2024 is a decisive year for democracy and the liberal order. 1.8 billion citizens in India and the United States, who together constitute nearly 1/4th of the world’s population, are going to elect their governments in the very same year. This will be the first such instance in a world increasingly mediated and intermediated by platforms, who will be crucial actors shaping individual choices, voter preferences, and indeed, outcomes at these hustings. It is therefore, important to recognise these platforms as actors and not just benign intermediaries.
Prime Minister Modi’s government, especially in its second term, has approached digital regulation with the objective of establishing openness, trust and safety, and accountability. In June this year, Union Minister of State for Electronics & Technology, Rajeev Chandrasekhar, invited public inputs on the draft amendments to the IT Rules 2021 with an ‘open, safe and trusted, accountable internet’ as the central area of focus.
Runaway platforms and cowboy capitalism are the big dangers to the sanctity of our elections and to the citizens’ acceptance of political outcomes.
This Indian aspiration for Accountable Tech must be an imperative for all liberal and open societies if we are to enrich the public sphere, promote innovation and inclusive participation, and indeed, defend democracy itself. If we fail to act now and act in unison, we could end up perverting the outcomes in 2024. Runaway platforms and cowboy capitalism are the big dangers to the sanctity of our elections and to the citizens’ acceptance of political outcomes. India has clearly seen the need for it and is striving to make large tech companies accountable to the geographies they serve. The latest comer who seems to have understood the importance of this is the United States of America.
From private censorship and unaccountable conversations hosted by intermediaries to propagation of polarised views, all of them constitute a clear and present danger to democracies, and certainly to India and the US, who are among the most plural, open, and loud digital societies. Digital India is indeed going to be ground zero of how heterogenous, diverse, and open societies co-exist online and in the real world. The efforts of the Indian government to put together sensible regulation may actually benefit many more geographies and communities. If India can create a model that works in the complex human terrain of India, variants of it would be applicable across the world.
The efforts of the Indian government to put together sensible regulation may actually benefit many more geographies and communities.
It must also be understood that there is no single approach to manage platforms, even though there could be a wider and shared urge to promote openness, trust and safety, and accountability. The regulations that flow from this ambition are necessarily going to be contextual and country specific.
Hence, it is important that India, the US, and other large digital hubs coordinate and collaborate with each other to defend these universal principles even as they institute their own and region-specific regulations. For instance, policy architecture in the US will focus on managing platforms and technology companies operating under American law and consistent with their constitutional ethos. India, on the other hand, has the onerous task of ensuring that these same corporations adhere to Indian law and India’s own constitutional ethic.
India and the US lead the free world in terms of global social media users. As of January 2022, India had 329.65 million Facebook, 23.6 million Twitter, and 487.5 million WhatsApp (June 2021) users, while the US had 179.65 million Facebook,76.9 million Twitter, and 79.6 million WhatsApp (June 2021) users. The online world is no longer a negligible part of society. Most people online see the medium as an agency additive and are keen to use it to further their views and influence others’ thinking. Of these, many are also influencers in their own localities. What transpires online now has a population scale impact. The mainstream media reads from it, social media trends define the next day’s headline and the debates on primetime television.
Policy architecture in the US will focus on managing platforms and technology companies operating under American law and consistent with their constitutional ethos.
Thus, the idea that one can be casual in managing content on these platforms is no longer feasible and will have deleterious consequences as recent developments have shown. Intermediary liability, that sought to insulate platforms from societal expectations, needs to be transformed to a notion of intermediary responsibility. It must now become a positive and a proactive accountability agenda where the platforms become a part of responsible governance and responsible citizenship.
Predictable regulation is also good for business and policy arbitrage harms corporate planning; so, platforms too have a stake in making their board rooms and leadership accountable. They must make their codes and designs contextual and stop hiding behind algorithmic decision-making that threatens to harm everyone, including their own future growth prospects. And this must be the ambition as we head into 2024–the year when technology could decide the fate of the free world.
India’s presidency must leave the grouping with the agility and energy to respond to new realities, and it must create a future-ready multilateralism through a novel and robust institutional architecture
India takes over the presidency of the group in December. To live up to the potential of this opportunity, it must choose a policy direction to focus on continuity, incorporate green and digital transitions, and recognise the realities of a post-pandemic world
India’s presidency of the G20 grouping next year — arguably the sole remaining effective forum for global governance — presents an enormous opportunity to accelerate sustainable growth within India, in the emerging world, and beyond.
For India’s presidency to live up to this potential, it must recognise the constraints of the grouping and the crises — from the pandemic to the Ukraine war — that it must confront. But there should also be a clear understanding of the levers that a G20 president has to affect global policy action.
Next year, the troika of the preceding, current, and succeeding presidents will be three developing countries: Indonesia, India, and Brazil. This fortuitous alignment must inform India’s strategy as it designs its G20 agenda.
Three broad principles should underline India’s planning. First, it must recognise the value of the emerging-world troika and choose policy directions that emphasise continuity. Second, it must incorporate the concerns of its dual development transitions — green and digital — into the G20’s agenda. And third, it must recognise the realities of the post-pandemic world and prioritise action on those sectors that have, since 2020, been revealed to be under-capitalised.
India’s agenda must resonate beyond the one year it holds the presidency. This requires it to set its priorities alongside those of the two other members of the troika. The G20 under Indonesia has articulated three priority issues — global health architecture, digital transformation, and sustainable energy transition. Reinterpreting these will be key to building continuity, and, thus, sustained action. It is also important to keep in mind that having too many priorities is the same as having none at all. Indeed, India must prevent the G20 from suffering — as other multilateral forums such as the World Trade Organization do — from an over-expansion of its mandate.
Two major transformations will define our economies and societies going forward: Digital transition and green transition. Both are key to addressing the development challenge as well. These transitions are the meeting point of geopolitical and youth aspirations that will dictate our political, economic and social well-being.
On the digital front, India, to a large extent, has been a first mover. India’s youth aspirations are digital-first; the government has responded, and the digital economy is at the centre of its aim for a $5-trillion economy by the second half of the 2020s. The Observer Research Foundation’s youth survey on tech policy found that 83% of respondents want India to adopt a policy that prioritises its domestic technology industry. At the same time, 80% welcome greater cooperation with international partners on technology.
Clearly, a fine balance is needed where technological multilateralism does not come at the cost of developing countries’ needs. The Think Tank 20 (T20) engagement process has identified the internet as a basic right and technology access as vital to reducing inequalities. Cooperation at the G20 would be a good testing ground for pioneering tech regulation that balances the interests of the private sector with sovereignty and the security needs of States, and the growth demands of the economy.
India’s G20 must also recognise the unprecedented, carbon-constrained nature of future growth. Arguments for a green transition can no longer be limited to the moral high ground of saving the planet. A commitment on sustainable consumption must be placed front and centre. International financial regulation and the mandates of multilateral development banks must also ensure that adequate finance incentivises a business case for rapid change with adequate global flows subpoenaed for the developing world. Can the Indian presidency help to architect this new global arrangement?
A third focus must necessarily be the post-pandemic world order. Covid-19 has proved that health, nutrition, and livelihoods all remain fragile despite commitments made under Agenda 2030. The United Nations has warned that the Covid crisis could result in a lost decade for development. It has sharpened inequalities and widened development gaps. The United Nations International Children’s Emergency Fund has also cautioned that the pandemic could lead to a “lost generation” of children in terms of education, nutrition, and overall well-being. These conversations have become more complex due to the crisis in Ukraine. The weaponisation of trade and the international banking system during this war has exacerbated uncertainties. The surge in prices of energy and essential staple foods has added a disturbing dimension to an already stressed economic recovery. By putting nutrition, food security, and health at the heart of its G20 agenda, India can ensure the success of the Decade of Action on Sustainable Development. The clincher will be to facilitate greater funding towards these efforts.
