Editorial 1: India’s choices in a world becoming bipolar again

Context

India cannot allow itself to be reduced to a pawn in the renewed contest between China and the U.S.

Introduction

Last month, when India’s National Security Adviser Ajit Doval met the Chinese Foreign Minister Wang Yi on the sidelines of the BRICS National Security Advisers’ meeting in St. Petersburg, Russia, a possibility was born anew. Is our diplomatic engagement with China, strained since the horrific June 2020 Chinese incursion into Galwan Valley that claimed the lives of 20 Indian soldiers, about to improve? India faces this question at a time when its relations with the United States have been thriving, with the U.S. regarding India as a useful partner to counter Chinese aggression in the Indo-Pacific. So, must India again face a crucial choice in a bipolar world?

Two nations at odds but still connected

• Connections between the U.S. and China: They have multiple connections with each other that the U.S. and the U.S.S.R. did not:
  • the U.S. is the largest investor in China’s economy, China owns more U.S. Treasury Bonds than any other country,
  • the U.S. sends more tourists to China than to any other Asian country, and
  • there are more Chinese students in the U.S. than those of any other nationality.
  • These are two powers at odds, but with multiple avenues of diplomatic dialogue and economic co-operation that simply did not exist during the Cold War.

Differences from Cold War Bipolarity

• Cold war characteristics: That was an era when the U.S. and the Soviet Union marshalled their satellite states into their respective camps,
  • sundered by the “iron curtain”, and competed to enlarge their nuclear arsenals.
  • The end of this bipolarity coincided with the advent of globalisation, heralding “the unipolar moment”,
  • It lasted a couple of decades and in which Washington enjoyed untrammelled global dominance in spheres political, military, economic, and technological.
• Challenge to American Dominance: But the U.S. did not remain uncontested in any of these spheres for long.
  • Around the 2008-09 financial crisis, the spectre of Beijing began to rise.
  • China’s “peaceful rise” over the last quarter of a century,
  • It is  fuelled by American investment in its industries and a booming export trade in manufactured goods, has rehauled the global order.

Sino-American Rivalry Today

• China has supplanted the U.S. as the world’s leading manufacturing and industrial giant, rivalling it in economic size and exceeding its surpluses, alongside challenging it in such new technologies as 5G.
• So, after decades of unchallenged American hegemony, another aspiring hegemon has emerged, with the resources to challenge American dominance across the board and deploying a new assertiveness under Xi Jinping.
• The U.S. is evolving a strategy to counteract China, much as the U.S. deployed “containment” during the Cold War to stem the spread of communism.
• Yet, just as today’s Sino-American rivalry is starkly different from the Cold War’s bipolarity, so must the contours of such a strategy — and India’s reaction to it — differ from the past.

Military parity and proxy wars

• The U.S. and China are intertwined economies, unlike the total economic separation between the U.S. and the U.S.S.R. during the Cold War.
• China’s economic might makes its claim to global hegemony greater than the Soviet Union’s ever was.
• China’s indispensability to global supply chains and, therefore, to the world economy is precisely why some observers choose not to use the label “cold war” to describe the Sino-American bipolarity, preferring instead such terms as “competitive coexistence”, “cold coexistence”, or “conflictual coexistence”.
• It was in recognition of this that American rhetoric shifted from “decoupling” from China — suggesting severance of ties — “to de-risking”, which implies curbing risks while avoiding a hostile estrangement.

Military Parity between Superpowers

• What is more, as superpowers rising from the ashes of the Second World War, the U.S. and U.S.S.R. were nearly equal militarily.
• China’s growing military strength: But China is nearing parity with, and now, in some areas, threatens to outstrip the U.S.
  • According to the Pentagon, the Chinese navy has surpassed America’s in the number of battle-force ships over the past decade, owing to China’s status as the world’s top ship-producing nation by tonnage.
  • Senior U.S. Air Force officials have also acknowledged the potential of the People’s Liberation Army Air Force to become the world’s largest air force.
  • Yet, military commentators believe that at least till the PLA’s centenary in 2027, there will remain a significant gap between China and the U.S.
  • Unlike in the Cold War, proxy wars between the two rivals do not litter our world today.
  • Nor is there much appetite for any in either Beijing or Washington.
  • Positing a Cold War-level bipolarity then, overstates both the status quo and the threat China poses to the global order.

