Ministry of External Affairs Government of India

India's Foreign Policy: Options in the changing geo-political context

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  By: Amb (Retd) K.P. Fabian
  Venue: Indian Institute of Science, Bangalore
  Date: March 29, 2019
  

We live in a world subject to change. The rate of change is not an invariable. At times the change picks up speed. We now find ourselves in a world under transformation at an unprecedented pace by technology including artificial intelligence, new ideas, new aspirations and much else.

To understand this changing geopolitics, a scientific temperament is absolutely necessary. It is your illustrious institute, the brain child of Jamshedji Tata, established in 1909 and guided by a series of leaders of eminence, where C.V.Raman, the Nobel Laureate worked, that can take the lead in providing that scientific temperament mentioned in the Directive Principles of our Constitution.

When India in 1947 entered the comity of independent nations, Prime Minister Nehru wisely chose not to join either of the two power blocs engaged in the Cold War. That war is best described in the words of Henry Kissinger, himself a prominent actor in the Cold War drama. He described the Cold War thus:

The superpowers often behave like two heavily armed blind men feeling their way around a room, each believing himself in mortal peril from the other, whom he assumes to have perfect vision. Each side should know that frequently uncertainty, compromise, and incoherence are the essence of policymaking. Yet each tends to ascribe to the other a consistency, foresight, and coherence that its own experience belies. Of course, over time, even two armed blind men can do enormous damage to each other, not to speak of the room.”

The room is our earth. Kissinger is referring to MAD(Mutually Assured Destruction). Obviously, India chose not to follow either of the two blind men. India chose to be non-aligned and other nations across the continents joined the movement. Yugoslavia, Egypt, and Indonesia were among those who chose non-alignment.

However, it will be wrong to say that India's foreign policy was identical with non-alignment. Non-alignment was only the means to promote India's interests and values.

On 7 September 1946, five days after joining the Viceroy's Executive Council as vice chairman and member in charge of external affairs, Nehru declared:

"We propose, as far as possible, to keep away from the power politics of groups, aligned against one another, which have led in the past to two world wars and which may again lead to disasters on an even vaster scale."

As Foreign Secretary Maharaja Krishna Rasgotra has pointed out in his insightful book titled A Life in Diplomacy the words as far as possible are important.

In short, non-alignment did not mean keeping India at equal distance from U.S. and U.S.S.R. In any case, if India has to keep itself at equal distance from the two super powers India loses control over its policy. The cardinal purpose of non-alignment was to retain one's independence and to look at issues and take decisions keeping in mind one's interests. Incidentally, interests include values. It was and it is in India's interest to have a world where peace and cooperation for shared progress prevail. Any country that allied itself with Washington or Moscow ceased to be independent.

Incidentally, the belief entertained by some that the U.S. has a nursery to grow great powers and India should have sought admission to that nursery is naive. There is no such nursery. Strength cannot be imported.

The Cold War was between the U.S.A. and the U.S.S.R. The latter ceased to exist in 1991. Since the collapse of the Cold War, geopolitics has changed much. When U.S.S.R. disappeared, for a while there was a moment of unipolarity as expounded by Charles Krauthammer who wrote in Foreign Affairs, "It is unipolar. The center of world power is the unchallenged superpower, the United States, attended by its Western allies." That was said over eighteen years ago. The "Western allies" are no longer " attending" an "unchallenged super power".

Let us take a look at the distribution of power, military and economic in our world. The U.S. defense budget for 2019 is $686 billion whereas it was $409.7 billion in 1990 and came down to$ 298.4 billion in 1999.

A comparison with other powers will be useful.



However, we should make a crucial distinction between military power, available and usable. Obviously, more power is available than usable. Another point is that one $ spent in U.S. and one $ spent in China might give differing outputs making a mechanical $ to $ comparison untenable.

There is a MAD relationship (Mutually Assured Destruction) between US and Russia as there was between U.S. and U.S.S.R.. Moreover, in Europe adjacent to Russia, say, Ukraine or Georgia, in terms of deployable conventional military power Russia has an advantage over US. Russia intervened militarily in Georgia (2008) when US was merely an onlooker. Similarly, when Russia grabbed the Crimea (2014) and destabilized Ukraine by sending in armed 'volunteers' to Donbas the NATO had to watch helplessly. In short, the US is no longer the unchallenged superpower that Charles Krauthammer claimed it was as the Soviet Union collapsed.