India’s presidency is an opportunity to reinvigorate, reinvent and re-centre the multilateral order. The G20 cannot be distracted or undermined by the bilateral relations of specific members, even as we acknowledge the gravity of the humanitarian crisis that is unfolding in Europe. India must leave the G20 with the agility and energy to respond to new realities, and it must create a future-ready multilateralism through a novel and robust institutional architecture.
Remarks by Dr Samir Saran at the Opening Plenary session of the BRICS Academic Forum 2022
It is a pleasure to be back again and be a part of the academic forum that has continued to raise important issues for intra BRICS cooperation and indeed, for the challenges that confront our world.
We are meeting today at an important moment—a moment that will be recorded and studied by future generations. It is important that all of us rise to the challenges that confront us and be creative in discovering solutions. Three major trends are seeking our attention and indeed, resolution.
First, global politics has been upended by the political actions in Asia and Europe. Conflicts, contests, and careless power projection have jeopardised stability, peace, and prosperity for all. Can we discover a new geostrategic balance and what role can BRICS play?
As we emerge from the pandemic—or at least begin to learn to live with it—what are the lessons that we have learnt? Will new development and growth models emerge, and will BRICS and other actors invest in what is most important for humankind?
And finally, we are experiencing the digitalisation of everything. Technology is having an impact on our economy, our politics, our societies, and indeed our individual behaviours, choices, and assessments of the world we live in.
New Politics, Green and Inclusive Growth, and our Common Digital Future beckons us. At the Indian presidency of the BRICS last year, we coined three words—Continuity, Consolidation, and Consensus. These remain relevant even as China steers the group and must continue to define the BRICS agenda.
We have to work together to overcome the contested politics of today. We must be contributors to stability in world affairs. We should reject actions as a group and as individual nations that can create further instability or exacerbate current tensions.
BRICS was always meant to be a grouping that would offer an alternative path to one prescribed by the Atlantic Order. We must continue to strive to do this. Unipolarity must give way to multipolarity. Bipolarity is not an option.
Three key elements will shape the path that BRICS and others must pave.
First, as the political assumptions of the 20th century may no longer be sufficient or valid for a more complex world, we must work together to script a multilateralism that is fit for purpose. It must reflect current realities, the aspirations of different geographies, and a governance structure that is plural, transparent, and accessible. The old hegemony of the Atlantic Order must not be replaced by a new hegemony from another region.
BRICS must continue—individually and collectively—to remain inclusive in shaping the multilateral system. This system must deliver on economic and trade growth. It must find new ways of catalysing financial flows for infrastructure and aspirational needs of multiple geographies. Multilateralism for this century will require new anchors and champions. BRICS can play that role, provided all members are committed to it.
Second, future growth and our economic needs will have to cater to our planetary responsibility. Green transitions must not simply be a buzzword, but the policy design for all. BRICS must work—both within and with others—to put together a template to invest toward a green planet. We have to rethink mobility, urban spaces, consumption, and our lifestyles. We must also work to protect those who are already being burdened by the deleterious consequences of global warming, rising sea levels, and harsh weather conditions.
Thirdly, we have to embrace technology and not allow it to become the new arena for zero-sum politics. The world must see technology as a digital public good and it must serve all of humanity equitably. The rules for this digital future are yet to be written. These rules must not be written only by the western hemisphere. In the absence of such agreed rules, sovereign arrangements must prevail over those written by the boardrooms. BRICS can share experiences and learnings from our individual journeys and offer to the world examples and methods of managing our common digital future. We must ensure that countries, within and outside, do not weaponise technology or game the digital public square.
It is impossible for BRICS to attain its full potential and contribute to global affairs unless each member is committed to the BRICS project and the thinking that led to its creation—peaceful co-existence, within the group and with others, being the primary ethos.
Our text of ancient fables, the Panchatantra, speaks of “natural allies”. If there are ever natural allies in politics, the European Union (EU) and India should exemplify this relationship. Our cultural exchanges date back to ancient times; our languages have common roots; our borders are closer than ever via a human bridge that connects us: There are millions of Indians in the Middle East, and millions from the Middle East in Europe. Europe and India are a geographical continuum. And both the EU and India— “the world’s largest democracies”—face shared threats and challenges. All roads must now connect Delhi and Brussels.
Here, we lay out a map to address three key challenges: The green transition, the digital transformation, and the preservation of our shared geopolitical landscape. On all three issues, direct and close cooperation between the EU and India will not only be vital for these two major powers and their people—but also for the world at large.
Green Transition
To address climate change, the EU and its members have been upping their domestic game. The European Green Deal is only one amongst several key initiatives that illustrate the seriousness with which the EU is addressing the existential threat of climate change. At the same time, there is much angst in Europe that these efforts will not suffice unless they are matched by China and India. While the concerns are understandable, a narrative framed in terms of “what will become of the world if every Indian has a car” is patronising and misplaced, especially when one compares the per capita fossil consumption in India to the EU members. In any case, specifically with respect to India, the EU is pushing through an open door on the issue of addressing climate change. India has led the way in international initiatives on the issue of clean energy, for instance, by creating the International Solar Alliance with France. India’s commitment to protecting the environment, moreover, does not stem from recent pressure exercised by Greta Thunberg or Fridays for Future. Contra western anthropocentrism in which activists advocate climate change mitigation for “our children’s future”, Indian philosophy teaches us that the planet belongs to humans, plants, animals, and all living beings. There are, therefore, deep-rooted and inclusive reasons for Indians to be committed to protecting the planet. This commitment should not be doubted. Instead, the EU needs to find ways to invest in this Indian cause and co-create solutions for our common future.
The European Green Deal is only one amongst several key initiatives that illustrate the seriousness with which the EU is addressing the existential threat of climate change.
To achieve this, we need actions and not words. It has taken a full-blown war in the heart of Europe for Germany to recognise the risks of over-dependence on Russia for energy purposes; diversification is proving to be far slower and more complicated than many would like. In light of this experience, it is perhaps even more unreasonable than before to demand that India “phase out” coal at the click of a finger. The EU will have to put its money where its mouth is if it is serious about addressing the global problem of climate change. The Carbon Border Adjustment Mechanism, for example, should be more than a “poverty tax”, as it is seen in India; it should be a tool to finance and incentivise the green transition in globally integrated sectors in the emerging world. Technologies vital to low-carbon growth will need to be co-created and co-owned by Europe and partners like India. European capital must be given a nudge to flow into climate-conscious investment in the emerging world. It is up to the EU to make sure that India’s efforts pay off—through significant European financing in key sectors, via public-private partnerships.
Digital Transformation
The EU is leading the way in setting people-centred standards on digital governance via GDPR. India’s Aadhaar Card scheme has shown the pioneering role that digitalisation can play in empowering the poor and facilitating development. There are also already several worrying examples of the pernicious effects of digital technology: Surveillance of local populations by authoritarian states, as well as the manipulation and control of infrastructure and security systems by external actors. To preserve the individual liberties of their people, and strengthen digital sovereignty, European and Indian cooperation will be key.
Research collaborations on dual-use technology, public-private partnerships for implementation and marketing of these innovations, and working jointly and through like-minded coalitions to establish rules for data governance and cyber-security are essential.
These two democratic powers will also be well-served to collaborate on diversifying away from their dependence on China, for e.g., on 5G technology and infrastructure development. Any trade agreement between the EU and India should prioritise this key consideration. Research collaborations on dual-use technology, public-private partnerships for implementation and marketing of these innovations, and working jointly and through like-minded coalitions to establish rules for data governance and cyber-security are essential. Neither the EU nor India can get left behind in a game that is dominated by the boardrooms in the US and party headquarters in China. India and the EU need to enter into a technology partnership that allows for all of this, and for ensuring reliable and integrated supply chains.
