Less than a hundred days into Donald Trump’s second term as president of the United States the tacit understanding that had held the world together for about three quarters of a century has been summarily torn apart by him. Uncertainty in international relations has been unleashed, and the course of things to come remains to be seen.Trump and Russia’s strongman, Vladimir Putin, have not only shown their utter contempt for what was a semblance of a rights-based world order, but, significantly, they have done this jointly. By colluding to strip tiny Ukraine of its dignity, they have ended over half a century of posturing that it was ideology that had separated the United States and the Soviet Union. Clearly for the two leaders only the basest of interests matter.For Putin it is the continuation of the Tsarist policy of asserting Russia’s age-old imperial right over a neighbour’s territory. For Trump, the real estate baron who shows none of the responsibility to secure global peace that former US presidents such as Woodrow Wilson have shown, there is also a business calculation involved it seems. Not only does he not see economic value in supporting Ukraine materially any longer but he is hell bent on recouping whatever the US has spent on it so far.We watch in dismay as he demands that a sovereign country turns over its mineral wealth to American economic interests. Business calculation is also present in his approach to the war in the Middle East, but with a difference. There a de-populated Gaza is seen as an opportunity for the US to not just claw back the money it has unstintingly spent financing Israel’s unrelenting military aggression against a stateless people but expand opportunities for American business. This extraordinary moment in history is an opportunity for India to learn what to expect in the emerging world order, and realise what it should do to protect its interests.From India, we can see that neither the US nor Russia in its earlier avatar as the Soviet Union have stuck to permanent friendships. The Soviets fell out with their Chinese communist brethren, whom they had once strongly supported economically, in the 1960s. India gained from this, as the Soviets now began to bail out India in the Security Council on the Kashmir issue. They also showed their loyalty, and gumption, in sending a nuclear submarine to checkmate the USS Enterprise despatched by Richard Nixon to intimidate India during the war in East Pakistan in 1971.Russia has since re-embraced China, and the strongmen Putin and Xi Jinping enjoy a warm relationship. America’s record on China is far more striking, though. Having projected Taiwan as the true China on the global stage for decades it unceremoniously dropped it. The once strongly anti-communist Nixon and Kissinger travelled to Peking for a rapprochement with Mao and engineered the People’s Republic’s entry into the Security Council of the United Nations.If ideology had mattered even slightly in US’s foreign policy it should have arranged for the world’s largest democracy to be invited to its membership but it did not. Now, while the chemistry between Trump and Putin is visible, another development remains a tantalising possibility – the strongmen of America, Russia and China will jointly determine the course of international relations at least till the end of Trump’s second term.Where, we might ask, would India fit in this emerging world order? While it cannot in the foreseeable future attain a military presence rivalling that of any member of the trio of US, Russia and China, its nuclear deterrent ensures for it some protection against war-like aggression. However, the level of its economic development leaves it politically vulnerable. Despite its relatively high growth rates for close to four decades by now it remains highly dependent on imported oil and technology. About 80 percent of India’s oil consumption is imported.While there are more than one source of oil in the world market, the United States, even before Trump’s return, and its European allies have pressurised India to refrain from buying Russian oil. Now in his meeting with Prime Minister Narendra Modi in February, Trump insisted that India buys oil from the US. Insistence on where a country should source its goods from would have been unthinkable a decade ago.On oil, it is imperative for India that it reaffirms its centuries-old association with the countries of the middle east, the original suppliers of the commodity. India has had historical links with these countries but has nurtured them less once it pivoted towards the United States after the economic reforms of 1991. But India should at the same time also double-down on its pursuit of renewable energy. While progress has been made in this direction, much more can be done.In the meanwhile, an effort should also be made to discourage the expansion of petrol-driven private vehicles which serve to cement India’s dependence on imported oil. A second aspect of India’s economic development that needs a strategic shift is its dependence on foreign capital inflows to finance its structural balance of payments deficit.Despite the much vaunted economic reforms of 1991, which opened the economy to global trade flows, India’s balance of payments deficits have not gone away. This contrasts strongly with China, which has successfully traded its way to dominance in world trade, reflected in its astounding hoard of hard currency reserves. India’s balance of payments has been shored up mainly by software exports, but with AI expected to take over the coding function global demand for Indian software engineers is likely to reduce. India has also allowed payments apps owned by American-owned tech giants to have an outsized share of the transactions on the UPI platform built by the government of India. It would need to reverse this dependence on the import of capital and technology if it wants to maintain a strategic autonomy in world affairs.India’s economic policy since 1991 has been to resolutely integrate with the world. While integration is a necessary part of growing your economy, seeing the latter as an end in itself without a concern for outcomes is not a credible approach to an economy. The policy pivot playing out over the past three and a half decades has been led by Indian elites determined to replicate the American economic model here. Accordingly, there has been a relentless pressure to cede greater space to corporates by, tacitly, giving them a say in policy making and, overtly, in the form of lower taxes and lighter regulation. Then there has been the almost wholesale borrowing of ideas on macroeconomic management, ranging from fiscal consolidation to inflation targeting, from the Washington Consensus of the 1990s. There is nothing in this model that can advance human development by enhancing the capabilities of the population. This is unsurprising, for what is projected as good for the economy in the American ideology is a corporations-oriented economic policy.However, if India wishes to remain independent in the emerging might-based order its ability will be wholly dependent on the prosperity of its people. In a world governed by strongmen unwilling to listen, India could continue to chant “vasudeiva kuttumbakkam” to them or choose to strengthen its economy by raising the living standards of the large mass of its population who remain poor and therefore unempowered. The latter is a goal it has ignored for much of its existence but one that it can no longer afford to.Pulapre Balakrishnan is an honorary visiting Professor at the Centre for Development Studies, Thiruvanathapuram. He is a recipient of the Malcolm Adiseshiah Award for Distinguished Contribution to Development Studies.