Not about ideology

• America’s Aim in Cold War: In tussling with the U.S.S.R., America also aimed to establish the primacy of capitalism over communism and liberal democracy over single-party authoritarianism.
•  The Sino-American competition: is not about ideology, much though Americans like to portray it otherwise.
  •  An ideological zeal to convert the world to communism does not galvanise China, which is really only interested in securing global hegemony for itself.
• Washington’s Summit for democracy: Since 2021, Washington has futilely experimented with the Summit for Democracy, hoping to conflate its desire for subduing its foremost political and economic rival with championing democracy.
•  China’s Response to American ideology: But even Europeans are not buying into U.S. President Joe Biden’s “democracy versus autocracy” binary.
  • America’s instinct to package all its vested interests as a crusade for democratising the globe has proven unsuccessful.
  • , China is glibly choosing to deride it as “Western-style democracy,” which, Beijing argues, serves not ordinary citizens but the forces of capitalism.

Russia’s Role in the Sino-American Rivalry

• What also makes the Sino-American rivalry distinctive is that Russia, the successor state to the U.S.S.R., is never far from the action.
•  Russia can play a menacing role in today’s brewing bipolarity; given its size, abundant natural resources, and immense stockpile of nuclear weapons, it outranks most middle powers.
• China-Russia Axis: Many, therefore, argue that America’s bipolarity is not with China but the axis of China and Russia.
  • Professor Josef Joffe, for instance, defines our world as a “Two-and-a-Half Power World”, where Russia “is held back from full parity with the US and China by its lack of ‘usable power.’”
• Moscow, with an economy smaller than Italy’s and a military budget that is only one-quarter of China’s, is far from a third pole:
  • it is Beijing’s junior partner, a fact manifest in China’s support of Russia’s Ukrainian misadventure,
  • demonstrates President Xi Jinping’s resolve not to be intimidated by the West.
  • Though China has no allies, only clients, its emerging nexus with Russia, North Korea and Iran could yet pose challenges from Taiwan to the South China Sea.

The new canvas of the Indo-Pacific

• Creation of a new Geopolitical canvas: The greatest consequence of this geopolitical churn has been the creation of an entirely new canvas: the Indo-Pacific, a term encompassing three overlapping developments.
• These are China’s goal of creating a blue water navy — a formidable naval force capable of operating and projecting power on the high seas — and becoming a transcontinental economic giant,
• India’s emergence as a possible counterbalance to China, and the role that
• US Role: the U.S. will play in shaping the contours of the seemingly inevitable shift in power from the west to the east: from the Atlantic to the Indian and Pacific Oceans.

Strategic Alliances in the Indo-Pacific

• The vaunted Quad: comprising the U.S., India, Japan, and Australia, is driven by the vision of a “free and open Indo-Pacific”, and has, more recently, been augmented by the “Squad” of the U.S., Japan, Australia, and the Philippines.
• The AUKUS:  the trilateral security partnership for the Indo-Pacific between Australia, the United Kingdom, and the U.S.,
  • through which the U.S. and the U.K. assist Australia in acquiring nuclear-powered submarines.
  • The Indo-Pacific arena symbolises the realignment of traditional alliances and geopolitical theatres.

Conclusion

With the Indo-Pacific emerging as a crucible of clashing Chinese and American ambitions, India’s deepening ties with the U.S. and the Quad bristle with both challenges and opportunities. We cannot forget that only we, and not the other members of Quad, face a land threat from China. So, we must not be deterred from safeguarding our sovereignty by restoring the status quo ante along the China-Indian border, engaging with the Chinese economically where we must, bolstering our military deterrence, and promoting our geopolitical and economic interests on our own terms. India cannot allow itself to be reduced to a pawn in this renewed bipolar contest

Editorial 2: Essential business priorities in a changing world

Context

In advanced and emerging economies, inclusive growth and development can become a reality if there is a focus on key policy actions that have been identified.

Introduction

Following the multiple exigencies of the recent past, the global economy appears to have stabilised this year, albeit with geopolitical risks remaining on the horizon. The G-20 economies displayed different growth rates in the first quarter of the year, with some growing more rapidly than expected, while others experienced setbacks. Within this scenario, businesses of the world have the potential to leverage new opportunities for growth and benefit from wider dispersal of developmental gains.

