Why India Is No Villain

Barbara Crossette is wrong: This rising power helps solve far more problems than it creates.

According to the Financial Times' Lucy Kellaway, "Elephant in the Room" was the most popular cliché to appear in major newspapers and journals in 2009. It is perhaps appropriate then that Barbara Crossette's latest diatribe against India appeared in Foreign Policy under that headline. Although it claims to show that India causes "the most global consternation" and "gives global governance the biggest headache," it is merely a series of rants and newsroom clichés selected entirely arbitrarily to support the author's prejudice.

Listing India's alleged failings, Crossette makes the unfathomable assertion that it is India that causes the most consternation and the biggest headache for the world -- more than Afghanistan, Iran, Venezuela, North Korea, Pakistan, and China. Without an attempt to compare the failings across countries (And why only these countries? Why leave out the West and the rest?), it is logically impossible to arrive at the conclusion that one of them is the biggest culprit. But once you trade logic for hyperbole, you can fit just about any animal you like into the room. For Crossette, it is the pachyderm.

Consider these facts instead: The only country to have militarily intervened to halt an ongoing genocide is India, which it did in East Pakistan (Bangladesh) in 1971. After the December 2004 tsunami, it was India's navy that was the first international responder, deploying within 24 hours and delivering humanitarian assistance to Sri Lanka, Indonesia, and the Maldives. It subsequently coordinated operations with the United States, Japan, and Australia. India has been involved in U.N. peacekeeping from the very beginning and remains one of the biggest troop contributors to this day, often putting its soldiers in danger in conflicts that have nothing to do with national interests. Indian naval ships are also involved in maritime security operations from Somalia to the Strait of Malacca. Even this partial list is enough to prove that India is not, as Crossette believes, "a country of outsize ambition but anemic influence."

Let's take a closer look at Crossette's rap sheet. First, she agrees with a quote from an article that appeared in the Bulletin of the Atomic Scientists, a journal that advocates arms control (hardly a neutral source), arguing that India's refusals to sign the Nuclear Non-Proliferation Treaty and the Comprehensive Test Ban Treaty make it "comparable to other defiant nuclear states [and] will undoubtedly contribute to a deteriorating security environment in Asia." She doesn't explain how, because she would be hard-pressed to prove that India's "contribution" is comparable to that of China, which helped put the bomb in the hands of the likes of Pakistan, or North Korea, which brazenly violated the treaty it signed. Actions matter more than signatures.

Second, on the Doha round of trade negotiations, Crossette blames India for single-handedly foiling a deal that "nobody loved, but one that would have benefited developing countries most." Does she really know better than the developing countries themselves? It seems odd that they would not love a deal that "would have benefited [them] most." It is just as presumptuous and illogical to blame the failure of Doha on India alone. Gideon Rachman, for instance, argues that "the Doha round ultimately broke down because of a stand-off between the United States, India, China and the European Union over agricultural trade." Turns out it takes more than one hand to wreck a multilateral deal.

It is on the third point -- climate change -- that Crossette's proclivity for being selective with facts stands out most. She mentions the Indian environment minister's refusal to agree to binding carbon emission targets five months before the Copenhagen talks, but ignores his statement in Parliament five days before the negotiations pledging 20 to 25 percent carbon emission intensity cuts from the 2005 levels by 2020. Nonbinding yes, but nevertheless a serious commitment. And no country's commitments at Copenhagen were binding. She also ignores that in the end, the Copenhagen "deal" came about in part due to India's bridging of the differences between the United States and China.

Fourth, on the basis of one data point -- the scandal over a pay increase to Paul Wolfowitz's girlfriend that precipitated his resignation as president of the World Bank -- Crossette alleges that India "attacks individuals." Wolfowitz, she says, was ousted "not because his relationship with a female official caused a public furor, but because he had turned his attention to Indian corruption and fraud in the diversion of bank funds." It is undeniable that there is corruption in India, but Crossette glosses over the fact that in the interview she quotes, Steve Berkman alleges that World Bank officials were involved in it too. What the latter actually said, as paraphrased by a journalist for Rediff India Abroad, is that "the international bureaucrats who run the Bank ... are the ones who conspired to nail Wolfowitz using the mini-scandal with his girlfriend to call for his ouster." Where does that leave Crossette's argument?

Fifth, Crossette claims that India "regularly refuses visas for international rights advocates," a failing that she supposes occurs because such advocates are critical of the government. Granting that there is a case for India to be more liberal in its visa regime, the country does not lack robust, committed, and vocal human rights activists. Tune in to any Indian television channel. On the other hand, the U.N. Human Rights Council is not exactly a shining example of how the international community protects human rights. Domestic activism and the liberal democratic institutions that allow it are perhaps far more effective in safeguarding human rights.

Ultimately, Crossette's suggestion that India presents a "headache" for global governance is a manifestation of an outdated mindset. It ignores the growing convergence of interests between India and the United States on the biggest challenges of this century: from establishing a liberal, democratic order to managing the rise of China to containing jihadi terrorism to addressing climate change and a host of other challenges. For those worried about rising elephants, make room if you don't want to be squeezed.

