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This is a pitiful situation for the world's budding powers. Both India and China are trillion-dollar economies. They deserve more respect. Overall, the Chinese do receive a higher level of attention, if not at the G-8 then through official and unofficial communications and contacts all the time. Yet toward India, a proper level of respect and understanding are not forthcoming.
Indian Prime Minister Manmohan Singh should have declined the 10-minute meeting afforded him by U.S. President George Bush on the G-8 sidelines. Bush preferred to meet with Albania's leader rather than spend an hour with India's prime minister.
India has been patient with the Bush administration for almost six-and-a-half years. When he was at the State Department, Colin Powell was standing in the way of improved Indo-U.S. relations, preferring the military dictator in Islamabad. Condoleezza Rice, his replacement, has found it an uphill task to get skeptical officials in the Bush administration to shift their thinking about India. Hence the initial euphoria over the 2005 Indo-U.S. nuclear deal seems to be evaporating.
Where does this leave India, which has spent more than eight years being friendly with the Americans, starting with the tail end of the Clinton era? Nowhere!
A big part of this apathy stems from the ill-advised war in Iraq. Senior administration officials and policy makers are focused on Iraq, and cultivating only those dictators elsewhere in the world who could be useful in the war effort. U.S. domestic political capital is all spent on keeping the opposition off the administration's back.
Economically, the United States and others are unable to offer India, Brazil and other developing nations at the WTO a trade deal that will push world trade a quantum level forward. Concessions on agriculture would infuriate the agricultural lobby in the U.S. Congress and make them change sides on the Iraq war issue.
As for the Indo-U.S. nuclear deal that India has been waiting for, it may never reach fruition. This again is due to excessive influence exercised by the U.S. nuclear lobby and some key administration officials. The politicians who wrote this deal erred in including some unpalatable clauses in the bill they passed. Now, to move the deal forward, Congress's consent is needed to change these clauses. This may not be forthcoming, again because Bush's political capital has all been spent on Iraq.
There is a bit of consolation for India in that the Bush administration has not stood in the way of U.S. companies outsourcing information technology and business processes to India. If the liberal Democrats were in power, they would have cut off this avenue many years back, as John Kerry wanted to do in 2004. This has resulted in increased foreign direct investment in India. Also a bit more foreign institutional investment has arrived, which has jacked up the Indian stock market. This is a bit tricky, as at the slightest change in fortunes in India, this money gathers wings and flies away. Small time investors in India then become the big losers.
China is still the U.S. darling for investment and praise. The Chinese did not like being excluded at the table of the G-8 Summit, but they love all the money that is pouring in. Sometimes the Americans do worry about the mobile intercontinental missiles that China has developed as a side effect of the FDI, but this is largely ignored. Nobody has shouted at the Chinese about human rights in the last three years; on the other hand Indians are constantly reminded through mischievous propaganda of the Indian Army's presence in Kashmir.
Even Pakistan, the headquarters of the world's terror network, has been receiving a lot more praise than India. Pakistan has in the last six years received all kinds of military hardware and a US$10 billion injection in its economy. If the Pakistani dictator visits the United States, the media fall all over him to praise his contribution to the War on Terror.
The Americans don't seem to realize that if they are mired in an endless war in Afghanistan it is because of Pakistan. The Pakistanis assure the United States of their determination to eradicate the Taliban movement, while behind their back they encourage the Taliban to continue their terror strikes on NATO troops. Yet U.S. praise continues for the Pakistani efforts in the War on Terror.
India cannot break out of this impasse easily. Its 9 percent growth in gross domestic product is helping, but India needs more muscle behind its actions. It also needs money to acquire the muscle.
India should not abandon its ambitions, but may have to put them on the back burner for a few years more. Let the FDI and FII flow into the country. Let the GDP reach greater heights. Let the exports double in the next five years. Let the dollar reserves also double in this period. And last of all, let China and the United States fight it out on one issue or the other. There are many issues current and upcoming over which this will happen. India may suddenly emerge on the world stage as a major power, and at that time it will have numbers to prove it.
When India emerges, it should do so on its own terms. It should accept nothing short of a permanent seat at the U.N. Security Council, an unconditional Indo-U.S. nuclear deal, a complete revamp of the attitude of policy makers in Washington, a revised WTO trade deal, a complete withdrawal of the U.S. presence in the Indian Ocean and a complete revamp of the exchange rate system.
In the meantime, India will have to manage -- and it is doing fine. It is a major hub for IT and business and knowledge outsourcing services. The export hub for diamonds, jewelry and gold is shifting to India instead of London and Antwerp. Already there are signs that India may become a hub for small car exports. Its pharmaceutical companies are doing a fine job in making their presence felt in world markets. Textiles and ready-made garment exports are scaling new heights.
This is all good news for India. All the right policies are in place for rapid growth. The future will soon shift to India and China -- then the G-8 will have to be dismantled in favor of a more practical group of nations that includes India, China, Brazil and others.
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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)
