Editorials/Opinions Analysis For UPSC 22 August 2023

Editorials/Opinions Analysis For UPSC 22 August 2023

Contents

1. The Road to Democracy and Economic Growth in India
2. India’s Geopolitical Conundrum: BRICS Currency and Global Governance

The Road to Democracy and Economic Growth in India

Context:

The G20 meeting in Delhi marks a crucial turning point in India’s development, where democracy and prosperity are merging. The G7’s enlargement into the G20 represents a historical turning point, or Zeitenwende in German.While several ageing, declining, and wary G7 nations may have opposed the G7 to G20 expansion, it is a significant event for India. The forthcoming G20 summit will celebrate India’s formation of the largest democracy in the world as well as the country’s impressive gains in freedom and economic development.

Relevance: 

GS Paper 2 -International Relations – G20 Summit

Mains Question

The next G20 conference in Delhi is a crucial turning point on India’s path to achieving both democracy and prosperity. How has India’s ideological change towards public empowerment and economic prosperity been impacted by the country’s transformation during the liberation struggle from an elite-led discourse to a mass political movement? Examine how India has advanced economically and in terms of democratic values, and consider what this means for India’s future growth and development. (250 Words)

A Changing Landscape of Economic Power in the G20

• However, the approaching G20 summit in Delhi is a recognition of India’s achievements in building the greatest democracy in the world against the backdrop of a hierarchical social system.
• It honours India’s expanding economic freedoms, which include formalisation, industrialization, financialization, urbanisation, and the development of human capital. These liberties put India in a position to quickly overtake China as the third-largest economy in the world, a development that shows how far the country has come in achieving Mahatma Gandhi’s goal of uniting majority democracy with mass affluence.

The Economic Odyssey of India: Obstacles and Successes

• The Bandung Conference in 1955 was significant because 29 leaders, or 54% of the world’s population, attended. Fast-forward to the G20 summit; this gathering is historic since its participants now account for an astounding 85% of the global GDP
• Despite this, India’s post-independence economic development was fraught with difficulties as economic might overrode geopolitical, military, and soft power. India’s GDP surpassed that of the United Kingdom in less than 72 years, demonstrating the rate of economic expansion. It explores the intricacy of India’s post-independence economic policies while underlining the repercussions of failing to distinguish between the “what” and “how” of policy execution and distortions in the social, economic, and political roles played by society (samaj), the market (bazaar), and the government (sarkar).

Finding the Growth Recipe for the Economy

• As seen by the ten-point programme of 1967, the 13-point programme of 1977, and the 20-point programme of 1975, India’s economic progress was hindered by a lack of vision in the design of policies. Due to an ignorance of the underlying issues and vested interests, these lists were ineffectual.
• At the moment, India places a strong emphasis on the value of entrepreneurialism, strategic planning, and differentiating between substances and their amounts. It emphasises how policy creation is shaped by iterative progress that is characterised by learning from errors. This iterative approach to policymaking is demonstrated by recent efforts like Degree Apprenticeships, the Jan Vishwas Bill, and the elimination of the Rs 2,000 currency.

India’s Economic Restructuring and Resilienc

• Over the last ten years, India’s economy has risen from tenth to fifth in the globe. A new economic strategy that puts the needs of those in economically underdeveloped areas first is responsible for this astonishing growth.
• This is clearly evident in the way that reforms focusing on formalisation, the introduction of the GST, bankruptcy laws, digital payments, and other initiatives have aided India’s economic recovery. The article analyses the changing economic complexity of India and proposes that innovation and enterprise are the “consonants” in a game of Scrabble where the government supplies the “vowels” (infrastructure and policy assistance).

The Way Ahead for Economic Reforms

It explores particular policies that can support India’s growth trajectory while acknowledging that a radical economic reform agenda is both unpopular and difficult. It talks about how to make corporate operations easier by emphasising employer compliance, how to handle skill development through targeted apprenticeships, and more.

Optimism, hope, and diaspora

Offshore Indians may raise doubt and concern about India’s economic prospects at the upcoming G20 summit. The Indian diaspora is urged to give India a few more years and perhaps consider returning to help the country thrive, despite the fact that pessimism frequently sounds prudent.

