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Has the time for India to lead come?

December 31, 2012 15:50 IST
For starters given a declining West, it is indeed unwise on our part to depend on it for any matter whatsoever for our growth, writes M R Venkatesh. 

The events of the past few years at the global level demonstrate that the west is on a significant decline. This decline, let me hasten to add, is not merely political. Rather, it is now visible in economics, finance, demographics and culture.

Possibly, this decline of the West is caused by a relative growth of the rest. In a sense one could argue that all this may result in a genuine rebalancing of global order.

But if events of 2012 are any indication, in my considered view, the decline of the west could well and truly be terminal where the hegemony of the west is increasingly questioned or probably challenged by the rest of the world in the next decade or two. Let me explain.

Americans at this point in time are grappling with their internal economic crisis. As a result a "fiscal cliff" looms large. The only way out of this mess seems to tax Americans more and simultaneously reduce government expenditure. This is ostensibly aimed at reducing budget deficits and by extension, debt. But as events of the last few days reveal, this is easier said than done.

If the US is in an economic crisis, Europe is facing economic calamity. Portugal, Ireland, Italy, Greece and Spain (PIIGS) are virtually written off at the global level. And all these developments in the west have profound implications for India in the next decade or two.

At the core of all this economic mess is that family and family values, the basic building blocks of any society and by extension national economy is weakening in the West; perhaps to the point of complete destruction.

In 2010, more than 50 per cent of children were born out of wedlock in the US. The rest of the western countries, things are no better. Illegitimacy, it seems, is the new norm! This breaking up of the family in the west has put tremendous pressure on the finances of governments and is primarily responsible for their economic mess. Let me explain.

According to a report in The Wall Street Journal  (10 October 2011), nearly half of US households received some form of government benefits like food stamps, subsidised housing, cash welfare or Medicare or Medicaid or social security.

All these means governments have to tax more - an impossibility given the fact that western democracies are rooted to libertarian views with well-defined individual rights. Similarly, given their extensive social security programs, it is impossible to curtail government expenditure.

Either way they need to borrow more - an economically unsustainable proposition from now on; a classical case of damned if they do, doomed if they don't.

Writing his column titled "Will India needs to prepare for the decline of the West?" [www.firstpost.com - December 15, 2012] Professor R Vaidyanathan bases his observation on two recent reports from the US - Global Trends 2030: Alternative Worlds, by the US National Intelligence Council, and US Strategy for a Post-Western World: Envisioning 2030, by the Atlantic Council that map a decline of the west with a concomitant rise of India in the next decade or two.

Professor Vaidyanathan neatly summarises the following five trends in the west which will have far-reaching implications for it:

  • The west's problems are related to the decline of the family as an institution and household savings.

  • Demography is increasing the proportion of old people in the population.

  • Rising longevity is leading to a social security crisis which will bankrupt governments.

  • The decline of the church and belief systems - both in Europe and US - could have major  implications

  • The Westphalia consensus about the sovereignty of nations which are not western/white is over.

An Asian Re-emergence

More importantly, he recalls the pioneering study of Angus Maddison for the OECD, in which Maddison demonstrated that till 1820 India had nearly one-fourth of the share of global GDP before its decline started, thanks to colonialism, to a mere four percent share by 1950.

Buttressing this view, the PM of India Dr Manmohan Singh speaking at the Oxford in July 2005, quoted Maddison and observed "There is no doubt that our grievance against the British Empire had a sound basis.

As the painstaking statistical work of the Cambridge historian Angus Maddison has shown, India's share of world income collapsed from 22.6 per cent in 1700, almost equal to Europe's share of 23.3 per cent at that time, to as low as 3.8 per cent in 1952."

From that point of view, Professor Vaiyanathan claims, we are "re-emerging markets" and not "emerging markets." The distinction is not merely an exercise in semantics. Obviously the 200 years of western dominance is an aberration in the last 2000 years recorded history of man and if these studies by US Think Tanks are correct, India's time has well and truly come.

This renaissance is probably pan Asian too. Writing his piece in The Guardian, [27th July 2012] Pankaj Mishra the author of acclaimed book From the Ruins of Empire: The Revolt Against the West and the Remaking of Asia brilliantly captures this entire paradigm and states "that the central event of the modern era is Asia's emergence from the ravages of western imperialism."

Yet, we in India are in a perennial state of denial on this tectonic shift. The reason for the same is not far to seek. For most educated Indians it is impossible to question, much less challenge, western supremacy as much as it is to accept Asians on equal terms.

For instance, can an Indian lawyer question the Anglo-Saxon jurisprudence model? Can an Indian doctor accept traditional Indian medicinal systems? Or can we learn appropriate lessons from the Japanese in handling their traditions and appropriately blending it with modernity?

The answers to these questions can never be answered in a binary manner. However it has to be conceded that our overwhelming acceptance of the west is stunning for an independent country, more so a civilisation of several thousand years. In contrast, the Chinese do, so do Koreans or the Japanese without being adversarial with the west.

But there is more to such lack of questioning or independent research by our educated of the west. In the absence of independent thinking, three western ideas has pinned India completely down since independence. If for the first twenty years it was socialism, it was secularism for the next twenty and globalisation for the rest.

In the process India has been reduced to a huge western laboratory since 1947!

Take the last one - globalisation - for instance and try and see if it was referred even once in the debates in the run up to recent elections in America or for that matter in any other part of the world. Simply put, the idea of globalisation, never appealed even in the west, its presumed land of birth. Yet, we celebrate the idea of globalisation even as it is orphaned in west!

But we are not on an elevator

But this does not mean we are automatically poised to grow, lead and dominate the world. Neither can we draw solace at this decline of the west. The west despite all these negative developments is in no hurry to vacate its position. Naturally, we need to draw appropriate lessons from our past for our future.

For starters given a declining West, it is indeed unwise on our part to depend on it for any matter whatsoever for our growth.

We must realise that our growth will be an outcome of our efforts. That in turn implies we must have an indigenous model - one that is home grown with local entrepreneurs, domestic capital and native enterprise. In contrast to the doctor's prescription, India is increasingly depending on foreign entrepreneurs, external capital and alien enterprise.

The reason for this baffling approach is obvious. As 2012 draws to an end, India will be seen globally as a confused, corrupt and a cynical nation - one that neither acts nor reacts. We seem to be in a perpetual state of paralysis where debates, not actions, matter. And believe me most of it self-inflicted.

Simply put the decline of the west offers an opportunity to lead the world. But how we handle the next decade is an immense challenge. Needless to emphasise a diffused nation that fails to handle itself cannot be handed the responsibility of leading the world.

Of course, this is not the sole responsibility of the Indian Government. India as a global leader is a responsibility of every Indian who must see, seize and act on this development.

It need to be understood at this point that leaders are not mere rule followers but perhaps rule breakers and definitely rule makers. That takes us to the question posed at the beginning - do Indians have it in them to question the West - and break the rules imposed on the rest? Can we as a nation successfully challenge western domination?

As sage Aurobindo Ghosh prophesised nearly a century ago - from the ruins of the west, India will rise. Will the west be in ruins? Will India rise? 2013 may well hold answers for all these questions.


The author is a Chennai-based Chartered Accountant. He can be contacted at mrv@mrv.net.in
M R Venkatesh