Prepare for the Unknowns: India’s Black Swans

Imagine the breaking news headline: Revolution in Riyadh. The scenario: The House of Saud, which has ruled Saudi Arabia for years, has been overthrown. Closer to home, think about what China going off the rails would look like-and portend for India. These are just two of the “Black Swans” that foreign policy scholars at the Brookings Institution recently identified as deserving the attention of the U.S. government, along with a series of Big Bets that the administration should make in President Obama’s second term. These black swans are low-probability, high-impact events that can have a dramatic impact on the plans and policies of a country. The idea behind this project was to identify potential events, suggest ways to prevent them if possible and prepare for them if they occur. With American involvement in a number of countries in the world, it might seem natural to undertake such exercises in the United States. It is essential, however, that such thinking take place in India — whose global interests and involvement are growing — as well.

Just a glance at the black swans that Brookings scholars envisioned indicates how each of them could affect India’s interests. The collapse of the Saudi monarchy would bring instability in a country that is India’s largest oil supplier and critical to its economy. It is also the location of two of Islam’s holiest sites. The spillover into other countries in the region that is not just the source of most of the crude oil and natural gas that India imports but is home to a large number of Indians, will also have major ramifications. A Eurozone collapse would have a significant impact on the Indian economy. A China-U.S. confrontation or especially a direct military conflict between them over Korea — though seemingly distant from India’s area of operations and interest — would change the geopolitical context in which India is operating. A confrontational Chinese leadership, driven by popular nationalism and desire for regime survival into war, could have serious consequences for India. Domestic revolution in China could also affect not just India’s geopolitical interests but its economic ones as well; it could also lead to significant changes in the Tibet dynamic. Finally, a dramatic rise in sea levels could devastate India’s coastal areas where about a fifth of its population resides.

One could dismiss these scenarios as far-fetched, but ignoring such possibilities entirely can be risky. India itself has felt the brunt of black swans — for instance, the Dalai Lama’s escape to India in 1959 or the black swan triple whammy in 1990-91 with the Iraqi invasion of Kuwait, the Gulf War and the collapse of the Soviet Union. India has also benefited from some black swans — for example, from two crucial ones that Nassim Nicholas Taleb, who generated the black swan theory, laid out in his book The Black Swan: the development and spread of the computer and the Internet.

India could face black swans again: A serious and sudden deterioration of the situation in Tibet. A climate change-caused catastrophe in Bangladesh with thousands, if not hundreds of thousands, of people trying to cross over into India. A major cyber attack with uncertain origins. A disintegration in Pakistan with the “loose nuke” problem becoming real. A collapse in the price of gold. A U.S.-Iranian rapprochement — a black swan that could throw up challenges or opportunities for India.

Black swans are not always negative and do not necessarily have a negative impact. As my Brookings colleague Govinda Avasarala notes, a major breakthrough in grid-level battery storage developed in India that could make solar and other intermittent forms of energy instantly economic could be one such “positive” black swan. This development would not only change India’s energy picture, it would change the debate on and the available solutions to the climate change challenge. It would also put India at the forefront of the next big technology revolution.

It is important to think about such black swans, consider ways of preventing them if they are negative ones and facilitating them if they are positive, and lay out ways of coping with them. Government agencies can do some of this thinking. Indeed, recently, at a talk organised by RAW, former president Abdul Kalam highlighted the need for the country’s intelligence apparatus to be prepared for black swans. Policy planning staffs can also undertake such exercises. Government agencies, however, are often burdened or overburdened with day-to-day priorities, with little time, inclination or resources to undertake such thinking. Therefore it is outside government — in think tanks, universities and the corporate sector — that such thinking about black swans, as well as forecasting, scenario planning and war gaming can and must take place. Such exercises do not necessarily require classified information. They do require time, resources, expertise and, most importantly, imagination.