KAMPALA – We know, the Central Intelligence Agency (CIA), the American external spy organization overthrew numerous governments in Africa, Asia and Latin America. It has been cited in the Coronavirus scandal. It killed various people including heads of State. Who killed Patrice Lumumba of Congo, Gadhafi of Libya, Saddam Husseni of Iraq, Mossadeh of Iran among others. There are conspiracy theories that the West or CIA created viruses to kill Africans! Who has had the audacity to sue the US? Declassified information about the activities of the CIA reveals some of this information.
The West will set China against other countries especially India and other developing countries. The US may use its currency to disenfranchise China economy. But China unlike other countries has many advantages probably these advantages outweigh the disadvantages it has. I am sure China has its own offensive and fensive economic strategies to fend off the West’s attacks. It must also have a plan for India. It is going to be a bitter fight.
China has the following advantages. China has a market. China has 1.4 billion people of whom 850 million are middle class. That is possibly the largest middle class you will find anywhere in the world. It is more than the combined the population of Europe and America together. That’s one strategic advantage. Two they have perfected manufacturing. As the Western system developed they got rid of the dirty jobs, the manufacturing jobs, these jobs, relocated into Asia. Many Asian countries developed as a result of manufacturing products for export to the Western countries, China inclusive. Today some of the most resilient countries like Germany, Japan and Italy are resilient because they have a large component of manufacturing in their countries. They didn’t surrender everything to China and other Asian countries. Countries like the US and the UK which depend a lot on services, especially financial services are more fragile than those countries that have manufacturing. China has a robust manufacturing system, China has been the world’s factory and therefore it has had that strength which you cannot easily take away.
Three China has the money. China has produced and traded itself into wealth. It rescued the American economy financially in its housing crisis in 2007-2009. The effects were almost similar to what happened in Japan in 1985, but China was a little wiser. The United States keeps on borrowing from those countries that have surpluses, it borrowed from Europe, Japan, it is borrowing from China. It will borrow from the next big country India, if it also emerges. Because the US owes China a lot of money, it may not be able to bully it. To bring down China the US may decide not to repay China. This will be self-destruction. Because China will start a new system it can support without America. Only India could be the spoiler.
The biggest advantage the US and the West have, is that it’s that the US currency can never change against other currencies. Because every other country’s currency is benchmarked against the dollar, therefore if there is inflation in the American economy it is exported directly to the whole world. Luckily inflation in the US has been very low and not causing negative impact. But most countries in the world who have their currencies paged on the dollar, they have to contend with the US. When the US prints money it affects the whole world. When the world has crisis, all those investors around the world seek refugee for their investments in dollars. It cause a high demand for the dollar because it is transferable and they feel it is safe! China is trying to have its currency as one of the trading currencies and if it does that it will definitely give it an advantage and again continue to weaken the dollar and the Western system. But it is an uphill task.
The other advantage which China has is that unlike many developing countries modernization doesn’t mean westernization. China has great food and great traditions. Confucius a great Chinese philosopher of the 6th century BC gave China its characteristics as a civilization. Chinese culture is based on Confucius principles. Modernization has been equated to acquiring Western values but this is not the case for China. The Chinese culture continues to be resilient unlike many African countries which no longer have their culture. Many Asian and European countries too have completely abandoned their culture in favor of the American culture. So China has that advantage that it has got the resilient culture and China can continue despite losing markets in the West. It can continue as the civilization on its own. So China cannot simply be wished away.
The Emergence of India
As the West comes to grips with the takeover of the World by China, they have started propping up India. Not as an alternative, but as additional adversary of China! There is expectation that India maybe the next big thing that takes over from China. Not Africa! Africa is too divided and too weak. In 2019, Africa’s combined GDP of US $ 2.58 Trillion, compared to India of $3.20 trillion. But India maybe not the next big thing. But why does India come to the table and what is the current position about India. India is a prospect because of its large population and India is a prospect because unlike African countries the spirit of entrepreneurship exists. India has established Western type of democratic traditions and is market oriented.
Many Indians globally are running businesses in many parts of the world. Lakshmi Mittal, an Indian associated with the steel industry is one of the richest people in the World today. He lives in the UK. So are many other Indians. Interestingly the Home Affairs minister and the Chancellor of the Exchequer in Britain are Indians! Today in many of the American science organizations you find a variety of Indians. Indians have gone around the world, they are inventing things. It’s just that in their own country they have not put their act together.
