BRICS, In the News

India, South Africa and the IBSA-BRICS equations of 2013: Francis A. Kornegay responds to Samir Saran

New Delhi, 2nd of January 2013
Please find here the original link.

For South Africa and India, 2013 promises to be a year of “Chinese interesting times” in navigating the IBSA-BRICS equation at a pivotal juncture for both groupings. The BRICS forum convenes in Africa in March with South Africa hosting the 5th Leaders’ Meeting in Durban. Later in the year, in October, India will host the 6th IBSA summit marking the 10th anniversary of the Brasilia Declaration which launched this troika. Meanwhile, the fact that South Africa’s hosting of BRICS will reflect a special Afrocentric twist in its thematic emphasis on ‘BRICS and Africa’ has drawn a sharp reaction from one of India’s leading civil society BRICS intellectuals, Samir Saran. And this is a good thing.
More often than not the coterie of academics and intellectuals networking the BRICS and IBSA confabs skirt around contradictions amongst ourselves which might upset individual and collective apple carts known as ‘polite company.’ This is by avoiding candidly expressing some of what is eating us.
In as much as this reticence tends to be at the expense of genuinely edifying intellectual discourse advancing mutual understanding, Samir Saran has done a much needed service in raising ‘The Africa Question’ in Indian media. And SAFPI has done a great service in disseminating this ‘question’ throughout its African network.
Saran, senior fellow and Vice-President of the Observer Research Foundation (ORF), the think-tank that did the initial spade work on BRICS for its founding summit in Russia in 2009, penned an op-ed in the December 12th edition of The Indian Express voicing exception with South Africa taking upon itself the “onerous task of discovering and representing a unified African voice.”
In the process of arguing this point, Saran demonstrates why it is critical that intellectual as well as governing elites of the five countries really make an effort to get to know one another in more depth, where we are all respectively coming from – and really get a handle on what BRICS is all about apart from, as seems to be suggested, simply a collectivity of national interests converging on reforming global governance generally, global economic governance in particular.
From Saran’s vantage point there are several flaws in South Africa’s approach to BRICS:
* Presumptuously taking it upon itself to speak on behalf of all of Africa;
* Misunderstands why it has been included in BRICS which is not to be a ‘proxy’ for Africa but, as an emerging power with a unique perspective, to add value to BRICS by itself;
* It’s misunderstanding reflects a lack of appreciation for the objective of BRICS which is to convey a counter-narrative on global governance to that of the West and to collectively leverage their individual weights in engaging western incumbents at “the global high table.”
Now presumptuous as it might seem for SA to take it upon itself to speak on behalf of Africa, the same question could be posed about who anointed BRICS countries to engage the West at this hierarchical ‘ global high table’ and on whose behalf? Their own individual behalf separately and collectively without regard for the interests of other emerging and developing economies?
And to what purpose if global governance is not about how various and sundry national interests are to be coordinated and if possible harmonized in a manner acknowledging how global economic integration has eroded the prerogatives of national sovereignty? No country is an island in today’s world, least of all in its own region.
Some countries are more capacitated than others within their regions to articulate aspirations that are transnational even though there may be (indeed are) national jealousies about the capacity of given regional powers to convey a regional agenda which, in concert with other regional agendas, may add up to a continental agenda. It is not for nothing that, in southern Africa there is a SADC to which South Africa belongs or a Mercosur to which Brazil belongs which, in turn, feed into the respective continental agendas of the African Union and the Union of South American Nations. The same might apply to India within the South Asian Association of Regional Cooperation though it is often pointed out that India aspires to escape its region in ascending to ‘the high table.’
No, no one anoints these members of IBSA as well as BRICS to represent them at the ‘global high table.’ Yet there is an unspoken if often grudging understanding that by default, South Africa, Brazil and India are better placed than their neighbors to engage at a global governance level which includes other emerging powers within the G20: Indonesia, Turkey, South Korea, Saudi Arabia, Mexico, Argentina.
Now honing in specifically on South Africa, what pray tell informs this “unique perspective” for adding value to BRICS if this uniqueness is not informed by an African identity on a continent saddled by history with a unique set of problems at a time when all of the BRICS countries are scrambling to avail themselves of Africa’s resources? This question strikes at the very heart of what constitutes ‘The Africa Question’ in a manner in which South Asia cannot compare, saddled by history as India and South Asia are with their own unique challenges which, again, ought to inform a South Asian regional sensibility underpinning efforts to come to terms with those challenges.
Now perhaps India is so big, constituting a subcontinental region in itself that some of its sons and daughters may not be able to appreciate a transnational vocation to the same degree that applies to South Africa within Africa. Be that as it may, the national sovereignty that Indians are so attached to simply does not work for South Africa in its relations within a fragmented Africa where national sovereignty is the essence of the continent’s weakness; a weakness that South Africa along with other AU members must work to overcome.
This is a contemporary and historical circumstance compelling a pan-Africanist perspective and agenda for any country on the continent that aspires to continental leadership as does South Africa. This what SA brings to BRICS which is widely understood if not appreciated by some.
South Africa, within its African context, therefore stands apart from other BRICS whose perspectives are informed by what might be termed ‘big country sovereignty’ which is tantamount to continental sovereignty. This is what Africa aspires to and informs South Africa’s African and BRICS agendas. This is a perspective informed by the realities of global economic integration which dictates a pan-African future as the only scenario that makes sense for South Africa and Africa – which by the way does not mandate a ‘united African voice’ as such.
Unless BRICS as individual countries and as a collective begin to more consciously approach global governance from the vantagepoint of making economic integration work within their respective continents and regions, its long-term role as a revisionist actor in the politics of the global economy may be limited. Indeed, this is a challenge facing the IBSA countries within BRICS as it relates to their trilateral relations as the Brasilia Declaration approaches its 10 anniversary in 2013. Thus, whereas Saran asks if BRICS should not also concern itself with South Asian “tensions and imperatives” and those exercising China regarding the South China Sea, as South Africa wants to do regarding Africa, in a qualified sense, the answer is ‘yes.’
BRICS should concern itself with these and other regions in which its members are embedded where issues of transnational economic governance arise having a direct bearing on regional and continental integration. This is what South Africa’s African agenda relating to its hosting of BRICS is intended to address and Tshwane-Pretoria would open itself to major criticism from elsewhere on the continent if this was not its intent. Other BRICS members may not share the urgency of this imperative regarding their regions and continents as does South Africa regarding Africa.
The urgent need for Africa to overcome its fragmentation through advancing an integrationist agenda cannot be contested and if other members of BRICS cannot be sensitive to this special predicament facing the continent and South Africa’s need to address it within the context of BRICS then this raises serious questions about the raison d’etre of South Africa’s membership in this grouping if pure ‘national interest’ narrowly defined is the be all and end all of BRICS. BRICS’ relevance for Africa and the individual agendas of BRICS members in Africa would consequently come under question.
Regional and continental integration and, indeed, inter-regional cooperation are even more explicit in IBSA given the geostrategic architecture of this grouping in two respects: the economic potential of the Mercosur-SACU-India preferential trade talks, difficult as they are; and the added dimension of security community-building in the Indian and South Atlantic oceans.
If New Delhi fails to hone in on strengthening this southern sea lanes comparative strategic advantage in its hosting of the IBSA summit later in 2013 (while also chairing the Indian Ocean Rim-Association for Regional Cooperation) this trilateral grouping could face declining multilateral utility. This would be in spite of India’s strongly held position, with China hovering in the background, of IBSA maintaining its autonomy and identity viz-a-viz BRICS.
2013 therefore should tell a lot about how important IBSA is in New Delhi’s strategic calculus regarding BRICS as it cannot avoid the demand of showing leadership on the occasion of the 10th anniversary of the Brasilia Declaration. Will it show the vision and political will to jointly take IBSA to another level with South Africa and Brazil?
As central as its building on IBSAMAR is to a re-energizing of IBSA, Indian Ocean-South Atlantic maritime cooperation is by no means the only challenge facing India in its hosting of the troika’s summit.
Here are few other considerations for the three governments:
* Given the elaborate sectoral working group agenda of IBSA and its uneven achievement together with its business, parliamentary and academic forums plus the geostrategic maritime cooperation potential of IBSAMAR, should not this troika contemplate a more formalized structure in the form of a secretariat, perhaps situated in Brasilia? Otherwise, there is a certain superficiality to IBSA and its initiatives which, compared to BRICS, may more and more take on little more than purely symbolic imaging with the real substance of India, Brazil and South Africa residing in BRICS where the leadership edge significantly resides with Sino-Russia.
* Can the three governments continue their south-south tokenism via the IBSA Development Fund run by UNDP’s South-South Joint Cooperation Unit with the prospect of the BRICS development bank coming on stream? Could they not negotiate some complementary synergy between the development fund under IBSA and the development bank under BRICS and up the funding level? Additionally, given the pressing developmental needs in all three countries, could not the development fund house a grassroots development ‘window’ or facility for small-scale income-generating community-level projects in the three countries?
* Why did India and Brazil reportedly shoot down a South African proposal that IBSA establish a working group on women/gender instead of addressing gender and status of women’s issues at a purely forum level? Given the epidemic of violence against women in South Africa as well as India and how the matrix of issues surrounding law enforcement, the judiciary and general vulnerability and brutalizing of women were exposed in India at the end of 2012, will New Delhi revisit the more substantive working group versus the superficiality of a forum for gender and women when it hosts the summit in 2013?
Finally, the structure of the parliamentary forum in particular deviates from the original concept of such an IBSA structure tied as it is under the ministerial focal points of all three governments. The original intent was that it would operate more autonomously like the SADC Parliamentary Forum as one step removed from an actual legislative body. Given the 10th anniversary crossroad challenges facing an IBSA in need of reinvigorating, should not the status of the parliamentary forum be revisited as well and how it would interact with the various sectoral working groups?
All said, as some in India ponder South Africa’s commitment to interrogating the BRICS-Africa connection while reflecting on what New Delhi will make of its own hosting of IBSA, there are a raft of issues on the table for the IBSA-BRICS civil society and academic constituencies to grapple with as they try to influence the direction in which these two groupings will develop.
The question we should ask ourselves is whether we are up to it, whether we are able to move from being arm chair theorists into the agenda-setting real world of action!
* This rejoinder to Samir Saran’s analysis, ‘The Africa question’, was commissioned from Dr Kornegay by SAFPI.

