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Securing digital terrain

Analysis, Observer Research Foundation , ORF Cyber Monitor , 17 March 2015

Original link is here

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The Sony hack is a textbook example of the fog of cyberwar. The whole incident is a telling manifestation of the many aspects of cybersecurity: There is the allegation of a state-sponsored international incident by North Korea and the promise of a ‘proportional response’ by the United States of America. The Sony hack brings to mind the question of state behavior in cyberspace; the threat to business advancing public-private cooperation in combating such attacks; and the question of motive – an assault on the freedom of expression, as opposed to the more predictable motivations of theft, terrorism and war.

Other countries, including India, have observed the consequences with keen interest. This includes the disruptions in North Korea’s Internet connectivity that followed immediately after the attack was successfully attributed to the authoritarian North Korean state by the US. How does this episode play out against all the narratives built to understand and respond to cyber security threats?

At the outset, there are larger questions to consider.

The first is the fundamental understanding that access to the Internet is an essential feature of security; that without connectivity, the citizen is not plugged into the system, as he cannot engage digitally with either his fellow citizenry or the state. After all, security cannot be for security’s sake. It must be based on the premise that security infrastructure is to protect its people, its nation-state, its economic interests within its territory and globally. To this end, India’s ambitious ‘Digital India’ project, which has committed an investment of $21 billion with the stated ambition to secure lastmile connectivity and effective e-governance for every citizen, is only a partial response to the enormous challenges facing the Indian subcontinent in its digital endeavors.

The second question relates to the fundamental tension between development and security. This holds especially true for developing countries like India. They are witnessing rapid internet proliferation, a phenomenon that goes hand-in-hand with cheap devices with questionable security standards and a digitally naïve population susceptible to hackers, thieves and phishers alike. They will be susceptible to sophisticated attacks as well, as they build up their capacity. The inevitably linked trilemma of security, privacy and surveillance, in the face of complex challenges has raised many-layered problems in need of examination. Finding a balance between surveillance and privacy in order to secure citizens without infringing their rights is the order of the day. But countries are struggling to achieve this equilibrium.

Most recently, the UK – to the horror of privacy activists everywhere – has come out in favor of banning encryption to intercept communications so as to ensure security more effectively. There is also the need for accountability of state intelligence agencies. They can quite easily infringe on citizens’ personal communications in their zeal to catch the bad guys. Therefore a strong mechanism needs to be put in place to ensure they are encouraged to act responsibly.

There is also a need for governments, private sector companies and civil society, including those fighting for individuals’ rights, to cooperate in creating robust cyber security frameworks. Key questions on the quality of interconnectivity and appropriate mechanisms for securing critical infrastructure have to be addressed. What are the costs of cyber security and how will they be shared? Who will define and how will we all agree to what is the optimal level of security in cyberspace? What is the role of the private sector in this regard? Governments cannot begin to understand the range, frequency and severity of the attacks on their countries unless critical infrastructure operators and private enterprises share this information with them. In many countries confidence building measures are necessary to develop this relationship.

Thirdly, given that attacks do not only originate from criminals and terrorists, an understanding – ‘norms’ – of state behavior in cyberspace need to be fleshed out. This could be done by way of universal multilateral agreements (desirable but unlikely) or by consensus between like-minded states who wish to set rules of engagement (less inclusive but more efficient). Countries also need to examine what can best be described as ‘unintended consequences’ of state behaviour. For example, the Stuxnet virus, which exploited a weakness in the Microsoft operating system, affected 18 percent of computers in Indonesia and 8 percent in India, causing these countries great financial loss as they had to upgrade their systems to counter the virus.

At the same time, no conversation about cyber security can be complete without addressing online terror. Online terror networks, aided by the multiplicity of communication networks over the Internet, have become a common cause of concern for individuals and states alike. This growing threat cannot be countered unless solutions that enable real-time information sharing between countries are developed. These questions – and more – were at the core of the debates at CyFy 2014 – the India conference on Internet Governance and Cyber Security hosted by the Observer Research Foundation. India’s Deputy National Security Advisor emphasized the importance of international norm-building and central role of the UN Group of Governmental Experts. He stated that “the Indian position on these issues will continue to evolve?”, adding that this group of experts “is a useful forum, but it should be made more representative.” India’s Minister of Communications and Information Technology echoed a similar thought at CyFy – “?this unhindered growth of networks of infected computers across the world – how do we propose to address this problem in the absence of global cyberspace norms to regulate and guide responsible behaviour in cyberspace?”

Which brings us back to the incident involving Sony, North Korea and the United States. It shines the torch on cyber security, state behavior, damages, responses and attacks on freedom of expression. Do we have a blueprint or a road map to respond to such developments? Maybe not – and therefore 2015 will be a vital year for finding common ground to keep the digital world secure.

(The author is Vice President and Senior Fellow at Observer Research Foundation, Delhi. This article originally appeared in The Security Times, a special edition of the Atlantic Times for the Munich Security Conference, February 2015.)

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Columns/Op-Eds, Politics / Globalisation

Six Silent Sins

When the family loyalist was summoned to the sanctum sanctorum by the “High Command” there must have been trepidation and unease in his mind. The organisation after all had just been humbled, humiliated and vanquished at the hustings. As Madam Gandhi asked A.K Antony to introspect and dig deep to find the causes of the Congress Party’s crushing defeat in the 2014 general elections, he must have recalled the string of fallen angels who preceded him, like Azazel and Lucifer. These angels were, as Milton describes them in Paradise Lost, “brighter once amidst the host of Angels, than the sun amidst the stars”. Their fault however was stepping out of line and questioning and defying god.

