Implosion: India’s Tryst with Reality

by John Elliott

  59. ‘Why the big four Andhra Pradesh-based infrastructure companies GMR, GVK, Lanco & IVRCL are in trouble?’, Economic Times, 24 June 2012, http://articles.economictimes.indiatimes.com/2012-06-24/news/32382929_1_gayatri-projects-airport-business-gmr-infrastructure

  60. ‘Top Indian Companies Burdened With Debt’, Forbes.com report on Credit Suisse report, ‘House of Debt–Revisited’, 19 August 2013, http://www.forbes.com/sites/meghabahree/2013/08/19/top-indian-companies-burdened-with-debt/

  61. http://ridingtheelephant.wordpress.com/2009/01/07/satyam%E2 %80%99s-raju-lifts-the-lid-on-indian-corporate-fraud/

  62. http://ridingtheelephant.wordpress.com/2008/09/22/%E2%80%9C family-silver%E2%80%9D-at-risk-on-hyderabad-metro-project/

  63. ‘Delhi Metro MD smells a scam’, http://articles.economictimes.indiatimes.com/2008-09-21/news/27718987_1_hyderabad-metro-vgf-viability-gap-funding

  64. http://ridingtheelephant.wordpress.com/2008/12/17/markets-kick-satyam-into-line-%E2%80%93-but-india%E2%80%99s-reputation-for-corporate-governance-is-hit/

  65. ‘Text – Satyam chairman Ramalinga Raju’s letter’, Reuters, 7 January 2009, http://www.reuters.com/article/2009/01/07/satyam-text-idINBOM36807220090107?rpc=44&sp=true

  66. ‘Ramalinga Raju gets bail after two years, eight months in jail’, Mint, 5 November 2011, http://www.livemint.com/Companies/NbnGDBW3olCdkKtcpHjo2M/Ramalinga-Raju-gets-bail-after-two-years-eight-months-in-ja.html

  67. ‘Enforcement Directorate files charges in Satyam case – Seeks prosecution of Raju brothers, 45 others and 166 alleged front companies for laundering ill-made money’, Business Standard, 29 October 2013, http://www.business-standard.com/article/current-affairs/ed-files-charge-sheet-in-satyam-case-113102800502_1.html

  68. Sanjaya Baru, ‘Breakfast with G.M. Rao – “Runway” success’, Business Standard, 6 July 2010, http://www.business-standard.com/india/news/breakfastbs-g-m-rao/400446/

  69. ‘GMR’s Shattered Dreams’, Forbes India, 13 June 2011, http://forbesindia.com/article/boardroom/gmrs-shattered-dreams/25792/0 and ‘GM Rao: Fighting For His Dreams’, Forbes India, 23 March 2012, http://forbesindia.com/article/worlds-billionaires-2012/gm-rao-fighting-for-his-dreams/32570/1

  70. ‘GMR Infra to sell road toll projects to pare Rs 33k cr debt’, MoneyControl.com, 6 August 2013, http://www.moneycontrol.com/news/cnbc-tv18-comments/gmr-infra-to-sell-road-toll-projects-to-pare-rs-33k-cr-debt_931375.html

  71. ‘Implementation of Public Private Partnership at Indira Gandhi International Airport’, CAG Performance Audit Summary, 21 August 2012, http://www.prsindia.org/administrator/uploads/general/1345638508~~CAG%20Report%20on%20the%20Indira%20Gandhi%20International%20Airport.pdf

  VI

  INDIA ABROAD

  19

  Uncertain Convictions

  India has never recovered from its devastating defeat by China in a brief 1962 border war, which shattered its significant role on the international stage and still affects its overall stance on foreign policy. There have, of course, been moments when it has successfully reasserted itself internationally since then, notably with its nuclear tests in May 1998 and its growing economic importance in the 2000s, plus a new constructive relationship with the US. These positive developments, however, have been offset by other events, and India has never rebuilt anything near the international self-confidence and presence that Jawaharlal Nehru displayed immediately after independence in 1947.

