A.V.
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Introduction
Fifteen years ago, Henry Kissinger nominated the United States, the European Union,
Russia, China and Japan as the five poles of power that would define the new multipolar
century.1 India made it only as a 'probable.'
Today's reality is that the European Union, Russia and Japan are facing an uncertain
economic future, and there is increasing agreement that the twenty-first century will be
an Asian one based overwhelmingly on the rise of China. Although America is entering
a period of relative decline, it will still remain the dominant power in Asia and the world
for several decades. On the other hand, the regional presence of a rising China will be
immense. The 2009 Defence White Paper released by the Department of Defence predicts
that China will be the strongest Asian military power by a 'considerable margin.'2
These kinds of projections have led the Rudd government to adopt a 'Chinacentric'
view of our future regional strategic environment and security policy, alongside
uncritical acceptance that building all-inclusive multilateral security institutions will be
the most effective way to manage China's rise and promote continued peace in the region
into the future. For example, the main impetus behind Prime Minister Kevin Rudd's
Asia Pacific Community (APC) idea is to build new security architecture in the
region that can help manage China's rise and diffuse future tensions. But even if one
accepts that the continued and rapid rise of China will be the most significant driver
of change in the region and the most likely cause of instability in Asia, there are
legitimate criticisms that Rudd's 'Asia policy' is focused too heavily on China and not
enough on deepening relationships with allies such as Japan—still the second-largest
economy in the world—and budding partners such as India. The future credentials
of India are consistently ignored or given relatively little attention by officials and
strategists in Canberra. Indeed, in the quest to build China-focused security architecture,
the strategic role of India and the importance of its geopolitical weight in structurally
constraining and 'managing' China are poorly appreciated. Beyond token statements
acknowledging its rise, India remains our great strategic blind spot.
Ignoring India is a serious mistake and a significant oversight considering that the
United States and our other allies and partners in Asia—also looking to anticipate
future regional problems—are working hard to cultivate a constructive and long-lasting
diplomatic and strategic relationship with India. Washington and other Asian capitals
are focused on bulking up bilateral relationships with emerging centres of power such
as New Delhi rather than the premature building of comprehensive, all-inclusive
multilateral security institutions in the region. As the Australian Defence White Paper
acknowledges, 'strategic stability in the region is best underpinned by the continued
presence of the United States through its network of security alliances and partnerships,
including with Japan, the Republic of Korea, India and Australia.'3 Enormous efforts
and diplomatic resources are being put into building a better bilateral relationship with
New Delhi in Washington, Tokyo, Jakarta and Singapore, in particular, with impressive
results. If Australia is to remain a strategically clever, active and relevant middle power,
it is time for Canberra to do the same.
India—the other rising great power in Asia
China's ongoing economic success story is a spectacular one, but it overlooks the fact
that the Indian economy—more reliant on domestic consumption and less on state-led
capital spending—has been booming for almost two decades and has tripled in size since
1988. India's GDP as a share of the global economy (by PPP measurement) grew from
3.4% in 1978 to 4.6% in 2008. Growth per annum has averaged around 7.5% since the
early 1990s, reaching 9% per annum for the past three years. Goldman Sachs estimates
that the Indian economy will quadruple in size from 2007 to 2020, will surpass the size
of the US economy in 2043, and will overtake Japan as the second-largest economy in
the world behind China.4
Despite the global downturn, the Indian economy will still grow between 7 and 8%
in 2009. Importantly, unlike East Asian economies, 30–40% of GDP growth is due to
rising productivity rather than ever-increasing capital and labour inputs.5 For example,
since the 1990s, the proportion of growth explained by total factor productivity is around
40%, compared to around 20% in the early 1980s with impressive improvements in the
services and industry sectors.6
True, there are numerous problems that India needs to be overcome—including
endemic corruption, institutionalised discrimination, an obstructive bureaucracy, the
need for land reform—before setting on an irreversible path of successful and spectacular
development. But in terms of exerting a significant strategic presence, it is significant
that India has the largest middle class in the world—approaching 300 million people.
China's middle class is still only 50 million–200 million (depending on the definition).
This means that India has a critical mass of elites generating crucial economic resources
required by New Delhi to become a great power even if a large proportion of the
country remains poor. Unlike China's ageing problem,7 India will have a favourable
working age demographic until at least the middle of the century: around 50% of India's
population is under 25 years old.8 In contrast, around 2015, more people will be leaving
the workforce in China than entering it.9 The Indian working-age population is due to
surpass China's in 2025 (approximately 900 million people) and its overall population
will surpass China's by 2030–40.
