Cinema buffs know that the dream sequence ends when the lights come on. But politicians and economists can spin national dream sequences over long periods to captivate ordinary folk in a make-believe world.
The end of the Second World War in 1945, paradoxically, through the diabolical nuclear explosions at Hiroshima and Nagasaki, led to high optimism about the new, dovish dawn. Germany and Japan, both pragmatic cultures, converted themselves in defeat into unlikely, perpetual peaceniks -- reserving their public money and entrepreneurial zeal for business wars, at which they excelled.
Irrepressible global conflict shattered this dream phase 13 years later in 1962 as the United States and the Soviet Union (now Russia) confronted each other in the Cuban missile crisis. The evil of great power, embedded in the destructive force of nuclear weapons, was to continue to shadow the world for the next 27 years till 1989, when the Berlin Wall fell,
followed by the demise of the Soviet Union. Yet again, the decimation of bipolarity in global power was heralded as a new era of peace, prosperity, and global solidarity.
Three decades later, the global peace, trade and investment is once again threatened by the rise of China and confrontational politics between the United States, its Western allies, Japan and South Korea versus China and its client states in Latin America, Africa, Asia; as well as Russia, and the offshoots of the erstwhile Soviet Union.
The two blocs are distinguished by differing political architecture and ideology. The Western alliance is the richer of the two, with more developed markets and higher incomes but afflicted by hubris and ageing. The new Sino-Russia alliance is younger but growing faster economically and therefore the “challenger” of existing global rules and norms.
The two differ most starkly in the role of political parties, citizens, and the State. For the Sino-Russia block, the Party (or the leader) is the single paramount mechanism to intermediate the will of the people, to which the government must apply itself and to whose collective wisdom, citizens must submit.
The Western alliance, led by the US, holds citizens paramount and political parties just contesting, individually impermanent vehicles, selected by voting citizens to form the government, which Parliament regulates whilst the judiciary protects citizens’ rights.
India subscribes to the Western model in form -- an outcome of a dream sequence which began at Independence and has continued since then. Power devolved vertically to state governments and notionally even to local bodies and horizontally between Parliament, executive government, and the judiciary, each with independent mandates enshrined in the Constitution, enhances debate and discussion but slows execution. Whenever citizens have voted in majority governments over long periods, the “substance” of democracy becomes diluted. Achieving party objectives in a hurry became dominant versus giving primacy to citizen-centric norms and rules for working a clunky “balance of power” architecture.
The future remains uncertain. But it is a fair bet that over the next three decades till 2050, the political norms and culture adopted in China and India will greatly influence global trends.
China now seems committed to acting according to the foundational principle of “Xi Jinping Thought” -- a dominant Party apparatus, public sector strategic dominance with private collaboration, stoking demand in the domestic economy rather than export-led growth -- a near total turnaround from the 1978 Deng Xiaoping liberalisations. These reforms convinced gullible Western observers that China was aspiring to be an imitation of the Western economies -- albeit a pale one.
This charade of aligning with global norms is now at an end except when it suits China. But then, that has been the leitmotif of all multilateral power politics till now, from the one-nation-one vote principle of the United Nations, rendered inconsequential by even a single veto from one of the five permanent members of the Security Council, to nuclear containment, or fixing the responsibility for mitigating carbon emissions -- the timing, scope and structure of international agreements have always bent the knee to the rich world. China is now not just near rich, it has the “national will” and the institutional capacity, courtesy the veto, to have its own way.
That leaves India between a rock and a hard place. Pretending to be non-aligned while sharing a long, disputed border with the Chinese leviathan is like burying one’s head in the sand. To try and fix the border dispute at this late stage, with an ascendent China, is like begging for a bad bargain. Aligning tighter with China is one option. But it means losing political face and presents the same problem as aligning with the Western allies – opening our borders to imported goods and services which threaten our non-competitive industry and the export of jobs rather than creating them at home -- key twin domestic political economy conundrums.
A deeper problem is with whom should our global value chains (GVC) connect? Following the global trend for “friend shoring” would connect us to the for now friendly Western alliance. But this also exposes us to becoming an “Ukraine” opportunity for China along with Taiwan – kind of a weak proxy of the real enemy. The direction of value chains determines more than just technology and business choices. GVC links, by symbiosis, shall also, either preserve our democratic architecture -- hybrid though it might be -- or degrade it further into a totalitarian one, approximating China and Russia.
This is an existential issue for our elites to mull over. The average citizen, given efficient governance, can prosper in either of these ideological silos, as can business. Both models can deliver economic growth, jobs, and access to decent public services. The real issue is – which choice would demand the greatest behavioural change?
India has savoured hybrid democracy -- starting with the right of elected representatives to be heard in provincial and national councils, for more than a century now -- since 1909, under the Minto-Morley Reforms, during the colonial period.
Extending this dream phase makes sense. Dialling back engrained habits is tough. Just ask movie buffs, workaholics, newspaper readers, patrons of a “speak easy”, Balushahi afficionados or health food freaks. Doing anything else, except to just keep going along the grain, would be risky. And now is not the time to accumulate risk....