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BRICS, Columns/Op-Eds

BRICS FORUM: The Africa Question – now also available in Russian

Please find here the link to the original publication
By Samir Saran

It will be counterproductive for BRICS if South Africa’s chairmanship ends up representing the continent.

With the impending handover of the chairmanship of BRICS by India to South Africa, there is a flurry of activities in BRICS capitals, including a visit of a high-powered South African delegation to New Delhi. While there would be discussions on the modalities of the handover, the central focus must remain on the BRICS agenda.

If recent conversations with South African scholars are any indication, the country’s chairmanship of BRICS may be conditioned by a strong impulse to represent Africa. In two recent conferences in China, interventions by South African delegates on BRICS matters introduced a heavy dose of Africa, issues that currently engage the African Union and the state of the continent generally. In the run up to the 2013 BRICS summit, the country seems to be placing upon itself the onerous task of discovering and representing a unified African voice. While this has drawn criticism, it is also flawed in more ways than one and has the potential of undermining the progress so far.

The first problem is the inherent moral hazard. South Africa must not see its role as the voice of Africa at BRICS. It would be presumptuous and a number of African countries may take strong exception. And is it anyone’s case that it is only Africa that somehow needs a special relationship with BRICS? Home to half of the world’s poverty and any number of development and social challenges, South Asia may deserve such attention as well. Should India then be the voice of South Asia and represent the subcontinent? Surely, some South Asian countries would have a reason to challenge this. This can also be argued in the case of Brazil and South America, Russia and Eurasia, China and East Asia. Such ambassadorial roleplay for larger regions is dangerous and can weigh down the lithe and nimble platform that BRICS seeks to be.

On the other hand, almost every BRICS member has robust bilateral engagements with the continent. While the Chinese may be more recent partners to many African nations, India has both civilisational and contemporary ties. Many Indians are settled in Africa; India has maintained among the largest peacekeeping forces; and of course Indian businesses, much like their Chinese counterparts, are taking increasing interest in the continent. Brazil also has a fair constituency in Lusophone Africa. Africa’s immense resource wealth, and underdeveloped infrastructure, have attracted a large amount of commercial interest from Brazil. Hence, can the premise that South Africa represents Africa and is best positioned to serve its interests pass muster?

The second flaw with the “South Africa for Africa” formulation is that it misunderstands the reason for South Africa’s inclusion in the group. Only a rather naive (and linear) rationale will attach the responsibility for Africa to South Africa. While it is undeniable that one of the key reasons for the inclusion was to have a voice from the continent, the voice was meant to speak for itself alone. South Africa is an emerging economy that offers a unique perspective and adds value to BRICS by itself. It is counterproductive and self-defeating for a small club to allow proxy memberships.

The third and central weakness of this proposition is its lack of appreciation of the core BRICS objectives. It is indisputable that the purpose of this group is to offer a counter-narrative on global governance to the one scripted by the incumbents in the Western hemisphere. BRICS is not and must not become another “trade union” or voice of the “global opposition”. It is a club that allows these five nations to pitch their collective weight behind efforts to shape and change rules for the road, old and new, at the global high table. There is a lot at stake. The world is in flux and governance is being re-imagined, redefined and indeed renegotiated. BRICS allows each country an exponentially weightier presence while parleying with the incumbents. That must remain the group’s salience.

It is time for BRICS to ask themselves some blunt questions. Should the resources and time devoted by each country at this forum be invested in regional issues such as those important to Africa? Should the tensions and imperatives of South Asia find centrestage? Will it be in the interests of BRICS to be engaged with the problems of the South China Sea? Or should BRICS remain that unique proposition, where a group of emerging economies, with critical stake in the global future, create a platform for meaningfully engaging with the developed and developing countries on key issues?

There is no denying that South Africa will remain the continent’s economic powerhouse for the foreseeable future. It is also a veritable geographic fulcrum, which is viewed by some as a strategic node between Latin America and Asia. This gives South Africa a weight far greater than its military might or economic numbers. South Africa by itself completes BRICS. As the next summit draws closer, it must urgently conduct a strategic and realist re-evaluation of what it wants from BRICS against what is on offer.

The writer is senior fellow and vice president, Observer Research Foundation, Delhi

As published in The Indian Express.

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Article in the Indian Express: “The Africa Question”

by Samir Saran
12th of December 2012
Please find here the link to the original article.

It will be counterproductive for BRICS if South Africa’s chairmanship ends up representing the continent.

With the impending handover of the chairmanship of BRICS by India to South Africa, there is a flurry of activities in BRICS capitals, including a visit of a high-powered South African delegation to New Delhi. While there would be discussions on the modalities of the handover, the central focus must remain on the BRICS agenda.

If recent conversations with South African scholars are any indication, the country’s chairmanship of BRICS may be conditioned by a strong impulse to represent Africa. In two recent conferences in China, interventions by South African delegates on BRICS matters introduced a heavy dose of Africa, issues that currently engage the African Union and the state of the continent generally. In the run up to the 2013 BRICS summit, the country seems to be placing upon itself the onerous task of discovering and representing a unified African voice. While this has drawn criticism, it is also flawed in more ways than one and has the potential of undermining the progress so far.

