A Grand Chinese Initiative for NaMo
China was amongst the first countries to start treating
Narendra Modi like a PM-in-waiting, even before he had won his latest term in
Gujarat. This was well before the Europeans beat a path to Gandhinagar, and years
before America decided to reluctantly smell the coffee. There was prescience in
the Chinese move to host Narendra Modi like a head of state in China. Done a
couple of years ago, it was an acknowledgement and an intelligence assessment
that was on target.
Is it any wonder then that China is on its way to overtaking
the US as the biggest economy in the world even as there are natural
apprehensions on its hegemonistic tendencies? We are especially traumatised by
our experience in 1962, at the bitter end of the Hindi-Chini-Bhai-Bhai era, but
this could be potentially a very different world now.
Standing as a bulwark against Western manipulation together,
may work to benefit both India and China more than alternate scenarios. After
all, the US-Chinese economic and diplomatic relationship continues strong, even
as Chinese power and assertiveness, economic and military, keeps growing
steadily. But first, the trust deficit between India and China must be bridged,
and this can happen gradually in a cautious and calibrated manner, if we
determine to do so.
But in 2014, should our fear of Chinese ulterior motives,
the tensions on the borders, the blatant alliance with Pakistan, and help being
given to some of our insurgents, turn us away from the opportunity for economic
growth and betterment on offer? Can the economic opportunities be regarded
separately from the other contentions? The present UPA Government seems to
think so.
What, after all, have we really gained by our overtures and
diplomatic leanings towards America and the West over many decades besides the
George W Bush era Nuclear Power Deal? Things have gone into a semi-freeze
thereafter during the Obama years, and China has given practically the same
deal to Pakistan alongside.
Some defence analysts state that Pakistan’s nuclear arsenal
is actually bigger and better than ours, and Indian access to nuclear fuel and
high technology has not, in fact, improved dramatically. Bush and the
Republicans might have wanted to create an unequivocal Indian ally, but there
has been some revision in the thinking of the Democrat-run US since. The EU,
Japan, Australia and the rest must therefore follow suit, if in a muted
fashion.
An economic cooperation with China now, and the consequent
mutuality, may thwart some American globocop ambitions in the Indian Ocean, the
Pacific and South Asia, but need not necessarily put India at increased
military risk. Besides, these tilts tend to engender healthy competition from
other ‘providers’, that could benefit both countries. Besides, it must be noted
realistically, that all our neighbours are already on board the Chinese omnibus.
And now China, with trillions in investible funds, has said
it wants to invest $300 billion, an estimated third of the present requirement,
to create, upgrade or modernise our quaint infrastructure. This is the biggest offer that has come to
India from any country in the world. Currently, China has a strong balance of
trade surplus of around $40 billion in its favour, but a miniscule share of
just 0.15% of India’s FDI inflows between April 2000 and December 2013. There are plans to ramp up bilateral trade
between our two countries to $100 billion by 2015, but this cannot come about
without some bold initiatives being taken.
On infrastructure, the Chinese have offered to work in
Telecom, Nuclear Power, Solar and Hydel Power, Railways, Roads, Sewage
Treatment, Tunnel building etc. as well as in agro-processing and manufacturing.
They are particularly keen on
transforming our Railways with enhanced electrification, high-speed trains,
modern wagons, last-mile connectivity and gauge conversion. This should surely
be welcomed by the incoming Government, because the once proud Railways,
amongst the most elaborate in the world, is now out-dated, inadequate, over-burdened
and notoriously unsafe.
The Indian Railways however, remains a major employer, and
is of enormous strategic importance because it links the length and breadth of
the country. That it gets a separate budget presentation every year speaks for
itself. It therefore merits the Government’s urgent attention to arrest its
terminal decline, particularly as it is also rapidly losing money. A recent CAG
Audit puts the loss figure at over Rs. 1,155 crores between 2010-2013 in
engineering and operations alone. This is a tremendous comedown for one of
India’s proudest institutions that was once a major revenue earner for the
nation. With no money being self-generated to spend on modernisation, safety,
comfort and capacity enhancement, the Railways are being slowly abandoned by
both passengers and freight whenever possible.
While the fulsome Chinese offer has come in the dying days
of the UPA dispensation, in which very little actual progress can be expected,
it needs to be taken up promptly by the incoming Government. China is
undoubtedly one of the most adept manufacturing nations in the world and also
has stellar infrastructure development experience under its belt, both at home
and abroad.
With $3.8 trillion in reserves and counting, it is already
contributing to the development of the South Asian region: in Pakistan, Sri
Lanka, Nepal, Myanmar, and extensively in parts of the African continent as
well. We must therefore take a fresh
look at our suspicions and induct Chinese expertise and money in a phased
manner, as this kind of economic engagement tends to also go a long way to ease
tensions and promote trust. If the West is interested in the Indian market
opportunity on favourable terms, then why not the Chinese?
The scale of the offer is indeed unprecedented, and dwarfs
our economic engagement with the West and Japan too. The Japanese, who have
recently financed some of our infrastructure projects, have only invested a
fraction of the Chinese offer, that too, over the years, inclusive of the Delhi Metro and the work
ongoing in the Delhi-Mumbai Industrial Corridor.
The Chinese offer is also in harmony with Narendra Modi’s stated dream to develop India
on fast-track to catch up to China by 2020. NaMo reportedly wants to provide
24x7 Power throughout the nation as a spur towards this objective. He has
repeatedly stressed that employment generation is a top priority in this
country with its huge demographic dividend.
He wants to enhance employment by promoting big and medium industry, the
IT, financial, and other service sectors, the backbone of infrastructure and
the initiative of entrepreneurship across the board.
The roads in some parts of the country may be fairly good
now thanks to the Vajpayee Golden Quadrilateral initiative, but in other parts
of the nation they remain quite basic or practically non-existent. This road
sector alone can be viewed as a metaphor
for all the work that remains to be done. Infrastructure development such as
this, on multiple fronts, in a new phase of dynamic activity, will boost the
GDP to near or above 10% per annum by itself, and open up a wealth of
unprecedented opportunity for everyone.
(1,169 words)
February 20th,
2014
Gautam Mukherjee
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