THE CONTEXT: The Russian-Ukraine war has disrupted the prevailing global order. The war is threatening to divide the world into two blocs reminiscent of the cold war. However, India committed to its principled position of non-alignment, with its huge demography and economy can be the fulcrum of shaping the post-war world order. This article examines the challenges the country faces and the strengths it carries to be the pivot of this new world order.
AN ANALYSIS OF THE EXISTING WORLD ORDER
THE FALL OF THE BERLIN WALL: Since the fall of the Berlin Wall in 1989, a model of free societies, frictionless borders, and an open economy has emerged as the standard in many countries, which has become a governing order.
FREE TRADE AND PROSPERITY: People, products, services, and capital were able to move more freely around the world as a result of this. During this time, global trade and per capita GDP nearly doubled, signalling a period of universal peace and prosperity.
INTEGRATION AND PEACE: With the goal of shared global prosperity, the world’s societies and economics have become increasingly interconnected. The conventional belief was that such close interdependence among nations would lead to fewer conflicts and promote peace.
IDEA OF GLOBAL VILLAGE: ‘Global Village’ of around 8 billion inhabitants of the world was established on top of modern transportation networks, with the US dollar serving as the reserve currency and integrated payment systems around it.
HOW IS THE GLOBAL ORDER CHANGING?
The Russia-Ukraine conflict is a global geo-economic conflict that threatens to go back to the Cold War era of two dominant power blocs. The Russo-Sino bloc is the producer powerhouse while the Western bloc is a large consumer and hence the conflict between them harms both the blocs significantly. If interconnection and trade between states are mutually beneficial, then its disruption and blockade will be mutually destructive. Economic sanctions enacted in retaliation for Russian actions have harmed all nations, albeit some have suffered more than others. Egyptians are facing food shortages as a result of their reliance on Russian and Ukrainian wheat, Germans face high winter heating costs as a result of their reliance on Russian gas, and Americans face a shortage of electric cars due to the unavailability of car batteries reliant on Russian nickel, Sri Lankans have taken to the streets as a result of economic woes, and Indian farmers face high fertilizer prices triggered by a global shortage.
CAN INDIA BE THE EPICENTRE OF THE NEW WORLD ORDER?
THE CHALLENGES:
- A forced and hurried dismantling of the international dollar-based currency order and replacing it with bilateral local currency arrangements are problematic.
- Buying discounted oil or commodities if it entails a departure from the established order of dollar-based trade settlement or jeopardizes established trading relationships with western bloc markets, can have longer-term implications for India’s export potential.
- India needs not just cordial relationships with nations on either side of the new divide but also a stable and established global economic environment.
- Social harmony is the edifice of economic prosperity. Fanning mutual distrust, hate and anger among citizens, causing social disharmony is a huge challenge to India.
- The communal divide that the country is facing today will affect the growth prospect of the country.
THE OPPORTUNITIES:
- India has benefited enormously from being an active participant in this interconnected world, with a tripling of trade (as a share of GDP) in the last three decades and providing vast numbers of jobs.
- Trade with other nations will always be an integral cornerstone of India’s economic future.
- India’s trade is dependent on both these power blocs and on the current global economic structures of free trade, established reserve currency and transaction systems.
- As the western bloc of nations looks to reduce dependence on the Russia-China bloc of nations, it presents newer avenues for India to expand trade.
- India, as the largest peace-loving democracy, stands to gain enormously from the ‘principled trade’ aspiration of the western bloc that values both morals and money.
- It presents a tremendous opportunity for India to become a large producing nation for the world and a global economic powerhouse.
- By dint of its sheer size and scale, India can be both a large producer and a consumer.
HOW DID INDIA RESPOND TO THE CRISIS?
EMPHASIZED DIALOGUE AND DIPLOMACY:
- Right from the beginning, India called for dialogue and diplomacy to resolve the dispute. On many occasions, the country has asked for the immediate cessation of violence and hostilities.
PROTECTED NATIONAL INTEREST:
- Russia is a very important partner in a variety of areas for India; similarly, fertilizer prices have a direct implication on the livelihood of a majority of our population and food prices.
- Even the security of the nation is at stake as India maintains its defence posture in the manner that the current security challenges warrant.
- All these are legitimate pursuits of national interest by India.
DESISTED FROM TAKING SIDES:
- While India was at the forefront of addressing the fallout of the war, it has been careful not to take sides despite the push by the West owing to its peculiar circumstances. This has been manifested in India’s abstention in the resolutions in UNGA, UNSC, UNHRC etc.
PROVIDING HUMANITARIAN ASSISTANCE:
- India has sent humanitarian assistance to Ukraine through Poland and Romania. The consignment comprised medicines, medical equipment, and other relief material.
INFLATION, LOW GROWTH AND EXPORT POTENTIAL
New Delhi is already bearing the brunt of high global crude oil prices (about $110-120 a barrel as against $70 at the beginning of November) as well as rising mineral, metal and edible oil prices, indicating a possible scenario of high inflation and low growth — stagflation. Ukraine has created an unlikely opportunity for select Indian Agri-exporters who trade in wheat, maize, millet, and processed food. Since the crisis unfolded last month, the world has been looking to Indian wheat to fill the huge void in stocks caused by the turbulence in Europe’s breadbasket. Ukraine is one of the world’s top wheat exporters, and Russia and Ukraine together have a 25% share in the global wheat market.
THE WAY FORWARD:
- India thus needs not just a nonaligned doctrine for the new world order but also a nondisruptive geo-economic policy that seeks to maintain the current global economic equilibrium.
- India needs to balance domestic compulsions with its international commitments without being pulled into any bloc.
- India needs to address the domestic problems of social divisions and economic boycotts, and issues of freedom to trade.
- India needs to arrest the slide in democracy being felt in multiple areas lest its credentials will be impacted.
- A new paradigm of emerging global order and India’s role in shaping it need a clear articulation of the contours of “Atmanirbhar Bharat.”
THE CONCLUSION: The reshaping and readjustment of world order will be a unique opportunity for India to reassess foreign policy, economic policy and geopolitical strategy and develop a mantle of global leadership. The strengthening of India’s global economic power through a cautious post-conflict geoeconomics strategy between Russia and Ukraine could represent a decisive turning point in India’s economic history. India could be the cornerstone of this new world order as a peaceful democracy with economic prosperity. But this requires India to first contain the division of the raging community within the country.
QUESTIONS:
- “To be the fulcrum of the new paradigm of the world order, India needs to address its domestic social divisions “Explain
- In order to be the pivot of an emerging global order post the Russian-Ukraine conflict, India needs to surpass multiple challenges. Critically Analyze.