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Op-ed

India: New Letter and Spirit

by Arvind Subramanian, Peterson Institute for International Economics

Op-ed in Business Standard, New Delhi
October 28, 2009

© Business Standard


Never mind that it was a confidential communication. Never mind too that the establishment came down on him and crushed any possibility of his private views translating into public policy. Never mind, in short, that it is back to the status quo with a vengeance. The impact of the leaked letter from Jairam Ramesh, minister of state for the environment, to the prime minister on the terms of India's international engagement was nevertheless seismic with the aftershocks sure to reverberate for some time. The terms of the debate, especially on the tone and possibly also on the substance of India's external entanglements—and not just in the climate change negotiations—have been altered, possibly for good and definitely for the better. Consider in turn the motives, content, and implications.

The provocation was threefold. The emergence of the G-20 means that India suddenly finds itself as an international player, a position it has long aspired to but has consistently been denied. It is not that India has become a superpower à la the United States. Nor has it acquired effective veto power like China. But it is increasingly seen as belonging to the world's steering committee. The job of this committee is to seek and secure cooperation, and to be seen as a cooperation-stymier would sit uneasily with India's new status and its long-run ambitions. That is, if India has finally been invited to the party, its early contributions cannot be those of a party-spoiler.

A second related reason is that India had come to realize, correctly, that in the area of climate change, India was losing the battle of the "narrative." India has discovered that possessing good economic and ethical arguments did not influence people that mattered. In climate change, for example, India found that deploying the rhetoric of recrimination—the argument that rich countries bore responsibility for their historical contribution to pollution and hence had to carry the burden going forward—was proving ineffective. For example, it did little to undermine the legitimacy of the United States and others in contemplating and threatening trade sanctions against India for not cooperating on climate change. More tellingly perhaps, even respected and moderate voices such as Lord Stern and the United Nations Development Program (in a report two years ago) have urged countries like India to undertake substantial emissions reductions. Losing the narrative was proving costly, necessitating a rethink of Indian strategy.

Finally, as in so many policy areas today, there was the China factor. On climate change and trade negotiations (although not on exchange rate issues), China has managed successfully to avoid the label of recalcitrant and is seen as a country that the world can do business with (literally and metaphorically). Indeed the fact that this was already happening—reflected in the US-China bilateral negotiations on climate change—fueled the fear of being sidelined and being presented eventually with a fait accompli that was the product of negotiations between a narrower set of countries. Thus, both the symbolic slight of playing second fiddle to China yet again and the substantive fear of being excluded from international decision making are clearly playing on the minds of India's policymakers.

On content, there is no denying the radicalism of Jairam Ramesh's views. In particular, the call for India to be open to external scrutiny of national policies and willing to undertake international obligations is a challenge to the long-standing principle of regarding sovereignty as a sacrosanct objective to be preserved at almost any cost. Related to this, he makes a strong pitch for India to alter the tone of its international engagement from one that is defensive and "theological" to one that is more open and constructive. The call to de-emphasize financial and technical assistance is also noteworthy because it forces India to abandon its involuntary self-perception as a recipient of largesse, and to start viewing itself also as a contributor to international cooperative efforts.

These views could be portrayed as a "selling out" on India's part and as a cozying up to the United States that is doomed to run up against American self-interest and its variant of sovereignty-obsession. To be sure, the Indo-US relationship is going to be difficult and complicated, not least because of what Pratap Mehta calls the paradox of the American liberal. The northeastern liberals, who populate policymaking in this Obama administration, view India through the idealist perspective, prompting them to call on it to make sacrifices for the global common good. In contrast, China is seen through the realpolitik lens, resulting in greater accommodation and fewer demands being made.

But it would be a pity if Jairam Ramesh's letter did not lead to a debate on India's economic engagement with the rest of the world—not just in climate change but on trade, foreign capital, and investment—that shuns the extremes of sovereignty obsession on the one hand, and the headlong embrace of all things and relationships foreign on the other. An informed and participatory search for the murky middle, what one might call a strategic pragmatism—where the key issues are not how to preserve sovereignty but how much sovereignty to cede, to whom, on what terms, in which areas, and over what horizons—would be a valuable legacy of the recent kerfuffle.

It is a measure of how far India has to go that Jairam Ramesh's letter has made such waves and elicited such a ferocious backlash. It is a measure of how far India has come that a politician close to or even part of the populist wing of the Congress party has called for such a radical break with policy and presentation and not just on one critical issue. For sure, not much will change. But as Tancredi tells his uncle, the prince, in that magnificent Italian novel The Leopard, "If we want things to stay as they are, things have to change."


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