Reimagining India: Unlocking the Potential of Asia’s Next Superpower (44 page)

India’s acrimonious relations with its neighbors hurt first and foremost because they weaken India’s own economy. They also tarnish India’s global image. Fractious ties with Bangladesh, Nepal, Sri Lanka, and, above all, Pakistan undermine diplomatic trust in India among East and Southeast Asia and with the Gulf, and constrain India’s soft power. Fairly or not, India has allowed itself to be perceived by its neighbors as the new regional hegemon, in some ways the modern equivalent of Britain, the region’s former colonial power. Such tensions are a huge distraction. They signal that as long as India is focusing on military competition with Pakistan, it will never play a full part in Asian regional security. India’s failure to establish cooperative and consensual relations inside South Asia sends a message that India will never be a committed partner or participant on a grander, Asian scale.

The notion that India might emerge as a regional and even global power is presumptuous, perhaps grandiose. But we need such visions to drive and give inspiration to policy and thinking today. Nehru was keenly aware of that need when he convened his 1947 conference with the aim of giving inspiration and leadership to the newly independent nations of a changing Asia. Geopolitical realities and domestic frailties meant that the inspiration and the leadership could not achieve what Nehru hoped. Now there is both another chance, and another need, for that inspiration and leadership finally to become real, sustained, and effective.

Stephen P. Cohen

Stephen P. Cohen is a senior fellow at the Brookings Institution and the author of
Shooting for a Century: The India-Pakistan Conundrum.

As India changes and grows, so naturally do the security threats the nation confronts. Before Indian strategists can properly order their responses, they need to map out this changed landscape, to understand who or what their real enemies are—and just as important, who are their friends.

The first thing to acknowledge is that domestic affairs must be treated as a major component of security policy. Conflicts over water, ethnic and linguistic tensions, and the pressures of widening income disparities all threaten India’s stability from within. Yet other than the Maoist uprisings in eastern India, these issues are generally relegated to the bottom of the threat hierarchy.

Similarly, the split between “foreign” threats and domestic problems is an artificial one. The internal politics of India’s neighbors have to be part of its political calibrations because they inevitably resonate within the country’s diverse linguistic and ethnic groupings. The reverse is also true: India’s treatment of its minorities, whether Muslims, Christians, tribals, or scheduled castes, are naturally of concern to the rest of the region. Delhi must not only acknowledge these linkages but also take advantage of them. Several long-standing border and water disputes—with Pakistan, China, Nepal, and Bangladesh—could be solved much faster if they were considered within a regional framework, rather than country by country.

Even the more obviously “hard” security issues need to be considered
in a new light. For the next half dozen years at least, India’s most pressing problem will continue to be Pakistan. Over the longer term it might—but only might—be China.

The fashion in Delhi now is to assert that Pakistan no longer counts, that India has surpassed it once and for all. This attitude is a manifestation of the “invincible India” syndrome and is unrealistic. Pakistan is not a trivial state, and a failing Pakistan could do great damage to Indian interests. First, there is the finite risk of future terror operations. As in the past, these could lead to broader crises involving both militaries, and in all of their recent crises each country made a serious policy or intelligence misjudgment. Given their combined arsenal of nearly two hundred nuclear weapons, the consequences of such a mistake are potentially enormous. Militarily, Pakistan is a low-risk but high-cost problem.

Second, even if an armed crisis can be avoided, a failing Pakistan is a drag on India. The main purpose of India’s national defense is to ensure that the country’s growth and development continue undisturbed. Yet although India and Pakistan are natural trading partners and culturally similar in multiple ways, their rivalry has helped to make South Asia one of the least integrated regions in the world. Continued tensions between them will prevent the Indian economy from achieving its full potential.

The best approach for India and other states is to view Pakistan in the same terms the West saw the Soviet Union: a state to be contained militarily, when necessary, but also a state that can be transformed over time (this was the view of George F. Kennan). Pakistan is no Stalinist state, so the prospects for internal reform are theoretically better. Indians must be patient with Pakistan’s difficult process of reform, as the West was patient with that of the former Soviet Union. Given the existence of a large Pakistani nuclear arsenal, there really is no other choice.

India is in sync with the rest of the world regarding China. Most countries welcome trade with and investment in the dynamic Chinese economy. But they also see the People’s Republic as a potential long-term problem, with everyone unsure of China’s future direction. For India, with a long and contested border with China, this is a grave issue, as are China’s expansive territorial claims.

India’s response is moderated by two considerations: its weakness on the ground, where China has developed its military capabilities along the border and bolstered infrastructure on the Tibetan plateau; and, as with Pakistan, the existence of a bipolar nuclear balance of terror. India’s military response to provocations from Beijing is also restrained by the knowledge that, were it to push against China militarily, it would be vulnerable to a nightmarish two-front crisis—all the more reason to pursue strategic normalization with its weaker ally, Pakistan.

Above all, India must refrain from seeing the Chinese challenge as a “race.” This is a horribly weak metaphor. If it is a race it has no end point, it ranges across many dimensions, and there will never be a clear winner or loser. All objective analyses note the differences between India and China—they pursue different political models and have different economic systems, and they are also vastly different societies. India must remain true to its core values, which are widely shared with the most powerful states in the West and Asia, and not be tempted by the totalitarian shortcut. (At the same time, this doesn’t mean that the present high levels of corruption and venality should be tolerated.) India has little counterleverage to the Chinese presence in Pakistan. But it can offer the prospect of economic normalization, which gives hope that Pakistan can be weaned away from China over the long run.

In both its containment of Pakistan and its steady course vis-à-vis China, India now finds a new and surprising partner, the United States. In this, American calculations parallel Indian ones, and the two countries are evolving a congenial working relationship. It is well short of an alliance but more than happenstance. This new ability to talk to each other is reinforced by growing economic and social links.

