subcontinent – The Acorn

The Pakistan stop of the SAARC yatra

Dispute management, not resolution

This is the gist of the points I made in a brief interview on Channel NewsAsia at 6:40pm IST yesterday. This was in the context of Foreign Secretary S Jaishankar’s visit to Pakistan as part of his SAARC Yaatra.

Q. Amid an aggressive growth agenda, how much of a priority is being placed by Mr Modi on resolving disputes with Pakistan, according to you?

Mr Modi has been keen on improving relations with India’s neighbours right from the word go. I think it reveals something about his mindset — the need for India to carry along its neighbours and its region — because strictly speaking, the neighbourhood does not matter a lot for India’s growth and development.

India’s linkages are to the West to the US and Europe and to East Asia. The subcontinental neighbourhood does not matter much for now. A lot of constraints to growth are domestic.

Q. There have been over 600 ceasefire violations in the past eight months. How much of an impact can high-level talks have on ground reality and actions?

The ceasefire has held for over a decade, so there is abundant evidence that the armed forces can hold their fire if there are top level instructions. A ceasefire is in the interests of both countries: Pakistan can focus on managing its own domestic violence. So too for India.

Q. This is all ostensibly a part of the ‘SAARC Yatra’ by the Indian government. How much has the India-Pakistan problem impaired SAARC’s development?

The problem with SAARC is not merely India-Pakistan relations, although they share part of the blame. The ethos of SAARC is more a collective bargaining forum for India’s neighbours against New Delhi. So countries focus more on what they can achieve vis-a-vis India, than what they can achieve as a group.

India’s growth and development will propel SAARC by presenting an opportunity to neighbours to benefit from the process.

India doesn’t need SAARC

Instead of getting caught in the pointless politics of SAARC, India should create a web of bilateral relationships

India doesn’t need the South Asian Association for Region Cooperation (SAARC). India’s neighbours wanted the outfit so that they could collectively pin down their bigger neighbour, something they cannot do individually.

Why New Delhi plays ball with this is unfathomable, for given India’s size, geography and power, it can achieve bilaterally everything that SAARC can achieve multilaterally. From freer trade to open skies, from counter-terrorism cooperation to join management of environmental resources, it is far easier for New Delhi to work out a web of bilateral arrangements than to attempt a big multilateral negotiation. It is hard to make a case for SAARC on the grounds of efficiency and effectiveness of subcontinental cooperation. [See this from the archives] Moreover, there is a lot of slack in the domestic policy environment before the neighbourhood becomes a constraint to India’s growth.

Some argue that India needs SAARC as a regional geopolitical bloc, on the lines of ASEAN or even a European Union. To accept this would be to ignore the history of the subcontinent’s political map looks the way it does. No country in the subcontinent needs regional solidarity to counter foreign powers. On the contrary, every one of India’s neighbours needs a foreign power to counter India’s influence. The dream for a ‘South Asian Union’ on the lines of the European Union is absurd, because Partition and Bangladesh were expressions of desires against being part of a liberal, democratic, secular, plural state. In fact, the EU took five decades to move towards something like the Indian Union (which is what the Republic of India is).

Prime Minister Narendra Modi was off on the right footing when he invited leaders of the subcontinent’s states to his swearing in ceremony. That was an expression of how India can unilaterally act to bring together the subcontinent. The SAARC summit, on the other hand, is at best a waste of time, and worst a perpetuation of an old mistake.

Related Links: We are not South Asian; and if Maldives is a neighbour, why isn’t Indonesia?

Diplomacy, politics, power and norms in the neighbourhood

Can New Delhi shape and use a normative consensus?

In today’s Indian Express, Pratap Bhanu Mehta carries forward the debate on neighbourhood policy that I attempted to initiate last week through the columns of Business Standard.

In short, I had argued that New Delhi finds itself in reacting to events around the subcontinent in an ad hoc manner because it has not yet thought out a policy framework on how to deal with the region. I recommended a new neighbourhood doctrine:

First, India must continue to generate high rates of economic growth so as to remain the economic engine of the subcontinent.

Second, India must unabashedly back pro-India political parties in neighbouring countries and make it more expensive for anti-India parties to hold their positions. [Business Standard]

Mr Mehta qualifies both these arguments. The influence of economic growth is gated by the fact that “region is still populated with leaders and political forces that will cut off their own nose to spite their face; and investments in enmity override the well-being of populations.” As for backing pro-India parties, he contends that, a short-sighted partisanship will not work, and “in the long term, these forces can only be those that have the potential to build a new normative consensus” in the subcontinent.

