Davos 2020: Ian Bremmer Says India’s Image Has Taken A Hit From Modi’s Nationalist Policies
India’s perception around the globe has taken a hit since Prime Minister Narendra Modi prioritised Hindu nationalist policies over economic reform. That’s according to Ian Bremmer, political scientist and founder of the Eurasia Group.
“In his first term, the priorities were very clearly about economic reform at the high level. And also bringing up the poor people at the low level,” Bremmer told BloombergQuint on the sidelines of the annual meeting of the World Economic Forum in Davos, Switzerland. “Now we see that those things still exist but they aren’t as high priority as Hindu nationalism that’s really helping drive the country—driving Modi’s base, but also driving India farther apart, creating polarisation.”
That clearly isn’t good for the Indian economy.Ian Bremmer, Founder, Eurasia Group
In the U.S., particularly, Bremmer said that both sides of the political spectrum find Modi’s policies problematic. The Democrats, Bremmer said, are concerned about the human rights violations in India which are drawing comparisons with the Chinese treatment of the Uyghur Muslims. “That’s ridiculous for a country with democratic institutions, checks and balances like India.”
The conservative Republicans, particularly defence manufacturers are concerned about India buying S4 missile systems from Russia, he said. “And of course, anchors of U.S.-India economic cooperation are in the defence sector. So I think for both sides the Indians have taken hits from the U.S.”
In their annual report of top risks for 2020, the Eurasia Group had listed Prime Minister Narendra Modi’s policies as the fifth biggest risk to the global economy. The report said that Modi’s “controversial social policies” will lead to higher sectarian and religious conflict in the year. That, the report said, may also spill over to India’s foreign policies.
Bremmer noted that Modi moved away from his economic policies, that had won him plaudits during his first term, and leaned into Hindu nationalism to get re-elected in an election where he wasn’t expected to secure a majority. “He’s done that with Kashmir and more recently done that with the issue of citizenship. And of course, anti-Muslim policies and orientations, particularly by his Home Minister.”
Why U.S. Election Is Top Global Risk
Bremmer said that U.S. election is the biggest risk to the globe because whoever wins it will trigger a period of uncertainty for the world’s largest economy. “If he (Donald Trump) wins and its close, the Democrats will say it’s delegitimised. If he loses and its close, Trump will say it’s delegitimised.”
But that will mean for weeks or months no one will know who’s the U.S. President. “It will become a legal battle. It will go to the Supreme Court. There might be social instability. This is not something you see in U.S.”
Bremmer also credited Donald Trump for the way he has handled Iran. Trump’s move (the killing of Iranian General Qassem Soleimani) has forced the Middle-Eastern nation to try and wait out the U.S. elections and hope that he loses.
“Because if you get a Democrat president then you’d be willing to go back to terms of the old deal. Which of course the Iranians were actually living up to the terms of. But that’s not the case,” Bremmer said. “Demonstrations inside Iran will grow so there’s the potential you actually have real crackdown and the reformists are forced out. Or the Iranians come to the table, Trump gets a big win and he actually gets a better deal than what Obama had done. That’s actually possible.”
WATCH | Full interaction with Ian Bremmer at WEF Davos 2020
Here is the edited transcript of the interaction...
Let’s start with the U.S.-Iran tensions. Things don’t seem to have escalated as badly as people had estimated.
Not even close. They de-escalated. The fact that when the U.S. decided to respond, and they hadn’t responded for six months, their tankers were getting hit in the Strait of Hormuz, you had the drone being knocked down, you had the Saudi oil facility hit by Iranian missiles and Trump did nothing. When Trump did respond, after the base getting hit and the Baghdad embassy being attacked, he responded quite strongly. At that point the Iranians understood what the red lines were. Iran may be an opponent of U.S. but they aren’t suicidal. And they deescalated dramatically. Clearly, that was going to happen. The fact that Iran knocked down a civilian plane, an incredible tragedy, a huge mistake and then lied about it, has put them under even more pressure, including from American allies in Europe and Canadians, who had been sympathetic to the Iranian position on the nuclear deal. They’re under a lot of pressure right now. But they are not going to come and attack the U.S. any time soon.
So where does this go from here?
The Iranians try to wait out the U.S. elections in November, maintain social stability. And hope that Trump doesn’t win. Because if you get a Democrat president then you’d be willing to go back to terms of the old deal. Which of course the Iranians were actually living up to the terms of. But that’s not the case. Demonstrations inside Iran will grow so there’s the potential you actually have real crackdown and the reformists are forced out. Or the Iranians come to the table, Trump gets a big win and he actually gets a better deal than what Obama had done. That’s actually possible.
And that’s wonderful for him in an election year.
Well, the deal’s not going to come before the elections. But from that perspective it doesn’t matter. But let’s be clear, he just gave a speech that was kind of a victory lap. He was talking mostly about the economy and the China deal but he was also talking about Iran, he was also talking about killing ISIS’s terrorist head. There are some foreign policy issues where he can say legitimately that he’s actually had some successes on. There are others where he’s had failures and he’s not paying attention to those. But, generally speaking, he has a list and he is now in reelection mode.
This outing of his in Davos has been received much better than the one two years ago.
