and facts should be acknowledged as facts if they cannot be changed.

Till now, Pakistan has claimed that it was making a concession if it agrees to discuss trade pending settlement of the Kashmir issue. India should take the position that trade is advantageous to both and not a concession from Pakistan.

Terrorism is part of Pakistan’s state policy towards India. India should insist that Pakistan change policy.

3) China does not believe that a comprehensive settlement of the border question is in its interest unless India signs on the dotted line. It will continue with incursions and statements claiming Arunachal Pradesh till India sends out a strong signal that China cannot have cordial commercial and economic relations and at the same time be hostile at the border.

China’s special relations with Pakistan will continue and should be factored in as a given. Chanakya was right when he said that at least one of the neighbors of a state might be a ‘natural enemy’.

The so-called Silk Road and Necklace of Pearls are essentially infrastructure diplomacy on China’s part. There is no point in opposing it. India should conduct its own infrastructure diplomacy , if possible, in cooperation with Japan.

4) India should strengthen and deepen relations with US. But, a formal alliance is not good as it will not be supported domestically and it has serious disadvantages.

5) Without taking a formal stand against China on the current disputes in the South China Sea and the East China sea, India should get closer to Japan, Vietnam, Philippines and Australia and have closer defence cooperation with them. As regards naval exercises India should conduct them with the four and also with China.

6) Diplomacy is not monogamous and Russia is a time-tested friend in need.

7) India should take care of its national interest better than it did in the case of the 1984 Bhopal Gas Tragedy. National interest includes the interests of the nationals.

8) In short, India should be assertive without being aggressive.

(Source- Amb (Retd) K.P. Fabian @ http://www.mea.gov.in/)