India is not just a rising economic power. It has the second-largest military in the world
and the fifth-largest navy in the world. Its rapidly growing navy is highly professional
and includes the British-built aircraft carrier INS Viraat. New Delhi is also designing
and building its own aircraft carriers, plans to construct its own nuclear-powered carriers
in the near future, and boasts an indigenously built and designed nuclear powered
submarine.10 Military spending has been consistently growing at around 10% every year
and is currently US$26.6 billion, compared to China's US$70.3 billion and America's
$518.3 billion.11
Many Australian officials privately consider their Indian counterparts as being
painstakingly difficult and too unpredictable to deal with constructively. Yet, officials
throughout Southeast Asia suggest to me that while this was their experience with
New Delhi a decade ago, it is much less so the case today. Australia has a relatively small
diplomatic presence in New Delhi—albeit ably led by Peter Varghese, former Director-
General of the Office of National Assessments—and only thinly staffed consulates in
Mumbai and Chennai.
Australia under Prime Minister John Howard caught on to the strategic value of
India only during his final term in office. The current Foreign Minister, Stephen Smith,
has promised to take Australia-India relations 'to a new level ... to the frontline of
our international partnerships.'12 But Prime Minister Rudd, the driving force behind
Australia's strategic and foreign policy, has devoted little personal and official energy
toward any concrete initiatives and secured few outcomes. As Hamish McDonald, the
Asia-Pacific editor of the Sydney Morning Herald, observes, Australia's peak intelligence
body, the Office of National Assessments, is struggling to build its analytical expertise on
India. Australian diplomats are learning about India after they arrive in their postings.13
Contrast the Rudd government's relative neglect of India with the barely reported fact
that on 24 November 2009, US President Barrack Obama will welcome Indian Prime
Minister Manmohan Singh for the first state visit of his presidency. Despite earlier fears
that the Obama administration would eschew the advances in the US-India bilateral
relationship made under the presidency of George W. Bush, the current administration
has been making low-key but consistent advances towards India. The choice of Prime
Minister Singh as Obama's first state guest is significant because as White House
spokesperson Robert Gibbs explained, the visit will 'highlight the strong and growing
strategic partnership between the United States and India.'14
Fifteen years ago, Henry Kissinger nominated the United States, the European Union,
Russia, China and Japan as the five poles of power that would define the new multipolar
century.1 India made it only as a 'probable.'
Today's reality is that the European Union, Russia and Japan are facing an uncertain
economic future, and there is increasing agreement that the twenty-first century will be
an Asian one based overwhelmingly on the rise of China. Although America is entering
a period of relative decline, it will still remain the dominant power in Asia and the world
for several decades. On the other hand, the regional presence of a rising China will be
immense. The 2009 Defence White Paper released by the Department of Defence predicts
that China will be the strongest Asian military power by a 'considerable margin.'2
These kinds of projections have led the Rudd government to adopt a 'Chinacentric'
view of our future regional strategic environment and security policy, alongside
uncritical acceptance that building all-inclusive multilateral security institutions will be
the most effective way to manage China's rise and promote continued peace in the region
into the future. For example, the main impetus behind Prime Minister Kevin Rudd's
Asia Pacific Community (APC) idea is to build new security architecture in the
region that can help manage China's rise and diffuse future tensions. But even if one
accepts that the continued and rapid rise of China will be the most significant driver
of change in the region and the most likely cause of instability in Asia, there are
legitimate criticisms that Rudd's 'Asia policy' is focused too heavily on China and not
enough on deepening relationships with allies such as Japan—still the second-largest
economy in the world—and budding partners such as India. The future credentials
of India are consistently ignored or given relatively little attention by officials and
strategists in Canberra. Indeed, in the quest to build China-focused security architecture,
the strategic role of India and the importance of its geopolitical weight in structurally
constraining and 'managing' China are poorly appreciated. Beyond token statements
acknowledging its rise, India remains our great strategic blind spot.
Ignoring India is a serious mistake and a significant oversight considering that the
United States and our other allies and partners in Asia—also looking to anticipate
future regional problems—are working hard to cultivate a constructive and long-lasting
diplomatic and strategic relationship with India. Washington and other Asian capitals
are focused on bulking up bilateral relationships with emerging centres of power such
as New Delhi rather than the premature building of comprehensive, all-inclusive
multilateral security institutions in the region. As the Australian Defence White Paper
acknowledges, 'strategic stability in the region is best underpinned by the continued
presence of the United States through its network of security alliances and partnerships,
including with Japan, the Republic of Korea, India and Australia.'3 Enormous efforts
and diplomatic resources are being put into building a better bilateral relationship with
New Delhi in Washington, Tokyo, Jakarta and Singapore, in particular, with impressive
results. If Australia is to remain a strategically clever, active and relevant middle power,
it is time for Canberra to do the same.
