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Modi’s improbable ambitions

Prime Minister Narendra Modi’s well-oiled media machine, and his Western cheerleaders, have created the expectation that his strong leadership will bring rapid growth to India, prosperity to its impoverished millions and vault the country to instant great power status.

Mr Modi’s many bold pronouncements, slogans like ‘Make in India’, bullying of slothful bureaucrats, denigration of Pakistan, visits to leaders of the major powers, promises of huge foreign investment, conferences with major corporations and even the call for more toilets, have evoked popular support.

Read: Narendra Modi concedes defeat in Delhi state election

The Bombay Stock Exchange has risen dramatically on expectations of promised growth. Fortuitously, lower oil prices have bumped up the growth rate — although last year’s headline figure of 6pc growth was manufactured by changing the base year for calculation to 2013 from 2010.

However, almost a year into office, there are growing doubts that Mr Modi’s government will be able to fulfil its proclaimed promises. Economic reforms — reduction of subsidies, removal of barriers to trade and investment, infrastructure development — have not even been initiated. Nothing has changed for the ‘common man’.

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The Bharatiya Janata Party’s ignominious defeat in the New Delhi elections to the Aam Aadmi Party (three seats vs 67) is a clear sign of popular disappointment with the Modi government. The Indian prime minister has had to resort to executive orders to kick-start some of his plans.

India is a large country and a huge market with considerable potential for growth. But it can realise its potential only if it can overcome the multiple political and social challenges it confronts internally.

Seventy years since independence, secular democracy has not succeeded in overcoming India’s caste, class, religious and ethnic divisions. Former Prime Minister Manmohan Singh once informed the Indian parliament that insurgencies afflict 119 districts in India. The BJP’s design to unify India under the banner of Hindu nationalism is likely to deepen, not ameliorate, these divisions. The forcible conversion of Christians and Muslims by the Rashtriya Swayamsevak Sangh ‘brown shorts’; violence against the ethnic groups in the northeast; the BJP’s bid to govern Muslim-majority Kashmir; the banning and burning of books which do not conform to the Hindu supremacist narrative; the ‘temple’ constructed to worship Modi, are all symptoms of the fascist forces unleashed by Modi’s ascendancy.

Economic factors also constrain Modi’s agenda.

Unlike China, the Indian government, running large budget deficits, does not have the money to finance the construction of vital infrastructure — ports, roads, railways — which can generate jobs and growth and create the foundation for domestic and foreign private investment. Infrastructure development cannot be left to the private sector which can at best complement government spending and leadership but not replace it.

The Indian prime minister will be unable to pummel Pakistan into accepting its regional domination.

‘Make in India’ will remain a mere slogan unless the private sector — domestic and foreign — is provided the infrastructure and the incentives to invest in India. With some exceptions, most of India’s billionaire-owned corporations are heavily indebted and in no position to put up the financing required for industrial modernisation. With scandals galore, the Indian government is unlikely to bail them out.

Likewise, the potential for expansion of Indian exports will be constrained by inadequate infrastructure and the renewed competitiveness of Chinese exports resulting from the recent weakening of the renminbi.

Foreign corporations and large Western equity funds are interested in exploiting the Indian market. They are looking for bargains, such as distressed Indian power companies. Many foreign companies remain hesitant to initiate Indian ventures due to tax uncertainty, land acquisition problems, sporadic energy supply and complex regulations administered by an overbearing bureaucracy. None of these problems has been convincingly addressed by the Modi government.

Attracting foreign investment flows may become even more difficult in future, not only for India but all emerging economies, once the US Fed, responding to the incipient US economic recovery, starts to taper its Quantitative Easing (money printing) programme and raises the dollar interest rate. The considerable foreign portfolio investment that has buoyed the Sensex may then exit quickly, knocking down Indian stock valuations and compounding the financial challenges besetting Indian companies.

Modi’s external ambitions also confront imposing obstacles.

Power relationships are, in their essence, a zero sum game. India’s proclivity is to profit from each relationship but refuse to pay the costs involved in sustaining these relationships.

For instance, the US wants India to join it in containing China, support its policies on Afghanistan, Iran and other issues and open its market for US exports and investment. India remains reluctant to compromise its relations with Russia or Iran or, so far, to confront China overtly.

For its part, India wants unconditional US support against Pakistan. Given the US need for Pakistan’s cooperation in Afghanistan and to fight terrorism, Washington is unlikely, at least in the near term, to risk a break with Pakistan to accommodate India, unless India fully endorses America’s strategic objectives.

Modi will find it impossible to pummel Pakistan into accepting India’s regional domination. Once Pakistan-Afghan relations are fully normalised, India will lose its principal avenue for waging its apparent shadow war against Pakistan through the Tehreek-i-Taliban Pakistan and the Balochistan Liberation Army. On the other hand, as the BJP’s Hindu extremists antagonise Kashmiri Muslims, India’s Achilles’ heel will once again be fully exposed.

Nor is Pakistan likely to be financially overwhelmed or strategically intimidated by India’s massive arms build-up. It will acquire defensive capabilities cheaply from China and possibly Russia. In any case, India appears to be arming itself for the wrong war. The next India-Pakistan war, if allowed to happen, will be fought not so much with aircraft, tanks or ships, but mostly with missiles. Such a war will be short and destructive and most likely escalate to the nuclear level.

The main question is what will happen once the realisation dawns in New Delhi that Modi’s ambitions are unlikely to be realised. As the BJP government begins to lose popular support, Modi’s instinct will be to retain the loyalty of his core constituency by returning to his Hindu supremacist roots. This will further divide India and threaten regional and global peace and security.

The writer is a former Pakistan ambassador to the UN.

Munir Akram, "Modi’s improbable ambitions," Dawn. 2015-03-01.
Keywords: Political science , Political issues , Political system , Political parties , Political leaders , Foreign investment , Economic reforms , Democracy , Violence , Leadership , Bureaucracy , PM Modi , Manmohan Singh , India , United States , China , BJP