The first problem is the inherent moral hazard. South Africa must not see its role as the voice of Africa at BRICS. It would be presumptuous and a number of African countries may take strong exception. And is it anyone’s case that it is only Africa that somehow needs a special relationship with BRICS? Home to half of the world’s poverty and any number of development and social challenges, South Asia may deserve such attention as well. Should India then be the voice of South Asia and represent the subcontinent? Surely, some South Asian countries would have a reason to challenge this. This can also be argued in the case of Brazil and South America, Russia and Eurasia, China and East Asia. Such ambassadorial roleplay for larger regions is dangerous and can weigh down the lithe and nimble platform that BRICS seeks to be.

On the other hand, almost every BRICS member has robust bilateral engagements with the continent. While the Chinese may be more recent partners to many African nations, India has both civilisational and contemporary ties. Many Indians are settled in Africa; India has maintained among the largest peacekeeping forces; and of course Indian businesses, much like their Chinese counterparts, are taking increasing interest in the continent. Brazil also has a fair constituency in Lusophone Africa. Africa’s immense resource wealth, and underdeveloped infrastructure, have attracted a large amount of commercial interest from Brazil. Hence, can the premise that South Africa represents Africa and is best positioned to serve its interests pass muster?

The second flaw with the “South Africa for Africa” formulation is that it misunderstands the reason for South Africa’s inclusion in the group. Only a rather naive (and linear) rationale will attach the responsibility for Africa to South Africa. While it is undeniable that one of the key reasons for the inclusion was to have a voice from the continent, the voice was meant to speak for itself alone. South Africa is an emerging economy that offers a unique perspective and adds value to BRICS by itself. It is counterproductive and self-defeating for a small club to allow proxy memberships.

The third and central weakness of this proposition is its lack of appreciation of the core BRICS objectives. It is indisputable that the purpose of this group is to offer a counter-narrative on global governance to the one scripted by the incumbents in the Western hemisphere. BRICS is not and must not become another “trade union” or voice of the “global opposition”. It is a club that allows these five nations to pitch their collective weight behind efforts to shape and change rules for the road, old and new, at the global high table. There is a lot at stake. The world is in flux and governance is being re-imagined, redefined and indeed renegotiated. BRICS allows each country an exponentially weightier presence while parleying with the incumbents. That must remain the group’s salience.

It is time for BRICS to ask themselves some blunt questions. Should the resources and time devoted by each country at this forum be invested in regional issues such as those important to Africa? Should the tensions and imperatives of South Asia find centrestage? Will it be in the interests of BRICS to be engaged with the problems of the South China Sea? Or should BRICS remain that unique proposition, where a group of emerging economies, with critical stake in the global future, create a platform for meaningfully engaging with the developed and developing countries on key issues?

There is no denying that South Africa will remain the continent’s economic powerhouse for the foreseeable future. It is also a veritable geographic fulcrum, which is viewed by some as a strategic node between Latin America and Asia. This gives South Africa a weight far greater than its military might or economic numbers. South Africa by itself completes BRICS. As the next summit draws closer, it must urgently conduct a strategic and realist re-evaluation of what it wants from BRICS against what is on offer.

The writer is senior fellow and vice president, Observer Research Foundation, Delhi

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Leaving the Hotel – The West has to get over its fruitless search for common values and instead negotiate global governance in a realist world

by Dr. John C. Hulsman and Samir Saran
3rd of December 2012
Please find hereFour-Seasons-Hotel the link to the original article

Though in theory they come from many places (particularly in the heretofore ruling West), the vast majority of the international foreign policy elite and its corresponding commentariat really only come from one place: Hegelian Land. Make no mistake about it; they form one quite homogenous group, with an unsurprisingly homogenous worldview. Spending weekends attending endless meetings in five-star hotels across the world (The Four Seasons is an especial favorite), their common views are so ingrained in discussions that they are rarely directly commented upon, let alone debated.

In fact, NGO (Non-Governmental Organization) Man has no need of self-reflection, since everyone they know shares their values, having attended the same prestigious universities, married into the same families, worked in the same think tanks, and spent their jet-set weekends together, talking about such weighty matters as ‘the centrality of the global commons,’ ‘the rise of the south,’ ‘the end of the nationstate’, ‘the multilateral global elite,’ and ‘the advance of the developing world toward universal norms,’ amongst other such self-aggrandizing pipedreams. Their basic analytical mistake (and it is seminal) is that as everyone they know shares these parochial Wilsonian values, such a point of view must be all that matters or really exists. Truly, they all hail from one indivisible Hegelian world. But as Woody Allen put it in Annie Hall, ‘Intellectuals have proven to the world that you can have all this brilliance and still have absolutely no idea of what’s going on.’ Like the possibly apocryphal story (later fiercely denied) about the New York Times film critic Pauline Kael, who was said to be sincerely baffled as to how President Nixon won re-election in 1972 (he carried 49 states) when everyone she knew had voted for the hapless George McGovern, there are distinct intellectual dangers to being so entirely cocooned in a comfortable, if wholly unrepresentative, bubble. Advanced-stage otherworldliness and an ingrained intellectual arrogance make true analysis almost an impossibility.

Sure, NGO Man (and Woman) would placidly reply, there are Neanderthal outliers (such as the two of us who were not properly vetted before being allowed in the inner sanctum) who still believe in the nation state, but the very transnational nature of today’s problems will soon make them appear to all to be the reactionaries that they are (never mind that the rising powers in today’s world such as the BRICS countries (Brazil, Russia, India, China, South Africa) share little in terms of common values except for a strongly nationalistic distrust of the West and the governance frameworks that have been designed for an Atlantic world). The fact that these rising powers are self-evidently nation-states–proving to all not basking in delusion that the new multipolar era demonstrates that the Westphalian state system is above all, alive and well-would never be brought up at The Four Seasons.

However, it is their last, common, wholly wrongheaded assumption that all states inherently share overwhelmingly binding universal values and norms, which is their self-evident truth that is most out of step with reality. Paradoxically, by believing the unbelievable (if the real multipolar world outside the hotel is to be finally taken into account), NGO Man dooms true initiatives at global governance to sure failure, making efforts to endeavor to make the planet a genuinely better place come to naught. Obliviousness in the end isn’t just about harmless self-delusion; intellectually NGO Man gets in the way of solving the very problems he spends so much time purporting to ‘care’ about.

The Common Values Chimera

Especially in Europe (though America is far from immune), one tired conversation dominates most European institutions and forums, threatening to become a fatal liability, distancing the EU from the new capitals that influence global decision making in Asia, Africa and Latin America. It is Europe’s obsession with “Common Values” and the Don Quixote-like quest for “Common Humanity.” Wasting time and intellectual capital looking for this faux Holy Grail is doing nothing less than preventing the global community discovering vital common ground on the key issues that the emerging multipolar world is confronted with. Be the issue of climate change, political intervention in unstable nations, or over broader geopolitical stability, spending time trying to find the fool’s gold of universal values gets in the way of cutting the interest-based deals that will actually make the new multipolar world work.

This European obsession also leads to an analytical failure at the geopolitical level, blurring Western understanding of the new ‘clubs’ such as the BRICS and explains their comforting dismissal of the reality that much has changed, due to the fact that the BRICS themselves seemingly share little in terms of ‘Common Values.’ From Brussels’ point of view how can such an organization (let alone its constituent members) matter if it doesn’t adhere to the Gospel of Monnet? But the BRICS do share common interests, with three among them being the most important. First, all BRICS countries stress there must be a stable external environment that cannot and must not be jeopardized by partisan interventions in Iran and other parts of the Middle East and Africa; in other words, contrary to NGO Man, state sovereignty still matters and non-intervention is also a viable political choice.

