Monday 15 June 2015

Comment on Modi's Economic Diplomacy

  • Dispute with Bangladesh resolved with Land Boundary Agreement which can now lead subcontinent towards a common market.
  • Modi knows that power of bowl of rice is much stronger than that from barrel of gun and thus his focus on trade and investment. 
    • With Bangladesh:
      • Indian goods travel via Singapore to reach Bangladesh in three weeks; now they will go directly to Bangladeshi ports in a week.
      • Indian companies will sell electricity and make goods in special economic zones across the border, creating masses of jobs while helping reduce Bangladesh's trade deficit.
    • The accord signals to Nepal, Sri Lanka and Pakistan the benefits of moving from the politics of suspicion to the economics of prosperity. 
  • How it was in past?
    • 2000 years back everyday ships would come to  Muziris in Kerala from the Roman Empire landed where they picked up fine Indian cottons, spices, and luxuries in exchange for Gold. 
    • Back home, Roman senators grumbled that their women used too many Indian luxuries, spices and fine cottons and two-thirds of Rome's bullion was being lost to India. 
    • One South Indian king even sent an embassy to Rome to discuss the empire's balance of payments problem. 
    • Fifteen hundred years later, the Portuguese had the same complaint: their gold and silver from South America was being drained in the trade with India. 
    • Indian textiles and spices changed culinary tastes and clothing habits around the world. Europeans began to wear underwear only in the 17th century when they discovered soft and affordable Indian cloth brought by the East India Company!
  • With a 5,000-mile coastline, India has historically been a great trading nation and in some periods, commanded as much as 20% share of world trade (compared to 2% today). 
  • It always had a positive balance of trade with the world until the Industrial Revolution in 19th-century England when the mills of Lancashire made our handloom textiles technologically obsolete. 
  • After Independence we forgot our trading past, closed our borders in the name of a bogus idea called `import substitution', denying ourselves the prosperity of inter national trade. 
    • We only opened up in 1991. 
  • Today, Modi is trying to recover that past
  • India's power has always been `soft', not expressed through military conquest but in the export of goods and ideas.
  • Across the vast area, Sanskrit became the language of the courts, government and literature. much like Latin in medieval Europe.
  • The elite spoke different languages but used Sanskrit to communicate across the border. We are not sure exactly how Indian culture travelled but most likely it was through trade.Tamil literature describes seafaring merchants sailing to distant places like Java in search of gold. 
  • The historian, Michael Wood, summed it up well: "History is full of Empires of the Sword, but India alone created an Empire of the Spirit." 
  • Modi's economic diplomacy is creating new possibilities. If he is successful, India may once again become worthy of the seventh-century Chinese traveller, Xuanzang's description: "People of distant places with diverse customs generally designate the land they admire as India."

Source: Times of India


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