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Compared to China, India’s development model more participatory, but lacks execution

By Simi Mehta* 

The world is going through a transition phase. We are experiencing the rise of new powers and the decline of old. India has to navigate its path through this changing order keeping its interest in mind. The changes underway offer India an opportunity to participate in the crafting of political and economic institutions that are more pertinent to the emerging geopolitical equations.
The Impact and Policy Research Institute (IMPRI) and Centre for International Relations and Strategic Studies (CIRSS) organized a web Policy talk on the topic India and the Evolving Global order with Prof Harsh V Pant, director of Studies and head of the Strategic Studies Programme at Observer Research Foundation, New Delhi, under The State of International Affairs – #DiplomacyDialogue.
The discussion started with the observation that the global order is in constant flux and India is an active participant in state of affairs around the world. Participants wondered: Do these changes offer India the scope and prospects to participate in crafting of economic and political institutions?
The chair of the session, Dr Rafiq Dossani, in his opening remarks asked: Does India have its strategic autonomy or are its actions largely reactive? In the analogy of stock markets, is India a market maker or a price taker? How important is collaboration with big powers for strategic autonomy? And what does India uniquely bring to the table- economic, diplomatic, social and/or military resources?

China and India – Material power

He elaborated that during the past two decades, we witnessed transformations to a global economic power. China’s saving rate, at 45%, is over thrice that of the US, while GDP is 66% that of the US. By contrast, India’s saving rate is 28%, which is about twice that of the US, while GDP is 13%. So, India’s investable capital annually is about 25% of US.
As the US-China standoff keeps getting murkier, people on both sides are asking tough questions. Can there be a victor? What will be the ramifications of an all-out trade war on the global market? And how will it end?
As the country exports more to the US than it imports, China simply does not have much room to counter American tariffs. However, if things get really serious, China and the US are financially intertwined in ways that China could seek to exploit, though not without creating risks for themselves as they currently hold $1.2 trillion in US Treasury bonds.
He wondered how ready is India to accommodate changes? Will it affect the future of multilateral institutions like UN, WHO, WTO to which India is deeply committed and if so what are the alternatives? India also needs to resolve several bilateral issues with China – border disputes, sea lanes in the Indian Ocean, trade and cyber security and how will these be affected?
Prof Pant began his lecture with the theory of power transition (having forecast the rise of China as early as 1958, this aspect of power transition is now fully integrated into the mainstream thinking of most current observers of world politics). While mentioning how the US performs this role as global economic stabilizer, he made references to the unipolar movement from back in the day.
During the 1990s, the unipolar moment brought the rise of the US as the sole superpower of the world after the end of the Cold War. Economic, military superiority as well as political influence throughout the world was coined to be the unipolar moment of the United States in the world system since there was no other challenging superpower. He discussed with the participants the inward orientation we still observe in American foreign policies today, melding “America First”, “American Dream” and other euphemisms alike.
These paradoxically emerged on the progressive left to put forth how unchecked capitalism and huge increases in private wealth would destroy the American dream of opportunity, because of inequality, but altered after World War 2. The newfound emphasis on individual economic liberty was in tension with the idea of justice for all, and this became more of a problem as economic inequality increased and the spoils of capitalism were restricted to a privileged few later in the century.
There have been incessant mentions of “Indo-Pacific”, as the emergence of new geographies happens to seep into the conversations diplomats and policymakers have to formulate legislations.
This is a colloquial name given to the territory stretching from Australia to India in Washington. It is even more relevant after the deluge of news that leaders of four large democracies who make up the Quad have reiterated their commitment to a free and open Indo-Pacific region that is “undaunted by coercion.”