The Iranian nuclear crisis is a case in point. The usual, half-cocked Western intervention–in this case an ineffective bombing strike by either Israel or the US that would have to be repeated–would amount to a geostrategic calamity (immeasurably strengthening the mullahs, quite possibly destabilizing broadly pro-Western governments in places like Jordan, Egypt, and Saudi Arabia, and setting back any hopes of stability in the region for a generation). Average Iranians and the Arab street may well hate and distrust the current leadership in Tehran; this does not mean that their distaste translates into obvious support for the West to bomb Iran into a recognition of its errors in ignoring the universal Hegelian virtue of negotiating in good faith.

Instead a realist response-which allows that interests and not values must be paramount if effective agreements are to be arrived at in this new era-impels a different way forward. If states themselves (such as Iran) are threatening the regional balance of power, closer ties between threatened countries within a region as well as between its major players and offshore balancing allies (such as the U.S.) are the chess move needed, rather than violating the offending country’s sovereignty due its less than dogmatic devotion to universal values or its inability to join the conversation in a language that it just does not recognize. Rather, extended deterrence based above all on the truly universal interest of physical survival) is the way forward, an approach seemingly and inexplicably abandoned by the Obama administration.

The second common BRIC interest is that an accountable and stable global financial regime must evolve-with a far greater say for the rising economic powers– the promises for which remain unfulfilled since 2008/09. The unambiguous and ambitious Delhi Declaration by the BRICS Heads of State served as a timely reminder to the Atlantic powers of the strength of the impulses that have brought the BRICS member nations together in the first place.

The message that went out was that the BRICS members will gradually begin to institutionalise an alternative path in terms of financial and economic governance. Be it the BRICS Development Bank initiative, the trade settlement processes, or teaming up on resisting the ‘carbon tax’ unilaterally announced by the EU, these countries are beginning to realize the importance of reframing the rules and perhaps changing the game itself.

In parallel, as this possible transition occurs, they will continue to demand progressive reforms in the existing structures of global financial governance. Their meeting on the sidelines of each G-20 meeting may not have resulted in their putting up a common candidate for the IMF as of yet, but these interactions (this new pattern of standardised consultation) will continue to strength their common ambition to push for reforms of outmoded Bretton Woods Institutions which have failed to even uphold the fundamental tenants of equity and inclusiveness on which they were built (or achieve the still more lofty goal of absolute poverty reduction).

At the recent and much written about Delhi Summit, while Western media and critics were dismissing these interactions as insignificant and unsustainable, the BRICS nations were drawing up a blueprint for a common development bank for the LDCs (Less Developed Countries), local lines of credit for trade, and an alliance of national BRICS stock exchanges. While such developments may not necessarily lead to long-term cooperation on other issues of significance, they will certainly fortify and greatly extend common interests in the areas of trade and finance. Representing nearly half of the global population, and a similar proportion of global growth, BRICS economies are no longer willing to be rule-takers on issues which are inherently crucial to their development trajectories. For the wise, this can be read as a sign of the coming outright rejection of the Washington consensus. That the Atlantic powers will have to accommodate this paradigm shift is certain; how they will respond remains a seminal mystery of the new age.

Finally, the BRICS all agree on a far greater global emphasis (if not commitments) on the development and poverty reduction efforts in Asia, Africa and Latin America and the fact that “green capitalism” or “green values” are new hurdles that BRICS must stand up against. No developing power is likely to commit economic suicide to make over-privileged Western Greens happy. In many ways, the recently concluded Rio+20 Summit seemed to mark the end of climate multilateralism, with countries failing to agree on anything substantial, despite the hype and hoopla preceding it. In an increasingly uncommon world, it is irrational to expect global binding commitments on issues as complicated and contested as climate change or sustainable development. In fact-far from being a shared value–the definition of the term “Sustainable” is contested itself. What implies inclusive growth and poverty alleviation for one, means stifling ‘Green Capitalism’ for the other.

However, this basic schism has been obscured over the many rounds of negotiations and many conferences convened and attended by NGO Man. It should be understood that the emergence of the BRICS on the global economic and political stage does not necessarily signal a default willingness to shoulder responsibility for historical emissions. Moral arguments may get you fair round of applause at The Four Seasons, but if you want a deal, then Atlantic countries need to vacate carbon real estate or pay the rent for squatting on it to accommodate for their ‘lifestyle emissions’.

With the average per capita consumption of primary energy of the BRICS members is still only a fraction of OECD averages, the notion of universal responsibility for the fate of the planet is redundant from the outset. No nation-state can be pinned down by narratives of universal moral accountability and culpability, given the real context. A man barely surviving on a dollar or two a day has no obligation, motivation or reason to preserve this planet the way it is for the next generation. And yes, he disagrees with the President of the United States of America and the Green Evangelists of the EU on this; they simply sit in different structural positions. Giving him a better tomorrow may over time see us strike the deal that the annual climate circuses around the world have failed to achieve.

Acquainting NGO Man With the Realities of our Times

It is well past time for Europe and the West as a whole to wake up to the world they actually live in and now move towards the more workable paradigm of “Shared Interests and Shared Prosperity”, terms that flow from the vocabulary of the “realist” camp, acknowledging that beneath every façade, nations and societies share only one common value, that of self-preservation based on self-interest. Sure, some of these interests do become normative and can be classified as values, but that they remain ‘interests’ above all must be recognized and in an indulgent and modest moment, negotiated as well. ‘Values’ lead to deadlocks and rigidities, ‘interests’ are often tradable, and when primary interests clash, well, at least one knows the score. This approach offers a far greater global potential for great powers old and new to collaborate and cooperate than the parochial, annoyingly moralitic, valuesbased approach that is viewed by most outside of the EU as a not-so-subtle attempt to impose European interests by the back door, despite objectively lacking the power to do so. A man in the gutter and a man in a mansion will share only one common value – self-interest and self-preservation. While the former will seek ways to reach the mansion, the latter will undoubtedly discover rules to remain there. But this fetish with values and the lack of agreement on their universal existence and definition is not the only intellectual challenge that efficient global governance is confronted with today. The concept of sovereignty–and the very different individual experiences of nation-states that compel them to define this critical notion differently–is another potential stumbling block.

For example, the US certainly does not share the diluted notion of sovereignty so common within the EU; as former Defense Secretary Robert Gates made abundantly clear, if Europe continues to free ride on American defense spending in NATO soon it will not be seriously consulted on the strategic issues of the day, common values or no. For America, NATO has always been a means to an end, not Valhalla in itself, as Europeans complacently believe. Rather, the perilous state of the American economy and its increasingly fraught domestic politics are already altering its role as a global policeman and as things get ever harder, a more inward-looking America is inevitable, based on its overriding economic interest to right its fiscal ship.

Similarly, the BRICS and other emerging power centers view this transition period of their relative rise as precisely the time to consolidate their sense of nationhood and to reclaim sovereignty from the formerly Western-dominated world. Again, Europe is the global intellectual outlier. Global governance in the new world we actually live in must be founded on the notion that sovereignty actually matters far more than those in many European capitals so fatuously think. If the BRICS are to be made stakeholders in the new era, alongside the older, western powers, this is the first negotiation and accommodation that must take place.

The third reality of our times is that large economies in the Indo-Pacific region (India, China and some others) with low-income populations will now be the fulcrum for governing the most important regions of the world; if they succeed the new primary engine of global growth will be safeguarded, if not, we will live in a far more hostile planet. Due to their own troubles and relative economic decline, the US and EU will increasingly need to carve out partnerships with India, China and the ASEAN countries to secure the sea lanes, manage the rules of trade, secure property and property rights and ensure peace and stability at this hinge point of multipolarity. This dependence on large emerging economies–which for a long while will remain relatively poor–will change the very ethos of global governance.

