On 05 Aug 2019, when Article 370 was abrogated, India was on top of the Geo strategic game. It was seeking a lasting solution to the K problem in a bold new gambit. Pakistan Army was left wringing its hands on the side-lines. Their PM whined and wailed to no avail. The Security Council just let it pass despite best effort by China. The OIC even gave a thumbs up under the table. Everyone winked. After all, they were dealing with a rising India asserting itself within its borders. So, what if the economy was a bit wobbly? Things were still promising. Those days are gone. We are in troubled times now. Economy. Corona Virus. Taliban -US deal. CAA-NRC- Riots. All working at cross purposes to each other. Each pulling in different directions. Each connected with the other. Time to take stock of the situation and apply course corrections. The road to a 5 Tn dollar economy and the Centrality of India in the Asia- Pacific region is on a shaky wicket suddenly. The transition from the upbeat ‘Howdy Modi’ to the sombre ‘Namaste Trump’ is now palpable. We are on the horns of many dilemmas.
The US-Taliban Deal
The US – Taliban deal in any form is bad news for us. Very simply put, peace or even lowering temperatures in Afghanistan will render hardened fighters unemployed. Taliban bosses will want some of these fighters in safe places, where they can be whisked up whenever wanted. What better place than Kashmir to keep them fighting fit? Pakistan has got into the act of midwifing the US- Taliban deal. The US stake in Pakistan has consequently increased. Hence if Pakistan gives safe passage to the Taliban fighters posing as Kashmiri freedom fighters and organises them as upholders of the Intifada, the USA will wink. Hence pressure must be put on Pakistan. That is possible through the Gulf and Middle East countries. There are indications already that they will not since there is an alternate narrative in India called the CAA-NRC-NPR combined with associated riots and violence. An India, whose economy is spluttering, and politics is fragmented is not so attractive anymore. Incidentally, Pakistan has become chirpy. For some time, their opinion makers were looking inward. However, of late their opinion headlines read – India Burning, RSS-BJP Split, Thin Skin – Big Chip. The Pakistani anti India media tirade is restarting. Expect trouble in the Valley in the summer. Expect headwinds in International fora. The big danger – expect Taliban to drop roots in Kashmir. The only silver lining is that the deal has too many loopholes and open ends. It has good chances to end in a quagmire with various factions vying for power. A weak Pakistan will get entangled in the cauldron and its western border will be in problems. However, this still does detract from fires in Kashmir being restoked.
The 21st Century Indian economy has sharply veered from its ‘fastest growing ‘path and strayed into the traditional Hindu growth rate tracks of pre 91. One can glibly explain it away in any number of ways. Global slow down factors. Corona Virus. We are still ahead as compared to others, etc. etc. The undeniable base line is that there is a downward shift and below 5% GDP consistently. A rebound look remote unless drastic steps are taken. There is a fundamental connect between social order and economy. One feeds on the other. There is a fundamental connect between unemployment and rioting. One leads to the other. There is a direct, but inverse connect between an economy and international opinion. When the economy is strong, everyone keeps quiet and vice versa. No wonder there are news items now surfacing that Trump’s advisors wanted to rake up religious freedoms, minority issues, Kashmir and CAA with us despite the hype of the visit. There is a seminal connect between the economy and national power which needs no explanation. One issue stands out. The erstwhile Hindu growth rates were characterised as lackadaisical, lethargic, laid back, lack of intent and so on. Overall the ‘Kinetic’ was low but the ‘Potential’ remained high. The ‘Kinetic’ of today’s economy is frenetic. The question however is – has the ‘Potential’ gone down? In many opinions the ‘Potential’ remains intact but is untapped due to lack of ability. Long back India had the best opening batsman in Sunil Gavaskar and the best all-rounder in Kapil Dev. Yet it lost most matches. Is India in a similar situation team which relies on its PM and a few gladiators alone? With lack of all-round talent and lack of focus our economy is nose diving. The international situation is just ensuring that the rate of fall is steeper. Unless the economy rebounds, we will be grounded. Big talk and rhetoric will not work. One of the biggest problems in our economy is to regenerate ‘Trust’. ‘Trust’ in the finance and business circles is sorely lacking and that more than anything else has subverted the flow in our economy.
