Month: August 2019

Kigali Global Dialogue only the beginning of Africa-India engagement

The dialogue was intended to highlight the potential of Africa, especially Rwanda, a country that has made significant socioeconomic and technological improvement, leaving behind a bitter and violent past

Rwanda, Rwandan, RCB, CNED, Kigali, Samir Saran, dialogue, sustainable, equitable, architecture, India, Africa, globalisation, investments, sustainability, emerging, economies

The government of Rwanda, Rwanda Convention Bureau, ORF, and UK-based Centre for New Economic Diplomacy, jointly organized the first Kigali Global Dialogue from July 3 to 5 at a top international hotel in the Rwandan capital.

The ORF played the lead role in holding the first of the dialogues, which will be held in Kigali every year from now on. The dialogue was intended to highlight the potential of Africa, especially Rwanda, a country that has made significant socioeconomic and technological improvement, leaving behind a bitter and violent past.

In an exclusive interview with Dhaka Tribune on the concluding day, ORF President Dr Samir Saran discussed the objectives and achievements of the dialogue.

Now that the dialogue is over, do you think you have achieved what you wanted to achieve? What are the achievements?

Samir Saran: I think this was only the beginning. As I said earlier, the ultimate objective is to create a more sustainable and equitable development architecture—one that is responsive to the interests of emerging economies around the world. This is easier said than done, but I think we have begun to bring together the people and organizations. They can make this happen. We are determined to organise such arenas that give agency to new voices and views around the developing world. It makes conversations richer, plural, and robust.

The agenda of the first ever Kigali Global Dialogue is vast. Could you briefly describe the objectives of the Dialogue?

SS: The agenda was vast because the Kigali Global Dialogue is an ambitious platform that seeks to engage new voices and regions on some of the most important questions of our times. It is an attempt to bring together stakeholders from the developed and developing world, to imagine a new global economic and development architecture shaped by many more stakeholders.

We identified three themes that were central to this: human capital, green energy and sustainability, and technological change and the future of work. These are the processes that will have a disproportionate impact on our development outcomes. We wanted to make sure that our communities are able to shape these trends.

Why did you choose Rwanda to help organize the mega event? What did ORF want to achieve from this dialogue?

SS: Rwanda’s governance propositions are widely hailed as a replicable model for emerging economies around the world. It is recognized as a leader in embracing green energy and technology in its development goals. It has placed people at the core of its political economy, and so it was a natural partner for us. ORF is a curator of conversations—we wanted to provide a platform for new voices, ideas, and solutions, and we are very grateful to our partners in Rwanda, the Government of Rwanda, and the Rwanda Convention Bureau for partnering with us on this important endeavour.

Are India’s engagements and investments in Africa satisfactory? If not, how can things improve? Should India have a long term plan in this regard?

SS: Given the importance of India and Africa to the world, I would say investments are not sufficient. Both need to align actors, investments, and institutions, to strengthen their partnership. More importantly, both should now start seeing each other as natural partners for both economic growth and development of their societies. There needs to be more coordination in shaping economic and development regimes, and the media and think tanks need to engage more deeply with each other. We currently learn of the other from western sources.

There is a perception that India’s growing interest in Africa is to counter China’s formidable presence in the continent. Is there any point to this particular perception?

SS: India and African countries share a history that is as old as modern civilisations. In fact, the first wave of globalisation was sparked by these two regions. More recently, we share solidarity linked to the anti-colonial struggle. China is a new entrant to this old story. I think the Chinese presence in Africa certainly informs the method of India’s engagement, but it is incorrect to think that countering China is the driving factor behind India’s partnership with Africa.

The India-Africa relationship will fundamentally be driven by the search for new economic opportunities and development partnership between their respective communities. It is a unique and privileged partnership.

This interview originally appeared in Dhaka Tribune

Seven plus one: India at the G7

 G7, summit, liberal order, climate change, tensions, communique, Macron, Zarif, Johnson, trade deal, EU, reality, Kashmir

The latest G7 summit is further evidence that the traditional guarantors of the international liberal order no longer possess the vision or will to sustain it. The divisions among the group’s members runs deep, on issues ranging from trade to climate change to tensions with China, Iran, and Russia. That two successive summits have ended without a joint communiqué suggests that while the G7 remains a gathering of similar, economically consequential states, the group’s politics is deeply fragmented.

