Columns/Op-Eds, Politics / Globalisation

The multipolar Asian century (part 2): Contestation or competition?

2 June 2016 4:40PM

By Samir Saran, Senior Fellow and Vice President and Ashok Malik, Senior Fellow, both of the Observer Research Foundation. Part 1 can be found here.

In the seven decades since 1945, the US largely succeeded in scripting some significant rules that still survive, and they have guaranteed the stability of global institutions that are the bedrock of contemporary multilateralism. The UN system, the key security treaties, conventions and norms for managing common spaces, all emerged from the conversations of that era. The period since 1990 saw the triumph of the liberal order, and placed the globalisation project firmly within the Atlantic consensus.

The economic imperative to rebuild post-war Europe inevitably necessitated some of these political responses and military instruments. Superpowers became the global guarantors of predictability, whether in trade and commerce or the security domain, and by extension, of multilateralism. This task is now devolving in Asia, but in an Asia that has not been dominated by one sovereign power since the times of Genghis Khan, and an Asia that is stubbornly multipolar.

Asia needs to discover a bridge between multipolarity and multilateralism.

This is occurring at a moment when many holdover institutions are flailing, if not failing. The UN resembles not an NGO, as is often suggested, but a think tank. It offers a good platform for talking about norms and rules, but is ill-equipped to enforce any. Inaugurated in 1995, the WTO is in a premature midlife crisis. So where are the new institutions for the Asian century? Where are the important conversations taking place, and among whom? Or, is it time to face up to the harsh truth and accept that rules, actors, institutions, arrangements and ethics that may be able to serve the Asian century are yet to be discovered, born, written and even conceived?

Perhaps, it is time to pursue a new project, one that begins to create a political Asia. Like the Atlantic order needed to flourish on the basis of the Bretton Woods and UN systems, Asia needs a new management, a new board of directors and a new security architecture. At the very least, this system needs to bring three resident actors (China, Japan and India) and two regional stakeholders (the US and Russia) to the same table. Other sub-regional influencers should be drawn in as well.

The East Asia Summit, of which all these countries are members, has been suggested as a possible fulcrum of such an architecture. Yet, the East Asia Summit is insufficient to address the concerns of Central and West Asia. Is an expanded mandate for the G20 (seven Asian countries, two more if one were to include Turkey and Russia) the answer? Alternatively, is a greenfield institution inevitable?

Three possibilities — distinct, but not mutually exclusive — emerge. At the commencement of the 21st century, Asia’s politics resembles the fraught, rudderless multipolarity of the beginning of the 20th. It took 50 years and two wars for that reckless order to settle into a multilateral equilibrium. Asia has to do it better, faster and without the external stimulus of a great War. As the dowager power, the US can incubate new institutional arrangements in Asia, playing Greece to emergent Asia’s Rome, to borrow from Harold Macmillan’s description of the post-war relationship between Britain and the US.

Should the US choose to bequeath the liberal, international order to Asian forces, India will be the heir-apparent. India would not, under this circumstance, play the role of a great power — because Asia is too fractious and politically vibrant to be managed by one entity — but simply that of a ‘bridge power’. India is in a unique and catalytic position, with its ability to singularly span the geographic and ideological length of the continent. But two variables will need to be determined. Can the US find it within itself to incubate an order that may not afford it the pride of place like the trans-Atlantic system? And, can India get its act together and be alive to the opportunity it has to become the inheritor of a liberal Asia?

The second possibility for an Asian order is that it resembles the 19th century Concert of Europe, an unstable but necessary political coalition of major powers on the continent. The ‘big eight’ in Asia (China, India Japan, Saudi Arabia, Iran, Australia, Russia and America) would all be locked in a marriage of convenience, bringing their disparate interests to heel for the greater cause of shared governance. Difficult as it would be to predict the contours of this system, it would likely be focused on preventing shocks to ‘core’ governance functions in Asia, such as the preservation of the financial system, territorial and political sovereignties and inter-dependent security arrangements. Given that each major player in this system would see this as an ad hoc mechanism, its chances of devolving into a debilitating bilateral or multi-front conflict for superiority would be high — very much like the Concert that gave way to the First World War.

A third possibility could see the emergence of an Asian political architecture that does not involve the US. This system — or more precisely, a universe of subsystems — would see the regional economic and security alliances take a prominent role in managing their areas of interest. As a consequence, institutions like ASEAN, the Shanghai Cooperation Organisation, the AIIB, the Gulf Cooperation Council and the South Asian Association of Regional Cooperation will become the ‘hubs’ of governance. The US would remain distantly engaged with these sub-systems, but would be neither invested in their continuity, or affiliated to its membership.

Rather than crystal gazing these three possibilities, our objective is to gauge the political underpinnings behind an emerging Asian architecture. Very simply: will it be defined by contestation or cooperation? Can the US incubate a political order that is largely similar to existing multilateral systems or will the cost of creating disruptive institutions keep Asian countries from buying into them? And finally, can any credible pan-Asian governance institution successfully absorb — or at the very least acknowledge — the cultural, economic and social differences that characterise the continent? The quest for the Asian century is not for the Holy Grail of shared governance, but diagnosing the right means to reach a sustainable and inclusive platform.

Original link is here.

Photo courtesy of Flickr user Studio Incendo.

Columns/Op-Eds, Politics / Globalisation

The multipolar Asian century (part 1)

the interpreter, 1 June 2016 12:30PM

By Samir Saran, Senior Fellow and Vice President and Ashok Malik, Senior Fellow, both of the Observer Research Foundation.

Original link is here

Since the collapse of the Soviet Union, the global political and economic architecture has been undergirded largely by one superpower, which set the stage for an unprecedented period of globalisation managed through multilateral institutions and actors. Now that unipolar moment is giving way to an era of diffused powers, with countries like the US, China and Russia each bearing considerable disruptive capacities, and each struggling to stitch together new norms and rules for these rapidly changing times.

This phase, the beginning of which was marked by the Global Financial Crisis of 2008 and characterised by America’s two bruising wars in Iraq and Afghanistan, has seen a vacuum emerge. Many are seeking to fill it, most determinedly China, but with a push back from countries such as Japan and India. Separately, ISIS and radical energies in the Middle East also seek to grab new space. Russia has chosen this very moment to signal its ability to muddy the Eurasian fields and intervene in the Middle East. The fact is, there is not enough room to accommodate all of these ambitions.

A median will have to be arrived at, but who will sacrifice what?

Today’s ‘multi-power’ reality is most visible in Asia and this can be attributed to the lack of a unifying political and security architecture for the Asian region (or regions). The question then arises: Will the Asian century be defined by contestation or cooperation? And how will Asian powers reconcile multipolarity and multilateralism, a process for which there are no handy 20th Century templates? The trans-Atlantic political and economic regimes that were the ‘hub’ of the liberal international order has no parallel in Asia. And the single guarantor of good behaviour (certainty and/or predictability) is clearly absent.

