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Delhis reluctance to support Indian companies abroad will cost it
Delhi may have good reason to downplay last weeks ouster of GMR from the Maldives. That a small neighbour has targeted a major investment by an Indian company has surely set teeth gnashing in South Block. But anger management is one of the first principles of diplomacy.
India, which has many other interests in the Maldives besides the GMR investment in Male airport, does not want to make the situation any worse by reacting aggressively. India is acutely conscious of the geopolitical significance of the Maldives, which sits astride the Indian Ocean sea lines of communication. So are China and the United States. Pakistan is pursuing its own agenda in the tiny nation of barely 3,20,000 people.
Delhi signed a wide-ranging partnership agreement with Male in 2011 that has defined the basis for strong Indian involvement in the development of the Maldives and a major role for the Indian navy in helping the island nation secure its vast exclusive economic zone. GMR will certainly not be the last Indian company caught in the whirlpool of the local politics of another nation. Nor is India the first country to experience this. All great powers, old and new, often find smaller countries targeting their assets, personnel and companies for a variety of political reasons. The US and other Western powers have struggled to cope with this for ages.
As its global commercial footprint grows, China is constantly confronting the political vicissitudes of having its companies operate in foreign lands. Consider, for example, Myanmars decision in September 2011 to suspend the implementation of the $4 billion Chinese project to build a large dam on the Irrawaddy River at Myitsone. An angry Beijing had to hold its tongue. This happened despite Chinas strong support to Myanmar during its long years of international isolation and Western sanctions. The scale and scope of Chinas relationship with Myanmar is certainly much larger than that between Delhi and Male. Yet China had no option but to demonstrate patience.
There has been some media speculation in recent days about India cutting off aid to the Maldives. Any action on those lines would have been terribly unwise. Indias current aid, running in tens of millions of dollars, is meagre in comparison with what others could offer Male. During a visit to China by President Mohamed Waheed earlier this year, Beijing has reportedly offered an aid package of $500 million to the Maldives.
The current problem between Delhi and Male is not about the lack of gratitude on the part of the Waheed government. Recall that it was Indias quick recognition of Waheed after the coup against President Mohamed Nasheed earlier this year that lent legitimacy to the new government. Many have criticised India for that decision and for abandoning the friendship with Nasheed, who played a major part in deepening the partnership with India. Gratitude and friendship are emotional terms and not very useful analytical tools to understand inter-state relations.
That said, Delhi must necessarily review its responses to the recent developments in the Maldives. It would be a pity, however, if we miss the larger lesson from the GMR debacle in the Maldives.
The big question here is not whether India picked the right horse at a critical moment of power struggle in the Maldives. The real lesson is that India is utterly unprepared to protect the interests of its companies operating abroad. At the very moment when Indias economic interests have become global nearly 40 per cent of Indias GDP is linked to imports and exports and the Indian corporate sector is investing tens of billions of dollars abroad every year, South Block appears unwilling to help.
Note, for example, some of the official comments from South Block last week, that what happened to GMR will not have an effect on bilateral relations with the Maldives. Officials have also stated that it is alright with India as long as Male sticks to the letter of the law in the GMR case.
The implied proposition, that Indian business abroad and the conduct of foreign policy are two separate realms, is unacceptable, given the rapidly changing nature of Indias external interests.
The fact is that GMR has been targeted precisely because it is an Indian company. If it was merely an industrial dispute between the Maldives and GMR, the problem could have been solved in many different ways. Unlike the Chinese companies that embarked on a go out policy more than a decade ago with strong and unstinting support from Beijing, Indian companies have ventured abroad covering the potential political risks on their own. Two decades after economic reform, Delhi seems hesitant to be seen holding the hand of the nations business in difficult alien places.
The Indian Foreign Service, which traces its origins to the Indian Political Service of the Raj era, remains largely disdainful of aligning with the business sector in the discharge of its duties. And when South Block looks to cooperation from Indian business to develop strategic leverage in different parts of the world, it finds these companies wanting.
The Indian economy today is utterly dependent on imports of critical natural resources and external markets for its products. This, in turn, demands that Delhi actively cultivate special political relationships with many countries and help its businesses develop the capacity to navigate their internal dynamics.
Our national security is now inextricably linked to the establishment of a credible and sustainable presence in many strategic corners in our neighbourhood and beyond. The longer we take to build synergy between Indian business and diplomacy, the greater the costs to the nation. Some of the losses could indeed be irreversible in the near term.
