Indian Decade

India’s Election Warning

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Indian Decade

India’s Election Warning

Last week’s elections highlight the threat of divided government in India. Will uncertainty lead to paralysis?

Imagine this scenario: A divided legislature, high resentment against the ruling classes, and a series of complex foreign policy equations that confound domestic governance. This may sound like the United States that President Barack Obama is currently leading, but it is also a scenario that Indian politicians could soon face. Even as analysts have hailed the rise of India’s international status, its coming out party could be delayed if last week’s state assembly elections prove a sign of events to transpire in two years.

As some Indian media outlets have indicated, neither major party achieved a key majority or mandate, signaling the stark possibility of a hung or severely divided parliament following the general elections in 2014. At a time when the Lok Sabha would be most needed to address key reforms, and manage the perilous international climate surrounding India, it would be rendered impotent by its own politics. It wouldn’t be foreign forces that halt India’s emergence as a global power, but rather the dangerous internal forces of domestic political disarray.

The government elected in 2014 would have a full slate of challenges facing them, including the prospect of instability in Afghanistan, reassessing the ways that India has handled its role in the South Asia, and addressing China’s rise. A divided government wouldn’t be able to create the ambitious platform needed to answer the massive geopolitical questions that face the country.

One of these concerns would be over the issue of the United States’ scheduled pull out from Afghanistanin 2014 (possibly sooner if recent events force an earlier exit).  In this massive security void, Indian assistance might be needed to help secure Kabul. Unfortunately, neither the Congress-led United Progressive Alliance, nor the Bharatiya Janata Party-led National Democratic Alliance, has proposed a sustainable, long term policy towards Afghanistan.

Indeed, the two terms of the Congress led UPA governments have seen a very limited approach towards Kabul involving limited amounts of manpower and money.  Prime Minister Manmohan Singh’s “reset” last May and the trade and security agreement  passed in October were steps in the right direction, but not enough to address some of the systemic problems facing Afghanistan. To remain as a functioning state, Kabul will need significantly more support from India. Needless to say, the NDA government wasn’t any better; previous Prime Minister Atal Bihari Vajpayee had a tepid policy towards Afghanistan, even in the days following the beginning of U.S. operations in 2001.  Undoubtedly, the frosty relationship with Pakistan drives any possible policy considerations, but the solution will lie in a broader strategy of engagement.

As Harsh Pant of Kings College London argued last year, many Afghans view India’s role in the country as a positive one, and the policies of development aid and investment have yielded many dividends among the citizenry. Soft power, as Shashi Tharoor said to the Council on Foreign Relations, will triumph in Afghanistan, and India needs to strengthen such policies in the coming years. This can ensure long term economic growth for Afghanistan, and can assuage Pakistani concerns of militarization across their northwest border. If that goodwill isn’t built upon, and instead wasted in political gridlock, New Delhi’s standing in the region would be severely compromised. Regional stability that has been sorely lacking in South Asia would continue to be forestalled.

A divided government would also not be able to address the emerging issues coming from the states surrounding India. As The Economist noted last year, India’s poor relations with its South Asian neighbors, including Bangladesh, Nepal and Burma prevent it from “soar[ing] globally while mired in its own backyard.” Even as recently as this past February, Reuters described the border of India and Burma in the eastern state of Manipur was teeming with violent gunmen and conflict. Trade with Bangladesh is limited, and relations with Nepal have been long complicated because of India’s shadow. As Rajiv Bhatia noted, relations with neighboring countries are“not a priority for our politicians.”

Perhaps seeing New Delhi’s indifference, China has expanded its diplomatic efforts towards South Asia. Last year saw the Chinese expand its relations with countries including Bangladesh, Burmaand Afghanistan, with a clear intent on securing good relations and economic linkages. As President Obama has noted in the administration’s heralded “pivot” towards Asia, a rising India is a component of this strategy. Unfortunately, through its inaction and political navel gazing, Delhi is being quickly left in the dust.  Though the costs may not be directly evident, India could risk losing more than just its influence; it could end up behind in key geopolitical contests for resources, trade agreements and diplomatic support within international institutions. 

Of course, India’s power isn’t determined solely by its international standing, but also its economic prowess. Should 2014 deliver a hung parliament, trust and investor confidence in the government and political system would be shattered. One of the components of India’s post-1991 growth has been the relative stability in Indian politics, with either of the two parties ruling the country. Through this relative stability, investors and policymakers  have had a general idea of the direction of India’s political and economic trajectory.  The aftermath of the recent assembly elections showed how investors saw the added political risk. Both the SENSEX and the Rupee fell in trading immediately following the announcement of the results. Compounding this loss of faith would be a drop in India’s credit rating. Standard & Poor’s recently cited the possibility of a negative outlook in the near term, a situation whose probability would surely increase with an obstinate Lok Sabha.

India can’t afford a loss of investor confidence at such a critical time for its economy. As many outlets have reported, the Indian economy is slowing down, and further global instabilities from possible oil shocks, higher inflation or the turmoil from the continuing aftermath of the corruption scandals would only scuttle growth.  Businesses are already becoming increasingly wary about expanding their operations within India, and would surely be tempted away towards greener pastures. Without adequate reform, many of the advantages that India developed could be lost to other upcoming competitors.

Last week’s elections in Uttar Pradesh were a warning sign from voters, who believed that neither party had the drive or motivation to enact the policies necessary to address the coming challenges. Both sides need to establish better leadership and accountability over the biggest issues that will make India into a great power, or hold back its development. Whether the solution involves reshuffling leadership, adjusting the strategic focus of both parties, or reestablishing a connection with voters, the answer is clear: ignore the issues facing the country, and India’s global rise will be compromised for generations.

Kedar Pavgi is an international relations analyst and journalist based out of Washington D.C. He blogs on his site The Couch Economistand for the Foreign Policy Association. You can follow him on Twitter @KedarPavgi.