New hurdles in a changing world

We have been so preoccupied with domestic events capped by the demonetisation surprise in 2016 that we have not stopped to ponder over the tempests in the Western world. These events will have a major bearing on India’s progress and ranking in the world.

First there was Brexit, Britain’s decision to leave the European Union in a referendum, a club it had tried to enter, despite initial rejection. Then the biggest surprise of all: Donald Trump’s victory in the US presidential election. This came against the backdrop of a populist wave that brought support to far-right parties in Europe. Globalisation became a dirty word and the new vogue was nationalism, often with a racist tinge.

Brexit, which led to Prime Minister David Cameron’s resignation and the rise of Theresa May, boosted Eurosceptics on the continent. One of the greatest achievements of the post-World War II world, the EU, is being badgered by the far-right — France’s Marine Le Pen of the National Front, the Alternative for Germany Party and the growing popularity of the Italian populist Five Star.

The concept of a new Europe putting two world wars behind it is now being defined in the colours of narrow nationalism. What is worse, the democratic underpinning of the EU is being blatantly questioned by at least two of its members, Hungary and Poland. The former’s leader Viktor Orban has publicly favoured “illiberal democracy” and has an enthusiastic pupil in the latter’s Law and Justice Party. These grave transgressions have provoked mild rebuke from Brussels because the EU does not have the will to call them fully to account.

The biggest impact on the world will be of Mr Trump’s victory, which promises to unhinge established American policies although the President-elect has chosen to define them in the most vague terms. His “America First” slogan with a strong accent on keeping and creating US jobs has led to an atmosphere exploited by jingoists and racists in a country built on immigration.

The problem for India and much of the world is that in view of America’s sole superpower status, with China breathing down its neck, Washington’s actions do matter. Prime Minister Narendra Modi spent considerable time and effort making his number with President Barack Obama. Now he has to start the process with a new President all over again. A breezy conversation Pakistan’s Nawaz Sharif had with the President-elect needlessly caused palpitations in India. Mr Modi should also keep India’s relations with Moscow in good repair.

There are, of course, valid causes for Western nations’ deep dissatisfaction with the ruling elites. At the basic level, poor peoples’ income has dipped, salaries of the middle class have stagnated and the rich have become vastly richer. Europe has largely been in recession after the boom years. Masses of refugees from West Asia and other wars flooding their countries have accentuated a feeling of helplessness.

The unpalatable truth is that globalisation is here to stay and Mr Trump’s refrain is unsustainable because even if American industry stays at home, it would employ robots, rather than human beings, to cut costs. Besides, the production chain of modern manufacturing stretches around the world: an Apple mobile telephone’s provenance, for instance, is shared by several countries.

On the other hand, narrow nationalism offers solace to Europeans, with far-right parties gathering more votes in regional elections. Marine Le Pen is confident of going into the second round in the presidential election later this year. Germany’s Alternative for Germany party has done remarkably well in regional elections. And Italy’s Five Star movement has improved its vote share.

The changing Europe can perhaps be best captured in German Chancellor Angela Merkel’s changing fortunes. She is seeking a fourth term and is facing new opposition in an election earlier viewed as a sure shot. She is identified with the open door policy on refugees — Germany took in nearly a million last year — and there has been a backlash, exacerbated by incidents of terrorism, most recently by a Tunisian asylum seeker rejected by the authorities driving a truck through a Christmas crowd in a Berlin market, killing 12.

India must find its bearing to negotiate in an evolving world. It has to rely to a greater extent on bilateral trade deals. But there are hurdles along the way. As British Prime Minister Theresa May’s India visit revealed, the desire for greater trade comes up against the United Kingdom’s aversion to having more Indians, with tightening visa restrictions on professionals and even student visas. For obtaining a visit visa for ordinary Indian passport holders in Delhi, it is purgatory and the vast sums demanded for long-term visas favour the rich.

Immigration was a major issue that swung the referendum vote against the EU and Ms May is sensitive to it although Britons’ main grouse is the number of poorer Europeans making their home in the UK. Somewhat like the old migrant communities from Britain’s former empire, the continentals have formed their own enclaves complete with home food establishments conducting business largely in native tongues.

As India and the world enter 2017, the need of the hour is an in-camera brainstorming session of the country’s experts in and out of office. Thus far Mr Modi has attempted to cultivate close relations with US President Barack Obama even while trying to pierce the diplomatic armour of two hostile neighbours. India-Pakistan relations are still hostage to the tangled history of Partition and the 1971 Bangladesh War while China is happy living with an unsettled border because it believes its bargaining position will improve with growing military strength.

In a sense, Mr Modi is a loner in taking major decisions like his imaginative sudden trip to Mr Sharif’s home in Lahore on his birthday a year ago, despite its failure to yield lasting results. But a changing world has become more complex and the limited pool of foreign service advisers need all the talent the country can provide. It is time to act.