A price for democracy

Six months have passed since 2011 began and increasingly this is being written off as India’s wasted year. Caught — some would say enthralled — by domestic political theatre, it has been easy for India to ignore the wider implications of the series of corruption scandals, a paralysed government and policy and public initiatives being hijacked by amateurs belonging to one or the other civil society platform.

India will survive 2011, survive the United Progressive Alliance government and survive this storm. Yet the India story has been substantially damaged. From falling foreign investment figures to rising home-grown pessimism, the signs are telling. It is for us to read them.
There is a substantial change from even eight months ago, when US President Barack Obama addressed Parliament and called India a power that had emerged and deserved permanent Security Council membership. This summer a vacancy arose at Roosevelt House, home of the American ambassador in New Delhi. If India were still the India of Mr Obama’s praise, there would have been a clamour in Washington, D.C., for the India job. Political high-fliers would have lobbied for themselves.
Instead, a veteran diplomat — an old India hand admittedly — has been appointed. He is a trusted professional but not the sort of “A list” insider the United States President would have sent to India if it were really top of his mind.
The Americans are not alone. One by one many ancient demons are coming back to haunt perceptions of India. Egregious corruption, ineffectual governance, inability to promptly honour contracts, failure to appear consistent in economic or strategic policy and goal-making: the doubts are surfacing again.
From Australia to the Netherlands, a clutch of foreign missions is constantly urging the ministry of external affairs to help clear payments to Australian or Dutch (or other) companies for services rendered during the Commonwealth Games. There have been no definite answers offered. The government is too scared to approve any payments till investigations into Games-related embezzlement are over. This could take years. In at least one case, an Australian company of long standing has gone bankrupt.
These may seem minor incidents but they are adding up. Exasperation with India, disgust with its venal and unreformed political system and concern it is slipping back to its mid-1990s (or even pre-1990s) ostrich-headed world view is growing. It would be futile to run away from that reality. In the past year India has not just stayed where it is; it has actually lost ground.
It is facile to pretend India is paying the price for democracy. Everything from coalition governments — and the failure of the Prime Minister to rein in wild political partners who may have won elections in a specific state — to Baba Ramdev submitting a list of outlandish demands, to lack of urgency on infrastructure reforms till a mythical “unanimity” is achieved can be blamed, rationalised and explained in the name of democracy.
Unfortunately, this so-called “democracy tax” is an excuse for a line of least resistance. That apart, while India’s commitment to universal franchise and free speech are applauded worldwide, the rest of the planet is driven by both political processes and economic outcomes. For India’s external stakeholders, it is not an “either/or” situation.
Global powers began to take India seriously in about 2002-2003 due to a happy confluence of phenomena. India’s economy shifted gears and GDP growth rates zoomed. The outsourcing boom matured. Key sectors — pharmaceuticals, automobiles — started to offer early evidence of India’s manufacturing prowess.
In parallel, India adopted a sober, pragmatic and modern foreign policy. It went out of its way to allay apprehensions that it was an unpredictable international actor that harboured adventurist tendencies. Finally, the US presence in Afghanistan and pressure on the Taliban and its backers in Pakistan took care of some of India’s near-term security apprehensions.
Other than 9/11 and the US intervention in Kabul, none of those events happened without effort on India’s part. Each was a hard won victory. Today, all three props of that edifice are vulnerable. The economy is shaky. A combination of high interest rates and a downbeat mood is keeping consumers from buying and manufacturers from increasing capacities (and so creating jobs).
In economic and foreign policy alike, the government has not fulfilled the potential India had demonstrated. Infrastructure, retail, land acquisition, an agricultural technology revolution, a genuine manufacturing thrust: India has been regurgitating the same promises and citing the problems for a half decade now. Where is the movement?
As for foreign policy, a country that was rewarded with an exceptional nuclear deal three years ago — the rules of global nuclear commerce rewritten only to accommodate India — has reverted to trademark diffidence. It barely counts even in Afghanistan, where the Americans are pushing for talks with the Taliban if only to give Mr Obama space and make symbolic “the tide is turning” gestures for his planned 2012 re-election. In short, India’s decade of good fortune is over.
Of course what this also means is that the supposed India-China rivalry has, in the medium term at least, devolved into a no-contest. India has chosen the worst moment to resort to navel gazing, give its economy sleeping pills and doggedly aim for strategic self-goals. In the past few months, China’s stock has actually risen. Its consumers are beginning to buy more, not enough for the West to be satisfied but more than the Chinese were willing to concede when the financial crisis broke in 2008.
The importance of China to the global economy is difficult for Indians to appreciate. In Canberra, the Prime Minister refuses to meet the Dalai Lama lest China — the largest buyer of Australian commodities — is offended. In something as obscure as the wine trade, expectation of demand from Chinese wine drinkers and collectors is pushing up 2011 prices to levels where these are 20 per cent above an anyway overheated 2010 market. In Asia, middle classes from Indonesia to the Philippines are increasingly looking to a life under the Chinese umbrella.
None of these groups and individuals has an option; and the India of 2011 is not even a ghost of an option.

The author can be contacted at malikashok@gmail.com