(Online Course) Contemporary Issues for IAS Mains 2012: The Hindu – India is Not a Global Power

The Hindu

India is Not a Global Power

Q. Is there a superpower in the Contemporary World?

Power in inter-state relations is the capacity as well as the
political will to use that capacity, of one country to make another country do
something which, left to itself, it would not do or would not want to do. “Soft”
power should not be considered a component of the concept of power since it is
not relevant to modifying the behaviour of another country; it can and does
serve as a model and indirectly — and over a period of time —to earn goodwill
among sections of society of other countries for its culture. But it has no
place in the discussion of power as a means to bring about a change in the
attitude of another country. India has a genuine attraction for many in the
Middle East because of its pluralism combined with a functioning democracy;
however, it does not give any “power” to India to influence decision-making in
those countries. When we talk of power, we are thinking of military, economic
and diplomatic clout, not of Bollywood or yoga.

The 20th century offers many examples of the exercise of
power by states mostly in neighbouring countries or countries regarded as
forming a part of their spheres of influence. There were at least 10 cases of
American intervention, starting with Cuba when the Platt amendment was adopted
in the Senate which gave virtual control over Cuba to the U.S. as well as
provided the framework for the lease of Guantánamo Bay. Other examples are
Panama in 1903, Nicaragua in 1912, Haiti in 1915, the Bay of Pigs fiasco in
1961, Chile in 1973, etc. An example of the blatant exercise of power was the
Anglo-French-Israeli joint attack on the Suez Canal zone in 1956. The Soviet
Union used brute force to restore its domination of Hungary in 1956 and
Czechoslovakia in 1968. There was of course the Soviet intervention in
Afghanistan in 1979 which had a lot to do with the eventual collapse of the
Soviet empire. The establishment of the United Nations in 1945 and the evolution
of international law since then have completely changed the rules of the game of
the exercise of power by the
introduction of the concept of legitimacy. It is universally recognised that
there are only two scenarios of the legitimate use of force: pursuant to the
Security Council authorisation or in the  exercise of the right of self-defence.
The latter has been severely circumscribed by the Charter which lays down that
the right of self-defence can be exercised only in response to an attack by
another state, thus rejecting the “pre-emptive” right of self-defence. The one
case of unilateral use of force in the 21st century was the American
intervention in Iraq in 2003 which the international community refused to
recognise as legitimate since it did not have the imprimatur
of Security Council approval nor was it accepted as having been in the exercise
of the right of self-defence. United States/NATO intervention in Afghanistan, on
the other hand, was sanctioned by the U.N.

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Of the three constituent elements of “power” — military,
economic and diplomatic — the economic is crucial. This is self-evident and does
not need elaboration. One important reason why the Soviet Union lost the Cold
War was the mismatch between its bloated military and the inability of its
economy to support and sustain it. The answer is clearly in the negative.
America has global reach, and its military is no doubt the strongest in the
world. But this does not confer on it the capability to impose its will on
others. To be fair to it, the U.S. does not ask others to recognise it as a
superpower, though it does not protest when the rest of the world describes it
as one. The Americans would rather prefer to be recognised as the “exceptional”
power. The capacity of its military as well as the will of its political
leadership to deploy anywhere at any time without worrying about adverse
political or diplomatic reaction remains, but it is severely hobbled by its
increasing economic weakness. To that extent, it is a global power. But it lacks
in other attributes of power. The most embarrassing moment for American
diplomacy was in March 2003 when it failed to persuade enoughmembers of the
Security Council, including some of its close allies, to support the “second
resolution” on Iraq which would have legitimised its intervention in Iraq; only
four countries promised support.More andmoremembers in the U.N. vote in favour
of the resolution criticising American sanctions against Cuba. The U.S. has not
had much success in getting countries such as India to fall in line with its
Iran policy. Getting its nominee elected president of the World Bank has less to
do with its diplomatic strength and more to do with the voting advantage that it
and its allies enjoy as also to the lack of unity among the challengers for the

America is without doubt a super “soft” power. Its movies,
television series, popular music, and, most of all, its espousal of democratic
values have immense resonance among the youth of the world, especially in the
Arab and Muslim world. But these do not translate into “power.” China is
portrayed as a legitimate claimant for the title of global power. China’s
economy has been the principal engine of growth of the world economy but is now
slowing down and facing the prospect of a reality bubble, political instability
and huge corruption scandals. It is nownot clearwhen, if ever, itwill become the
biggest economy in theworld. Itsmilitary capability is nowhere close to
America’s. In R&D and labour productivity, it is way behind the U.S. China has
increased its military profile, especially its navy. But the neighbours, while
distrustful, are not afraid of China because of the American “pivot” or other
factors. Much weaker countries, such as the Philippines, refuse to be
intimidated by Chinese threats. If the U.S. and China can be eliminated as
candidates for “superpower” status, there is no need to consider any other state
for the position. Is India at least a “regional” power? The most conspicuous
example of the exercise of power by India was the operation in 1971 in former
East Pakistan. India’s intervention was not authorised by the U.N.; India
justified it on the ground of self-defence since Pakistan had earlier attacked
several Indian Air Force bases as also on the one that Pakistan had in fact
invaded India in the form of 10 million refugees. There is also the case of the
intervention in the Seychelles in 1986, and one case of ill-advised military
intervention, in Sri Lanka in the late 1980s which had disastrous consequences
for India. There was talk of India sending a brigade to Iraq in 2003, but wiser
counsel prevailed. As a general rule, Indian participation in military
operations has been as a part of U.N.-mandated peace-keeping operations, with
the exceptions mentioned. The global powers of yesteryear became such for
concrete reasons: control over sources of rawmaterials including oil and gas and
protection of the interests of their corporations,e.g. the case of the