The quest for global or regional leadership is the quest for control of common spaces. If in the earlier centuries, territorial borders and maritime frontiers were the crown jewels, today’s common spaces have been rendered seamless by digital arenas and technology that straddles deep oceans and outer-space. What makes the Asian century unique is the differing conceptions of common spaces by major actors. Continental trade regimes and economic integration will sculpt Asia’s future, but these terms are by themselves contested. How can the competing agendas of, for instance, the Regional Comprehensive Economic Partnership, the Trans-Pacific Partnership and One Belt, One Road be reconciled?

On the digital front, is the internet of today the ‘Splinternet‘ of tomorrow? Is cyberspace the new coliseum for digital gladiators? Asian powers and every power engaged with the region is excited by the potential of the digital economy, but many perceive the virtual world through the territorialism of pre-digital politics. Can the internet be a force for collaboration or is it destined to be a contested arena within and between countries, communities and peoples? How can multilateralism sit with this new paradigm where the power of transnational corporations make the equations more complex?

To be sure, the old fault-lines remain active. The Indo-Pacific system is the world’s greatest maritime trading zone, but political ambitions, too, sail across its seas and waters. In the absence of an Asian equivalent to the Monroe Doctrine (sole power dominance in the region), sovereignty is being contested everyday on the high seas. Robust military capacities sustain these conflicts in the Indian Ocean and Pacific littorals. Will the waters of Asia connect and empower, or will they divide and devastate?

Perhaps the most significant policy question for the Asian century is ensuring the realisation of ‘human value’. How will demographic realities in Asia translate into economic, and by extension, political transformations? The region hosts the youngest as well as the most rapidly ageing populations in the world, suggesting that demography can both be a dividend and a disaster. Growth models of decades past are being rendered obsolete by technological advancements and digitisation. These cripple the notion of a demographic dividend. What are the livelihood avenues available to 21st Century Asians? Will unemployment continue to fuel the high-octane nationalist and sub-nationalist movements that Asia is witnessing? Does this detract from the ability of Asian actors to ‘sacrifice’ and ‘compromise’, something that multilateralism demands?

Asia needs to think through these pressing questions and so does the world. After all, the Asian century is not exclusive to Asia. It is as much about the rise of Asia, Asian actors and Asian institutions as it is about others who engage with the continent. Challenges and transformations in the region will define not just this continent’s century, but that of the planet.

Asia will shape the 21st Century as much as the Atlantic consensus shaped the 20th Century, or Europe, the 19th. In Part 2 of this two-part series, we will suggest some possibilities regarding the future political architecture of Asia.

Photo courtesy of Flickr user Thomas.

Columns/Op-Eds, Politics / Globalisation

EU needs a reality check

Original link is here

The Hindu, April 28, 2016

Rumours of the death of the European project are, as Mark Twain would have put it, vastly exaggerated. The importance of European powers and the contribution of the European Union (EU) in recent years are indelible. It was evident that even as the United States and Iran took binary positions, it was the EU’s outreach to Iran that paved the way for a diplomatic breakthrough. Its contested, yet continuing and valiant efforts to absorb Syrian war refugees are seminal. And, its clever, geo-economic manoeuvres have succeeded in effectively containing Russia’s sphere of influence across central and eastern Europe. These are all examples of the contemporary impact of that geography to world affairs. However, it is undeniable that Brand EU is taking a beating. It is time to unpack where the scepticism and perceived frailty stems from.

Patchy integration

The first of the two most visible weaknesses of the project has to be that this strong collective of European nations has achieved only patchy social integration within its members. The states have been open to economic migrants and welcoming distressed populations from across the world’s conflict zones in the past (most recently from West Asia). The Gastarbeiter model adopted by several of them in the 1960s and 1970s may have addressed short-run labour problems but may not have been as efficient in assimilating newcomers into their society. Arguably, an immediate consequence of this is the emergence and consolidation of radical Islamism and its twin, racist-right-wing politics. As such, liberal EU is now grappling with two illiberal ideologies

The second is in the economic sphere — the touchstone of the European integration project. The EU finds itself caught in the inevitable confusion that comes from being a monetary union without being a fiscal union. The periodic eruption of the Greek tragedy fundamentally arises from this cleavage.

But besides these, there are essentially four issues that dilute what the EU could potentially offer. To begin with, as a brand, it is behind its time. While smaller countries and developing regions of the world are seeking new collectives and the weight of these larger aggregations to reform the global order, the EU and the European project are seen and presented as status quo-ist, primarily concerned with perpetuating entrenched interests. From reforms of key Bretton Woods institutions like the International Monetary Fund to that of the UN Security Council, European powers are seen to want more of the same. While some European powers do realise that this posture may not be sustainable in the long run — witness their enthusiasm for the China-led Asian Infrastructure Investment Bank — they are either unwilling or unable to upend the existing global governance order and allow it to be refashioned according to the realities of the 21st century.

Too Atlantic-centric

The second issue seems to be Europe’s conception of the map — and its place in the extant geography of the world. Europe must realise that its future is to a large extent coupled to that of Asia’s and Africa’s. Instead of a serious institutional push towards building a common future with the powers that will shape these two regions, Europe and the EU have functionally de-hyphenated themselves from both. For example, Paris consults Washington for guidance on its Syria policy, but not New Delhi, from which it may have obtained more sage advice. It is not hard to get an impression that Europe’s penchant with trans-Atlanticism is a sentimental anachronism. Such attitudes also reinforce the impression that Europe is too busy consolidating the old boys’ club to realise that the geopolitical centre of gravity is inexorably moving eastwards. Obsessed with the Atlantic Order, Europe is near absent in the great debates of the Indo-Pacific.

Europeans could, defensively, justify this trans-Atlantic orientation in the name of values, except that the tyranny of values — whether it is as self-proclaimed champions of human rights, or of liberal non-invasive multiculturalism — has cost Europe tremendously in recent years in real political terms. Europe’s promotion of norms was driven by self-interest in the past. A world remade in its own image was a self-serving agenda from the colonial era to the Cold War, with tangible material benefits. What Europe has engaged in since is promotion of self-determined values and norms divorced from immediate political interests. This has led to the establishment of a tremendously inelastic value system that seeks to enforce conformity on those who see the world differently. Arguably Europe’s problems with integrating minorities in its national mainstream are one though not the only consequence of this social inelasticity.

