The riches of the Indies goes on the bloc


David Cameron, the UK’s novice prime minister, couldn’t have expected to reestablish “the raj”. But he hoped to burnish the British commercial image during a summer doldrums India visit. He came loaded for the proverbial tiger – the biggest delegation since Indian independence 63 years ago including cabinet ministers, businessmen and sports stars. It would take all that to halt the slippage in UK trade and investment being displaced, in part by the U.S., and others [not the least, ironically, the Chinese].

But like other commercial [and diplomatic] hopefuls making the pilgrimage, Cameron ran into “The East Asia Company Syndrome” — fear investment will lead to untoward foreign influence. Not least, too, he walked into the India-Pakistan feud which dominates every decision. Despite elaborate apologies for “colonialism”, he committed a public gaff – as some of his American cousins too often have – criticizing, in this case Pakistani links to terrorism, before an Indian audience. Not only would it muddle his Pakistan stopover [where he hopes to talk eventual withdrawal from Afghanistan] but delicate ties to monitor the UK’s two million South Indian Muslims too often linked to domestic terrorism in all three countries.

Cameron could be excused for stumbling. The terrain is rocky with Indian Prime Minister Manmohan Singh balancing a constantly shifting coalition, with the heir of the Nehrus, the widow Italian-born Sonia Gandhi, backseat driver as leader of his National Congress Party. She grooms her son, 39-year-old Rahul, for the fourth dynastic generation founded by his great grandfather, the sainted Jawharlal Nehru, followed by his daughter, Indira Gandhi [assassinated b y her Sikh bodyguard], her son Rajiv [martyred by a Sri Lankan Tamil Tiger suicide “black widow”], Rahul’s father. Cameron didn’t manage to see either.

Cameron was exploring abiding hope the massive 2009 win of Singh’s Congress against the Hindu-revivalist but business friendly Baharat Janata Party  would bring a major overhaul of the Soviet-styled Indian economy. Singh, a planning bureaucrat until his conversion to market economics on the road to the 1990 Soviet implosion, promised to sweep away the babu [British Indian clerks] and socialist protectionism in his own leftwing. But more than one foreign investor is still waiting – not least major retailers [such as Walmart] who have played an enormous role in China’s export onslaught on world markets. Over the past year Singh shelved opening retail, pension and insurance sectors, not able to play host to any and all investors which has been so much the key to China’s success.

Still, Asia’s third largest economy hasn’t done badly. The International Monetary Fund projects 9.4% growth for 2010, slackening to a still-impressive 8.4% for 2011. New Delhi, like Beijing, had hoped to escape the worldwide recession. But exports crashed; there was capital flight [not the least India’s oligarchic capitalists heading for secure Western investments, particularly in the UK]. The government went to stimulus to prop up the 6.7% in 2008-09. That has brought a growing inflation challenge now running at over 10% and even higher food prices.

But the return to growth points up overwhelming long-term geopolitical questions: is India the tortoise against China’s hare? Can its more modulated program – governed by minimum accoutrements as the world’s largest democracy – produce sustained long-term development now that China’s rickety high-pace structure is under increased pressure?  And, never stated openly, can an alliance between a rapidly industrializing India and the U.S. and its partners [Cameron out front] counter what is increasing suspicion of Chinese intentions?

Debate often ignores India’s problems, even though they are constantly ventilated by a free media and no surfeit of domestic critics. However, only a few note the backwardness of China’s vast majority in capital-starved rural areas. But the horror of India’s 650,000 villages, including 410 million Indians living at subsistence level [out of a population of some 1.2 billion, soon to surpass China’s 1.3 billion] is constant. Singh’s subsidies to bankrupt farmers [egging on the inflation] and the leap-frogging technology – well over half a million cell phones and 130 million TVs for villagers who often do not have safe drinking water – ameliorates but only highlights inequities of one of the world’s most skewed income distributions.

But that is only the beginning of India’s woes. Nihilistic self-styled Maoists — that the Prime Minister has labeled India’s greatest security risk, replacing the usual “Pakistan” – are building in a dozen Indian states with a confused government  alternately seeking federal and state solutions. A half dozen local independence guerrilla movements operate in the northeast – too close to Chinese-occupied Tibet where New Delhi had a short and disastrous war with Beijing in 1962. As China’s growing naval forces encroach in the Indian Ocean which New Delhi considers home grounds, a massive military buildup is underway. [U.S. manufactures hope to cop the $11 billion fighter plane ticket.]

Cameron’s old school try – Eton and Oxford, doncha know – probably wasn’t up to more than denting all this. But he did make the effort and is likely to be followed soon by others, the U.S. and the Germans.

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