Scheherazade S. Rehman is a professor of international finance/business and international affairs at The George Washington University. You can visit her homepage here and follow her on Twitter @Prof_Rehman.
India is not, nor will it become a superpower for the foreseeable future. There… I said it upfront. Why would I do that? Especially given the fact that on most Indian streets there seems to be underlying buoyancy about a brighter and promising future that is thoroughly justified given the rapid growth rates over the past decade in all facets of the economy. India more than tripled its living standards (gross domestic product per capita) over the last decade with an economy that is currently valued at almost $2 trillion albeit with somewhat erratic growth rates ranging from 4 percent to 10 percent. It has a young populace (median age less than 25 in a population of 1.24 billion) that is destined to overtake China's population at some point in the mid-2020s. Poverty is significantly less than it was a decade ago, consumer demand is high despite a weak global economy, and foreign direct investment reached record levels ($47 billion) in 2010. India's growth rate, in 2011, when compared to other BRICs (Brazil, Russia, India, and China) was almost double that of Russia and almost three times that of Brazil, second only to China. The same is true of its ratio of both investments and savings as a percentage of GDP—India was higher than Brazil or Russia, second only to China on both counts. High savings and investments bode well for future growth. This current year was not a great one for India as growth rates have slowed, foreign investment dropped by 67 percent, and the symbolic elephant seems generally sluggish. Yet optimism still brews for the young, professionally-driven, entrepreneurial activity as India has significantly less state-owned enterprises, only 14 percent of national GDP, versus China's 30-plus percent. I have mentioned only but a few things that provide Indians with the hopes of a robust future. The problem is that the rapidly growing professional class is not representative of India. India is much more complex and in many cases more underdeveloped than meets the eye. For example, 47 percent of Indian children under the age of 3 or younger are malnourished and an estimated 40 percent of the world's severely malnourished children under age of 5 live in India. On these types of issues India is on par with Sub-Sahara Africa.
India is full of contradictions.
Here are but a few: Its fiscal house is in serious trouble with an almost 9 percent deficit as a percentage to GDP (which is more than 7 times that of China); about half of the Indian population is still employed in the agriculture sector versus manufacturing and industry; India's inflation and unemployment is the highest amongst the BRICs; its energy problems makes global headlines when 600 million people were in the dark due to blackouts; foreign investment is again uncertain as the exciting liberalization of the 1990s is but a distant memory; and anticorruption has taken a central stage as 99 percent of the people are angry at the 1 percent superrich and a bureaucracy that is seemingly hunkering down as opposed to reinventing itself to pursue dynamic reform. From the outside looking in, all of a sudden there seems to be a malaise over India's future. The country's big sweeping reforms seem to be moving in slow motion. These are but only a few of the numerous hurdles towards Indian superpower status. There is little doubt that India lags decades behind China in terms of not only development but also strategically positioning itself as an economic and geopolitical juggernaut.
Indians hope that the 2014 general elections will bring forth charismatic and dynamic leadership that will propel India into hyper drive surpassing China…this seems unlikely. China has the advantage of a centralized political leadership that is currently able to engineer and execute a 10 year economic, social, and political plan. India cannot. India is the world's largest democracy by populous and fractured politically by religion and class. Now enter stage left, Narendra Modi of the Bharatiya Janata Party. This ambitious and charismatic chief minister of the State of Gujarat is seeking to be India's next prime minister. He has the best economic track record amongst his peers but is commonly perceived as a Hindu nationalist with a political record that is severely tarnished. In 2002, as chief minister, he was seemingly deliberately slow in stopping Hindu mobs unleashing their wrath on Muslims when a train fire killed Hindu pilgrims. Over a 1,000 people died, mostly Muslims. No court found him guilty but he became a polarizing political figure. Even if the Bharatiya Janata Party does not achieve a victory in the 2014 general elections, Mr. Modi is likely to have hand in shaping India's political future. This may aggravate tensions for any new future Indian leadership, however, secular, whose task is already daunting as it will have to do far more than just keep the Indian economy floating—it will have to it make prosperous at a breakneck pace while juggling the myriad of basic social and human developmental issues.
A simple 900+ word blog is grossly inadequate to comprehensively debate the complexities of this mammoth of a country which houses one sixth of the world's population. Having said that my prognosis of India as a potential superpower is this: India is simply "big" and nuclear and is likely to remain, just like Russia, a "key swing state" and is not likely to develop into a power house anytime in the distant future.
This is the sixth of a series of articles on potential superpowers.