India cant be in Chinas league and we shouldnt worry about it

Written by Sharad Raghavan | Updated: Jul 15 2012, 07:05am hrs
Speaking about his recently-released book Pax Indica: India and the World of the 21st Century, Shashi Tharoor tells Sharad Raghavan that we shouldnt be worried that China has broken out of Indias league, as long as we focus on looking after our own people. And as far as the US goes, Obamas policy of discouraging outsourcing will not affect India too much since the benefits to American companies are still too great. A cricket enthusiast, he also talks about how the Indian team will cope once all the big four senior players retire. Excerpts:

On reading the book, the first thing that strikes one is that the timing of its release is perfect, with the whole question of India, where its going, what its doing. Was that planned

No, I think circumstances play a part as well. My very first book, my PhD thesis rehashed, was written way back in 1977-78 and published in 1981. Many people have come up to me at book events saying that was my favourite book, when are you writing on foreign policy again So, its been on my mind that I should return to the subject, which is a subject I care about. And now after having served, however briefly, within the system, I felt that I was ripe for a re-visit to these issues.

I do believe that its not at all a bad time to talk about foreign policy because we havent had a systematic rethink. Theres been a serious shift in policy in the early 1990s, which has been captured in books like C Raja Mohans Crossing the Rubicon and so on, but theres been no systematic re-evaluation of the entire doctrinal and practical underpinnings in a form that will be accessible. I didnt want to write another footnote-ridden book. I wanted to write for thoughtful, educated living room conversation.

The chapters on China and the US have particular relevance, given India's current position. You mention a Goldman Sachs report that says China is likely to become the biggest economy by 2020. Will that still be the case, with their growth slowing down

In PPP terms, China is doing very well. I mean, right now, they are only $4-5 trillion to the $14 trillion of the US. But once you start multiplying the purchasing power of the same dollar in China, they may actually be a very close second and will soon, therefore, be able to overtake the US. China slows down from 10% to 8%, and we slow down from 8% to 5.9% and everybody starts beating their chest. Brazil grew at 0.8% last year, but you hear nobody saying the BRICS are collapsing. Two hundred years ago, both China and India were extremely dominant powers economically. Its unlikely that we can regain that dominance again. The Industrial Revolution just changed the game entirely...We cannot regain that dominance again, ever. I mean, were talking about 50% of global GDP between these two countries. And, in fact, if you look overall for 2,000 years, not just since the 1800s, India and China, particularly India, were very dominant from about 100 BC. There have been interesting studies, most notably by Angus Maddison, projecting GDP figures on what we know of previous historical data, and we were even more dominant at that time! Having said that, we certainly dont need to be dominant in that sense. Its not the percentage of the world economy we have that matters, its to what extent we are able to look after our own people.

How do you think were faring on that front then NREGA and similar programmes are great in theory, but many say NREGA is failing, in that most of the beneficiaries are the non-poor. Is there a targeting problem

Well, I dont think those people are entirely accurate. Ive been to NREGA projects in my home state and talked to the beneficiaries, and many of them are womenin Kerala 92% of them are womenand theyre anxious to have work. And I heard some very moving stories; there was one woman saying she had a mentally handicapped child whom she was thinking of surrendering to an orphanage and this work was enabling her to keep the child. Its made a real difference in the lives of these people. There is no indication of corruption in the scheme in Kerala, whereas in other parts of India, I understand there are allegations that need to be looked into. The government has tried to build in fairly sensible mechanisms, but there are some parts of our country where its a way of life...

How much is the perception of India being corrupt hurting us

I think it has definitely hurt us. Over the last couple of years, the whole Anna Hazare movement and the national headlines created talk about corruption in India around the world. My whole argument has been that the more we expose corruption, the better it is; it shows a system at work. Im also upbeat that there have been a lot of serious allegations, prosecutions and resignations. It shows that there is some self-correcting mechanism at work, which many other countries dont have. You very rarely get to hear of a corruption investigation in China, for example. I think people in the global financial world have begun to see that India has some advantages, and that a small amount of corruption may be a price they would have to pay to do business in India.