B-20 Process and Emerging Economies

• The B-20 process has been led by emerging economies over the last three years, and with the handover to South Africa later this year.
• An unprecedented agenda for the Global South has been catalysed.
• Businesses of both advanced and emerging economies have come together and identified key priorities and policy actions that will facilitate inclusive growth and development.
•  At the same time, as lead players in the growth endeavour, businesses also must prioritise certain actions to align with emerging challenges faced by the world.

Focus on inclusive development

• Top Imperative for the World: Equitable growth remains a top imperative as the world seeks to promote inclusive development.
• The tools for enabling this include: skill development and education which will work towards empowering workers and building their capacity to adapt to changing industrial scenarios.
  • Businesses must play a proactive role in offering tailored programmes for skilling and upskilling workers — particularly women —
  • including through on-the-job training, working with academic institutions and developing curricula suited to evolving industry needs.
• Financial Access and Inclusion Policies: Financial access and tailored credit solutions along with diversity and inclusion policies have been highlighted by B-20 Brazil.
• India’s Financial Transformation: In India, the convergence of Unified Payments Interface and digital access has transformed financial transactions, with over 530 million accounts opened under the landmark Jan Dhan Yojana.
  • Such success at scale has many lessons for the world.
• Africa’s inclusion in the G-20: during the India presidency opens up a wealth of new opportunities in the continent.
  •  It is important for global businesses to expand their footprint in Africa to not only leverage its rapid growth and young demographics but also to support the continent’s inclusion in global value chains.

Ensuring better food security

• Critical Pillar for Sustainability: Sustainable food systems and boosting food and nutrition security are another critical pillar of focus for encouraging sustainability efforts.
  • Myriad factors including the impact of extreme weather events have exacerbated the global food crisis.
• The use of technology and other digital tools in promoting sustainable agricultural practices,
  •  reducing waste, and ensuring equitable access to nutritious food for all would be imperative.
• Businesses’ Role in Food Security: Businesses can play a pivotal role in addressing food security by advocating sustainable practices, investing in infrastructure and agricultural technologies
  •  such as precision farming and fostering collaborations with governments and international organisations for amplifying efforts on food security.

Resilient Global Trade Flows

• Second Priority is – Accelerating resilient global trade flows is intrinsic to global growth, yet national security concerns and unfair trade practices are leading to rising tariffs and other hurdles that constrain the efficacy of trade.
• Organisations such as the World Trade Organization should be strengthened to identify and counter unfair trade practices
  • while agreed interoperable taxonomies for environmental measures can bring in more clarity for businesses in industrial and trade policies aimed at sustainability.

Digital Transformation and Innovation

• The third priority that businesses must lead is digital transformation and innovation including Artificial Intelligence (AI) for the common good.
• Businesses must harness AI for responsible use in health care, climate change and resource management.
•  It is also important for businesses to engage youth in developing innovative solutions to pressing contemporary issues and drive positive societal impact.
• Investments and mentoring for social tech startups, digital platforms for research and development collaborations and developing science, technology, engineering and mathematics (STEM) talent should be taken up by corporates in mission mode.

Sustainability Mission

• The sustainability mission is the fourth priority for businesses.
• As the world accelerates towards net-zero transition, fair and just climate policies can enable businesses to work towards carbon mitigation.
•  Availability of finance is required for all enterprises, and particularly for small and medium enterprises, to align with net zero targets.
• Building renewable energy capacity and greater use of biofuels and green hydrogen can be promoted by businesses.
• Industry should also be conscious about circular economy options and strive to inculcate sustainable business practices in their usual operations across the board.

Way Forward: Aiming for the highest standards

Above all, corporate governance of the highest standards must be prioritised by businesses, and this includes large global corporates and small and medium enterprises. It is the responsibility of the private industry to go beyond established best practices in compliances and regulatory systems to continually drive ethical operations. This will facilitate building trust between different stakeholders including the community, governments and businesses. Trust is today viewed as intrinsic to the growth process and ease of doing business across the world.

Conclusion

These are some of the issues that we would be working on through the B20 Global Institute that was envisaged during India’s B20 leadership and is now taking off. With the participation of successive G-20 presidency countries, the institute will maintain alignment in policy suggestions, undertake action agendas to facilitate business competitiveness in the above areas and monitor outcomes. As the B20 recommendations are presented to the G-20 group, businesses of the world must take a key role in ensuring that our common global aspirations are catalysed to fruition.