Month: February 2017

Globalism, radicalism, populism on Raisina Hill

Samir Saran

The keynote speeches by three world leaders at the Raisina Dialogue stood out for their pronouncements on globalisation.

Raisina Dialogue, Raisina Hill, globalisation, radicalism, Narendra Modi, Stephen Harper, Boris Johnson
Photolabs@ORF

In many ways, the Raisina Dialogue hosted by Observer Research Foundation and the Ministry of External Affairs, Government of India, set the tone for the year’s momentous developments in geopolitics. 2017 is yet to complete fifty days, but the events of the last few weeks will have a lasting impact on our times. The Raisina Dialogue, in particular, highlighted the clash between liberal “internationalism” and the radical movements that threaten to upend it. Keynote speeches by three leaders at Raisina stood out for their pronouncements on globalisation. The first, by India’s Prime Minister Narendra Modi, sounded a note of caution about the “gains of globalisation” being at risk. “Economic gains are no longer easy to come by,” said PM Modi, who went on to cite the “barriers to effective multilateralism.” The Prime Minister’s message was direct and simple: that globalisation needs new inheritors who can help promote the projects, regimes and norms of the 20th century. This responsibility would invariably fall on the shoulders of a class of nations that we have come to know as “emerging powers.”

“Globalisation needs new inheritors who can help promote the projects, regimes and norms of the 20th century.” — Narendra Modi

A second perspective on globalisation came from former Canadian PM Stephen Harper, who highlighted the role that religion plays in these turbulent times. Mr. Harper noted the role that Pope John Paul II, a Pole, played in providing “anti-communists in Poland effective leadership outside the country” in their struggle against the Soviet Union. PM Harper was hinting at the capacity of a religious leader whose tacit support of the Western ethos ensured resistance to entrenched nation-states. In this respect, religion returned to world politics (to destroy the Soviet Empire) in the eighties, long before the rise of the Islamic State. Can tendencies driven by religious sentiment today — whether through the rise of terrorist groups like ISIS, or through the counter-movements against migration in Europe — defeat the globalisation project driven by states?

Can tendencies driven by religious sentiment today defeat the globalisation project driven by states?

And finally, British Foreign Secretary Boris Johnson offered yet another take on globalisation, in balancing his full-throated defence of Brexit with his call for greater economic cooperation with Britain. The “selective” or “a la carte” globalisation that Secretary Johnson pushed for at the Raisina Dialogue reflects the desire of many Western states to preserve its economic benefits while assuaging “nativist” tendencies at home.

What do these three speeches at the recently concluded global conclave tell us about the world today? For one, they concede that globalisation of a certain kind has run its course. This was a globalisation spurred by Western leadership in the 20th century, promoting ideas and institutions to salvage economies that had been devastated after two great wars. The urgency and desire to create those linkages no longer exist in the trans-Atlantic universe, so this period is witnessing selective de-globalisation.

Second, the leaders’ speeches acknowledge that globalisation is a victim of its own success. In true Hegelian fashion, the “idea” has been destroyed by its “actualisation.” Globalised economies today promote the free and rapid flow of information, bringing communities, societies and peoples together. These connected networks are by no means homogenous. They are miscellaneous groupings that often have little in common, by way of political heritage or intellectual traditions. As a result, they begin to sense their respective differences quickly and conspicuously. To be sure, the world was just as polarised or opinionated before the Information Age. But digital spaces have made distances shorter, and differences sharper.

Digital spaces have made distances shorter, and differences sharper.

Third, their utterances indicated globalisation is in need of new torchbearers, who may not be able to project strength or underwrite stability in the same vein as the United States or Europe, but will preserve its normative roots regionally. These torchbearers will emerge from Asia, Africa and Latin America: they may not be connected by a lingua franca but their political systems will share a common commitment to free expression and trade. Their rise will be neither smooth nor inevitable. If disruptors today find the cost to destabilise the global system rather low, its custodians realise it is expensive to fix the mess they leave behind.