Shared geopolitical landscape
Our shared geopolitical landscape—extending beyond geographical proximities and including the Indo-Pacific—has been under extreme stress in recent years. The EU has a war triggered by Russia on its borders; India and its neighbours have had to put up with Chinese adventurism on the Himalayas and in their maritime neighbourhood.
Research collaborations on dual-use technology, public-private partnerships for implementation and marketing of these innovations, and working jointly and through like-minded coalitions to establish rules for data governance and cyber-security are essential.
This is a time for both the EU and India to be working together to help restore balance in the region. The EU will need to jump off the fence with respect to China; the European mantra of “partner, competitor, rival” is highly inadequate in dealing with a China that has signed a “no-limits” partnership with Russia. India will also need to rethink its own dependencies. The two democracies have now very real incentives to develop closer economic and military ties.
Sanctimonious lectures about morality will need to be replaced by a shared empathy of the like-minded. And all this will require the use of not only Europe’s favourite tool of “soft power”, but also the use of hard power through infrastructure projects, green investment, and military cooperation. Re-aligning their economic and security cooperation with each other will enable both the EU and India to stand up for the values that they both hold dear: Democracy and pluralism.
The emergence of new technologies has digitalised markets, societies and nations. Once perceived as a strength, this proliferation of technology is now also a vulnerability. It has made tech-governance more political and social, and less about the traditional modes of regulation such as permissions, standards and tariffs.
India is among the most technology adept nations, a function of its people’s comfort with IT products and services as well as its late-mover advantage. It must now engage with a spectrum of evolving needs around law and regulation. This is necessary to accelerate population-scale opportunities and address widespread risks.
Three sets of issues emerge here – understanding the nature of technology-linked risks; assessing the challenges to governance; and being imaginative in embracing new modes of regulation.
Three sets of issues emerge here – understanding the nature of technology-linked risks, assessing the challenges to governance, and being imaginative in embracing new modes of regulation.
Improved access is credited with enabling financial inclusion, efficiency in education and healthcare, and fostering local e-commerce as well as global trade. However, a large user base is also a double-edged sword. As a result, corrective interventions need to be nimble and at digital velocity and population scale. Legacy regulation is simply ineffective.
This is best illustrated by problems plaguing social media platforms. A 2021 study found a high rate of social media misinformation in India, and attributed this in part to the country’s higher Internet penetration rate, driven by smart phones. Between June-July 2021 alone, Facebook received 1,504 user complaints in India – with a significant proportion of these related to bullying, harassment or sexually inappropriate content. Concerns are also emerging across other digital ecosystems, such as online gambling and crypto-assets. The mobile phone is a communication device, a crime scene and also an unsafe personal space.
Several state-level laws regulate or entirely prohibit betting and gambling. However, research suggests India is among the top five countries in terms of income potential from online gambling, and that the domestic online casino market may grow by 22 per cent each year. People from several states, such as Maharashtra, Telangana and Karnataka, are among the most frequent visitors to online gambling websites. The market for illegal betting and gambling in India is highly lucrative, with some estimating its value at USD 150 billion.
Offshore gambling websites often channel black money, engage in illicit transactions and launder wealth through financial intermediaries. Their operators are invariably based outside India, which makes it difficult to enforce the writ of the state. Recent investigations by bodies like the Enforcement Directorate have revealed instances of locals being hired to open bank accounts and trade through various online wallets, revealing gaps in due diligence mechanisms.
For the digital economy to flourish, it is important to evolve approaches that help resolve systemic and structural risks. It is time to reassess what is good, what is bad and what is ugly in this new digital landscape. Online gaming and online gambling must not be conflated. Similarly blockchain and sensible DeFi must not be clubbed with predatory crypto-gaming. After all, if we don’t embrace disruptive technology markets through sensible regulation, others will. A failure to capitalise may see India lose key avenues for economic growth and investment. India risk environment will then be shaped by external jurisdictions, some inimical to the country.
For instance, there are approximately 15 million crypto-asset investors in India, with total holdings of INR 400 billion. However, the regulatory and policy uncertainty has compelled crypto-asset entrepreneurs and exchanges to look to operate in more favourable markets. Exchanges such as Cryptokart, Koinex and ZebPay have exited the Indian market. ZebPay, for instance, is now headquartered in Singapore. In late 2021, many crypto-asset founders in India were considering moving their businesses to either the UAE or Singapore.
What we need today is new thinking and a new imagination of the digital world as not merely a virtual extension of the real, but an entirely different paradigm.
By banning cryptocurrencies altogether, nations such as China have missed the bus. India must leverage its position as the world’s third-fastest growing technology hub and seize the opportunity created by Beijing’s command and control ethos that is antithetical to innovation. India can and should become a global norms shaper in tech.
Tech regulation at population scale is akin to writing a new constitution for a digital nation. What we need today is new thinking and a new imagination of the digital world as not merely a virtual extension of the real, but an entirely different paradigm. There needs to be a clear-eyed understanding of what is legal, what is illegal and what may be illegal and yet requires regulations to serve and protect users and citizens.
To use a real-world analogy, since the 1990s, many countries including India have consistently distributed condoms and undertook safety campaigns among sex-workers without legalising prostitution or made available safe syringes to drug users without legalising the act. For governments and regulators, the role is no longer one of a gatekeeper that has the ability to prevent or permit activities online; it is becoming more of an ecosystem shaper and reducer of public bads.
By taxing cryptocurrency assets but not recognising these as legal tender, India has shown some welcome flexibility. It would do well to retain this nimbleness and become a co-curator of relatively safe tech platforms, services and products of the future that respond to Indian jurisdiction rather that off-shore the production of risks along with the rewards.
In the third decade of the twenty-first century, democracies face a new adversary — technology. Technology was once seen as a force for good, which could bridge the gap between the state and restless streets. Today, owned and controlled by large enterprises and extra-territorial governments, that very technology sometimes undermines the foundations of democracy, where it functions as a public sphere and a vibrant information exchange.
Much of the world has blearily woken up to big tech’s ambitions, expansion and unaccountable power to shape the human condition. A few companies, dotted on America’s West Coast (henceforth referred to as big tech), now possess the ability to harness the digital gold rush — along with the equally overwhelming influence on discourse in democratic societies. In parallel, a rising China, with its rapid successes in building a vibrant technology ecosystem, has unleashed plans to dominate innovation, high technology and the global perceptions ecosystem (henceforth referred to as red tech).
Technology from the West Coast of the United States and technology that seeks to serve the Chinese Communist Party (CCP) have both chosen to pursue their defined objectives with little thought for constitutional systems and laws in third countries. As such, much of the democratic world is at risk of being caught in the vice-like grip of big tech and red tech. It is, therefore, time for democratic societies to discover and examine means to secure an open and free global technological ecosystem that serves all shades of democracy.
Technology from the West Coast of the United States and technology that seeks to serve the Chinese Communist Party (CCP) have both chosen to pursue their defined objectives with little thought for constitutional systems and laws in third countries.
Why the Battle for Tech Matters
The threat that big tech poses to democracy is multifaceted. First, major social media platforms — Twitter, Facebook, Google and others — curate, promote and curtail information received by and, indeed, even the opinions of citizens in democratic societies. This power over speech and expression, and therefore over our politics and polity, is unrivalled in history (Baer and Chin 2021). While US steel, big oil and big tobacco were brought to heel by domestic regulations and national governments, the transnational reach of big tech has made it much harder to circumscribe (Lago 2021).
