Manmohan Singh's rendezvous with
history By Dinesh Sharma
Indian Prime Minister Manmohan Singh has
come under increasing scrutiny in the Western
media, mostly for the issues Indian journalists
have been reporting about for several years:
corruption in his party and elsewhere, slow
economic growth and poor governance. Manmohan's
public image in India, while mostly clean, is seen
as subservient to the Congress party structure
governed by Sonia Gandhi, the head of the nation's
oldest political dynasty.
India stands at
a crossroads, facing economic, demographic and
global challenges, while at the age of 79 years,
Manmohan is staring history squarely in the face.
He was the chief architect of the economic
reforms in 1991 that now, 20 years later, seem
stalled. Economists have projected that India has
a narrow window of opportunity to take advantage of
the conditions that come
around once in a generation, the so-called
"demographic dividend", with a pool of young
Indians to propel the nation to new heights.
Thus the glaring lights of Western media
have been turned against Manmohan, first by a Time
magazine article, labeling him "an underachiever",
and recently The Washington Post, which reported:
"The image of the scrupulously honorable, humble
and intellectual technocrat has slowly given way
to a completely different one: a dithering,
ineffectual bureaucrat presiding over a deeply
corrupt government."
At an Asia Society
meeting recently, Duvvuri Subbarao, governor of
the Reserve Bank of India, a position once held by
Manmohan, joked that his own appointment as head
of the bank was correlated with the global
recession of 2008 and his reappointment two years
later coincided with the downgrade of the US'
credit rating.
While these random
co-occurrences brought laughter among the audience
- bankers, consultants, investors - who were
gathered to hear about "India in the Globalized
World", the rest of Dr Subbarao's address was
nothing to laugh about.
He presented with
calculated precision the scope and breadth of the
changes that have taken place in the financial
sector in India during the past two decades. Yet
many households still have no access to a regular
bank or an automated teller machine. This is
obviously not enough to reassure investors that
the Indian economy is ready to make the leap into
the 21st century.
Significant macro-level
challenges stymie India's progress: high
inflation, slowed growth, a large current-account
deficit, while at the personal level a shortage of
basic commodities such as water, food and oil.
While liberalization has increased savings,
production, productivity, consumption and exports,
India has been affected by the global recession.
The challenge now is how to bring down inflation
without hurting growth, Subbarao said.
The
developed and emerging markets were not
sufficiently de-coupled as originally
hypothesized. The global recession took a toll on
India and China alike. For 2012, growth of India's
gross domestic product is projected to be merely
5.5% and China's around 7.6%.
The global
slowdown, the eurozone crisis and domestic factors
have led to slowing of investments in India. Will
this drive India and China closer together rather
than apart, possibly complicating the United
States' triangulation strategy for the "Pacific
pivot" in the region? India might choose to remain
a "swing state" between China and the US, the
world's two largest economies. This would clearly
not be well received by the US administration.
This is a likely scenario, however,
projected by policy think-tanks in the US and
China. The Center for New American Security
suggests that as the geopolitical and economic
order shifts, the US will need new partners in the
future. "Of these countries, Brazil, India,
Indonesia and Turkey stand out. Each nation has a
strong and growing economy, a strategic location
and a flourishing democracy."
Yet none of
them have fully settled on a preferential and
strong ally in the new global order: "They have
yet to fully embrace the international system,
reject it or offer an alternative. These 'swing
states' will greatly influence the shape of global
politics in the coming decades."
India as
the largest secular democracy has a critical role
to play in this new world order. The Shanghai
Institute for International Studies suggests that
India has much to gain by remaining a swing state
in the short and long terms. India cannot catch up
with China fast enough. A report by the institute
suggests that the US wants to use India to check
China's growing influence in the region. "India
will act as a swing state in the global balance of
power, particularly in the China-India-US
equation."
Likewise, on another
contentious issue involving Iran and Israel, India
has stood firm with the non-aligned nations. While
significantly cutting off oil supplies from Iran
because of international sanctions and embargo,
India has remained supportive of Iran's peaceful
nuclear program, backed recently by 120 countries
of the Non-Aligned Movement in Tehran.
Walking a tightrope between these two
close allies, which have been at odds with each
other, has not been easy. Manmohan has not won any
new friends in the US. According to recent
Associated Press story, "Israelis are astounded
that Iran continues to be one of the leading oil
producers, because exports have continued almost
unabated to China, India and other points in
Asia."
On the 11th anniversary of the
September 11 attacks in the US, as tensions
between Iran and Israel remained very tense and
the walls of the US Embassy were stormed in Cairo,
news reports that Israel demanded even tighter
sanctions and some sort of military action against
Iran were rampant. With the US election coming up
in two months, suggestions for the "eleventh-hour
surprise" include among other things loose talk
about an intervention against Iran.
Not
surprisingly, Manmohan's historical legacy as an
economic reformer, who brought India into the age
of globalization and secured the nuclear deal with
the US, has been roughed up in the media. It
remains to be seen whether he will come roaring
back at his enemies or go the way of a gentle
giant.
Dinesh Sharma is the
author of Barack Obama in Hawaii and
Indonesia: The Making of a Global President,
which was rated as one of the top 10 black history
books for 2012. His next book on Obama,
Crossroads of Leadership: Globalization and
American Exceptionalism in the Obama
Presidency, is due
to be published with Routledge
Press.
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