All of these problems are compounded by the fact that Brand EU has a serious marketing problem. Brussels has made very little effort to engage the world beyond the borders of Europe in any meaningful way, and to great consequence. At a meeting between European and Indian scholars last year, both sides bemoaned the lack of communication initiated by the European side. EU public diplomacy has been fairly ineffective in large parts of Asia and Africa, with the consequence that the many positive messages that the EU could communicate to countries and regions to its east have been muted, to be crowded out by narratives emerging from eurosceptics in Britain and the U.S. instead. Therefore, the EU in India seems to be in the news mostly for the wrong reasons. It is time Europe took a hard look at its messaging, the medium, and at the concrete steps it needs to take to establish and reinvent itself among people it would need the most in the coming years.

Samir Saran is Vice-President at the Observer Research Foundation, Delhi.

BRICS, Columns/Op-Eds

What the Moscow Communique on Internet Governance Says About India’s Role in the Global Order

BY ARUN MOHAN SUKUMAR AND SAMIR SARAN ON 19/04/2016

Original links are here

Samir Saran article with Arun Mohan Sukumar on Moscow Communique on Net Governance & India’s Role in the Global Order – priyaverma@orfonline.org – Observer Research Foundation Mail

The communique is testament to India’s role as the bridge between the liberal international regime and its counter-construct.

The Heart of the Internet: Fiber optic switches that can each handle up to 60GBs. Photo: Shawn Harquail

The joint communique from the recently concluded Russia-India-China (RIC) Foreign Ministers meeting in Moscow, as it relates to internet governance, reflects the unique role New Delhi plays within BRICS. The operative paragraph of the Moscow communique reads:

The Ministers advocate a peaceful, open and secure Internet space. Considering the Internet a global resource, they are convinced that all states should participate in its evolution and functioning on an equal footing. In particular, the Ministers underlined the primary role of the States in promoting security, stability, and economic cooperation in the use of ICTs. The Ministers emphasised the need to ensure Internet governance based on multilateralism, democracy, transparency with multi-stakeholders in their respective roles and responsibilities.

The reference to “multi-stakeholder” internet governance in the communique is significant for two reasons and possibly unprecedented. First, the suggestion to include this came from India, which in 2015 unequivocally endorsed ‘multi-stakeholderism’. Chinese and Russian interlocutors — plainly aware that India’s multistakeholder line is uniform and has no BRICS variant — agreed to this inclusion, reflecting India’s ability to inject a “Western” norm in a decidedly different setting. Second, the RIC communique was drafted in Moscow, with Russia holding the pen. Russian Foreign Minister Sergei Lavrov is one of the sharpest minds in the business, and Moscow and Beijing agreeing to India’s input on “multi-stakeholder” governance indicates that New Delhi is no longer a pushover at the joint meetings.

That said, give-and-takes are part of multilateral diplomacy. The Moscow communique also emphasises the “need to internationalize Internet governance and to enhance in this regard the role of International Telecommunication Union.” The role of the International Telecommunication Union (ITU) in Internet governance is contested, given that it is an inter-governmental platform. Its inclusion in the document is a concession from the Indian side, but also an acknowledgement of the role that states play in addressing security related concerns in cyberspace. The BRICS declaration signed at Ufa last year tipped its hat to the UN’s “facilitating role” in Internet policy making. The Moscow communique arguably goes a step further with its pointed reference to the ITU. New Delhi is actively engaged both at the ITU and in multi-stakeholder venues like the Internet Corporation for Assigned Names and Numbers (ICANN), so the communique does not change any negotiating stance. Information Technology Minister Ravi Shankar Prasad’s call at ICANN 53 in Buenos Aires for “multi-stakeholder, multi-layered” Internet governance still animates the Indian line.

The larger lesson here is India’s ability to carry its own distinct preferences with the RIC group, which is at the core of BRICS. Consider the international context: China, under President Xi Jinping’s leadership, has supported a state-led “duobian” (multilateral) model of Internet governance. Russia has unwaveringly opposed multi-stakeholderism and it would be remiss to forget the larger, Cold War-levels of antagonism between Moscow and Washington, D.C. today.

The Moscow communique on Internet governance, therefore, is testament to India’s role as the bridge between the liberal international regime and its counter-construct. New Delhi has engaged agnostically with multilateral and plurilateral forums, allowing for its own global orientation to be independent of bigger and dominant players. The RIC meeting suggested it can not only absorb norms but also transmit them, while conditioning their application to the context at hand. Therein lies the value of BRICS for India. The group, especially in light of the political and economic challenges that many of its members face, has long invited criticism for being a talk shop or a forum for solidarity. But it is patently in India’s interests to support a bloc that presents a formidable political challenge to the global order. For one, it helps New Delhi — whose own strategic interests are clear — to influence evolving norms at BRICS. If G20 meetings under the presidency of China this year lead to a confrontation between the great powers — there are many indicators that it may — there are few countries better positioned than India to act as an honest interlocutor. Conversely, its diplomatic “legroom” to manoeuvre multilateral rights-based forums is a strategic lever that India must deploy to assist neighbours and partners like Maldives and Sri Lanka.

Inhabiting these two political universes is not an easy task and the Indian establishment must consider its autonomy before making diplomatic moves, be it with the US, Russia or China. “Alignment” with norms, ideologies or regimes is first and foremost a political act — South Block has realised it is time to harvest them for strategic consequences. Just as India seeks to move political outcomes in its direction, its actions will attract a greater degree of visibility and criticism, for which New Delhi should be diplomatically prepared.

Arun Mohan Sukumar heads the Cyber Initiative and Samir Saran is Vice President at the Observer Research Foundation, New Delhi.

Columns/Op-Eds, Politics / Globalisation

#Raisina Files: Seeking a sense of balance in a tilted, multipolar and technicolour world

Mar 1, 2016 16:33 IST

Original link is here

By Samir Saran and Abhijnan Rej

Introduction

Futurists often hedge their prognoses with Yogi Berra’s dictum that prediction is difficult, especially when it comes to the future. And yet, when it comes to drawing the broad contours of how the future would look like in the medium-run, all one needs to do is revisit yesterday’s news. The past year saw five meta-narratives emerge around ‘asymmetries’ between means and abilities, ‘multiplicities’ of malign and benign norms, and glaring ‘contradictions’ between aspirations and capabilities. This is true — in equal measures — both at home and abroad.

If predicting the future is a difficult exercise, doing so for Asia is doubly so. Looking at the continent, one sees certain centrifugal forces dominate the centripetal forces that would promote status quo ante when it comes to continuity of norms and practices. These forces correspond to five meta-trends — the consolidation of geopolitical asymmetries; the rise of big economies that are poor in per capita terms and weak states with demographics which are double-edged swords; competing models of globalisation; the continued tug of war between the pre-modern and post-modern; and economic growth trajectories in which the fruits of innovation do not translate into rise in purchasing power.

The era of dangerous asymmetries

Asia is home to states that have significant military capabilities, but very limited stakes in the liberal international order. Such states cultivate hard military power — and the consequent ability to upend the geostrategic status quo — but have very little ability (and desire) to shape the collective economic order. From the global governance perspective, the challenge, therefore, is to discover means by which these ‘military-maximalist’ states can be integrated further into international processes.

