Later this week, India will get active at talks in two multilateral forums, the outcome of which will doubtless be crucial for its future political economy. The actions of the country’s policy wonks will be watched closely, more because it would also underline the new-found zeal of the Congress-led United Progressive Alliance (UPA) to recast the country’s international image from that of a predictable spoiler to a more proactive participant in crucial global negotiations.
The first of these will be the two-day ministerial meeting of key members of the World Trade Organization (WTO) being hosted by India in New Delhi from 3 September. Almost concurrently, finance minister Pranab Mukherjee will be attending another two-day Group of 20 (G-20) meeting of finance ministers in London from 4 September; this is the preparatory meeting ahead of the G-20 heads of state meeting in Pittsburgh in the US on 24-25 September.
The former will see India in a leadership role to revive the global trade negotiations that have run aground after WTO member countries failed to reach a consensus in July last year. The latter meeting is crucial because the agenda includes issues that India has steadfastly opposed; their inclusion itself is a sufficient signal of the fact that the country is willing to at least debate, if not revisit, its stance. All the more so because it comes after a deal signed at the Major Economies Forum on energy and climate on 9 July in L’Aquila, Italy, which committed India to act quickly to limit global temperature increase at 2 degrees Celsius above pre-industrial levels.
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The new initiatives are in stark contrast with the negotiating stance adopted by India as recently as a year ago. In July last year, when the WTO talks broke down in Geneva, the then UPA held it up as an example of its ability to stand up against global pressure led by the US. Similarly, on climate change discussions, India had till now stuck to its stance that since in terms of per capita emissions it is way below developed countries such as the US, it will not volunteer any emission cuts—especially since it could jeopardize its development prospects.
However, the advent of the UPA 2.0—with a 200-seat plus Congress victory in the 15th general election, fewer allies and no Left parties—has progressively signalled a radical shift in stance. Most of the efforts have been subtle, but connecting the dots reveal that slowly and steadily India is redrawing its position on the crucial subjects of trade and climate change.
Nothing wrong per se; it is time India focused on maximizing its own interests rather than just being a token flag bearer for all the poor nations.
But the flip-flop raises natural concerns: what was bad till yesterday can’t overnight become good today. All the more so because subjects such as trade and climate change are so esoteric by nature and very complex to comprehend. In fact, they have rarely stoked a healthy national debate and have often been reduced to a polemic that gyrates between two extremes. For every fact there is a counter-fact and intervention by experts only leaves us more confused. It is only fair then that the government strike a national consensus, especially since the effects of such negotiations will unravel over several decades and can hold severe consequences for the economy.
Officially, there is no word from the government about either any change in stance or the underlying reasons if any, even while it is visibly moving the goal post. Informally, though, interlocutors do concede that India is introducing a flexibility in its negotiating position largely to avoid being hemmed in by its rivals, especially on grounds of being a spoiler.
Whatever be the reasons, hopefully the government recognizes the underlying risks of the country’s new negotiating stance. While they may be game changers that would eventually return a greater net benefit to the country, there is also a downside risk of such out-of-the-box thinking going awry. The danger of the latter is that it will nix what may be a game changing idea and set the clock back, maybe even permanently.
The most recent example being the unprecedented political concessions that were offered to Pakistan to kick-start the relationship between the two countries. It was badly executed and did not recognize that any deal that excludes the Pakistan army has little chance of succeeding. The fallout, which has eroded the social capital of Prime Minister Manmohan Singh in particular, could have been worse but for the image of impeccable integrity that Singh carries, despite such a prolonged stint in politics. Worse, it has severely dampened prospects of setting the stage for a healthy and meaningful discussion between the two countries. As the UPA goes about salvaging itself politically, the relationship between the two countries has incrementally deteriorated. The biggest setback is that a great idea—lasting peace with Pakistan is a prerequisite for India to realize its potential—may have suffered a demise. It will require enormous political will for Singh to revive such an initiative and the Congress party to back it entirely.
On hindsight, may be a safer way would have been to strike a consensus. Since it entails the country’s strategic interest, it is imperative that this be done in-camera to avoid any unwarranted disclosures. There is nothing in the body language of the UPA to suggest that it has indeed learnt its lessons. Till then we only have what the interlocutor said in an informal interaction: “You have to trust us.”
But is that enough?
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics.
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