Operating outside rules and regulations prescribed by sovereign constitutions, social media platforms now exercise a worrying level of influence without accountability. Big tech has deplatformed controversial political figures such as Donald Trump (Byers 2021); censored content, a decision that internal ombudsmen disagree with (Eidelman and Ruane 2021); and has encouraged an engagement-based content ranking system that has allowed everything from disinformation about coronavirus disease 2019 (COVID-19) to hate speech to spread (Harris 2021). Platforms are free to decide whether they function as private hosting platforms or providers of a vital public utility; they cannot be both. Yet, they pick and choose between the two functions as it suits them.
National governments have not been asleep at the wheel. From New Delhi to Canberra, they have tabled regulations to rein in social media behemoths. In every instance, platform enterprises have chosen to obstruct, obfuscate and outmanoeuvre regulatory efforts (Clayton 2021). Left unregulated, our digital commons may become a noxious space that suffocates democracy, rather than being the promised breath of fresh air.
The future of democratic societies will also be decided by the contest with China in high technology. This competition runs deeper than China’s desire to build “national champions” that can outcompete the Googles and Apples of the world. To Beijing, China’s technology capabilities directly serve interests, ideologies and inclinations of the CCP (Tyagi 2021). Even as the Great Firewall of China allows the CCP monopoly control over ideas and over truth among its own citizens, China’s ever-increasing reach and economic expansion provides the party the ability to pervert and undermine the public sphere of other nations.
Platforms are free to decide whether they function as private hosting platforms or providers of a vital public utility; they cannot be both.
From harnessing artificial intelligence (AI) in the form of facial recognition technologies to vastly expand its citizen surveillance system (Davies 2021) to deploying those very capabilities against Uighur minorities in Xinjiang (Mozur 2019), the CCP will not shy away from deploying tech to reinforce strict authoritarian control at home. Overseas, “wolf warriors” (Martin 2021) insert themselves into every global debate of consequence and Chinese money power prevents Western media or social media from acting against such insidious and troubling participation that aggravates cleavages in other societies.
As China’s economic influence and technological capabilities have grown, it has sought to influence and manipulate global publics. China’s official media, governmental entities and diplomats have leveraged open platforms such as Twitter to peddle disinformation on the origins of COVID-19 (Associated Press 2021). China’s influence operations have also extended to election interference in Taiwan (Kurlantzick 2019), and they are increasingly inserting themselves in other countries as well. According to Freedom House, China has used its technological capabilities, in tandem with its economic and political power, to launch a massive influence operation that is gaming democracies from the inside out (Cook 2020).
Red tech is clearly an extension of the CCP’s global ambitions. For example, global standards bodies and multilateral organizations have been flooded with standards proposals by Chinese tech firms that would enshrine CCP values into the fundamental architecture of the internet (Gargeyas 2021). At the United Nations, Huawei and other Chinese state-owned enterprises have led advocacy for a “New IP” to replace the existing TCP/IP (Transmission Control Protocol/Internet Protocol) structure of the internet (Gross and Murgia 2020). Industry analysts have expressed concern that this new structure, with inbuilt controls that would allow for vastly increased governmental interference, is fundamentally at odds with the open internet of today.
According to Freedom House, China has used its technological capabilities, in tandem with its economic and political power, to launch a massive influence operation that is gaming democracies from the inside out (Cook 2020).
The ascendance of Chinese standards and tech also worries global actors for other reasons. While the United States and the European Union have enabled the creation of penetrated and argumentative democracies — wherein all countries and civil society organizations can advocate for the regulation of big tech or the promulgation of General Data Protection Regulation (GDPR) standards — China has no equivalent political structure. In fact, China’s intemperate wolf warrior diplomacy, which has precipitated clashes with Australia (Ryan 2020), Sweden (BBC News 2018) and France (Seibt 2021), among others, demonstrates that China has little tolerance for dissenting views or for reciprocal tolerance of criticism.
The Regulatory Void
Despite the high stakes and clear threat, regulation has failed to keep up. Major powers have not come to the fundamental realization that regulations must be both political and functional. Technology regulations driven by industry may have prized functionality, but both big tech’s subversion of regular constitutional processes and democratic debate as well as red tech’s brazen advancement of the CCP’s agenda demand regulation to recognize and return to its political roots.
Part of the reluctance to commit to a more political vision of regulation stems from overdependence on a China that dominates major global economies and the tech innovation ecosystem (Pletka and Scissors 2020). Given the massive size of the Chinese market, its capable and growing technology product and service lines, and Beijing’s willingness to use market access as leverage, many dither in enforcing regulations that exclude Chinese technology from specific sectors and functions. Others feel that government interference and politicization in regulatory matters could result in the fracturing of the global tech innovation ecosystem altogether (Schneider-Petsinger et al. 2019).
Technology regulations driven by industry may have prized functionality, but both big tech’s subversion of regular constitutional processes and democratic debate as well as red tech’s brazen advancement of the CCP’s agenda demand regulation to recognize and return to its political roots.
However, the return to more political regulation to oversee technology in the days ahead is inevitable. Simply, it is part of a well-established historical cycle. As Caetano Penna (2022) points out, every technological revolution has generated cycles of exuberance that leave contemporary social forces and political institutions in disarray. Only later does society mobilize to reshape institutions to suit a new era. Such regulation in service of societal goals has always been a key determinant in the evolution of industrialized societies. The spread of communication technologies in the boom from the 1980s to 2008 represented a cycle of exuberance. Today, however, technology possesses the power to fundamentally remake, disrupt and destabilize societies. AI-enabled machines threaten to put millions out of work and social media platforms, with a little Chinese help, have the potential to undermine democracies.
What Does a More Political Vision Look Like?
States, civil societies and general publics will have to take back control of the conversation over technology from tech companies. Part of this process will be nationally led and the rest multilateral. Domestic polities need to debate and hammer out a national consensus on some key issues, including on whether to enshrine privacy as a fundamental right. Assuming privacy is guaranteed, what level of privacy would suit their purposes? Who should own and have access to data? Who decides, and through what process, whether particular ideologies and groups should have access to the public commons?
In parts of the world where this debate is ongoing, robust data protection and privacy laws have been framed. While Canada now holds major tech platforms to the same transparency standards as traditional broadcasting groups (Solomun, Polataiko and Hayes 2021), Australia (Choudhury 2021) and India (Saran 2021) have adopted more stringent social media rules aimed at forcing big tech to comply with national-level regulations and directives on content. Nations would also have to debate the merits and benefits of the existing open internet model versus competing visions such as China’s New IP proposal. Each of these decisions would require clear choices by citizens who have, thus far, been excluded from conversations by governing elites and technology companies.
Domestic polities need to debate and hammer out a national consensus on some key issues, including on whether to enshrine privacy as a fundamental right.
At the multilateral level, bringing politics back into regulation will help safeguard data and democracies. An excellent example of political regulation is the European GDPR data architecture. Even firms outside the European Union that provide services to EU citizens find themselves subject to the European Union’s fundamentally political vision of privacy for its citizens (Nadeau 2020). The GDPR has also allowed for another political choice: flows of data will be free within the European Union but will be subject to protections upon leaving its borders.1 In effect, the European Union has erected a robust regime of protection that privileges countries that share a similar vision of privacy and data protection.
The European Union’s economic, political and normative leverage, popularized through the “Brussels effect,” has effectively forced other regimes to make way for it, with numerous countries enacting similar procedures. As such, the European experience in norms and standards setting is useful. Countries that share similar political visions of internet governance, disinformation and other aspects of technology policy can come together multilaterally to make the vision prevail globally. And disruptive players such as China, still new to the standards game, must make their peace with liberal democratic norms — or risk being left out in the cold.