“The latest G7 summit is further evidence that the traditional guarantors of the international liberal order no longer possess the vision or will to sustain it.”

While many blame U.S. President Donald J. Trump’s idiosyncrasies for the sorry state of affairs at the G7, he merely represents the new political normal. Consider the surprise invitation by French President Emmanuel Macron to Iranian Foreign Minister Mohammed Javad Zarif, the announcement of a new U.S.-Japanese trade deal , and British Prime Minister Boris Johnson’s statement on his plan to “talk tough” to the European Union. Each underscores the new reality with which the West will have to contend—individual whims now shape the agenda and outcomes. And that reality will outlast the Trump administration.

India’s presence at the G7 as an observer state is an acknowledgement of another dimension of this new reality. There is a growing realization that revamping the post-war order for the twenty-first century requires new torchbearers, especially from Asia and Africa. In this context, there are three salient observations about India’s diplomacy at the G7.

First, while India has traditionally found the European Union a difficult jurisdiction to navigate diplomatically, a better relationship between the two is emerging as a policy priority. Over the past year, Indian officials have visited the region to strengthen strategic ties. This is a new coalition in the making and deserves more attention.

Second, India’s ability to safeguard its core sovereign concerns even as it deepens its partnership with the West is growing. Issues such as trade, Kashmir, and India’s relations with Russia and Iran were all discussed with G7 members. A decade ago, it was more likely that the G7 would have censured India’s policies. That India set the agenda of these conversations, and that these discussions did not result in discordant press releases, suggests that India is leveraging its heft in the international order. Its message on Kashmir was clear: that is a sovereign issue and New Delhi is in control.

Third, Indian Prime Minister Narendra Modi participated in two sessions at the summit, on climate change and digitization, signaling India’s growing willingness to lead on issues that are points of contention for the transatlantic actors.

Ultimately, the G7, like many other steering mechanisms developed in the twentieth century, is struggling to find relevance in a parochial world order marked by so-called “coalitions of convenience.” For now, New Delhi’s presence at the G7 will go down as another milestone in its rise as a “leading power.”

This commentary originally appeared in Council of Councils.

India and major powers: China

To understand India-China relations during the first term of Prime Minister Narendra Modi, it is important to place the bilateral within the larger rubric of rapidly changing political forces at work in Asia. For the past two decades, the so-called “Asian Century” has been defined by the rise of China, and to a lesser extent, India’s economic growth. It was also characterised by cooperation between the two Asian giants in a number of forums, such as the BRICS, and even more recently at the New Development Bank and Asian Infrastructure Investment Bank (AIIB). And even though the border remained a point of friction, China and India were often found defending similar positions in global arenas on issues such as trade and climate change.

Figure 2: AIIB Loans (in USD Millions)

Source: AIIB.

This quasi-camaraderie ended in 2012, when President Xi Jinping proclaimed that the Middle Kingdom was committed to realising the “China Dream”[1]  by mid-century. Since then, Beijing has attempted to globalise its own “internal arrangement” for organising societies based on a mix of political authoritarianism and state-led capitalism. In 2017, President Xi called this “Socialism with Chinese characteristics for a new Era”[2]  and offered it to the world to embrace.

These developments marked an important point of departure for Asia and India. Beijing was now visibly willing to dictate the political, economic and security architecture of the continent—and it had little respect for existing sub-regional groups and balance of power arrangements such as those in South Asia and South East Asia, and extending right up to the European Union. The Belt and Road Initiative (BRI), which seeks to alter extant political geographies and economic models, is China’s most potent tool in this regard.