Clearly then, one implicit parameter for Saint Anthony (if he knows what’s good for him) was to avoid Lèse-majesté when talking of the Holy Trinity – Mother, Son and Daughter. While one has access to his report outside of the usual gossip one hears, it doesn’t exactly take a genius to figure out who and what was left out under the garb of “collective responsibility”. With a great deal of certainty, one may assume that the following seven reasons never made it into the “introspection” report.

The first reason for the loss has to be the undue influence, in party matters, of people like Mr Anthony himself. Some of them clearly irrelevant to contemporary Indian politics, many just sycophants whose raison-d-etre’ were the favourable whims of 10 Janpath, most lacking organisational credibility and legitimacy, and all, so far divorced from ground reality that their influence on party strategy was recipe for failure. Party politics was managed by the extended household of the former first family, not by those with personal political weight and credibility among the people.

By the end of his second term in office, the former Prime Minister was the second reason for what unfolded. He broke his own promises though he never broke his silence. He sold India the hope of reforms and inclusive growth – of a market oriented liberal democracy. By the end of 2009 India was back to the 80s’. All corporates were once again thieves, market based reforms were passé, licence raj had been replaced by regulator raj and corruption was rampant. The Prime Minister who reformed India in 1991 as its Finance Minister presided over a period that destroyed the country’s entrepreneurial spirit and scarred its enterprising soul.

Following from this a dated approach in responding to contemporary needs was the third reason for failure. The infatuation with ‘doles’ to the poor, as against offering ‘agency’ to them, represented a re-institutionalisation of feudal thought. India of 2014 is not the India of 2004. It is younger, low-income and seeking opportunities. What was on offer was continued state patronage and welfare schemes, which may have appealed to a poorer and older demography of the past. India today, is young and aspirational and has dreams that transcend promises of lifeline existence. The poor were the target vote-bank and the approach seemed to imply that the party would thrive because of incessant poverty.

The mediocre branding of the protagonist-in-chief, Rahul Gandhi was to be the next reason. He could not relate to the people, and his moral renunciation and episodic political participation was disingenuous. His contrived anger against corruption, his feeble remorse for the riot victims of 1984, his convoluted commitment to a progressive India and his role as an ‘outsider’ was poorly thought through and badly executed. There were limited takers for the “RaGa” proposition.

The fifth, reason would have implicated ‘Madam’ herself. Democracy seldom allows power without responsibility and even when it does, it remains a fundamentally bad equation. Maybe the Philippines could accept an Imelda Marcos, Egypt a Suzanne Mubarak and Argentina an Eva Peron, but India persistently rejected quasi-democratic authoritarian regimes that those three were. The leadership may very well have been benign. The leader may not have hoarded shoes like Imelda; or stolen money like Eva; or adopted a “country be damned, my son first” attitude like Suzanne. Yet ‘Madam’ was ultimately responsible for everything and refused to accept that this comes attached to the immense power that she enjoyed. India was fooled once, by the buffer that the Prime Minister offered, but they were not willing to be fooled a second time round.

The communication and engagement with the electorate has to be the sixth reason. Spokespersons were patronising and arrogant, hectoring and often aggressive, even as they justified by the unjustifiable. They were masters of phrase and prose and so proud of their glib talk they forgot political communication is a dialogue. They said what they wanted to, and were willing to hear only their own voices. They criticised the feedback from Social Media as being sentiments of enemies and irrelevances. Well-meaning advice was rejected as coming from those who had made a pact with the devil. The cries, the pleas and the anger were ignored. The government spoke to itself even that was with discordant voices.

The last and most important reason for the defeat is that the preceding six paragraphs will not find their way into the report. To win one needs to accept the truth – no matter how bitter. If one cannot or deliberately refuses to understand what really went wrong, one cannot fix things – expect superficially. But the fact remains that that the “high command” wishes to guard its position and that of its progeny. The fact remains that everyone in the Congress core committee wish to hide their de-facto irrelevance and that spokespersons like bad singers do not want to hear that they are bad at what they do.

So what would St Anthony’s concluding paragraph be? Presumably that the incumbent too would be “led astray” by those who surround him and their lust for power. Ultimately his conclusion would be that nobody in the congress was wrong, and all they need to do for the next ‘sonrise’ is for the current dispensation to falter, and inevitably it will.

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“THE BABU IS BACK:” SAMEER SARAN’S LECTURE ON MODI’S FOREIGN POLICY

Munk School of Global Affairs, University of Toronto, November 4, 2014

Original link is here 

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Nehruvian strong handed centralization coupled with bureaucratic despotism will be the future of India under the newly elected Indian Prime Minister, Narendra Modi. Despite being, what many would say, the antithesis of a secular Jawaharlal Nehru, Modi has demonstrated several tendencies of Nehru-like micromanagement during his first hundred days in office. These thoughts were expressed by Sameer Saran, Vice President and Senior Research fellow at the Observer Research Foundation, while delivering an emphatic talk on ‘Narendra Modi and his Foreign Policy Objectives’, hosted by the Centre of South Asian Studies at the Munk School of Global Affairs onOctober 2, 2014.