India—the other rising great power in Asia
China's ongoing economic success story is a spectacular one, but it overlooks the fact
that the Indian economy—more reliant on domestic consumption and less on state-led
capital spending—has been booming for almost two decades and has tripled in size since
1988. India's GDP as a share of the global economy (by PPP measurement) grew from
3.4% in 1978 to 4.6% in 2008. Growth per annum has averaged around 7.5% since the
early 1990s, reaching 9% per annum for the past three years. Goldman Sachs estimates
that the Indian economy will quadruple in size from 2007 to 2020, will surpass the size
of the US economy in 2043, and will overtake Japan as the second-largest economy in
the world behind China.4
Despite the global downturn, the Indian economy will still grow between 7 and 8%
in 2009. Importantly, unlike East Asian economies, 30–40% of GDP growth is due to
rising productivity rather than ever-increasing capital and labour inputs.5 For example,
since the 1990s, the proportion of growth explained by total factor productivity is around
40%, compared to around 20% in the early 1980s with impressive improvements in the
services and industry sectors.6
True, there are numerous problems that India needs to be overcome—including
endemic corruption, institutionalised discrimination, an obstructive bureaucracy, the
need for land reform—before setting on an irreversible path of successful and spectacular
development. But in terms of exerting a significant strategic presence, it is significant
that India has the largest middle class in the world—approaching 300 million people.
China's middle class is still only 50 million–200 million (depending on the definition).
This means that India has a critical mass of elites generating crucial economic resources
required by New Delhi to become a great power even if a large proportion of the
country remains poor. Unlike China's ageing problem,7 India will have a favourable
working age demographic until at least the middle of the century: around 50% of India's
population is under 25 years old.8 In contrast, around 2015, more people will be leaving
the workforce in China than entering it.9 The Indian working-age population is due to
surpass China's in 2025 (approximately 900 million people) and its overall population
will surpass China's by 2030–40.
India is not just a rising economic power. It has the second-largest military in the world
and the fifth-largest navy in the world. Its rapidly growing navy is highly professional
and includes the British-built aircraft carrier INS Viraat. New Delhi is also designing
and building its own aircraft carriers, plans to construct its own nuclear-powered carriers
in the near future, and boasts an indigenously built and designed nuclear powered
submarine.10 Military spending has been consistently growing at around 10% every year
and is currently US$26.6 billion, compared to China's US$70.3 billion and America's
$518.3 billion.11
Many Australian officials privately consider their Indian counterparts as being
painstakingly difficult and too unpredictable to deal with constructively. Yet, officials
throughout Southeast Asia suggest to me that while this was their experience with
New Delhi a decade ago, it is much less so the case today. Australia has a relatively small
diplomatic presence in New Delhi—albeit ably led by Peter Varghese, former Director-
General of the Office of National Assessments—and only thinly staffed consulates in
Mumbai and Chennai.
Australia under Prime Minister John Howard caught on to the strategic value of
India only during his final term in office. The current Foreign Minister, Stephen Smith,
has promised to take Australia-India relations 'to a new level ... to the frontline of
our international partnerships.'12 But Prime Minister Rudd, the driving force behind
Australia's strategic and foreign policy, has devoted little personal and official energy
toward any concrete initiatives and secured few outcomes. As Hamish McDonald, the
Asia-Pacific editor of the Sydney Morning Herald, observes, Australia's peak intelligence
body, the Office of National Assessments, is struggling to build its analytical expertise on
India. Australian diplomats are learning about India after they arrive in their postings.13
Contrast the Rudd government's relative neglect of India with the barely reported fact
that on 24 November 2009, US President Barrack Obama will welcome Indian Prime
Minister Manmohan Singh for the first state visit of his presidency. Despite earlier fears
that the Obama administration would eschew the advances in the US-India bilateral
relationship made under the presidency of George W. Bush, the current administration
has been making low-key but consistent advances towards India. The choice of Prime
Minister Singh as Obama's first state guest is significant because as White House
spokesperson Robert Gibbs explained, the visit will 'highlight the strong and growing
strategic partnership between the United States and India.'14