India and its neighbourhood

I have just returned from Katmandu, where I attended a regional conference organised by the South Asian Network for Economic Research Institutes (Sanei), which is one of the eight regional research networks established by Global Development Network (GDN).

Sanei was established in 1999 and for the first five years, its secretariat remained at Icrier in New Delhi. These research networks are making a significant contribution in bringing regional thinktanks and researchers together, and even more important, in building research capacity through a variety of innovative modalities. The conference, which attracted a large turnout, was inaugurated by Mr Mahat, Nepal?s finance minister and a graduate of Gokhle Institute at Pune, who spoke of the need to strengthen regional cooperation. And it was indeed satisfying to see eminent professors like TN Srinivasan of Yale, M Ali Khan of John Hopkins, S Osmani of IDS Sussex, and others commenting meticulously on papers presented by younger researchers from all South Asian countries. I am confident that Sanei will find more supporters and become a dynamic contributor to the South Asian economic scene in the coming years.

But the first bit of bad news we received was that most of our colleagues from Dhaka could not join us on account of the disturbances there. In Katmandu itself, three bombs exploded on the afternoon of September 2, soon after we left. My interaction with a wide range of people has left me in little doubt that we can expect more instability and confusion in Nepal before conditions settle down. People seemed to be reconciled to the Maoists not accepting the electoral verdict if it is unfavourable for them. This will revert the situation to a year ago, with all possibilities wide open. My Sri Lankan friends were generally pessimistic about the likely course of events and wary of the current mood in Colombo of going for a possible military solution to the long-drawn civil strife.

Pakistani colleagues were clearly anxious and on edge, as the next couple of months could witness either a relatively peaceful transition to some form of democracy or a period of political turbulence and civil strife that could spin out of hand. In all our neighbouring countries, except perhaps Bhutan, conditions are fairly unsettled and in some cases about to worsen.

It would be unwise on our part to expect India to remain unaffected by these disturbed conditions. Our porous borders will bring a tide of refugees if conditions worsen in the region and generate unmanageable stresses for our polity and economy. It is clear that some players in these countries have strong links with their counterparts in various Indian states, and so these border regions will surely be affected. Regional instability has a strong dampening effect on FDI for the region as a whole.

Can Indian policy mitigate some of the worst features of this disturbing regional scenario and minimise the negative impact on our strategic interests? It can and should do so.

First, India must do all it can to maintain the current high growth rate and its reform programme to sustain this momentum, as this has significant positive externalities for the region. Second, we have to pay more attention to our border states and see them as being embedded in their regional context that includes neighbouring countries. This will hopefully yield a more proactive (as opposed to reactive) policy stance, leading us to work closely with relevant entities in these countries for ensuring regional prosperity and stability. We will have to do this while being constantly and overtly conscious of the self-esteem and sovereignty of our neighbours. Third, given the extreme complexity of the situation in all these countries, we will do well to allocate more resources to gaining a better, more nuanced and strategic understanding?based on solid research and analysis undertaken at domestic thinktanks and universities. This will ensure that our approach towards our neighbours gets a fresh start and escapes the realm of the traditional security establishment, dominated as it is by former diplomats and men in uniform.

Fourth, bringing in thinktanks and researchers will yield results only if a process of regular interaction is set up between them and our desk officers in the ministry of external affairs and other parts of the security establishment. I know that some senior policymakers are keen that this interaction starts as soon as possible, and I urge them to take this as top priority and not let the daily firefighting push this important task to the background. Fifth, we need to urgently improve the connectivity with our neighbours. Since this involves infrastructure, we need to jettison our reluctance to accept outside help and vigorously pursue all regional cooperation initiatives with an enhanced role for private foreign and domestic investors. Finally, I think it is surely time for us to consider a significant expansion of our diplomatic cadre.

Our aspirations of emerging as a significant global player are in line with the likely reality of India emerging as one of the five largest economies by 2020. But these must be backed by real resources.

?The author is director and chief executive of Icrier and member of the National Security Advisory Board