The Male takeaway - Indian Express
Delhi may have good reason to downplay last weeks ouster of GMR from the Maldives. That a small neighbour has targeted a major investment by an Indian company has surely set teeth gnashing in South Block. But anger management is one of the first principles of diplomacy.
India, which has many other interests in the Maldives besides the GMR investment in Male airport, does not want to make the situation any worse by reacting aggressively. India is acutely conscious of the geopolitical significance of the Maldives, which sits astride the Indian Ocean sea lines of communication. So are China and the United States. Pakistan is pursuing its own agenda in the tiny nation of barely 3,20,000 people.
Delhi signed a wide-ranging partnership agreement with Male in 2011 that has defined the basis for strong Indian involvement in the development of the Maldives and a major role for the Indian navy in helping the island nation secure its vast exclusive economic zone. GMR will certainly not be the last Indian company caught in the whirlpool of the local politics of another nation. Nor is India the first country to experience this. All great powers, old and new, often find smaller countries targeting their assets, personnel and companies for a variety of political reasons. The US and other Western powers have struggled to cope with this for ages.
As its global commercial footprint grows, China is constantly confronting the political vicissitudes of having its companies operate in foreign lands. Consider, for example, Myanmars decision in September 2011 to suspend the implementation of the $4 billion Chinese project to build a large dam on the Irrawaddy River at Myitsone. An angry Beijing had to hold its tongue. This happened despite Chinas strong support to Myanmar during its long years of international isolation and Western sanctions. The scale and scope of Chinas relationship with Myanmar is certainly much larger than that between Delhi and Male. Yet China had no option but to demonstrate patience.
There has been some media speculation in recent days about India cutting off aid to the Maldives. Any action on those lines would have been terribly unwise. Indias current aid, running in tens of millions of dollars, is meagre in comparison with what others could offer Male. During a visit to China by President Mohamed Waheed earlier this year, Beijing has reportedly offered an aid package of $500 million to the Maldives.
The current problem between Delhi and Male is not about the lack of gratitude on the part of the Waheed government. Recall that it was Indias quick recognition of Waheed after the coup against President Mohamed Nasheed earlier this year that lent legitimacy to the new government. Many have criticised India for that decision and for abandoning the friendship with Nasheed, who played a major part in deepening the partnership with India. Gratitude and friendship are emotional terms and not very useful analytical tools to understand inter-state relations.
That said, Delhi must necessarily review its responses to the recent developments in the Maldives. It would be a pity, however, if we miss the larger lesson from the GMR debacle in the Maldives.
The big question here is not whether India picked the right horse at a critical moment of power struggle in the Maldives. The real lesson is that India is utterly unprepared to protect the interests of its companies operating abroad. At the very moment when Indias economic interests have become global nearly 40 per cent of Indias GDP is linked to imports and exports and the Indian corporate sector is investing tens of billions of dollars abroad every year, South Block appears unwilling to help.
Note, for example, some of the official comments from South Block last week, that what happened to GMR will not have an effect on bilateral relations with the Maldives. Officials have also stated that it is alright with India as long as Male sticks to the letter of the law in the GMR case.
The implied proposition, that Indian business abroad and the conduct of foreign policy are two separate realms, is unacceptable, given the rapidly changing nature of Indias external interests.
The fact is that GMR has been targeted precisely because it is an Indian company. If it was merely an industrial dispute between the Maldives and GMR, the problem could have been solved in many different ways. Unlike the Chinese companies that embarked on a go out policy more than a decade ago with strong and unstinting support from Beijing, Indian companies have ventured abroad covering the potential political risks on their own. Two decades after economic reform, Delhi seems hesitant to be seen holding the hand of the nations business in difficult alien places.
The Indian Foreign Service, which traces its origins to the Indian Political Service of the Raj era, remains largely disdainful of aligning with the business sector in the discharge of its duties. And when South Block looks to cooperation from Indian business to develop strategic leverage in different parts of the world, it finds these companies wanting.
The Indian economy today is utterly dependent on imports of critical natural resources and external markets for its products. This, in turn, demands that Delhi actively cultivate special political relationships with many countries and help its businesses develop the capacity to navigate their internal dynamics.
Our national security is now inextricably linked to the establishment of a credible and sustainable presence in many strategic corners in our neighbourhood and beyond. The longer we take to build synergy between Indian business and diplomacy, the greater the costs to the nation. Some of the losses could indeed be irreversible in the near term.
The Male takeaway - Indian Express