Robert Fay suggests key digital powers come together to form a multilateral body, the Digital Stability Board (DSB), which would enact digital policy in much the same way that the Financial Stability Board helps design and monitor the implementation of key financial policies while assessing risks and vulnerabilities in the global financial system (Emanuele 2021). A DSB would lead discussion on regulating data value chains, countering misinformation and the development of cutting-edge technologies such as AI (ibid.). Given the transnational nature of the challenge posed by big tech’s dominance, a forum such as the DSB would be well suited to lay down the rules of the road on regulation and reining in major tech platforms.
Countries that share similar political visions of internet governance, disinformation and other aspects of technology policy can come together multilaterally to make the vision prevail globally.
While such a DSB would be useful to manage hostilities with powers such as China, another interesting proposal comes in the form of a group of 1o leading democracies, or D10. Proposed by British Prime Minister Boris Johnson (Fisher 2020), a D10 grouping would significantly source equipment for key technologies such as 5G from countries within the partnership. It could also develop a shared approach on key threats facing democracies, including countering disinformation, penalizing purveyors of influence operations such as China (or even Russia and other countries) and devising workable regulations for social media platforms that strike a balance between fighting fake news and preserving freedom of expression.
Ultimately, the introduction of the D10 to digital policy debates would signify a shared political vision, born out of democratic values, toward building the digital economy and regulating malcontents in the system. Good, old-fashioned democratic politics remains a primary driver even in the digital age. Wolves and wolf warriors hunt in packs; open societies need to respond with similar unity of purpose.
This piece builds on an intervention by Samir Saran at the Summit for Democracy on December 10, 2021.
A decade ago, the Arab Spring levelled the divide — even if briefly — between the Palace and the Street. Powered by social media, the age of digital democracy was upon us. Technology has since become the mainstay of civic activism. Not only are more voices heard, but elected governments are also more responsive to them. And indeed, in many countries, more people are participating in politics than ever before. From attitudes and approaches of platforms and governments to the proliferation of intrusive technologies that invade personal spaces, the gains of the past decade are nevertheless being undermined. The past year or so has made us acutely aware of the weaknesses and threats to digital democracies. Some of these need a coordinated global response.
First, the very platforms that have fuelled calls for accountability often see themselves as above scrutiny, bound not by democratic norms but by bottom lines. The fact is acquisition metrics and market valuations don’t sustain democracy. The contradiction between short-term returns on investment and the long-term health of a digital society is stark. If hate, violence, and falsehoods drive engagement, and, therefore, profits for companies and platforms, our societies are indeed on shaky ground.
To make technology serve democracy, regulation will have to be completely rethought. Big Tech boardrooms must be held to standards of responsible behaviour that match their power to influence and persuade. Moreover, any accountability framework must be global. The global south lives with and depends on technology platforms designed in the north. These platforms have been visibly taken to task by lawmakers and institutions in the countries of their design. Does the larger cohort of users in the developing and emerging democratic world have recourse to such action? And is this denial tenable and fair?
Most democratic constitutions around the world, while protecting expression, do so with safeguards that are meant to secure peace and co-existence in societies that have histories longer and more storied than America’s.
Second, much of Big Tech is designed and anchored in the United States (US). Understandably, it pushes American — or perhaps Californian — free speech absolutism. This is in conflict with laws in most democracies — including in the US after January 6. Most democratic constitutions around the world, while protecting expression, do so with safeguards that are meant to secure peace and co-existence in societies that have histories longer and more storied than America’s.
This American approach to freedom of expression imposed on other democratic societies, at velocities facilitated by technology, is a formula for serious disorder. If American Big Tech wishes to emerge as Global Tech, it must adhere to global democratic norms. Its normative culture must assimilate and reconcile, not prescribe and mandate. In the absence of such an understanding, a clash is but inevitable. It must be emphasised that the fault line would be social norms, not the benefits of technology.
If global democracy and global tech are to coexist, the global south must sit at the high table when regulations are designed and as ethics are embedded in algorithms. Today, the global south’s participation in policy and design decisions that shape our tech future is like the map of vaccinations in our pandemic world — significantly underrepresented in democratic Africa and Asia.
Finally, the greatest danger to the freedom our democracies enjoy is from authoritarian regimes that exploit our liberties and turn them against us. In the real world, Peng Shuai is under house arrest. But in the virtual world, she is presented as being free and happy. Wolf warriors have given a whole new meaning to the phrase “virtual reality”. Recently, an Indian speaker at a transportation conference in China found her microphone turned off because she questioned the Belt and Road Initiative. We are in an unprecedented political landscape where authoritarians weaponise our debates even as we are silenced in theirs. Would any country allow another to open an embassy if it did not have reciprocal rights in the other capital?
The global south’s participation in policy and design decisions that shape our tech future is like the map of vaccinations in our pandemic world — significantly underrepresented in democratic Africa and Asia.
We are living in that perverse reality already. China’s media and government handles conduct aggressive diplomacy in our digital public sphere while we are denied the right to do so in theirs. Beijing and other authoritarian regimes are omnipresent in our digital lives. Their handles bombard us; their chosen narratives besiege and colour the truth. How can we prevent such regimes from gaming the public sphere, and from this perversion of institutions, academia, media, and tech platforms? Their presence on our platforms represents a systemic challenge and a security risk. It must be responded to.
The alleged disruption of America’s elections in 2016 will be child’s play as compared to what may happen in 2024. That year, India, the US and the European Union Parliament will all hold elections — the first such coincidence in the age of digital democracy. We face a perfect storm of misinformation and manipulation. Confronted by wolf warriors, the rest of us can’t be lambs to the slaughter. Open societies have always stoutly defended their borders. Now, they must safeguard these new digital frontlines. At the Summit for Democracy — called by President Joe Biden and addressed by, among others Prime Minister Narendra Modi, it was apparent to all that the democratic world needs to get its house in order. Even as democracies attend to this they need to ensure that other’s don’t burn the house down.
As the BRICS passes through a crucial milestone of its existence, celebrating 15 years of its formation, this report examines the initiatives launched since inception and makes recommendations for consolidating and streamlining the agenda.
The BRICS remains a prominent grouping in the global governance architecture due to the individual influence of each member-state and the collective size of their economies. The confidence in BRICS from within and the perceptions outside the grouping are shaped by its successes in institution-building and resource mobilisation. The highlight of BRICS’s success is its strong focus on issues of financial stability and global governance reforms, particularly in areas related to macroeconomic stability. These are supplemented by attention to sustainable development issues backed by finance and technology.
The BRICS agenda has witnessed a steady expansion of its scope ever since its inception. During the initial years, the agenda was focused on responding to the trans-Atlantic financial crisis with a special focus on multilateralism, particularly the need to reform the international monetary and financial architecture. Subsequently, the BRICS established the New Development Bank and the Contingent Reserve Arrangement, two flagship financial initiatives that remain the biggest success stories of the plurilateral to date. Notably, with the outbreak of Covid19 in 2020, there has been a special focus on responding to the pandemic and coordinating recovery.
Given the expanding scope, there is a need for consolidation and streamlining of the BRICS agenda. This will help address structural deficiencies and facilitate the smooth coordination for building consensus on key issues. To realise these goals, a thorough review of the BRICS cooperation mechanisms is necessary. This joint academic study presents an assessment of the various tracks under the BRICS framework, such that the grouping can better pursue the collective agenda of economic cooperation and sustainable development.
The year 2021 has been significant, with the Indian presidency underscoring ‘BRICS@15: Intra-BRICS Cooperation for Continuity, Consolidation and Consensus’ as the theme. The aspect of ‘consolidation’ received special attention. The Indian presidency also helped in concretising several action areas that had remained dormant. A case in point is the Agriculture Research Platform proposed by India at the 2015 Ufa Summit with a memorandum of understanding signed during the Indian presidency in 2016. This was launched in the virtual format in 2021, again during India’s presidency.
