Australia and the Asia-PacificR. James Ferguson © 2006
South Asia and the Indian Ocean:
Cooperation or Institutionalised Conflict?
1. The Significance of India
2. The Tangled Web of South Asian Affairs
3. India’s Regional and Global Role
4. IOR-ARC and BIMSTEC: Slow Ground-Work or Stalled Regionalism?
5. India as a Key Player in the Asia-Pacific Region
6. Resources and Further Reading
1. The Significance of India
There will not be time in this subject give due credence to all the countries of South Asia. For reasons of time, we will focus on India and its regional impact on South Asia and the wider Asia-Pacific. India, in its earlier Indus, Aryan, Classical and Mughal forms (see Wolpert 2004), remains a great seminal civilisation, representing one of the great continuities in Asia, a source of three of the world’s great religions (Hinduism, Jainism, Buddhism), and a major influence on Southeast Asian art, culture and literature for the last 2,000 years. India and China, mutually, were the great external influences on Southeast Asian kingdoms down to the 18th century (indigenous civilisations were also diverse and culturally rich), and formed part of an extended trade network which reached from eastern Africa to Japan (see Chaudhuri 1990). These Indian travellers brought with them the great religions (Hinduism, Buddhism, and along with Arabic traders, Islam, often in the more eclectic version of Islamic Sufism). This traditional impact can be seen in the Hinduism of Bali, the great architectural temples of central Java, and in the role of the Hindu epic myths, the Ramayana and the Mahabharata, in shaping Malay dance, shadow theatre (Wayang Kulit) and story-telling. Brahmanism was the first Indian religion to flourish in Java - it was followed in the 5th century by Buddhism (Saksena 1986, p160). Some of these cultural ties have been partially redeveloped since the 1950s, with numerous exchanges of cultural delegations, and dance and puppet troops, though India has to be careful to avoid any sense of cultural imperialism (Saksena 1986, pp166-7).
In modern times, India, like China, was the source of a diaspora of traders and migrants who spread out into the Indo-Pacific and the world. Overseas Indians (sometimes called Non-Resident Indians, NRIs) are found in Malaysia (comprising 8-9% of the population), Singapore (comprising 7%), Burma, Hong Kong, and as far afield as Fiji, Australia, east Africa and South Africa, with small groups found in Indonesia and Thailand. A small but active Indian population is also found in the United States, Europe and Australia (Gordon 1993, pp98-9), and form part of an ‘intellectual’ export in many professions as well as scientists, academics and IT experts. Elsewhere Indians have been labourers, farmers, and merchants, e.g. in parts of Southeast Asia and Fiji. Most of these groups, of course, like the Chinese diaspora, are second, third or fourth generation residents, and wish to view themselves as nationals of Malaysia or Singapore etc. (Suryanarayan 1995, p1207). Certain comparisons can be drawn with 'overseas' Chinese. The Chinese diaspora has been a source of massive reinvestment back into China, with an estimated $44 billion of foreign capital invested between 1970 and 1993 (Suryanarayan 1995, p1219). Comparatively, investment back into India by Overseas Indians has been smaller, though government programmes in the 1990s have tried to attract this capital into the country (‘FDI approvals’ increased from around around $384 million during the late-1980s to approximately $3 billion during the late 1990s, see Balasubramanyam & Mahambare 2003). At the same time, it must be remembered that, excluding Hong Kong and Taiwan, there were in the early 1990s at least 26 million overseas Chinese in Southeast Asia, while there are only several million Indians in the same region (Suryanarayan 1995, p1221). However, there have been transnational linkages in IT, software and related industries: -
The one notable exception here is the participation of India's Diaspora in the Silicon Valley and the spectacular growth of India's export-oriented software industry. The Indian software engineers and entrepreneurs in the Silicon Valley appear to have successfully utilized India's endowments of highly trained but relatively cheap engineering talent (Balasubramanyam & Mahambare 2003).
Alongside these traditional influences lies the reality of India as a significant nation in world affairs and especially in the Indo-Pacific region (see lecture 1). India (the Republic of India (Hindi Bharat), which received its independence from Britain in 1947, emerged as a poor nation greatly in need of economic and industrial development. In general terms, India has made massive strides in increasing food and industrial production. However, though poverty has been reduced, some 36% of the population still lived in extreme poverty through the late 1990s, defined in terms of minimum calorific intake, therefore suggesting the metaphor of the half-full, half-empty glass in developmental terms (Kumar 1999). With a population growth rate of 2.1% and a population of now over 1.08 billion, these problems remain pressing, especially in supplying meaningful jobs for all levels of society (Gordon 1993, p40; DFAT 2004; DFAT 2005). One of the main aims of Indian policy has always been not just to increase GDP, but also to ensure through various welfare policies that economic growth lifts the everyday quality of life of Indians from sub-human conditions (Arora 1996a, pp1546-7).