Restoration of a strong executive space and empowering of the bureaucracy, characteristic of Nehru’s India, will mark the return of the Babu – a metaphor for technocrats that historically constituted India’s bureaucratic steel framework. Saran holds the belief that Modi’s superstar persona (as seen in his recent drawing of several thousand members of the Indian Diaspora at the Madison Square Gardens), will suffice to press the ‘reset button’ on the prevailing negative investor confidence surrounding India. This can be largely accredited to Modi’s approach towards ensuring neo-liberal economic space, creating market access and ensuring a creation of jobs – a far cry from the garland of communal Hindu nationalism he adorned during his time as the Chief Minister of the Indian State of Gujarat.

A larger section of Mr. Saran’s lecture centred around India’s Foreign Policy aspirations given its role as an emerging regional and global power. Modi’s drift towards realpolitikin internal governance is also manifested in his external relations strategy. The policy of ‘India First’ – implying a clean up the internal mess first – however has not curtailed India’s global ambitions. A recent visit by the Chinese premier opened several new avenues of cooperation. Moreover, India has begun to see its neighbourhood in an extended sense. Enhancing investment in the ASEAN region; conceding to Bangladesh in an old water dispute; recent visits to Nepal and Bhutan; and newfound enthusiasm in interacting with Japan and Australia, are all parts of Modi’s efforts to have India assert itself regionally. India, under Modi, has also demonstrated flexibility in dealing with the BRICS, by understanding the value of accepting Shanghai as the economic headquarters. Modi’s Pakistan policy however remained ill-defined, with a seemingly unchanged plan to maintain the status quo. Some of the greatest anti-Pakistan vitriol emanates from his own party, and if Modi is to challenge the bilateral stalemate with Pakistan, a shift in opinion within his own ranks is necessitated.

Mr. Saran’s lecture portrayed Narendra Modi as the provider of much needed salvation for India. While Modi’s dynamism and pro-business and anti-corruption attitude may provide India some impetus after nearly half a decade of stagnation, transforming a country of 1.3 billion people may not be a task as easy as making populist electoral promises. With just over a hundred days in office, whether Narendra Modi can make a Nehru out of himself is yet to be seen.

-written by  S. Taha H. Shah, a third year student in the Contemporary Asian Studies Program

This article is part of  a series of articles written by undergraduate students affiliated with the Asian Institute about events hosted by the Asian Institute.  

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In the News

Obama Discusses Cybersecurity with India

Collaboration Has Potential to Improve Bilateral Ties

By Varun Haran, January 26, 2015
Original link is here 
Obama Discusses Cybersecurity with India

Cybersecurity was among the topics discussed by President Barack Obama and Indian Prime Minister Narendra Modi during the U.S. president’s visit to India. Obama is in India as the chief guest at the Indian Republic Day parade, which was held on Jan. 26.

“It was identified as an area where there can be increased cooperation,” U.S. Deputy National Security Advisor Ben Rhodes said during a press briefing in New Delhi on Jan. 26. “The cyber discussion came up specifically in that context with the need to protect intellectual property

Obama picked up on that theme at a dinner hosted by the U.S.-India Business Council. “In knowledge-based economies, entrepreneurs and innovators need to feel confident that their hard work and, in particular, their intellectual property will be protected,” the president said.

In a joint U.S.-India statement, both leaders noted their growing cooperation on battling cybercrime and its “serious risks to national and economic security from malicious cyber-activity and agreed to cooperate on enhancing operational sharing of cyberthreat information, examining how international law applies in cyberspace and working together to build agreement on norms of responsible state behavior.”

Meaningful Dialogue on Cybersecurity

Such cooperation may be inevitable, considering that the two democracies share common values and face similar cybersecurity challenges, especially in the face of China’s potential emergence as a cyber superpower. Meanwhile, India is poised to take up a leadership role in cyberspace and become one of the largest digital economies in the world, fueled by its potential user base and its proven expertise in services and software technology. Obama’s visit may be a good place to start a meaningful bilateral dialogue on cybersecurity (see A Boost for Indo-U.S. Cyber Cooperation).

Dr. Cherian Samuel, associate fellow at the Institute for Defense Studies and Analyses in New Delhi, notes that earlier attempts at cybersecurity cooperation foundered on the twin rocks of distrust and neglect. “If anything, global mistrust on cybersecurity cooperation has only increased with the Snowden revelations,” he says.

Security experts, however, say that given most major Internet and technology companies are American, and much of the Internet infrastructure is located in the U.S., there are still many areas where meaningful cooperation is possible – particularly in law enforcement, technology and information sharing.

“Collaboration in cybersecurity has the potential to enhance the bilateral partnership, while addressing an issue of strategic importance to both states,” says Jennifer McArdle, research associate at the Arlington, Va.-based Potomac Institute for Policy Studies.

Basis for Cyber Cooperation

The benefits of collaboration are mutual. While the U.S. can benefit from India’s dynamic human enterprise and scientific talent pool, India can benefit from U.S. cutting-edge science in cybersecurity, potential lessons learned from the development of a central cyber command, and established processes and norms, particularly with regard to hardware and supply chain security.

The ability to ensure “trust” in the microelectronics that underlie critical infrastructure and military systems is of utmost importance, experts say. Samir Saran, senior fellow and vice president at the Observer Research Foundation, a Delhi-based think-tank, says India’s hardware and supply chain depend on “dubious” sources, which may carry engineered backdoors and weaknesses, will continue in order to fulfill increasing demand in the digital age.