Oh, much better. You feel it. There’s no question. He only got one applause line where he talked about planting a lot of trees which is not a priority of his. But when you talk to the delegates, particularly to the corporates and investors, the people watching your show, these are people who feel much more comfortable with Trump now than they did three years ago. They are people who feel more comfortable with Trump than they do with Elizabeth Warren or Bernie Sanders. And I think, and we have to understand, this is not a reflection of the American society but it is a reflection of a group which is closer to Donald Trump’s agenda than say Greta Thurnberg’s. It’s much more close to Donald Trump’s agenda than those who oppose the globalism that Davos actually stands for. And that’s an interesting point. Politics is making very interesting bedfellows here.
You’ve listed U.S. elections as the top risk in your global risk report you release a few days ago. You said you’re not sure that either side will accept defeat whichever side loses. And that is going to be a stalemate. What do we make of? What does it mean for American democracy, society and its leadership of the world?
You didn’t ask me the impeachment question? He was giving his speech here and the Senate was advancing impeachment. All of the votes went down, 53-47. Why because the Republicans are all voting together. So impeachment is going to fail. And its going to fail despite the fact that Trump has clearly committed abuses of power to try to help ensure that he wins election. Once impeachment is broken as a political constraint on the American president what’s going to stop him in continuing to abuse that power in the run-up to 2020? If he wins and its close, the Democrats will say it is delegitimised. If he loses and its close, Trump will say it is delegitimised. We are entering in unprecedented territory. Why U.S. election is the top risk? Because it is the world’s largest economy.
But what happens then?
It means that for a period of weeks or months we’ll not be sure who the President is. We are not going to be quite sure how America is governed. It will become a legal battle. It will go to the Supreme Court. There might be social instability. This is not something you see in U.S. Even with Gore-Bush. It went to the courts but both sides were prepared to accept the outcome of the courts. This will be a little more challenging.
So I wonder what that means for the second and third risk in your report which is China and U.S.-China decoupling. I am curious that if American leadership is under a cloud what does that do for China’s status in the world?
We do see, after 50 years of Davos, that we’re now seeing a tipping point in globalisation. The tipping point comes because of the decoupling of China from the U.S. in technology and data. Unlike in trade, where we are competitors but we both ultimately want to cooperate. We want to trade more. On AI and data we actually want each other to fail. It’s become a zero-sum battle with the two largest economies of the world in the part of the economy which is the most advanced and growing the fast. Obviously, that’s not a good thing for the future of the economy and in terms of where global conflict goes. A lot of countries, including India, will have to decide where they align technologically. And Indians do not want to decide between U.S. and Chinese technology. It is a bad position for you to be in.
Speaking on India, you’ve reassessed your view of PM Modi and his ability to carry out economic reform. You were a lot more optimistic before in his first term and now you think differently.
Of course the Indian economy isn’t growing fast. We saw the IMF downgrade them more than any other major economy of the world on the back of that. And in order for Modi to win a majority that very few thought he could pull off in the last election, he moved away from some of those economic reforms and leaned into Hindu nationalism. He’s done that with Kashmir and more recently done that with the issue of citizenship. And of course, anti-Muslim policies and orientations, particularly by his Home Minister, 14 percent of Indian population. So I haven’t become anti-Modi, I wasn’t pro-Modi before but before in his first term the priorities were very clearly about economic reform at the high level. And also bringing up the poor people at the low level.
Now we see that those things still exist but they aren’t as high priority as Hindu nationalism that’s really helping drive the country—driving Modi’s base, but also driving India farther apart, creating polarisation. That clearly isn’t good for the Indian economy.
How has that impacted the world’s perception of India?
It has impacted. In U.S. when Modi came to Texas and filled that stadium, more people showed up for the inauguration for Trump. I mean he was considered to be a much more successful leader. And I would say now, particularly among the Democrats in the U.S., the human rights issues in India are starting to get comparisons with the way the Chinese were treating Uighurs. That’s ridiculous for a country with democratic institutions, checks and balances like India. On the conservative side, the fact that Indians are moving ahead with the purchase of S4 missile systems from the Russians makes the defence industry feel like they can’t work with Indians as it might lead to some sanctions. And of course, anchors of U.S.-India economic cooperation are in the defence sector. So I think for both sides the Indians have taken some hits from the U.S.
One final question. You’ve been now talking for a couple of years about a geopolitical recession that has hit the world. What does that mean for countries like India or across the world in this new decade?
I mean less leadership from the United States means nobody else can play the global leadership role. Then, the G-zero we have in the world. It means that we have more conflict, it means that you have less efficiency in global markets. It makes it harder for people to want to take risks in riskier markets like in India. So, generally speaking for emerging markets unless your governance is really solid, it’s going to be more of an uphill climb. Part of the reason the geopolitical recession is going to be deeper is because it doesn’t affect the United States as much as it affects other countries. World’s largest energy producer, food producer and refugees have a hard time getting to the United States. In a case of India, these problems are much more real and they’re much more immediate. So, it’s a problem.
So, that means that the governments are going to look even more inward and more insular, so a decade of hyper-nationalism?
So, it is a decade of more nationalism, a decade where that nationalism is constrained by stronger institutions in the developed economies but in the emerging economies one where elections will whiplash policies back and forth from one to the other. We see that happening already.