It’s time to talk about economic nationalism, not just growth

With a flailing GDP growth and some accruing negatives in the national economic calendar of performance, could India seek its own version of that mystic ‘animal spirit’ in its approaches, internal and external, for an early economic revival?

More than ever before, New Delhi, on its own and on behalf of other growing economies of the world, needs to convey appropriate signals to the effect that temporary fiscal or monetary or policy deficits are in no way tantamount to a strategic ‘idea deficit’. A majority of Indians still believe that the growth story the world was once linking with India is both renewable and restorable.

Significantly, India can do so in an air of democratic transparency rather than through a resort to any ‘cold calculus strategy’ that unfolds in responses from certain global economic majors today. Despite various pressures brought on New Delhi by a falling rupee, India’s manifest interface with the world economic order has so far been mature and patient, based on a spirit of striving for correctives.

Yet, the need to rework our decision-making processes more effective, less layered and time-bound is no doubt a supreme priority. Indian policy-makers must take cognisance of FICCI Secretary General Rajiv Kumar’s rather introverted and extreme concern that, “all new investment in the private sector has dried up, I’ve never seen people as downbeat as they are now”. Though these remarks may really not capture the truth in its entirety, the fact that he represents FICCI, a coordinate body of influential businessmen from all over India, cannot be by-passed.

Notably, in FICCI’s lexicon of options, the China model currently figures with prominence. Others have also waxed eloquent on the Chinese theme, as China is indeed a success story when it comes to economic delivery levels or in creating infrastructure at par with global standards.

Without doubt, India has to revitalise and seek better coordinates of synergy and affectivity when it comes planning for infrastructure, as well as in attaining delivery goals. This is where we could emulate China, but there are some Chinese practices which may find difficult to practice. China, in order to protect its people and trade, zealously determines the value of its forex currency and the West and the rest of the world quietly acquiesces. This is a privilege New Delhi can never have or would like to have, respect to the enfeebling rupee!

But there is also another area we can mentor as much as Beijing or Washington. Both American and Chinese interlocutors argue and act with a brazen self-oriented objective to protect their national interests. Their paramount objective during international negotiations is to protect their respective economic interests. Each concession granted in the course of trade share or a related negotiation is based on reciprocity or proportionalities granted by the interlocutor sitting across the table.

Our negotiating history, on the contrary, does not show many real favours extracted from negotiating tables if we are to go by the concessions given by India in the sphere of civil aviation rights to foreign airlines or on the issue of compliances to foreign buyers.

We could, for instance, never put it across to our US or European interlocutors that much like empowered and affluent young children from the Western world who practice and perfect their skills on the piano or the PC or the laptop, less empowered Indian children in Bhadoi, Varanasi or Jammu and Kashmir, have historically learnt the skills of carpet-weaving or handcrafting from their ancestors as part of vocational education.

The rigorous set of compliances on so-called child labour, agreed to by India, could well set the stage for hastening a premature demise of carpet-weaving or jewellery-making as handicrafts. This is the real objective of interest groups in the West, who seek the so-called ‘golden opportunity’ to take over global markets by killing handicrafts and promoting machine-made variants.

The Japanese, among others, are said to be preparing to release in the world markets IT and sensor-based machinery that would make a machine-made product, such as jewellery, approximate handmade products. Such a changed paradigm in future is merely illustrative of the range of challenges ahead for India, other than China or the US.

The rub is that even several decades after Independence, Indian political establishment is yet to evolve a sustainable model of economic nationalism. We must free ourselves from our extant range of inhibitions and put economic nationalism at the top of the agenda, both in the arena of internal economic regeneration and our economic interface with the world at large.

Menon is a former additional secy, Cabinet Secretariat