South Asia’s Role in Geo-politics and the Global Economy Post-2014

On the 4^th of April, 2014, Brookings India hosted a panel discussion on “South Asia’s Role in Geo-politics and the Global Economy Post-2014.” The panellists were James Stavridis, Dean, The Fletcher School of Law and Diplomacy, Bhaskar Chakravorti, Senior Associate Dean for International Business and Finance, The Fletcher School of Law and Diplomacy, Tufts University. WPS Sidhu, Senior Fellow and Subir Gokarn, Senior Fellow and Director of Research, Brookings India moderated the discussion.

Dean Stavridis, who retired from the U.S. Navy last year, was Supreme Allied Commander, NATO and Commander of the U.S. European Command from 2009-13. He provided his perspectives on global security dynamics against the backdrop of the change in U.S. levels of engagement in Iraq and Afghanistan and how this might impact South Asia. Senior Associate Dean Chakravorti, who has traversed the academic and consulting worlds, is particularly known for his 2003 book “The Slow Pace of Fast Change.” He provided his perspectives on key forces shaping the global economic and business environment over the next few years and what these mean for companies in the South Asian region.

1)      India, Europe and China face different demographic challenges – just as capital flows, human capital flows. The panel noted that no other developing countries are dealing with shifting global order with success- the crisis has broken down old models. Meanwhile, the richer economies have been experiencing more growth – a panellist commented that “the shoe is on the emerging market’s foot”.

2)      While celebrating the new global economy, we also need to think of sustainability of growth of the global economy. In India, the economy is running further ahead than governance, human rights, and sometimes access to services/justice. There is a need to balance fast, top line growth with inclusive growth, which requires better institutions and public-private partnerships. China is creating a parallel internet economy – globally, we are nearing fragmentation of the internet, which will hamper innovation. While it is a game changer, a panellist commented that the internet does not immediately solve problems of human development – it could help resolve them, but the money is going to the “next shiny app”. A panellist asserted that cyber runs an enormous spectrum, is vulnerable and “we haven’t done a good enough job of protecting it”.

3)      A panellist noted that Afghanistan is a place where hard power (military training) and soft power – such as providing literacy training – is necessary. Another panellist countered that the dominant emotion in the transition within Afghanistan is “more fear than hope”. The solution to this is to deal with violent extremism by bringing in jobs, security and hope. A panellist asserted that he is not concerned about weapons of mass destruction as they are protected well by nation states – instead, there is more concern over trafficking of WMD. A panellist noted that the US is committed to remaining in Afghanistan, and any new president would sign the security agreement with Washington. However, he cautioned that this would continue as long as the US had the economic power to remain, citing the Russian experience of compulsion to withdraw from Afghanistan decades ago. While discussing Crimea, the panel commented that the new tussle between the US and Russia was worrying but Moscow was unlikely to escalate or takeover Ukraine.