A happy state without the State

Written by Bibek Debroy | Updated: Aug 13 2009, 07:27am hrs
You cant discuss Indias soft power without discussing the Indian diaspora. The diaspora consists both of non-resident Indians (NRIs) and persons of Indian origin (PIOs). Excluding Pakistan, Bangladesh and Sri Lanka, the NRI and PIO population is estimated at 30 million, of whom 3 million are in the US, a little over 1 million in the UK, almost 1 million in Canada and 6 million in the GCC (Gulf Cooperation Council) countries. There are 4,000 PIO faculty and 84,000 Indian-born students in US universities. Though a neologism, the term Bollystan has been used for the region this diaspora inhabits and expressions like diasporic diplomacy have also been used, a subset of what has been called the practice of soft power.

Within the diaspora, there has been a switch from the low-end, unskilled, semi-skilled and small-business category to the relatively prosperous professional and large-business category, a switch that plays a significant part in shaping perceptions. Before the Wall Street crisis, in the February 2008 Forbes list, there were 10 Indians in the list of the worlds top-100 wealthiest people Lakshmi Mittal, Mukesh Ambani, Anil Ambani, Kushal Pal Singh, Shashi Ruia and Ravi Ruia, Azim Premji, Sunil Mittal, Kumar Mangalam Birla, Ramesh Chandra and Gautam Adani.

Not much has been written about Indian philanthropy to academia abroad. Ratan Tata has gifted $ 50 million to Cornell University, Kiran Patel has donated $ 18.5 million to Florida State University, the Dhirubhai India Education Fund will be administered through the Stanford Graduate School of Business and so on. This is no less important in shaping opinion than Indian FDI abroad, estimated at $17.43 billion in 2007-08.

There are also instances from sports and one doesnt always mean collective games like cricket, where the revenues are largely India-driven. There are successes from lawn tennis, chess, shooting, formula one racing, badminton, boxing, golf, billiards and snooker, even if one doesnt mention the professional wrestler Khali. There is some positive correlation between performance in sports and levels of economic development. India may not have done that well in Olympic Games. But the performance in regional or limited events like the Commonwealth Games or Asian Games has improved.

One can add to these examples of Indian soft power. For instance, almost 10 million Indian tourists travel abroad every year. There are almost 62,483 newspapers and periodicals, in 101 languages and dialects. India sells 99 million newspapers a year, just after Chinas 107 million and some of these are also read globally, on the Net.

In their present form, Indias reforms date to 1991, though some limited economic liberalisation started in the second half of the 1970s and acquired greater momentum in the second half of the 1980s. Consequent on liberalisation, has Indias soft power visibly increased The answer clearly is in the affirmative.

To state the obvious, the practice of soft power makes sense only in large countries, where there are economies of scale and scope in developing national identities. Has there been a correlation between economic reforms and increase in Indias soft power There are two reasons why the answer is yes. First, directly, reforms have resulted in liberalisation in external sector transactions, such as trade, foreign exchange and capital flows. Such liberalisation facilitates the practice of soft power. Second, indirectly, reforms have resulted in an increase in per capita incomes, even more pronounced in that segment of the Indian population that is globally integrated in various senses. Much more than in China, the practice of this public diplomacy in India is not State-controlled or State-driven. Thats precisely the reason why it is credible and successful and that is also the reason why one doesnt need a policy to push it. There is no particular reason why these trends should not continue.


The author is a noted economist