This expansive geopolitical ambition has naturally given rise to opposition from others. India, as a self-described “leading power,”[3] was the first to vocalise discontent with the BRI—and set the template for the other critics that have emerged since.[4]  From this global pushback against China’s geopolitical ambitions  emerged  a  new  conceptualisation  for  Asia:  “the  Indo-Pacific.” While it was an American construct, India is undoubtedly the lynchpin of this new geography. The framing of this political geography is different from the imagination of the Asian century; this construct is driven not by cooperation, but by contest, conflict and competition.

The past five years of the India-China bilateral have been defined by this one trend: of vacillation between camaraderie in and of the Asian century, to the contest and acrimony in the Indo-Pacific. Consider, for example, the political dynamics of the China-led AIIB. India is the second largest shareholder in this institution that was widely recognised as a juxtaposition between Asia’s rise and America’s diminished influence over the international economic order.[5]

It was also perhaps the strongest indicator of cooperation between India and China. Contrast this with the BRI. China is coopting states in the Indo-Pacific into its broader BRI network to serve its export and national security interests while disregarding the territorial integrity of India and ignoring India’s priorities and vision for Asia.[6]

Similarly, consider India ascension into the Shanghai Cooperation Organization (SCO). The SCO has developed norms that serve as a direct counterpoint to the extant liberal international order. It is an impressive testament  to  how  multipolarity  has  given  rise  to  new  engagements  and propositions. From cyberspace to multilateral trade, the Beijing-led organisation is developing uniquely Asian solutions to political, economic and security imperatives. In 2019, in fact, India joined other members to criticise the US’ aggressive attitude to trade.[7] On the other hand, India is also invested in a revival of the Quadrilateral initiative. A grouping of democracies in the Indo-Pacific, the Quad seeks to preserve a democratic and rules-based order in the region. Like the SCO, the Quad’s cooperation is multifaceted and encompasses infrastructure investment, cyber norms and maritime security cooperation. Only this time, it is China’s mercantilist trade and investment propositions and its maritime coercion that India seeks to respond to.

Figure 3: India-China Trade

Source: WTO

Clearly there are two contradictory forces that drive the bilateral today: the appeal of an Asian Century that seeks to escape the burdens of colonialism, and a contest in the Indo-Pacific to avoid a new form of subjugation. This dynamic was invariably going to produce new friction and ultimately culminated in a skirmish in the Himalayas. The Doklam Standoff in the summer of 2017 marked the nadir in India-China relations and the sharpest decline in bilateral relations between the two powers in over four decades. Fundamentally, the dispute was a struggle to define and then manage Asia.[8]  The stand-off will likely be remembered as a moment when ‘a’ sovereign finally stood up to China’s aggressive attempts to redraw political maps. Beijing is unlikely to either forget or forgive this. It will be naïve to ignore the acrimony, unease, contest and struggle that has defined the relationship between the two countries ever since.

Politically, China has attempted to choke India’s options. Beijing is not being petty when it refuses to allow Masood Azhar’s listing as a global terrorist, or when it objects to the Dalai Lama’s travels in India or refuses to accept India into the Nuclear Suppliers Group (NSG). With these actions, China is being unrelentingly strategic in undermining India’s capacity to influence global and regional political developments.

On the  economic and  trade  front,  the  numbers  tell  an  obvious  story about how China views the relationship with India: as a mere market for its manufactured industrial and consumer goods. China’s mercantilism offers no room for partnership; only dependence. Despite multiple negotiations in which India has indicated its displeasure with the negative balance of trade, the difference has only gotten larger.

On the security front, Beijing has been completely disregarding India’s sovereign concerns in Kashmir by investing in the China Pakistan Economic Corridor. It has also attempted to undermine India’s economic influence around the neighbourhood, most dramatically in the Maldives, Nepal and Sri Lanka even as it sustains its overtures to Bangladesh (See Figure 4).[9] The Middle Kingdom has also been unrelenting with its pressure around Doklam, with satellite imagery suggesting that it maintains a growing security presence in the region.[10]

By exercising diplomatic, economic and military pressure on India within the sub-region, China is positioning itself to unilaterally design the continent’s

Figure 4: India FDI v. China FDI

Sources: Central Bank of Sri Lanka, Bangladesh Bank, and Nepal Rastra Bank

security and political architecture. This vision is at odds with the original conceptualisation of the “Asian Century,” which was fundamentally a story of the rise of a group of countries in the region. Indeed, 21st-century Asia will not be defined by a solidarity of developing countries led by China and India. Instead, it will be defined by Beijing’s attempt to integrate, on its own terms and for its own interests, the Eurasian landmass.