These are well-considered qualifications. It is easier to respond to the proposition that economic growth alone is unlikely to persuade political parties that would rather keep their populations poor than abandon their anti-India politics. This is rational from their perspective because they see it as politically advantageous. For precisely this reason, New Delhi must back pro-India parties and chip away at the perceived political advantage of being anti-India.

The issue of building a normative consensus is harder to crack. It is a challenge at the best of times to balance respect for sovereignty and a particular domestic political order at the same time. It is easier if the attempt to balance these is discarded: ASEAN, for instance, solved this dilemma by placing sovereignty over democracy (or authoritarianism) by enshrining the principle of non-interference in domestic affairs. India cannot take this escape route: a large democracy constitutionally and popularly committed to human rights and pluralism cannot be completely oblivious to the state of its neighbourhood. This is so even when New Delhi might prefer dealing with assorted despots and authoritarians. There has always been a strong constituency in parts of Indian society that stands up for democracy and human rights in neighbouring countries. (Admittedly, this constituency has been inconspicuous recent months.This is very likely due to the unusually high level of preoccupation with India’s domestic politics and economy.)

Even if New Delhi somehow manages to walk the tightrope, its ability to enshrine and enforce norms is an altogether different matter. K Subrahmanyam expounds realism when he notes that “norms can have power despite being marked by organised hypocrisy”. That said, states usually use the language of values on three occasions: when they are too weak to employ power; when they want to mask the employment of power; and when they are too strong and would rather not use power.

So a weak, newly-independent India championed liberal internationalism; during the Cold War, the United States cloaked its use of power by invoking the language of freedom and in the proximate post-Cold War era, the West hopes that enshrining norms will reduce the need for it to take the expensive route of employing hard power.

Where does India stand today in the context of its subcontinental neighbourhood? It is certainly not so weak that it has to rely on moral platitudes alone. On the other extreme, at current levels of national income and given the increasing openness of the region to external powers, it cannot be said that India can enshrine and enforce norms relatively easily.

At the risk of leaving idealists and other well-meaning people aghast, this leaves New Delhi with the middle option: use norms to cloak the use of power, participate and even lead the organised hypocrisy.

Therefore, I agree with Mr Mehta that India must build a new normative consensus as part of its neighbourhood policy doctrine—although I suspect it is for different reasons.

Related Posts: The paradox of proximity — my paper on why neighbourhood policy is difficult and a short, quirky look at the power-principle matrix.

The paradox of proximity

Having a fragile state in the neighbourhood makes it important for you to intervene, but there are structural constraints to your ability to do so

My paper, The Paradox of Proximity – India’s approach to fragility in the neighbourhood is the first of a series of papers published by New York University’s Center for International Cooperation on rising non-Western powers’ policies towards fragile states. It was prepared with inputs from Sushant K Singh, my Takshashila colleague.

From the introduction:
The risks posed by fragile states have moved to the centre-stage of Western security consciousness only in recent years, fundamentally as the result of globalisation and precipitously due to the 9/11 attacks on the United States. The threats posed by fragile states to the Western countries are palpable and proximate—for instance, in the form of terrorist plots, influx of refugees and organised crime—but their origins of the threats are relatively remote and distant. Western policymakers and publics, therefore, enjoy a certain geographical and temporal insulation, not only allowing for detached analysis but also allowing a broader range of policy options.

It is different for India. Both its immediate and its extended neighbourhoods consist of several states that in the turbulence of transition, contending with institutional weaknesses, political fragility and governance failure. For India, history and proximity turn what might have been largely matters of foreign policy into a number of inter-connected issues of domestic politics.

It is nearly impossible for India’s policymakers to detach the approach towards a nearby fragile state from a panoply of domestic political considerations. From a security perspective, the range and intensity of threats increases with proximity; but so too, the number of domestic political constituencies that have a stake in the game. Even within the Indian government, neighbourhood policy is shaped by a large number of agencies across federal, state and sometimes even district levels. Given that domestic policy outcomes in parliamentary democracies like India are generally political resultants of the complex interplay of political forces, there are limitations on the timeliness, coherence and effectiveness of India’s response.

