I recently spoke in an event discussing world economies 'beyond China': My topic was Africa and I reported what I spoke about in an earlier post on this blog (Read Beyond China: Why Africa Matters). I was, however, not speaking about India's prospects in this changed world. It is only fitting for me to supplement my earlier post with what I think of India's prospects.
China's prosperity and ascendancy present both a great opportunity and a grim challenge to India. China's economic growth, and consequent rise in Military Power, dwarf India's position in its immediate neighbourhood, where it faces many challenges anyway. Its relative loss of significance will both impact its domestic polity, where a particular firebrand nationalism is on the rise, and its resource economies, which is far more interdependent with its neighbouring countries than Indians will like to believe. At the time when the United States and China are particularly prone to falling into a 'Thucydides Trap', pitting the ruling power against a rising one (read more about Thucydides Trap here), a defensively minded insecure India is great danger of becoming America's foot-soldier in Asia, embarking in pointless challenges to China's hegemony. At the same time, however, a rising China presents an unparallelled opportunity for India for partnership and shared growth, because the economies and societies of these two nations can be seen as interdependent and complementary. India's skills can be useful to China's vast material economy, and China can dramatically expand the market for Indian goods, services and people. China is, in more ways than one, India's big opportunity.
However, such economic common sense is likely to be trumped by binary, antagonistic views of the world, coming out of politically motivated constructions of India's history. What makes such partnership even more difficult is because India, so far, has displayed what one would call a 'closed mind'. Pratap Bhanu Mehta came up with this wonderful comparison between China and India, which, for anyone even vaguely familiar with both countries, will find intuitively appealing: China, he says, is a closed society, but has an open mind. India, in contrast, has an open society, but as a nation, a closed mind. This description seems apt: Despite India's vibrant democracy, young population and wonderful entrepreneurs, the limits of its own imagination holds India back. While Indian professionals earn plaudits for their intelligence, knowledge and work ethic from all over the world, India collectively seems to be caught up in an interminable adolescence, viewing itself as a perennial victim and constructing an introverted world view around the same.
While there are sociological and historical explanations of this phenomenon which make it look deeply rooted and difficult to change, this is a massive tragedy. India's attempts to bracket itself with its bigger neighbour increasingly looks vain; despite its cacophonous democracy, its claim to a premier role in the world community is rendered fragile by its inability to engage. Its callous disregard for its own poor citizens, almost comical corruption of its 'Babu' class, the persistent and self-defeating moral relativism of its public life, put a serious dent to its claim to economic dynamism. And, this is not just about competing with China or impressing the bond market: The demographic 'dividend' that the Indians make so much about can very easily turn into a demographic disaster, if India fails to deliver its promise.
In their perceptive book 'Why Nations Fail', Daron Acemoglu and James Robinson make a point that may be valid for India: Contrasting economies such as Mexico and the United States, they show countries prosper when its citizens limit the power of its elite. And this works even in the old economies: Their point is that the English Industrial Revolution owes a lot to its revolutions in the Seventeenth century, which limited the powers of its aristocracy and the Church and opened up spaces for its scientists, inventors, and entrepreneurs. On the other hand, in countries like Mexico, the ruling classes and their cronies accumulated unchallenged power, and this went beyond politics and invaded all walks of life. One needed to be 'connected' to do anything in these economies, hindering social mobility and economic dynamism. This was also the case made by Alan Beattie in his False Economy, in the narrative why Argentina could not become United States, despite having similar starting points. The case currently being made for a 'strong leader' in India is the case for leaving it to the elites, its upper classes, to take care of the country through unchecked capitalist development. This has failed before, and except in economics fantasy, this has never worked anywhere else.
Given the experience so far, India may follow the path of Argentina, succumbing into a fragile economy, rather than developing robust institutions and making good of its implicit promise of the rule of law for all its citizens. To do so, however, it has to approach its own problems with an open mind. At a time when the Indian heartland is teeming with insurgency and the Indian government is having to pull back the Helicopter Gunships that it sent to the UN Peacekeeping missions in Central Africa for use on its own people, India is uneasy talking about its model of development: Any idea that is remotely foreign is usually rejected out of hand, though this idea of an India based on shared history itself is directly imported from Europe. Anything short of a rosy portrayal of India, is immediately jumped upon, with the claim that such discussion is not patriotic and worse, an evidence of worldwide conspiracy to undermine India. Anyone bothering to talk about the 'other' India, the one which is being systematically robbed by corporate interests, are heckled into silence; sadly, most Indian middle class professionals, sensible in other walks of life, join the Social Media gangs employed by Prime Ministerial hopefuls in suppressing any discussion.
India's opportunity, I shall argue, is not in building a capitalist Disneyland or submitting to a strong leader, but in building a strong citizenry and respecting rights and promoting opportunities. Instead of living in denial of its own problems, its future lies in opening up to the world and engaging with it. At this very moment, India's path is a choice between a path of adversity and confrontation with the inevitable self-destruction at its wake, or the prospect of cultivation of a common Asian future alongside China. Such economic common-sense is usually trumped by historical memory and self-serving elites; India can, and should, do more to be introspective and reinvent itself to be ready for a world of Chinese preeminence.
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