It has been suggested that education, the changing role of women, and growth in the middle class may already begun to slow population growth rates with serious demographic changes over the next decade: -
As a direct result, better education will ease two of India's heaviest burdens. India has always suffered the compound handicap of overpopulation and the wasted resource of large numbers of women who are uneducated and confined to the home. Those problems are likely to ease in the years ahead. According to the 2001 census, 54% of Indian women and girls can read and write, up from only 40% a decade earlier. In several relatively prosperous, urbanized states, the official number is higher than 80%. As a result, women are getting out of the house, getting jobs, and winning more control over their lives. This process invariably reduces fertility in developing countries. We expect India's birthrate to drop by about 35% over the next decade. As Indian families shrink, their prosperity will grow. So will the nation's productive capacity. (Cetron & Davies 2006)
Indian communities form a vigorous part of many Asian and western societies:
Little India, Singapore (Photo Copyright R. James Ferguson 1999)
This is a crucial component of political stability for India, not an option. In India there is a widespread recognition that poverty exacerbates existing social, religious, ethnic and class tensions, and that environmental sustainability has to be linked to human development. The reduction of the suffering of the poor was a key element in the political and intellectual construction of the modern Indian state, and was emphasised by both former Prime Minister Nehru and Mahatma Gandhi as a true measure of independence and legitimacy (Kumar 1999). In spite of strong political consensus on the need to eradicate poverty, its gradual alleviation has been exacerbated by the growing gap between expectations and the limited delivery by governments of an improved quality of life to all sectors of the population, especially among the young (Singh 1994; Kumar 1999). Further serious reduction of poverty in India, as suggested by Government policy, will require annual growth of 6%-7% GDP (sustained over a decade), combined with deepened provision of minimum services (water, health care, education, public housing assistance, food security, road and energy infrastructure), and special attention to poor and 'socially disadvantaged groups' (Kumar 1999; Cetron & Davies 2006). Likewise, AIDS/HIV has emerged as a major health problem for India, with some 5.7 million suffers making it the country the highest number effected through 2006, and with the government committed to the production of cheap generic drugs for its treatment (Lancet 2006). Economic growth and reduction of poverty have emerged as the major focus of PM Singh's government through 2005-2006: -
India clearly recognizes the dangers of the income gap. Shortly after coming to power, Prime Minister Manmohan Singh, the economist who set India on the path to economic reform in 1991, offered a guarantee that all households will get at least 100 days of work each year. Beyond that, the government has stated that it will not allow economic growth to fall below 7%-8% annually. With the exception of the employment guarantee, any social program that threatens to bring growth below that level will be tossed overboard. But when growth exceeds 7%, Singh promises to increase the budget for aid to the poor. These guarantees alone are a big advance for India's poorest. (Cetron & Davies 2006)
The 2003-2006 GDP growth rates of 6.5-8.3% (7.3% estimated for 2006), with inflation of around 4.4%, indicate that this is not impossible (Cetron & Davies 2006; DFAT 2006; DFAT 2004), depending on future international trade flows. Indeed, Indian sources have become rather up-beat on the idea of 'outshining China' within 15 years, and have projected hopes of sustained growth through 2006-2020 (India Times 2005; Cetron & Davies 2006).
At the same time, the potential of India must be grasped. It is the second most populous nation on earth, has control of most of an entire subcontinent with substantial agricultural and economic resources, and had a quite substantial education and transport infrastructure (largely developed in its modern form on the basis left by the British), and is now developing selected areas of high technology and research (computing, nuclear and missile technology, plus new areas of research in medicine and pharmaceuticals). India also has enormous problems - a large poor population with a relatively high growth rate, vulnerability to seasonal rains, fluctuating patterns of poverty and vulnerability, plus ongoing religious and social conflicts. Yet these negative images should not be taken as a permanent condition. Indian agriculture has enormous potential - 57.15% of its land is arable (Arora 1996a, p1550). India has now become largely self-reliant in food production. India's further steps in its 'green revolution' (use of irrigation, balanced use of farm inputs such as seeds, fertilisers and agricultural credit) could make use of some of China's experience, while trying to limit negative environmental impact (Wang Hongyu 1995, p552; Gordon 1993, p39; Ramachandran 1996).
