Par­a­digm Shifts

In­dia to­day is un­doubt­edly shift­ing the global eco­nomic and po­lit­i­cal power cen­ters. How­ever, re­gional co­op­er­a­tion can en­able this growth and sta­bil­ity to spill fur­ther into South Asia.

Southasia - - Global Economic Dynamics - By Syed Moaz­zam Hashmi

Ex­pect­ing its al­ready mas­sive pop­u­la­tion to grow to 1.5 bil­lion by 2050, In­dia has warmed up to pur­su­ing a gi­ant ‘Leap For­ward,’ thus ini­ti­at­ing a par­a­digm shift from the mil­i­tary to the eco­nomic ap­proach in or­der to meet the up­com­ing chal­lenges, com­pat­i­ble to re­al­iz­ing its am­bi­tion of tak­ing the cen­ter stage as a global power.

De­spite the pre­vail­ing bleak sce­nario for de­vel­op­ing economies, the fastest grow­ing Asian coun­try is tipped as the cen­ter of global econom- ic power in the fu­ture. The mantra of change, ‘In­dia Ev­ery­where,’ that seems to be echo­ing around the world as a ma­jor ‘In­dia-lean­ing shift’ in the poli­cies of world pow­ers, has al­ready been in put place. The ques­tion of how soon other re­gional coun­tries will tune in to the change is a mat­ter of time. How­ever, given the re­gional and global strate­gic and eco­nomic com­pul­sions, many na­tions will be left with lit­tle choice but to swim with the cur­rent.

Nu­clear dis­ar­ma­ment re­mains a dilemma for In­dia. A com­plex is­sue, par­tic­u­larly with ref­er­ence to China and Pak­istan, ini­tia­tives such as ban­ning nu­clear test­ing and re­duc­tion of nu­clear arse­nal could gain In­dia moral and strate­gic lead­er­ship be­fore the US and China.

The days when war was con­sid­ered glo­ri­ous have also passed. De­spite the heat and dust of the past decade, In­dian in­tel­lec­tu­als be­lieve that the re­gion will have a win­dow of se­cu­rity. Amid the re­al­iza­tion that both In­dia and Pak­istan can­not achieve

their ob­jec­tives through war, prob­a­bil­ity of a ma­jor con­flict be­tween the two neigh­bor­ing coun­tries seems to have min­i­mized. How­ever, the de­bated pos­si­bil­ity of irrational el­e­ments at­tain­ing Weapons of Mass Destruc­tion (WMD) in Pak­istan, re­main an ex­cep­tion.

A soft­en­ing of its strate­gic stance to­ward neigh­bor­ing coun­tries, ex­hibits In­dia’s se­ri­ous­ness to­ward this par­a­digm shift. Fur­ther­more, press­ing prob­lems of poverty, hunger, en­ergy cri­sis, water scarcity and dis­eases need the at­ten­tion of col­lec­tive global ef­forts. In the case of In­dia, tra­di­tional na­tional in­ter­est and na­tional se­cu­rity com­pul­sions re­quire an ef­fi­cient han­dling to meet the chal­lenges, which will only in­ten­sify as the global pop­u­la­tion rises from the cur­rent seven bil­lion to nine bil­lion in 2050.

In South Asia, the de­mo­graphic gains are nu­mer­i­cally good but poor in qual­ity. The need of the hour is to trans­form the pop­u­la­tion growth into a de­mo­graphic div­i­dend be­fore it turns into a de­mo­graphic nightmare. While la­bor force growth is en­cour­ag­ing, state com­pe­tence in terms of re­source con­ver­sion is very poor.

In the fluid clus­ter of an­tag­o­niz­ing in­ter­ests, re­gional pol­i­cy­mak­ers need to look at the prob­lems with a dif­fer­ent per­spec­tive. A col­lec­tive and co­op­er­a­tive se­cu­rity ap­proach is im­per­a­tive to ar­tic­u­late is­sues of na­tional in­ter­est. In par­tic­u­lar, five ma­jor gaps need to be ad­dressed: knowl­edge, which is cru- cial in con­flict trans­for­ma­tion; nor­ma­tive ap­proach that plays an im­por­tant role in se­cu­rity is­sues; pol­i­cy­mak­ing; in­sti­tu­tional ca­pac­ity to de­liver ef­fec­tive re­sults, and com­pli­ance.

