The current global economic recession could last for another
5-6 years, IMF chief economist said recently in Hungary. Besides, IMF has also
pared the growth rate for India to 4.9 per cent. What do these two developments
portend for India? First, the assessments are realistic and quite accurate and
therefore, these factors need to be taken into account while making policy or
plans. By opening up more sectors of the economy, the GoI will help attract
more investment into India. But economic reforms must be carried out gradually
and deliberately keeping the welfare of the vast underprivileged in India. Will
reforms lead to greater job creation, will it bring in necessary technological
and managerial expertise into India which the country is currently lacking?
Will they help raise the per capita GDP in India? Will they help the common man
in India to raise his income levels in a lawful way? Will they help in boosting
infrastructure in vital areas? Riband capitalism is under attack in many parts
of the world, and it is generally felt that the working class is paying for the
‘priviliges’ the affluent enjoyed on borrowings or credit. Certain aspects of
capitalism may not necessarily be good for India and we need to adapt this
concept suitably keeping our peculiar conditions in mind. An open economy where
entrepreneurship can thrive and where businesses can flourish is good but at
the same time there must be safety nets in the form of social security. We need
an environment where Indian businesses thrive and can compete with the best in
the world.
Russia and Pakistan have recently exchanged trade
delegations and there have been quite a few high profile visits from one to
the other. This should not be a concern for India. As India embraces a more liberal,
open economy and a pluralistic democratic environment we will naturally
gravitate towards the US, EU, Japan and Australia where we have shared values.
Russia, sensing this will also balance this with forging alliances with those
with whom it was not so cozy earlier. However, Russia has helped India a lot in
the 60s, 70s, and 80s in basic industries. We should value this help which the
erstwhile Soviet Union extended to India and should maintain a healthy and
trusting relationship with Russia. We should push for more ties in those
sectors where there can be transfer of technology in key areas. Russia has
supported India on many issues in the UN on many occasions and we should never
forget that.
However things have changed in the last 20-25 years. The world is
a lot more different place. The Soviet-US cold war is over and now we are
entering a phase of Sino-US cold war. Without overtly appearing to be anti-Chinese,
we should have our rooks and knights in place and play in concert with democratic nations. Relationships
even with countries espousing different ideologies can be carried out provided
it serves our interest from trade, economics or commerce. Should China and Russia cozy up beyond the
current levels, then we should not hesitate to ally with US, Japan and Australia.
Gain some, lose some. Gains in some relationships will invariably lead to
losses in some other relationships. But so be it.
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