Though the popular message in international media is that India is on the brink of explosive growth and is following the path of its eastern neighbor, China, I hold a slightly more pessimistic view of India’s future.To a large extent, India faces the same immense developmental obstacles it did at the beginning of its cycle of economic liberalization in 1991. On a basic level, the poor conditions of roads, railways, ports, airports and power supplies illustrate the enormity of India’s task of modernizing its infrastructure to attract more FDI and allow businesses to operate more efficiently. While India’s IT-driven states require only minimal levels of infrastructure, particularly in fiber-optic networks and electricity, the rest of India is largely underdeveloped. Thus, India is not in the position to become a highly industrialized country.
The India-China comparison has become common discourse, but is not an easy comparison to make. China began its economic reforms in 1979 under an extremely focused and strategic “period of readjustment” that has been successfully implemented through the effective central control of China’s authoritarian regime. In contrast, India is arguably a highly diverse, massive and fractionalized democracy lacking the central control necessary to put policy reforms into action. No democratic country comparable to India in terms of size and diversity has succeeded in implementing wide-scale democratic reforms to achieve rapid economic growth.
Though India’s current government is economically focused, actually getting state governments to implement reforms is a chore. In addition to rampant corruption and bloated bureaucracies in the Indian public sector, the Indian government’s democratic structure and competing views of India’s openness to trade and investment allow the states’ chief ministers to ignore government policy reforms and pursue each political party’s agenda, which is usually designed to garner votes through populist appeals. An important distinction to make is that while FDI is strongly sought after and encouraged in China, it is merely approved of and often resented by state governments in India. These differing attitudes toward reform define the contrast between the Chinese and Indian approach to economic development.
With about one-fourth of the population living in absolute poverty, India has a significant number of voters who are not interested in FDI or global competition; the average voter is more concerned with where his next meal is coming from. This poverty is a developmental issue that must reach a manageable level before ruling governments can think past elections and toward long-term economic reforms. However, as local governments are forced to leverage poverty reduction and economic liberalization, the downward trend of poverty levels and upward rate of liberalizing India’s markets will counter each other, thus preventing a rapid pace of economic development or poverty reduction.
On a geopolitical front, India will view Russia’s disintegration as an opportunity to build its strategic alliance with the U.S. superpower. Although China will slow down economically, the East Asian giant will continue its attempts to tilt the balance of power on the Asian continent in its own direction, providing more reason for India to align with the United States and become part of the “winning” team in the global arena. India also will use this alliance to counter its historical opponent to the west—Pakistan. India realizes the United States values the Indo-U.S. alliance in the long-term over its short-term alliance with Pakistan, which was primarily built in the last half of the previous decade because of the U.S.-led war on terrorism.
Domestic constraints in India and Pakistan lead me to believe the issue of Kashmir will not be resolved in the coming few years. However, New Delhi and Islamabad will continue the process of normalization and will likely reach a point at which the two states will begin implementing a “road map” solution.
The United States’ final battle against al Qaeda will be fought within Pakistani territory early in the coming decade. We expect the operation to be successful for the United States but costly for Musharraf, as domestic instability will rise in opposition to U.S. forces in the region. With the Pakistani government centered around Musharraf’s leadership, political instability in Pakistan will continue to loom over the horizon.
Regardless of the domestic upset Musharraf is bound to face when U.S. troops enter the region, I expect the current military regime in Pakistan to stay in power until 2007, given that there are no viable opposition forces strong enough to unseat Musharraf. The balance of forces among the military, bureaucracy and centrist political groups ensures the survival of the state, despite any instability that occurs at the regime level.
After 2007, Musharraf probably will reach a deal with his regime to step down as military commander of Pakistan, enter a civilian role as the elected president of Pakistan and assume leadership of the ruling Pakistan Muslim League.
The centralization of power around Musharraf does not suggest that the Pakistani government would collapse in his absence. In accordance with historical precedent, the military and bureaucratic establishments would reach a consensus and Pakistani politics would shift back to increased civilian control until the domestic situation settled.
Pakistan will undoubtedly be influential in the nation-building effort in Afghanistan, given the large presence of ethnic Pashtuns in the two Pakistani provinces -Northwest Frontier and Balochistan -located along the Afghan-Pakistani border and the fact that Pashtuns account for at least 40 percent of Afghanistan’s population.
The United States also will maintain its military presence in Afghanistan as part of its operation against al Qaeda. Opposition to U.S. forces in Afghanistan is significantly less than in Iraq, and the U.S. presence in the region will allow for much-needed stability to aid Afghan President Hamid Karzai’s emerging state. The Taliban movement has collapsed and evidently splintered into at least three different factions, one of which wishes to lay down its arms and become part of the developing political system. As a result, the Taliban will be unable to make a comeback in the next decade.
However, Karzai’s government does face effective opposition from Afghan warlords, Uzbeks and Tajiks, all of whom have a vested interest in representing their respective communities in the government. I expects a consensus to be reached among the key players of each major ethnic community to work toward extending Kabul’s influence to the 29 Afghan provinces.
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