Consider this. On one hand, out of the nine nuclear powers in the world, six are Asian, including Russia. On the other hand, Asia’s share of global gross domestic product (GDP, computed at purchasing power parity levels) is only 35.6 percent, Russia included. The Russian atomic arsenal is actually bigger than that of the United States (US, at 7,500 weapons against 7,200) but its GDP is a small fraction of the US GDP.

China has the world’s largest military but it has only 3.8 percent of voting shares at the International Monetary Fund. Pakistan’s nuclear arsenal can be put to apocalyptic use, and yet it remains a non-starter as a responsible player in global governance. Then there is North Korea, a nuclear power with absolutely zero stakes in global governance.

This asymmetry — between military capability and limited global governance stakes — becomes more pronounced as one traverses Asia from the North to the South and from the West to the East. To integrate these states into an open world order, it becomes an imperative to further empower the few initiatives in which these states have a stake. For example, Russia has been enthusiastic about Brics (acronym for association of Brazil, Russia, India, China, South Africa) since it perceives the grouping as a balancing coalition. Irrespective of its perceptions, however, empowering Brics does increase Russia’s involvement in the global governance architecture.

Big, poor, young and (in)capable: The rise of testosterone politics

Two of the largest Asian economies, China and India, are poor in per capita terms, the middle-income tag notwithstanding. This tyranny of arithmetic is compounded by the fact that such big economies with relatively poor populations are also growing at the fastest rates. Such states also face significant demographic challenges in terms of growing old and young populations and gender imbalance.

Traditionally, big economies that were also rich in per capita terms assumed significant responsibilities in managing global crises. Today’s ‘big and poor’ Asian countries are unable to respond similarly due to their understandable ‘domestic development-first’ agendas.

Demographics would continue to limit the commitments that these ‘big and poor’ states can make to their own populations as well. The United Nations estimates that by 2050, India will have 300 million elderly, more than the current population of the US, while its median age will be 37. This means that the Indian state will have to provide for substantial young and old populations by then. How we design our institutional mechanisms today — from pensions to skilling, from social sector redesign to incentivising market forces to play a greater role in what has been the province of the state — will determine and foil the crowding-out of the old by the young in the future.

If the rise of the young and the old is one challenge, gender imbalance is the other. China’s preference for male children — a deep-seated Asian prejudice — has led to 118 boys for every 100 girls (against the global average of 103 to 107). India’s gender imbalance now stands as the worst in recorded history — 93 girls to every 100 boys. This imbalance points to the rise of testosterone politics, where the voices and imperatives of men will crowd out those of women. They also point to the possibility of deep structural changes in the very fabric of Asian societies.

The multiverse of Globalisation

Between the fall of the Berlin Wall in 1989 and the destruction of the New York World Trade Centre in 2001, there was broad consensus that Fukuyama’s Last Man having arrived and overseen the end of Hegelian history, Globalisation (with an uppercase ‘G’) was the magic bullet that would lift billions out of poverty and be the vanguard of liberal internationalism. Things have not turned out to be as simple: What Asia is seeing now are multiple globalisations, characterised by exclusion of the Other.

At the same time, the world is witnessing the rise of a Middle-Kingdom version of globalisation, promoted by China. In this version, China’s ‘opening outwards’ will create a physical web of land and sea routes linking inner China to Europe, cutting through the Asian heartland and the seas. Through its One Belt, One Road (OBOR) initiative, China seeks to export a model of authoritarianism at home and part of global value chains. The US-led Trans-Pacific Partnership (TPP), signed in 2015, is a reactive geoeconomic rebalance to OBOR, which seeks to homogenise trade and remake economic activity in the member-states in its own image. Both OBOR — and the partial policy connectivity support, the Regional Comprehensive Economic Partnership (RCEP) will provide it — and the TPP are similar in their exclusionary nature: The US is absent in RCEP, China in the TPP.

Which universe would India choose to inhabit? Would it actively participate in the US-led one, as a “Western power”? (1) Would it be co-opted into China’s vision? Or would it — through the dent of soft power and influence — create its own? The forthcoming years will see answers emerging.

Digital engagements, feudal mindsets

The state is back. The patriot is back. The misogynist is back. One of the paradoxical features of the social media explosion is that it consolidates the obnoxious and the obsolete instead of transplanting us into a virtual classless international utopia as it was billed.

One of the reasons behind this is premature de-industrialisation that promoted a leapfrogging from the pre-modern to the post-modern. Whether it is the use of matrimonial sites in India to arrange marriages according to class and caste lines, or the remarkable efficacy of Twitter as free advertising for the Islamic State, social media has consolidated old prejudices instead of upending them.

Authoritarian states have learned — àpres China — that the best way to contain the challenges of social media is by selective and tailored access. The Chinese are happy with Weibo because it offers the surrogacy of experience; the Communist Party of China exists, because of its total control over it.

These bring up an important point. Karl Popper famously identified ideologies such as Marxism as enemies of open societies; could the cult of the Digital — in the sense of being a pawn of constricting mindsets — be another one?

Fissuring of the link between innovation and consumption

That innovation is key to economic growth is now recognised. The role of technology innovation in increasing individual purchasing power and consumption, however, is becoming weaker than ever, thanks to the ever-important role of global value chains. Simply put, the fruits of innovation, originating in advanced economies, are not contributing to the upliftment of consumers of high-end technology, mostly in poor countries in the global South.

The Fordist model of industrial organisation was such that the fruits of innovation — the assembly line, to begin with — translated to higher incomes for workers, which in turn made them consumers of the very products they were manufacturing. This virtuous cycle promoted higher standards of living and incentivised continuous innovation. The breakdown of this cycle necessitates course-correction for the current technology and intellectual property rights regimes.

Conclusion

The five meta-trends identified here can be situated within five crises of global governance the world faces today.(2) These crises are of legitimacy — of international institutions and even national governments failing to deliver lifeline support to their populations; of sovereignty — the ongoing clash between the state and the world; of the collective — the push-and-pull of aggregation and devolution; of identity — where globalisation, instead of dissolving identities, consolidates it; and finally, of representation — where the global South finds itself with a disproportionately small voice in the global governance architecture. The crises of legitimacy and the collective have led to multiplicities of globalisation. The crises of identity have led to the hijacking of information and communication technology to promote global extremism à la the Islamic State. The crisis of sovereignty is reflected by the unenviable choices members of mega-free trade agreements such as the TPP face. Finally, the crisis of legitimacy points to nations that have great power to harm the international order without fulfilling their basic domestic obligations.

One needs to watch how these crises are resolved in the coming years — if at all — to determine Asia’s, and the world’s, trajectory.