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A $123 Trillion China? Not Likely.

The many, many reasons -- from the financial crisis to the country's aging population to environmental limitations -- why Robert Fogel's forecast for China is completely inconceivable. 

In his bombshell of a projection that China will produce $123 trillion in economic output by 2040, Robert Fogel conveniently dismisses any number of problems that threaten China's economic development, from environmental degradation to stalled political and economic reforms, by arguing that "Beijing has proven quite adept in tackling problems it has set out to address."

Past success is no guarantee of future results, and Fogel sets his entire analysis -- which implies an average annual growth rate of about 10.8 percent a year for more than 30 years -- on that shaky assumption, entirely overestimating the Chinese government's omniscience and its ability to overcome the country's enormous political, economic, and environmental challenges.

These problems on almost every level will prove far more threatening than Fogel suggests. First, the financial crisis has stalled the process of economic liberalization in China and strengthened the state's role in market outcomes. Over time, this will certainly create a range of inefficiencies that hinder future growth. Beijing's stimulus response -- originally deployed last year to compensate for the fallout in global demand for Chinese exports -- will probably have permanent repercussions. Already, industry revitalization and consolidation programs, coupled with a massive influx of easy credit, are stifling the private sector (aside from real estate, which could present its own downside growth risk) and encouraging production overcapacities in state-controlled, export-intensive, heavy industries like steel and cement. The Chinese renminbi's steadfast dollar peg since mid-2008 is giving even more incentive for export firms to over produce, which will inevitably perpetuate a reliance for growth on exports to consumers in America, Europe, and Japan -- with all the risks that come with that dependency.

The leadership now looks less willing than it has in decades to abandon its economic control. Beijing won't soon forget that China's restricted system allowed the government to quickly mobilize fiscal and credit resources to rescue growth and prevent social instability in the face of serious economic crisis. Meanwhile, the more liberalized U.S. economy, once a model for China, remains burdened with surging debt and double-digit unemployment. The free market has lost a bit of its luster.

This heavier reliance on a state-led approach will doubly skew China's growth potential by dampening innovation and reducing the returns expected on sizable education investments. It will be enormously difficult for China to move beyond manufacturing to become an innovator without genuine reform of a political and economic system that stifles individual expression and creativity and directs massive human and financial resources toward less-innovative, state-owned firms. Fogel's expectations for education's growth contribution, based on education and productivity data in the United States, may not fully transmit to China. After all, China's top college graduates are actively seeking jobs in either government or state-owned firms, for higher salaries and job security. That's good for the bureaucracy, but not so good for innovation and entrepreneurialism.

Fogel warns that Europe faces some serious demographic challenges. True enough, but as Fogel only briefly acknowledges, China has an aging population of its own to reckon with. Chinese statistics show that the country's birthrate fell 42 percent from 1990 to 2007, and government projections suggest that by 2025, nearly a quarter of China's population will have celebrated its 60th birthday. Not surprisingly, Beijing is already considering ways to strengthen the country's inadequate social safety net, but this process carries its own policy risks and the country's fragmented pension system won't be fixed so easily. Local governments that operate their own social security funds will resist a push to centralize the effort, and the amount of capital needed from the central government to make benefits meaningful will meet fierce resistance from deficit hawks within China's Finance Ministry. If the leadership falls short in caring for the elderly (efforts to date have certainly been inadequate) this population will present a much larger than expected drag on economic growth.

But the most important reason why we won't see 1.4 billion Chinese earning an average of $85,000 per year is simply that the Earth can't sustain such rapid growth. Today, just 4 percent of China's people own their own automobile. Now multiply that number by 20 and imagine the environmental stresses China would have to manage as a result of such an increase -- not to mention the impact of price spikes for the traditional resources that will remain principal components in the energy mix for at least the next 20 years. Fogel's forecast seriously underestimates these problems.

The biggest environmental challenge for China's leadership will be in securing enough water to keep the economy afloat. Fogel predicts that the agricultural sector, China's heaviest water consumer by far, will remain an "underappreciated economic engine" for growth. But Beijing already faces water scarcity, and industrial growth plus urbanization will mean increasing demand on China's already-inadequate water resources. The Water Resources Group, coordinated by McKinsey & Company, recently forecast that without significant policy changes, China will face a 25 percent supply gap for expected water demand by 2030. This is an expectation of what will happen, not an outside possibility.

Beijing's capacity to cope with the complex issues tied to continued growth is anything but assured. It will face insurmountable difficulties, for example, in forcing local-level bureaucracies and companies to adhere to central-level environmental and economic policies. History suggests a far more pessimistic outlook: Despite the 20 years that have passed since Beijing mandated that local governments incorporate water environmental protection into their production and construction plans, and the numerous iterations of that policy since, China's Ministry of Environmental Protection's own data clearly shows a more than 34 percent increase in wastewater emission from 2000 to 2007 alone (a primary driver of water pollution). Nearly two-thirds of the population now believes that water pollution is China's most pressing environmental threat.

Is the world ready for the China that Fogel describes? A better question: Is China?