The Century of Economic Clout
“˜India bans import of various goods from China including some electronic items, specific mobile phones, milk and milk products, and some steel products”™. This was a step taken by the Indian government almost immediately after China opposed India”™s bid for a seat in the Nuclear Suppliers Group (NSG). Ever since the government has continued to raise the dumping duty on some or the other product being imported from China. This perfectly supports the theme of my article ““ the 21st century is one of economic warfare, not military warfare.
Rather than reacting by taking any aggressive military decisions against China after India”™s bid to the NSG was cancelled, India opted to hurt them economically. The trade deficit between the two nations is hugely in favour of China, and as we all know China”™s economic structure is dependent on its exports. Even after opposition by China to India”™s NSG bid ““ which will affect our nuclear ambitions ““ India chose to respond economically. This is a small example of how the most useful weapon in this century is economy and not military.
The 20th century, with the two world wars and then the Cold War between Russia and the US, was primarily an era that saw superiority in military might. The world earlier revolved around powers like Germany, the US and the Soviet Union. Then as Germany fell behind, the enmity between Russia and the US rose to such heights that it resulted in the most elaborate and the most threatening of arms races ““ the Cold War. While on the one hand, the US understood the importance of economic growth, Russia solely concentrated on military expansion, a decision whose consequences it faced soon after. The oil prices slumped in the 1980″™s as Saudi Arabia expanded production which caused Russia an immediate loss of about $20 billion, and Russia”™s agriculture which was in a terrible state of affairs desired immediate resurrection. But Russia couldn”™t fund all this as incredible sums of money were tied up in weapons production. Today we see that the US is the largest economy in the world while Russia is at the 14th spot probable to fall further in the coming years.
Just about 20 to 30 years back in time, the US saw Russia as its biggest geopolitical challenge. Today, its eyes are primarily on China. Its actions and policies have largely become China-centric. You hear President Obama or Donald Trump speak and more of their talk is about China than Russia. China remains to be the 3rd strongest military power in the world, and no matter how much people argue that it can challenge the US forces, I strongly believe that China is no match militarily to the US forces. In a nutshell, I believe the US has no military threat from China. Yet, the US is more worried about China than Russia today. Reason? Economic might.
China has grown at over 10% for close to 20 years making it the 2nd largest economy when measured in terms of nominal GDP and the largest in terms of GDP based on PPP (Purchasing Power Parity). It has the highest foreign reserves ($3,520 billion while the US doesn”™t even feature in the top ten list), and the US is in such debt to China, that it is said that the expenditure of the Chinese armed forces is funded solely by the interest payments paid by the US to China. Military growth is still very evident and will always remain so in a world like ours that is marred by conflicts, but unlike the 20th century, this era is one where military expansion is a by-product of economic growth. No sane nation goes on massive military-spending sprees unless they have the economic stature to do so (unlike Pakistan, of course).
India, China, and some other rapidly developing economies have gained a reputation worldwide because of their economic rise. By 2022 India will be the 4th largest economy in the world. People consider China a huge threat to India”™s security and warn of its expansionistic nature. But to me China is not a fool to destroy its relations with India ““ a major trading partner and a future economic powerhouse ““ because of petty issues or differences on the border that can be avoided, if not solved immediately.
One can understand the true importance of economy, economic resources and economic partnerships by studying the trips that Prime Minister Modi has made to foreign countries. Other than drawing big investments from countries like the US, Britain, China, Japan, and some others, he has visited nations that no Indian Prime Minister had visited for as long as even 50 years. When it comes to our defence, our major partners are the US, Israel, and Russia. Yet, his list of visits is an extremely long one excluding these nations.
PM Modi became the first Indian PM to visit Mongolia ““ a nation that most people would fail to even mark on the world map. His purpose of the visit was mainly to draw this Chinese neighbour closer to India. He did this not by providing Mongolia with weapons or weapons technology, but by giving the country a $1 billion credit line. In return, he attained supply of uranium for our energy plants. As relations improve, it”™s also said that India might place its missiles in Mongolia ““ a strategy that China uses to counter India through Pakistan by supporting it militarily. So as I said before, in this era, military aspects have become a by-product of economic decisions.
Another example is his visit to Mozambique ““ one of the poorest and most underdeveloped countries in the world. Neither does this nation have anything to offer to India in terms of geopolitical advantage or in terms of military. Yet, our PM visited Mozambique. His motive was to raise import of pulses so that the shortage of pulses in India can be met and the high prices can be brought down. India aims to double its pulses imports by 2021-22. Of the 190-odd countries in the world, a small, socially and economically backward nation proved to be of help to the world”™s 2nd largest population, the 7th largest economy, and the 4th strongest military ““ this epitomises how economic desires have trumped military ones in today”™s times.
Think back to the 19th and the early 20th century, when annexation through military means was a means of displaying ones superiority. The more the land and people one brought under its control, the stronger it was said to be. Today, a rather similar conquest is on display in various parts of the world, and it has been termed as terrorism.
The motive of these terrorists is explicit ““ they proclaim that Islam is superior to all and that the whole world should become a caliphate. They desire to hurt nations internally by killing innocents and to somehow force them to slump down onto their knees, accept defeat, and accede to the “˜Islam is supreme”™ philosophy. Although this is not a conventional war, the motive is eerily similar to what was followed in earlier centuries where the supremacy of ONE NATION was the motive, not ONE RELIGION (as it is today).
The motive is similar, yet today it”™s met with fierce global condemnation and military action from across the globe. This again highlights the fact that military or any other form of warfare is not and will never again be the basis of greatness. It you tread that path, you will face destruction. On the contrary, those who wish to raise the living standards of its people and alleviate poverty will be respected and supported.
Economic warfare is how one can define the interconnected functioning of countries in today”™s times. In the 1971 Indo-Pak war, the US had sent “˜Task Force 74″™ led by USS Enterprise, a nuclear-powered aircraft carrier into the Bay of Bengal to halt India”™s rapid intrusion into Pakistani territory. In reply, the Russians did the same by deploying its destroyers and a nuclear submarine, and forced the US to back-off. The motive behind this tacit warfare of both the nations was similar. India was seen as a Russian ally and Pakistan an US ally. If India had crippled Pakistan beyond repair, Russia”™s hold in the Asian subcontinent would have risen. That is why the US intervened; it wanted to protect its and China”™s (a tacit ally) supremacy. To prevent the US from asserting itself, Russia responded. So, the method employed by both was military warfare, and the motive can be termed as “˜world domination”™.
Today, even as Russia grows closer to China fearing global isolation, it continues to be India”™s top defence partner. Fighter jets, nuclear submarines, attack helicopters ““ Russia is only expanding its defence cooperation with India. This would definitely be pinching China, who might in the future look to talk Russia out of such an elaborate military arrangement with its competitor India. But why is Russia doing this? For economic survival. India”™s military spending is rising and will only rise at a higher rate in the years to come as it expands economically. This weapon import by India supports numerous jobs and industries in Russia which is currently in a bit of an economic slump. So even though Russia”™s method to further its purposes is military-related, its motive is economic survival unlike the situation in 1971.
When talks about a war between India and Pakistan go abound, experts even on the Pakistani side resort to one argument ““ we can”™t win a war against India because we don”™t have the economic resources to fight a war even for 3 continuous days. So in the end, it all boils down to how economically powerful you are. The great thing about PM Modi is that he desires to make India an economic powerhouse in the next 10 years (with an estimated GDP of $10 trillion). As we progress along that path, we will notice how world-view of India keeps getting positive, and how oppositions of any kind fade away.