?The world will become tripolar around 2040?

He believes that economic strength is the foundation of a country’s power, but the ability to exercise power depends on the strategic assets, capabilities and technology that a country develops. Dr Arvind Virmani, executive director, IMF, in his latest work From Unipolar To Tripolar World: Multipolar Transition Paradox, published by Academic Foundation, makes a clear argument for it. The former chief economic advisor, ministry of finance and principle advisor, Planning Commission, tells Sarika Malhotra how India’s defence equipment and its nuclear and space programme are all strategic assets, as its triad of nuclear deterrence capability and the anti-ballistic missile (ABM) programme. Excerpts:

You mention how the world will gradually move from a unipolar power structure to a tripolar one. Where do you place India, China and the US in the scenario?

The world became unipolar around 1990 on the collapse of the USSR and the emergence of the US as the sole superpower. With the growth of the Chinese economy and the rise in its economic power (or power potential) by around 2020, things will change. India’s economic growth will exceed that of China around the middle of the next decade and India’s economy will start catching up with that of China. It will be a slow and long process, with respect to China, but much faster with respect to the other powers such as France, UK, Germany and Japan. The world will, thus, become tripolar around 2040.

You have pointed out that this transition will be characterised by a multipolar interregnum. What will this transition entail?

We are currently in a multipolar interregnum, because China’s economic power is only a little higher than that of traditional powers such as Japan, Germany, UK, and France. On the other hand, the economic power of India and other emerging economies such as Brazil and Russia is somewhat lower than that of the traditional powers. Thus the world currently appears to be multipolar in terms of power potential. This will change very rapidly in the next 10-15 years, with the world first becoming bipolar (US-China) and then tripolar (US-China-India). Another reason for this appearance of multi-polarity is the new dimension of power and constraints on power, introduced by globalisation (socio-political dimension of which soft power is one facet).

Projections, no matter how imperfect, are essential for any kind of planning. How would you weigh this in the backdrop of India and China?

Nobody can foretell the future. This does not mean we should not make any forecasts. Forecasts are essential for planning as well as contingency planning. My forecasts are based on a study of historical growth processes that have happened in many countries over many decades. These are the processes of catch-up growth and globalisation of the world economy in terms of trade and capital flows. They are mean forecasts and it is quite possible that unexpected events could slow the emergence of a tripolar world (the period in which it happens is much later than in the mean forecast) or speed up (happen earlier than forecast).

Do you think that the economic downturn has affected the current and future power dynamics of the US, China and India?

Recent developments, including the global economic crisis, have affected earlier forecasts made in 2004-05 and 2005-06. The overall effect of all these changes is to delay the emergence of a tripolar world by about seven years. However, the effect of the economic crises will be (i) to weaken the position of crisis countries, like the US, because of the increase in their government debt and its effect in constraining the use of military power and (ii) to slow the growth of export oriented economies like China vis-?-vis countries like India, with export neutral policies and lower dependence on external markets for growth.

What role will strategic technology play in determining a state’s overall global power, especially India’s?

Economic strength is the foundation of a country’s power. But the ability to exercise power depends on the strategic assets, capabilities and technology that a country develops. Thus India’s defence equipment and it’s nuclear and space programme are all strategic assets as its triad of nuclear deterrence capability and the ABM programme. Strategic technology is not traded on normal, competitive commercial markets. It includes defence, space and nuclear technology that has very high monopoly elements with monopoly exercised in collaboration with the government of the state in which it is developed.

As signs of recovery have started to resurface, there are estimates of a double dip gaining ground, do you see emerging markets getting impacted by it?

A bumpy U-shaped recovery is a distinct possibility. This will affect the growth of countries with an export-led growth-development strategy and those whose growth is now dependent on natural resource (oil & gas) exports and natural resource (oil) prices. China with an export-investment-led growth model can use govt directed/linked investment to counter the effect of the global export slowdown for three to five years (from the start of crisis). However, the crisis has made it imperative to either change its growth model (towards private income, consumption and services) or transfer its excess manufactured goods capacity problem to other countries and face a greater backlash from such countries.