Due to this sea change, global priorities are bound to change as well. Growth and not human rights will dictate the agenda. Industrialization will trump environmentalism and poverty alleviation will define sustainable development. The implementation of governance will alter dramatically. Due to the core difference in the understanding of sovereignty, partnerships between the Atlantic countries and countries of the Indo-Pacific will be tested. On the other hand, partnerships could strengthen when instead of patronizing sermons, efforts are made to accommodate the views, interests and needs of all based on the fruitful search for shared interests. So how to make sense of this confusing new world? The primary rule of the road must be the unbreakable link between burden sharing and power (or responsibility) sharing. This basic principle (while easily applied in terms of the voting weights controversy in the IMF and World Bank) must become nothing less than the new mantra for the multipolar age. For it is the only hope for future global governance efforts, based as it is on the only durable political factor in the world….actual power realities.

Of course, this fundamental global change takes place on a continuum; it will take several decades for the transition from a Western-dominated world to a world with many powers (with the BRICS leading the economic way) to be completed. But as the global financial crisis made clear, change may be occurring far more rapidly than anyone could have imagined. Along the way, a fading west and a ‘not-yet-up-toit’ rest could well drop the ball over vital global governance issues, resulting in what Ian Bremmer (somewhat apocalyptically) has referred to as a G-0 world, where nothing much gets done.

It is time for Europe to get over it. Nations will not have common values, because nations themselves are a collection of diverse historical experiences and ambitions. However, there is no need to throw in the towel over global governance, for nations can have a vision for shared prosperity with different approaches to get there. To make all this work, there must be some common macro rules for the road for achieving this shared prosperity (the greatest common interest of all) and these must be negotiated on the realist terms of common interests and not through the fruitless semantics of ethics and morality. It’s time for NGO Man to leave the hotel and xperience the new world that has sprung up while he was inside; the multipolar era needs realism to work.

(Dr. John C. Hulsman is President and Co-Founder of John C. Hulsman Enterprises (www.john-hulsman.com), an international relations consulting fir, and a life member of the Council on Foreign Relations. He is also the author of all or part of 10 books, including Amazon bestsellers Ethical Realism, The Godfather Doctrine, and most recently an acclaimed intellectual biography of Lawrence of Arabia, To Begin the World Over Again. Samir Saran is Vice President at the Observer Research Foundation and Chairman and CEO of ‘g_trade’, the creators of the 3rd dynamic green index, ‘BSE Greenex’ at the Bombay Stock Exchange. He is author/co-author and editor of a number of publications including Re-imagining the Indus, Navigating the Near, Radical Islam and BRIC in the New World Order. This expanded essay flows from an earlier op-ed written for the Times of India, May 11, 2012.)

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Columns/Op-Eds

Obama 2.0: Who will crash the party?

by Samir Saran and Dr. John C. Hulsman
1st of December 2012
Please find here the link to the original article

Second term presidencies, like second marriages, can be seen as the triumph of hope over experience. George W. Bush met with calamity in Iraq, Bill Clinton was impeached over the Lewinsky scandal, Ronald Reagan suffered through Iran-Contra, Richard Nixon perpetrated Watergate and resigned, and LBJ was engulfed and then devoured by the Vietnam War. Given this doleful record, what can realistically be hoped for in a second Obama term? This time around, will chronically dysfunctional West Asia be a slow bleed that will drain the momentum of the new presidency?

Two major over-arching priorities immediately head the to-do list of President Obama; the first a great danger, while the second presents almost unparalleled political opportunity. The fiscal cliff–and insane joint suicide pact agreed to by the outgoing Congress-promises automatic tax increases and spending cuts totaling $600 billion coming to pass on January 1, 2013. The only way to avoid this contraction to the American economy, which it is estimated would amount to a full 4% of American GDP, thereby casting a feebly recovering American back into recession, would be for the Republican House and the President to reach a broader budget deal amounting to around $1.2 trillion in savings over the next 10 years. So, at least on paper, it is hard choices quickly arrived at or…Armageddon.

Given the stakes (and both parties desire to avoid the wrath of the American people at their persistent inability to behave as grown-ups) it is still more than even money that a patched-up compromise will be reached, a temporary deal which kicks the fiscal can down the road, without actually solving America’s long-term deficit and debt crisis. However, failure to reach such a deal (and it is important not to underestimate how politically divided Washington has become) would practically doom the president’s second term from the start.

Obama’s tremendous opportunity, also best done quickly while the Republican Party is still reeling from its electoral defeat, is to, in terms of policy, lock in the gains made by the creation of his new and seemingly enduring Democratic majority. The President’s winning political coalition for the past two presidential election cycles has led to nothing less than the rejuvenation of the Democratic Party itself. Women, African-Americans, the Professional Classes, the Young, and Hispanics are the basis of the evolving power of the Democrats, who have carried the popular vote in five of the last six presidential contests.

Locking in Hispanics, the fastest growing segment of the American electorate, is a particularly tempting prize. Now comprising a full 10% of the voting public, Hispanics gave the president 71% of their votes this November; the main reason for this is the administration’s efforts to offer amnesty and an ultimate path to citizenship for the roughly 11 million undocumented workers now living in America, and the Republicans’ suicidal desire to punish both them and their children.

In his immediate post-election remarks, the president gave the game away by stressing the need for immigration reform, truly a win-win proposition if ever there was one in politics. If Republicans balk at reaching a compromise over immigration, they will have lost the chance to win over the fastest growing segment of the American electorate for at least the next generation. If they go along with Obama’s proposals, there will be civil war in the GOP, and President Obama will get the lion’s share of the credit anyway. Look for moves to introduce such a policy very early in 2013.

If this is what the White House will do, the great White Whale of the next four years is a simple fiscal question: Can America arrest its trajectory of rather steep decline and enact a Bowles-Simpson style compromise that both raises taxes (as the Democrats dream about) while engaging in entitlement reform of Medicare, Medicaid and Social Security (the Republican’s fondest wish).

In the Bowles-Simpson plan–a bipartisan compromise reached by the president’s own appointed committee in the latter days of his first term-there is a durable blueprint to do this. There would be three dollars in spending cuts for every dollar in tax increases, entitlements would be means tested, and benefits would be cut and doled out slightly later in life, taxes would be simplified, with loopholes and deductions would be curtailed. Such a grand plan would stabilize the American debt rate at around 60% of GDP, thus preserving American economic power for the next generation.

There are two fundamental problems in reaching for the Bowles-Simpson Holy Grail. The first is that it presumes that people in both parties are less ideological than they currently are. It is not just the right-wing Tea Party that is the problem here; House Minority Leader Nancy Pelosi and her left-wing followers have also shown no sign of being able to make the significant compromises that would be necessary to make this whole process work. Without the left agreeing to entitlement reform and the right agreeing to tax rises, the deal will never be done. It is an open question as to whether this level of compromise is now possible in a Washington more ideologically divided than at any time in memory.

The final problem in nailing down this ambitious domestic agenda is that it assumes the world will simply not intrude while America tries to sort itself out. History simply does not work like this. While it is highly unlikely there will be simultaneous: War with Iran, tensions between China and Japan over the Senkakus, the euro-crisis going septic, and Syria’s civil war leading to regional instability or even regional war in the Middle East, there is a very good chance that some of this happens. Any foreign distractions could well doom the domestic-only focus the president is banking on.

Given this highly ambitious domestic agenda, Obama the second time around is likely to disappoint both the Wilsonian liberals who seek American intervention in troubled regions around the world to promote liberty and protect human rights (think Libya) and the neoconservative hawks who seek greater U.S. commitment to lead the 21st century world through the preponderance and use of its military might (think Iraq). If the first term is any indication, U.S. foreign policy will to continue to develop in a cautious, limited, pragmatic, yet largely reactive manner. There will be few American efforts to order the new multipolar world, or respond proactively to much of anything.

And therein lies the danger. Reactive agendas may result in hasty interventions and unintended outcomes. For one thing, the hurriedly brokered ceasefire between the Hamas and Israel is one that will surely need a revisit sooner rather than later. And this time around who (if anyone) will script the agenda remains the million-dollar question.

