Month: March 2017

The Future of the Indian Workforce

Samir Saran|Vivan Sharma

The informal economy is growing in India, and that may be a good thing. Even as policy-makers around the world attempt to grapple with challenges linked to labour productivity and ageing, India’s circumstances are unique. By 2030, when most major countries will have middle-aged or elderly workforces, India will still be young. Around 36% of the Indian population in 2011-12 was 17 years or younger and around 13% was between 18 and 24 years (Table 3.3). The informal economy also accounted for nearly half of the employment for those between 18 and 24. Therefore, the discussion on the future of India’s informal workforce must be brought to the forefront when discussing growth, employment, sustainability and poverty eradication efforts.

Read the full paper here.

This paper has been published in the OECD Library under Chapter 3 – ‘Risks and Opportunities for Inclusive Societies in Developing and Emerging Countries’ of the book titled, ‘ Beyond Shifting Wealth: Perspectives on Development Risks and Opportunities from the Global South’. 

Building a New Delhi Consensus

March 17, 2017, Original article is here

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What kind of great power will India be? Is “greatness” an index of raw power – economic, military and political — or is it variable of a country’s ability to punch above its weight? While tipping one’s hat to the already robust debate in New Delhi’s strategic community about India’s future as a “leading power”, it is also important to acknowledge the fluid environment in which such ambitions will be pursued.

What do we know for sure? There is a certain inevitability to India’s imminent arrival as a 10 trillion dollar economy. Moribund politics or risk-averse policies cannot prevent this from happening. In pure mathematical terms, our trajectory appears to be on the right path, to break out as one of the three biggest economies in the world, perhaps by 2035. What is uncertain is India’s ability to “act” like a multi-trillion dollar economy. In other words, there is no inevitability to India having the necessary administrative capability, strategic foresight or institutional arrangements that can effectively leverage its size. There is even less certainty that India will shape global affairs in consonance with its own ethics and experience.

This is due to a number of factors: nation-states today find themselves with limited resources to pursue “development”, given that wealth generation and deployment is definitively in the hands of the private sector. For instance, India spends nearly 5% of its GDP today — nearly $90 billion — on infrastructure building. Over their lifetimes, Facebook founder Mark Zuckerberg and his wife Priscilla will give away half that amount to philanthropic causes. What does the staggering and unprecedented accumulation of wealth by the private sector mean for the state? Governance will no longer be the domain solely of the state, as businesses contribute and influence the agenda of “nation-building”. The assumption that an economically powerful India will have a unified strategic vision to execute its great power plans will, therefore, be severely tested.

Secondly, civil society actors and academics are today at the forefront of global governance, their inclusion made possible by digital technologies. If businesses and civil society actors struggled to make their voice heard at the time the General Agreement on Tariffs and Trade was negotiated (GATT) in the nineties, they have been instrumental in killing the Trans-Pacific Partnership. Policymaking on internet governance today needs the seal of approval of civil society, who make sure digital spaces respect free expression, privacy and affordable access. The Indian state, whatever its grand strategy may be, will have no option but to co-opt civil society and policy thinkers in its attempt to project power in the region and beyond.

How might a multi-faceted, multi-stakeholder discussion about India’s great power ambitions come about? Given the multiplicity of actors and interests, is it reasonable to expect India to act in a coherent, unified and most importantly, far-sighted manner so as to sustain its global clout? In other words, can a New Delhi Consensus emerge?

India has just over 15 years to discover some key aspects of its own national identity as it makes its journey to the 10 trillion GDP mark. The New Delhi Consensus can be achieved if India eschews some of its idiosyncratic postures and gives shape to a coherent Indian voice and proposition that will help guide the remaining decades of this century. The principles of the New Delhi Consensus must go beyond a common, minimum proposition and must be endorsed and advocated enthusiastically by India’s own businesses, its influential thinkers and commentators and civil society actors. While they may contest some micro propositions as all healthy democracies must, the specific positions of all stakeholders must in the same quadrant. All big powers have been able to shape such a ‘quadrant of consensus’.

Some of the defining characteristics of the “consensus” have already made themselves apparent. These features, as noted below, could form the baseline principles around which the Indian state, businesses and non-governmental organisations coalesce.

First, India is likely to pursue a developmental model that combines democracy and liberal values with high growth, setting a template for other emerging economies. As the only successful example of this variety — the “developmental states” of East Asia have all conceded to some form of authoritarian tendencies in the past century — the New Delhi Consensus must have this as the bedrock of its foreign policy. The Indian foreign secretary described it best at the recently concluded Raisina Dialogue: “Can India be different by being different?”

