Eco­nomic Gam­ble

China and In­dia, sky­rock­et­ing Asian economies, have had rocky diplo­matic and mil­i­tary re­la­tions. In at­tempts to boost its econ­omy, the US will have a tough time try­ing to rub shoul­ders with both.

Southasia - - Cover story - By Anees Jil­lani

In­dia will be the most pop­u­lous na­tion, sur­pass­ing China some­time around 2025. The United States will re­main ex­actly where it is now: in third place, with a pop­u­la­tion of 423 mil­lion. This of­fers a re­veal­ing look into the fu­ture. It shows that China’s pop­u­la­tion boom is fi­nally slow­ing down, while In­dia’s pop­u­la­tion con­tin­ues to rise; the lat­ter’s pop­u­la­tion, ac­cord­ing to the 2011 Cen­sus is cur­rently 1.21 bil­lion.

China’s pop­u­la­tion at present is slightly more than In­dia’s but the dif­fer­ence in the GDP is phe­nom­e­nal: $3,250 ver­sus $1,311 bil­lion. This dif­fer­ence is then re­flected in their re­spec­tive de­fense bud­gets: $84.9 ver­sus $30 bil­lion. More­over, the state of poverty is very acute in In­dia as com­pared to China. It can thus be sur­mised that there is at least, as of now, no com­par­i­son be­tween the two states as far as the eco­nomic and so­cial in­di­ca­tors are con­cerned. Things that In­dia can cite in its fa­vor are its demo­cratic cre­den- tials which to its dis­credit are marred by se­ri­ous cor­rup­tion and crim­i­nal scan­dals. It also dan­gles its boom­ing mar­ket as an at­trac­tion to western cap­i­tal­ist pow­ers, par­tic­u­larly the ex­is­tence of its large mid­dle class.

Both China and In­dia are re­cent dis­cov­er­ies for the West af­ter they adopted the cap­i­tal­ist mar­ket-ori­ented eco­nomic mod­els in the early nineties and achieved un­prece­dented eco­nomic growth rates. While look­ing for po­ten­tial mar­kets, it is thus not ad­vis­able, if not im­pos­si­ble, for the West to ig­nore these states.

The eco­nomic im­por­tance of In­dia can be gauged from the fact that the United States re­called its am­bas­sador to New Delhi when Amer­i­can com­pa­nies Boe­ing and Lock­heed Martin, along with Rus­sian cor­po­ra­tions, lost out in a $10.4 bil­lion deal for 126 com­bat jets for the In­dian Air Force in one of the world’s largest mil­i­tary con­tracts. Many saw this as a pos­si­ble re­flec­tion of In­dia’s un­hap­pi­ness over the con­tin­u­ing US re­stric­tive poli­cies re­lat­ing to the

trans­fer of high tech­nol­ogy to In­dia. Oth­ers in­ter­preted it as an In­dian ploy to pres­sur­ize the United States to sup­port In­dia’s cam­paign for per­ma­nent mem­ber­ship in the United Na­tions Se­cu­rity Coun­cil, although Pres­i­dent Obama had sup­ported this bid dur­ing his Oc­to­ber 2010 visit.

The Amer­i­cans heaved a sigh of re­lief when a few months af­ter opt­ing for the Euro­pean air­craft, In­dia de­cided to go for the big­gest de­fense deal in its his­tory with the US by agree­ing to buy ten Boe­ing C-17 strate­gic heavylift planes worth $4.1 bil­lion. The ju­bi­lant US am­bas­sador to New Delhi said that the sale would boost strate­gic ties and gen­er­ate 23,000 jobs in Amer­ica. “This sale cap­tures the mu­tual ben­e­fits of the Us-in­dia global part­ner­ship. For In­dia, the sale adds strate­gic and hu­man­i­tar­ian mus­cle to its de­fense needs,” the am­bas­sador said in a state­ment. He said that the sale will fur­ther strengthen the strate­gic ties be­tween Amer­i­can and In­dian armed forces, lead­ing to en­hanced co­op­er­a­tion for a safer and more se­cure re­gion and world.

Fac­ing a national debt of $14,271,000,000,000, the In­dian deal was a ray of hope for the un­em­ployed in the United States and the Obama ad­min­is­tra­tion. Its ex­tent also showed the im­por­tance of In­dia to the US econ­omy.

