Canada’s previous high commissioner to India, David M. Malone, is considered to be one of the most articulate voices in New Delhi’s diplomatic community. During his two-year tenure, Malone began work on a book on India’s contemporary foreign policy, which will be published by Oxford University Press in 2010. Malone left the foreign service in June to become president of the International Development Research Centre, a Canadian government-funded organization, which supports research in developing countries, especially in areas relating to economic development policies. He spoke to Mint in late June on several issues. Edited excerpts:
You’ve been in India for two years, tell us about your experience.
Well, there’s nothing that I didn’t expect to like about India. The impression is that India’s been moving very fast in recent years, but in fact it’s been moving quite fast since independence. I think key policy fell into place fairly early on, while the benefits have devolved later. One of the things that is constantly enthralling is the element of surprise. In India one never knows what’s going to happen next.
Politically, what was the most surprising thing that you found?
Of course India’s a vibrant democracy, a noisy democracy, which sometimes gives rise to a great deal of agitation. I think the violence needs to be attended to particularly in cities which have aspirations to be major financial centres. Politically inspired violence in Mumbai clearly runs counter to Mumbai’s economic aspirations, and that needs to be looked at. But the quality of India’s democracy is interesting because it is very participatory. Indians all over the country let the political world know what they think. This is often amplified in a very free, very dynamic and sometimes by a not very responsible media. So it’s an exceptionally lively polity.
Do you think this is also counterproductive?
I don’t think so. Democracy in India provides very strong stabilizers in society that wouldn’t exist otherwise. People who are unhappy, be they in rural areas, in cities, in certain regions of the country, if they are very unhappy, know that there’s a vote on the way, and as we would say in Canada, they can vote the bums out. This is tremendously stabilizing and also keeps governments working hard. No government wants to be thrown out. Compromise can be good in politics, but it can also be paralysing, and how the politicians deal with these new realities in India, tells a large part of the story of India into the future.
What next? How the politicians deal with new realities in India, tells a large part of the story of India into the future
What would you be referring to (when you speak of how compromise can be paralysing)?
Many domestic policies can be controversial, be they economic reform, or compromises necessary to developing stronger infrastructure in India. If India’s economic future is dependent to some degree on the exploitation of its very rich mineral resources, then political compromises are required among the parties with different views so that firm regulatory frameworks can be set in place. If regulatory frameworks are uncertain, or as in the area of mining not yet set, then India will fall behind in those areas, because the rest of the world is sprinting along.
In the mining sector, do Canadian companies have interests here?
Canadian companies no doubt have an interest in mining in India, just as a number of Indian companies have interests in Canada. Truth is that there’s no overall framework in India in mining. Chief ministers are discussing the matter with the Centre, but it is slow. This development phase requires foreign investment, and to attract foreign investment there have to be clear rules of the road that are widely understood, particularly in areas which are sometimes controversial, like power. In power, foreign investors are not going to come if there’s a serious risk that having reached agreements, they will then be confounded by contentious politics, or local conditions that have not been anticipated.
So what areas can India do a much better job?
Power is a crying need of India. But as we know there has been very little progress in generating actual power. Power is a prerequisite for industrial growth. Companies can create their own power resources, but it’s suboptimal. Power requires major decisions in investment to be taking place now for benefits 10 to 15 years down the line. That’s not always terribly attractive to decision makers.
Infrastructure is weak in India, although in some sectors, like civil aviation, it has sparked development of airports. But what’s the good of a spanking new airport, if the roads to the airport aren’t there and you spend a few hours getting to the airport.
Why do you think India can’t get its political act together and fix these issues?
In any country with a proliferation of parties, it’s always much more difficult. But when a government doesn’t have a majority in Parliament, everything needs to be negotiated.
What do you think of the regional politicians, for example, the rise of Dalit politician Mayawati to power as chief minister of Uttar Pradesh?
I think it’s tremendously empowering for minorities everywhere to see a formerly very repressed minority to come forward and stake a claim, politically give pride to the members of that community and compromise, as Mayawati did, with some of her opponents to achieve a very large victory.
Can I bring you to the Indo-US deal and ask what you think India should do?
I don’t really have a view, because it’s for the Indians to decide. Canada hasn’t formulated a view until it goes to the IAEA board and to the Nuclear Suppliers Group on which Canada sits. But non-proliferation is important to many countries, it’s been an important issue in Canada, so any exemption from the non-proliferation regime will require careful attention. So depending on what the Indian government decides, there could be a flurry of activity in the summer ahead, or nothing at all in the fall.
Canadian companies in Kerala, you’ve had a few problems…
Commercial disputes are nothing new in international relations ... I was down in Kerala last winter, I spoke with some people in government, we are aware of that dispute, the company has signalled to the government that it’s quite prepared to enter into discussions. This is how disputes get resolved ultimately, not by shouting at each other.
Overall, the economic relationship between India and Canada is doing very well. Canadian exports to India increased by 40% in just three months of this year. The untold story is the huge increase in Indian private sector investment in Canada, billions of dollars in the past 18 months. We welcome it in Canada, especially as it’s private sector driven. Canadian investment in India remains modest, but as India liberalizes further, I am sure we’ll see a good amount of it, in mining and in areas where the regulatory framework isn’t yet fully set.