Therein lies the paradox of proximity: having a fragile state in the neighbourhood makes it important for you to intervene, but there are structural constraints to your ability to do so.

This essay examines motivations, constraints and processes that shape India’s policy towards fragile states. It aims to show that addressing state fragility in the vicinity is a vastly more challenging project than managing risks emanating from distant ones. It begins with an overview of India’s contemporary motivations for engagement and intervention in the turbulent geopolitics of southern Asia. It identifies the various types of interventions India has engaged and attempts to derive the underlying features of India’s approach. The policy process is discussed next, analysing how drivers, constraints and players affect decision-making. We conclude with a brief assessment of how India’s policy towards fragile states, both proximate and distant, might change as India becomes a middle-income country with global interests.

Download it in PDF

The Indira Doctrine is dead

Make way for the Global Raja-Mandala Doctrine

Led by the redoubtable Aziz Haniffa some observers are getting more than a little flustered at a senior US official’s remarks about the United States letting China play a bigger role in and around the Indian subcontinent. Speaking at a seminar at the Woodrow Wilson Center for Scholars, James Steinberg, deputy secretary of state in the Obama administration said “”China has an important role. It’s a neighbor of South Asia. And it’s unimaginable that China would not be involved.”

Well, he’s right. He appears to refer to Afghanistan and Pakistan, but even if he were to mean the subcontinent and its neighbourhood, he would not be wrong. Whether you like it or not, China is and will, in the coming years, become a even more influential player in India’s immediate neighbourhood. This will undoubtedly mean that India’s neighbours will attempts to play one against the other, and because India is the status quo power, this will work to India’s relative disadvantage vis-a-vis China.

The Indira Doctrine—which saw the subcontinent as India’s exclusive sphere of influence—died somewhere over the last twenty years. Whatever might be the reasons for its lapse, the objective reality today is that India is a pre-eminent power, but not the sole hegemon, in its immediate neighbourhood. Getting excited over Mr Steinberg’s realist appreciation of the situation is therefore unwarranted.

Should Indian foreign policy attempt to resuscitate the Indira Doctrine? Doing so would be limiting the vision to India’s capabilities and interests to what obtained during Indira Gandhi’s days, would be very challenging, of dubious strategic wisdom and perhaps even unnecessary. Why? Because India is playing in a much bigger playground today. New Delhi needs a Global Raja-Mandala Doctrine. If China seeks to gain influence in India’s neighbourhood, India should do the same in China’s neighbourhood and elsewhere. [See East of Singapore and The Asian Balance]

What is interesting about Mr Steinberg’s remarks is that the United States is prepared to engage India on this. “Just as we talk about South Asia with China,” he said, “we talk about East Asia with India…” In fact what is even more interesting is this “We see India as (an) East Asian country. We engage with them on issues like North Korea and the like because we think of the importance that India plays.” This is almost exactly The Acorn’s argument.

Because of geography if not anything else, India’s influence in its immediate neighbourhood will grow in parallel with its own development. It is important, however, to understand the opportunities in the geopolitical environment that allow India to implement the Global Raja-Mandala Doctrine. At this moment, it is in the United States’ interest to support India in the East Asian balance of power. New Delhi must swing towards this opportunity.

The Asian Balance: Recognising good neighbours

My new monthly column in Business Standard is called The Asian Balance. It “will devote itself to chronicling and interpreting the unfolding geopolitics of East Asia. It will be a unabashed advocate of Looking East far beyond the Straits of Malacca. Rebuilding the economic, cultural and political relationships that India historically shared with the countries and the peoples to its East has never been more important to our future than it is today.”

The first piece is up. Here’s an excerpt:

Three factors will shape the Asian balance: first, nuclear weapons—what I call the New Himalayas—will shift the India-China contest away from a direct military conflict along the land border. It will take place, among others, in and around the Indian Ocean. It will play out in the form of increased Chinese presence in the waters off India’s coast and renewed US engagement of Asean countries. The big question is to what extent will India be a player in areas that China considers its backyard.

Second, the small- and medium-sized countries of the region will prefer a balance where no single power dominates over them. If they do not see this forthcoming, they are likely to join the stronger side. What this implies is that the importance they give to their relationship with India will depend on their assessment of whether New Delhi has the capability, and the will, to contribute to the balance.