In the current world order, India has a big advantage over China in terms of political system. India is called the biggest democracy in the world with 1.3 billion people. They change governments democratically. India has some other advantages which are probably not seen. Officially India presents its position of a strong India, a cultural India that cannot submit to any superpower. This has enabled it to do that during the active times of the Non-Aligned Movement. India was one of the founding leaders of the Non-Aligned Movement. The intention here was to have countries that where not aligned either to the west or to the east to form a group to minimize threats from any of the groups.
India fought a war with China and lost the war in 1962. It had a small victory over China in 1967. India is a home to the Tibetan refugees. China has the Tibetan problem. The spiritual leader of the Tibetans the Dalai Lama is a world known personality who has been trying to fight for the rights of the Tibetans. Tibetan territory was annexed by China in 1950-1951.This has created a challenge between the Indians with the Chinese, for this and other reasons India is always on the opposing side of the Chinese. Attempts have been made to reconcile the two but tension continues to simmer between them. This will act as an advantage for India. India will go into alliances with countries that have problems with China and it is one of the reasons that India maybe promoted by the West to counter China as an economic force? Individuals also fought wars and have had military skirmishes with Pakistan. Whoever wants to exploit or weaken India instigates Pakistan against it. This disadvantages India.
The challenge though is that the West thinks that it is the one to orchestrate these changes more than these changes metamorphosing, on their own. This is the biggest problem that the west has. Everything done by countries outside them is not good enough. If one person is shot in an African country it is a problem but mass shootings like in the US are normal. The West think that up to now, they can continue to control things, call the shots. They have overthrown governments at will. they bully small countries. Asia as region has risen. With a population of 4.46 billion people, Asia if well led, can take over the world affairs from the West. But Asia is constituted by China, India, India, Japan, South Korea! Thanks to the US and the Western alliance, some of these countries don’t see eye to eye.
Can India do it?
The belief that the West can continue to control world affairs is contrary to their own thinking that the market knows best. If the market knows best, then things will evolve in on their own based on the feelings and actions of people about their economies and markets. The West has been able to control the press, it has been able to control the money through the IMF and the World Bank, it has been able to control technology through its research and development. It has been able to provide leadership in terms of new products and new markets. It has led the world in various things based on what they call western democracy and capitalism. Times have been good but that appears to be changing. They are losing this ability. The Coronavirus appears a stimulant.
This position is slowly fading away and China has been able to demonstrate that they can take leadership in many things primarily as a result of simply hard work, planning and being able to do the right things right. China has won markets without firing a shot. Can India do it? Can it out compete China?
India has challenges though. Among them is internal weaknesses, the caste system. The caste system doesn’t allow Indians to develop in an agreed manner and this continues to divide India. This is social discrimination. Many Indians believes in this system which dictates certain people never to be wealthy or occupy certain positions in society. This is a major government constraint. India has also had the challenge of the political system. They have strong communist parties, strong Western oriented parties and then the RSS the Hindu party of which the current Prime Minister Narendra Modi is a member. This is a Party that wants India to be Hindu state. The RSS, periodically clashes with Muslims in the country and as such India suffers for problem of communalism. This affects the economic progress of the country.
Another disadvantage about India is the most Indians want to look like people in the West. The ordinary Indian, the average Indian wants to leave India and go and live elsewhere on the West. This is like most Africans. That is why many Africans are drowning in the Mediterranean Sea trying to get to Europe (but this has been created by the West by economically disenfranchising these countries). India, while it has its pride, has that weakness. People want to work to go live abroad. In terms of what is happening on the ground India is weak. India has also challenge of corruption which hinders economic progress.
So, will India be able to take over? For that matter, takeover from who, the USA or China. Definitely it cannot take over from the US. Yes and No India will be able to take over if India promotes Indian policies and Indian philosophy like China has done. But if India falls in to the bait of the Western countries as an alternative to China, India will not succeed as such. India has to deal with the massive poverty in a different manner from what it is doing now. It can pick lessons from China. Current policies will not work! To become a contender India needs consistent GPD growth rates of about 10% per year for over 15 years! What did China do to promote growth?
India will continue to grow but probably not at that rate of 10%. It will continue to be a developing country because if the large number of poor people in India.
India has had an opportunity to provide leadership to the rest of the developing countries and somehow it has not exercised it. While there are thousands of Indians in different countries running businesses, India has not had the hegemony that the west has had, that China is trying to have therefore India while it might be the next big thing it has to overcome the challenges and the bait of the Western countries to create it as an alternative to China.
The writer, Prof. Waswa Balunywa, is the Principal of Makerere University Business School