  Pakistan matched India’s nuclear capability by testing weapons (developed with China’s help) two weeks after India’s tests in 1998. This diluted the regional significance of what India had done, although, on a broader international front, the tests did lead to the new interest from the US. Predictably, this did not lift India’s international clout for long, and indeed it complicated relations with China. India’s economic ebullience of the 2000s then floundered by 2011 in a morass of corruption scandals, populist politics, weak government leadership, and declining rates of economic growth. Corrupt and democracy-fettered decision-making had by this time also dashed any hope of matching China as an international economic power.

  Here then is a country rich in culture, history, natural resources and brains, which has experienced the prospects of increasing economic importance but has not attempted to assert itself internationally since Nehru’s idealism was crushed. Overall, its self-esteem is diminished by the extent of its poverty – it accounts for one-third of the world’s poor. Its power is also restricted by limited economic and financial clout. Nevertheless, it is failing to rise to the potential that it does have, and it does not perform the international role that many outsiders, and some Indian experts, believe that it should be doing. Nor does it equip a desperately under-resourced external affairs ministry with the ability to do so. The Indian Foreign Service has only about 700 officers, which is ludicrously inadequate. (The number is being doubled over the next 10 years, but it probably needs to be nearer 3,000, with broader expertise and less elitist disdain for other government departments.)

  Internationally, India’s voice is rarely heard on major issues and was not even taken significantly into account when the country had a two-year term from 2011 to 2013 as a non-permanent member of the UN Security Council. Humphrey Hawksley, a BBC correspondent, emailed me during that period saying, ‘Just come out of a half hour editorial meeting on Syrian crisis. India not mentioned – despite being on the UN – India doesn’t have a voice’. That fits with an often-heard view that India is more focused on the prestige and the glory of joining clubs than what to do when it gets there – ‘it has no apparent strategy at the UN except intervene less,’ said another journalist.

  President Obama tried, and largely failed, to get India to abandon some of its reticence when he addressed the Indian parliament in November 2010.1 In a powerful speech, he came down firmly on India’s side in relation to Pakistan terrorism and involvement in Afghanistan, and broadly backed its ambition to become a permanent member of the UN Security Council.2 But as soon as he had drawn applause from the assembled members of India’s two houses of parliament, he bluntly stated: ‘Now, let me suggest that with increased power comes increased responsibility’3 for those (implicitly, like India) ‘that seek to lead in the 21st century’. He was, however, knocking on a closed door.

  Such an approach does not fit precisely into the jugaad concept of turning shortages, chaos and adversity into some sort of order and success, nor precisely the chalta hai attitude of ‘anything goes’. But, though few in India’s foreign policy establishment would agree, there is a chalta hai sense that India’s foreign relations will somehow fall into place, whatever is said or done. ‘We have to change the absurdity that is our foreign service if we are to help shape the world rather than merely fend the world off,’ says Kanti Bajpai, a leading policy analyst.4

  Nehru’s Vision

  It all looked so different in 1947, when Nehru led India into an idealistic vision of non-alignment that was based on each country’s right to decide issues as it saw fit and not because of commitment to either bloc. This was in tune with Mahatma Gandhi’s approach of passive resistance and non-cooperation in India’s independence movement, but was developed separately to handle the foreign policy realities of the time. It caught the mood of the world’s ‘whiff of idealism’ after the 1939–45 war and led to the founding of the Non-Aligned Movement (NAM), with India as prime mover of independence for all countries, which Nehru felt could only be fully achieved if decisions were taken independently and not under pressure.

  ‘We were accused of putting ourselves on a high moral plane, but we weren’t trying to be better than anyone else – we were groping our way in a world we didn’t understand,’ says K. Shankar Bajpai, who was ambassador to Pakistan, China and the US between 1976 and 1986 and chairman of the prime minister’s National Security Advisory Board in 2008–11.5 ‘Nehru felt that the greater the polarisation of states between the two blocs, the greater the risk of war. Nonalignment was thus an ancillary to his search for prevent
ing war, with the United Nations as the real forum for sorting out conflicts. It was this faith in, or at least an urge for, a set of multilateral institutions and the development of international laws as the basis for a new world order, that coincided with the ‘whiff of idealism,’ says Bajpai, who was a young Ministry of External Affairs official in the 1950s and so is reflecting the view of diplomats at the time.