Taking a longer view of history, it is important to recall that in the two major wars in the post-World War 2 era , namely, the Korean War and the Vietnam War, the US had to concede to a stalemate in the first and defeat in the second.

Coming to the economic power of U.S., in 1948 it had more than 50% of global manufacturing output. Let us look at the table below:

Table 1: Leading countries on manufacturing output, 2015

Country	Manufacturing Output (USD in billions)	Percent of National Output	Percent of Global Manufacturing
China	$2,010	27%	20%
United States	1,867	12	18
Japan	1,063	19	10
Germany	700	23	7
South Korea	372	29	4
India	298	16	3
France	274	11	3
Italy	264	16	3
United Kingdom	244	10	2
Taiwan	185	31	2
Mexico	175	19	2
Spain	153	14	2

However, U.S. is doing better in services. In 2018,U.S. had a trade deficit of $891 billion in goods and a surplus of $379 billion in services.

The current trade dispute between U.S. and China hurts both, but unequally. It is China that is hurt more and it will do its utmost to end the dispute. But, President Trump is a hard bargainer.

For a while as China was rising , there was speculation that U.S. and China might form a G2 with the rest of the world at the receiving end. President Obama tended to encourage that speculation when he visited China and stated in a joint communiqué that the two sides would work together in South Asia. India protested and nothing more was heard of it.

China has been strengthening its clout in Asia. The New York Times of 9 March 2018 carried an assessment by experts who listed the following countries as getting closer and closer to China:
Pakistan
Nepal
Bangladesh
Laos
Cambodia
Sri Lanka
Malaysia
Indonesia

As a matter of fact, the assessment is wrong. Bangladesh and Sri Lanka are closer to India than China. Malaysia has discontinued projects associated with China's Silk Road Project. We in India, especially the young have to take with a pinch of salt what Western pundits say.

Ministry of External Affairs' Annual Report as well as JSXP's statements and briefings from time to time give a more accurate picture of the real world in such matters. Nevertheless, we need to bear in mind that China has been working hard and with commendable success to deepen its economic links with the rest of the world.

Most of the countries in Asia have more trade with China than with U.S. Let us first list the countries:

Myanmar
Cambodia
Vietnam
Laos
Taiwan
Malaysia
South Korea
Thailand
Australia
NepalNew Zealand
Pakistan
Indonesia
Bangladesh
Philippines
Japan
Sri Lanka
Bhutan
India

Except for India, Japan, South Korea, Taiwan, and Bhutan all others have more trade with China than with U.S.

However, in terms of sale of arms, U.S. is way ahead of China. In South China Sea, China has successfully encroached upon the maritime rights of others and they are not sure that U.S. will be prepared to confront China militarily.

Recently, we have come across an important geopolitical shift. Russia, as we have seen, came under economic sanctions and was expelled from G8 following its annexation of the Crimea. Moscow moved closer to Beijing and the two increased their economic and political collaboration. It may be recalled that U.S. under Nixon 'opened up ' to China in 1971 to promote it as a counterweight to U.S.S.R.

Will China ever equal the U.S. and thereafter overtake it? A number of economists have predicted that it might happen soon. For example, Arvind Subramanian in his book Eclipse: Living in the Shadow of China's Economic Dominance envisages the following scenario:

In February 2021, the newly elected President of the United States goes to the I.M.F. seeking a loan. The Chinese national heading the I.M.F. demands withdrawal of U.S. Navy from the eastern Mediterranean as a quid pro quo.

Subramanian wrote the book in 2011. He extrapolated confidently from the pace of growth of China and the pace of growth of U.S. in GDP and came to the conclusion.

Such extrapolation is uncalled for to put it mildly. You young people should always read critically the books written by your seniors. Such rather mechanical extrapolations are part of conventional economics. We need to revive the Political Economy prevalent in the 19th century and early 20th century before economics was mathematicized, or over-mathematicized.

Coming back to the question of China's overtaking the U.S. in terms of state power, there is no reason to believe that it will happen in the next five years. We should practice intellectual humility and cease to predict what might happen by 2050 as some think tanks do with such abandon.

For me U.S. is a declining power and China is a rising power. Let us imagine a building with a couple of lifts. China is going up on a lift and U.S.is coming down by another. When will they reach the same floor? It will take a long time as U.S. started from the highest floor.