“The U.S. needs to help India build capacity through technology transfer in fabrication, semi-conductors, etc., or U.S. interests may be at risk as well, given its close ties to India’s digital economy – soon to be one of the largest in the world,” Saran says.

Dr. Ashwini Sharma, managing director of the National Institute of Electronics and Information Technology, the HRD arm of the Department of Electronics and Information Technology, says that with the present government’s emphasis on “Digital India” and “Make in India,” it is imperative that India enlist U.S. help in better understanding the challenges faced, “especiallycapacity building of citizens, financial institutions and technical institutions in cybersecurity.”

Existing Indo-U.S. Arrangements

At first glance, it may seem that India and the U.S. have the beginnings of a robust cyber engagement. In June 2013, during the 4th Indo-U.S. strategic dialogue between U.S. Secretary of State John Kerry and India’s former Minister of External Affairs Salman Khurshid, both parties emphasized the need to develop stronger cybersecurity partnerships through the next iteration of consultations, cyber policy dialogue and joint working groups.

India and the U.S. had signed a memorandum of understanding on cybersecurity in July 2011 as a part of the Homeland Security Dialogue. The memorandum established best practices for the exchange of critical cybersecurity information and expertise among the respective governments, CERTs, broader cybersecurity communities and their counterparts on a range of technical and operational cyber issues.

An Indo-U.S. Cyber Security Forum was set up as early as 2002. The motivation on the U.S. side was to safeguard the interests of U.S. companies outsourcing to India. On the Indian side, the emphasis was on capacity building, research and development, Samuel says. “Five working groups were established under the aegis of the Forum,” he says. “Since then, cooperation has been spotty and episodic.”

CERT-In and U.S.-CERT currently have monthly operational meetings to address cyber issues, andperiodic meetings are held between collaborative groups such as the ICT and other joint working groups. More recently, Christopher Painter, U.S. Coordinator for Cyber Issues,traveled to New Delhi in October 2014 to meet with officials from the National Security Council and other ministries.

PIPS’ McArdle says that despite these and other measures, the Indo-U.S. cyber engagement lacks substantive progress. “There is a need to build trust, develop capacity and better align interests in the two capitals.”

Potential Action Items

Many lessons can be learned from studying U.S. cybersecurity programs, experts say. The scope of cybersecurity today entails broader issues, such as access, jurisdiction, e-commerce, entrepreneurship, information sharing, capacity building and enforcement. “There is scope for cooperation in each of these areas, but the devil is in the details,” Samuel says.

ORF’s Saran agrees there is a need for a much wider conversation than just between the information security institutions of the two countries. “Indo-U.S. cooperation in cybersecurity must entail addressing issues around Internet governance framework and the safeguarding of national strategic interests in cyberspace,” he says.

India’s interests need to be taken into account at engagements of multilateral, multistakeholder organizations, such as the GGE, ICANN, ITU and similar forums. Indo-U.S. cooperation at each of these forums must be enhanced, and joint working groups and other touch-points need to be strengthened.

The weaponization of cyberspace is another important concern, Saran says.

“With nation-states resorting to strategic cyberweapons without attribution, to further national interests, friendly countries like the U.S. and India need to formulate norms around the usage of these weapons,” he says.

Saran warns against the danger of digital/cyber non-proliferation agreements developing between key players, such as China and the U.S., similar to the arms control arrangements between U.S. and USSR in the 20th century. India may be left as a bystander if it does not get involved.

A cybersecurity program that focuses on scientific and technical engagement could reap enormous benefits for both India and the U.S.

“Designing a program that transcends rigidly delineated government-to-government programs, and builds public-private cybersecurity cooperative initiatives with academia, labs and industry could help build trust,” says PIPS’ McArdle. While India has wanted deeper scientific and technical cooperation in cybersecurity, no such program currently exists.

The current mechanisms for sourcing information are archaic and out-of-sync with the requirements of law enforcement agencies today, Samuel says. Bilateral mechanisms to enable information sharing for law enforcement purposes should be pushed from an Indian perspective.

“While the mantra of an open, global and secure cyberspace is still repeated ad infinitum, it seems like these are all mutually exclusive goals,” he says. Insecurity abounds, with a plethora of actors engaging in unchecked malicious activity. The big picture should be to work on bilateral norms to secure a borderless cyberspace, he says.

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An ‘India exception’ for climate talks

By Samir Saran and Bruce Jones, The Hindu, January 23, 2015

Original link is here 

SOLAR POWER: “Narendra Modi’s victory has created the opportunity for India to benefit from the renewable energy-friendly policies he pursued as Chief Minister of Gujarat.” Picture shows him during the inauguration of India’s first 1MW canal-top solar power plant at Chandrasan village, Mehsana district, Gujarat.

SOLAR POWER: “Narendra Modi’s victory has created the opportunity for India to benefit from the renewable energy-friendly policies he pursued as Chief Minister of Gujarat.” Picture shows him during the inauguration of India’s first 1MW canal-top solar power plant at Chandrasan village, Mehsana district, Gujarat.

If the U.S. partners with India for more efficient industrialisation, it could be the kind of investment that cements ties between the two countries

As India and the U.S. build closer ties, they should pursue a win-win agreement on climate. It is in the U.S.’s strategic interest that India grows into a regional power, which can only be accomplished if India is given sufficient development space to grow its economy and eliminate poverty. It is in India’s interest to diversify its energy portfolio — a prospect that can be strengthened with the U.S.’s assistance. The way to achieve these objectives is to forge an “India exception” at the global climate talks in Paris; doing so is the only realistic pathway to a global climate deal and will cement the growing ties between the two critical actors in an evolving international order.