India’s presidency of BRICS in 2021 has set a definite example for streamlining of the BRICS agenda. As the agenda consolidates, future presidencies will find room for emerging themes that require urgent attention. Consolidation does not always only mean weeding out weaker sprouts, but to have comprehensive approaches towards setting common goals so that even relatively weaker initiatives can be scaled with resources. A preliminary assessment of the initiatives launched by BRICS is presented in this report.
As the price of natural gas reached record highs in the UK and Europe—trading at the equivalent of $200 per barrel of oil,[1] and as economic activity in China has been curtailed by the country’s power supply crunch, central bankers and policymakers from across the globe are forced to confront significant challenges to price stability, with a focus on shielding households and businesses from an increase to the cost of transport and basic goods, while monitoring the potential for price pressure and supply chain bottlenecks to upend the global economic recovery. This is important at this time, for the ripple effects of disruptions to energy markets could amplify social and political fissures that are visible across the global landscape, and which might portend complex domestic politics as many countries head into elections in 2022.
Surging demand for natural gas—and shortages and bottlenecks to supply—have resulted in a corollary demand for oil products (referred to as gas-to-oil switching), thus driving up the price of WTI crude to seven-year highs.[2] The skyrocketing commodity price environment has led one observer to point to the “revenge of the old economy”, according to which the collective noble efforts to move toward a cleaner, greener future fuelled by renewable energy have been stymied by a recent past of inadequate investment into the capacity and infrastructure of the hydrocarbons that power our economies.[3]
Thus, even as COP26 has drawn to a close, and as policymakers, business leaders, and investors have left Glasgow with firm commitments to ostensibly advance the decarbonisation agenda, we are reminded of the extent to which our entire energy infrastructure still hinges upon the use of fossil fuels. This includes oil used for transport or power generation, or natural gas (or coal) for power generation, as well as natural gas deployed as “bridge fuel” to support the growth of renewable energy, including wind, solar, and hydrogen. This is effectively captured by what transpired in Germany earlier this year. In the first six months of 2021, the country increased its coal-based generation, which contributed 27 percent of the country’s electricity demand.[4] The need to resort to coal-fired power generation is not unique to the case of Germany: the US has also posted the first annual increase in coal use for power generation since 2014.[1] The combination of an asynchronous economic recovery, attendant shocks to demand, curtailments of supply, and surging prices in natural gas are contributing factors to rich income countries’ pivoting toward the use of coal. This illustrates one stark reality: hydrocarbons continue to underpin our global energy infrastructure.[5] For all the talk of “stranded assets” and potential “dinosaurs of investment”,[6] hydrocarbons still compose the lion’s share of energy consumption on a global basis.[7]
What are the lessons to be learned from the recent power crunches? And what are the potential macro, socio-economic, and geopolitical implications as we navigate the energy transition? Amidst so much uncertainty and volatility, where are the opportunities for accord, as well as bright spots for investment?
Humility is also requisite as governments confront their energy interdependence with one another: again, despite record growth in renewable energy capacity,[8] and surging climate financing, countries within the European Union are poignantly aware of their dependence upon natural gas imports—whether from Russia, Norway, or the US. And even despite its own domestic shale and conventional oil and gas production, the US continues to import hydrocarbons from countries such as Canada, Colombia, and Saudi Arabia. Similarly, even despite trade tensions, resource ties still bind China with Australia, with the latter having exported a record volume of natural gas to China in 2020.[9] Thus, geopolitics remains at the very heart of the changing energy landscape. The inverse is also entirely true.
In the past, resource ties have been a source of tension; but, as we shall see, such bonds also have the potential to become a geopolitical salve, provided that the relationship is designed to be mutually beneficial to both parties. As we navigate the path toward net zero, and by seeking balance and diversification, our continued energy interdependence can actually spur opportunities for cooperation amongst policymakers, and for long-term investment and profit generation for enterprises and economies around the world.
The quest for resources to fuel industrial growth, military campaigns, and transport and urbanisation lies at the very heart of geopolitics. In considering the relationship between energy and geopolitics, the existence of resources is often associated with tension, be it in the form of border disputes, armed conflict, trade disputes resulting in embargoes, or interstate conflict or war. Access to strategic reserves of coal in Romania was a pivotal part of the campaign on the Western front during the Second World War. During the 1970s, energy-importing countries experienced the oil shocks related to the OPEC crises in the wake of the Arab-Israeli War, the Yom Kippur War, and the Iranian Revolution.[10] Indeed, research shows that if a resource-rich country has an endowment of oil along its border with an “oil-less” country, then the probability of conflict between these two countries is higher than if there were no oil at all.[11] Recent data also indicates that the presence of onshore oil might even portend a higher rate of conflict than the presence of offshore oil, as the potential for production and output to be seized by rebel groups is far higher on land than it is in deep-sea projects.[12]
And yet, while asymmetric access to resources might spur tensions between countries, it can also be a geopolitical salve, by underpinning ties of trade, development, and civic diplomacy and even employment. Japan’s quest for resources to fuel its extraordinary manufacturing era from the 1960s onwards resulted in a mutual export of ODA (overseas development assistance) to southeast Asian countries such as Vietnam. One might also argue that Israel’s relatively recent discoveries of natural gas—and successive exports to Egypt—have also underpinned a normalisation of relations with Cairo, — a diplomatic rebalancing which has also been a key facet of improving relations between Israel and the UAE.
A crude awakening: our enduring energy interdependence, and continued reliance upon fossil fuels
Such positive examples of resource ties are swiftly forgotten in times of crises. The underlying conditions that led to positive benefits to the political relationship in these two instances are also ignored. And so it is with the present power crunches ricocheting across the globe. With the asynchronous reopenings of economies in the wake of the COVID-19 pandemic—and amidst ongoing disruptions to supply (be it from underinvestment in hydrocarbons, weather-related events such as flooding, pandemic-induced stoppages to production, or port congestion)— we are reminded not only the extent to which our economies depend upon fossil fuels for power generation and for transport, but also, of the extent to which many countries remain deeply interlinked in patterns of energy interdependence.
The European dilemma regarding natural gas supply from the Russian Federation is instructive, but it must also be recognised that energy interdependence cuts both ways. As long as Russian gas is a competitive source for energy, then energy-hungry European manufacturing powers will need to engage with the leadership in Moscow; equally, as long as Europe has access to alternative sources of fossil fuels – even if not as cheap – Russia will need to retain an understanding of European red lines. This is what interdependence means. This insight is equally applicable to the energy interconnections of the future: China can be a useful partner in the energy transition, even if it is not the only one.
Indeed, for some policymakers, part of the allure of developing domestic renewable energy capacity was that it ostensibly would lead toward more enhanced energy independence. Ostensibly, extraordinary efforts in diplomacy might not be needed in such a green future, as countries would, in theory, no longer be reliant upon conflict-ridden territories to secure energy supply. Even in a net-zero future, this is perhaps to view the world through rose-coloured glasses: for the development of wind, solar, and hydrogen energy—or indeed techniques of greater energy efficiency—at an affordable cost is intrinsically related with garnering supplies, inputs, R&D, and human capital from different jurisdictions. Overly halcyon scenario-planning for domestic renewable energy capacity development often fails to incorporate these facts.
The shift from fossil fuel-based to renewable energy capacity does not end interdependence; it merely pushes interdependence to a different part of the energy mix. The dependence now shifts from hydrocarbons to metals and from ores to rare earths. Countries in Africa, Asia, Americas and Australia are likely to emerge as global mineral hubs, and the routes to ship these new commodities might pave new geostrategic highways.