Third, unless there is an addition to the number of nuclear powers in East Asia, there will be a preference to create and work through regional multilateral institutions like the Asean Regional Forum (ARF) and the East Asia Summit (EAS). The absence of direct nuclear deterrence in the Western Pacific has emboldened China to claim almost the entire South China Sea as its own. All the activity in East Asia trying to form one big workable grouping is premised on the unfounded hope that a powerful China will play by the rules it promises to. [Business Standard]

The wolf in the cabbage patch

…is unlikely to be vegetarian

The tragedy of M K Bhadrakumar’s article in today’s Hindu is that one half of it is eminently sensible and the other, unsubstantiated wishfulness. Yes, it is important not to allow paranoia to determine policy towards China, but unless Mr Bhadrakumar is wired into the minds of the Chinese leadership, it is illogical and dangerous to assume that the wolf in the cabbage patch is vegetarian. And will remain vegetarian.

As I had tweeted earlier, reports of Pakistan handing Gilgit-Baltistan over to China are almost certainly exaggerated. This does not mean, however, that the scenario is implausible. To the extent that Selig Harrison’s article caused the public and politicians to consider the implications of such a scenario—and hopefully, prepare for it—it served a purpose. It is quite possible that Mr Harrison was an unwitting part of a disinformation operation, perhaps by the United States, to ensure that public opinion in India remains wary of China. If this were so, shouldn’t China be extra careful to ensure that it doesn’t deliberately carry out unfriendly acts like the visa denial to a senior military officer? Mr Bhadrakumar would have been on a firmer footing had he listed some measures China took to prove its bona fides vis-a-vis India. I myself can count none.

Mr Bhadrakumar goes on to make two key assertions. First, that stability in India’s immediate neighbourhood needs India and China to co-operate, and that China sees a stable subcontinent as in its interests. Second, that growing Chinese influence in the neighbourhood will not damage India’s interests. There is no basis for such beliefs, and surely enough, he does not offer any.

On the first point, there is direct evidence that China uses unstable states to indirectly keep its adversaries engaged. China deliberately transferred nuclear weapons technologies to Pakistan, Iran and North Korea so that India and the United States could expend their resources tackling the paw, not the cat. It is hard to adduce evidence to prove conclusively that China is deliberately destabilising the subcontinent in order to contain India, but no sensible person can dismiss the possibility. The onus is on Mr Bhadrakumar to produce evidence of Chinese moves to stabilise the neighbourhood in co-operation with India. Does selling nuclear reactors to a highly unstable Pakistan, in violation of its international commitments, count?

On the second point, realists will accept that China’s influence in the subcontinent will grow, whether or not India likes it. But that’s not the issue. The issue is, even in the unlikely event that China itself does not use its influence against India’s interests, the countries of the subcontinent almost certainly will. Bilateral relations with Nepal, Bangladesh, Pakistan, Sri Lanka, Maldives, Myanmar and countries of ASEAN will get even more difficult to resolve, because their leaders will play New Delhi against Beijing. There’s evidence for this: King Gyanendra, Khaleda Zia and Mahinda Rajapaksa all pursued policies contrary to New Delhi’s recommendations. Two of them lost power, but not before plunging their countries into instability and crises. Mr Rajapaksa didn’t lose power, but thanks to Chinese influence, tragically believes he can avoid genuine reconciliation after the civil war.

While India cannot prevent China from increasing its influence in the subcontinent, there is no reason to welcome it. New Delhi must act to increase its own influence and counter China’s. That’s not all. The game is not restricted to the neighbourhood—it is global. Ergo, India must extend its influence in and around China’s immediate neighbourhood. As I wrote in my Pax Indica column recently, New Delhi needs a Look East Beyond Singapore strategy. Achieving balance within regions and balance between regions is the surest way to have a stable relationship with China.

Related Posts: M K Bhadrakumar routinely imputes benevolent motives to Beijing. Couple of instances: Worshipping false gods; John 8:7 doesn’t apply to international relations

Pax Indica: Five neighbourhood paradoxes

Five neighbourhood paradoxes

You might have noticed that, relatively speaking, India’s policy towards the United States or Japan is far more coherent than towards, say, Nepal. Over the last few years, New Delhi was able to challenge the age-old dogma of the nuclear non-proliferation treaty (NPT), strike a favourable bargain with Washington and break into the international nuclear mainstream. Contrast that with the Indian government’s inability to play any palpable role in the political upheavals taking place in all the countries across its borders. The consensus, confidence and coherence that is increasingly visible in India’s dealings with the world’s powers is conspicuously missing in its dealings with its immediate neighbours. Why? Because neighbourhood policy is trapped in five paradoxes.