Second, if India is able to pursue both its economic development and liberal democratic traditions, it must offer a non-Western ethos to balance both. This is easier said than done. After all, it is commonly (but mistakenly) argued that modernity, pluralism, free societies and indeed democracy are all products of the Enlightenment era. Distinctly different from the binary Anglo-Saxon and Judaeo-Christian traditions that the United States and UK have followed, India must be less evangelical in its advocacy, and must respect and acknowledge the many forms of social contracts between the state, citizens and businesses.

Third, India must channel its leadership towards equitable global governance. Its foreign policy must be rooted in respect and shared governance of common spaces and the public goods they provide. India is the sole emerging power that does not see common spaces in acquisitive or captive terms, and its presence will temper the unbridled western urge to profit from the management of public goods. Indian contribution to the global climate change agenda in the Paris talks of 2015 as well as its developmental assistance to African countries seeking access to affordable antiretrovirals in the battle against HIV/AIDS offer examples of actions that are morally correct and economically sustainable.

Fourth, India’s global partnership and assistance programme should be recipient-led for it to be an influential shaper of the global growth and development agenda. The largest “quota” of new development finance will flow from India (among other economies) in the next two decades. What’s more, India’s journey to the $ 10 trillion mark will be replete with experiences to share, some to emulate and others to improve. Having made no attempts to pursue exceptionalism — unlike the United States and China — India’s development story will be embraced with vigour by foreign markets and governments.

And finally, India must combine its pragmatic pursuit of economic or strategic interests with idealism. For instance, New Delhi should pursue an absolute commitment to universal nuclear disarmament as a realisable goal, along with desire to be on the NSG high table as a responsible and rule-setting nuclear power. Moral leadership, dismissed all too easily in the dust and dirt of international politics, is increasingly important to global governance. The pursuit of ideals is itself a strategic imperative, as the United States and Europe have most recently demonstrated through their successful campaign for “green growth”, ensuring both a global emissions reduction pathway and the promotion of Western technologies for sustainable development.

Observers of India’s foreign policy would acknowledge that Prime Minister Modi and his team have already taken a few steps to further develop these tenets. Renewed attention towards India’s development partnership programme, its leadership role on matters of global governance (such as climate and internet regimes) and the government’s “Neighbourhood First” policy emphasise the desire to cultivate a New Delhi Consensus. This desire is also motivated by a realist assessment of current times. In a rare speech on foreign policy delivered at the Raisina Dialogue 2017, Prime Minister Modi acknowledged that “gains of globalisation” were at risk and there were new “barriers to effective multilateralism.” Implicit in his remarks was his appreciation that the world needed new leaders, such as India, who would guide many global projects over the course of this century.

India’s approach to global governance would stand out from the Washington Consensus or the Beijing Consensus in that it would acknowledge the important roles of the private sector and civil society. While both the United States and China see the capturing of global markets as a way to perpetuate their influence, their world views stem from the absolute primacy of the state. The Washington Consensus, despite its professed commitment to open markets, saw the nation-state as the mediator of the terms of development.

The New Delhi consensus, in contrast, must absorb views from outside the government, co-opting businesses, rights groups, universities and research institutions as essential players in its global agenda. The history of india is a saga of the progress of society, and of social and community institutions, with or without a strong state and sometimes in spite of the state. We cannot forget that essence while crafting the New Delhi Consensus.

(Samir Saran is Vice President at the Observer Research Foundation)

 

 

 

The next chapter in Internet governance

Samir Saran

Once cradled by global ideals, the multistakeholder community that manages the global commons of cyberspace must now be nurtured by local realities.

 civil society, advocates, not-for-profit organisations, Internet governance, multistakeholder community
Photo: Eric Bridiers/CC BY-ND 2.0

The inclusion of “civil society” — an umbrella group of activists, advocates, not-for-profit organisations, and even the academia — in Internet governance ranks among the most significant achievements of this decade in international relations. For a while, it appeared the “global, multistakeholder community” that drove normative processes like the 2014 NetMundial conference in Brazil, would stitch together rules for managing the global commons of cyberspace.

That assumption today stands on shaky ground. If multistakeholder models of Internet governance were itself a product of globalisation, its future appears uncertain in this current climate of “de-globalisation” and localism.

So, if states and strongmen have reclaimed political authority over national governance, why would they allow digital economies to function outside their remit? What’s more, these popular political leaders have discredited the private sector, which was expected to underwrite the global expansion of digital networks.

