Can Modi Rise to India’s Challenge?

Many people, both in Asia and beyond, hope and expect that under Modi’s government India will recover from the political drift and sluggish growth of recent years. But a note of caution is in order about what to expect from India, economically and strategically.

Posted on 08/15/14
By Hugh White | Via The Straits Times


Narendra Modi’s new government in New Delhi has restored the sense of excitement about India’s potential both as an economic powerhouse and as a key regional power. Many people, both in Asia and beyond, hope and expect that under Modi’s government India will recover from the political drift and sluggish growth of recent years and at last fulfil its promise as one of the indisputable great powers of Asia.


We should all hope that this optimism is justified. There is no doubt that a more prosperous India would be good for the whole region economically, and that a stronger India could do more to help build a stable and secure new order in Asia.


And equally there is no doubt that Modi has a lot to offer India. He has a clear plan to reboot economic growth, based on the successful economic polices he pioneered in his home state of Gujarat. His electoral success gives reason to expect that he will have the authority to implement his plan. And he seems to have an expansive vision of India’s future as a major Asian power.


But a note of caution is in order about what we should expect from India, economically and strategically. Let’s take economics first. The plan that Modi pioneered in Gujarat and now wants to apply to the whole country is based on manufacturing. This is an important shift. Much of the earlier bullishness about India’s economic trajectory was based on the idea that India could forge its own path based not on manufacturing but on services.


Certainly India has done very well in service exports because of its unusually large numbers of highly-educated people. But it has always been uncertain that India could achieve sustained high growth without the primary focus on manufacturing, which has powered economic take-off in every other country from Britain in the eighteenth century to China today.


To follow this well-trodden path, India has to start moving huge numbers of people — hundreds of millions in this case — from semi-subsistence farming into urban factory work. Modi’s policies certainly address some of the barriers that have prevented India from doing this until now. But that will not be enough to turn India into the next China.


The evidence from two hundred years of industrialisation and urbanisation suggests that there are two essential preconditions for sustained economic take-off which India does not yet satisfy.


The first is mass literacy. To move from farm to factory, people must be able to read and write. Literacy in India remains low — some estimates as low as 63 per cent, compared with Indonesia for example at over 90 per cent — and literacy growth has apparently slowed over the past decade. Modi’s economic plan will not work unless he can turn this around.


The second, related factor is social mobility. People moving from village to city must leave their old community and social settings behind and create new ones. Every society finds this hard, but social conservatism seems to make it especially hard in India, and particularly hard for women.


These barriers to growth will only be overcome with bold policies, well-conceived, well-executed and sustained over decades. Even for Modi this will be a huge challenge in India’s factious and fractured political system, especially when so much of the work must be done by state governments over which the national government in Delhi can exercise little control.


What of India’s role in the new and complex geopolitics of Asia? India already has significant strategic weight, and that will grow if and as its economy grows. But what will India do with its growing power?


Many people throughout the region hope that India will use its power to counterbalance China’s and prevent China dominating Asia. Don’t bet on this. Sino–Indian strategic rivalry is primarily maritime because, notwithstanding their land border disputes, the Himalaya is an effective barrier to any serious power projection by land in either direction. And, at sea, long-term trends in maritime warfare give a huge advantage to the defensive over the offensive.


This has big implications. Even if its economic growth increases its strategic weight and military reach, India’s capacity to project power into East Asia’s littoral against Chinese opposition will remain very limited indeed. Conversely, China’s massive investments in maritime forces will give it very little capacity to project power into the Indian Ocean against India’s growing maritime capabilities.


India will therefore be able to prevent China establishing any kind of primacy or even a significant strategic presence in the Indian Ocean, but India will not be able to prevent China establishing primacy in East Asia. And vice-versa. These geographical and military factors mean we should be very careful about assuming the emergence of a single, integrated ‘Indo-Pacific’ strategic system over coming decades.


It is just as likely that Asia’s two giants will each stick to their own oceanic spheres and avoid direct confrontation with the other. Moreover we might wonder why India would want to try to compete with China in East Asia. Leaders in Washington and Tokyo might hope that India will help America to remain the primary regional power, and Tokyo no doubt hopes as well for India’s support against China if America’s leadership in Asia falters.


But these hopes assume that India’s strategic interests in relation to China will closely align with Japan’s or America’s. Why would India take on China to fight their battles, if Delhi is confident that China cannot project power into the Indian Ocean? India is a great power in its own right, with its own vitally important relationship with China, which it will not sacrifice for America’s or Japan’s sake, or anyone else’s. That means East Asians should not be too sure that India will save them from China.


Finally, there is the problem of Pakistan. Though India is far stronger, Pakistan with its nuclear arsenal is still strong enough to hobble India strategically. It is no exaggeration to say that India cannot fulfil its potential as a great power in Asia until its dispute with Pakistan is settled.


Modi’s Hindu nationalist credentials should make it easier for him than for his Congress predecessors to make the concessions to Islamabad which will be needed to move towards a settlement. Whether the government in Islamabad is capable of responding remains an open question, but if Modi is serious about expanding India’s regional role he must look first to Pakistan.


Hugh White is professor of strategic studies at the Strategic and Defense Studies Center at the Australian National University in Canberra.

This article first appeared here in The Straits Times

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