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Columns/Op-Eds

Obama 2.0: The Triumph of Hope Over Experience?

by Samir Saran and Dr. John C. Hulsman
30th of November 2012
Please find here the link to the original article

Second term presidencies, like second marriages, can be seen as the triumph of hope over experience. George W. Bush met with calamity in Iraq, Bill Clinton was impeached over the Lewinsky scandal, Ronald Reagan suffered through Iran-Contra, Richard Nixon perpetrated Watergate and resigned, and LBJ was engulfed and then devoured by the Vietnam War. Given this doleful record, what can realistically be hoped for in a second Obama term?

One major over-arching priority immediately heads the to-do list. The fiscal cliff–an insane joint suicide pact agreed to by the outgoing Congress—promises automatic tax increases and spending cuts totaling $600 billion coming to pass on January 1, 2013. The only way to avoid this needless body-blow to the American economy, which it is estimated would amount to a full 5% of American GDP, thereby casting a feebly recovering American back into recession, would be for the Republican House and the President to reach a broader budget deal amounting to around $1.2 trillion in savings over the next 10 years. So, at least on paper, it is hard choices quickly arrived at or…Armageddon.

Given the stakes (and both parties desire to avoid the wrath of the American people at their persistent inability to behave as grown-ups) it is still more than even money that a patched-up compromise will be reached, a temporary deal which kicks the fiscal can down the road, without actually solving America’s long-term deficit and debt crisis. However, failure to reach such a deal (and it is important not to underestimate how politically dysfunctional Washington has become) would practically doom the president’s second term from the start.

If this is what the White House will do, the great White Whale of the next four years is a simple fiscal question: Can America arrest its trajectory of rather steep decline and enact a Bowles-Simpson style compromise that both raises taxes (as the Democrats dream about) while engaging in entitlement reform of Medicare, Medicaid and Social Security (the Republicans’ fondest wish).

In the Bowles-Simpson plan–a bipartisan compromise reached by the president’s own appointed committee in the latter days of his first term—there is a durable blueprint to do this. There would be three dollars in spending cuts for every dollar in tax increases, entitlements would be means tested, benefits would be cut and doled out slightly later in life, taxes would be simplified and cut for all, and loopholes and deductions would be curtailed. Such a grand plan would stabilize the American debt rate at around 60% of GDP, thus preserving American economic power for the next generation.

There are two fundamental problems in reaching for the Bowles-Simpson Holy Grail. The first is that it presumes that people in both parties are less ideological than they currently are. It is not just the right-wing Tea Party that is the problem here; House Minority Leader Nancy Pelosi and her left-wing followers have also shown no sign of being able to make the significant compromises that would be necessary to make this whole process work. Without the left agreeing to entitlement reform and the right agreeing to tax rises, the deal will never be done. It is an open question as to whether this level of compromise is now possible in a Washington more ideologically divided than at any time in memory.

The final problem in nailing down this ambitious domestic agenda is that it assumes the world will simply not intrude while America tries to sort itself out. History simply does not work like this. While it is highly unlikely there will be simultaneous: war with Iran, conflict between China and Japan over the Senkakus, the euro-crisis going septic, Syria’s civil war leading to regional instability or even regional war in the Middle East, there is a very good chance that some of this happens. Any foreign distractions could well doom the domestic-only focus the president is banking on.

Given this highly ambitious domestic agenda, Obama the second time around is likely to disappoint both the Wilsonian liberals who seek American intervention in troubled regions around the world to promote liberty and protect human rights (involvement of the Libya variety) and the neoconservative hawks who seek greater U.S. commitment to lead the 21st century world through the preponderance and use of its military might. If the first term is any indication, U.S. foreign policy will to continue to develop in a cautious, limited, pragmatic, yet largely reactive manner. There will be few American efforts to order the new multipolar world, or respond proactively to much of anything.

And therein lies the danger.

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Columns/Op-Eds

Column in The Hindu: “Obama’s eastern pivot, made in Asia”

by Samir Saran and Dr. John C. Hulsman
8th of November 2012
Please find here the link to the original article

In his second administration, the form and contours of America’s ‘Asia Focus’ will be determined more by Asians than the U.S.

We live in an era that feeds off slogans and lives the clichés. For the Obama campaign it was the rallying cry “Forward.” And it seems that despite the ruminations of the pundits, who will complicate a straight line, the U.S. has given The President of the United States of America (POTUS) the mandate to march on, without the pressures of having to fight another election. The onus is now on President Obama to deliver on the many domestic challenges that confront his country and certainly on his vision for positioning the U.S. strongly in a rapidly changing world.

So far, the subtleties of the multipolar world — a place where America is a declining Chairman of the Board, beset by new board members with ever-growing market share — had not allowed for a bumper-sticker view of what was going on. Obama’s first term administration articulated its response to this new world in a verbal shorthand. Discussions on American foreign policy and grand strategy have been punctuated with the liberal use of terms like “Asia Pivot,” “Strategic Rebalance,” and “Asia Focus,” popularised by U.S. Defence Secretary Leon Panetta and Secretary of State Hillary Clinton. Attempts to truly decipher the underlying motivations of this new focus on the Indian and Pacific Oceans and what it means practically in policy terms have come to very little — in terms of U.S. force posture, budget (and cuts) and doctrinal shift. In other words, beyond the bumper sticker, what are we really talking about here? And how will this pan out in the second Obama administration?

LOOKING AT THE REGION

It must be clearly understood that the Asia Pivot or its various “avatars” do not signal greater U.S. engagement in and with Asia. It is a powerful historical fact that ever since the country emerged from being an isolated continental island, it has been fundamentally engaged with Asia. The U.S. has been a primary Asian Power since the dawn of the post-WWII world. Its strategic partnerships and security blanket in the western Pacific and in South-East Asia have underwritten the progress and stability of the region. It is undeniable that U.S. deployments, “East of the Suez,” in the 1960s, and in the Malacca Straits have secured trade routes, as well as the movement of energy and wealth that have benefited the Asian economies, just as much as it has helped preserve U.S. oil and market interests in the region.

So why the new slogan about America’s interest in Asia now? What does the U.S. seek to achieve? And how will this change the configuration of U.S. engagement in the region? The official American take on this subject reveals very little and certainly does not answer the pertinent strategic questions. But behind this apparent vacuum, something profound is happening.

First, the Asia pivot is all about transitioning from a world where a single great power reigned, to one where others ascend to great power status. By locking in new and old allies and strengthening its strategic position in the region, America hopes to cushion the blow of a relative global diminution in power. History is replete with examples of premier countries attempting to fight off growing rivals (Edwardian Britain and Wilhelmine Germany come to mind).

Washington is hoping to demonstrate strategic strength as a reassurance to allow for a peaceful realignment, wherein China continues to rise without its ascendancy provoking military conflict. As an American policymaker grandly stated, we are in the midst of a novel experiment where the only Hegemon is “allowing” the transfer of power peacefully (and grudgingly) to a newly-rising power. The only way this works is for basic American interests in the region to be reinforced.

Second, a lot of the “Asia pivot” narrative is about internal American discussions; it is as much a “call to action” allowing America to rouse itself, as it is a reaffirmation of commitment to its allies and new partners. Such a new strategy does away with the most indelible image of America in the new multipolar world, where it is often seen as “Uncertain Sam” or “The Reluctant Eagle.” The pivot to Asia serves as a rallying cry of decisiveness. It is also a blueprint for budget priorities, redeployments and a new and more efficient force architecture that the new administration will need to define given its campaign commitments.

Third, the pivot narrative is a comment on the changed dynamics of the Indian Ocean. Soon there will be the possibility of two or three new powerful navies (India, China and Indonesia) operating in the region. Doubtless, there will be new contests and competition for the role of commissioner of the seas.

