Poverty: Common Enemy of India and China

One term which had gained much currency in the first decade of the new millennium was “Asian Century.” The term represented a promise, a prospect and a goal; and, almost invariably, was used with optimism. For a while, it was as evocative as the term “21st Century” was in the 1980s, replete with visions of new vistas of life, living and development far removed from the poverty, deprivation and tribulations the world’s oppressed majority suffered in the 20th century.

When the 21st century was actually upon us, much of the romantic yearning for it had ceased. Similarly, invocation of the term “Asian Century” ceased to resonate with the robust aspirations it brought to mind. It came to be used less frequently, especially in capitals such as Beijing and New Delhi. In the last few years, Asia’s movers and shakers seem to have all but abandoned both the phrase and the promise held out by its usage. If there are any who continue to nourish hopes of an Asian Century, they keep it concealed. Even those striving for it have stopped uttering what has become an empty cliché and mocks the impoverished people of Asia, particularly of India and China, which dined out on the term at the world’s high tables.

The Asian Century meant different things to different countries. However, there was a general agreement that it would mean the end of the American Century and a global power-shift from West to East. And, when the world’s centre of gravity moved from the western to the eastern hemisphere, then Asian powers China and India would emerge as the twin drivers of the new international order. The global financial crisis of 2008 – which saw Western capitalism in a funk, India bucking the downtrend and China riding high on three decades of turbo-charged growth – further fed these aspirations of an Asian Century.

Although the Asian Infrastructure Investment Bank (AIIB) has been launched, and the IMF has included the Chinese RMB in the SDR basket as a fifth currency along with the US dollar, the British pound, the euro and the Japanese yen, there have been no game-changing moves towards reform of international institutions, particularly the prevalent financial architecture.

However, as much as international structures, there are serious internal challenges that hold back the continent, especially India and China, from taking any effective steps for bringing about the Asian Century. In their preoccupation with seasonal ups and downs of the economy, the market, the investment cycles and the currency, China and India tend to lose focus on the common, and central, challenge facing the two countries, namely: poverty and inequality. This is a challenge facing Asian economies, which is made worse by the disparity within countries, between countries and even within prosperous regional forums such as ASEAN.

It is imperative to address this rich-poor divide – which is actually deepening– within and between Asian countries, for there can be no Asian Century unless and until the gap between advanced Asia and developing Asia is reduced to acceptable levels.

The avowed pursuit of an Asian Century, howsoever presumptuous, meant that the Asian giants could neglect poverty in their country and the region only at their peril. There was a time when, as much as India, China and international organisations, the problem engaged thought leaders such as Nobel laureates Amartya Sen, Martha Nussbaum and Joseph Stiglitz. The discourse on elimination of extreme poverty in India and China in the foreseeable future was visible and inspiring, and commanded as much attention as the political priorities of the season. That is no longer the case.

Today, the climate for sustained focus on fighting poverty seems to be changing, and for the worse. At this juncture, it may be pertinent to recall what India’s Finance Minister Pranab Mukherjee had said a few months before he became President. Setting the tone for a two-day expert group discussion on the “Role of India and China” in the Asian Century, Mukherjee, who had also served as External Affairs Minister, said: “To gain in unison, we must act in unison. Even in existing multilateral fora, including the G-20 and the IMF, we should aim to coordinate more in areas where there is significant collective gain to be achieved.”

Although he did not explicitly mention China, clearly Mukherjee was making a strong pitch for greater India-China cooperation across the continent and on the world stage. He cited poverty and inequality as the common challenge facing Asian economies. The underlying assumption in such exercises is that the enormity of the issue – poverty – would compel India and China to find answers to the hard questions which haunt bilateral relations; and, generate new impulses for greater cooperation to advance the interests of Asia and developing nations.

Closed-door discussions of India-China cooperation always bring to the fore two realisations: One, that to take advantage of the global centre of gravity shifting to the East, the Asian giants must join hands. Two, coming together and moving forward in tandem requires greater trust. The latter implies a recognition that several initiatives of New Delhi and Beijing to dissolve the existing distrust have not succeeded.

Despite the good rapport between the political leadership, successful bilateral visits and booming trade, recurrent strains in the relationship prevent cooperation in combating poverty with resolve and vigour. The mutual distrust is unsettling enough to preclude any joint effort to end poverty in the world’s two most populous countries. Yet sooner than later, China and India need to dissolve the distrust, resolve bilateral disputes and come to terms with each other for eliminating poverty in their respective countries and in Asia. Only when the two countries accept this global responsibility, can they hope to take the first steps towards ushering in the Asian Century.

The author is Senior Consultant and Editor of China-India Dialogue, CIPG.

Published in the ISSUE 3 of CHINA-INDIA DIALOGUE