A policy shift – for a new World Order

 

Of late the Indian subcontinent is seeing unprecedented turmoil. After the pandemic it looked as though the countries in the region had managed to avoid the worst of the effects. But that is not the case as is evident now. However, the story goes back a few years before the pandemic hit the sub-continent.

Sri Lanka is currently ruled by a single family. Brothers, cousins and uncles hold posts in the government. The rulers took heavy loans from the Chinese, seemingly for development. But as is now common knowledge, Chinese loans are a sure-fire recipe for disaster for any developing economy.

India has provided a line of credit to Sri Lanka to mitigate its immediate problems of food and other essentials.

In many countries in the region the story is the same. A combination of heavy external debt, taken by a ruling dispensation which was partial to the Chinese and populist policies followed at home. The economies of Nepal, Pakistan and the Maldives are also facing serious headwinds.

Why this is significant is that these predatory tactics by China are meant to keep the indebted countries under the Chinese thumb. It is no secret that China wants to become a regional hegemon. They are ready to achieve their goals by any means. The blatant claim over the South China Sea was an early sign which was ignored by the regional powers. 

India has its work cut out to contain China. But contain China it will have to. The spate of infrastructure projects in the country, from ports to roads, the ‘Atmanirbhar’ policy, the digital payment systems, the various PLI schemes for boosting exports, all are geared towards strengthening of the economy. Currently China has an overwhelming advantage in the economic sphere.

However, the pandemic has changed the view of the world regarding supply chains. It was realized that the world was overly dependent on China for most of its goods. As China went into a lockdown the world faced shortages. Now supply chains are being diversified to other countries as well. Most of the supply chains originate in Asia and the Indo Pacific.

The pandemic also had a big negative impact on Chinese Belt and Road projects. Many countries like Malaysia. Indonesia, Thailand, Maldives, Bangladesh and even Pakistan have realized that B&R projects bring nothing but misery to countries in which they are implemented.

China is today grappling with an unprecedented fourth wave of the pandemic. China’s status as a workshop of the world will be downgraded as companies leave China for other locations.

Being a regional power and viewed as a benevolent giant, India will have to step in to stem the rot initiated by China. This will take some doing as India is still grappling with its own problems arising out of the lockdowns which had to be imposed during the pandemic. However it looks like India is on its way to a faster recovery than what was anticipated.

India will need to gear up to compete with China on the economic front. Militarily they are already at loggerheads because of the border dispute. However, most of the countries in the region consider India to be the only power which can counter China if push comes to a shove. India has its work cut out to live up to those expectations. The recent overtures by China to separate the border dispute from the trade relations was shot down by India.  

The war in Ukraine has also has had some positive impact. Egypt, which is the largest buyer of wheat in the world has approved India as a supplier, as Ukraine is out of the market. The Sri Lankan crisis has opened up the Iranian Tea market for Indian exporters. Russia is selling oil at a discount. 

The Ministry of External Affairs recently has been building a narrative which stresses on an independent foreign policy. This has been stressed during the Indo-US 2+2 interactions as well as during the Raisina Dialogues. The message is that India will follow an independent foreign policy guided by its national interest take sides.

The balance of power is changing in the world. India is the only country in this part of the world which has shown a marked change in its approach to its relations with other countries. National interest has been placed front and center by India in all her dealings with foreign powers. She has resisted pressure to cut her economic and military ties with Russia, also, earlier, India did not sanction the ruling junta in Myanmar and cut off ties as it saw China trying to increase its influence there.  If India is to lead the new world order, it has to start with its neighborhood.