United Fruit Company in Guatemala in the 1950s, an American
company in which the then CIA director was a shareholder.

Why do some analysts in India feel enamoured of the prospect
of India being called a global or a regional power? Is it because of the sense
of self-importance or prestige? Will such a “title” give India a place at the
high table in international diplomacy? Others sometimes use this adjective for
us for one or both of these reasons: to flatter us— and we are the most
flattery-prone people in the world — and/or to make us take foreign policy steps
which would serve the objectives of those flattering us. Will the label of
regional power help ameliorate the lives of the poor in our country, which is
and should continue to be the guiding principle of our domestic as well as
external policy? Further, while we have soft power of doubtful practical
utility, we definitely are or have become or are becoming a super “soft state.”
India’s neighbours have the fullmeasure of its will, or lack thereof, to use
whatever hard power it has.

One criterion of military power ought to be, not the
unlimited capacity to pay for imports of hardware, but how much of it is the
country able to manufacture domestically; India fares poorly in this respect.
The possession of nuclear weapons does not change anything. Pakistan too has
them. And, our nuclear weapons did not deter Pakistan from indulging in the
Kargil adventure, but Pakistan’s nuclear weapons apparently deterred us from
crossing the Line of Control (LoC) at that time, and restrained us after 26/11.
The boom years of India’s economy seem to be over at least for the short term.
Our forex reserves have ceased to grow and are likely to dwindle, with the
rising energy bill and diminished exports. A reduction in interest rates might
at some stage induce NRIs to start pulling out their deposits as it happened in
1990-91. A declining economy makes for a poor case for acceptance as a “power”
of any kind. In today’s world, the concepts of super or global or even regional
power do not make sense. We should not waste our time or energy over this
non-issue. Fortunately, the Indian government does not seem to be much
preoccupied about such recognition.

Dealing with the Devil’s Excrement

In coming years, India will become evermore dependent on oil
from an evermore troubled region. “Ten years from now”, the man who founded OPEC
told a young graduate student during a 1976 interview, “twenty years from now,
you will see: oil will bring us ruin”. India’s strategic community ought to
reflect on those words: little-noticed but seismic shifts in oil geopolitics
mean the country is staring at a strategic challenge of a magnitude it is
utterly unprepared for. From a peak of more than five billion barrels in 2005,
the United States’ crude oil and refined products imports fell to 4.14 billion
barrels last year [See Table 1]. Imports from Saudi Arabia and the volatile
Persian Gulf have been in slow but steady decline for years. In 2011, over 23
per cent of all U.S. crude oil and refined products came from Canada — over
twice as much as from Saudi Arabia, six times as much as Iraq and 20 times as
much as Libya. If a $7-billion pipeline linking Canada’s oilfields to refiners
in the U.S. passes environmental hurdles, the country could even end up being a
net exporter of oil.

In time, the U.S. might draw back from the Middle East on
this receding tide of oil — a nightmare for India and other growing Asian
powers. Ever since 1947, the U.S. has used guns and cash to impose order across
the Middle East. Now, India could be left needing evermore oil from a region
that is ever-less stable. India, like China, has watched helplessly as
Western-led policies in the Middle East have led oil-producing Iraq and Libya
into quasi-anarchy. Iran’s nuclear programme could, conceivably, spark-off
murderous regional confrontation. Emerging, oil-thirsty Asia, the United States
Energy Information Administration has estimated, will be consuming some 33.6
million barrels per day [mpd] of oil by 2025 — more than double its demand at
the turn of the century. It won’t be able to get it, though, without order in
the Middle East. For India, there is another   peril. Indian policies
on Pakistan have long rested on the assumption that the U.S. would push its
troublesome ally away from the brink. The reason the U.S. locked itself into an
alliance with Pakistan in the first place, though, was to  protect the
Persian Gulf and Saudi Arabia — and the future, could care less about regional
security. OPEC’s founder, Juan Peréz Alfonzo, had warned of oil’s exceptionally
toxic political properties back in 1976: “we are drowning”, he famously said,
“in the Devil’s Excrement”. The petro-states on which growing economies like
India rely to fuel their search for prosperity, he had realised, simply cannot
be stable. In the mid- 1970s, when Mr. Alfonzo had made his dark prophecy about
ruin to scholar Terry Lynn Karl, the corrosive character of the Devil’s
Excrement was little understood. Instead, it appeared to have made the ruler of
every petro-state a Midas. The Shah of Iran promised his people a “great
civilisation”; Carlos Andrés Pérez, Venezuela’s President, imagined a future
where “Americans will be driving cars built by our workers in our  modern

