04 October 2011

The Rising Tiger and The White Knight

The two largest and richest democracies of the world, India and the U.S. have always had a love-hate relationship, which has been through a lot of changes over the years. The countries, which are seen as strong competitors to each other have also been pillars of strength during times of troubles. Here we examine the Indo-U.S. relationships over the years.
The Rising Tiger and The White Knight


The Past

The United States and India are the world's richest and largest democracies, respectively. Democracy has survived and thrived in the U. S. for almost 240 years without a single hiatus, despite the various wars we have fought -- Civil, Mexican-American, World Wars I and II, Korean, Vietnam, Iraq, and Afghanistan. And, the U. S. has never had a military coup d'e`tat since gaining freedom from the British Rule. Modern India is a much younger democracy, a little over 60 years old. Remarkably, India has not had a single coup since its independence, even though its neighbors Bangladesh and Pakistan have suffered a constant onslaught of dictators and tyrants.

After gaining independence from the British in 1947, the new leaders in India were wondering what form of government they should set up. Under the British Rule, India was a Constitutional Monarchy. It could follow an American-style Constitutional Republic. What did India choose?

Dr. B. R. Ambedkar, a freedom fighter and often called the Father of Indian Constitution, rose to preeminence after attending the University of Bombay, Columbia University, University of London, and the London School of Economics. Having faced untold discriminations in India, because he was a dalit, an untouchable, and having lived in both the U. S. and England, he drew the best of both countries, thoroughly studied the Constitutions of both these countries - after all, he was a lawyer - and, with other leaders, recommended that India should adopt a Parliamentary Republic system. He was instrumental in drafting the Indian Constitution, which is relatively more malleable and hence by no means perfect, because there have been 94 Amendments to it since 1950 vis-a-vis 27 for the U. S. Constitution since it was adopted in 1787.

Present

These two great nations have had love-hate relationships over the last 60 years. Under Prime Minister Jawaharlal Nehru, India was inspired by Socialist ideals, led the non-aligned nations, yet became a close ally of the U. S. S. R. His daughter, Prime Minister Indira Gandhi, banned all Constitutional Rights during a brief Emergency Rule in the late 1970s. The U. S., on the other hand, with its Communist phobia, supported oppressive governments and military dictatorships in Pakistan to establish a strategic presence close to the Soviet Union.

Politics aside, on the economy front, India eased its regulations and opened up its economy in the early 1990s - thanks to a visionary, Oxford-educated and the then-Minister of Finance Dr. Manmohan Singh, albeit a bit too late vis-a-vis China - for foreign investments, loosened banking regulations, and started privatizing many of its inefficient, money-losing, bureaucracy-bloated, state-owned enterprises. Had India embraced Capitalism and a freer economy in the 1950s, as Japan did in in the 1950s and China did in the late 1970s, it certainly would be an economic giant by now - possibly ahead of both these countries. China trailed India in GDP in 1980, overtook it in 2000, and will continue this trend through 2030, and perhaps going even beyond, as the following graphic shows.

As we have discussed in the chapter The White Knight and The Dragon,India has a much more transparent economy and open books than China, although both countries are battling the systemic malaise of corruption. Foreign entrepreneurs reveal that in China you bribe your way to get the work done, but in India there is no telling when and where the bribes will stop. Foreign direct investments in India fell by 31 percent in 2010, because investors are apprehensive that a large fraction of the money is eaten away by the corrupt bureaucratic machinery.


If religious extremism has been Pakistan and Bangladesh's undoing, corruption is India's number two nemesis, with China's growing geopolitical ambitions being India's gravest threat. Corruption in India is at such an inflection point, with the black money circulating in the country estimated at $1.4 trillion - larger than the nation's GDP - that a prominent social leader Anna Hazare recently went on an indefinite fast to demand the passing of the Lokpal Bill which seeks to curb, if not uproot, corruption at the highest levels of Indian polity. This is a tremendous start for India in its march towards cleaner governance.
The Rising Tiger and The White Knight


On the social front, Indian civil activists and social reformers over the years have played a yeoman's role in the fight against the caste system and the subjugation of women. The current president of India is a woman, and her predecessor hailed from the lowest social strata - an untouchable. These facts point to the tremendous strides India has made on the social front.

India has provided safe haven for asylum seekers and refugees from countries like Tibet ravaged by war or facing ethnic cleansing by China. India, very much like the U. S., is home to several faiths and numerous ethnicities, a country of diverse beliefs, dialects, and culture.

Future

No matter what political uncertainties its neighbors are going through, democracy will continue to flourish in India. The economic reforms made over the past 20 years should be left alone and, if anything, more aggressive reforms are needed. Warren Buffett, the Oracle of Omaha and the world's third-richest man, recently said that America will prosper more if countries like India prosper and indicated that he would like to invest in the insurance sector in India, but for the 26 percent cap on foreign investment imposed by India.

The post-cold war politics has dramatically altered the U. S.-India relationship, making each a natural ally and a strong strategic partner of the other. Besides stronger economic ties, other measures, such as beefing up vital sectors of cooperation, including nuclear energy for civilian use, sharing of intelligence information, collaboration in the defense and education sectors, and a hotline between New Delhi and Capitol Hill to facilitate communication in times of international crises, are needed to strengthen the relationship. India and the U. S. should work towards dual-citizenship and review and revamp the tax treaties between the two countries which date back more than two decades. Closer trade and education ties between the U. S.-India sister cities, like Salem, Tamil Nadu, India and Salem, Massachusetts, serve to strengthen the partnership between the countries.

On the global scene, the U. S. should strongly back India's membership in the U. N. Security Council. In fact, back in the 1950s India was invited to join the Security Council, but Prime Minister Nehru declined and suggested instead that the membership be given to China since it was a more populous country. China is becoming both an economic and military superpower. Already a manufacturing workshop for the world, too much dependence on China on not just petty stuff, but electronics, microprocessors, computers, and other high-tech gadgets that equip our defense and weaponry is dangerous. China's geographical and political growth ambitions and influence surrounding India - in Myanmar (formerly Burma), Nepal, Pakistan, Sri Lanka, and Tibet - pose major threats to India continuing as a democracy. It behooves the U. S. to further strengthen its ties with India, supply advanced weaponry, carry out joint military exercises to keep China at bay, and curb Beijing's appetite for 21st century-style neo-colonialism - not necessarily occupying foreign lands, but extending its tentacles beyond what is considered safe for world peace.


The article is based on the ebook Camus Does a Double-Take writen by M.R. Pamidi, K. B. Anand and Meera Pamidi The authors are alumnis of IIT and IISc. The book brings an Indian-American viewpoint in the U. S. mainstream and is a refreshing take on U. S. politics, economy, entrepreneurship in the age of social networking, current world events, and international affairs. It is available on Amazon Kindle Store, Google eBookstore and Apple iTunes bookstore.
The Rising Tiger and The White Knight


The article is authored by M. R. Pamidi, Ph. D., Founder and CEO, C-Cube Consulting