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Editorials For IAS March 14, 2017

For a bold foreign policy – OPINION – The Hindu

    • National interest is not served by avoiding problems left over by a previous global order
  • Moving to a multipolar world
  1. In the last 20 years, incomes of 80% of the population in the West stagnated while per capita income in China quadrupled, and India’s more than doubled.
  2. technology is disrupting labour markets and business models.
  3. Society is ageing
  4. The digital economy is expected to provide one-quarter of global productivity by 2025 and will have the U.S., China and India reinforcing the multipolar order.
    • The functioning of the global economy has affected the economic and political relationship between the large and small economies, reducing and increasing the leverage exercised by the U.S. and China, respectively.
    • The China-led Asian Infrastructure Investment Bank, which former U.S. President Barack Obama failed to weaken, and the New Development Bank of the BRICS could provide the required $8-15 trillion, marginalising the World Bank
    • China is projecting the One Belt, One Road (OBOR) initiative as a replacement for the U.S.-led post-1950 multilateral institutions.
    • Mr. Trump is understandably questioning the relevance of the United Nations for the U.S., favouring bilateral deals and forcing others to rethink the nature and role of international cooperation. He is resetting priorities away from peacekeeping, environment and human rights to trade.
    • Mr. Trump recognises that he cannot stop global trends and the diminishing returns from a reliance on diplomacy and force, exemplified by the failure of the U.S. ‘pivot’ in containing China.
    • The difference is that Mr. Trump is prepared to limit imports and boost exports even at the cost of upsetting long-standing agreements and allies.

  • Asian connectivity and India

      • Chinese exports to the U.S. are already declining, the shift to a consumption-driven economy will open markets for U.S. goods, and the RMB is now a global reserve currency.
      • India is more vulnerable with two-thirds of the exports of the $150-billion IT industry to the U.S. and the ‘Make in India’ strategy colliding with Mr. Trump’s priorities, requiring India to make strategic choices.
      • As the multilateral order fragments into spheres of influence, we first need a bold vision on Kashmir and must not just seek to isolate Pakistan. We should join the OBOR, while maintaining our reservations on its branch passing through Kashmir, and become part of the growing Asian market.

  • With world-class cyber-space-biotech capability, we should reconsider large-scale purchases from abroad for massive investment in cybersecurity and the related digital economy that will make the ‘Digital India’ initiative into a ‘Digital Asia’ one.