In recent years, control over the production of rare earths has become a familiar site for geopolitical tension. In 2021, the Biden administration in the United States ordered a review of the country’s critical mineral supply chain; the recommendations included prioritising development financing for “international investments in projects that will increase production capacity for critical products, including critical minerals”.[13] The administration’s concern is readily understandable, as shown in Table 1.
Table 1: China’s share in the rare earths supply chain
*Disaggregated data for neodymium was not available; the data for Rare Earth Concentrates (REO) has been used since neodymium is a rare earth metal.
Yet it is not just production of rare earths that will be relevant, but also the locations of their processing and other forms of value addition. These might emerge as the equivalent of present-day refineries and petroleum complexes, and their distribution potential linked to key consumption centres might lead to the birth of new geostrategic lynchpins such as the Straits of Malacca and of Hormuz. The notion that domestic renewable energy production would free countries from the intricacies of dependence is misguided – and a seminal mistake if it was to be the basis of new energy order.
Sunset on Malthus?
Part of the reason why the aspiration of energy independence retains its sheen is that our energy economics and policymaking continues to be suffused with a Malthusian legacy.[14] Said another way, the spectre of scarcity continues to inform the way we think about energy and resources. The fear that “there will never be enough” renders misgivings about dependence—or else outright denial. A sense of energy insecurity –no matter how much it is brushed under the rug might also prompt a premature and imprudent vaunt into a disorderly energy transition, with a disproportionate focus on bolstering capacity at home. Such a policy would have little regard for the fact that climate change has been branded as humanity’s largest negative externality: in order to mitigate the situation, global actions ought to be in concert. Humility is thus needed not only in recognising the endurance of hydrocarbons within the energy mix, but also, but it is also implicit in our interconnectedness as we navigate the green transition. For the rich income countries, part of this humility also requires understanding the various ways in which the energy transition has the potential to deepen the chasm between the ‘haves’ and the ‘have nots’.
The haves and the have-nots: is the energy transition deepening the chasm?
The energy transition has the potential to create a deeper chasm between the standings of the ‘haves’ and the ‘have nots’ in the global macroeconomic environment. First, if we consider the traditional trajectory of industrial growth—that is, from agrarian activity to textile production, and then from heavy industry to light manufacturing, eventually segueing to services-oriented economies—the case can be made that for developing countries earlier on the maturity curve (such as Vietnam and India), stringent measures toward decarbonisation might actually thwart what would otherwise unfold as a full evolution of robust domestic industry. For the ‘price takers’ and for commodity-hungry countries, this might take the shape of premature restrictions on access to or use of resources to fuel domestic manufacturing activity.
And for the ‘price makers’—that is, commodity-rich exporting countries—the case can also be made that swift or unrealistic moves toward decarbonisation might rob oil and gas exporters from a significant base of output as well as a source of gross national income. In a country in which resource wealth underpins GDP, export activity, employment (both directly related to exploration, extraction and production of natural resources, as well as indirectly, via civil service salaries), national income, and sovereign and pension funds, the potential for social fissures to either manifest or to be exacerbated is clear.
It should be noted that history indicates that access or proximity to natural resources is not perfectly correlated with a trajectory of sustainable economic growth—hence the “Dutch resource curse”. Research from Brazil also indicates that oil endowments within a province or a municipality do not necessarily result in improved livelihoods for members of that community.[15] Indeed, even in a lofty commodity price environment, such as at present, windfalls potentially reaped from higher export prices of oil and gas do not always translate into higher incomes for households within the exporting country.[16]
This tension between environmental and the development agendas within emerging markets and developed economies (EMDEs) is also evident in the debate surrounding the potential carbon border adjustment tax (CBAT), as well as recent agreements on deforestation in COP26.
Home game: mitigating the domestic bias of climate finance
An effective, secure energy transition is currently undermined by the “domestic preference” evident within the realm of climate finance. In recent years of tracking climate finance flows, data from one leading industry body evidences that 76 percent of capital is invested in the same country in which it is sourced.[17] Thus, despite various commitments and guarantees from bodies such as the G7 or the G20, a significant challenge remains regarding the ability for much-needed climate finance to cross borders.[18] Certainly, a long-running trend of a domestic bias for investment is not limited to climate and infrastructure investments. Rather, it extends across sectors and asset classes, including real estate, energy, private equity, and venture capital. Whilst managing ‘sticky capital’ and the prospect of generating long-term returns, and building up enterprise and asset values, investors might harbor an inclination to place their money close to home—in other words, “where home-country risks are well-understood.”[19]
As these authors have highlighted previously, playing close to home in infrastructure investing may not always be the least risky option.[20] And yet, we have already motioned that the dawning age of renewables is not one of energy independence, but of a new kind of interdependence. Policymakers operating under the illusion of energy sovereignty are otherwise missing out on the opportunity to cultivate positive structures of interdependence which could potentially support their own geo-strategic aims – such links, might, in turn, spur opportunities for private investment.
Thus, we might witness a shift in incentivisation for private finance and the climate problem: such that sticky capital not only supplies the domestic market, but that it is directed outwards as well, perhaps even towards the geographies where host countries of finance might find mutually beneficial resource ties – such as the model of Japan and ODA in Southeast Asia, discussed earlier. As argued above, interdependence can be a salve for geopolitics as long as both sides gain in the energy or in the development equation. Such a value exchange – or what Michael Oakeshott refers to as an “enterprise association” – rests upon an understanding of interdependence – again, something that has been jettisoned in the lack of humility in the energy transition (something which is mirrored in the “domestic bias” of climate capital).
Such misconceptions have the potential to divert policymakers from a future of true sustainability, which involves the creation of resilience through diversification. Redirecting long-term flows of investment—including private capital—towards emerging market/developing economies will not necessarily be easy. Large sources of private capital in the global north – whether institutional capital or banks – will need a fresh set of incentives to invest in the energy supply chains of the future.[21]
Moreover, recognising that these investments will likely be in new minerals, new processes, and new geographies, it is clear that old regulatory risk models may no longer be suitable. New market mechanisms to help enable a level playing field of investment in new energy materials are needed—which might take inspiration from the industry bodies which have developed over time in support of oil markets around the globe.
Conclusion: The Green Marshall Plan
The scale of the rebalancing required – of investment, attention, and financial flows – is vast. If anything, it should be compared to the Marshall Plan. That enormous effort, after all, had both pragmatic and idealistic motivations. On the one hand, it was necessary to assist a Europe devastated by war; on the other, it was essential that a liberal community be built that was strong and resilient in the face of the Soviet challenge. There are similar overlaps today between the realist search for security and the idealist requirements of climate action. A Green Marshall Plan has the potential to both stabilise international relations and create the diversification and resilience necessary to allow for durable interdependence during the energy transition.
For the energy transition to act as a geopolitical salve rather than as a source of discord, a Green Marshall Plan must have four characteristics.
First, it should be genuinely global in character. A global net-zero approach would understand that some regions might take longer on the fossil fuel transition because of the specifics of their development or their energy landscape. Nor should geographical factors be ignored: An archipelago like Indonesia will take longer to transition to solar energy and away from natural gas than a continental country.
Second, legacy energy infrastructure will need attention to help enable the success of the Green Marshall Plan, to make it implementable, and to scale it. As is evident in energy consumption patterns across the globe, fossil fuels remain a part of the energy mix, and a way of working toward a balanced and global green transition. Nor can sectors like mining be ignored: the Green Marshall Plan will likely have to go into a “dirty” sector, invest in new ways of mining and new materials to mine.
Third, the Green Marshall Plan is not just about blue-sky research into the possibilities of the future. It is about increasing investment in nuts-and-bolts manufacturing in underserved geographies as well – whether energy efficiency in the Asian steel producers of the future or new cobalt mining technologies in sub-Saharan Africa today. It is about enabling development of critical frontier technologies, as well as swiftly and sustainably spreading a green ‘know-how’ which is globally benchmarked.