Prime Minister Modi astutely observed at the RaisinaDialogue that the dust has not yet settled on what has replaced the Cold War. Russian Parliamentarian Vyacheslav Nikonov, one of the speakers at the Dialogue, went one step further: “We may not be the number one military in the world,” he said, “but we [Russia] are not No. 2 either.” With the traditional leadership of Western powers giving way to the rise of regional powers, it is anyone’s guess if they will emerge as preservers or destroyers.

Above all, the speeches by Mr. Modi, Mr. Johnson and Mr. Harper at the Dialogue reflect their desire to couch globalisation in normative terms. The Washington Consensus was not solely about free markets, but also untrammelled expression and political dissent. The room for promoting such norms, for all the reasons mentioned above, is considerably limited today. The rise of China presents perhaps the biggest challenge to an ideas-based global order. Beijing has pursued with transactional vigour and single-minded ambition the setting up of regional financial architecture to bankroll its infrastructure projects. These initiatives place little regard for notions held sacred in the international order.

At the Dialogue, PM Modi highlighted the importance of these norms for the continued execution of the globalisation project. “Only by respecting the sovereignty of countries involved, can regional connectivity corridors fulfil their promise and avoid differences and discord,” said PM Modi.

It should be clear then that there is only one legitimate inheritor to the global liberal order of any consequence: India. New Delhi alone can pursue the expansion of regional and global economic linkages while staying true to the ideals that drive them. The Raisina Dialogue itself was an example of how a global platform can be forged in India, bringing together contradicting opinions and voices from across the world. As the steward of the process, the Prime Minister cited the Rig Veda, inviting “noble thoughts […] from all directions.” The future of the globalisation project is intimately tied to India’s modernisation and rise. There is no growth without ideas, and conversely, no innovation without prosperity. India is the world’s best shot and perhaps the last shot at achieving both in these turbulent times.

The end of Davos man: West-led globalisation has reached its limits, new champions for it are needed

February 7, 2017, Times of India , Samir Saran and Ashok Malik

Original link is here

President Donald Trump’s initial policy pronouncements on migration and his increasingly evident determination for creating jobs in America itself are new markers in this post-globalisation era. They end an epoch that began 25 years ago today, when the Maastricht Treaty was signed, creating the European Union. Three years later WTO was inaugurated. By the turn of the century, Project Globalisation had gained unstoppable momentum courtesy the internet.

The vocabulary and ethic of globalisation was written in the liberal democracies of the West. There were some foundational assumptions: that as economies opened to trade, incomes would rise, consumer tastes would converge, and so would values and beliefs. The Davos Man (or Woman), as it were, would become the universal exemplar or at least aspiration. This made a whole generation of politicians, scholars, trade economists and stand-up commentators from the West robust evangelists for globalisation.

As is now obvious after Brexit, the revolt among European nationalities and the Trump mandate – several of those suppositions were flimsy. Additionally, the economic success of globalisation made it easy and convenient to ignore fundamental paradoxes in the international system. For instance, since the end of the Cold War it had been apparent that the multilateral order desperately needed updating. It had been crafted in the aftermath of World War I and metamorphosed into the United Nations 20 years later. Much of its institutional design was no more relevant.

Heady narratives enhanced the allure of globalisation and allowed for papering over many such discrepancies. They also obscured domestic tensions within societies and communities: between coastal and heartland America or rich northern Europe and depressed southern Europe. Since the financial crisis of 2008, the bottom has been knocked out of the West-driven globalisation model. Absent its economic deliverables, it is no longer able to stave off the challenge from societal tensions, political ghosts, institutional gaps and stakeholder inequities. This is happening both internationally and within nations. A “domestic South” is mirroring the grievances of a “global South”.