——-

Other references

(1) C Raja Mohan, “India and the Balance of Power,” Foreign Affairs, July/August 2006, 18
(2) Samir Saran, “The Global Crisis of Governance: India’s Options in a Polycentric World” (Lecture at the Nehru Memorial Library, 7 October, 2015)

This is part of a series of special essays brought to you by Firstpost ahead of the #Raisina Dialogue that begins in New Delhi on Tuesday. #Raisina is India’s first MEA sponsored global conclave on geopolitics and geoeconomics, Firstpost is the media partner.

Columns/Op-Eds, Politics / Globalisation

Engage the dragon on Balochistan

February 4, 2016, 2:38 am IST TOI

Original link is here

By Samir Saran and Abhijnan Rej

How New Delhi can counter Islamabad/ Rawalpindi’s good cop, bad cop routine

The Pathankot attack has once again confirmed that Rawalpindi – as a rational strategic actor – realises that playing “bad cop” to Islamabad’s “good cop” allows it use of a sub-conventional space to strike at India and undermine any Indian strategy on Pakistan. The shrill “talk/ don’t talk” debate in India post Pathankot is a case in point. The Indian strategic commentariat –predictably – went into overdrive with the usual liturgical analysis.

What, however, is significant this time around is how a cross-section of analysts openly advocated the need for India to acquire greater sub-conventional retaliatory capabilities. Among the pressure points that India could leverage are Balochistan’s festering separatist movements.

A year or so before Ajit Doval became national security adviser, he famously warned Pakistan that a repeat of the Mumbai 26/11attack could lead to Pakistan losing Balochistan. The Doval Doctrine – as it has now come to be known – involves what he calls a “defensive-offensive” strategy where India’s security establishment acquires a sub-conventional secondstrike capability, to be wielded as and when needed.

The Pakistan military establishment is aware that Balochistan is a natural weakness India could exploit with telling impact. In May last year, the Pakistan army’s media machinery all but accused India of fermenting secessionism there.

But here lies the twist. China – as part of the China-Pakistan Economic Corridor (CPEC) – sees the Balochistan port of Gwadar as an integral part of its One Belt, One Road (OBOR) initiative. Indeed, as former foreign secretary Shyam Saran recently wrote, Gwadar is significant precisely because it is where China’s Maritime Silk Route (“the Road”) meets its Eurasian landbased connectivity project (“the Belt”).

The geopolitical significance of Gwadar to China makes any Indian subconventional response in Balochistan exceedingly complicated. The reality is that the same Balochi rebels who want to secede from Pakistan have also opposed Chinese activities.

This was evident last March when Balochi rebels set fire to five oil tankers servicing a Chinese company. However, it is likely that unrest in that region, organic or manipulated, that hurts Chinese interests could be viewed by Beijing (or could be sold to them), as Indian provocation.

It is also inconceivable that China would sit idle if the separatists, allegedly backed by India, move from being a mere nuisance and acquire the potential to seriously jeopardise their prize – Gwadar – of the $46 billion CPEC investment. China could initiate and enhance its support for militants in the Indian northeast, or worse, encourage and abet Pakistan’s proxy warriors.

Meanwhile, an assertive US AsiaPacific re-balance in the region – in response to China’s naval activism in the South China Sea – is likely to ensure greater US control of the Malacca Strait in order to deter the Chinese from revising marine territorial borders.

China, therefore, seeks alternative routes for its energy supply and goods, which would connect the Strait of Hormuz to a port in the Arabian Sea, along with better land connectivity through the Eurasian landmass.

Even as these new realities reshape multiple arrangements in the region, the challenge for India is to ensure that Balochistan does not transform from being Pakistan’s quagmire to another thorn in the Sino-Indian relationship. India must wean China away from the Gwadar port, and CPEC in general, by offering credible alternatives.

India could fast track its commitment to the Bangladesh-China-India-Myanmar (BCIM) corridor and invite the Chinese to set up a land connectivity corridor from Kolkata to Gandhinagar, passing through Mumbai. It should also offer to partner with the Chinese to refurbish the NH-6 linking Kolkata to Mumbai.

Finally, it should get the Chinese on-board the Sagarmala initiative, and allow the Chinese to co-develop a port off the coast of Gujarat, which would link up with the Indian-Chinese land connectivity corridor running roughly parallel to the Tropic of Cancer. The financial model for this land initiative could be along the lines of what has been proposed for the Delhi-Mumbai Industrial Corridor in collaboration with Japan, and implemented through the China-led Asian Infrastructure Investment Bank in which India is the second-largest shareholder.

The land corridor would cut through central India, which means that access can be controlled at will in event of an India-China conflict, vastly diminishing its dual-use potential. The fact that China should be made a partner in servicing India’s infrastructure needs has been argued for some time; the proposed connectivity projects could help India target its infrastructure deficit.

The Kolkata-Gandhinagar land corridor could be developed into a full-fledged manufacturing hub, linking one of the most resource rich Indian states to one of the least. From the point of view of domestic politics, West Bengal state assembly elections are scheduled this year. A credible proposal for the land corridor with Chinese backing will certainly do no harm to BJP’s electoral prospects there.

Geo-economics – as defined by the scholar and former US ambassador to India, Robert Blackwill – is the theory and practice of leveraging economic tools for strategic gains. A vigorous India-China connectivity partnership that offers China what it seeks on the Arabian Sea in return for the freeing up of sub-conventional space for India and/ or to encourage good behaviour from Pakistan, is a way by which India’s geo-economic strategy would serve India’s security strategy.

Samir Saran is Vice President, Abhijnan Rej is Fellow at Observer Research Foundation

Columns/Op-Eds, Water / Climate

Indian climate policy in a post-Paris world

2 Feb 2016|Samir Saran and Aniruddh Mohan

Original link is here

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Most experts agree that the consensus achieved at COP21 in Paris, like most global agreements, produced a sub-optimal outcome, and by itself, is unlikely to limit global average temperature rise to two degrees centigrade (much less 1.5 degrees). The real work will happen within nations, as countries begin to roll out the implementation of their Nationally Determined Contributions (NDCs).

Going forward, India’s climate policy and energy policies are likely to be shaped by three documents: the Paris Agreement, the Sustainable Development Goals (SDGs) Agenda and the Indian NDC submitted to the United Nations Framework Convention on Climate Change (UNFCCC). All three have implications for India’s national ambitions to grow infrastructure, ensure inclusive development and maintain sustained economic growth. The agreements also raise questions around financing, namely whether the global financial architecture can respond to the needs of this new development paradigm.

India requires in excess of $1 trillion in the next five years for meeting its stated national goals. Besides the domestic mobilisation of resources, there are two fundamental challenges that need to be resolved if the country is to meet its climate and energy goals. The first is to ensure steady global funding for its traditional infrastructure and energy projects in a carbon-constrained world. That will be difficult. The World Bank has already restricted loans for building coal-fired power plants since 2013; and in November 2015, the Organization for Economic Cooperation and Development (OECD) agreed to limit most state financing to ‘ultra-supercritical plants,’ which burn less coal to produce the same amount of electricity.