And fourth, the Green Marshall Plan should embed energy resilience at its heart. Areas which have sped up their energy transition are those where it is seen as assisting in energy security. As these authors argued, dependence on a single source or vendor is antithetical to achieving long-term and sustainable energy security. As such, the strategic mapping of a secure energy future cannot exclude a China, with its strong presence in the rare earths supply chain, or a Russia with reserves of natural gas, or the countries of the Gulf, abundant in oil and gas reserves. Again, humility as well as diversification might render each actor a more responsible and empathetic participant in the global energy transition.
What we are recommending is an all-inclusive future. That will require the leaders of key nations to invest political capital in a new institutional framework that supports the energy landscape of the future. The International Energy Agency, OPEC, commodity exchanges and others defined and shaped the hydrocarbon world. The global energy transition requires new frameworks, organisations and political arrangements to underwrite our common journey ahead, which reflect the needs of multiple stakeholders, in both the private and public spheres. The G7’s B3W, the European Union’s Global Gateway, and the Indo-French International Solar Alliance all point to one imperative: of green arrangements underwriting green transitions. The world needs a new institutional structure: one that keeps the lights on in the 21st century.
[5] See also, Vivan Sharan and Samir Saran, “India’s Coal Transition: A Market Case for Decarbonisation,” ORF Issue Brief No. 505, November 2021, Observer Research Foundation.
[14] For an excellent discussion of how Malthus continues to cast a long shadow on economics in advanced economies, see J.K. Galbraith, The Affluent Society (US: Houghton Mifflin, 1958).
This article was first published in The Economic Times Magazine
The narrative of a widening strategic gap between New Delhi and Moscow has been prevalent for some time now. Even within the strategic communities of Russia and India, there is an ongoing assessment of the importance of this bilateral engagement. Ahead of the upcoming India-Russia summit, this article delves into what is working for the relationship between the two nations, and what needs to be worked on.
It would be fair to say that the essential glue keeping the two together is strategic legacy. It is supplemented by a contemporary strand of political convergence in a world where both South Block and the Kremlin are actors, but also being acted upon.
One of India’s primary objectives in the coming decades is to prevent China’s hegemony in Asia. A multipolar world and a multipolar Asia are in its interest. Russia will strongly endorse this, and, for differing reasons, seek it. In its calculus, it would position the US as the principal protagonist to thwart. The Russians would not want to curtail China if that ends up enabling US influence. Therefore, there is a big picture convergence on a multipolar world order, even as India and Russia differ on relative roles of the poles shaping this order.
As of 2020, Russian weapons systems and equipment accounted for about 60 per cent of the inventory of the Indian armed forces.
This could change dramatically if Russia were to reach the conclusion that it is happy to sit in the court of the Emperor in Beijing as a junior partner. India sees this as unlikely. It hopes for a more independent Russian worldview that would not hesitate to differ with others, including China, in defence of its own interests. New Delhi is, therefore, continuing to invest substantially in this relationship, and in a number of areas.
The first and biggest is defence. As of 2020, Russian weapons systems and equipment accounted for about 60 per cent of the inventory of the Indian armed forces. While India is determinedly diversifying sourcing of military hardware, Russia remains a strong legacy player. Much of this is driven by spares and component upgrades. However, there have also been significant new ventures. These include the S-400 missile contract (on track for first deliveries this year); manufacture and co-production of four Project 1135.6 Frigates; manufacture of the world’s most advanced assault rifle – the AK-203 – under the ‘Make in India’ initiative; and additional deliveries of T-90s, Sukhoi-30 MKI, MiG-29, MANGO ammunition and VSHORAD systems. Russia is more involved with the ‘Make in India’ initiative in defence equipment than any other country.
Simultaneously, exercises have also increased in numbers and sophistication. As he demitted office as Indian Ambassador in Russia, DB Venkatesh Varma pointed out that the two nations were exploring different formats – including mobilisation of forces and their transportation across long distances, impact of drone technology on modern warfare, and impact of cyber on future of conflict. The landscape for doctrinal coordination and understanding is ever expanding.
India aims to increase import of oil from Russia, currently 1 per cent of all imports, to 4 or 5 per cent in the next five years.
The second area of convergence is energy. This includes not only hydrocarbons (oil and gas), but also nuclear. While India does import gas from Russia, a rapid increase is on the cards. If successful, the Vostok negotiations will bring India into one of the world’s biggest energy projects. India aims to increase import of oil from Russia, currently 1 per cent of all imports, to 4 or 5 per cent in the next five years. Another avenue is petrochemicals, where a Russian investment in the Paradip cracker plant and an Indian investment in Arctic LNG-2 are being explored.
The third area of mutual interest is high-technology. A proposal to establish a Joint Commission on Science and Technology Cooperation is being explored. It would encompass hi-tech areas like quantum, nanotechnology, cyber, AI, robotics, space and bio-technology. Pharmaceuticals, digital finance, chemicals and ceramics are all potential economic drivers of the relationship. Each of these is at the core of the fourth industrial revolution.
The fourth area of significance is food security. India leasing land in the Russian Far East, and cultivating it with Indian labour, offers a tantalising prospect. Russia is going through a demographic crisis and has notable human resources deficits. China has leased thousands of hectares of land in the Russian Far East. This is cultivated by Chinese farmers, whose produce is partially sold in the Russian domestic market and partially exported to China.
A proposal to establish a Joint Commission on Science and Technology Cooperation is being explored. It would encompass hi-tech areas like quantum, nanotechnology, cyber, AI, robotics, space and bio-technology.
A similar strategy can be followed by India. The government could negotiate an enabling arrangement with Russia but leave it to the private sector to execute. The Chennai-Vladivostok maritime connectivity corridor enhances scope for such cooperation.
This strategy would be a genuine win-win. India would contribute to its food security by reducing load on its resources (land, water, electricity) and providing opportunities to its excess farm labour. For Russia, dependency on China would come down, giving Moscow the strategic leverage that it needs and wants.
And here is where India needs to answer a strategic question. Is it willing to invest in the Russia story just as we celebrate Russia’s engagement with “Make in India”? India must write itself into the development text of the Far East and other parts of Russia through investments and expertise. There could be no stronger foundation for the relationship.
There is also an urgent need to overcome some recent angularities. The first is Afghanistan. At least till 15 August 2021, India and Russia had a serious disagreement, with Moscow unabashedly flirting with the Taliban. While both countries want stability in Afghanistan and curbs on export of terrorism and drugs, the perception in New Delhi is Moscow’s negotiators with the Taliban ended up become negotiators for the Taliban. That is a credibility problem for Russia to ponder.
India must write itself into the development text of the Far East and other parts of Russia through investments and expertise.
The second divergence is on the Indo-Pacific. It boils down to lack of trust. Russia does not trust India vis-à-vis the US, and India hears Russia reading from China’s script. This is a challenge to be addressed. Either country is the other’s flexibility mechanism, an arrangement that has stood the test of time. Russia’s ‘Greater Eurasia’ project and the Indo-Pacific are complementary and describe the same emergence: Of a new political moment and of a political geography that will seek a new alignment of interests and actors. Even as India and Russia carve new relationships, their sturdy partnership is a bank guarantee for both.
President Vladimir Putin’s visit to India is only his second trip abroad since the beginning of the pandemic. The first was to Geneva earlier this summer, for a summit with President Joe Biden. Coming to New Delhi to meet Prime Minister Narendra Modi is hugely symbolic and strategic. It indicates that the President knows India allows him a more equal partnership with China, even as Russia offers India room for its own endeavours.
Samir Saran 