Great expectations for India's new govt

Mr Narendra Modi's new government in New Delhi has restored the sense of excitement about India's potential both as an economic powerhouse and as a key regional power.

Many people hope and expect that under Mr Modi's government, India will recover from the political drift and sluggish growth of recent years and at last fulfil its promise as one of the indisputable great powers of Asia.

We should all hope that this optimism is justified. There is no doubt that a more prosperous India would be good for the whole region economically, and that a stronger India could do more to help build a stable and secure new order in Asia.

And equally, there is no doubt that Mr Modi has a lot to offer India. He has a clear plan to reboot economic growth, based on the successful economic policies he pioneered in his home state of Gujarat. His electoral success gives reason to expect that he will have the authority to implement his plan. And he seems to have an expansive vision of India's future as a major Asian power.

But a note of caution is in order about what the rest of the world should expect from India, economically and strategically.

Economic imperative

Let's take economics first. The plan that Mr Modi pioneered in Gujarat and now wants to apply to the whole country is based on manufacturing. This is an important shift. Much of the earlier bullishness about India's economic trajectory was based on the idea that India could forge its own path based not on manufacturing but on services.

Certainly, India has done very well in service exports because of its unusually large numbers of highly educated people. But it has always been uncertain that India could achieve sustained high growth without the primary focus on manufacturing which has powered economic take-off in every other country from Britain in the 18th century to China today.

To follow this well-trodden path, India has to start moving hundreds of millions of people from semi-subsistence farming into urban factory work.

The evidence from 200 years of industrialisation and urbanisation suggests that there are two essential preconditions for sustained economic take-off which India does not yet satisfy.

The first is mass literacy. To move from farm to factory, people must be able to read and write. Literacy in India remains low - some estimates put it as low as 63 per cent, compared with Indonesia, for example, at over 90 per cent - and literacy growth has apparently slowed over the past decade.

The second, related, factor is social mobility. People moving from village to city must leave their old community and social settings behind and create new ones. Every society finds this hard, but social conservatism seems to make it especially hard in India, and particularly hard for women.

These barriers to growth will be overcome only with bold policies, well conceived, well executed and sustained over decades.

Even for Mr Modi, this will be a huge challenge in India's factious and fractured political system, especially when so much of the work must be done by state governments over which the national government in Delhi can exercise little control.Geopolitical landscape

What of India's role in the new and complex geopolitics of Asia?

India already has significant strategic weight, and that will grow if and as its economy grows. But what will India do with its growing power?

Many people throughout the region hope that India will use its power to counterbalance China's and prevent China from dominating Asia. Don't bet on this.

Sino-Indian strategic rivalry is primarily maritime because, notwithstanding their land border disputes, the Himalayas is an effective barrier to any serious power projection by land in either direction. And at sea, long-term trends in maritime warfare give a huge advantage to the defensive over the offensive.

This has big implications. Even if economic growth increases India's strategic weight and military reach, the country's capacity to project power into East Asia's littoral states against Chinese opposition will remain very limited indeed.

Conversely, China's massive investments in maritime forces in its own backyard will give it very little capacity to project power into the Indian Ocean against India's growing maritime capabilities.

India will therefore be able to prevent China from establishing any kind of primacy or even a significant strategic presence in the Indian Ocean, but India will not be able to prevent China from establishing primacy in East Asia. And vice versa.

These geographical and military factors mean we should be very careful about assuming the emergence of a single, integrated "Indo-Pacific" strategic system over the coming decades.

It is just as likely that Asia's two giants will each stick to their own oceanic spheres, and avoid direct confrontation with the other.

Moreover, we might wonder why India would want to try to compete with China in East Asia. Leaders in Washington and Tokyo might hope that India will help America to remain the primary regional power, and Tokyo no doubt hopes as well for India's support against China if America's leadership in Asia falters.

But these hopes assume that India's strategic interests in relation to China will closely align with Japan's or America's. Why would India take on China to fight their battles, if Delhi is confident that China cannot project power into the Indian Ocean? India is a great power in its own right, with its own vitally important relationship with China, which it will not sacrifice for America's or Japan's sake, or anyone else's. That means East Asians should not rely on India to be a counterbalance to an ascendant China.

Finally, there is the problem of Pakistan. Though India is far stronger, Pakistan with its nuclear arsenal is still strong enough to hobble India strategically. It is no exaggeration to say that India cannot fulfil its potential as a great power in Asia until its dispute with Pakistan is settled.

Mr Modi's Hindu nationalist credentials should make it easier for him than for his Congress predecessors to make the concessions to Islamabad which will be needed to move towards a settlement. Whether the government in Islamabad is capable of responding remains an open question, but if Mr Modi is serious about expanding India's regional role, he must look first to Pakistan.

The writer is professor of strategic studies at the Strategic and Defence Studies Centre at the Australian National University in Canberra.

This article was first published on July 30, 2014.
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