The second challenge is to reform the structural bias in the global financial architecture, which, since the global crisis, pays more attention to ‘credit adequacy’ rather than the ‘credit enhancement’ that India and other developing countries so urgently require. Aligning those banking needs and the global banking mood is an imperative for traditional, renewable and low-carbon projects.

Understanding India’s energy options is also a crucial task. On the mitigation front, the Indian NDC commits to reducing the emissions intensity of its economy by 33–35% by 2030 from 2005 levels and achieving 40% of its installed electrical capacity from non-fossil fuel sources by 2030. The latter commitment is conditional on receiving adequate technological and financial support. The NDC also signals that India’s per capita energy consumption may grow up to more than six times beyond 2015 levels.

As of the end of 2015, the installed capacity of clean energy sources (renewables, hydro and nuclear) in India was 30% of the total installed capacity. Therefore, even if that were to be scaled up to 40% by 2030, 60% of capacity would still be based on fossil fuels. The real room for India to maneuver is in this large block of base-load conventional generation, which will account for a majority of the actual power generation, given the low capacity factors of renewable sources of power.

According to analysis done by the Centre for Policy Research, India could have something between 600–800 GW of total electrical capacity by 2030. Taking the median figure of 700 GW, 60% of fossil fuel capacity would add up to 420 GW. The current fossil fuel capacity stands at 198 GW with 173 GW of coal and just over 24 GW gas. India is therefore likely to more than double its fossil fuel capacity by 2030, alongside the impressive commitment on increasing renewable installations.

To ensure that India’s path to development doesn’t compromise its climate action, India has a few options. First, it can ensure that the additional 200 GW of fossil fuel capacity that’s to be added up to 2030 is significantly fueled by gas. Gas-based power has roughly half the emissions of coal fired power plants. 24 GW of current gas capacity points to the limited presence of gas in India’s current energy mix and also to the potential to dramatically scale that up.

Two market conditions allow India to pursue that policy path aggressively. First, the slump in global gas prices following the restart of Japanese nuclear reactors and an oversupply in the market means that it’s the perfect time for India to negotiate new gas deals and secure long term supply at competitive prices. In fact, a lot of Indian gas plants were idle in 2015 as the prices of importing gas was more expensive than the cost of selling power. The Indian government has had to recently renegotiate the price with Qatar, its main supplier, and achieved a price reduction of about 50%. The second follows from the Iran nuclear deal, which could see Iranian gas becoming available as a viable source. Just last month, it emerged that India and Iran are considering a US$4.5 billion undersea pipeline that would connect Iran to India’s west coast via the Oman Sea. Iran has the largest gas reserves in the world and the availability of Iranian gas changes India’s energy calculus significantly.

India’s second option is to significantly scale-up nuclear power. Nuclear energy has the advantage of being both carbon free and, like gas power, available all the time. It’s therefore the only clean energy option to substitute coal in the electricity grid. However, India’s tardy rate of growth in the nuclear sector so far, with only 5.8 GW of current capacity, as well as issues with the liability law, procurement of technology and long construction times, mean that gas remains the only viable and cleaner option over the short term.

However, to make this shift to gas India needs to work on three key areas. First, the country’s gas infrastructure needs to be scaled-up so that it can link to transnational pipelines, draw from regasification terminals of Liquefied Natural Gas (LNG) and develop last-mile connectivity to consumers.

Second and more importantly, the political will to allow for the development of an integrated gas market is needed. The difficult decision to remove direct and quasi control over pricing and end-use needs to be taken. Such a move will create conditions where benefits and costs are accrued through market operations and will help attract interest from investors, producers and distributors.

Finally, India’s geopolitical overtures need to support this new energy agenda. Financing and infrastructure development require strong global support and partnerships. India’s relationships with Iran, Qatar and Turkmenistan among others also needs to be re-energized and must be seen as part of the national imperative of seeking energy security and more robust climate action.

Samir Saran is Vice President and Aniruddh Mohan is Junior Fellow at the Observer Research Foundation in New Delhi, India. Image courtesy of Flickr user UK DFID.

Columns/Op-Eds, Politics / Globalisation

Seizing the ‘One Belt, One Road’ opportunity

Updated: February 2, 2016 00:17 IST | Samir Saran, Ritika Passi

Original link is here

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“The ‘One Belt, One Road’ initiative of Xi Jinping’s government is likely to become the lynchpin of Chinese engagement with the world.” Picture shows Iranian President Hassan Rouhani with the Chinese President at the Sa’dabad Palace in Tehran, Iran. The two leaders signed several agreements, including on the OBOR. | AP

China’s ‘One Belt, One Road’ could potentially allow India a new track on its own attempt to integrate South Asia.

The central feature of much of the post-World War II American external engagement has been the security of its energy interests. Likewise, recent conversations with Chinese scholars, Communist Party of China members and officials indicate that the ‘One Belt, One Road’ (OBOR) initiative of Xi Jinping’s government is likely to become the lynchpin of Chinese engagement with the world. If, to understand American foreign policy of the years past, many have ‘followed the oil’, to decipher Chinese interests going forward, we may just have to ride the Belt and the Road.

At the third edition of the India-China Think-Tank Dialogue in Beijing, hosted in early January, a cross-section of Chinese scholars and officials discussed India-China relations and prospects for regional cooperation. Unlike at previous meets, this time the conversation cursorily engaged with the usual tensions in the bilateral relationship; instead, the centrepiece of all discussion was the OBOR initiative.

A Mandarin tale

Some facets of the new formulations that are giving shape to Beijing’s vision for OBOR and Asia could be discerned at this recent interaction.

The first was the novel idea of ‘entity diplomacy’. This construction argues for engaging within and across regions to secure the best interests of an entity that is necessarily larger and with interests broader than those of any sovereign. This follows from the argument of a revival of ‘continentalism’ as the Eurasian landmass deepens linkages and ‘Asia’ emerges. OBOR segues perfectly into this framework. It becomes, for the Chinese, an Asian undertaking that needs to be evaluated on the gains it accrues to the entity, i.e. Asia, as opposed to China alone. It therefore follows, from Beijing’s perspective, that Indian and other Asian nations must support and work for the OBOR initiative.

Entity diplomacy also translates into the establishment of “one economic continent”, the second theme undergirding the conversation. OBOR, then, becomes a vehicle that promotes alignment of infrastructure, trade and economic strategies. Indeed, for some Chinese speakers, India is already part of the initiative, as its own projects like Project Mausam and economic initiatives such as Make in India and Digital India complement and complete OBOR. Indian participation in the Asian Infrastructure Investment Bank and joint ownership of the New Development Bank only reaffirm India’s partnership in this Asian project for many in Beijing.