US elites, hitherto evangelists of globalisation, are numbed by the thought that the sun is setting on the “American century”. Its little people, on the other hand, are rudely rejecting the notion that globalisation benefits all. While rising inequality in emerging economies is widely commented upon, it is often ignored that the current generation in OECD countries will be the first in the modern age to have a standard of living worse than their parents. This has caused a new and sometimes irrational aggregation of grievances. It has resulted in, for instance, the paradox of down-at-heel Americans empathising with a gold-plated Trump.

Gradually, every pillar of the Atlantic System – American hegemony as a security guarantor of last resort; industrial capitalism; liberal trade and free markets; the irrevocable retreat of the state from the citizen’s economic life and well-being – is crumbling. Yet, the West is not alone. The industrial order of the past 150 years, with its stress on big manufacturing and relentless export, is being overtaken by the digital age. This has placed a question mark on the Chinese model, as currently practised. Services and innovation are the rising currency, not shop floors and industrial production. It is these factors that will drive growth in India and Africa.

Having said that, India’s economic transformation, China’s merger with the global political mainstream and Africa’s promise as the final frontier all require the liberal trading order to retain its essential vibrancy and osmosis. This is not necessarily due to any ideological belief in the inevitable universalisation of liberal values, but simply because of utilitarian benefits: market access, capital and technology needs. As such, the Indian state and Indian enterprise can live with, indeed embrace, the pressing reality of transactional capitalism. They are not dogmatically opposed to it, unlike free-trade ayatollahs who never face voters or meet real people.

In its own way, the past 20-25 years have written internationalism into India’s political DNA. In theory, it offers a halfway house and a proposition to moderate both the isolationist impulses of Middle America as well as the overreach of Brussels and the Eurocrats. In attempting this, India is only doing itself a favour. For its economic growth and well-being it needs partner countries, from the European nations to Japan to of course the US, to retain a certain buy-in to the open trading system.

The quest to reimagine the ethic and vocabulary of globalisation is not India’s alone. In January, President Xi Jinping donned the mantle of benefactor of the World Economic Forum in Davos and made a case for free trade (and China’s unfettered access to Western markets). On the same day, Prime Minister Narendra Modi opened the Raisina Dialogue in New Delhi by stating baldly: “Globally connected societies, digital opportunities, technology shifts, knowledge boom and innovation are leading the march of humanity … But walls within nations, a sentiment against trade and migration, and rising parochial and protectionist attitudes across the globe are also in stark evidence. The result: globalisation gains are at risk and economic gains are no longer easy to come by.”

The globalisation narrative is being reimagined by the leaders of both China and India. This has economic implications, but comes with political baggage too – for only one of these narratives is rooted in liberal democratic values. It is for India to promote its narrative, as much as for the West – even the transactional West – to make its choices.

Samir Saran is vice-president and Ashok Malik is distinguished fellow at the Observer Research Foundation

India needs to articulate the principles of managing world affairs

Samir Saran

The Indian example and its democratic choices are persuasive and much needed in the world.

BRICS,New Development Bank,Soft Power

Historian and sociologist Krzysztof Zalewski sits down for a Q&A with ORF Vice President Samir Saran.

Krzysztof Zalewski: India is a large country, both in terms of its population and its land area, with a fast-growing economy. It is perceived as a major new player on the global stage. What would the world order look like if co-organised by India?

Samir Saran: India’s impact on the world order is already significant, but it is a ‘work in progress’ at the same time. It is significant, because it is a telling story of a poor, developing country adopting robust democracy as the principle political instrument to improve the lives of its people. While India’s peers have fiddled with democratic and liberal ambitions, the Indian example and its democratic choices are persuasive and much needed in the world generally and in its own neighbourhood particularly. This story is a source of India’s soft power.

It is still a work in progress because a few concrete ideas need to crystallise. Over the next couple of years India needs to articulate its view of the world and on the principles of managing world affairs. What could be our proposition? Will it be based on key Indian realities like its democratic experiences, high-tech industry, expanding service sector, and agrarian transformation? India will need to arrive at an internal consensus on what is the Indian proposition.