Before India can respond to China with its own propositions, it must acknowledge another set of contradictory forces that drive the relationship: even  while  China  may  apply  tremendous  pressure  on  the  political  and security front, it has also emerged as the largest investor in key areas that are likely to drive India’s economic growth (See Figure 5). As India’s economy moves towards the US$5-trillion mark, both political friction and economic engagement will only increase. In managing this, India will find little help from the North-Atlantic countries—who are themselves struggling to set the terms of engagement with China, both individually and collectively. Italy’s decision to join the BRI and the EU’s inability to decide on the future of 5G infrastructure only drive home the point.[41]

India will have to build its own capacity to resist and counteract China’s political aggression, even as it embraces investments and commercial opportunities. This is certainly easier said than done. However, China in its own emergence has demonstrated the method to do this. For years, it benefited from the American economy and investments even as it pushed back against a US-led world order and its presence in the Western Pacific. This is a template that India must emulate.

Figure 5: Chinese Investments in India (in USD Millions)

Source: China Investment Tracker, American Enterprise Institute.

This will be the government’s most complex task: navigating the disconnect between the opportunities of the Asian Century and the hard realities of the Indo-Pacific. Even as India leverages Chinese investments to fuel its growth, it must offer to Asia and the world an alternative model for development that is based on democracy and a proposition for security based on international rules and institutions. Which conceptualisation eventually characterises Asia will invariably define the contours of the world in the 21st century.

Figure 6: A Timeline of India-China Engagement (2014-’19)

Source: Ministry of External Affairs, India

This article originally appeared in special report Looking Back looking Ahead.

End Notes

[1] “Chinese Dream,” China Daily.

[2] Xiang Bo, “Backgrounder: Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” Xinhuanet, 17 March 2018.

[3] “IISS Fullerton Lecture by Dr. S. Jaishankar, Foreign Secretary in Singapore,” Ministry of External Affairs, Government of India, 20 July 2015.

[4] “Official Spokesperson’s Response to a Query on Participation of India in OBOR/BRI Forum,” Ministry of External Affairs, Government of India, 13 March 2017.

[5] ANI, “India Is Second Largest Shareholder Of AIIB: Piyush Goyal,” Business- Standard, 24 June 2018.

[6] Samir Saran and Sushant Sareen, “Battle for South Asia 2.0,” ORF, 27 September 2018.

[7] Dipanjan Chaudhury, “India Likely to Join China-Russia Call for New Trading System on SCO Sidelines,” The Economic Times, 10 June 2019.

[8] Samir Saran, “India Sees the Belt and Road Initiative for What It Is: Evidence of China’s Unconcealed Ambition for Hegemony,” ORF, 19 February 2018.

[9] Ashlyn Anderson and Alyssa Ayres, “Economics of Influence: China and India In South Asia,” Council on Foreign Relations, 3 August 2015.

[10] Vinayak Bhat, “Near Doklam, China Is Again Increasing Forces, Building Roads & Even A Possible Heliport,” The Print, 2 April 2019.

[11] Colin Lecher, “Europe Is Worried About 5G Security, But It Isn’t Banning Huawei Yet,” The Verge, 26 March 2019.

The India–US trade dispute and India’s evolving geopolitical role

While the strategic partnership between the United States and India remains robust, some analysts see the relationship as becoming significantly strained if current trade disagreements are not managed properly. To examine the root causes and the potential longer-term consequences of current tensions, and to consider India’s evolving geopolitical strategy, Samir Saran, President, ORF spoke to the World Economic Forum.