This is a major development in both countries. Until the 1980s, the
United States and India were strategically hostile: Indian elites had come to regard America as part of an encircling ring crafted to “keep it down,” and Americans regarded India’s nonalignment as phony at best. The change was ushered in by the Clinton administration’s criticism of Pakistan for the 1999 Kargil adventure and the Bush administration’s bold recasting of nuclear policy. The latter may never power any lightbulbs in India, but it represents a turning point, summarized in the phrase “natural allies,” first used by Prime Minister Vajpayee more than a decade ago and echoed by American officials. The term preserves India’s nonaligned status and provides cover for a strategic change of course by both states.

On other security issues, such as stability in the Indian Ocean region, there is general agreement between Washington and New Delhi, and for the same reason. Both are status-quo powers, and both are wary of a China that might seek regional dominance. Cooperation in stabilization operations is in the interest of both, and the United States has backed up its policy by selling India several weapons systems—landing craft and long-range airlift—that are explicitly designed to enhance India’s overseas capabilities.

For the next decade at least, the world will be multialigned, with one major world power and several states on the next rung. India is one of those states, and it knows that it’s not yet ready to lead an alliance of the other countries in its tier. “Partner” thus aptly describes the India–United States relationship, implying a situation that is profitable to both sides but not necessarily one of perfect equality. Full understanding may lag until the cold war generation passes in both countries. But in the meantime, the two countries’ economies, societies, cultures, and educational systems will continue to interpenetrate. This has already facilitated some breakthrough agreements and the understanding over such countries as Pakistan and China.

In some ways the strategic cooperation between India and America
will resemble that between America and France, only India is expanding its power, not shrinking it. Paradoxically, India also depends more now than ever on the United States, not for aid but for defense technology and modern organizational models. The relationship will differ markedly from the single-issue rapprochement between Nixon and China over the Soviet Union. It could be a precursor to normalization between India and Pakistan, which would be as big a transformation as that heralded by the United States–India nuclear agreement.

Americans and Indians alike must bear in mind that for both countries, domestic issues have to take precedence over foreign and security policy. This will dominate the concerns of their leaderships for at least two years for America, perhaps longer for India. The idea of a formal alliance fits neither their cultural temperaments nor the threats that they face. But their new partnership looks to be very long-lasting.

Kumar Mangalam Birla

Kumar Mangalam Birla is chairman of the Aditya Birla Group.

Mahatma Gandhi was killed in my great-grandfather’s home. Near the end of his life, India’s founding father used to stay at Birla House when he came to Delhi, and in January 1948 an assassin shot him point-blank as he walked out into the grassy courtyard where he held his daily prayer meetings. The house and garden are now a shrine and museum, visited by tens of thousands of admirers every year.

Growing up, I hardly needed to visit the memorial to be reminded of the values held by my close-knit Marwari family. Our tiny community, originally from Rajasthan, has had spectacular success in business in part because we have maintained tight familial relations and traditional values—including many of those promoted by Gandhi himself. Marwari traders apprenticed their sons to other Marwari firms, loaned each other money, and insured one another’s goods, confident that their partners held to these same codes. To some in the West, our ways probably looked old-fashioned: When I took over the company in 1996 at age twenty-nine, after the sudden death of my father, no meat was cooked in Birla cafeterias; no wine or whiskey was served at company functions.

Seven years later we bought a small copper mine in Australia. The
deal wasn’t a huge one, worth only about $12.5 million, but it presented me with a unique challenge of the sort I had not yet faced as chairman. Our newest employees were understandably worried about how life might change under Indian ownership. Would they have to give up their Foster’s and barbecues at company events? Of course not, we reassured them.

But then several of my Indian managers asked why
they
should have to go meatless at parties, if employees abroad did not. At Marwari business houses, including Birla, the top ranks of executives traditionally have been filled with other Marwaris. I had introduced some managers from other firms and other communities, and they had a valid point. I was genuinely flustered. My lieutenants were relentless: I had never faced a situation where my own people felt so strongly about something. Yet at the same time I knew vegetarianism was a part of our values as a family and as a company. A core belief! I had broken a lot of family norms, but I thought this one was going to be multidimensionally disastrous for me.

Fortunately, my grandparents merely laughed when I approached them with my dilemma: They understood better than I did that our company had to change with the times. If we wanted to make our mark on the world, we had to be prepared for the world to leave its mark on us.

The Aditya Birla Group is now one of India’s most globalized conglomerates. We have operations in thirty-six countries on five continents and employ 136,000 people around the world. Over 60 percent of our revenues come from overseas. In the 1970s, my father, frustrated by the heavy-handed and corrupt license raj at home, expanded widely in Southeast Asia. Since I took over as chairman, we’ve made a dozen acquisitions overseas worth a total of more than $8 billion, in sectors as varied as mining, pulp, aluminum, and insurance. We’ve branched out into Australia, America, Canada, and Europe. For the moment our top
management remains all-Indian, even if not all-Marwari. But I would guess that within a decade, half of our seniormost staff will be non-Indian.

We have expanded internationally for many reasons—sometimes to spread our bets, sometimes because we found it impossible to open a plant in India as fast and as cheaply as we could abroad. In each case we’ve made our decision based on whether or not the deal would increase shareholder value. Yet when I look around me, I see too many Indian companies eager simply to be written about as global players. Sometimes that clouds the fundamentals of making an overseas acquisition or having an overseas presence. To globalize for the sake of globalizing—as a matter of ego—is perilous. Expanding internationally is hard, risky work. And as I was reminded the first time I saw butter chicken being served in a Birla canteen, the most difficult challenges turn out to be the ones you least expect.