From: sanjeev nayyar
Date: Thu, Apr 11, 2013 at 2:25 PM
Subject: Plummeting influence of India by G. Parthasarathy
To: sgmail
Plummeting influence of India
Effect of economy heading for a tailspin 11/4/2013
by G. Parthasarathy http://www.tribuneindia.com/2013/20130411/edit.htm#4
Nations inevitably lose international influence and power when they are either militarily unprepared or floundering economically. We are still to recover psychologically from the humiliating military defeat inflicted on our underprepared armed forces by China in 1962. The 1962 conflict led an adventurist Field Marshal Ayub Khan seeking to seize Kashmir and failing to do so, in a largely inconclusive conflict in 1965. This conflict had disastrous diplomatic consequences, with the once friendly Soviet Union seeking the role of a mediator, ready to supply weapons to Pakistan. India became a classical basket case dependent on the Soviet Union for arms and on the US for IMF assistance, to deal with a balance of payments crisis. With a begging bowl in hand, India sought American food aid as chronic food shortages led people to the verge of starvation.
Things turned for the better when Indian agriculture revived, in the wake of the Green Revolution spearheaded by then Agriculture Minister C Subramaniam. The Soviet Union came out in support of an economically self-reliant, rhetorically left-leaning Indian government. The dark shadows of 1962 receded when, backed by the Soviet Union, India emerged victorious while pitted against a Nixon-Mao-Yahya axis in the 1971 Bangladesh conflict. By the early 1990s, however, we were hit by a "double whammy" when the Soviet Union collapsed and we had to mortgage our gold reserves to stay afloat. Worse still, a malevolent Clinton Administration was prepared to go to any length, including putting pressure on the Russian Federation to end cooperation even in space with India, in a relentless effort to "cap, roll back and eliminate" India's nuclear weapons programme. Our prestige sank so low that we were trounced and humiliated in an ill-advised contest against Japan for a seat in the UN Security Council in 1997.
It was only when the revolutionary economic reforms and liberalisation initiated by Prime Minister Narasimha Rao took effect that India's economy recovered enough for the country to withstand global economic sanctions, which it faced after the nuclear tests of 1998. A chastened Bill Clinton visited India once he realised that it was pointless to impose sanctions on an economically vibrant India. The NDA government under Mr Vajpayee accelerated growth rates steadily and observed the fiscal prudence required not to let runaway inflation to break the backbone of people. The UPA-I built on all these developments. Global nuclear apartheid against India ended, with the country assuming a larger global profile by its participation in forums like G-8, G-20 and BRICS. But the UPA political dispensation is still dominated by powerful elements, wedded to populism and fiscal irresponsibility. The much-touted loan waiver to farmers and a series of so-called "entitlements" orchestrated by the extra-constitutional National Advisory Council led to an era of unrestrained populism. Few people remembered that the economic disaster in 1991 immediately followed a populist loan waiver for farmers by then Prime Minister VP Singh.
The unbridled populism saw the deficit of the Union Government, the net of asset sales, rise to 6.6 per cent of the GDP by March 2011, rising dramatically from 3.9 per cent of the GDP, in a very brief time span. Growth in the last quarter plummeted to 4.5 per cent. A populist Environment Minister brought in regulations destined to inordinately delay project clearances. The lack of transparency in decision making has led to a situation where despite its vast resources of coal, imports of coal are rising alarmingly. With the prices of imported coal rising, power shortages are becoming endemic even in traditionally well-administered states like Andhra Pradesh and Tamil Nadu. Industrial growth is slowing and new investments are becoming scarce as Indian entrepreneurs seek greener pastures abroad for investment. Every rating agency, foreign investor and foreign government knows that India has become a difficult investment destination.
It is now commonly mentioned that BRICS would be better served if India is replaced by Indonesia, where economic management is prudent and sound and the investment climate free of delays and uncertainties, which investors experience in India. The current joke is that while corruption is present everywhere in emerging markets, one sees "efficient corruption" in China but faces "inefficient corruption"" in India! While the Finance Minister has promised to reduce the fiscal deficit, India faces an equally serious problem of a burgeoning current account deficit, recently estimated at 6.7 per cent of the GDP, being larger in percentage terms than it was during the crisis of 1991. In these circumstances, it was somewhat ludicrous for New Delhi to be advocating a BRICS Investment Bank, in which India would be a relatively minor player, given China's vast reserves and potential. This at a time when observers believe that we may have to seek a bailout from the West-dominated IMF, whose influence the BRICS Bank is designed to erode.
Reports from Durban that South Africa's President Jacob Zuma did not bother about meeting our Prime Minister while he was busy feting President Xi Jinping and President Putin are disturbing. Moreover, while other Heads of Government were housed comfortably in Durban, Dr Manmohan Singh was made to stay 40 kilometres away from the Conference venue. Lack of due courtesy and consideration to an Indian Prime Minister is not an issue we can ignore or take lightly. Indian prestige and credibility today are at its lowest in recent years. In the Maldives, we have been outmanoeuvred by a wily President Waheed who, under our noses, bought insurance from China and Pakistan. On Sri Lanka, we have vacillated in the UN Human Rights Commission between sticking to a principled position of opposing intrusive, country-specific resolutions and the "compulsions of coalition politics" in Tamil Nadu. In the process, we have gratuitously offended a friendly neighbour and not persuaded public opinion in Tamil Nadu of the merits of our stand. Moreover, we should ask ourselves whether our diplomacy has really helped a friendly Prime Minster, facing serious challenges from Islamic extremists in Bangladesh.
There are serious challenges we will confront while approaching the conclusion of the American "end game" in Afghanistan, in December 2014. Are we clear on what needs to be done to meet the challenge of an ISI-backed Taliban and its affiliates? Moreover, we could well see the PPP-led coalition replaced in Pakistan by a Nawaz Sharif-led coalition, which includes rabidly anti-Indian elements from the Islamic parties. With the defence budget reduced to 1.79 per cent of the GDP and essential acquisitions delayed or postponed, do we have capabilities to deter adventurism and terrorism from across our borders? These issues will hopefully receive attention when the Budget session of Parliament resumes.
sanjeev nayyar
https://twitter.com/sanjeev1927
To unsubscribe write back
sent from samsung galaxy note, so please excuse brevity
No comments:
Post a Comment