Geography Reference
In-Depth Information
For all the hoopla about India's 'opening up' its economy to the outside
world, New Delhi's pace of reform has been very measured. According to the
widely-noted
2001 Index of Economic Freedom,
India has one of the world's
least free economies, ranking 133rd out of the 155 countries surveyed.
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Despite
substantial tariff reductions, for instance, India still possesses some of the
highest tariff barriers in the world. US exports to India during the 1990s grew by
a paltry $1.2 billion—despite the celebrated 'opening' of India's economy.
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Until India makes progress in the so-called 'second wave' of liberalization—
including privatization, deregulation, freeing up capital flows, reducing subsidies,
and reforming labor laws—the American business community is unlikely to find
India an attractive venue for expansion. Yet real doubts persist whether the
current government in New Delhi, or any likely successor, has either the will or
the political muscle to push the reform agenda forward.
Finally, there exists a further difficulty in expecting these very modest levels of
economic activity to serve as the ballast for a more substantial relationship
between Washington and New Delhi. The fact of the matter is that the two
countries have fundamental differences on many of the day's most important
economic questions—the North-South divide, for instance, or the priorities of the
World Trade Organization. US Trade Representative Robert Zoellick publicly
singled out India as an especially 'troublesome' country in building a consensus
for new international trade negotiations.
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At the Doha trade summit in late
2001, India and the United States found themselves on opposing sides of the
question on many of the most contentious issues. Rather than bringing the two
countries together, economic issues threaten to pull them apart.
A Community of Democracies?
Nor—for all the talk about 'the world's two largest democracies'—do shared
values and a common commitment to political pluralism guarantee a
complementarity of interests or purposes. The two countries appear to have
different ideas, for instance, on what their shared allegiance to democracy
implies for policy. In the United Nations General Assembly, they come down on
opposite sides of important resolutions as often as not. At the Community of
Democracies summit in Warsaw in July 2000, Washington lobbied to show a
videotaped message from Burma's opposition leader Aung San Suu Kyi. New
Delhi, however, which seeks to cultivate better ties with Burma's military junta,
opposed this affront to Rangoon's sensibilities. In truth, the 'democracy linkage'
is perhaps a necessary, but certainly not a sufficient, ingredient for the forging of
a long-term stable partnership between the United States and India. Shared
democratic values did not keep the two from quarreling in the past, nor will they
guarantee a convergence of interests in the future.
