Nations are now giving up old orders to adapt to new ones. India has woken up, but it must take a re-look on its priorities
The media flags shrieking headlines: Death, accident, terror, rape, murder, fraud and of course, verbal slanging matches. It does not need a comment.
The world, however, in most of its evolved zones, moves forward. There is jostling for space amongst nations, and in many parts of the world, old order is crumbling and new ones are emerging. China is out in the front.
It is obvious that as it is the case, Indians will choose what captures their imagination. However, there is a need to take a look around. Few things speak as clearly as a chronological narrative. The other wheel of action, which can give insights into this chronological narrative, is finance.
If you look at the last two years, you will notice fundamental changes that have overtaken the global economic order.
In July 2014, the New Development Bank (NDB), also referred to as Brics Bank, was born in Brazil, it took years to reach this agreement. In less than three months, China signed a Memorandum of Understanding with 24 counties in October 2014, for the formation of the Asian Infrastructure Investment Bank.
Interestingly, it was five months after the unveiling of the New Silk Road, and as noted above, three months after the agreement of NDB.
Soon, the One Belt One Road project was on the roll. In fact, amazingly, a phrase which got into the lexicon was Maritime Silk Road. In reality, the play on the word apart, it was a serious economic break through and had significant new security/strategic thought.
The strategic Maritime dimension of One Belt One Road included developing a string of logistic bases in the India Ocean region. Clearly, the option of developing them into Naval bases was open.
It is here that the ports become important. At the intersection of the ‘Maritime’ Silk Road and the New Silk Road, were the new strategic centers. The origin was the Chinese landmass. The hub of not only the new market, but the new strategy was the ports.
The maritime component of the string of pearls in the India Ocean extends westwards to Europe through the Red Sea and eastwards to the South China Sea.
The economic development part assumes a huge over capacity in Chinese manufacturing and construction industries; almost ignoring the returns to domestic investment. Clearly, low cost of funds allowed low profits and high economic risk investment in foreign infrastructure.
Eye was on raw material supplies, globally, and equally, global was the search for the market of Chinese goods. Foreign exchange reserves were intelligently used for small capital outflows. large foreign exchange assets were used to support exchange costs.
There was a unique symphony of Chinese finance, with Chinese material and, of course, Chinese labour. While in India, people were delivering talks on ‘disruptive innovation’ to win awards, China, as usual, was working on the real world.
Instances have come to attention where Chinese prisoners were sent to live out their rigorous imprisonment spell, by working on constructions sites in Africa.
The One Belt One Road was not just dealing with vehicular traffic and movement of people and goods. Parallel to it was rail road traffic, oil pipelines and fiber optic cables. The focus was again on ports, airports and production estates.
The territories through which these passed required the Governments of those nations, in many cases, to transfer those lands to Chinese control. The script was from Mozambique to Zaire. Here was a new concept in economics of resource highways which is yet to surface into text books. The world had moved on and being daring was the requirement.
The sea-change of economic theory rolled out on the land and the sea shows the deep reflection which preceded this action. In times to come, concepts of economic viability, sunken costs, not to overlook the nature of capital and investment, would need re-definition.
The world will never be the same again. Americanism, unless it reinvents itself, may well be on the road to be where Britain finds itself today.
That India has finally woken up is a good omen. However, to operate, we will have to recalibrate our focus and relook at the priority areas of national themes of discussion and action.