India-Sweden Relations

Written by Subhash Agrawal | Updated: Jan 15 2004, 05:30am hrs
Goran Perssons recent visit to India was the first by a Swedish Prime Minister in 17 years. It is actually quite amazing when you think about it. We were close friends and partners during all those glory days of anti-imperialism and non-alignment, and both were drawn towards and nourished by a socialist ideal, but there has been a remarkable absence of courtship in precisely the period when so much has happened in the world.

The list is long: End of the cold war, break-up of Soviet Union, overturn of the apartheid regime in South Africa, resurgence of economic blocs, ascent of multinational enterprises, European unification, and the rise of global terrorism and fundamentalism. And of course, alongside all these dramatic transformations is the phenomenal economic growth in non-Japan Asia, topped by Chinas GDP growth of almost 300 per cent in the last 17 years.

In India, the changes during this period have been similarly huge even if more perilously balanced. 1987 was certainly the last year of political stability and unquestioned Congress domination in India, as also the last year of typical Hindu rate of growth. In 1988, the GDP growth suddenly shot up to 7.6 per cent, which just about makes the average rate in the 1980s look respectable. Since then, the real economy has grown by almost 140 per cent, per capita PPP income has more than doubled, the country has become relatively self-sufficient in food, poverty has fallen from 45 per cent to 26 per cent, the IT sector has grown to a colossus out of nowhere, and the Indian brand in technology and services is now a recognised talking point rather than a late-night parody. India has compressed too many experiences, traumas and qualifications during this period, and it is now a far more multi-dimensional and happening place to be in, even if macro-economic dangers lurk under the surface.

Sweden too is not the country it was then. The old Swedish model which required constant replenishment of public coffers to pay for welfare is on its way out and the socialist high noon is over. The post-Palme years have been a painful period of introspection and reorientation, triggered by the economic shock and poor recovery of the nineties which have forced budget pruning in most areas of social good. There is an effort in the country, belated but strong, to nurture new layers of private economic competitiveness and jobs. Moreover, the country is now a member of EU and increasingly guided by European consensus on international issues. Its close links with NATO make it all but an official member of the alliance, and to enable its EU membership Sweden has been forced to shed its military neutrality.

There are occasional pangs at losing the unique Swedish way but most political parties, including the ruling Social Democrats, realise that the clock cannot be turned back. These new policies have helped Sweden successfully migrate from an endemic reign of high fiscal deficits around 15 per cent till the 1980s to one of modest budget surplus.

In fact, 17 years ago may now seem a bit like history, making it a matter of inexplicable oddity why Sweden and India have largely avoided each other, acknowledging each other with only careful cordiality or with the occasional protocol on developmental aid. Even the American president and the Japanese prime minister, two of the most grudging travellers to this part of the world, have come knocking. Swedish foreign policy experts now recognise this as a mistake, as perhaps do ours, given all that has happened in the world.

Enter the Swedish Prime Minister, in 2004. This was a different Sweden this time, and there were no talks about developmental aid or Third Word solidarity or defence deals. Yes, there have been feeble attempts by Swedish companies to quietly make a comeback after the lifting of the ban on Bofors, but the focus of his visit was very much outside of the defence box, on trade and technology. In fact, to a direct question on this very subject over a small lunch, the PM was disarmingly candid and an impressive extempore speaker. His agenda, utterances and manner reflected Sweden wanting to discover a new India and to move beyond the Bofors-induced sourness that had all but marred our traditional proximity based on liberal values and egalitarian principles. A very welcome initiative, one we should now reciprocate.

The author is an analyst of Indian political and business trends and the editor of India Focus, a political risk report for international investors