Today, companies have neither the appetite nor the legitimacy to incubate such governing platforms. Instruments of globalisation like the Trans-Pacific Partnership were supported by big technology corporations, but as the TPP’s demise shows, the mood across much of the world appears to favour protectionism over expanded trade. If the private sector recedes, multistakeholderism loses its most powerful advocate.

The inclusion of “non-state” actors in global governance itself emerged from a political context, which no longer exists. A world bruised by the global financial crisis mistrusted governments, and created a network of institutions that would not be managed by states alone.

The formation of the G20 (and its sister groupings for businesses and civil society like B20 and C20), short-lived government-bank partnerships, and the renewed focus on cross-border trade all, but ensured that the private sector and non-governmental organisations were seated at the high table of international politics.

Digital spaces benefited immensely from this geoeconomic moment. Whether to widen their consumer base, sustain their fledgling online presence, or ensure connectivity, businesses and governments realised they needed the Internet. Digital networks, therefore, became the conduit for globalisation.

Ironically, digital spaces also sowed the seeds of the current anti-globalisation mood. By shrinking geographies, social media platforms brought divergent, often conflicting voices in proximity to each other. Such online polarisation spilled over into the real world, pitting communities in a zero-sum game.

Majoritarian movements unleashed across the world threw up political strongmen, who in turn renewed the mandate of a strong nation-state. Governments today are more powerful than ever, enforcing protectionist policies, limiting migrants, micromanaging currency supplies, and engaging in widespread surveillance.

This moment in international politics should offer pause to the multistakeholder community, which finds itself in danger of being sidelined by governments — perhaps for good reason.

“Multistakeholderism 1.0” reflects a sharp bias towards transnational corporations, and powerful, omnipresent civil society actors, while constituents from the global South have had their voices hijacked.

As the plethora of cyber policy conversations at the 2017 Munich Security Conference demonstrated, matters of the Internet are essentially a dialogue between white males shouting across the Atlantic. Meanwhile, the biggest technology giants have woefully under-invested in local talent, resources and needs.

This model is synonymous with the absence of government from governance, and relied mostly on the benevolence of markets. This is unsustainable, and will prompt state agencies to step into the governance vacuum created by continuing market failures.

What is the solution to this crisis of conscience and confidence for the multistakeholder community? First, the role of the state should be reviewed in multistakeholder processes. State-led institutions still hold political appeal, especially in democracies, and Internet governance must work with this real and popular mandate of governments.

The state in developing countries continues to guarantee the security of digital infrastructure and networks as a public good, a role that must be acknowledged in multistakeholder platforms. Second, domestic multistakeholder conversations on Internet governance need to be strengthened to ensure marginalised communities that do not have the wherewithal to participate in global dialogue are uniquely represented.

Finally, the thrust of multistakeholder Internet governance itself requires reformation. So far, such processes have sought to promote the openness and freedom of digital spaces and conversations, a laudable goal in which civil society plays an important role. But little energy has been spent on ensuring affordable digital access, and in conceptualising how the next billion will engage with digital platforms.

Will first-generation Internet users in the Asia-Pacific and Africa rely entirely on mobile devices, triggering new conversations on platform security? Are digital policies equipped to handle the proliferation of local language content across devices? Are emerging Internet of Things ecosystems interoperable? Will new Internet users be discouraged from digital spaces by subversive activity online? Will insurance hurdles and cyber-risk ratings retard the growth of digital economies in some regions? These are complex questions that should be confronted by “Multistakeholderism 2.0”.

Multistakeholderism 2.0 requires a democratisation of the process of Internet governance and pluralism in uncovering the universality of the so-called “core values” that influence policy conversations. Recent political developments in the US and Europe suggest the sanguine belief of the existence of a “global civil society” — rallying around common values or ethics — will be tested in the days to come. Therefore, the success of Multistakeholderism 2.0 will be contingent on bringing local communities, businesses and leadership to the forefront of Net politics. As commentators like Latha Reddy argue, countries like India will not only have the obligation to speak for the second largest constituency of Internet users, but also the largest population of unconnected citizens. To serve them, multistakeholderism, cradled by global ideals, must now be nurtured by local realities.

This commentary originally appeared in Live Mint.

Being Vladimir Putin: Russia’s president gets 20th century geopolitics, what he doesn’t get is 21st century geoeconomics

Times of India, March 2, 2017

Link is here

Being Vladimir Putin: Russia’s president gets 20th century geopolitics, what he doesn’t get is 21st century geoeconomics. 