Again in the China chapter, you mentioned Project 119their concerted effort to get Olympic golds. Why don't we have such a system

Were very different societies. We dont tend to do things top-down. Our successes tend to be bottom-up, on individual merit. Id be much more in favour of encouraging and supporting decentralised sporting academies all over the country, in the north east, in Kerala, etc, to unearth talent and develop it. China tends to be a top-down society, theyre able to set a national objective, raise the money, find the trainers, essentially take over the lives of the kids they have identified, turn them into world-class athletes. Thats not the Indian way, and Im not sure it would work if we tried to impose it here.

The basic point that comes out of that chapter is that there is no point trying to equate India and China; its out of our league. But, at some point, were going to have to compete over natural resources. What then

Yes, Im not a fan of either the comparison or the whole Chindia formula. Were different countries, and frankly, they have burst free of our league. They are now in a one-way race with the US, barring a serious political collapse in China. One thing they have not been able to deal with successfully has been politics. They have a very efficient bureaucracy, but the moment popular unrest becomes more of a factor, we might well find that things will be a bit different. Short of that, I dont think we will be in their league. As far as natural resources go, the Chinese have far more available to them than they can exploit. And so do we.

Their involvement with Pakistan against us has always been a sore point..

Pakistan, as I have said in the book, is our single-most important foreign policy challenge. The Chinese have not lately overtly encouraged Pakistan and even Saudi Arabia recently turned over to us a wanted man on a Pakistani passport, who is implicated in 26/11. So even Pakistans most fundamental backers are seeing the merit of cooperating with India.

Coming to the US, Obama has been good news for India generally. But not lately, with his clamping down on outsourcing recently, and encouraging manufacturing to move back to the US...

Well, he has to do certain things for his domestic constituency. He has to preserve jobs in America, but the reason outsourcing still continues is that it's still a good bargain for American companies. So, I dont think weve actually been hurt that much.

Cricket being a passion for you, how do you think the Indian team will fare now that the seniors are slowly making way for youngsters

Cheteshwar Pujara, Rohit Sharma, Ajinkya Rahane, Manoj Tiwary are the names people have been talking about as the guys lying in wait. At this point, you cant either say that the cupboard is bare, or that the obvious replacement for the four great seniors are here.


China and India: Competition, Cooperation or Conflict

The rise of China and India in the world has become a clich of contemporary political analysis. It is widely accepted that these are the two countries whose development is having and will have a significant impact on the global system, and on the worlds sense of where international economic and political power will shift in the decades to come. The question we must consider is whether the two countries will compete, cooperate or even enter into conflict. Of course, both China and India are extraordinary success stories of recent years. Both have multiplied their per capita income levels many times over since 1950, and have done so far faster in recent years than Britain or the United States did during and after the Industrial Revolution. The idea that both China and India could triple their current economies in the next fifteen years is not implausible to most economists, not even to the World Bank, if their annual assessment of Global Economic Prospects is any guide. I am not an economist, but I have always been profoundly sceptical of those who issue forecasts of any sort; to me, the future is never quite what it used to be. But few will disagree that China and India are going to be richer than they are now, both in absolute terms and in relative ones. That is why it is meaningful to speak of an increasing shift of economic and, as a result, political powerand to ask how the two countries, which fought a short but brutal war just fifty years ago, will deal with each other in the process. China and India are the two most populous countries in the world, with India set to overtake Chinas population around 2025. They account for nearly a tenth of global GDP, a fifth of world exports and a sixth of all international capital flows. China and India are the worlds second and eleventh largest economies in dollar terms, though both rank higher in PPP (purchasing power parity) terms. China holds by far the largest foreign currency reserves in the world, at some $3 trillion; half of that is held in US paper, and if it pulled its money out of the US Treasury it could in one stroke destroy the US economy (at some considerable cost to itself, of course, which is why this wont happen, but it reflects how much the United States is dependent on it). We can say with some confidence that India and China will continue to prosper and pull more millions out of poverty than they have ever done, that they will compete effectively with Western corporations for business, purchase foreign companies and assets, expand their trade and overseas investments, invent and develop new technologies and displace more economic weight around the world. As a result, they will inevitably demand more authority in the international system, and I believe they will acquire it. China will, in my view, be the country that strips the United States of its current designation of being the worlds sole superpowerperhaps within one generation. India will not stride the global stage to that extent, but it will be a significant player in its own region, and through the attraction of its soft power, be hugely influential well beyond its borders.

Excerpted with permission from Penguin Books India from Pax Indica by Shashi Tharoor