In a seminal 1999 article, since fleshed out by other
economists, Dr. Karl explained why the souring of the dream could not just be
attributed to mismanagement or corruption. Instead of building infrastructure
and industries, she noted, the cash available drove petro-states’ rulers to
establish patronage networks that ensured the survival of their regimes.
Therewere no incentives to engage in economic reforms, and easy cash killed
entrepreneurship. In time, generous handouts led entire “polities to develop an
addiction to petrodollars”. Few took oil-pessimists seriously — in spite of the
clear warning signs that emerged from the 1979 revolution in Iran. From the
outside, Libya’s economy grew at six per cent in 2007, winning it applause from
the World Bank. Bahrain has a per-capita income not dissimilar to New Zealand.
Egypt grew at 4.7 per cent in 2007. Bahrain and Libya built their future by
pumping the seemingly exhaustible pool of cash from the ground beneath their
feet. Tunisia, Egypt and Yemen exported their own inexhaustible pool of low-wage
workers to the petro-states.

But the growth rates masked a less happy reality: the
apparent prosperity didn’t drive industrialisation or generate productive jobs.
Half the population in the arc of nations running from Nigeria to Pakistan is
less than 25 years old, but unemployment is at record levels. There’s a simple
reason why the world’s economy is powered by such a politically toxic fuel.
Bizarre as it might sound at a time when petrol costs Indians well over Rs.70 a 
litre, the Devil’s Excrement is relatively cheap [See Table 2]. From 1946 to
1973, the price of crude in the U.S. stood at just over $20 per barrel, measured
at 2012 prices. In the wake of OPEC’s efforts to ramp up oil prices, and the
Iranian revolution, it surged to over $100. Then, the data show, oil prices
again hovered around the pre-1973 historical average until 2001, when 9/11
ushered in a new era of war. But even now, crude oil is cheaper in real terms
than in 1980. Even more important is this: incomes in the U.S., the world’s
largest consumer of oil, have risen faster than oil prices. In 1929, an average
American would have had to pay 1.49 per cent
of her or his annual income of $84.90 to buy a barrel of crude oil, which then
sold for $1.27. Fifty years later, in the wake of the Iranian revolution, oil
prices soared to $31.61. But the annual earning of the average American had
risen even more sharply, to $7,956. That meant that a barrel of oil would cost
them just 0.39 per cent of their earnings — a quarter of what it did in 1929. In
2008, oil prices soared to $96.91. The average American earned $35,931 that
year, which means a barrel of oil would cost them 0.26 per cent of their
earnings. Now, consumers in the world’s great economies are paying more than
ever for oil — but those who sell it aren’t prospering, either. Barring Norway,
the world’s largest oil exporters are now poorer, relative to the world’s great
economies, than they were five decades ago. “The conclusion must be,” the
commentator Amir Taheri wrote in 2006, “that those who buy oil get rich and
those who sell it do not.”

For geostrategic experts, though, it has long been clear that
cheap oil comes at a high price. Ever since 1947, the U.S. purchased stability
in the Middle East by funding client regimes, and setting up a string of bases
stretching from the Persian Gulf to Turkey. In the next six years, though, U.S.
defence spending will decline by as much as $477 billion — a consequence of
wrenching economic pressures which also means there may be less to spend on
propping up pliant governments. Given the country’s declining interest in Middle
East oil, there will also be less and less reason to do so. There is no doubt
the U.S. will remain the most significant military
force on the planet for decades: its military spending accounts for 43 per cent
of global military expenditure, against China’s estimated 7.3 per cent and
Russia’s 3.6 per cent. The U.S. has 11 aircraft carriers to the rest of the
world’s eight — and its air power is a generation ahead of the competition.
However, the cuts will mean U.S. resources will be more narrowly focused:
targeting potential Chinese expansion in the Pacific, and using intelligence-led
operations to contain terrorism-related threats. The days of grand expeditionary
warfare in the Middle East are at an end.

India can’t say it wasn’t warned: for years now, the U.S. has
been doing so. In his 2006 State of the Union address, President George W. Bush
set America on a new course towards oil independence. “America is addicted to
oil,” he warned. He vowed to “make our dependence on Middle Eastern oil a thing
of the past.” Few paid attention, because past Presidents like Jimmy Carter had
said much the same thing, to little avail — but  the figures show it is now

Ambitious but not Realistic

The latest supplement to the five-year Foreign Trade Policy
(FTP) (2009-14) announced by the Commerce Minister on Tuesday certainly does not
lack ambition. Exports which rose 21 per cent to cross $300 billion at the end
of last year are budgeted to touch $500 billion by April 2014, admittedly an
extremely tough task during a period of macroeconomic stress in India and
abroad. The medium-term goal is for India’s share in global exports to double by
2020. These two objectives are predicated on an export performance scaling new
heights consistently and well into the medium term.

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