  Nehru shunned a ‘quest for dominance’ – a phrase that prime minister Rajiv Gandhi used in the 1980s to illustrate India’s limited ambitions, according to Mani Shankar Aiyar. ‘Such an India was not content to merely not be non-partisan in the Cold War. It also had something different to tell the world. And it was precisely because India had something to say which no one else was saying that the world paused to listen. Thus, an asymmetrical foreign policy gave an asymmetric influence hugely disproportionate to the material strength of an India which, in conventional terms, would have been paid little heed to if it were merely parroting the words and postures of others,’ Aiyar said in a foreign affairs lecture in Melbourne in 2011.6

  Jaswant Singh, who held three top portfolios as external affairs, finance and defence minister in the 1998–2004 NDA government, talks about a ‘mentality of separateness’ that existed from the time of independence.7 It was this that led Nehru to reject an informal suggestion from America in the mid-1950s that India should join the United Nations Security Council when it was formed. In practical terms, Nehru’s reply avoided India upstaging and upsetting China, which was being left out in favour of Taiwan, but it also fitted with his approach, especially at a time when the world was splitting into two Cold War camps. The result, of course, was that India was excluded from the inner workings of the UN, which it is now trying to rectify with embarrassingly persistent cries to become a permanent member of the Security Council.

  Nehru did not want an alliance with any single country or power block, but he did want India to play a leading role in a large constituency, which NAM provided when it was founded in 1961. For a time Nehru’s voice was heard, and India had a significant influence on major international issues in the first decade of independence. Aiyar summed this up in his Melbourne lecture: ‘On the major international issues of the first decade of India’s independence – Palestine, Korea, Indo-China, Suez – so influential was the differential Indian voice that India was included in both the UN committees set up in 1947 to bring about the transition in Palestine from Mandate to Partition... In Korea,8 precisely because India asymmetrically refused to see right as belonging only to one side or the other, she was invited to become the chairman of the Neutral Nations Repatriation Commission without which the Korean War could not have been brought to an end.’

  Although not invited to the Geneva Conference on Indo-China in 1954, writes Aiyar, Krishna Menon installed himself in the Hotel Beau Rivage on the banks of Lake Leman and played such a crucial role brokering accords between the principals9 that the former French premier, Pierre Mendes-France, referred to the Geneva Conference as ‘this ten-power conference – nine at the table

  – and India’. In consequence, India was invited to chair the three International Commissions for Supervision and Control set up to monitor the implementation of the accords on Vietnam, Laos and Cambodia.10

  India was at this time ‘punching above our weight, measured strictly in realist balance of power terms’, as Shivshankar Menon, India’s national security adviser from 2010 in the Manmohan Singh government, and a former foreign secretary, put it in August 2011 in a wide-ranging exposition on India’s foreign policy.11 ‘This was possible because of the strategic space that the Cold War opened up for us, and because of the eminent good sense and reasonableness of what Nehru was doing and advocating. During the fifties, India stood higher in the world’s (and her own) estimation than her strength warranted’. Menon went on to admit rather elliptically what happened after that: ‘During the sixties the reverse was the case. After 1971 there has been a greater correlation between India’s strength and prestige, and this seems likely to continue for the foreseeable future’. This was a neat diplomatic way of saying (correctly) that India’s defeat by China in 1962 ended both its clout and Nehru’s international attempts at leadership. India then displayed regional strength when it helped Bangladesh to be carved out of Pakistan in 1971, but it has not been able to extend that on a wider international plane because of its relative economic and military weakness, despite the 1998 nuclear tests and economic growth in the 2000s.

  After Nehru

  In any case, India no longer has the will to be heard, nor does it seem confident, as it was in Nehru’s time, that it has something different to say, apart from believing in non-intervention in other countries’ affairs and therefore opposing the sort of regime change led by the US and UK in Iraq and elsewhere. Implicitly criticizing the West’s military intervention in Libya and support for Syrian rebels, Manmohan Singh said at the UN in September 2011: ‘The observance of the rule of law is as important in international affairs as it is within countries. Societies cannot be reordered from outside through military force. People in all countries have the right to choose their own destiny and define their own future’.12

  That said, India is now much more focused on its own concerns, as Menon explained in his 2011 lecture: ‘Our primary task now and for the foreseeable future is to transform and improve the life of the unacceptably large number of our compatriots who live in poverty, with disease, hunger and illiteracy as their companions in life. This is our overriding priority, and must be the goal of our internal and external security policies. Our quest is the transformation of India, nothing less and nothing more.’ India had ‘sought the strategic autonomy that nuclear weapons bestow upon us’ so that it could pursue that goal ‘without distraction or external entanglement’, he added, diplomatically stopping short of naming China and Pakistan as the potentially distracting entanglements.