Ideological Change in India: From Elite to Mass Empowerment

• The comments of Maulana Azad from a century ago still hold true today, demonstrating how the freedom movement evolved from an elite discourse to a mass political movement. This change sparked new relationships, supported Indian alternatives, and opened the door to democracy.
• It emphasises how India’s post-independence economic theories at first remained imprecise, copycat, and constrictive. But transformation started in 1991, picked up steam over the following ten years, and is now reaching its zenith with the upcoming G20 summit. India is on the rise, and this fusion of democracy and prosperity emphasises the union of two freedoms.

Conclusion

With the G20 meeting in Delhi, India’s quest to combine democracy and prosperity approaches a historic turning point. The transformation of India from an agrarian civilization to an up-and-coming economic powerhouse is a prime example of its adaptability and tenacity. The core of this transition is learning from previous policy mistakes, embracing iterative development, and developing reforms to boost economic growth. India is poised to overtake China as the third-largest economy in the world, giving fresh significance to the union of democracy and wealth. It’s an exhortation to adopt optimism, make aggressive policy decisions, and ignite India’s rise to prominence on the world arena. The G20 summit marks a natural turning point in this transformational process and signals India’s ascent to unite the twin freedoms of democracy and prosperity.

India’s Geopolitical Conundrum: BRICS Currency and Global Governance

Context:

As the world struggles with altering geopolitical dynamics, India finds itself in the spotlight, taking part in significant summits, choosing its course of action, and attempting to exert influence on the international scene. The creation of a single currency for the BRICS nations is a major suggestion on the table. The proposal for a unified currency highlights the bloc’s goal to thwart sanctions and promote economic self-sufficiency as the BRICS leaders meet in Cape Town, South Africa, from August 22–24, 2023, to increase their influence throughout Asia and Africa.

Relevance 

GS Paper 2-International Relations – BRICS Summit

Mains Question

How does the BRICS bloc’s plan for a single currency reflect its desire to thwart sanctions and promote economic independence? Examine the potential advantages and difficulties of creating a unified currency for the BRICS countries while taking into account elements like economic toughness, international clout, and the actual application of such a currency. (150 Words)

A Forum of Influence or Limitation:

The BRICS The importance of BRICS should not be understated, even though its potential to transform the world economy is still debatable, its capacity to broker economic agreements among its members is limited, and its historical impact on world geopolitics has been contested. Despite its shortcomings, BRICS has the potential to develop into a force that may influence the political climate of the entire world. The BRICS’ position has been revitalised as a result of recent events and difficulties faced by traditional international institutions. Notably, BRICS has a more diversified membership than the UN Security Council (UNSC) and the G-7, although it is not as inclusive as the G-20.

The Global Governance Landscape and BRICS

The flaws and undemocratic nature of global governance have been widely recognised. Even if BRICS would not be a perfect replacement, it might fill the gap left by conventional institutions. The fact that over 40 nations have expressed interest in joining BRICS shows how the global South is unhappy with their influence’s limitations. Middle powers and regional players look for forums like BRICS to define geopolitical trends and make informed decisions as the world navigates geopolitical uncertainties and power transitions. These forums, despite their inherent complexity and hierarchies, have the potential to spark talks about more representative global governance.

India’s Difficult Position: BRICS and Beyond

• India faces complex difficulties as a result of the current geopolitical environment. Where India fits into the larger picture is a complicated one. India’s participation in the Quad, G-20, G-7, BRICS, SCO, and the global South are frequently questioned by Western observers.
• The BRICS bloc, made up of Brazil, Russia, India, China, and South Africa, is a strategic alliance that seeks to oppose the dominance of the G7. The bloc’s consideration of membership expansion beyond the original member countries is proof that its power is progressively growing.
• However, India’s involvement in non-Western fora must be seen as a reaction to the unfair governance frameworks put in place after World War II. India’s interests span non-Western and Western domains, reflecting the country’s geographical, historical, and developmental identities.

