Institutions And Competition

BRICS and Washington's social pivot to India

October 2, 2014
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On the eve of prime minister Narendra Modi’s visit to Washington, the Obama administration and friendly media have positioned the new Indian leader as a leader who is open to reforming big government and implementing free market policies.

But critics of Modi say that the much heralded economic performance of his Gurajat state, based on Gross Domestic Product (GDP), is merely at parity with half a dozen other key industrialized states in India and the rest is social media hype.

Gurajat is a state of 62.5 million in a nation of 1.8 billion located on India’s border with Pakistan, around 800 km south of Karachi. When Modi started out his first term as chief minister of Gujarat in 2002 he was accused of ignoring riots that took the lives of over 1000 people, many of them Muslims, and some Sikhs.

Characterized as a Hindu nationalist by many in India as well as by the international media, Modi,leader of the center-right Bharitiya Janata Party (BJP), served as chief minister of Gujarat state until May of this year (13 years).

The Obama administration recently removed Modi’s name from the state department “blacklist” that prohibited his entry into the United States over the incident involving the alleged massacre of Muslims, and Sikhs that transpired during his watch.  It was a move of convenience similar to Obama’s effort to hold up the conviction of his friend and ally Kenyan president Uhuru Kenyatta as a war criminal in the International Court of Justice. 

Modi’s candidacy gained momentum when the body politic of India needed a change.  The nation’s internal politics had become a hotbed of inertia and disposed to sluggish growth and inflation. China has been dumping cheap consumer goods into Indian markets for the past few years and continues to do so, which has been a drag on job creation.

Modi presented a fresh alternative to the scattershot alliance of parties controlling congress that has been used by the rival Congress Party leadership over the previous decade.

The victory by Modi in nationwide elections in May caught many in official Washington off guard. Beltway analysts, and the big contractor network of private sector experts put more emphasis on Modi being stigmatized by Washington over the alleged anti-Muslim massacre back in 2002 than on the probability of his victory.

Modi’s BJP has a history of cooperation with Washington

Modi’s mentor in the BJP, Atal Bihari Vajpayee, served as foreign minister (1977-79), and prime minister in three non-consecutive terms (1996-2004). While Vajpayee was BJP prime minister, president Bill Clinton made the first state visit to India by a U.S. leader in 22 years.

After the 911 attacks PM Vajpayee’s BJP government cooperated with the George Bush administration to patrol and secure the strategic shipping lanes from Singapore to the Horn of Africa.

If anything, Modi inherits the legacy of positive relations with Washington established by his mentor, Vajpayee, who did campaign for his victory.

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Charm Offensive won’t stop China-Iran cooperation

Through Washington’s eyes India’s strategic location makes it a candidate to counterpoise the growing military relationship between Beijing and Tehran, particularly naval exercises in the strategic Indian Ocean shipping lanes. But India and Iran are strong allies.

Iran is a major provider of energy needs to India with the Tehran regime carrying a $5 billion debt run up by successive governments in New Delhi and the Rouhani government not pressing for collection. In the mindset of western “free market” economists this amounts to a subsidy, in the same way that Venezuela provides cheap oil to Cuba’s communist regime.

Modi’s “Make in India” campaign

This theme is nothing new. It was the mantra of the Congress Party and its founders including the British activist Annie Bessant prior to independence. Modi took it as a clever marketing ploy, recycling and rebranding it as his own. 

Now, beyond the headlines, the reality is that Modi faces a steep challenge since India’s current economy is four times less productive than China’s, if you look at Gross Domestic Product (GDP). China, with a population of 1.35 billion, roughly half a billion less than India, logged a GDP for 2013 of $9.24 trillion. India's just $2.1 trillion.

Brazil and India offer another sharp contrast. With a 1.8 billion population India’s GDP for 2013 is estimated at $2.1 trillion and trending upward. Brazil, with a population of less than 10% the size of India (200 million) has a GDP that is nearly the same (2.24 trillion for 2013). Russia, with a population of around 165 million, generated a GDP for last year of 2.0 trillion.

India and BRICS support Russia on Crimea

Although Obama and Modi discussed intelligence, security and defense cooperation India’s nonaligned foreign policy continues to create mistrust in Washington and among the “five eyes” intelligence consortium that dominates electronic intelligence collection across South Asia and the Indian Ocean shipping lanes. The “Five Eyes” particularly Australia, regard India with circumspection just as they do Indonesia.

That view is predictable considering that Brazil, China, Russia and South Africa India criticized the UN Crimean Resolution and abstained from voting on it. Traditional observers and analysts who are in alignment with U.S. interests have characterized this stand as “anti-western.”  As a result, the level of cooperation between the White House and India’s intelligence community may not produce optimal results.

Modi’s vision for the BRICS

So far, Modi is the only BRICS leader to offer his personal vision for the organization. Modi’s want’s the BRICS to be driven by people-to-people contact led by the youth of the five nations. He made this clear to the leaders of China, Russia, Brazil and South Africa at the BRICS summit in Brazil.

"Our own greater good, however, lies more in deepening our bonds vertically. This is why I have spoken on decentralizing this powerful forum in our earlier deliberations. We must proactively move beyond being Summit-centric. We must champion sub-national level exchanges, champion engagement between our states, cities and other local bodies," he has said.

Modi has proposed a BRICS Young Scientists' Forum, BRICS language schools,massive open online courses (MOOC),and a BRICS University. This is an ambitious agenda for a nation that is struggling to power up its internet infrastructure from 2G to 3G while Brazil and other developing economies are implementing 4G technology.

Modi’s agenda for the BRICS sounds more like Al Gore promoting TED reeducation programs designed for wealthy global elites than a manifesto for the BRICS future.

Public health problems could squelch investment

With the Hong Kong protests pushing Modi out of the news the India leader is back home working on another of his big social media initiatives. “Clean India.”

India has historically lacked adequate public health infrastructure and the “Clean India” campaign is a another of his recycled projects, this time from the Gandhi era.   

In spite of a wave of favorable social media, public relations and a reluctance to criticize developing economies the enormity of this challenge could be a disincentive for prospective investors.

A recent study by UNICEF claims that 595 million — around half of India’s population — defecate in the public areas (open space), increasing the risk of disease in urban and rural areas at a time when global public health infrastructure is already stretched by the Ebola virus and other epidemics.

“If we can reach Mars, why can’t we clean our neighborhoods,” Modi asked in a recent nationally televised speech. India’s BRICS partners and prospective investors in the “Make In India” campaign wonder about that too.

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