Corona Virus is double edged. The first edge is debilitating our economy. It is going to take its toll. The worst part of the knock is yet to come. However, in my opinion, the Corona Virus has tremendous strategic opportunity for India in the long term. Consider this. A major worldwide epidemic called SARs came out of China. Two decades later a pandemic called Corona Virus has again come out of China. Put two and two together. People will now build hedges to have alternatives to their China based sourcing and operations. Ideally, India should be the alternate destination and walk away with the cake. For that there are some essentials. First is social stability. The second is governmental intent and capability. Our demonstrated ability in both these conditionalities is poor. The Delhi Riots during a US Presidential visit will not be forgotten by the international community in a hurry. As far as the intent and capability goes, the Defence Establishment is the worst example. All the Aerospace and Defence hubs and corridors are degenerating into real estate selling efforts rather than capacity enhancement of any kind. Also, the Andhra Pradesh model where a new government is undoing all previous international agreements will weigh heavily on the minds of any potential investors. Unbelievably, news is also filtering out that the PM has expressed his displeasure at some of his cabinet colleagues for their association with some NGOs being run by their prominent sons. It is time for the Government to read a riot act to itself. The second major opportunity is the knock China is going to take on account of the Virus. Take the total picture into view. An already cooling economy. A debilitating trade war with USA. The Hong Kong crisis. And now Corona Virus. The net multiplicative effect will set China back. There will be a blow back on BRI. Supporting Pakistan might not be unaffordable. Its militarisation and superpower ambitions will be set back. It opens a window of opportunity for India to get its act together. The Indian Military System needs a major overhaul in this window of opportunity. The overhaul is mostly mental. In an era when USA is looking at unmanned air dominance fighters, we are unable to even produce unmanned surveillance aircraft. We are preparing for a conflict which is not going to occur. We are not thinking of the next gen war. Our funding for the military is a clear indication that we are out of depth intellectually. Very simply put- we need to discover the next Manohar Parrikar who can rise above the din. The third great opportunity is that this is the best time to decouple from China. In an interdependent world, total decoupling might not be possible. However, strategic decoupling is feasible. One needs to be nimble footed for that. A lot of terms and conditions must be reset. One needs focus.
CAA- NRC- NPR Combine
The CAA- NRC- NPR combine is queering India’s strategic pitch heavily. Whether this combination is good, bad or ugly or whether it is correct or incorrect – legally, politically or morally is irrelevant. The reactions from different parts of India are a clear indication that in its present avatar this combination is doing the country more harm than good. Such widespread reactions – spontaneous or organised, were last witnessed during the implementation of the Mandal Commission recommendations. Just visualise this. When news comes periodically about protests coupled with violence from Delhi, Meghalaya, Assam, Tamil Nadu and many other places; for a bozo sitting far away in Houston, Texas it will seem as if India is on fire. Add to it travel advisories being issued by various embassies. All this magnified by local politics. Further when he hears that senior ministers talk of “revenge” and “shooting bullets” he will never come here to invest as an alternate to relocate his businesses from China. The flight of FPI (Foreign Portfolio Investment) from the market is a clear indication. It started before the Corona Frenzy came into play. India does not seem to be a haven anymore. The shadow of this combination will fall on Kashmir sooner or later. It is a matter of time. The negative synergy of this combination and the unfolding of the Kashmir story will be toxic. As said earlier Pakistan will leave no stone unturned. This is exactly the opening they were seeking. All the goodwill in the Gulf is fast evaporating from the feedback available. Pakistan’s staunch allies, Turkey and Malaysia are already pitching in to tarnish our image. Of course, till such time this plays out the business and investment sentiment will be poor. There is a moot question which we must think of. Is it worth it to bash on regardless or is there a reason to change course? The consequences are clear. An opportunity analysis and a cost benefit assessment will indicate that the CAA-NRC- NPR combination in the present form is a strategic dampener. Our diplomacy will not be able to shield or protect us. Our under-funded Armed Forces will not be strong enough to ward off the dangers. It is no more just an internal matter of India. It is an internal matter of India with external and negative geostrategic consequences with a sense of déjà vu. That must be thought through.
Where Are We Going?
Indian Economy aims to get to the 5Tn Dollar mark. At current growth rates of an average of 5% it will take more than a decade (beyond 2030) to get there at compounded rates. If we raise our growth rates to an unimaginable 10.5%, we can hit 5tn in 5 years. With the current internal political scenario and the evolving external geopolitical scenario sustaining even the current rates is a dream. Very evidently our strategic choices are stark, and we need a plan based on wisdom. The plan needs to ward off the dangers posed by the US Taliban deal, exploit the opportunities presented by a weakening China due to the Corona Virus, remove the dead weights of the CAA- NRC- NPR combine to kick start the Economy. Alongside that we need to invest in the Armed Forces in a meaningful manner. It is a very big ask. Look at it from another way. The three pillars of hard power are the Economy, Diplomacy and Armed Forces. The Economy is in doldrums. The Diplomacy is enfeebled. The Armed Forces are aged. Overall, we need a major rethink as to where we are going. One place where we are not going to is the Security Council of the UN as its permanent member. We might go there to get discussed as a subject!
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