Investigating Other Options: Potential Advantages of a Common Currency

• The New Development Bank (NDB), with its headquarters in Shanghai, advanced the idea of using alternative currencies to protect the BRICS countries against sanctions during a meeting in Cape Town. This action aims to protect the bloc from being subject to sanctions imposed on nations who were not directly involved in the first dispute. The Cape of Good Hope, a joint declaration from the BRICS countries that emphasised the use of local currencies in international commerce and financial activities, was also released. The BRICS countries collectively account for a considerable share of the world’s population, GDP, and trade, giving this initiative tremendous economic clout.
• The proposal for ‘alternative transfer mechanisms’ was first floated by Russian President Vladimir Putin inside the BRICS bloc immediately after the invasion of Ukraine. Putin emphasised the significance of commercial diversification and collaboration amongst dependable partners like India, China, and other BRICS members in an effort to lessen the effects of the devastating sanctions imposed by Western nations.
• The idea for a unified currency is consistent with BRICS’ ultimate objective to restructure global geopolitics in order to favour its member countries’ economic, geographic, and demographic strengths. The New Development Bank (NDB), established in 2015 by the BRICS group, aims to raise funds for infrastructure and projects in developing and emerging economies. In order to balance out the dominance of Western-driven international financial institutions like the World Bank and the International Monetary Fund, BRICS established the NDB.
• Expansion of the BRICS and Economic Influence Several nations have shown interest in joining the BRICS to compete with Western alliances like the G20, NATO, and the EU. More than 40 nations have expressed interest in joining the group. The sanctions on Russia, a founding member and substantial stakeholder in the NDB, have, nonetheless, had an influence on expansion. India and Brazil also voice their disapproval of China’s strategy for boosting the power of the bloc.

Local Currency Push: BRICS’ Strategy for Resilience

To get new nations to join the union, BRICS has been actively promoting the use of local currencies in bilateral commerce. Although it does not specifically mention sanctions against Russia, the joint statement from the recent Cape Town meeting highlights this strategy. Instead, it draws attention to the difficulties brought on by unilateral economic action and urges a peaceful resolution through negotiation and diplomacy.

Prospects and Challenges for a Common Currency

• Despite the enthusiasm surrounding a single currency, real-world obstacles still exist. Leslie Maasdorp, the Chief Financial Officer (CFO) of NDB, has disregarded short-term aspirations for a BRICS shared currency. He asserts that even the Chinese Renminbi is a long way from being a major reserve currency. Additionally, neither South Africa nor India have acknowledged having held conversations about a single currency. These nations place a strong emphasis on developing trade ties with major powers and fortifying their domestic currencies.
• The BRICS Pay project, which was launched in 2018, promises to simplify digital payments among participating countries by removing the need for currency conversion. The system mixes decentralised and central bank digital currencies. Russia and Brazil both support a single currency, but the BRICS group as a whole has mixed feelings about the idea. Although the objective is lofty, its immediate realisation is still doubtful.

India’s concern for the Euro

• India is the only nation in the bloc that is growing economically on its own. As a result, it is asserted, the nation has no need for assistance from BRICS and is capable of surviving without the new BRICS currency.
• India also enjoys favourable ties with the US and Europe, with which it has signed military and economic agreements worth billions of euros. Because it believes in the BRICS currency, which has not yet been introduced, the nation does not want to jeopardise its trade with Western nations.

Geopolitical Challenges for India: Finding a Balance

India must delicately balance its global positioning. Problems arise from China’s ascent, India’s participation in numerous forums, and its commitment to multipolarity. The goal of India’s multipolarity is to advance equity and representation, but it runs the risk of aligning with China’s objectives. The growth of China might unintentionally be aided by non-Western institutions, which could harm India’s reputation. India must protect its national interests while working to promote non-Western institutions.

Geopolitical Crossroads in India: Challenges and Approaches

India navigates numerous international forums simultaneously and with complexity. India must control China’s influence as it participates in BRICS and the SCO, protect its own interests, and strike a balance between its commitment to multipolarity and potential alignment with China’s revisionist goal. India needs to keep its focus on promoting a more representative international order while defending national interests. India faces a significant challenge on the international stage in balancing the paradigms of the West and China.

Conclusion

• The BRICS group’s pursuit of a single currency in the face of sanctions shows how determined it is to increase economic resilience and lessen reliance on the US dollar. This enormous project fits in with BRICS’ overarching objective of changing the world economic system for the benefit of its member countries. However, difficulties abound, and a common currency’s actual implementation is still a difficult and divisive issue. The BRICS nations are meeting in Cape Town to debate these and other tactics, and the results of their discussions could determine how these developing world powers cooperate economically and remain resilient.
• The complex geopolitical situation facing India is highlighted by the BRICS conference. India must make sure that its participation in various forums advances its goal of just global governance. It can be difficult to strike the appropriate balance between cooperating with China and adhering to Western ideals. India’s ability to navigate this difficult terrain will not only affect its geopolitical standing but also the changing global order.