On Economic Reforms and India's National Interest

 

The Indian Prime Minister, Manmohan Singh’s, decision to increase diesel prices and allow FDI in multi brand retail is both symbolic and substantive. It is symbolic because it reflects continuity in the reform process that India embarked upon over two decades ago. And it serves as a signaling mechanism to both the international investor community and the comity of nations. It appears to be aimed at signaling that India is serious about reform and it that will continue to globalize. Its substantive content lies in the potential gains that continuing on the reform path-deep and intensive engagement with the global economy- that will accrue to India. There reference here is not to the economic gains that will accrue from a deeper engagement with the global economy but to the overall transformation of India.   

 

A deeper and more intense engagement with the global economy and globalization can potentially release the energies of the Indian nation.  An international orientation, openness to the forces of globalization and a policy posture that ties India into the sinews and process of globalization can fast track India’s modernization process. Ultimately, it is comprehensive modernity and modernization that will not only unshackle India and redound positively to the teeming masses of India. This has implications on the nature of India’s foreign policy. In this day and age, the nature of power has changed. Power now has different forms and dimensions. It is not longer, to quote Stalin, the number of tanks and brigades that determines the power of a country or nation. Power in a knowledge society (or in a world where there is a premium on knowledge and information is a critical variable) among other things, perhaps stems from an empowered society and polity. Empowerment, in turn, stems from an economically vibrant and dynamic and vibrant society where people have equal opportunities, access to education and knowledge. The causality here runs in the direction of access to education and knowledge but this is possible only when a certain economic well being is pervasive in society. The question is how can or where does foreign policy come into the picture? And what political implications does this have?

 

The answer lies in globalization and its impact on the state and the concomitant impact on international relations and foreign policy of a state. While globalization has not rendered the state  state, it has significantly altered it in many ways and dimensions. The state is no longer the self contained container or entity it was and many of its policy and structural functions are determined by supra territorial and national forces beyond the control of the state. The state has not, against these forces retreated but these forces have significantly transformed the state.   By and large, the state has benefited from these structural changes especially in the realm of economic growth and the attendant improved living standards for the peoples comprising the state.

 

The foreign policy implications for the state are obvious. The state was hitherto held to be a self contained container in perpetual competition –security, political and economic- with other states. The billiard ball metaphor was an accurate one to describe this competition. However, not that the state is porous given the structural forces of globalization it has had to contend with, this metaphor does not hold. It is cooperation and integration that is the buzzword of international relations. (This does not mean that conflict and war have disappeared from interstate relations). Cooperation between states  and integration with the forces of globalization redound positively to states. The trajectory of the Indian state since 1991 is a classic example of this. India clocked n economic growth of around and above 8% for many years and it elevated the living standards of millions of peoples. India was, as a result, feted by powers that be in the world and became a factor in both international politics and the international economy. There are thus huge dividends to be reaped from tapping into openness, and the forces of global economy. It is here that the foreign policy aspect comes in to play. If India continues to be open, has an outward orientation-economically, politically and culturally- the road to a comprehensive transformation of peoples lives is then a given. Would this have political consequences?

 

The answer is yes. An economically empowered citizenry with access to education and equality of opportunity will, as per the prognostications of modernization theory will lead to an expanded middle class. This middle class will not be quiescent. It will be demanding. It will ask for voice in the politics of the country and will not be led like sheep. This will have an impact on the political system which will have to be responsive. A responsive state and an empowered citizenry will naturally improve the quality of India’s democracy. And this can only be an unalloyed good for India.

 

In combination and in concert, these will lead to a well and truly modern India, unshackled from the encrustations of caste, poverty, and other divisions which stem from economic malaises and ignorance. The path to great power status will be smoother and there will be substantive content to this status. What will underpin and undergird this trajectory and path is continued openness, an outward orientation and a global India. And a global India is possible only if and when there is impetus to reforms and when these are set in stone. It is then India’s national interest to be more open; less insular and more integrated into the international economy and the sinews of globalization.  Prime Minister Manmohan Singh , a darling of both the international and national media only a while ago, copped a lot of flak for ‘policy paralysis’ and inability to pass further reforms. He has, however. Now he has a made a bold and beautiful decision. He deserves support and encouragement for this. Let not partisanship and petty politicking come in the way of this. India’s national interest is at stake and the people of India are owed a better life. This is what the Prime Minister’s decision means and implies for India. Let this not constitute the last sigh of the government but the beginning of a bright future.