Executive Intelligence Review
This presentation appears in the May 25, 2001 issue of Executive Intelligence Review.
SUJIT DUTTA

India and the Eurasian
Development Perspective

[PDF version of this article]

Professor Sujit Dutta is a Senior Fellow at the Institute for Defence Studies and Analysis in New Delhi. He delivered this address on May 5 at a conference of the Schiller Institute in Bad Schwalbach, Germany.

The Schiller Institute's ideas and the kind of conference you have held in the past two days, is clearly an important step in the global struggle over ideas, which is the most important in the current stage of the international system.

It is now well-recognized that the world is at a turning point in the realm of political and economic ideas. It has been so since the end of the Cold War. Large structures and ideas which underpinned Cold War era institutions, and the politics and economics of that era, have died with the end of bipolarity, Soviet disintegration, and the decline of state socialism, on the one side, and the opening up of new states and political areas.

But also, in the capitalist domain, the old institutions are not working, and are no more suitable to the kind of international challenges which have emerged since the end of the Cold War. The efforts of classical economics, underpinned by "structural realism" and neo-liberal ideas in the international relations arena, are clearly not adequate to deal with the kind of cooperative ventures which the international system—as described at this conference—currently requires. The ideas, structures, and perceptions that shaped the post-1945 order have struggled to cope with the radical and ongoing changes.

What we clearly need, is "globalization" of a different kind. We need global integration; we need dominant international ideas, that will link and make possible the kind of corridors and new institutional relations; but we need to move away from the current debate on globalization, to make that possible. It is not going to happen, unless there is a victory in the realm of new institutional thinking: In the concept and strategy of new ideas, that will link independent, national developmental strategies, with regional and global strategies.

The Struggle Over Ideas

I am extremely happy, that all of you are engaged in creating these new ideas. What is critically important, is the move away from the dominance of Cold War ideas, towards a new international structure, conducive to the current era.

The Cold War-era ideas are increasingly inadequate to deal with the very different challenges that the world now faces: the emerging tensions in America's relations with China; the huge economic uncertainties in the advanced capitalist economies of Japan, the United States, and Europe; the financial meltdowns that have hit many of the new industrial economies such as that in East Asia in 1997; the internal conflicts that are ravaging states such as Indonesia, Afghanistan, Pakistan, or parts of Africa; the rise of fundamentalist political movements; and the myriad challenges of economic reform facing the large developing economies—Russia, China, India, Mexico. This is a historical point from where the international system could take several directions, depending on the kind of political forces and ideas that emerge as the dominant vision of the era.

This struggle over ideas to reconceptualize and reconfigure the international system—and the political, economic, and security institutions that are critically important for its stability and well-being—has been a defining feature of the new era. While globalization, unipolarity or multipolarity, clash or cooperation of civilizations, end of history, Asian values or general human rights, etc., have been among the more prominent issues in this debate, the fundamental issue has been to find the principles that will ensure a peaceful, stable, secure, and increasingly prosperous global community of peoples and states.

The Role of India

India is in many ways at the center of this struggle for the shaping of the structures and dominant ideas of the emerging global order. This is not normally understood in many countries. From the very beginning, the kind of ideas that the Schiller Institute is discussing and proposing, have had a strong resonance in India. They have been there since the 1950s, and the combination of a developmental strategy linked to Non-Alignment and castigation of the Cold War, meant that India has produced some of the very interesting ideas and movements internationally. The Group of 77, the struggle for a new international economic and political order: Many of these, were movements which were born in India, and had strong resonance through Africa, Latin America, and Asia.

These ideas did not succeed, because the global institutions and the major powers, did not back them. These ideas cannot come to fruition, without solid backing of Europe, Japan, and the United States, and other countries which dominate institutions.

However, the fact is that today, as these institutions face a crisis, there is a possibility that the ideas that are discussed here, can succeed. Therefore, what is absolutely important, is pragmatic notions of building this alternative model of globalization, on structural linkages, infrastructure, and new ideas of economic development.

The largest state, along with China, in terms of population, India has been organized by its post-independence nationalist leadership as a democratic, secular, federal republic. With its heterogeneous linguistic, caste, and religious composition, and the complex identity-formation of its people over 4,000 years, the notions of secular values, cooperation and coexistence among cultures, and rule of law, are crucial to its statehood and form the core of its Constitution.

India's worldview is therefore rooted in universal political values that are increasingly shaping a united Europe in particular.

For some 40 years after Independence, India followed an inward-oriented industrialization policy and a non-aligned foreign policy that abjured the power politics of the Cold War. This achieved great success. Like China, we started off from scratch—the British had built some things, but the country was left with a huge, extremely challenging economic situation. Levels of illiteracy and poverty were huge, infrastructure was poor, the educational system was poor. All that had to be developed.

In collaboration with the Soviet Union and some other European countries, and even with the United States in the agriculture sector, we built a very diversified and extensive economy over the past 50 years.

It is critical to understand, that this was a policy that enabled India to build a large industrial and scientific base covering all areas—steel, machine tools, nuclear energy, aerospace technology, chemicals and pharmaceuticals, metallurgy, telecommunications, shipbuilding, railways, automobiles, textiles, fertilizers, cement, computer software and hardware, electronics. Today, the world software industry heavily relies on India for its well-being, and India has been very badly hit by the crisis in the software industry.

International Involvement

Since the 1980s and especially from 1991, the inward-oriented strategy has been gradually given up, as India has sought to speed up its growth rate, enhance investments in infrastructure, and modernize its industrial, technological, educational, and agricultural sectors.