Likewise, there are considerable mineral resources in India (especially coal and iron), and India has about 40% energy self-sufficiency (Dobbs-Higginson 1993, p173) though certain imports, including gas and oil, are essential. This reliance imported oil and gas has led to a new phase of 'energy diplomacy' whereby India has sought to improve its relations with Persian Gulf countries including Iran (Alam 2000). Likewise, there may be future prospects for China-India cooperation in gaining access to Central Asian resources, especially after a new round of improving economic relations between the two countries through 2003-2005 (Vatikiotis & Hiebert 2004). Through 2004-2008 there have been plans put forward for access to energy via proposed pipelines from Iran, Turkmenistan, and Burma. India has also invested in nuclear power plants, with 15 plants operational and seven more under construction (Strategic Comments 2005). India has also begun to explore wind power options, and has the fourth-largest wind power industry globally and the largest for a developing country (Cetron & Davies 2006)
India (Map courtesy of PCL Map Library)
The other resource is India's population. A growing ‘middle class’, estimated anywhere between 12% and 40% of the population, 100 to 350 million, (Cetron & Davies 2006; Dobbs-Higginson 1993, p174, p178) with disposable cash for commodities has meant that business groups around the world have looked towards an Indian economic 'miracle', just as there was an economic miracle in East Asia. It is this class that also provides the main investment and capital saving source within the country (Dobbs-Higginson 1993, p178). Here comparisons are often made with China, which has experienced much higher economic growth and foreign investment during the 1980s and 1990s (Arora 1996a, p1572). China, of course, began its economic reforms earlier (1978 verses 1992), but both countries are still striving to integrate themselves further into the world economy (Arora 1996a, p1545). It has been suggested that at 'the current rate of growth, a majority of Indians will be middle-class by 2025 - a rate of social progress no one else in the world can match' (Cetron & Davies 2006). However, there is no guarantee that the middle class can continuously expand in India unless the rural poor can be engaged in this process and employment expanded in a wide range of sectors. The 'consuming class' may comprise only 150 million, with only some 6 million with the sustained interest and wealth for expensive foreign brand-named goods (see Tharoor 1998 pp280-282; For high projections as a neo-colonial desire to open Indian markets, see Rayan 2000). Yet, India has some distinct advantages in global terms. For example, the main business and nation-wide language in use is English (though Hindi has had a national role, and there are seventeen official state languages in India, plus hundreds of dialects, Dobbs-Higginson 1993, p175), and higher levels are educated to a high standard in a system rather similar to Britain’s (for the need to further bolster primary education to maintain social reform, see Datta-Ray 1998). On this basis, India now produces large numbers of scientists, engineers, physicians, and technicians each year (Cetron & Davies 2006).
This has resulted in a relatively high technical and scientific research base, which has since 1947 managed to build a large Indian indigenous industrial capability, including major steel production abilities from 1966 (Wolpert 2004, pp365-366), and to develop weapons systems including tanks, attack helicopters, a light combat aircraft, a range of short and medium range missiles, and a strong nuclear power industry. It has developed its own weather and telecommunications satellites, and India plans by the year 2006 to land an unmanned vehicle on the moon. Indian technology can provide most of its own telecommunication systems (Dobbs-Higginson 1993, p184). India has since moved in a major role in programming and software development, as well as beginning to explore a role in cost-effective research and development centres for medicine and other high technology areas, a move supported by the Indian government through 2002-2006 (see Bagla 2003). This move into IT, out-sourcing and service industries has boosted the economy and selected areas of India's development: -
While China continues to be largely a manufacturing economy, India leads as an emerging service economy. India's fastest-growing and most-profitable service sector is high technology, and yet little more than 1% of India's citizens own a personal computer; some 50,000 villages lack even a single telephone. India views its skill in information technology not just as the basis for a profitable export industry, but also as a force multiplier to improve its military. By making India an indispensable component of the global high-tech economy, this dominance in IT is a route to greater influence in world affairs. India wants to be a Great Power, and IT is the tool by which it hopes to achieve that goal. (Cetron & Davies 2006)
Likewise, India now has around 51 million Internet users, and has put one 'public Internet connection' into most villages, hoping to boost the flow of information into poorer rural communities (Cetron & Davies 2006).
India in the past had followed a somewhat socialist and government-guided economic path, especially under the early leadership of Jawaharlal Nehru, who looked to the Soviet Union and Fabian socialism to some extent as an economic model, thus using a series of five-year plans to boost her economy (Wolpert 2004, p354; Dobbs-Higginson 1993, p181; Arora 1996a, pp1548-9). Yet India also has a strong trading and entrepreneurial tradition, has established stock exchanges, a strong legal and accounting system (Yahya 1995, p36; Dobbs-Higginson 1993, p174, p197), and even under the early protected economy, a group of important businessmen grew rich 'behind the shelter of the world's highest trade barriers' (Dobbs-Higginson 1993, p181). By the mid-1990s its economy was a market-oriented mixed economy (Arora 1996a, p1549), with a 21st century trajectory towards a more open market and further privatisation.
India has also been able to retain a democratic structure, both at state and national level, in spite of a range of problems ranging from limited literacy (59.5%, Cetron & Davies 2006) through to corruption and dispersed political violence. There are both advantages and disadvantages in India's democratic tradition: -
India, no doubt, is better recognised as far as its political, legal and judicial institutions and their democratic strengths are concerned; but India has always been slow in adapting to changes unlike China which has been quick in learning from past mistakes and adopting changes compatible to future needs. There is no doubt that the democratic institutions, the Press, the Opposition parties provide checks and balances by compelling the government in power to modify the ongoing plans to formulate new people-oriented policies and take preventive measures whenever required, but the role played by disciplined leadership possessing an ideology capable of mobilising people - workers, peasants and intellectuals - in the nation's restructuring and economic modernisation can also not be ignored. How these two aspects are reconciled would probably determine the course of further progress in both China and India (Arora 1996a, p1574)
Over the last 10 years India has sought to reduce problems of public and private corruption through 'vigilance commissions' operating at 'all levels' of government and business, with the Central Vigilance Commission having successfully cleaned up parts of the banking industry (Cohen & Davies 2006).