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Economy
and the Nation
Short-term goals cannot address long-term challenges
Sanjaya Baru
The India Summit of the World Economic Forum
and the Confederation of Indian Industry and the Annual General
Meeting of the Federation of Indian Chambers of Commerce and
Industry, provided ample opportunity for the National Democratic
Alliance-led government to articulate its vision on economic
policy half way through its term in office. At the end of the
week one remains as confused as ever, and this is not because
the key economic ministers did not do their job.
On the contrary, Union finance minister Yashwant Sinha spoke
eloquently at both events and both audiences were impressed
by his honest and energetic portrayal of the extant economic
situation, the gains made and the tasks ahead. Equally eloquent,
candid and convincing were other key economic ministers like
Dr Arun Shourie and Mr Murasoli Maran. Adding to the quality
of their presentations were the highly regarded chief ministers
of Andhra Pradesh and Madhya Pradesh, Mr Chandrababu Naidu and
Mr Digvijay Singh. A developing country democracy can be reasonably
proud for bringing such ministerial talent into government through
the democratic process.
A major disappointment was Union home minister Lal Kishan Advani
who was asked to speak on economic security at the FICCI AGM,
but preferred defending the Prevention of Terrorism Ordinance
— which he said was needed to tackle terrorism and would create
the right environment for business. Hence POTO is vital for
economic security.
For a man hailed as a latter day Sardar Patel, Mr Advani sounded
like an intellectual version of Om Mehta, the minister of state
for home during the Emergency of 1975-77! FICCI gave Mr Advani
an excellent opportunity to elaborate his views on economic
policy. Most businessmen and diplomats gathered at the luncheon
meeting came to hear a potential future Prime Minister. In the
event, they were disappointed not just by his reticence in going
beyond his narrow ministerial brief on the concept of national
security, but also by the fact that he opted to speak in Hindi,
as if he was addressing an audience outside, perhaps the electorate
in Uttar Pradesh. What a pity.
If Mr Advani’s speech ended up as a mere footnote in the week’s
proceedings, the government should thank Mr Sinha for saving
its face and gathering the courage to speak on larger issues,
even if he too ended up defining the concept of economic security
rather narrowly by confining himself to the gains made in defending
India’s external economic security over the past decade. FICCI
had more than September 11 on its mind when it chose to focus
on economic security as the theme for this year’s AGM. The session
theme was sub-titled “New Issues, New Options and New Opportunities”.
What exactly are these? What have security analysts and strategic
policy thinkers been saying? What was the message coming through
from some of the speakers at the WEF-CII summit? Speakers like
Dr Narayana Murthy of Infosys, Mr Rajat Gupta of McKinsey, Dr
A P J Abdul Kalam and Mr Richard Haass, a Bush Administration
official from the United States but more importantly a former
big gun from the Brookings Institution.
What should the representatives of the government have focussed
on? That the key challenge for India is to return to the 7 per
cent growth trajectory of the mid-1990s, to invest in human
capabilities, to step up the rate of investment, to increase
our share of world trade, to reverse the process of de-industrialisation
witnessed in the second half of the 1990s. To make government
and the public sector more efficient and effective.
A quick reading of the reports of the National Security Advisory
Board may have helped. How many of our ministers are even aware
of the existence of this report, leave alone having had the
time and inclination to read it. Mr Haass’ speech showed that
he had read something written by a colleague on India which
underscored the critical importance of economic growth and development
for India’s national security and global stature.
I am referring here to an excellent paper written earlier this
year by Dr Ashley Tellis, presently Advisor to the U.S. Ambassador
in New Delhi and formerly a senior policy analyst at Rand Corporation,
USA. Dr Tellis’s paper on “South Asia” is published in a book
entitled “Strategic Asia 2001-02: Power and Purpose” (Edited
by R J Ellings and A L Friedberg, Rand, 2001). Summing up his
analysis Dr Tellis says: “If India can sustain an average growth
rate of even 5.5 per cent or thereabouts for the next two decades
or so, it will become a significant actor on the Asian stage.
If it can accelerate its growth rates to levels beyond this
5.5 per cent band, then its significance for Asian geopolitics
only increases further. ... If this growth occurs as a result
of a trade-centered strategy, India’s economic relevance to
Asia will become obvious as new patterns of interdependence
arise.”
However, concludes Dr Tellis, “a realisation of a growth rate
consistently 7 per cent or higher, an economic performance that
inexorably transforms India into a great power, positions it
as an effective pole in the Asian geopolitical balance, and
compels international attention to itself as a strategic entity
with continent-wide significance.” Dr Tellis echoes the thinking
of many in India who have studied the concept of economic security
and national power. If our ministers and political leaders were
familiar with what has been written here they would have been
more focussed in their work in government and in their public
statements at this week’s events.
Mr Advani referred to many books in the course of his speech
at FICCI and yet could not think beyond POTO. A government obsessed
with short-term political challenges and gains can not think
and act for the long term. It is not through stricter laws and
better policing that our national security will be enhanced.
Rather, it is superior governance in the economic field that
will make India prosperous, powerful and secure.
It may be news to many of us in this country, but we have many
friends today in the outside world who want us to succeed economically,
partly because in our success they see an opportunity for themselves.
We are fortunate today in that our friends far outnumber our
adversaries. It is up to us what we make of this opportunity. |
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