The paradox of proximity: While a peaceful and stable neighbourhood is conducive to India’s growth and development, domestic politics circumscribes New Delhi’s ability to intervene coherently. Look no further than the way the UPA government handled the Sri Lankan civil war. A government that names every fixed object built with public funds after Rajiv Gandhi could still not bring itself to unequivocally oppose the terrorist organisation that killed him. It’s not as if the LTTE enjoyed massive support in Tamil Nadu — it’s popularity waned after it assassinated Rajiv Gandhi in 1991 — but such was the political calculus that untrammeled support for the Sri Lankan government became impossible. This opened the gates for China to make inroads into India’s southern neighbour, the implications of which will unfold over the next few years.

It’s a similar story with Bangladesh, Pakistan and Nepal, and not always political. S D Muni, one of India’s leading authorities on international relations, says that the PWD engineers in the Indian districts adjoining Nepal have a say in New Delhi’s policy towards its Himalayan neighbour, because water-sharing is a key bilateral issue.

The paradox of power: as India’s geopolitical power has grown so has its fear of overreach. In a way, this is a reversal of the 1980s when the Rajiv Gandhi government’s ambitions were not always matched by adequate economic and military capacity. Like his mother, Rajiv Gandhi understood and was unhesitant to project power where necessary. Sending paratroopers to the Maldives to foil a coup by armed mercenaries, getting the Indian Air Force to drop relief supplies over Jaffna in defiance of the Sri Lankan government and ordering military exercises that implicitly threatened Pakistan were bold uses of power. Unfortunately, Indira Gandhi had severely damaged the domestic economic engines necessary to generate and sustain that power, ultimately resulting in the overreach in Sri Lanka. That experience so scarred India’s politicians and policymakers that the use of military force outside India’s borders has been practically renounced as a tool of statecraft.

Instead of a careful projection of power within India’s (much greater) capacity today, we have strategy by bureaucracy. When you hear policy-makers say ”we will only send troops under the UN flag” you wonder whether our armed forces exist to serve our interests or those of the United Nations. This is not an argument for a trigger-happy policy. Rather, that India is incapable of protecting its interests without rethinking its policy on overseas military deployments.

The paradox of engagement: New Delhi talks to the powerless but can’t talk to those in power, or vice versa. It’s most obvious in Pakistan. General Ashfaq Kayani is the man calling the shots. India has no direct channel of communication with him. The people New Delhi does talk to — the likes of President Asif Zardari and Prime Minister Yusuf Raza Gilani — have little say in the subjects that New Delhi talks to them about. This creates an illusion of movement in bilateral relations when, fundamentally, there is none. To be fair, the fact that Pakistan has such a complicated political structure (I’m being charitable here) is not India’s fault. But if the Americans can rejig their foreign policy apparatus such that some people talk to the generals while others talk to the politicians, surely, so can we.

It’s somewhat similar in Nepal, where we don’t properly talk to the Maoists. It’s the opposite in Myanmar, where we speak only to the generals and have so ignored the beleagured democratic opposition that, in the event that there is a change in circumstances in that benighted country, New Delhi will find itself needing to make new friends fast. Yes, circumstances are unlikely to change, but that’s no excuse to not hedge your bets.

The paradox of process: we are relying on processes that are only feasible when they achieve the outcomes they seek. In simple English, that’s called putting the cart before the horse. That absurd game of dossiers & lawsuits with Pakistan is a case in point. It would have been meaningful to use legal processes if India and Pakistan enjoyed the kind of normal relations that exist, say, between Malaysia and Thailand. But since they don’t, and Pakistan’s legal system is a joke (I’m not being charitable this time) dossiers & lawsuits is not only ridiculous. It is counterproductive, because anyone who reads newspapers will be put off by Islamabad’s shifty, brazen, too-clever-by-half attitude.

And finally, there’s the paradox of neighbourhood—we can’t choose our neighbours, but we have. For centuries, Gujaratis have been neighbours with East Africans. Keralites are neighbours of the Gulf Arabs, Tamils of Malaysia and Singapore. New Delhi doesn’t consider these countries neighbours. Yet they are. Treating them as if they are not has trapped us into a mindset of living in a troubled, unstable neighbourhood. This is one unfortunate fallout of the faulty conceptualisation of “South Asia” as being limited to the countries of the subcontinent. Once you see the neighbourhood as what it is, and includes East Africa, the Gulf, and South East Asia, you’ll find it full of opportunities, not vexed problems.

