August 09, 2020
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On Paper, A New India

One fine day, the West bought the story. Or was it a thin fable?

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On Paper, A New India
The great change that has come about in outsiders' ideas about India dates back only to 2003. In that year, Edward Luce—the London Financial Times reporter in Delhi—wrote what was then a conventional commentary on the state of the Indian economy following the presentation of the budget. India's growth remained erratic, and the country's economic potential was still shackled by inefficient state intervention. The burden of subsidies continued to drive up public sector deficits; the economy remained starved of investment in infrastructure. Economic reforms were not being pursued with the necessary vigour. International capital remained largely uninterested in India, while foreign investment continued to pour into China. Indian industry was still not internationally competitive. Trade restrictions were still too great. Luce and the Financial Times chief economic editor, Martin Wolf, wrote a longer article in a similar, familiar vein a week or so later.

But by the middle of 2003, the two writers had changed their tune. The story now was of the Indian economy's success, not only in the IT sector, but increasingly in manufacturing industry as well. India was becoming very attractive as a destination for private investment. It had joined China as the great success story of globalisation, and, according to Wolf and others, economic growth in India and China has so reduced poverty as to have brought about a historic reduction in global inequality (because the average citizen of the world is constituted so significantly by the populations of these two countries).

Since then, this has become the new refrain. India, in the western media, is no longer compared so unfavourably as it was with China. True, there is still a gap between the two great Asian giants, but 'giants' they both are, and in the longer run—it is suggested with increasing frequency—India's prospects are perhaps better than those of China. India, after all, has the advantages of democracy and openness, and of an established and sophisticated commercial and industrial bourgeoisie. And the fact that Indian industry is doing so well without the same massive amounts of foreign capital as China is perhaps an indication of its greater productive efficiency.

Just as the old idea of India as a laudably secular and democratic but regrettably 'socialist' republic has been replaced by a new idea of India as a successfully globalising and increasingly liberal economy (with questions about secularism and the character of democracy in India conveniently pushed aside), so too the other old idea of India as a non-aligned power of only marginal significance in international politics has been replaced by new ideas. India's military strength and strategic importance—situated as it is alongside what is widely seen as the world's most dangerous zone (Pakistan, Afghanistan and Iran)—have made it into a potentially, if not actually, great power. India's geopolitical importance to the United States is now so great that New Delhi has persuaded Uncle Sam to behave with extraordinary—and extraordinarily damaging, for him—inconsistency in nuclear policy. A significant moment marking India's emergence as a major power was when President George Bush had to withdraw opposition to the proposed pipeline from Iran. The United States badly needs India as a counterweight to China on the eastern flank and as a bulwark against the mayhem that is abroad to the West.

These new ideas of India—as a successful liberal economy and an emergent great power—have substance to them, no doubt. The economy has been liberalised—even if there is still a very long way to go for neo-liberals—and there are economic sectors in which India is globally competitive in a way that is distinctly new. Geopolitically, India's punch begins to correspond much more with her weight than before, whether in trade negotiations or in security affairs. Yet it is still very striking that outsiders' ideas of India should have changed as suddenly as they did in 2003. It is legitimate to wonder whether it was not the case that a moment came when it was necessary for the liberal protagonists of globalisation to claim India for their cause, even in defiance of their own perceptions of the persisting failures (from their point of view) of economic policy.

Ideas shape perceptions, and as ideas of India have changed, perceptions too have shifted in such a way as to bring some observations of external reality into sharp relief whilst making others faint. Western outsiders are comfortable with perceptions of India as a successful globalising economy that is generally on 'our side'. We are less comfortable with evidence of intolerance, of violence between people of different religious ethnicities—of the failure of secularism in India—or with evidence of the limitations of India's democracy.

Few of us are aware of the extent to which the variety of radical 'Maoist' politics has purchase across large swathes of rural India—or of the ways in which such forms of politics may be a response to the failures of democracy in regard to historically subordinated and excluded people. We are comfortable with the evidence of the success of the Indian middle classes; we are sympathetic with their modernising aspirations for the transformation of the built space of India's great cities. We tend not to see the consequences of those aspirations in the lives of millions of slum dwellers, especially those whose homes are brutally removed in the interests of beautifying, or just of rationalising the city. We gave millions for the relief of those who lost their homes in the tsunami of December 2004. Few of us even knew of the government-created 'tsunami' that bulldozed away many thousands of homes in Mumbai just a few weeks later in January 2005. Sometimes we are reminded that India's apparently dramatic economic growth has not been matched by the growth of productive employment—that India's experience is of 'jobless growth'—but few of us are aware of the frailty of the empirical evidence for the reduction of poverty in India over the past 15 years. Perhaps income poverty has been reduced, but if employment has grown principally in the informal economy, then it is highly likely that many more people's lives are characterised by vulnerability, in the urban economy as much as in the countryside—where, even if the story of 'terminator genes' destroying livelihoods and lives is a myth without foundation, there is little doubt of the continuing vulnerability experienced by most people.

The new ideas of India are not baseless, therefore, but they obscure the extent to which old problems persist and are being dug deeper. This, on some level, is their point, the purpose they serve.

(John Harriss, an LSE economist, is the author, with Stuart Corbridge, of Reinventing India. He is to soon become director of the School for International Studies at Simon Fraser University, Vancouver).
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