KZ: So what would be the nature of India’s influence in the world?

SS: We need to answer a few questions internally first. Will India be seeking to replace old powers with a new face? Or is it going to change the ethos of how we manage our affairs collectively? As a country that will rise from the third world to soon become the third largest economy of the world, I am sure there would be expectations that the inclusive governance frameworks, which have been sought by India from the time of its first Prime Minister Nehru to its current Prime Minister Modi, must be what the Indian proposition should be based on. It will still take India another two decades to get to this point and this time should be spent on building up domestic debate and participating in conversations on the subject.

KZ: Every new power tries to formulate its ideological appeal when it is rising. We know what the American Dream is; in the last few years we have heard much about Chinese attempts to formulate the Chinese Dream. So what would be the Indian Dream in your personal view?

SS: Any Indian dream would not be too different to the ones of our founding fathers or even those of our current leaders. It has to be one that envisions a result in the eradication of poverty, disease and despair. In other words, the challenge is to integrate into global economic processes the approximately 500 million Indians who were born in the last 25 years and about four times that number born globally in the same period. They all want to have jobs, they all have dreams, they all have aspirations. Many were denied their dreams because of the colour of their skin, because of the place they call home, or because incumbents have refused to allow them a fair share of this world. India must attempt to find space for them in the global order.

KZ: Here in India I find many people are fascinated by the Chinese example and are sometimes a bit frustrated both by the slow decision-making process, normal for a democratic society, and the very complicated Indian federal system. So is it possible that Indian society will find the Chinese model increasingly attractive?

SS: Yes and no. To answer the first part of your question, many of us, and perhaps the vast majority, imagine ourselves as open, liberal and democratic people. We are far more comfortable with the values enshrined in the liberal order. India, in the second half of the century, will be one of the largest contributors to and defenders of the liberal order. In a sense, we will inherit the responsibility of serving these values, just as the Americans have been doing since the second half of the 20th century. In my opinion, it will be impossible for international liberalism to survive unless India takes the baton by then. The rest of the big international players will not necessarily have the affinity to Western European and American models of global governance.

While we do criticise our complex decision-making processes, which delay and sometimes deny development, in my mind, this criticism is not directed at the foundations of the political system that we have chosen and that we are governed under. While we admire the Chinese, we also admire the Germans and the Japanese. There is a greater allusion to China because it has been a fellow developing country and it offers us a real target to chase.

KZ: One of the instruments India has developed to become more visible as a global player is the BRICS group. In the Oxford Handbook of Indian Foreign Policy you have recently written a wonderful article on what BRICS is for India. From this I conclude that the BRICS grouping is a bit like a train with passengers leaving it at different stations.

SS: I am not speaking for the government of India, and I am certainly not speaking about the ambitions of China, South Africa, Brazil or Russia. I would argue that BRICS is a transitory vehicle for India. For a long time we were heading the global trade union, we were the driving force behind G-77 and Non-Aligned Movement, we were the energy which created third world institutions. Now we are a power that needs to contribute towards growth, peace and sustainability, and we will need to bear the costs of these as well. India will need to become a net provider in the global development architecture.

BRICS will help move India from the position of a global trade union leader to that of a global manager. We must do this carefully. We have to leave our erstwhile partners in this process, and it is more palatable if we part company in favour of BRICS than the OECD, given current realities.

KZ: So what does BRICS bring India in concrete terms?

SS: We are learning how to build new institutions of global governance, such as the New Development Bank (NDB) and the Contingency Reserve Arrangement (CRA) to manage liquidity and currency crises in the BRICS countries. We are also thinking of creating a credit rating agency, and about strengthening the WTO. We have also established security and energy working groups under the national security advisors within the forum of BRICS.

