By Pranay Kotasthane
With Covid-19, the most common phrase in every webinar on geopolitics is the “new world order”. This phrase is used to describe periods of history with dramatic change in balance of power between nation-states.
In its most recent avatar, the new world order has been on the anvil since 2007. China’s hostile and rapid rise, the economic aftermath of the global financial crisis, networked politics over the internet, and most recently the pandemic, together are transforming international politics.
What will this new world order look like over the next quarter century? More importantly, how can India shape this emerging order to attain peace and prosperity for all Indians?
Some foreseeable geopolitical trends include a unipolar United States (US)-dominated world, a co-operative US-China G2, a full-on US-China confrontation, or a multipolar world. Similarly, key geo-economic trends can be thought of along the lines of a global recession, a secular stagnation, a new economic boom, or a technological disruption. The confluence of the geopolitical and geoeconomic trends results in multiple world order scenarios. In each scenario, strategies to maximise India’s national interest can then be worked out.
Geopolitically, the pandemic has accelerated the confrontation between the US and China. Geo-economics-wise, it has plunged the world into a recession phase. Taken together, this could create a “race to the bottom” world order with stable geopolitical dynamics — characterised by US-China rivalry — and dynamic geoeconomics — characterised by the emergence of many new economic webs. In this order, the US will likely see countering China as an overriding national priority.
Reorienting supply chains to reduce dependence on China will be taken more seriously. Like the global economy, technological governance may splinter into multiple interacting webs with more State oversight. Global bodies such as the UN could become far less important, and regional institutions organised around powerful nation-states could gain prominence.
In this world, where distrust with regard to China increases, India can be a part of multiple economic webs and gain from them. At the same time, its ability to shape the world order gets intricately linked with the economics and politics at home. With newer restrictions in global labour flows and thinned out capital flows, India will need to find a new engine of growth such as large-scale manufacturing.
Returning to a higher economic growth trajectory then becomes a precondition for India’s emergence as a swing power between the US and China. Without this, India’s global role will decline, forcing it to bandwagon with other powers on less favourable terms.
Some other reforms that would serve India in multiple scenarios are implementing labor and factor market reforms, becoming an attractive foreign investment destination, championing the cause of globalisation, and executing three critical military shifts — from land to sea, from the physical to the technological, and from more manpower to more firepower.
More Indian perspectives about the changing world will enrich the global discourse. India’s current problems can’t be an excuse for insularity.
(The opinion piece appeared in The Hindustan Times)