This is combined with a new international involvement in international affairs, made possible by the end of the Cold War. The last era of our international involvement, was largely focussed on moving away from the Cold War, and keeping co-existence. Now, it's possible to build new linkages with Europe, Japan, and the United States, which earlier had been prevented. In this new situation, Indian policymakers have been deeply divided over the issues of globalization, and what kinds of policies are exactly beneficial for maintaining rapid economic growth.

India has been the fastest growing economy outside East Asia through the past two decades. It grew at 5.5% in the 1980s and 6.5% through the 1990s. Unlike East Asia—which grew at very fast rates largely on the basis of globalization, linked to integration into the global economy, and foreign trade- and investment-led labor-intensive exports going to the U.S. market—India has not had that integration. Until 1990, India's economy was essentially internally led.

As we have opened up, we find that the world economy is also going through a critical stage. Therefore, it is of great significance that these new ideas coincide with India's search for a globalization model: a model of economic development in an increasingly integrated international system.

These ideas of physical economy, of the Eurasian corridors, and restructuring the international economic and financial institutions, are critically important from our perspective. We have made repeated efforts in international institutions, the IMF and so on, to come forward with alternative views, of keeping alive global cooperation, and keeping a different orientation from that normally supported by the IMF and World Bank.

The national goal is to grow at 8-9% over the next 25 years, in order to eliminate poverty, create enough jobs for a growing labor force, reconstruct cities, and emerge as a global economic and political force. In fact, much of the world's growth in the coming decades will depend on the rapid modernization and expansion of the Indian and Chinese economies.

If India is to attain its economic and political goals, it needs to develop three key strategies. One, an internal strategy that will create large agro-industrial bases throughout the country, interlinked through a network of modern highways, railways and airways, and telecommunications. It will also need large investments in power, ports, and education.

India urgently needs an expansion of infrastructure, and the government is very concerned about this. We are rapidly expanding a network of national highways and railroads, and airports. This will integrate central India into the coastal and other zones.

Two, we will need an international strategy of technological, trade, and investment ties with the advanced techno-industrial states—Europe, the United States, Japan, and Russia—to accomplish modernization.

Three, India will be heavily energy-import dependent, especially on the Gulf and Central Asia. It is therefore concentrating on nuclear energy, as well as developing thermal, hydro, and solar power internally, and externally to develop access through pipelines to natural gas from Iran, Central Asia, Bangladesh, Myanmar, and perhaps Indonesia. As we move towards an integrated, globally oriented strategy, the ideals of building energy and road and rail-network corridors, become extremely important for the success of the Indian economy. To interlink energy routes and energy supplies, with modern transportation corridors, this overall developmental approach is a very important one.

The Southeast Asia linkage, as well as the Iran linkage, are critically important. The kind of Eurasian rail network being proposed, has three dimensions. From our perspective, the southern Asian dimension is a vital area, to link Southeast Asia to India, and then to Iran, and then move on to Central Asia, Russia, and Europe. This will go through the bulk of the population of Asia.

The link to China is already a proposal: the Kunming to Calcutta route, to link eastern India to southern China, via Bangladesh, Myanmar, and Thailand. On the Indian side, this route already exists. We are building some of the routes in Myanmar. The Chinese have also built up to Yunnan, so it is possible, in the coming years, to complete this route.

The rapid development of India is increasingly tied to a stable, secure, and increasingly cooperative global and regional order. Creation of strategic transportation and energy corridors in Eurasia and Southern Asia are of immense significance to India. In terms of ideas, these at once address the issues of peace, stability, economic, and security cooperation across Eurasia.

However, current efforts to create these corridors face significant obstacles: political instability and conflict in regions such as the Talibanized Afghanistan-Pakistan belt, that threaten to spread into Central Asia; the lack of requisite backing from Europe and Japan; and absence of strong ties among key Asian states—India, China, Iran, Indonesia.

It is critically important in Asia, to build inter-state relations that move away from conflicts, and to expend efforts to build confidence and understanding. Nations must realize the necessity for such projects and such cooperation, in order for their own states to survive: that it is in their own self-interests, to build larger cooperative ventures and political stabilization in this area. There are big problems: Indonesia is going through a major crisis; Burma is not yet ready for many of these efforts; the Gulf area internally remains in tensions; the Pakistan-Afghanistan area has gone into absolutely backward civil war conditions; and fundamentalist Islamic trends are of deep concern, and are affecting India very badly.

Second, there is a need for Europe, Japan, and the United States to support this process. I am given to understand here, that the Maastricht process [in Europe] and others, really are a problem, in terms of providing the kind of state backing from Europe and elsewhere, which would make low-[interest] credit-driven new ideas to fund this kind of infrastructure construction. It is very important, that the U.S., Japan, and Europe, are strongly committed to develop these kinds of new ideas, and move away from the other globalization model.

This can only take place, if these ideas win out in European governments, and Germany, France, and other leading countries here, support and bring forward, new, innovative ideas for funding and financing and providing credits for these kinds of processes.

The second element, is the global cooperative policymaking changes, in the institutions of Europe, Japan, and the U.S., that can bring about this large-scale structural change in the globalization model.

Finally, there is an absolutely important demand, for the countries of Asia, for India and China, for Indonesia and Iran, and Russia and Japan, to work together to build a more stable, peaceful Asia. What is needed is much greater cooperation in terms of leadership exchanges, economic ideas, and cooperative stability and security models, to bring this about.

India is deeply interested in this. Its own proposals, for a united Asia, and an Asian relations conference, go back to 1946. The Afro-Asian movement was triggered in Delhi. These kinds of ideas have a great sympathy in India, and we expect, as we move into our own development in the coming years, to play an important role in bringing about, in cooperation with all of you, the successful change in strategy in globalization.

It is important, therefore, that key Eurasian countries focus on the political, economic, security, and technological factors that would make possible a unified developmental strategy. India has great interest in such an outcome, and would play an active role in bringing this about.

Thank you.

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