BRICS is important for the messaging it provides to India’s domestic audience. It motivates Indian citizens to be part of something bigger, to contribute to global challenges and realise greater responsibility, such as through the BRICS fund put to disposal during the eurozone crisis few years ago.

KZ: You mentioned the New Development Bank. In Asia a number of institutions of global economic governance are emerging, such as the Asian Infrastructure Investment Bank. How do you see the division of labour between these two institutions?

SS: The AIIB is exactly what the name suggests: it is a bank that focuses on Asian needs in developing infrastructure, in which India is the second biggest equity holder. The NDB has different goals and a different structure, which is novel, as every participant has equal rights. It will help finance not only infrastructure, but also place emphasis on social goods, such as advancing healthcare and stimulating small and medium enterprises. Joseph E. Stiglitz, the previous head of the World Bank, has argued that the world needs many more such institutions. Indeed, AIIB and NDB are only two of the many more institutions which need to emerge in order to transfer global savings into investments in developing countries.

KZ: The NDB has five member states with equal voting rights despite the vast difference of economic power within the BRICS. But it is open to other participants.

SS: 49% of the ownership can go to entities outside of BRICS member countries. It already envisages that other international institutions and maybe even countries can contribute. And I think over the next 2-3 years we will see that happening. The largest percentage of shares will be held by the BRICS countries, the rest can be owned by different states and institutions. It is important for the bank to have Americans, Scandinavians, and other Europeans on board. It will improve the bank’s rating, which means the cost of capital will go down.

KZ: If one wanted to encourage the Polish government to participate, what kind of arguments should be used?

SS: I would use two kind of arguments. Firstly, there is a huge disparity between development needs and the available capital. If Poland believes development infrastructure is an important area, the NDB is a useful vehicle for global economic development. Secondly, the NDB is a new bank, so if you come in early, you can still co-create this institution and have a say in the decision-making processes of the bank.

KZ: The NDB is just a part of the BRICS agenda for a change in global economic governance. But in my country it is sometimes perceived as a rival to the geopolitical order we generally support, a rival of the US. How would you convince people that you would like to contribute to the world order and not to fundamentally challenge it?

SS: The way you perceive BRICS’ contribution depends on where you are sitting. If you control global institutions, you will always look at newer constructs providing similar services to the global community with a certain degree of scepticism. BRICS is often accused of undermining the established international financial institutions, such as the World Bank or IMF, which is not true. I think BRICS does not have the capacity to be adversarial even if it wanted to play such a role. BRICS offers complimentary institutions in financial security and in other fields. It will deliver these services to those who need them most, that is, the underdeveloped countries. And it will do it in a manner different from what the OECD countries have done so far. So if it can lend money without the same conditions the World Bank does, and it can lend money directly to the sectors which will create jobs in Asia and Africa, it is contributing to creating solutions in these countries, and this will give it credibility in Asian and African countries. If the only difference between the NDB and the World Bank are the ethnicities of its managers, we would only be replacing one set with another and business will continue as usual. The credibility of BRICS will be assessed by the quality of the institutions it offers. Can the member countries create a credible BRICS rating agency, can they create secure digital economies, can they create an effective energy agency? So the challenge is really to create institutions.

KZ: Commenting on the BRICS summit in Goa last autumn, the media tended to focus on Indian attempts to isolate Pakistan. What should be done in order to prevent current political issues from dominating the BRICS agenda?

SS: We must not allow bilateral politics to define the narrative of these institutions; they must be bigger than the individual members.

We need to create a comfortable arms-length distance between bilateral relations of BRICS member states with third parties and the agenda of the grouping as such. If you look at the outcome document, Pakistan is not mentioned. Principles are mentioned. As long as you can discuss (within BRICS) principles of countering terrorism, it is helpful. If you try to shame and blame, you make cooperation weaker. BRICS should, however, continue to focus on strengthening economic cooperation.

This interview originally appeared in CSPA.