A unique dilemma

India faces a predicament which previous countries that used energy to grow their economies did not face. It stands on the cusp of industrialisation just as the world may finally be willing to take multilateral action to reduce carbon emissions. As it possesses vulnerable coastlines and is reliant on the monsoon and glacial melt, India is as susceptible as any other country to the consequences of collective action failure on climate. But for India, the tradeoffs between environment and growth (and poverty elimination) are harsher than perhaps anywhere else. India’s overall size of both population and emissions makes it the most critical low-income country at the Paris climate talks.

Despite India’s importance to the climate debate, it continues to pollute below its weight. Though India’s emission intensity would be expected to rise in the coming decades, it has committed to reducing emission intensity by 20 to 25 per cent by 2020 (from 2007 levels). Prime Minister Narendra Modi’s victory has created the opportunity for all of India to benefit from the renewable energy-friendly policies he pursued as Chief Minister of Gujarat and has opened up the possibility for it to become a leader in cost-competitive renewables. India is already the world’s largest biomass, third largest solar and fourth largest wind energy producer.

“If India chooses to grow through the traditional carbon-intensive pathway, there will be no credible prospect for global carbon reduction”

There is a strong strategic imperative for the U.S. in supporting India’s role in Asia. A successful India can play a major role in stabilising Asia during an otherwise turbulent transition, and can be a vital partner to the U.S. India could act on climate change on its own by reprioritising spending away from its planned naval expansion or other defence expenditures, but as China’s defence budget soars, nations around the region are becoming more invested in a balance of power that includes India. It is profoundly in the U.S.’s interest that there be a strong India — an India that is prosperous and contributing to a stable Asia and Indian Ocean.

The U.S. could reapportion part of its international development budget towards India’s green modernisation, create a way for U.S. cities that have successfully used clean building techniques to work with Indian cities, and invest in Indian efforts on energy-efficient urbanisation. It can help ensure that the Green Climate Fund and the World Bank support and crowd in private sector and other investments towards this end.

There would have to be a generational partnership between the U.S. and India. Challenges in aligning the private incentives of U.S. financiers with public incentives in India can be solved by a high-level agreement between President Obama and Prime Minister Modi on public monies through bilateral or multilateral tools.

India as an exception

India’s unique circumstances necessitate specific exceptions. Any climate agreement must exclude India from obligations that do not befit a country in an earlier stage of development. It must be allowed lifeline energy at affordable prices. India cannot agree to a peaking date; Indian poverty cannot be frozen by a dateline. A global peaking date will depend on other nations taking on mitigation commitments to account for India’s exceptional challenge. However, certain pathways could be pursued that would allow a U.S.-India partnership to contribute to the global effort. These could include: continuing and supporting India’s voluntary emission intensity reduction goals that move its economy from a ‘business as usual’ trajectory; focussing the spending of the Green Carbon Fund and similar instruments, including technology transfer, on Indian energy options; following common but differentiated responsibility within India, requiring rich states and cities to develop further mitigation methods; initiating a universal agreement on corporate emissions mitigation that would involve large Indian companies on equal footing with developed country corporations and mandating sectoral efficiency goals for these large corporations; and a decadal review of India’s development status, as no exception should outlive its rationale.

Such a deal is the only way to maintain climate progress. If India chooses to grow through the traditional carbon-intensive pathway, there will be no credible prospect for global carbon reduction and India will soon add another European Union to the world’s carbon emissions budget. India has a veto on a global climate agreement — both in the room, and more importantly in how any deal is implemented. India has walked away from global deals like the World Trade Organization, when they are perceived to be counter to its core interests.

If the U.S. partners with India for more efficient industrialisation and supports an “India exception” in global climate talks — using bilateral ties and the Major Economies Forum on Energy and Climate to help build a clean energy ladder for India — it could be the kind of investment that cements ties between these two countries. From the perspective of a stable international order, it would be a big deal; from the perspective of global climate talks, it is the only realistic path forward.

(Samir Saran is a senior fellow and vice president at the Observer Research Foundation and Bruce Jones is deputy director of the Foreign Policy Program at the Brookings Institution. This is an adaptation of an article published by the authors for Brookings and ORF earlier this month.)

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CONTRA VIEW: Financial inclusion is the key

PUBLISHED: 00:03 GMT, 16 January 2015 | UPDATED: 00:03 GMT, 16 January 2015, Mail Online India

Original link is here

For the last two decades India has not only accepted but actually revelled in being labelled an “emerging market”. India felt pleased and privileged by this tag, which seemed to signify that it had somehow ‘arrived’.

Strangely enough, the country’s sense of pride came not from being an industrial powerhouse, financial centre, or innovation capital. It was perversely derived from being seen as a ‘market’.

The problem is that markets fluctuate and can be a haven for merely temporary investments. As just a ‘market’, India was consigned to remain the chosen destination for everything the rest of the world produced in excess. Therein lay a deep disconnect — consumption can only go hand in hand with production. Surely India could not have hoped to emerge as a global power on the back of being a mere market, one that ran a trade deficit with over 100 countries!

