Foresight and Indian policy making

Parag Khanna is probably not a very renowned name in India. Recently this renowned American foreign policy expert, came into news after making a quite interesting proposal that the United States should look more towards Latin America than Asia in the new millennium in order to rebuild American economic influence and another very creative part of his idea was that America could think about whether “the $100 billion IT outsourcing industry could be brought back from India into the United States' time zones”.

Now this can at best be considered as a very creative idea albeit with one significant hindrance. After all India is more or less an English-speaking country thanks to our colonial legacy whereas most of Latin America is still very much Spanish and Portuguese speaking region. So until and unless the United States of America turns into a Spanish-speaking majority nation (as most recent demographic studies suggest it would become so probably at the end of this century due to higher birthrates amongst the Americans from the Latino background), India can pretty much feel comfortable of continuing to reap the advantage of being home to one of the largest number of English-speakers outside Britain.

However it is always safe to be sorry in some respects. What should be our Plan-B if the creative idea, floated by Mr. Khanna , does indeed come to reality one day ?

One of the challenges of being an expert in foreign policy is to conjure up unpleasant and previously unthinkable scenarios and try to find out possible solutions so that if the threat really comes to pass, there is a fitting response.

Pro-activeness is something that our grand old Indian policy making establishment can not be blamed to possess too much of. And they do not have any reason to practice it too much in terms of policy making so far in this new millennium.

Historically, the two biggest factors that determine how a country’s establishment looks at its foreign policy are the perception or presence of threats from outside and the willingness to expand a country’s interests and influences.

In the case of India, fortunately we live in a time of history where there is no strong power in our neighborhood, which is at present engaged in a policy to endanger our existence or our interests. This is the main reason that the Indian establishment seem to be always comfortable in “leading from behind” when it comes to major foreign policy initiatives in the 21-st century.

It is true that our diplomats and ministers are invited into major international forums around the World like Davos and numerous conferences on the future of Afghanistan but when it comes to real discussions and decision making to determine the outcome of any important political process of global significance, India seem to be very much in the “leading from behind” mode.

The Indian establishment cannot be blamed for this state of mind. After all, “leading from behind” has not hurt India in any real terms and is not India a IT-superpower and are not the American arms manufacturers coming running to India for possible purchases? So, if India is getting so much without being pre-active why should India think differently?

Well one big lesson of history is that even entrenched situations can change overnight and those who are not ready to accommodate and prepare themselves to the changes of history, pay dearly for it. Take the example of those investors, who have put all their money into purchasing the Russian Czarist bonds prior to the First World War and they went bankrupt rapidly when that government itself collapsed in the course of war and revolutions.

Now coming back to the idea of Mr. Khanna , suppose if India losses its $100 Billion US-outsourcing market what could be the other options that India should look at ?

A very tried and trusted method in this regard is diversifying. However in this case, finding out other different markets may not be that easy. The two other markets that can be comparable to America are the EU and China. Now, Europe is a diverse continent with diverse set of cultures, languages and thanks to the current EU leaders, more complex set of stringent rules and regulations. In other words, Indian Software bigwigs will not have that easy to penetrate into the European market with such ease as with America due to these very reasons. China is altogether a different story whereby Indian private companies would have to face direct competition from their Chinese counterparts backed by the Chinese government , looking to protect and nurture its own domestic IT services industry and probably rightly so from a Chinese viewpoint.

So that narrows down our options to catering software products to the customers in our very own country. India does have a growing population and majority of it still live in abject poverty and backwardness but thanks to the modern revolution of cellular phones, creating innovative products for this otherwise under estimated market could be the “next big thing” for our Software industry. There are more than many million Indians who do fall under $2 dollar income category. Our entrepreneurs and ideators can think about catering basic services to these people through the cell phone technology and still being able to profit from it considering the hugeness of the market.

So as Mr. Khanna advises his fellow Americans to look closer to home, we should also follow his advice and look at our own countrymen to prepare ourselves for any possible fallouts in case the countrymen of Mr. Khanna do consider his ideas seriously.

Note: “Look South, not east” by Parag Khanna (http://www.foreignpolicy.com/articles/2011/11/11/look_south_not_east)