To counter popular allegations of OBOR being a “Chinese scheme”, à la the U.S. Marshall Plan, the Chinese were quick to clarify that the original project is named the Belt and Road Initiative; the ‘One’ has been an English effect that has popularised a mien of exclusivity around OBOR, to the primary advantage of China, instead of an inclusive Asian economic project.

The third formulation was that of a mutually beneficial ‘swap’ — India protecting Chinese interests in the Indian Ocean, and China securing India’s essential undertakings in their part of the waters, read the South and East China Seas. However, there was unambiguous clarity that if India cannot assume more responsibility in the Indian Ocean, China will step in.

Core conflicts

Structural challenges confront the Chinese formulations and the OBOR proposal. First, the perception, process and implementation to date do not inspire trust in OBOR as a participatory and collaborative venture. The unilateral ideation and declaration — and the simultaneous lack of transparency — further weaken any sincerity towards an Asian entity and economic unity. The Chinese participants explained that Beijing is committed to pursuing wide-ranging consultations with the 60-plus nations OBOR implicates; an ‘OBOR Think Tank’ is also being established to engage scholars from these countries.

The second poser for the Chinese is on Beijing’s appetite for committing its political capital to the project. While for obvious reasons the Chinese would not want to be seen as projecting their military and political presence along OBOR, it was clear that China is willing to underwrite security through a collaborative framework.

The third challenge deals with the success of the ‘whole’ scheme, given that the Chinese vision document lays out five layers of connectivity: policy, physical, economic, financial and human. While no developing country will turn away infrastructure development opportunities financed by the Chinese, they may not necessarily welcome a rules regime built on a Chinese ethos.

Finally, how can this initiative navigate the irreconcilable geometries of South Asia that prevent India from providing full backing to OBOR? A formal nod to the project will serve as a de-facto legitimisation to Pakistan’s rights on Pakistan-occupied Kashmir and Gilgit-Baltistan under the China-Pakistan Economic Corridor (CPEC) that is “closely related” to OBOR.

Options for India

Fundamentally, New Delhi needs to resolve for itself whether OBOR represents a threat or an opportunity. The answer undoubtedly ticks both boxes. Chinese political expansion and economic ambitions, packaged as OBOR, are two sides of the same coin. To be firm while responding to one facet, while making use of the opportunities that become available from the other, will largely depend on the institutional agency and strategic imagination India is able to bring to the table.

First and foremost, India needs to match ambition with commensurate augmentation of its capacities that allows it to be a net security provider in the Indian Ocean region. This will require New Delhi to not only overcome its chronic inability to take speedy decisions with respect to defence partnerships and procurement, but will also necessitate a sustained period of predictable economic growth; OBOR can assist in the latter.

Therefore, just as U.S. trade and economic architecture underwrote the rise of China, Chinese railways, highways, ports and other capacities can serve as catalysts and platforms for sustained Indian double-digit growth. Simultaneously, India can focus on developing last-mile connectivity in its own backyard linking to the OBOR — the slip roads to the highways, the sidetracks to the Iron Silk Roads.

Arguably, OBOR offers India another political opportunity. There seems to be a degree of Chinese eagerness to solicit Indian partnership. Can India seek reworking of the CPEC by Beijing in return for its active participation? Furthermore, for the stability of the South Asian arm of OBOR, can Beijing be motivated to become a meaningful interlocutor prompting rational behaviour from Islamabad? OBOR could potentially allow India a new track to its own attempt to integrate South Asia.

(Samir Saran is vice president and Ritika Passi is associate fellow at the Observer Research Foundation, Delhi.)

Columns/Op-Eds

How to deal with Facebook’s Free Basics

January 28, 2016, 5:40 AM IST Economic Times in ET Commentary | Edit Page, India | ET

By Samir Saran & Arun Mohan Sukumar

Original link is here

In his monograph, The History of Computing in India (1955-2010), Indian Institute of Science professor V Rajaraman notes the work of the Dandekar Committee on Automation set up by the government in 1969 to assess whether computers would put Indians out of jobs. These were the heady days of socialism in India, and our computing sector was dominated then by one global giant: International Business Machines (IBM).

IBM had a difficult relationship with the Indian government right from the days of Jawaharlal Nehru. It was battling a hostile regulatory environment with capital controls and local manufacturing requirements. But the straw that broke the camel’s back — leading to IBM quitting India for decades — was the Dandekar Committee report.

Egged on by vocal labour unions, the committee recommended sweeping restrictions on the “use of computers in banks, government departments, private companies and insurance organisations”. Parliament was convinced that the introduction of computers would “increase efficiency”, but opted against the “social cost of computerisation”.

Today, we are in the middle of a noisy debate on Free Basics, a platform devised by Facebook for free “access to useful services on mobile phones in markets where internet access may be less affordable”. The debate has been characterised by extreme opinions. Some have argued for a complete ban of the initiative, pointing out that Free Basics will be a walled garden that conditions access to information for millions of Indians. Those across the aisle view this as an ‘elite’ argument, and see Free Basics as a tool to provide affordable access to first-time users, who can then choose to go beyond the initiative’s services.

2016 is not 1969, and Facebook is not IBM. But the public policy questions around Free Basics — affordable access, consumer choice, free speech — will determine India’s internet landscape for years to come. Here are some markers for India’s regulators to evaluate this debate.

Hang Around with the Cable

Consider a ‘must-carry, must-provide’ rule: The ‘must-carry’ rule, present in broadcasting rule books in India and the US, imposes an obligation on cable TV networks to carry public or local broadcasters. Its corollary, the ‘must-provide’ rule, requires channels to provide their content to all networks without discrimination. Were the ‘must-carry, must-provide’ rule be transposed on to the Free Basics context, it would require Facebook to carry applications without discrimination on its platform.

Conversely, internet applications would be platform-agnostic, providing the same content to Free Basics as they do to other such initiatives. The rule would provide a level playing field for emerging startups and local (language) content providers, who would have the same opportunity to feature on Free Basics as Facebook’s home-grown applications. Qualitative standards can be enforced by the zero-rating platform, but evaluated by the regulator.

Regulatory commitment to free speech: Zero-rated plans like Free Basics can have varying effects on free speech and access to information. Do Indian regulators have the policy tools to correctly evaluate the effects?

Last year, a UN high-level meeting to review the World Summit on Information Society goals concluded that the free flow of information can take place through nine policy interventions, including “open access to data”, “fostering of competition”, “creation of transparent, predictable, independent and non-discriminatory regulatory and legal systems”, “efficient allocation of spectrum” and “infrastructure-sharing models”.

