It has been a rather busy month, with the back-drop of the Russian invasion of Ukraine, the raging inflation at home, the weakening Rupee, our shrinking foreign exchange reserves, our glorious Thomas Cup victory, the Mandir-Masjid re-controversies and so on. I decided to dwell upon the late-last-months’ Quad Summit at Tokyo followed by the launch of the new “Indo-Pacific Economic Forum” (IPEF).
The 4th Quad Summit (the Quadrilateral Security Dialogue) between its four Indo-Pacific members – the US, Australia, Japan and India – the second in-person summit, in the midst of the Ukraine invasion, as only expected, was not much different in the tone and tenor of members’ response. For example, notwithstanding the strong criticism of Russian military action in Ukraine, from Australia, Japan and the United States or “warnings” against attempts of “change of status-quo by force” of China vis-à-vis Taiwan, what ultimately came out as the Quad Joint Declaration was the more docile document, avoiding a direct mention of China’s growing military power in the region, but left little doubt about where its concerns lie. The “diplomatic” statement did refer to the conflict in Ukraine, but without offering any joint position on the Russian invasion, that India has repeatedly declined to condemn. The other members reportedly, have been quite forthright on their views that a strong response to Russia’s war was called for, one that would send out a clearer message world-wide. But to me, the surprise Bertie Wooster of the day was a report, that whilst the Quad was in session, Chinese and Russian fighter jets were carrying out joint-flight-drills over the Sea of Japan and the East China Sea close over Taiwan. “Unseen in the background, Fate was quietly slipping lead into the boxing-glove.” (Wodehouse in “Very Good, Jeeves!”).
India reportedly, got its share of a generous pat-on-the-back from President Biden, on our success and China’s failure to handle the pandemic, (sounded a bit patronizing to me, though)!
My take: “Jumbled-up” is what I take from all of this! I don’t really think we’re looking for certificates of achievements from the West in any case, what we look for is consistent peace in the region and a position of leadership amongst a group of nations with similar military, strategic and commercial interests, to be seen as a formidable security-cum-trade grouping, standing on its own feet, on a position to talk on equal terms to all three powers – the US, China and Russia. The basic question that looks for an answer in my view is how do the geo-diverse groupings as in the Quad, for example, really help India. Why I say “diverse” is we did not quite agree on the primary agenda of the day, which is the Russian invasion, or rather, if we did, we are not prepared to advance a direct condemnation. Or, are the other members quite serious? For example, the Quad committed $50 billion for Indo-Pacific “infrastructure”, who brings how much and by when and for what precise program? (The Quad being a security grouping, I assume the program would impact our own National Security priorities). Shouldn’t citizens know what exactly they were paying for? We saw the so-called “financial commitments” of the top carbon emitters, US and the EU, at the COP summits, how much has been fulfilled as planned? For another example, in the first two months of the Ukraine invasion, Russia exported €63bn worth of fossil fuels and Germany was the biggest Importer at €9bn. In fact, the US itself imported fuels from them, more than we did. (CREA).
So, my take here is that, hopping in and out of these diverse groupings, with the sole Anti-China thread (of doubtful durability), are we running the unnecessary risk of being seen scared? My point is, we are a 3-trillion-economy (the 5th largest); the 3rd largest military power, world-wide, we should be on our own and we should prioritize “Atmanirbharta” on one hand and on the other, putting together our own grouping of nations who share similar priorities, strategic and military, somewhat like the “Non-Aligned Nations” grouping of long ago. And why “Atmanirbharta”? I need not remind you, China itself continues to be our second-largest trade partner $116bn, 2021-22 (which’s on a 28% increase over the last 4 years).
The second agenda was the more tangible one, the launch of yet another trade grouping, (don’t know whether to call it an FTA yet), the Indo-Pacific Economic Forum, the stated “Initiative”, that seeks the “integration of Indo-Pacific economies” and secure resilient and clean supply chains and (probably) uniformity in tariffs as well. First, rightly with consultations and then the negotiations. The 13 countries in the Asia-Pacific, (including the Quad members) that are partnering the IPEF, account for 40 per cent of the World GDP. Although I’m optimistic of such an initiative, particularly if we really want to make it to the top in cost-efficient manufacturing and deliveries world-wide, I’m not quite clear on its tariff-roles vis-à-vis the RCEP for instance (where most of the proposed members of the IPEF are already members there, with China itself leading and towering over them), or vis-à-vis other FTAs like the CPTPP, where China is already set to enter. I think it’s a delicate balance which India has to strike and unlike in the unsavoury case of the belated withdrawal from the RCEP, this time if this initiative really takes off and clarity on its mechanism emerges, over those of the other groupings, it would be good for India as I see it, in terms of costs and deliveries globally.
And in Conclusion: Time waits for nobody; we still have $ 2-trillion a year to make for that target of “5-trillion by 2025”!
(Binayak Datta is a finance professional)
