“The Private Sector Is India’s True Face – Open, Pragmatic”

Indian-born, Harvard-educated Fareed Zakaria is an award-winning journalist and editor of Newsweek International. He is also an author, columnist and broadcaster. His column on international affairs, World Views, is widely circulated; his recent book is The Future of Freedom: Illiberal Democracy at Home and Abroad, and he hosts a weekly current affairs show on ABC Television. Esquire described him as "one of the 21 most important people of the 21st century". The buzz is he might be the first Asian-born US secretary of state. Excerpts from the interview follow.

Do you think the rise of India and China accentuates the need for America to engage the outside world better? Do you feel there is a better understanding of India and the changes it is undergoing now?

America is a vast continental nation surrounded by two large oceans and two weak neighbours. But because of its dominant position in the world, it’s crucial that it better understand what’s going on abroad. The problem in America is not at the elite level. Professionals in Washington, policy wonks and journalists often know a great deal about the world. There is probably more concentrated talent on international issues in Washington than in any other capital. But there is a huge gap between these people and the American people. Look at issues like outsourcing, immigration, relations with China and you will see a yawning gap. My television show is an attempt to bridge this gap.

Americans like India. The more they see of it, the more they like it. Both countries are large, messy, noisy democracies with diverse populations and a commitment to diversity and tolerance. But Americans may not like where India stands in the global economic realm, a source of cheap and high quality labor in an increasingly connected world. As long as the first perception is strengthened, the second should not prove too troublesome.

The US and China are already bumping heads on several issues, most recently during Chinese oil major cnooc’s failed bid for Unocal. How will the US deal with the rise of China?

China is not the Soviet Union. First, it is flourishing economically and will in all likelihood be the world’s largest economy in two decades. Second, it does not seem likely to confront the United States in a political-military sense in the next few decades. But it will position itself in a way that tries to weaken American influence in the world, particularly in Asia, by developing strong ties of its own. You can see this in Southeast Asia, where China has gone in a few decades from being the great threat to the great opportunity. This is an economic, political, diplomatic, and even cultural challenge. It has to be countered in a subtle, sophisticated way. Rather than bellowing about the China threat, America should be carefully and quietly strengthening ties with Japan, India, and other key Asian countries. It must also recognize that China will benefit from

perceptions that the United States is aggressive, arrogant and imperial in its dealings with the world. As Theodore Roosevelt once said, America should speak softly and carry a big stick.

In this context, there is a view that the US will help India’s development. What will its priorities be for India’s development? What will be its spinoffs for the region?

The United States helps India enormously by doing one crucial thing, keeping its market open for Indian goods and services. That is worth more than all the foreign aid and technology tie-ins in the world. The rest is really up to India. And India should focus on what it can do to prosper. For too long, the Indian government has looked to others to deve-lop economically.The answers are all at home.

You have often talked about the dark side of globalization, or the need for "shock absorbers," to soften its impact in the context of developing countries.Do you think the rise of India and China has brought the dark side of globalization into the fore ground in the US?

India and China actually highlight the bright side of globalization. In the last thirty years, since India and China have moved towards markets and embraced globalization, more people have been moved out of poverty than in the previous six decades. That’s a massive accomplishment.

Of course, globalization has a dark side. It increases development, which means pollution, urbanisation, sprawl, building, and the destruction of communities. But that cannot mean one wants to stop development. It is scandalous that urban intellectuals, living privileged lives, want to stop people from getting out of poverty.

The intelligent discussion is about what kind soft shock absorbers and safety nets one can put in place that allow for the creative energy of capitalism but minimise its downsides. It’s a case-by-case process. I don’t believe there is any one thing that one should do. Above all, you need competent and honest government. But that’s a tall order.

The danger in India is that this becomes an excuse for protectionism and political payoffs. Giving rich farmers free electricity is not a shock absorber. It is a bribe for votes. It means the poor get less attention and resources. The great tragedy in India today is that the rhetoric of poverty alleviation is used to justify policies that benefit the rich and well-organized. What the poor need more than anything else is a functioning economy and a government that is not bankrupting itself in buying votes.