PM’s ‘Make in India’ initiative will transform the nation

Aspirations 

Clearly, India’s self-image needed a re-boot. This rebooting of India’s 1.3 billion aspirations was conducted by the Prime Minister on the 15th of August last year. He did it with characteristic simplicity, by a simple call for “Make in India”. A call he hoped, would catalyse a seismic shift in India’s image of itself.

The world has changed since the Financial Crisis. Economic growth cannot be taken for granted. According to the IMF, global growth will continue to be under four per cent for some years. Even this nominal growth will not come without innovation to increase productivity, enhance quality and cut costs. And importantly, the race to be at the forefront of global innovation has intensified. India’s economy and enterprises must be prepared to face increasing global competition. “Make in India” must therefore attempt pushing Indian industry through global competition into a tsunami of innovation. It must not be misappropriated for primitive protectionism or misunderstood to imply insular industrialisation.

The “Make in India” initiative is at its core a ‘call to arms’ so that we as a country invest in our most precious resource- our demography. In a few years India will have the world’s largest workforce. It perhaps already is the world’s youngest workforce. Why must our youth be productive and innovative in Silicon Valley alone or help create financial instruments in only London and New York? To rectify this, we must build the eco-systems and conditions that can create the most productive, the most innovative army assembled in human memory; a peaceful army of wealth creators for the society and country.

Skill 

“Make in India” is therefore a rallying cry for “Made by India”. Its purpose is to arm close to quarter of a billion youth, between 15-24 years of age, with the tools to be productive. The rallying cry is also immediate. It is to skill around 500 million workers to innovate, create and add value to the global economy. We have in a limited way shown this can indeed be done. We have shown it in the automotive sector, which has rapidly become the seventh largest in the world. We have shown it in refining and petro chemicals where we use the worst quality raw materials and transform them into top-end products intended for the most discerning markets. We have shown it in telecom, where we are constantly innovating to empower millions through technology — a transformation which will soon touch the lives of a billion telephone subscribers in ways not imagined elsewhere.

But in all these areas we have shown it as an exception—an exception that only proves the rule. What has been the rule for India? The rule for India so far has been Jugaad. “Make in India” is not Jugaad. Moving beyond frugal innovation, it means delivering value to the consumer at the bottom of the pyramid, the 800 million or so who live at less than two dollars a day. The bottom of the pyramid also needs value, and it increasingly demands value—not just in manufactured products but in services, in transportation and in financial services. They demand the same value that high net worth consumers of the Atlantic countries demand of their manufacturers and service providers. “Make in India” is a proposition to “Make for this India.” And what is made for this India is relevant to many communities in Africa, Asia and elsewhere too.

Simultaneously, the “Digital India” initiative offers unforeseen opportunities to small producers, farmers, artisans and solution providers. It has the potential to ensure that we find an Indian fingerprint in every mosaic, a little bit of India in everything produced and consumed globally. It offers India the opportunity to leapfrog generations of industrial evolution and become part of global value chains. It offers the chance to make the informal sector—employing more than 90 per cent of the workforce—as productive as the formal sector. There is an unprecedented opportunity to integrate with the global market place, virtually. The “Digital India” initiative can transform “Make in India” to “Make with India.”

Initiative 

The “Digital India” initiative is complemented by the Prime Minister’s Jan Dhan Yojana, which has far greater power than any similar initiative to transform the lives of the excluded. Fifteen million bank accounts were opened in one day, and potential remains immense. Jan Dhan Yojana can be a basis for providing access to rural credit, crop insurance, loans to scale MSMEs, and for families and individuals to respond to special events and calamities. Financial inclusion is the building block for unleashing the creative capabilities of this country.

When these three initiatives can be synchronised and skilling the workforce made central to each of them, the prospect for India becomes truly transformational. It becomes a promise that it is now “Time to Make India.”

The writer is vice presdent, Observer Research Foundation. His Twitter handle is @samirsaran

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The European Union as a security actor: View from India

Samir Saran

What is a security actor and how is it different from being a great or major power? In many ways, this question is central to understanding the lack of appreciation of the European Union as an actor in the security arena in India and certainly in some other parts of Asia.

What is a security actor and how is it different from being a great or major power? In many ways, this question is central to understanding the lack of appreciation of the European Union (EU) as an actor in the security arena in India and certainly in some other parts of Asia. The use of the word ‘security actor’ by EU agencies and research institutes is itself perhaps a neutralisation of the phrase ‘major power’. This reveals the ambivalence of the EU to power in contemporary times, despite having given the world several great powers in the past. This ambivalence, and the hesitant Asian comprehension of the EU’s role in the security domain shape the current debate.

However, to move beyond this general understanding and to try and understand the Indian perspective on this issue, three key enquiries are essential. First, does the EU have the agency to be a security actor? Second, does it have the capability and capacity to follow through in this role? And, finally, does the EU, or a significant part thereof, see itself as a Security Actor?

Agency: Who do I call?

The EU is a great economic power and is central to the construction of any polycentric order. In spite of this, it is not viewed as a security actor. Perhaps this can in part be explained by what Henry Kissinger once famously said, in an interview with Der Spiegel, ‘Who do I call if I want to call Europe?’. While the EU now has a number of structures that deal with security its security policy has not evolved to the point where it can shape emerging international security scenarios.

The principal issue is that of integration. Collectively, it appears that the EU thinks of itself more as a civil and economic power, viewing military instruments as an option of last resort. Within the EU, France and the United Kingdom have a different approach in which use of force, or the threat of the use of force is a prominent instrument in their toolbox. Some others like Germany tend to take the opposite view and are generally more reluctant to sanction the use of force.