The first of these paradoxes might well be structural — foreign policy problems are more difficult to solve when entangled with domestic politics. But the other paradoxes are those of agency — we might be able to escape them if we want to. If we want to.

(This is the unedited version of my column in Yahoo! India)

Pax Indica: We are not South Asian

The term ‘South Asia’ is an attempt to appropriate the Indian subcontinent’s geography while denying its composite civilisational history

At a seminar a couple of weeks ago, one of the organisers argued that the “South Asian identity” has made inroads across the world. He supported this argument with an example. Many universities in the United States, he said, now have bhangra and garba troupes, often consisting of people of entirely non-South Asian backgrounds.

I nearly fell off my chair.

There is nothing ‘South Asian’ about bhangra and garba, just as there is nothing ‘South Asian’ yoga, ayurveda or tandoori chicken (when was the last time you went to a North South Asian restaurant?). Actually, there’s nothing South Asian about qawwals, ghazals or the Multani raga (when was the last time you went to a South Asian classical concert?). In fact—and you might think, I’m stretching it—there’s nothing South Asian about Nepal, Bhutan, India, Bangladesh and Pakistan. If you measure Asia north to south, roughly along the 120°E longitude from the Siberia’s Arctic coast to Indonesia’s southern islands, you’ll find the subcontinent more or less in the middle. Geographically, if there is a South Asia, then the self-confessed ‘South Asians’ are neither in it nor from it. Read the rest at Yahoo! India »

Af-Pak insecurities and investment in the region

The challenges to India’s growth come more from the stalled economic liberalisation process than from the Af-Pak situation

Yesterday, Sarika Malhotra, a journalist from Financial Express asked me for my views on the regional security situation and the impact on investment. Here’s the exchange:

How do you think concerns regarding terrorism and political violence in AfPak, India, Sri Lanka are causing businesses to avoid investing in politically sensitive areas?

First of all, I think considering Af-Pak and India in the same breath is incorrect. Af-Pak has deep structural problems. Part of the Af-Pak problem affects India, but it’s relatively minor and not on the same scale as the “Af-Pak problem” itself.

Investors will respond to two cues: the fundamentals of the economy in the medium- to long-term and the political risks in the short term. So the impact on investment in India & Sri Lanka will be different from the impact on investment in Pakistan & Afghanistan.

In India’s case, the economic crisis and its aftermath suggest that to the extent that the Indian government competently manages economic policy, foreign investment will continue to flow into India. India is far more attractive—despite concerns over security—than many other developed and emerging economies.

Also, after almost two decades of India’s opening up to foreign investment, the world has come to better understand the political risk ‘norm’ in India. A decade ago, a travel advisory by the US State department would have panicked investors. Today it doesn’t matter as much.

Pakistan is in a negative spiral. The greater the political instability there, the greater will be the movement of wealth and people out of the country.

Conflict and instability are significant barriers to foreign direct investment—how do you view this? If you could cite some companies who have stopped their plans owing to the instable conditions in AfPak, India?

I haven’t heard of any company which have stopped their plans due to instable conditions in India. What has caused problems is the issue of land acquisition and labour reform—these are old bugbears that the presumably reformist-minded prime minister has forgotten about. SEZs, even done correctly, are not a solution.

Far more than security risks, it is the inability of the Indian government to ensure a robust property-rights regime and liberalise labour laws that drags down investment (both foreign and domestic in India)

How much of a business loss is India incurring owing to this?

I do not have estimates.

What conflict sensitive business practices can help in this regard?

The short-term response is for companies to go in for an intelligent mix of self-provisioning and co-operating with the government towards improving security of their operations, personnel and commercial interests.

But this should not be seen as an end in itself: unless corporate India consistently pressures the government to improve the overall quality of governance—including economic liberalisation, implement the Supreme Court’s order on police reforms and modernise the armed forces—both investments and returns on investments will be lower than they might otherwise have been. What this means that the competitiveness of the Indian economy will suffer. It is important for Indian corporate to compel the government to do its job, rather than substitute for it by private provisioning as has been the case in recent years.