India’s security lies in greater trade

The wages of inattention to trade

There’s a good reason why army chiefs are not allowed to solely define foreign policy. Just look at Pakistan. For that matter, it’s a bad idea to allow the petroleum secretary (or any other secretary for that matter) to lay down the word.

So while Gen Deepak Kapoor and Petroleum Secretary M S Srinivasan can forcefully argue their perspective on India’s interests in Burma—as they should—by no means can their views be seen as definitive. The whole point of having a democratic institutional set-up like ours is so that elected politicians can make policy based on the larger national interests.

India’s appalling failure to promote its interests in Myanmar, therefore, cannot be attributed to the army chief or the civilian bureaucracy. It should properly be attributed to the abject failure of the UPA government to steer the nation’s policy with a deft hand during a defining moment in the region’s history. The fault is that the UPA government’s leaders see the state as the sole solver of problems. In doing so they reinforce a bureaucracy that is long conditioned to statist solutions. Energy security? Here, take state-owned pipelines or ‘equity oil’. Small neighbours playing India off against China? Here, take arms sales or ‘non-interference internal affairs’. And blame it all on realpolitik.

But here’s the rub: If India finds itself having to submit or turn a blind eye to an energy rich country, it is because it has failed to deepen bilateral economic relationships. [See this excellent Mint editorial] It’s far too easy for a energy rich country to blackmail India if the only thing at stake is fuel supply (for which there is no shortage of buyers). If there is a lesson from recent incidents—from Iran to Russia to Myanmar—it is that it’s time for India’s policymakers to realise that greater trade builds mutual dependencies that make bilateral relations more stable. Ironically, India is trying to create mutual dependencies in the wrong place—Pakistan.

3 thoughts on “India’s security lies in greater trade”

  1. “Ironically, India is trying to create mutual dependencies in the wrong place—Pakistan.”

    Are you sure that’s what you meant? I read somewhere, in Mint, I think, by a well known author that the same trade-based dependency rule applies to India-LoP as well 🙂

    Having said that, there is only so far one can stretch the trade-based dependency rule. It probably cames out of Friedman’s Dell supply chain rule type hypothesis that applies to Taiwan-China or, even better, China-US. But the fact of the matter is most oil/gas producing countries/economies are very small and such dependencies simple don’t exist. India has little to offer Russia, other than, probably, tea, that it can’t buy somewhere else and Russia surely doesn’t need the tiny Indian economy for it’s oil/gas. Ditto for Gulf countries and, of course, for Myanmar.

    China trade relationship with Myanmar is purely one way ie merchantalistic. What China offers that Myanmar (and for that matter Venezuela and other oil-tyrannies) is not some good that Myanmar can’t get anywhere else. China offers a service more precious – a veto in UNSC – that no other country would offer to Myanmar (may be Russia is an exception but it’s not clear what Russia gets in return other than sticking it to west).

    Trade analogy (McDonald, Dell whatever) can go only so far and applies to only intricately tied trade relationships.

  2. Chandra,

    My reference was in a different context. The Indian government’s idea of mutual dependency is the IPI pipeline. Furthermore, my argument of developing trade with Pakistan is not so much to create mutual dependencies, but to create additional pressure points.

    As for the point about whether or not there is potential for trade with Russia and Myanmar—well, predictions are usually from a historic-static point of view. But trade patterns are dynamic. Once you do create the conditions for free trade, you are bound to notice rather interesting patterns emerging.

    I think very few analysts have paid attention to just why China has influence in Myanmar. The veto surely is one. Official trade is US$2b, that’s another. But quite a bit of trade occurs through the land border (Kunming in Southern China is the “big town” for most people in Myanmar/Laos etc). Everything from slippers, to consumer goods, to legal and illegal drugs pass through this region; and the place is seeing a mini-economic boom.

  3. Let’s just say $2bil trade in trinkets for a $1tril trading giant is hardly worth the scorn that it faces because of foreign junta.

Comments are closed.