This can have consequences like France declaring that its permanent membership of the United Nations Security Council will remain a French seat and will not be ceded to the EU. France has also rejected the validity of a UN veto when humanitarian crises loom (as was the case in Syria)[1]. These two French positions have led to both disappointment and alarm in other members of the EU. Damagingly for the EU, the latest crisis in Europe, i.e. the occupation and annexation of the Crimean Peninsula by Russia, has only confirmed this apprehension. The lack of a coordinated EU response is disconcerting, as what we have is a set of nations individually condemning Russian actions and others staying silent.

Trade and commerce across the EU is now so integrated that it allows for similar perceptions and ideas on most macro and several micro economic policies. This allows the EU far greater cohesion and therefore, weight in trade talks. On the other hand, political approaches and realities in each member country vary dramatically. This dissonance between a cohesive economic union and a relatively divided political union has a significant impact on the perception of the EU in a continent like Asia where the realist paradigm dominates. The EU is likely to be seen as a ‘hyper-successful’ regional trading and economic arrangement, but not a unified security actor or a ‘great power’. It is also seen to be creating a large political and security bureaucracy, which churns out some strategic and security objectives, without seeking to possess the hard power elements to realise these set of goals.

Capacity: Acute deficit

Capacity is the key element that will define the EU’s ability in the Asian theatre. In 2012, as per the International Institute of Strategic Studies’ (IISS, London) estimates, Asian defence expenditure exceeded Europe’s. Indeed within the EU, member states are increasingly hesitant to commit towards defence expenditure. Additionally, the focus of current expenditure is on capabilities that are not decisive in the Asia-Pacific theatre or suitable for hard power projection in the classic sense. There is little political and public support for defence expenditure when social spending is deemed a higher priority.

As a result, the EU’s ability to play a role in the international system is going to be far more constrained than ever before. This is perhaps evidenced by the fact that not a single European or EU action has been carried out without US support even when taking on vastly inferior militaries like those of Serbia or Libya.

This acute capacity deficit means that if the EU chooses to act by itself, it comes up against the various perceptions among the EU member states on its role as security actor. On the other hand, if it chooses to act through the agency of NATO to bypass this internal dissonance, it is fundamentally dependant on the US for capacity.

Self-View: “Empire of Norms”

The recent description of the EU being an ’empire of norms’ is another important facet of the view of the EU as a security actor.[2] It connotes a renunciation of the modes and methods of traditional empires in favour of one that leads by example and rules, largely renouncing the use of force and prioritising economic integration. In this, the EU has something to teach the world; the postmodern construction of international relations. But beyond the EU, the post 1989 sense of euphoria, has not translated into political evolution that suggest support for any such new approach to sovereign relations.

The EU firmly believes it has entered a post modern world, whereas in reality much collective action today is directed towards pre-modern situations like Afghanistan, Iraq and Libya. To use an Americanism, ‘when you don’t have dirty work to do you can be dressed in white clothes’. As a result, when the EU piggybacks on US hard power, it can well afford to play the ’empire of norms’ role. This harks back to India in the 1950s and 1960s when India was ‘preachy'[3], telling Europe to peacefully coexist with the USSR, substituting rhetoric, largely to compensate for acute structural weaknesses. Today, India and Europe have traded places and the projection of EU rhetoric is seen as a sign of weakness, borne out by the structural factors discussed earlier.

View from Asia 1: Largely favourable

Immediately after World War II, the main goal was peace and stability and hence there was the need for a specific role for the set of actors who could provide this. But in the 21st century, the narrative has changed. Economic growth and prosperity, in an age of stagnant industrial growth, is the overarching political priority of these times. Even though the world may have moved beyond the post-war quest for peace, to the singular objective of greater economic vibrancy, the EU’s role in securing this objective cannot be denied given its economic agency. However, political stability is a necessary condition for sustainable growth and economic well-being. This stability is to be created and preserved collectively by the old and new powers. Therefore in Asia, in countries such as India, there exists a largely favourable view of the EU’s role in the world. India sees a decisive security role for the EU, albeit as an agent of ‘The Asian Century’.

Following from this, if the EU is a decisive player in the contemporary context, European hard power is not necessarily viewed unfavourably and is a situation that India can negotiate well. A strong EU is good for the balance of power and stability in Eurasia and therefore favourable to India. In fact, a not so uncommon view in India is that if there is a decline in the EU’s hard power, it might contribute to flux in the balance of power in Eurasia, leading to instability. Thus, the EU is still seen as a decisive actor in the security dynamics of Asia. And a real example is the EU’s arms embargo on China, which could be said to contribute to stability in Asia.

However, in India, the EU is also seen as hypocritical in its application and espousal of rules and norms. This is sometimes inimical to the larger objective of stability and prosperity because the EU is perceived to be trying to impose normative frameworks on societies, which are not yet ready to accept them. This is not necessarily an EU-specific flaw. Every country has displayed this hypocrisy where its core interests are at stake. India itself follows a very different set of rules in its own neighbourhood than in the rest of the world. For example, India intervened decisively in 1971 in Bangladesh and for much of the 1980s and 1990s in Sri Lanka. But where its core interests are not at stake, it adopts a very different stance.