Rather than second-guessing the impact of Free Basics on free speech, the government should put in place regulatory regimes that make this assessment more accurate. These nine areas make for a good start.

Skip the development Kool-Aid: Whatever Free Basics may claim to offer, it is first and foremost an initiative advanced by a for-profit corporation. Corporations should not define India’s development agenda, but their projects should refine it.

In the short term, regulators should assess Free Basics on three simple questions. One, has it limited or facilitated the entry of new data-farming platforms in the market? Two, does it discriminate between internet applications, especially local language content and emerging startups? And three, has it restricted or broadened consumers’ choice on eservices and applications?

In the long term, regulators should also see Free Basics as a test bed for data protection norms in India. If public services and payment portals were to be part of zero-rated platforms, what would happen to sensitive data of Indians stored in such applications? Free Basics is as much about the privacy of data as it is about net neutrality.

The Book’s Face Value

Assess through empirical evidence: Assessing empirical evidence of Free Basics’ impact on the market is not easy. But in the absence of precedent, there is little choice. Regulators could recommend that Facebook deploy Free Basics for a limited window — say, six months — in line with the ‘must-carry, must-provide’ rule. At the end of this ‘trial run’, the programme would automatically be rolled back, providing both regulators and researchers with valuable data to assess its impact on connectivity, consumer choice and competition.

The Free Basics debate is a classic sign of the digital economy teething. How we respond will determine its forecast for decades to come. It is also a choice between being a ‘ban’ economy to evolving to one that ‘regulates’.

Saran is vice-president, Observer Research Foundation, and Sukumar heads the Cyber Initiative, ORF

Columns/Op-Eds

Forget Odd and Even, Delhi Needs a Total Disruption of its Transport Model

by Samir Saran and Prashant Kumar, January 5, 2016, The Wire

Original link is here

The present attempt to reduce the number of cars on the road is well-intentioned but misguided in the long-run unless there is the political will to adopt a wider set of restrictions

The Aam Aadmi Party government’s odd/even formula to manage Delhi’s traffic and curb pollution has been met with extreme opinions and impulsive reactions. Some have applauded Chief Minister Arvind Kejriwal’s attempt to tackle these two seemingly intractable problems, while others, mostly those inconvenienced by the regulation, or by his style of politics, have been quick to criticise the plan.

The question, however, is not whether the odd/even formula will be complied with fully or will be spectacularly successful. Similar strategies have failed in other mega cities and have had modest success in some. More crucial is whether this new rule can serve as a catalyst for disrupting what has become the ‘’Delhi transport normal”.

What is the Delhi “normal”? Simply put, it is an archaic 20^th century notion of urban transportation being played out in the 21^st century. Vehicle ownership has become associated with class, wealth and prestige in Delhi. The appearance of status is more important than functionality, efficiency and the environment. Ironically, Delhi’s car obsession is actually far removed from the reality of those cities it is trying to emulate. Can the new rule change this paradigm?

The odd/even formula’s attempt to reduce the number of cars on the road is well-intentioned but misguided in the long-run unless there is the political will to adopt a wider set of restrictions. As in Beijing, the rule may result in car owners simply buying more cars to circumvent it. Rather than trying to target the number of cars on the road, then, the government would be wise to target the time vehicles spend on the road. Stagnant traffic has a greater causal relationship with environmental degradation and economic inefficiency than freely moving larger numbers. Can this be achieved under this new regime? May be not.

The odd/even rule’s other objective of improving air quality in the city may not be realistic either. In a recent study, it was shown that only 9% of Delhi’s bad air quality and environmental deterioration was caused by private vehicles. Given that two wheelers and certain commercial vehicles – that form the majority of automobiles on the road – have been exempted, the rule cannot be expected to improve air quality dramatically. A slight decrease in pollution levels has been noted since January 1 (data points are too small to draw any conclusions), but for the government to meet its own environmental goals, it will gradually have to bring other vehicles into the ambit of the odd/even formula. Will it have the stomach to do that?

What is clear is that to meet these ambitious goals, the odd/even rule is not enough. If Delhi traffic is to be managed, both regulatory and behavioural changes are required.

A question of disincentives, and social justice

First, the ruling must be supplemented by other initiatives. Car ownership has to be disincentivised. Measures can include car owners paying punitive taxes on each additional car, the imposition of a congestion charge on usage of arterial routes and making ownership of a vehicle difficult.

Global examples of such strategies include additional registration taxes on a second car in the same family; London, where congestion charges are imposed on certain zones to limit heavy traffic; and Singapore, whose Vehicle Quota System (VQS)makes vehicle prices nearly 3-5 times the actual cost. In Singapore, it is in fact more expensive to buy the right to purchase a car, then to buy the car itself. The 41% ad valorem custom duty on all cars does not make it cheaper either. But each of these cities were in the first instance able to create public transport infrastructure. It could be argued that perhaps Delhi is the best suited amongst Indian cities to embark on moving the middle class to public transport.

But for this, besides enacting rules and regulations, a behavioural shift among NCR residents is urgently required. The aim of the city’s government must be to catalyse the preference of the growing middle class towards a “new normal”. This attitudinal change, evident in global cities like New York, London, Singapore, Tokyo and others is rooted on the usage of public transportation rather than private car ownership. It is absolutely respectable for a CEO to use the subway or an office worker to ride the bus; and carpooling is in fact encouraged, with lanes of roads dedicated to those who carpool.

Another behaviour change that must be favourably considered is to dispel the notion that people must work in offices. In an age so intertwined with technology, it is unimaginable that physical presence in offices is still a requirement. To reduce the number of cars, this notion must be challenged and provisions to facilitate telecommuting, especially for non-essential personnel, by offering broadband charges as part of an employee’s income, as against a fuel allowance or conveyance costs, must become an attractive option.

Finally, Delhi must realise the social injustice embedded within the phenomenon of car ownership. Each car occupies real estate in a city that lacks space. Car owners are effectively squatters, occupying high value land – which they don’t own and which they don’t pay for – to park their vehicles, to ride across the city, to conduct personal and official engagements. This same land is denied to countless others in their pursuit of a basic livelihood. Hawkers and vendors are often turned away from setting up stalls in the pursuit of ample parking space. The right to luxury and leisure has eclipsed the right to a livelihood and if Delhi is to be a global city, it must address this imbalance immediately.

The jury’s out on the Delhi government’s ambitious experiment. But there is no denying the urban landscape will become unmanageable if corrective measures, at a structural, regulatory and behavioural level are not initiated. The “Delhi normal” should reflect a modern, sustainable ideology of urban governance that is rooted in social justice, propelled by new technologies and embraced by new attitudes. Otherwise, this city will remain stuck in the 20^th century, no matter what regulation any government adopts.

Samir Saran is Vice President, Observer Research Foundation and Prashant Kumar is Associate Fellow, Observer Research Foundation, New Delhi