The recently signed nuclear energy deal between India and the US is symbolic of the new warmth between the two countries. But it is not likely to get an easy passage through Congress. What do you make of the deal?

The nuclear agreement is a milestone that should pass. International institutions and regimes must reflect the realities of power. India is a major global player and it is not going to dismantle its nuclear program. It has also been extremely responsible with that program, there is not a single allegation of proliferation out of India. The administration has generally handled relations with India very well so I am loath to say they need to do more. They are working on passage through Congress and I think it has a good chance of passage.

After the tsunami you had said that India’s development mirrors that of the US, with society making up for the failings of the state. Now, with similar crises hitting Mumbai and New Orleans, how do you look back at the comment? Also, why do you think we did not see scenes of violence, looting etc in Mumbai like we did in New Orleans?

One of the things that puzzles the world about America is that constitutionally and ideologically, it believes in a small central government. This is not true in the area of defense, of course, where it is a mighty empire. But within America, the federal government is one among many actors. This contrasts markedly with countries like France, China and Japan. (India has had the ideal of federalism but the reality of an oppressively strong central government.)

Why the difference between Mumbai and New Orleans? First, the hurricane was a much larger phenomenon than the floods in Mumbai. Second, Katrina hit one of the poorest, worst managed, and dysfunctional parts of the United States. And finally, America has been disinvesting in government—both in terms of money but also energy, attention and prestige—and the result is that government doesn’t function that well, particularly in places like Louisiana.I think Katrina might change things but it will take decades.

You talk in your columns about the momentum that India’s development has generated but you also talk about how "messy" it is.Does that also parallel growth in other countries? We have a microcosm of the globalization debate within India, with increased polarisation. How do you think that can be addressed?

If you mean the polarisation between rich and poor, that has not sharply increased in India. One gets that impression because of the new billionaires but the data suggests that inequality in India is not up sharply. India does face certain challenges in common with other developing democracies. How to get government to focus on long-term development? How to get it to inflict some necessary short-term pain for long-term gain? The Indian government needs to invest much more money in education, healthcare and infrastructure. But it doesn’t have the money to do this because it is too busy subsidising voters.

Brazil, South Africa, Turkey, Thailand, all face similar challenges. Alas, I have to say, most governments have been able to do a better job at it than India has. Indian growth is taking place because of the enormously energetic and inventive private sector. It’s actually incredible to see how competitive it is able to be in an environment that is still quite unhelpful.

Do you think India’s soft power, i.e. popular culture, etc, is having a stronger impact in shaping perceptions of it and the image of a new India than official diplomacy?

I think Indian society has been a better ambassador of India than the Indian state. For too long the public sector presented an image of India that was arrogant, verbose, ideological, and closed to the world. In particular, the Indian private sector has represented the true India—pragmatic, forward-looking, diverse, open to the world. That said, the current PM is probably the most progressive, intelligent, decent and thoughtful messenger India could possibly have. Whatever the limits of his power at home, he has been a superb face of India abroad.

More than four years after the war on terror began, when do you think we will know it has ended? After several "mission accomplished" moments, when will the US declare victory?

It’s not a war in that sense and it may be a misnomer to use the term. It is a war more like the Cold War, a political-ideological struggle between the forces of modernity and medievalism in the Islamic world. It will take decades but I believe the right side is winning. We will know victory when most of the Arab world is ruled by reasonably open regimes that give their people something to live for. That kind of political and economic system will drain off the extremist opposition that feeds terrorism. For example, if Pakistan continues to open up and modernise economically, and then makes similar moves politically, I believe its fundamentalist forces will get smaller and smaller. These people have no answers in the modern world, only rage and hate. That doesn’t sell well in a country that is on the move.

If you were the secretary of state, how would you deal with India and Pakistan, and India-Pak relations?

Carefully and in a balanced way. Now, how is that for a diplomatic answer?