While largely hypothetical, India’s main concerns, should the EU decide to play the role of a security actor would be: where and how does the EU want to operate? Does it merely look at its periphery? Or does it seek to project out? If it operates for longer periods of time in Asia, will it be in a continental or a maritime role? Given that the naval dimension and the security dynamics of the Indian Ocean have largely driven much of India’s strategic realignment post 1990, India would almost certainly welcome EU as an offshore balancer. This is evident from the fact that India welcomed the EU-led operation Atalanta aimed at controlling piracy off the coast of East Africa. Similarly, India voiced no concerns at the build up of a formidable projection force off the proximate Myanmar coast following cyclone Nargis, and actively cooperated with US and European navies in the wake of the Boxing Day tsunami in 2004.

View from Asia 2: Geography and sovereignty matter

Multiple path dependencies, along with the overarching economic prosperity objective mean that the EU’s cost-benefit analysis of engaging in Asia, for example, is very different from India’s. The EU would have more to lose economically in any prolonged military engagement in Asia and therefore prefers economic tools such as sanctions. Of course geography matters not just to the EU. This is evident in how India perceived Bangladesh in 1971 and how it perceives the situation in Syria today. In the case of the former, the instability in India’s neighbourhood had a direct impact on India’s demography and security and the cost-benefit analysis of action was very different to the likely costs of EU’s action in the region. Syria, on the other hand, was more of a normative issue for India on how it balanced humanitarian intervention against a breach of the Chemical Weapons Convention (CWC); whereas Syria had a more proximate impact on Europe and subsequently on its cost-benefit analysis of action.

Lastly, in a continent like Asia that has a history of being colonised, sovereignty is an important consideration. From this perspective, the EU’s rather relaxed interpretation of sovereignty, partly used in its explanations for humanitarian interventions, can be seen as unsettling. Moreover, the selective use of sovereignty can erode the credibility of the EU as a whole. For example, defence sales such as those of the Rafale, Gripen or Eurofighter are carried out under sovereign flags and these in turn guarantee certain sovereignties to recipient countries. However, when uncomfortable decisions are taken such as the arms embargo on China, the EU is used as the shield, effectively a policy of safety in numbers.[4] This means bilateral brownie points accrue to individual sovereign constituents of the EU, without translating into advantages to the EU as a whole. However, disadvantages and the resultant negative perceptions are spread across the board and impact on the image of the collective.

Conclusion: Going forward

Going forward, there are four central cleavages between the Indian and European worldviews.

The first has to necessarily be language and the principle source of information that shapes Indian understanding of Europe and EU. Not having a core of experts trained in European languages, a disproportionately small foreign service and a structural incapability to collect primary data[5], much analysis of Europe and the EU rests on secondary source analysis of a euro-sceptic English language press. Consequently, the nature of the EU’s decision making remains even more of a mystery to Indian audiences.

The second is that the EU (for reasons already discussed) is not viewed in India as a credible security actor. In fact, Europe’s recent humanitarian interventions are seen as creating dangerous precedents in Asia, changing the security dynamics in the region and creating fresh security challenges which the EU does not have the capability to deal with. This is where India and the EU are on a collision course. India wants Europe to be more cognisant of its hard security role. In addition, India wants the EU to be responsive to emerging security issues, which will be shaped by new specificities and geographies of conflict. Local understanding and localised responses would be in order and Europe must begin to engage from within and not from outside.

The third is with regard to global governance. European institutes tend to securitise the global commons and global public goods discourse.[6] Every economic and social service provision is being subsumed under a security discourse. This approach may be useful to galvanise public opinion in the Euro-Atlantic community; but in Asia, where societies are still evolving and discovering a balance of narratives between the political and military discourse, it could be dangerous and counterproductive. In countries like Pakistan and Bangladesh, if water, environment and trade become security narratives, discussions within and among these regional countries would essentially become zero sum games. Additionally, the preponderance of the military architecture and defence bureaucracy diminishes the role of democratic institutions and the role of civilian governments. This is counterproductive to the liberal democratic value system that EU espouses. It may appear that in order to compensate for its lack of military heft, the EU seeks to overbalance through the securitisation narratives.

Finally, the central division between the EU and India is the tyranny of grammar. Europe and the EU pursue their interests under the grammar of values, which is sought to be achieved through ideological underpinnings. India has sometimes also couched many of its strategic interests in its own grammar of ethics. Till a new language is discovered where the two can negotiate their individual interests (doing away with ideological sermonising), common ground (based on core interests of prosperity, growth and liberal market framework) will be lost to a rather unnecessary battle of perceived virtues.

(The writer is a Vice President at Observer Research Foundation, Delhi)

Footnote

1. Opinion expressed by French Foreign Minister, Laurent Fabius, 5 October 2013, »ambafrance-in.org«.

2. Jan Zielonka, »Europe as a Global Actor: Empire by example? (PDF)«, International Affairs, 84(3), 2008.

3. Bhaskar Roy, ‘Tharoor questions Nehruvian line’, 10 January 2010, »timesofindia.indiatimes.com«

4. ‘Tharoor for overhaul of Foreign Service Recruitment System’, 8 October 2012,»thehindubusinessline.com«

5. For example, when Finland wishes to raise uncomfortable issues with Turkey, »finnbay.com«.

6. See, for instance, ‘The securitisation of climate change in the European Union’,»climateandsecurity.org«

Courtesy: http://www.bpb.de/internationales/asien/indien/190264/the-european-union-as-a-security-actor

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