Observer, New Delhi, December 14, 1991
more to cooperation than sushi, golf and nightclubs
intelligentsia in Japan seems to be unable to understand the
‘liberalisation’ taking place in the Indian economy.
Confronted with the Marxist rhetoric in Indian academic and
media circles, the Japanese perceive the social and
political realm in India as a stronghold of socialism and
unproductive economic policies.
prime minister Narasimha Rao and finance minister Manmohan
Singh have pronounced on the obsolescence of centralized
planning, yet our officialdom has not been able to frame a
credible case of India’s economic logic. The climate of
opinion at the highest level in New Delhi may have changed,
but in Tokyo, India is still perceived as a country where
people believed in the idolatry of socialist, if not
Japanese economist remarked “Narasimha Rao and Manmohan
Singh’s economic goals are laudable, but their methods are
unsound.” Indian officials still nurse nostalgia for
left-wing ideas. Their defence of India’s economic
distortions appears to the Japanese mind as both frivolous
and silly. It would be wiser for India to emphasise the
bold reversal of her ideological direction in favour of the
economic diplomacy needs a more realistic approach. We must
tell the Japanese at all levels that we wish to emerge as an
important actor in the world market and that we
wholeheartedly endorse the spread of liberal economic ideas
in the developing world.
realize that the Japanese are not going to be fooled by the
manipulated meanings we love to give to socialism in our
political discourse. If we continue to use the idiom of
Leftist-state economics, we are likely to lose the support
of those in Japan who are in favour of recycling surplus
money to India.
conceptual framework for bilateral trade and economic
relations between India and Japan cannot be realized by the
outmoded liturgy of the cult of central planning, state
ownership and collectivism. If we do not grab this
opportunity to break away from the old ethos in our economic
dialogue, there may not be another chance. We must project
Indian investment policy as a logical scheme which entails a
qualitative transformation of Indian economic life. A
broader and qualitative improvement to the Indo-Japanese
relationship cannot result from mere government-level
exchanges. It requires a new relation between politics and
economics, going beyond the recalcitrant Indian bureaucracy,
to deal specifically with social pathologies through
higher-levels of policy unification.
In his book,
The Business of the Japanese State, Richard J Samuels
forcefully points out that the transactional nature of
Japanese government-business relations is enduring because
the political stability of Japan’s national institutions is
an undisputed reality. He also explains that Japanese
firms have full control over the markets which is respected
by the state and they, in turn, accept the jurisdiction of
the state over the markets. The Japanese economic miracle
has been helped by this “reciprocal consent” between the
state and private business.
guideposts must be developed for issues like foreign aid,
market access, and capital and technology transfer. For
this, Indians do not need to attempt philosophical forays.
A great deal
will depend upon the ability of the Indian think-tanks to
establish dialogue with advisory and research groups in
Japan who have a crucial role in creating homogeneous
economic and political values.
economists, political scientists and business management
specialists will have to give up rigid paradigms of
thought. India simply does not have, at present, anything
resembling the intellectual enterprise which has sustained
the Japanese economic miracle. Indians must pay attention
to the way in which Japan has created a particular kind of
political and economic culture which sustains its market
quite a few areas, both in private and public life, where
action is necessary for optimizing Japan’s involvement in
the Indian economy. First, India should take advantage of
the ‘Asia first’ approach of the Ministry of International
Trade and Industry, which is animated by an overwhelming
concern for an Asia-wide economic resurgence.
failed to “look East” and has not shown any comprehension of
the geo-political and economic dynamics of the Asia-Pacific
region. A case in point is the flawed Indian policy towards
APEC which is emerging as a full-fledged economic community.
India should give up its ostrich-like attitude on the
question of fund-raising efforts in Japan’s securities
market. If we are serious about using private enterprise as
an engine of Indian prosperity, there is no point in
maintaining a low economic profile on the Japanese economic
A good way
to re-condition ourselves psychologically and economically
in Japan would be to enter the banking and capital market
with Samurai Bonds – yen terms bonds to be issued by India.
reason to believe that the Export-Import Bank of Japan would
be sympathetic to a much bigger role for individual private
loan extensions for helping Indian firms.
revitalized Indian economic system in which the relationship
between capital and labour is not perceived in terms of
antagonism would help to create a social and intellectual
climate for both direct investment and financing of private
industrial enterprises in India and for Indian investment in
the Japanese securities market.
fervour in Japanese governmental and business circles for
protection of environment in the developing world has to be
given due regard. India should ask experts to review Indian
projects from the point of view of protection of environment
and make proposals to Japan as part of a broad
environment-friendly strategy. This will not only help
return India to the call of conscience, in Gandhian terms,
but will also help move economic levers in Japan.
India must understand Japan’s concern about the division of
the world into economic blocs. At a time when Japan’s
Official Development Assistance (ODA) payments total more
than $8,900 million, and when it has become the main source
of world’s purchasing power, Japan is greatly agitated by
the trends which contradict the universalist framework of a
free and open global system.
socialist sentiments do not usually translate into global
visions, and Indian bureaucrats and administrators have an
inbuilt tendency to support artificial divisions.
therefore, imperative to study the broader implications of
supporting Japan in the struggle for an open global system.
India should build a network of trust with Japan and other
countries wishing to remove the deadening hand of
bureaucracy on international economic life.
It is time
New Delhi started serious negotiations with Japan, not only
in the economic sphere. Both countries should be natural
partners in the peace process in Asia and the world.
Step-by-step political negotiations will help reinforce the
democratic partnership between the two countries should be
emphasized as also the international dialogues which go back
to Subhas Chandra Bose and Radha Binode Pal.
countries have also to make a realistic assessment of their
future roles in the UN system, possibly as permanent members
of the Security Council. They can make joint proposals to
strengthen Prince Norodom Sihanouk’s position in Cambodia
and to counter Kim Il Sung’s efforts to unleash nuclear
terror in north-east Asia. India must support the return of
Kurile Islands to Japan and use its influence with Moscow.
India-Japan relationship is full of potential, both in the
economic and political aspects and, above all, in its