Ranged against this, are declining American oil and natural gas interests in play as the coming fracking revolution in America itself allows for a dramatic new domestic growth in energy production. The Asia pivot at once answers why America should continue to care about what goes on in the rest of the world; America may not get its oil from Asia, but all the countries it finds itself interdependent with do. Thus, the Asia pivot sells continuing American engagement to a weary and economically overburdened American public. So, in the end, this is a bumper sticker that actually says something.

AND THE RESPONSE

While all this may explain the American pivot, what is even more interesting is how the region itself will respond. For Asia is, but an artificial grouping of nations painted with one brushstroke. A unified character is indescribable and its evolution is characterised by a mosaic of individual national experiences or, at best, by developments of subregions like Asean.

Today, Asean in a seemingly chaotic manner has accommodated the U.S. as an Asian Power while at the same time economically aligning its path primarily with that of China and some other emerging centres. Asean has in many ways already learnt the fine art of using the U.S. as a strategic balancer; for example during recent Chinese assertiveness in the South China Sea, Asean drew the U.S. in as a very useful offshore balancer. Asean’s finely-calibrated balancing act is likely to continue.

In the short to medium term, India is a key to the “Pivot Paradigm.” For India, China is a natural neighbour. Difficult as the relationship may be, trade between the newly emerging economic giants will only increase, whatever the strategic pitfalls ahead. As the relative economic and political weight of China grows, it is the Indian response that could well befuddle most American planners. Proud of its “strategic autonomy,” the Indian reaction to the pivot will be an outcome of the Chinese approach to and engagement with India. Recent developments show that while China is keen to avoid pushing India to a place where a U.S. partnership seems reassuring, the new-found chauvinism and assertiveness emanating from Beijing is disturbing New Delhi.

Therefore, China itself will ironically determine the contours of the American pivot; the biggest game changer may well be the upcoming changing of guard in Beijing — the mood and demeanour of the new leadership led by Xi Jinping. Paradoxically, and the ultimate sign that we do live in a very different era from the preceding one of American dominance, the form and content of the U.S. pivot to Asia may be determined more by Asians than Americans. And this will test the skills and will of Obama 2.0.

Samir Saran is a vice-president at Observer Research Foundation and Dr. John C. Hulsman is the president of a strategic consultancy firm.

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Columns/Op-Eds

Column in The Hindu: “Looking beyond the honeymoon”

by Samir Saran and Seema Sirohi
New Delhi, 29th of September 2012

Please find here the link to the original article.

The relationship between India and the U.S. is emerging as one of the three that will shape Asia and global politics in the decades ahead, the other two being U.S.-China and India-China

It is rare for the ideas people to be behind the curve but those who say the India-US relationship has been reduced to merely “feel good” meetings and junkets are exactly that — a little behind the curve. Critics in both Washington and New Delhi complain about the preponderance of grand rhetoric which remains unmatched by delivery. Yes, India has signed some significant defence deals with the U.S. but where’s the real beef or the strategic content, they ask.

This reductive description is more a function of the traits typical of people in the two countries — if some Americans are driven by “instant gratification,” their Indian counterparts see “melodrama” as a virtue. But beyond these personality quirks, clues point to a maturing partnership that no longer needs the adrenalin rush of big-ticket developments such as the Indo-U.S. civil nuclear agreement of 2008.

The language

It is apparent that India and the U.S. have made a long-term bet on each other even though the language reflects a cautious discretion bred in political realities. In India it is still not kosher for many to call America a good friend, a useful partner. It is ever so easy to point to the long history of Washington’s coddling of Pakistan and its disregard of Indian concerns as exhibit A. Their counterparts in Washington complain: what has India done for the U.S. lately? Remember the promise of commercial dividends from the nuclear deal?

Fortunately, those who make decisions are largely unfettered by this narrative. They don’t want the present to be completely hostage to the past. They are already moving ahead, pushed by new geographies and challenges. The India-U.S. relationship is emerging as one of the three bilateral relationships that will shape Asia and perhaps define global politics in the decades ahead. The other two being U.S.-China and India-China.

Four trends

The new India-U.S. partnership has four broad trends, which were apparent during recent discussions between Indian parliamentarians and scholars with senior officials in the departments of State and Defence, and at the National Security Council as part of a delegation organised by the Naval Post-graduate School, Monterey Bay and the Observer Research Foundation.

The relationship has moved beyond “parallel actions” where both countries despite a congruence of interests moved separately, whether in Myanmar, the Middle East or Afghanistan. The old distrust has been replaced by a new respect for this kind of independent parallelism, which now seems to be converging. This has opened up the field to a wide variety of issues for frank discussion and an exchange of ideas between the two. From Pakistan to cyber security to space, no subject is taboo.

The two main drivers for American consolidation of thought: an externality called China on the one hand, and internal doubts about the merits of unilateralism, on the other. American people have no appetite for new, expensive engagements. They imagine themselves better off “leading from behind” despite the hawkish clamour from conservative talking heads.

The second noticeable trend is the understanding between the political leadership in both countries, stressed and repeated at very senior levels. In the U.S., bipartisan support for India is public and enthusiastic, putting New Delhi in the sanguine position of not having to fret about a change of administration in Washington this November. In India, the support is pledged quietly and firmly and repeated through itinerant former foreign secretaries and retired generals. The challenge here is to overcome the inertia of the mid-level bureaucracy on both sides which can puncture their political masters’ biggest dreams with pinpricks born of residual institutional memories.

Also apparent is a new appreciation at high levels that the bet on India cannot and should not be purely for its large market. India’s emergence is good in itself because of strategic convergences. Short-term transactional expectations around that odd contract or defence deal gone awry will continue to disappoint, but policymakers understand the need for “patience” — a word that has become part of official U.S. speak on India. The understanding has opened the door to Washington looking at India in the medium-term instead of just for short-term gains. A growing number of thinkers in Washington believe the strengthening of India will be one of the main features of the U.S. presence in Asia this century.

The last and perhaps the most interesting development is the real entry of the U.S. Defense Department to try to “own and guide” the India relationship in ways that were unimaginable a few years ago. Defense Secretary Leon Panetta and Deputy Secretary Ashton Carter have taken a decision to act on some of India’s perennial complaints about tech and weapons transfer to put real meat on the bones. Almost all key U.S. relationships are driven by the Department of Defense (DoD) because of the high element of the strategic content. The trajectory from the early 1990s when the DoD hardly had any interest in India to reach a point where it wants to be the main driver is significant.

Regional issues

This has important benefits. Plain talk is one. Senior U.S. officials have apparently conveyed to the Pakistani generals that India’s strategic interests in Afghanistan far outweigh theirs because India has greater capacity, reach and ultimately more robust goals in the region. So they had better get used to the idea. The de-hyphenation is complete. This attitudinal change is a far cry from even two years ago when the Americans were hedging their bets between the two countries. But today there is greater appreciation of India’s pain. The Americans are equally perplexed about how to deal with a country that has allowed its own slow radicalisation and despite opportunities, has failed to stem the tide.

Where will the new trends lead? There could be a mismatch of expectations and capacity. For instance, the U.S. may now be willing to see India as a key balancer in the region and in Afghanistan. New Delhi, however, may be more comfortable with a far modest role. India is unlikely to agree to be a net provider of security and its strategic outlook may be limited to ensuring that anti-India forces don’t dominate Kabul. The green-on-blue attacks against U.S. troops may have already given the Indian political class jitters about training Afghan forces.

Then there is the brute reality of India itself, which can alienate the strongest ally. The Democrats and the Republicans are united in their support for India but what about the political climate in a country with narrow horizons and where short-term obsessions manifest in “tactical” moves that can derail the country’s larger strategic goals?