Moreover, China's economic rise is crucially dependent on globalization and there is already a strong backlash against globalization as seen in Trump's revision of NAFTA, BREXIT, and some other developments including the questioning of EU integration in Italy, Austria, Germany and elsewhere.

U.S. has a huge trade deficit with China and President Trump is determined to bring it down drastically. However, Trump has not succeeded so far. The trade gap rose to $419.2 billion in 2018, from the previous record of $375.5 billion in 2017. His rather tough negotiating and intimidating tactics are a challenge for China.

Another crucial aspect of the geopolitics of the day is that there is a deep nexus between Pakistan and China. Chanakya said that any country has at least one 'natural enemy' among its neighbors. India seems to have two. Do mark my words. I am not saying that India should treat Pakistan or China as its 'natural enemy'. My thesis is that Pakistan and China seem to consider India as their 'natural enemy'.

In Pakistan, policy towards India, China, and U.S. is determined by the military. The military argues that there is a threat from India and it alone can save Pakistan, thus justifying its pre-eminence in Pakistan's politics, to put it mildly. With Pakistan India's main problem is that it uses terrorism as an instrument of policy against India.

How should India address the terrorism from Pakistan? We need a set of policy measures. There is no single step that India can take to change Pakistan's behavior. At the same time the air strike at Balakote has sent a strong message to Pakistan that there is a price to pay. But, unless the people of Pakistan assert themselves and tell the military that the threat from India is fabricated, there will be no real change in Pakistan's policy.

India attaches high importance to maintaining good neighborly relations with its neighbors. India has succeeded in maintaining such relations with Bangladesh, Sri Lanka, and Maldives. In the case of the last two, the democratic process brought in governments that recognized the wisdom of having mutually beneficial relations with India. The Indo-Bangladesh relations are an example for others. Nepal has been ambivalent and has not fully responded to India's good neighborly approach.

India has reached out to Japan which has responded warmly. Japan was defeated in World War 2 and the Allies imposed on it a draconian treaty in 1951. India refused to join and signed a separate treaty with Japan in 1952 waiving all claims for reparation. However, as Japan got itself allied to U.S. in the Cold War context, bilateral relations did not take off as envisaged in the 1952 treaty. Currently, India and Japan are engaged in deepening and broadening their relations. The close personal rapport between the two prime ministers helps.

Are we living in a multi-polar world? Yes and no. The world is multi-polar except in the realm of international finance. In that realm U.S. dominates as seen from the sanctions imposed on Iran and the diplomatic pressure exerted on India and other importers of oil from Iran to reduce or stop importing oil. We need to understand the historical circumstances under which U.S. Treasury arrogated to itself the role of the global Central Bank. During the Breton Woods conference (July 1944), John Maynard Keynes had proposed an international currency(bancor); the U.S. representative Harry Dexter White opposed it. The final decision was that there will be a fixed exchange system where every currency will be pegged to $ which will be linked to gold, with one $ equal to 35 ounce of gold. Though U.S. under Nixon walked out of the gold standard, the U.S. domination remains.

It will be in the interest of India and the rest of the world is international finance becomes free and fair. The diplomatic pressure exerted by Washington on other countries to reduce or even stop import of oil from Iran is unacceptable.

What should India aim for? To my mind, India should strengthen its military capability and reduce drastically its dependence on others for arms and technology. India's military should be so strong that nobody will dare to attack it. It is not India's intention to send its military to other countries except under a U.N.flag. India's remarkable contribution to U.N.Peace-Keeping Force is universally admired.

India needs to speed up its economic growth based on inclusive growth.

India has more or less succeeded in maintaining good relations with powers that quarrel among themselves.

For the youth of India there is a vast ocean opportunities. Civil Service, especially the Foreign Service, is a good career option. (Many hands went up in response to the question how many wanted to join the IFS. and an intensely interactive Q& F followed.)

Let me conclude by invoking Tagore who had a noble Idea of India:

"Where the mind is without fear and the head is held high, where knowledge is free.
Where the world has not been broken up into fragments by narrow domestic walls.
Where words come out from the depth of truth, where tireless striving stretches its arms toward perfection.
Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit.
Where the mind is led forward by thee into ever widening thought and action. In to that heaven of freedom, my father, LET MY COUNTRY AWAKE!”