'India will have to rethink its growth model in post-corona world'
Being shaped by the broad trends in the global environment caused by Covid-19, India will have to rethink its growth model as following the "post-1991 mantras" makes "little sense" with a greater emphasis needed on self-reliance. This is all the more so in a scenario where plurilateralism will increasingly replace multilateralism, External Affairs Minister S. Jaishankar writes in his new book, "The India Way - Strategies For An Uncertain World" that encompasses a wide canvas of issues.
"India too will be shaped by the broad trends in the global environment that the coronavirus will intensify. But more than that, it needs to take into account the more direct consequences of the pandemic. Its destructive impact naturally demands a strategy of national revival. And that, in turn, warrants a fundamental rethink about our growth model," he writes in the book, which has been published by HarperCollins.
This rethink was "probably coming anyway" given how much the current economic framework has "hollowed out" India's manufacturing capabilities. And, in the context of the free trade agreements, there is already an ongoing debate about the "adequacy of our preparations" to engage the global economy "more intensively".
It is also evident that many concerns "stemming from the policies of our partners" remain unaddressed. Thus, competing against those with structural advantages has been difficult as evidenced by India's growing trade deficit, Jaishankar writes.
"Going further down that very pathway without a course correction has obvious implications" as there are direct livelihood and social stability consequences and a revival strategy, therefore, needs to be chalked out "with the utmost deliberation".
As India has discovered in the past, economic strategies "have to be in consonance" with not only its own national situation but the global one as well and "if we are significantly out of step with the world, as we were in 1991, then they are difficult to sustain", Jaishankar maintains.
Three decades later, India's capabilities, competitiveness and trade are under stress, due to the post-1991 belief "that we could rely on the costing of others abroad to build our own businesses at home" had come at a high price.
A lowest bidder syndrome and obsessive quest for profit margins has ended up eroding domestic capabilities. Even more, the efficiency of others, instead of spurring competitiveness, has actually led to putting off further reforms.
"Openness abroad ironically has led to stagnation at home, discouraging innovation and killing creativity. MSMEs have borne the brunt of the damage" and while the pandemic may have brought out weaknesses pertaining to health security, "it has also exposed the larger strategic complacency", Jaishankar contends.
Whether it is unfair advantages that competitors enjoy or the lack of a level playing field, India needs to "predicate policies on realities rather than rhetoric. And the access we give and the arrangements that we enter into must take these into account".
If India is to take stock, "it could begin with the realisation that the world has been more protectionist than we expected" and "continuing to follow the post-1991-mantras in such circumstances makes little sense", Jaishankar says.
"Both national circumstances and (the) global situation call for a much greater emphasis on self-reliance (Atmanirbharta). Such a policy outlook would encourage approaches that would be more self-generating and self-sustaining. By its very performance, there would be greater innovation and creativity. It's only when its own production flourishes at home that India can make an economic difference abroad. Therefore, a greater emphasis on Make in India, obviously not just for India but for the world.
"We must also be caring of our own interests and support them to compete globally. And certainly, our home turf should not be left wide open to those who close their own firmly. Where India is a late starter, what it needs to catch up must always be factored into policies. And these must aggressively promote employment, skills, innovation and commercialisation. As any other polities do, there must be no hesitation in standing up for sensitive sectors," Jaishankar asserts.
Noting that "narrow economic interests that drove past policies cannot prevail over the welfare of the many", he writes: "This is not to make a case for autarchy but to argue for greater capacity-building so central to comprehensive national power. Current times must clearly mandate that every nation must have cards to play in the global arena; big nations especially so."
"Rising in the midst of global turbulence, a lot will depend on India's ability to distinguish itself from others," Jaishankar writes, adding: "The India Way, especially now, would be more of a shaper or decider rather than just an abstainer."
This is the way Jaishankar sees for India in a world where, even before the pandemic, multilateralism had diminished its "stature" as it could "not rise effectively to the occasion".
"As a consequence, plurilateralism will be the beneficiary because it has a purpose and commonality now found wanting in multilateralism. The pursuit of resilient supply chains, especially in the health domain, could well be added to its growing agenda," Jaishankar writes.
Leave alone multilateralism, even our understanding of globalisation has changed as a result of recent developments. For instance, as with climate change and terrorism, pandemics (the present one, SARS, MERS et al) have now demonstrated that "there are issues on which no one can really stay out".
"Such realities cannot be a subject of calculations or negotiations or mere indivisible existence. If the world were to draw the right lessons, then this experience has the potential to reframe the debate on global issues," Jaishankar writes.
Where does this leave India?
"It is a polity which would strengthen stability and add to reassurance at a time of global volatility. It's influence will contribute to world rebalancing and shape the pace of multipolarity, political or economic. Its strong bonding with the global South is critical to ensuring that developmental priorities and natural justice are not disregarded.
"As an advocate of reformed multilateralism, it can support genuine collective endeavours even in a more nationalistic era. And as a civilisational power coming back on the global stage it would be another powerful example of return of history," Jaishankar maintains.
Truly, it's time for India to seize the day!