In 2009 we witnessed a watershed moment for geoeconomics when the credit crisis, born in the United States, spread across the world. The integrated global economy temporarily tilted over the edge of the financial abyss before being pulled back by concerted collective action involving large economies around the world.

In 2016, we witnessed a backlash against this economic interconnectedness and the ideal of collective governance with a plethora of populist anti-globalisation movements leading to outcomes such as Brexit and the election of Trump. It is increasingly apparent that we are at the beginning of a new epoch, where global arrangements will be defined by various shades of nationalism, reassertion of state sovereignty, and multidimensional contests over territory, both real and virtual.

These developments also shaped the conversations at the recently concluded Munich Security Conference. Beyond the interest and noise around the Trump presidency, and the US approach to some of the global challenges, it was clear to most that President Putin was by far the most influential global leader on all matters security, something that three contemporary developments demonstrate emphatically.

Let’s start with West Asia. In less than 18 months, Russia has cleverly co-opted Turkey, firmly embraced Iran as a strategic partner and doubled down on its old ally Syria, bringing into its tent three diverging interests masterfully. In fact this alignment and the Russian relevance in this region stems from its understanding of how regional constellations of states and state-supported militias align. Guided by its partners, the US has faltered precisely on this aspect, erroneously programming itself into the Shia-Sunni schism, without realising that the nation-state still holds normative appeal in the region.

Second, Putin has managed to breach Fortress Nato by making Turkey pivot significantly towards Russia. Using President Erdoğan’s disillusionment with the Obama White House deftly, Putin has managed to drive a wedge between Nato and one of its oldest member states.

And finally, Putin has turned the tables on the most powerful nation in the world, by using its own modus operandi against it – that of intervening in the domestic politics of other states. Through strategic leaks, Putin deftly placed his finger on the scale of the American elections, tipping them in favour of Trump.

In this age of renewed political gamesmanship, Putin is the only player who has retained a chess set from the 20th century. While others have long forgotten the craft of geopolitics, Putin continues to move pieces like a Grandmaster. But does he have an endgame?

And herein lies the rub. This most influential global political figure, a man who has formidable military and security capacities at his disposal, is an inconsequential economic actor with insignificant economic agency. Russia, a country with a military might rivalling that of the US, has a GDP smaller than that of Australia and is ranked only ahead of South Africa among the Brics grouping that it helped create.

For all the accumulation of power and orchestration of geopolitics, Putin’s tactics are not going to fill Russia’s treasury. While 20th century realpolitik may be useful in 2017, Putin is also handicapped because he continues to view economics through a 20th century prism. Russia’s fixation with large transcontinental connectivity projects has led it to support China’s New Silk Road.

Without any significant expansion in Russia’s industrial and manufacturing economy, the country is fast being reduced to a political guarantor for Chinese economic expansion or a policeman for China’s property. And what of the future? In a world where 3D printing may become de rigueur, the transportation of millions of tonnes of manufacturing goods could be a dying reality.

Connectivity in this century is not simply about roads and railways, but also about bits and bytes and hearts and minds. It is the networks – knowledge, digital, social – that transfer and transmit value in the new world order. Economic growth in the 21st century requires digital hubs, clusters of start-ups and liberal regulatory confines where young minds working with technology can push society forward.

The reality is that 20th century economic projects that Russia is undertaking benefit China, and 21st century economic projects in Russia suffer from the absence of a requisite ecosystem. This has led to a certain fragility in the global governance architecture.

I have argued before that the asymmetry between Russia’s military potency and its economic state is dangerous. China, with its $11 trillion GDP, has significant destructive and disruptive capability as well. The stakes that it holds in the global economy, however, ensure that it will never destabilise global systems because it stands to gain from them. Russia does not have sizeable economic stakes in these systems and therefore only its political capability motivates its actions. This is being Vladimir Putin.

US efforts to “isolate” Moscow through sanctions have not only failed but also proved to be counterproductive. They have reduced Russia’s skin in the global economic game, allowing Putin to engage in exactly the same conduct that sanctions seek to deter. Washington DC must focus on cultivating a sense of ownership (and consequently, the fear of loss) in Russia towards economic and trading regimes.

But this is easier said than done and ironically it is Donald Trump, derided for his lack of diplomatic acumen, who is proving himself to be astute in this matter by reaching out to arguably the most influential man in the world – Vladimir Putin.

The writer is Vice-President Observer Research Foundation