Partnership, geopolitical, consequences, Samir Saran, trade tensions, interconnected, transformations, disagreement, digital platforms, localization, e-commerce, contested issues, natural allies, Silicon Valley, WTO, G20, data governance, RCEP, Indo-Pacific, maritime, global system, digital economy, Eurasia

File photo of President Trump And Indian PM Modi at White House

Source: Win McNamee / Getty Images

WEF: How do you see current trade tensions affecting the long-term relationship between the U.S. and India?

Samir Saran: These trade tensions are a manifestation of a bilateral relationship that is maturing in the midst of several interrelated structural transformations in the world order. Two interconnected transformations are particularly relevant to friction in the trade relationship: first, the digitalisation of the global economy and second, the politics of ‘techno-nationalism’.

Around the world, there is disagreement over the governance of data and the role of technology in development and security. Countries are used to conceding sovereign power over the course of decades, through long and hardened negotiations on say, trade and migration.

The explosion of digital platforms has pulled the rug from beneath governments: it has taken away their agency over their populations and businesses overnight

India is no different: one only need look at New Delhi’s gradual embrace of liberal internationalism since 1947. But the explosion of digital platforms has pulled the rug from beneath governments: it has taken away their agency over their populations and businesses overnight.

It would be naive to think that a government of over a billion people will cede the management of its democracy and its all-important services sector to technology companies half way across the world.

This is why data localization, e-commerce, mutual legal assistance, and data protection are the most contested issues between the U.S. and India.

Image: Trade At A Crossroads: A Vision for the US–India Trade Relationship, Atlantic Council

Both countries are routinely termed “natural allies”, but few acknowledge the fact that the maturation of the democratic system in India as well as the expansion of its economy will follow a trajectory different from that of the United States. Rather than viewing ongoing negotiations as part of a process of self-discovery, as it is of self-preservation, the strategic and business communities in the U.S. and India have been talking past each other.

At issue is a fundamental disagreement about how digital technologies will shape our societies. In the United States, there is a firm belief that Silicon Valley can create value in developing economies like India while protecting human rights and cybersecurity.

The Indian perspective is dramatically different. There is a sense that Indian industry and governance propositions must manage the development and deployment of emerging technologies. The assumption that U.S. firms are able to protect the economic rights and civil liberties of Indian users better than its own government has been proven wrong by some recent events and developments.

Image: Trade At A Crossroads: A Vision for the US–India Trade Relationship, Atlantic Council

While both states have done well in keeping these tensions from affecting the broader bilateral relationship, the question of the digital economy will only continue to get larger and more consequential.

It is incumbent on the United States to acknowledge that cross-border data flows cannot be seen as an isolated issue – as they must be discussed in the broader context of national growth and development in the Fourth Industrial Revolution. India, meanwhile, must articulate its policy preferences clearly and quickly – to begin with it must identify sectors and operations in the digital economy where the market can operate without being worried about arbitrary or capricious policies.

There is currently considerable confusion amongst American lawmakers and businesses – as well as stakeholders across the international community – about India’s digital regime. India has dodged the question of data governance at the WTO, at the G20, and at trade negotiations like the Regional Comprehensive Economic Partnership.

The global digital economy will take shape without India if Delhi cannot make up its mind.

WEF: As the United States looks to impose stronger sanctions on Iran, what are the implications for India, Iran’s second-largest consumer of oil?

SS: In failing to exempt India from its sanctions regime, the United States is, unfortunately, pursuing short-term interests over long-term gain. It is essential to understand that energy trade between India and Iran is only one aspect of a far more crucial trend: the gradual merger of the Asian and European continents that is underway and is largely being effected by one player: China. At the moment, Eurasia is being defined primarily by China’s geo-economic thrust through its Belt and Road Initiative and the attendant politics riding on Beijing’s tracks and roads.

The ‘Eurasian’ supercontinent is fast emerging as the second geography influencing the future world order alongside the Indo-Pacific maritime system. Trade, infrastructure, energy, migration and security interests are all at play here and rules and frameworks that emerge will infect the entire global system. India must remain relevant in this emergence and its partnerships with Iran, Russia and others in the region will be crucial.

Different approaches to the digital economy are likely to grow and become more significant.

This interview originally appeared in World Economic Forum