  ‘So, while India is already a major economy in terms of size and ability to influence prices and supply and demand in certain markets, it will still be a country of poor people with overwhelming domestic priorities for an extended period of time. This will certainly be true for the foreseeable future which is, at best, fifteen years,’ said Menon. ‘That is why it is important to peg our goals and use of power to our immediate and overriding interest in our domestic transformation. In other words, our condition and the state of the world require us not to seek hegemony, or domination, or expansion, or strategic depth. None of these serve our basic interest, even in a defensive sense. Being a bridging power, or a swing state might, in certain circumstances. Power is the ability to create and sustain outcomes. Weight we have, our influence is growing, but our power remains to grow and should first be used for our domestic transformation.’

  From Nehru to the present day (with Menon presumably reflecting the views of Manmohan Singh), it can be presented as a noble, well-honed and gradually developing cause – though Menon admitted it could also be seen as a ‘very selfish policy’. In this view of history, India has moved logically and coherently from being an independent opinion-leader under Nehru, to a pragmatic domestic-oriented player in the twenty-first century’s era of globalization, guarding and promoting its internal interests and staying out of trouble abroad when it does not need to be involved. This means that it does not think it should seek alliances with other countries (for example, as the UK does with the US), and it should oppose interference in other nation’s affairs, especially interference that is aimed at regime change. If it is sometimes as selfishly hypocritical in choosing whom it supports as the West is when it goes for regime change in unfriendly oil-rich states while ignoring the lack of democracy in Bahrain or Sudan, so be it!

  A Narrow Focus

  Indian officials define the country’s foreign focus as primarily on the neighbourhood, stretching from the Middle East across South Asia to China and Southeast Asia and, further away and to a lesser extent, the US. The actual focus is really much narrower and is driven by
a sometimes proactive (and more often reactive) policy in relation to Pakistan, which stems from post-partition border disputes and tensions, plus the threats and reality of cross-border terrorism. In South Asia generally, India has failed so badly to get onto co-operative terms with any of its neighbours (apart from Bhutan) that China has seduced them and, in so doing, has gradually encircled India.

  With the US, it has in recent years become an almost-partner (though not an ally), but it is Washington, not Delhi, that drives the relationship or allows it to drift. With China, which is its biggest and potentially most threatening neighbour, India is constantly on the back foot and allows Beijing to set the agenda. With the Gulf states and the rest of West Asia (broadly the Middle East), India only showed what some officials admit was ‘benign neglect’ till the late 2000s. This was despite the presence there of some six million Indians who send home $35bn remittances annually, and the fact that the region supplies about 60 per cent of India’s oil and gas.13 The same applied to Southeast Asia. Elsewhere, India is beginning to take more notice of Africa (with $5bn three-year aid and other initiatives announced in May 2011), the Gulf and eastern Asia, especially as it searches abroad for sources of energy and other essential supplies, realizing the need to counter China’s growing international influence. It has also begun to develop an important relationship with Japan that was marked by the first-ever visit to India by an emperor and empress at the end of 2013. Japan is interested because it is attempting to counter aggressive diplomacy from Beijing, and there are potentially big gains for India in terms of development finance and other assistance.

  India has always felt comfortable with the old Soviet Union, its ally in the Cold War; Indira Gandhi and other top leaders used to say that Moscow ‘has never let us down’. India was directly affected when the Soviet Union collapsed in 1990–91 because the economic support it had been receiving stopped. But the relationship has continued with Russia, certainly on international affairs, though Moscow is uneasy about India’s growing defence and other links with the US, and there have been problems with Russian defence contract delays and cost over-runs.