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Business News/ Opinion / Columns/  Opinion | Can India show the path ahead if the US ends up losing its way?

Opinion | Can India show the path ahead if the US ends up losing its way?

New Delhi should take the opportunity to influence the world’s future if America lacks the resolve

US secretary of state Mike Pompeo insisted on Thursday that the 'tide is turning' in dealings with China (Photo: Bloomberg)Premium
US secretary of state Mike Pompeo insisted on Thursday that the 'tide is turning' in dealings with China (Photo: Bloomberg)

On the last day of the month of July, a risk scenario began to form in my head as I woke up to the following five news items: One, China and the European Union (EU) are to speed up negotiations on an investment agreement; two, US secretary of state Mike Pompeo insisted on Thursday that the “tide is turning" in dealings with China, citing international support for Washington’s policies even as he expressed “dismay" at the number of countries supporting Beijing’s new security law for Hong Kong; three, anti-China sentiment in the US is at a “historic high", a Pew Research survey finds, amid friction over trade, coronavirus and human rights; four, China’s 14th five-year plan would mark a move towards “the second centenary goal", namely turning China into a powerful socialist country by 2049 when it celebrates its 100th anniversary, the Politburo said; it added that the nation would continue to enjoy a “strategic period of opportunities"; five, in a separate meeting with China’s political advisers earlier this week, President Xi Jinping said, “No country or person can stop the historical march of the Chinese nation’s great rejuvenation."

The scenario I will speak of is blue-sky thinking, or perhaps an exercise in unreason. It is neither plausible nor probable at the moment, I admit, but anticipating black swans often requires one to be unreasonable. So, here goes.

An axis of Germany-Russia-China is becoming more likely, no matter how infinitesimal a rise in the probability of such an outcome is, and how unlikely it was to begin with. With the euro temporarily becoming stronger against the US dollar, and the EU seen to have agreed on debt mutualization among its member-states (not quite; but mainstream media is painting it as such), and with Germany and the EU under Berlin’s influence found to be pussy-footing the China threat, such a scenario is that much more plausible than a year ago.

Fearing isolation and lacking self-confidence, a new Democratic administration in the US (for now, it looks as if this year’s White House election is for the Democratic candidate to lose), while keeping up the anti-China rhetoric in public, will quietly try to isolate Russia, bring Germany around and mend ties with China. The Pew Survey brings out the Democrat ambivalence over China quite starkly. However, the other three countries will not be persuaded because it won’t be credible. American public sentiment will likely be against it, and even the US Congress may not fully back this stance. In the wake of such overtures, an emboldened China could try something even more adventurous or rash in Hong Kong, Taiwan and the South China Sea.

In all likelihood, a new US administration will respond fecklessly, further eroding its geopolitical credibility at a time when its economic might will look rather brittle, given its sub-par economic growth, large fiscal deficits and a mountain of public and private debt. The US dollar will be increasingly threatened by a coalition of the euro and Chinese Yuan. Stories abound of Russia and China wanting to settle trade in currencies other than the US dollar. They may even call for a new Bretton Woods meeting and global arrangement. The International Monetary Fund will throw its weight behind it. The US will still have a veto, legally. But, the mainstream media would coerce the administration to fall in line and agree on a multi-currency standard.

America will need a leader who can steer the country through this flux. Will it find one? Unlikely. It might take a further decline in US standing, perhaps till 2028, for the country to embark on a long road to recovery of its status. But, it might not be the same country again.

Should the scenario outlined above come to pass, where would it leave India? It would leave India vulnerable. The Quad minus the US will be largely rudderless. Indeed, it might fall on India to lend substance to the troika. In fact, India might have to induce greater resolve among many fence-sitting nations, not to speak of a reluctant new American administration. India will have to become adept at harnessing US public opinion and influencing its lawmakers. To gain a chance of succeeding in these extremely challenging tasks, there are at least four prerequisites.

One is that India must shed its long-standing diffidence and must understand that it has an opportunity to play a major role in influencing global geopolitics. Two, it must be clear-headed, for there will be any number of detractors—inside and outside the country—who will ridicule the effort, as they did when India tested nuclear devices. Three, India must punch above its weight without appearing to do so. And, four, India should work on gaining economic girth.

Adding to economic girth is possible only if economic problems are tackled promptly and with confidence. Policies that foster self-reliance can and should be pursued without being apologetic, but with a clear-eyed focus on extracting performance, productivity, good governance and ethical behaviour from the private sector in return. Without any obvious intent and plan, India may find itself in a position to influence—more than ever before—the shape of global events to come. It should not let such an opportunity go waste.

V. Anantha Nageswaran is a member of the Economic Advisory Council to the Prime Minister. These are the author’s personal views

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Published: 03 Aug 2020, 08:24 PM IST
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