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MARCH-2013 ISSUE
Force Magazine
Guest Column - Force Magazine
Importance of India
Both French President and British Prime Minister want to invest in India relationship
 
Kanwal Sibal
By Kanwal Sibal
The back-to-back visits of French President Francois Hollande and British Prime Minister David Cameron to India in February call attention to the European dimension of our foreign policy. Many in our establishment have a tendency to dismiss the importance of Europe.

It is argued that Europe is trapped in low growth structurally, its population is ageing, its welfare system is becoming unsustainable, its products are not sufficiently competitive, it has reached a level of comfort that makes reforms difficult, it has lost the edge in innovation, its defence capacities have got eroded with the decline in defence budgets and peace in the continent. The Eurozone crisis has strengthened the already existing negative perceptions.

Such thinking is fed by the conviction that global economic power is shifting from the West to Asia, and along with that political and military equations are also changing. Sooner or later, it is believed, the US/European hold over international political and economic institutions will be loosened. On the issue of ‘values’ — those of democracy, pluralism, human rights and the like — both the aggressive manner in which US/Europe propagate them and the double standards adopted in this exercise has eroded their appeal, not to mention that China’s economic success in moving hundreds of millions out of poverty under an authoritarian regime offers a competing model for numerous countries that have no tradition of democracy and no attachment to it.

India’s own high growth rates in the last few years, the transformation of its image from a poverty stricken country to an engine of growth for the global economy hit by recession, the bracketing of India with China in economic discussions in the perspective of these two countries steadily recovering their share of the global economy which was lost to Europe after the 16th century, the projections that India will become the third largest economy in the world by 2030, has led to the development of a certain world view in which Europe no longer looms as large as before. The US still retains its hold on the mind of those looking at India’s future.

Despite its current financial and economic troubles, it is believed that the US is still capable of innovation and that its recovery will be quicker than that of Europe. US military strength and its presence in all regions of the world also gives assurance that through good understanding with it, many of the challenges India faces can be met or alleviated, whether that of terrorism or the threats posed by the rise of China. Europe, militarily dependent on the US, is not considered as a potent enough partner in this and hence, a certain amount of disdain for the value of the strategic relationship with it.

Some commentators are presumptuous in arguing that for France, for instance, ‘to become a partner more in sync with a new post-liberalisation India, the key would be to make itself meaner and leaner at home’, a reference to hard decisions it needs to take on welfare costs and government spending. It is not clear whether with some 300 million below the poverty line, urban decay, inadequate sanitation and the anguish in the country about poor governance we can smugly refer to the ‘new post-liberalisation India’.

Our declining growth rates, large fiscal deficit, expanding current account deficit, the fall in the value of the rupee, are problems we need to address urgently before we are in a position to give lessons on economic management to Europe. Sniping at the French economic model that is ceaselessly attacked by the Anglo-Saxons who believe in less government, less regulation and weak trade unions hardly clarifies the debate on the Indian situation and the economic and social policies we should pursue. It is not clear where calls for ‘inclusive growth’ in India figure in the thinking of those who find continental Europe’s welfare model incompatible with the new Indian economy.

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