So­cio-eco­nomic re­gional in­equal­ity is the first ma­jor chal­lenge faced by South Asia. On the one hand, is­sues such as ur­ban in­flux, re­source and im­port de­pen­dency, en­vi­ron­ment, agri­cul­ture pro­duc­tiv­ity, cli­mate change, ter­ror­ism and eco­nom­ics are spe­cific is­sues that need to be ur­gently ad­dressed. On the other hand, emer-

Amid the re­al­iza­tion that both In­dia and Pak­istan can­not achieve their ob­jec­tives through war, prob­a­bil­ity of a ma­jor con­flict be­tween the two neigh­bor­ing coun­tries seems to have min­i­mized.

gence of the mid­dle class, ris­ing trend of ed­u­ca­tion, par­tic­u­larly the fe­male ed­u­ca­tion and re­gional in­sti­tu­tion­al­iza­tion are the ex­ist­ing hope-gen­er­at­ing in­di­ca­tors.

With global dy­nam­ics hav­ing changed sig­nif­i­cantly since 2001, the in­ter­na­tional econ­omy has en­tered a new era of un­cer­tainty as the in­ter­na­tional mon­e­tary or­ga­ni­za­tions play a de­fen­sive role in di­lut­ing western dom­i­nance. The change will be slow but is sure to come. What­ever hap­pens in the world econ­omy di­rectly im­pacts South Asia. The idea of the Asian Mon­e­tary Fund (AMF), has led an­a­lysts to be­lieve that the cur­rent global mon­e­tary struc­ture will even­tu­ally go re­dun­dant with pri­vate banks pre­vail­ing over the in­ter­na­tional mon­e­tary or­ga­ni­za­tions in the fu­ture.

Ex­pect­ing the ex­ter­nal en­vi­ron­ment to bring more volatil­ity to the sit­u­a­tion, the pat­terns of trade will also change with the shift in the eco- nomic cen­ter of grav­ity. The geoe­co­nomic shift is likely to come in the next two decades with Asia’s share of ex­ports dou­bling while that of Europe would be cut down to half. Un­for­tu­nately, in South Asia, the in­sti­tu­tional in­fra­struc­tures are de­signed to give the least de­nom­i­na­tors for trade. The re­gion that seems to have been left be­hind de­spite all the de­mo­graphic ad­van­tages can in­crease its GDP up to 50 per­cent by sim­ply im­prov­ing in­fra­struc­ture with par­tic­u­lar fo­cus on the en­ergy sec­tor and mod­ern­iza­tion of bu­reau­cratic pro­ce­dures.

Since an­cient times, the South Asian re­gion has had a his­tory of con­sis­tent po­lit­i­cal di­a­logue, trade and com­merce, re­li­gious in­ter­ac­tion and art and ar­chi­tec­ture. There is no dis­con­tent in the liv­ing cul­ture of South Asia but it needs to be linked through an­cient knowl­edge that has to trickle down to the grass­roots level. Re­gional in­te­gra­tion is not pos­si­ble with­out con­nec­tiv­ity and build­ing bridges. In this re­gard, strate­gic com­mu­ni­ca­tion is vi­tal. Hence, all the states in the re­gion have to have mean­ing­ful di­a­logues to cre­ate a win-win sit­u­a­tion rather than shuf­fling around the po­lit­i­cal cards.

At the end of the day, the rules of the game may be de­ter­mined by power pol­i­tics but the un­der­ly­ing dy­nam­ics are so ro­bust that the growth process would con­tinue de­spite all im­ped­i­ments. In or­der to progress fur­ther and be a part of the strate­gic and eco­nomic ca­pac­ity build­ing to achieve the ul­ti­mate ob­jec­tive of pros­per­ity and peace­ful co­ex­is­tence, all that is re­quired is to lay the foun­da­tion of growth. Luck­ily for South Asia, the first step for the thou­sand mile jour­ney has been taken.

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