This is the bot­tom line when it comes to Indo-us re­la­tions. This may be cou­pled with the con­stant Amer­i­can en­deavor to counter the Chi­nese in­flu­ence in the re­gion and to an ex­tent in Asia by align­ing it­self with In­dia. How­ever, this may not be as easy as it proved to be in the six­ties.

In­dia has bor­der dis­putes with al­most all its neigh­bors, with the one with China on the Mcma­hon Line be­ing the ma­jor one. The Chi­nese way back in 1914 had re­fused to sign a treaty with Bri­tish In­dia at the Simla Con­fer­ence on this very is­sue and the im­passe con­tin­ues to date. Af­ter the com­mu­nists’ take-over in 1949, troops were sent to “lib­er­ate” Ti­bet in 1950. In­dia re­luc­tantly ac­qui­esced to this an­nex­a­tion but the sit­u­a­tion be­came com­pli­cated with the Khampa re­bel­lion in 1956 that forced some Ti­betan lead­ers to flee to In­dia. In 1959, large-scale up­ris­ings in Ti­bet fur­ther ag­gra­vated the sit­u­a­tion by forc­ing the Dalai Lama and many of his fol­low­ers to flee Lhasa for In­dia. In­dian premier Nehru met his Chi­nese coun­ter­part Chouen Lai to re­solve the dis­pute but failed. The im­passe over the bor­der even­tu­ally led to a war be­tween the two states in 1962 which re­sulted in a hu­mil­i­at­ing de­feat for In­dia.

The war, cou­pled with the change of lead­er­ship in China in the sev­en­ties, re­sulted in a se­ri­ous im­passe in the Sino-in­dian re­la­tions till Va­j­payee, as the In­dian for­eign min­is­ter, vis­ited China in 1979 to break the long hia­tus in ties. This was fol­lowed a decade later by PM Ra­jiv Gandhi’s visit (1988) that brought about a se­ri­ous thaw in re­la­tions. The two

The Amer­i­cans re­al­ize that both China and In­dia are not pawns that can play in their hands

and the Bri­tish pol­icy of “di­vide and rule”

may not be suc­cess­ful in this

day and age.

coun­tries in 1996 agreed on con­fi­dence-build­ing mea­sures to keep the bor­ders tran­quil and peace­ful.

Sino-in­dian re­la­tions were im­prov­ing, per­haps to the dis­may of the Amer­i­cans, un­til May 1998 when In­dia jus­ti­fied its nu­clear tests on grounds of se­cu­rity threats em­a­nat­ing from China. The Chi­nese strongly re­acted to it and the re­sul­tant ten­sion en­sued un­til PM Va­j­payee al­layed their anger dur­ing his 2003 visit.

Sino-in­dian re­la­tions since the Va­j­payee visit have been even keyed and sev­eral Chi­nese lead­ers af­ter decades have vis­ited In­dia (Chi­nese Premier Wen Ji­abao’s 2005 visit which re­sulted in the two states declar­ing a strate­gic part­ner­ship; and Pres­i­dent Hu Jin­tao’s 2008 visit in which he an­nounced ten points to strengthen bi­lat­eral ties).

The Amer­i­cans re­al­ize that both China and In­dia are not pawns that can play in their hands and the Bri­tish pol­icy of “di­vide and rule” may not be suc­cess­ful in this day and age. Both the coun­tries re­main im­por­tant mar­kets not just for the Amer­i­cans but for the whole of Europe. The western pow­ers thus may not be un­fa­vor­ably af­fected if the two coun­tries main­tain cor­dial and peace­ful re­la­tions. In­dia in the midst of this cor­dial­ity can help the West main­tain the bal­ance of power in the re­gion. The ques­tion, one won­ders then, sit­ting in Is­lam­abad, is where does Pak­istan fit into this strate­gic rig­ma­role? The an­swer might be dif­fi­cult, and even un­fa­vor­able, but this is some­thing that all Pak­ista­nis need to se­ri­ously pon­der about. The writer is an ad­vo­cate of the Supreme Court and a mem­ber of the Washington, DC Bar. He has been writ­ing for var­i­ous pub­li­ca­tions for more than 20 years and has au­thored sev­eral books.

Can the US reap the ben­e­fits?

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