INDIA, A GROWING SUPERPOWER: THREAT TO US?

At this moment in world history, China and India are pushing for recognition and status on the global stage. They are beyond the phase of suppression or containment by the United States and its Western allies. Former Singaporean diplomat Kishore Mahbubani's new book The New Asian Hemisphere. The Irresistible Shift of Global Power to the East describes an untenable situation in which Asia is growing heavier in power scales while the West is obstinately unwilling to accede to a bloodless transition to a fresh world order.

The author's thesis is that Western societies are apprehensive about Asia's galloping modernization. Instead of celebrating Asian resurgence, Westerners fear that the undemocratic world order built to sustain their domination will be overthrown by it.

Ironically, Asia's boom is founded on "pillars of Western wisdom" like free market economics, science-driven technological innovation, meritocracy in handling human capital, shunning of ideological rigidity, sanctity of contract, property rights, and quality higher education. Indian and Chinese self-belief that they, too, "can be world-class" comes from judicious adaptation of these Western elixirs of enrichment.

If we talk about India, a much-cited 2003 study by Goldman Sachs projects that over the next 50 years, India will be the fastest growing of the world's major economies (largely because its work force will not age as fast as the others). The report calculates that in 10 years India's economy will be larger than Italy's and in 15 years will have overtaken Britain's. By 2040 it will boast the world's third largest economy. By 2050 it will be five times the size of Japan's and its per capita income will have risen to 35 times its current level.

In 2007 a new research from the McKinsey Global Institute (MGI) said that within a generation, India will become a nation of upwardly mobile middle-class households, consuming goods ranging from high-end cars to designer clothing. In two decades the country will surpass Germany as the world's fifth largest consumer market.

And if the Indo-US nuclear deal comes clear, it may not take that long either. In wake of the Indo-US nuclear deal, the centerpiece argument made by the Indian government on behalf of the nuclear deal is that it would usher in a bright new era of nuclear power generation and motor India's economic growth. Nuclear power currently contributes to barely three percent of India's overall energy production and is expected to reach nine percent only by 2016, provided deals with Washington and the rest of the Nuclear Suppliers Group (N.S.G.) go through.

While all of this may be true, in a clear indication that India dominates the outsourcing business in the world, a Forbes magazine survey says that five of the seven billionaires whose primary source of wealth is outsourcing are Indians. This year, thirteen Indian companies, along with a growing number from Russia and China are crowding out traditional occupants in a prestigious list of the world's most valuable companies. Despite obstacles such as poor infrastructure the strides India is making has left the US concerned over its super-power crown.

A recent PBS Now program showed the new face of increased consumerism in India with examples such as a farmer's son joining Infosys and buying a microwave from an upscale mall only to be placed adjacent to an earthen pot (matka) in his parent's traditional Indian kitchen. The point made was how an average Indian could easily afford luxuries so far restricted to average Americans and how that was a threat to US, which worried over countries like India and China using up world's resources. US indeed has every reason to feel threatened simply because it has so far been used to consuming maximum natural resources such as oil, gas and food. As it is, battling the economic slowdown and war in Iraq has taken its toll on the US exchequer However it fails to see the opportunity that the growth in India offers to the US manufacturing industry. Rather the reason why South Asian economies are doing better even in these troubled times. In case of the US much of the economy in the past has been built on housing sales, automotive and service industry. To have a thriving and growing economy you have to have a strong manufacturing base, which is where India, China and other Asian countries are winning the game.

Besides US has its own battle to win against recession and depleting dollar value. In 2007 the American Gross Domestic Product grew 2.2% to $13.8 trillion but since the American dollar is worth 18% less than last year in reality the American economy actually took a huge hit. So when you think about it the US economy actually shrunk by roughly 16% in 2007 compared to the rest of the world. The United States government is currently running a budget deficit of $1.8 billion/day. The US National Debt is $8 trillion+. It has to be paid back eventually by raising taxes. Of course the global recession hasn't spared India either. India's corporate sector is nervous about spiraling inflation that hit a 14-year high of 11.42 percent in the week ended June 14, but feels there could be moderate recovery in the medium term, said a survey by an industry lobby. The latest quarterly business confidence survey by the Federation of Indian Chambers of Commerce and Industry (FICCI), said 64 percent of the 413 companies questioned felt current economic conditions were the worst in the last six months.

Both countries have their own set of issues to deal with but one thing is sure: A resurgent India is on its way up and US sure needs some reality check. At least it needs to get over the notion that no other country can wrest its position. The world could be safer and less violent if the West could learn to work with, rather than against, Asia's renaissance.

- Editor