India’s global concerns

Prof Pant quoted from his piece published in ORF: 
“Ever since the coronavirus pandemic started revealing its true scale and scope, Modi has tried to position India carefully as a nation that can speak of global concerns with the widest possible range of stakeholders. And the first platform he used was SAARC, a grouping which he has tried to marginalise over the last six years…
“This is also an attempt to fill the leadership vacuum in the global order when both China and the US have exposed their vulnerabilities. India has shown that a nation with limited capabilities can also emerge as a leader by outlining the concerns of like-minded countries and working with them to build capacities in smaller states.
“Indian diplomacy during the time of Covid-19 pandemic has been proactive and has tried to shape the global discourse. Towards this, existing platforms like NAM and SAARC has been used by Modi in the same way in which he has used newer groupings like the G20. In his address at the NAM summit, Modi showcased India’s efforts towards global cooperation by underlining the supply of critical drugs and medical devices to 123 countries, including 59 members of NAM.”

Dr Parama Sinhapalit, adjunct senior fellow at the Rajaratnam School of International Studies (RSIS) in the Nanyang Technological University (NTU), Singapore, reiterated the stance discussed in the lecture earlier, and spoke at length about the geopolitical implications of Covid-19, and the reset dynamics for US-China. This year’s Malabar exercise included Australia, a rhetoric of better ally-ship with the allies of the countries in question.
Malabar is an annual maritime exercise that enhances planning, training, and employment of advanced warfare tactics between the Royal Australian Navy (RAN), Indian Navy (IN), Japan Maritime Self-Defense Force, and US Navy which demonstrates the commitment between like-minded nations to upholding a rules-based maritime order in the Indo-Pacific.

Global power shifts

Responding, Prof Pant said that the international institutions such as United Nations Security Council, the World Trade Organisation and the International Monetary Fund come under pressure to adapt to new power realities. In the wake of global power shifts both emerging and established powers can change the status quo.The countries are today going for lateral groupings instead of investing in formal institutions which require a certain kind of power structure.
He commented that the past decade has witnessed a geopolitical churning in the Indo-Pacific region with new strategic alignments being created and mini lateral groupings such as the Quadrilateral Security Dialogue (or Quad) have emerged which are a result of changing geopolitical dynamics in the region.
The changing balance of power dynamics both at the regional and global levels impact the effective functioning of the larger multilateral institutions. Perceptions of ineffectiveness of more formal multilateral bodies in dealing with regional challenges has pushed countries to look for alternatives.
The event spanned also on the Russia-India-China trilateral, since “all three countries support a just and rational new international order with democratization of international politics and multi polarisation, there are a number of areas possible for their political cooperation in the new century.”
Responding to sets of important questions – How ready is India to accommodate this change? Could it affect the future of multilateral institutions like the UN, WTO, WHO to which we, as a nation-state, are so deeply committed? If so, what are the alternatives? India needs to resolve its bilateral issues with China, border disputes, sea lanes in the Indian Ocean, trade, cybersecurity, etc.? – Prof Pant stated that one way in which India tries to differentiate itself is in development aid and financing infrastructures.

India's bottom-up approach

Compared to China, India’s model is more bottom up and participatory. The development aid that India gives has risen compared to the past but India struggles when it comes to implementing and delivering projects. Hence a more streamlined and time bound approach to complete projects is a necessity.
India compared to the past is much more active in projecting itself upfront like in the International Solar Alliance. India Today is willing to move forward and create new international frameworks like CDRI (Coalition for Disaster resilient Infrastructures).
Responding to a question of India being a weak link in Quad, Prof Pant stated that everyone in the Quad was a weak link when it started and India is trying to do something new without actually signing a treaty with the US.
Talking about the BBIN (Bangladesh, Bhutan, India, and Nepal) Initiative he responded that Bay of Bengal should be the focus and India should have a much better response to the problems.
Talking on Blue Dot Strategy Network, Dr Dossani responded that it seems to have taken a back seat that referred to the United States and other countries to create a standard space framework for infrastructure investment and logically it was always a non-starter and for the US to get involved in this to in effect subsidized China standards.
One of the problems all the countries are facing is a faster scale of change and there is constant responding to real time things which the international institutions are unable to handle leading multiple challenges at varied levels. Ability of states to respond to some of these challenges is a major concern. India is institutionally unprepared and still struggling to craft these institutions. “India needs to strengthen and modernize its Institution fabric”, said Prof Pant.
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*CEO, IMPRI

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