Seema Sirohi is a columnist based in Washington DC. Samir Saran, Vice-President at the Observer Research Foundation, was a part of the recent Track-2 interactions with the U.S. establishment.

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In the News, Water / Climate

Samir Saran in MINT discussion on “Making sense of sustainability”

Mint conclave on the ways to promote sustainability in business
New Delhi, 16th of July 2012
Please find here the original link to the article

New Delhi: Ravi Narain, managing director and chief executive of National Stock Exchange of India Ltd; Rajat Kathuria, economist and in-coming director, Icrier; Sivasubramanian Ramann, executive director of Securities and Exchange Board of India (Sebi); Seema Arora, executive director at CII-ITC Centre of Excellence for Sustainable Development; and Samir Saran, vice-president at Observer Research Foundation, were the panellists who took part in a Mint debate on sustainable development. The panellists discussed the ways to promote sustainability in business. Mint’s deputy managing editor Anil Padmanabhan moderated the discussion. Edited excerpts:

Padmanabhan: Sustainability is not possible without inclusion. Environment has to be seen holistically. Is there a business case for sustainability?

(Left) Ravi Narain, Managing director and CEO, NSE and Seema Arora, Executive director, CIIITC Centre of Excellence. Photos: Pradeep Gaur/Mint

(Left) Ravi Narain, Managing director and CEO, NSE and Seema Arora, Executive director, CIIITC Centre of Excellence. Photos: Pradeep Gaur/Mint

Arora: There is certainly a case for sustainability. As the minister (M. Veerappa Moily) said, it is not that business has to do it for anyone else. Business has to do it for its own survival. And that’s how we advocate it. That’s why mainstreaming sustainability into corporate decision-making. Sustainability here includes social and governance issues. Corporates need to look at it from this lens as well as from long-term perspective. Typically businesses look at it from short-term lens because they are driven by certain rewards they get. For this movement to actually succeed, that reward mechanism has to have a long-term lens. This is what we are trying to do with different stakeholders. Coming back to your question, there is certainly a business case, that is why we see many corporates already doing it. They are creating value for themselves and their stakeholders.

Saran: I am not sure about there being a business case for sustainability because there is no agreement on how we define sustainability. You saw Rio +20, there was no agreement among various nations on what sustainability is. But governance is something that can be measured. We have tried to create a method where we measure energy and emissions. We see these two as a proxy for governance. Any company with good governance will be efficient with its fuel consumption.

Padmanabhan: If we look at the guidelines laid by the (ministry of corporate affairs) ministry, they are more holistic.

Saran: Here again, we have to separate sustainability from social enterprise. If you were to tag your social ventures as corporate social responsibility, CSR, then I think you are confusing the cost of employee with CSR and that’s not right. That’s what most of the companies do. They try to project workforce infrastructure development as giving back to larger society. I think, these two have to be segregated. Up to the 90s, companies were hiding that they were making profit. Because the companies were projecting themselves as not profitable, they didn’t have to do much for others. Post 90s, profit became the mantra and then inclusion didn’t matter. And until 2007-08, it was the mantra. Only in 2009, social inclusion was introduced in the budget by UPA (United Progressive Alliance). The issue is, social transformation and growth are not linked.

From Left to Right: Samir Saran, VP, Observer Research Foundation; Rajat Kathuria, Economist, Icrier and Sivasubramanian Ramann, Executive director, Sebi

From Left to Right: Samir Saran, VP, Observer Research Foundation; Rajat Kathuria, Economist, Icrier and Sivasubramanian Ramann, Executive director, Sebi

Narain: There is a very clear business case, but it is not explicit enough. The so called enlightened businesses see it as a business case, but it is not out there in all our faces. We need to help bring out the cases of successful businesses who managed to see it as a business case and that has the ability to move it forward. There is empirical and anecdotal evidence that companies can get a premium if they are able to demonstrate good governance. It gets fuzzier when you come to non-governance part of sustainability. That’s about markets and investors. The other half is funders. I think the banks need to do a lot more to align their interests with corporates in making a business case.

Padmanabhan: As a regulator, how do you see it?

Ramann: I agree there is a business case in this whole move towards sustainability. If inputs are costed correctly, that is where a company is going to go forward, and make the best of whatever inputs are available and discard the expensive one and take on what is cheaper. We should bring that out more clearly.

Padmanabhan: You mean include the environment and social cost in the price?

Ramann: We are talking about moving ahead, looking clearly ahead at cost, which is real. One good thing that happened was the BSE green index. So, why not put out a simple number on which companies could be graded. That would certainly be good step forward.

Kathuria: One of the classic reasons for market failure has been that the externalities. It is not the inability but the complete dissociation from firms’ point of view to include those costs, those externalities into cost of production, which gives rise to market failure issue. The question is how to get firms to do that. There are two ways, one is voluntarily, or force companies to include those costs and therefore get the desirable results. The world is experimenting with carbon credits and standard for environmental sustainability and jury is still out there. But the problem is market failure and addressing that market failure, culture is also important. Do we have the culture of compliance in our country or not. So getting the firms to do it is a long road ahead. One of the ways in which compliance happens is through a strong institutional structure. Nor are we that sanguine about market any more, that the market is going to lead to the outcomes that are desirable, neither is the world. The way, to get the market to achieve the desirable outcome, is the institution structure that has sound enforcement and the right market incentives.

Padmanabhan: Samir you said growth and social inclusion are delinked at this point of time. Do you think these incentives can be a bridge?

Saran: I am not a believer in carrots. I think sometimes sticks are needed too. Now, I am not saying that should be done. The Greenex is a good way of doing it, you are listing good performers. Then, like Ravi (Narain) mentioned, hopefully we can ensure that funds flow to these performers. What is not happening today is that you are creating institutions and standards, but funds are not necessarily being driven to those performers in that framework. I completely agree with Ravi, unless bankers start backing good performers, good governance and social practices, you are not going to see companies either hurt enough or incentivize enough to change.

Padmanabhan: It is clear that we need incentive structure. Now the big debate is whether you follow stick approach or a carrot approach.

Arora: In our country pressures and dilemmas are completely different at the moment. I don’t think we can say that this is the only route by which we will get the results we really want. Also, culture has to play a major role here in a way we change the behaviour and the way industry responds to certain things. There is certainly a case in providing some kind of incentives for good performances. They could be different types of incentives, market-based incentives, financial incentives or recognitional incentives, we can start and experiment with. The important point is the entire ecosystem at this moment is rewarding corporate performance on quarterly performance. If that is going to be the main metrics, then obviously the ecosystem is not rewarding anything else the corporates do in terms of value creation on sustainability. So, the system has to work together to make that happen. We need to bring consumers on to the table. We need to have mix of incentives and gradually move to disincentives. But we are not mature enough to start immediately with it.

Ravi: Can we ask every institutional investors to put out in public domain what their assessment is for each corporate they have invested in, on their ESG (Environment, Social and Corporate) view, ESG action and sustainability.

Padmanabhan: Raman, as a regulator, can the disclosure be expanded to include these?

Raman: Most certainly. The facts is the initiative of ministry of corporate affairs has given the way forward for regulators like us. And it is something that is probably going to come out soon on how to get companies to make better disclosures. It is active work in progress, be it a listing agreement or any other form, the companies will be bound legally to bring out disclosure with regards to ESG.

Padmanabhan: What can be the collaborative mechanism that can be put in place, which will incentivise whether through carrot or stick, or its combination.

Rajat: It can’t be either carrot or stick approach. It has to be both. What works better is a carrot approach. A stick approach would work well in trying to establish culture of compliance if you have credible enforcement. Unless you are going to be able to enforce standards on whether environment or carbon, the stick approach is going to be difficult. But it can’t be either-or approach. Some good case studies show that carrot approach is a good approach, but a stick, enforcement and penalizing the non compliers is going to create compliance culture in the future.

moulishree.s@livemint.com

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