A comparative analysis of the US, China, and India
As the great political scientist and renowned foreign policy expert Henry Kissinger succinctly puts it, “No foreign policy—no matter how ingenious—has any chance of success if it’s born in the minds of few and carried in the hearts of none”. To simplify it, the foreign policy of a country is a set of principles and objectives that it aims to deploy as well as accomplish in its engagement with other nations.
A government’s foreign policy (FP) may be influenced by domestic considerations, the behaviour and policies of other states, or plans to advance its geopolitical designs. The post-Cold War period, however, saw ‘geo-economics’ emerge as the fulcrum of a nation’s foreign policy. It is this intricate linkage between a country’s businesses and its foreign policy that this article aims to analyze.
To begin with, let us take the case of the USA. The U.S. foreign policy has time and again reflected its obsession with promoting its businesses. This obsession may not be organic, as the big businesses in the U.S. pump big money to get favorable political leadership at the helm, and then you exercise a great degree of leverage in shaping foreign policy. In fact, business extension abroad is largely viewed as an extension of the American frontier—a key element of a nation’s ‘Manifest Destiny’— an ideology that Americans were destined to extend their nation across continents.
While the notion of ‘Manifest Destiny’ does have positive connotations that are too visible in the form of Neo-liberalism (Reaganism in the U.S.), the ugly side of it has turned the U.S. into a virtual warfare state. No less than a former President, Dwight D. Eisenhower, warned about the disproportionate influence exerted by big businesses in shaping U.S. foreign policy.
These intricate interlinkages between defence contractors, the Pentagon, and politicians feeding off each other were described by President Eisenhower as the Military-Industrial-Congressional (MIC) complex.
To understand the staggering sum of dollars involved, it is pertinent to mention the U.S. State Department data, according to which $14 trillion has been spent by the Pentagon since 9/11, and one-half of this figure ($7 trillion approx.) has gone to defence industries and corporations.
While some of the profits earned by these big corporations are legitimate, a significant portion of this $7 trillion figure was appropriated as a result of corrupt practices involving abuse, fraud, profiteering, and price gouging.
It is the same military-industrial complex that drove the U.S. into expansive wars in Afghanistan and Iraq, as per major defence analysts and international relations (I.R.) experts. Corporate America benefits from the warfare state while everyone else pays.
Moving on, the Chinese Belt and Road Initiative (BRI), with its signature foreign policy in the 21st century, is another shining exposition of the interlinkages between trade and foreign policy.
At the heart of the Belt and Road initiative is the Chinese desire to re-orient the world economy towards China by increasing the amount of trade, investment, and connectivity between China and European nations. It also aims to make Chinese economic leverage over these countries decisive by making them dependent on China. As the analysts argue, this network of investment in the form of debts allows China to shape the rules and norms of the economic affairs of the subject country and thus aids in advancing core Chinese F.P. goals.
It won’t be wrong to say that insidious ‘Geoeconomics’ warfare combined with the unique ‘wolf warrior’ style of diplomacy is at the fulcrum of the Chinese dream of ushering in the ‘Middle Kingdom’ with China as the centre of the world.
The Chinese megastate-owned enterprises (SOEs) and their big businesses like PetroChina, Alibaba Group, Tencent, etc. aim to gain huge profits by virtue of their signature foreign policy moves like BRI. The Chinese State, on the other hand, by virtue of booming business for its SOEs and big corporations, aims to displace the U.S. and become the world’s largest economy in the near future. There is an intricate symbiotic relationship visible between the two.
There has been a significant churn in the global arena in the 21st century. After its famed LPG (liberalization, privatization, and globalization) reforms of 1991, the Indian economy has opened up and witnessed a remarkable growth story. In fact, currently the 3rd largest economy in PPP terms and the 5th largest economy, Indian foreign policy and its linkages with businesses merit a holistic analysis.
The Indian foreign policy analysts have arrived at an order of priority to be followed while promoting Indian business interests abroad. They argue that those businesses that generate the most jobs and the ones that contribute most to the Indian economy should be accorded the two highest priorities. It is in regard to these principles that Indian diplomats negotiate trade agreements, resolve pending trade disputes, and facilitate investments in other countries.
Which top Indian businesses benefit greatly by virtue of these tailored foreign policy moves? The bigger picture must not be missed, viz., the sheer ‘financial value’ it eventually adds to the Indian economy.
The healthy symbiosis between Indian foreign policy and its businesses positively influences India’s soft power capabilities and boosts its diplomatic relations with other countries. The constructive and attractive aspects of Indian foreign policy engagement with big businesses augur well for not just India but for the wider world. This harmonious exposition provides an alternative to the US military-industrial complex and Chinese debt trap diplomacy, making India a major international player in the global arena.
Besides, in an era of trade wars, India has treaded a deft tightrope. Its fine-balancing between the West on one side and the Russia-China axis on the other has ensured that the Indian economy in general and Indian businesses in particular flourish by exploiting and navigating the uncertainties of a polarized world. Realpolitik has, of late, become the trademark of Indian foreign policy, wherein the national interest rather than moral considerations are accorded primacy.
As a consequence of India’s pragmatic moves, FDI inflows have increased 20 times in the period from 2000-01 to 2021-22. David Malone, in his seminal work, ‘ Does the Elephant Dance?’ rightly puts economic capabilities as one of the primary pillars driving ‘Indian foreign policy, and this has been vindicated by the famous remark of Indian PM Narendra Modi exhorting Russian President Vladimir Putin: Today’s era is not that of war’.
Geo-economics has triumphed over geopolitics, and nations are using foreign policy as a tool to advance their economic interests and firmly establish themselves on the international stage.
With the shift in focus from the Atlantic to the Pacific, India’s unique geographic location places it at the centre of appropriating new opportunities in the Indo-Pacific.
The world, particularly the West, recognizes this moment. Consequently, the launch of the QUAD grouping (India, Japan, the U.S., and Australia) in the Indo-Pacific and the I2U2, dubbed the West Asian Quad (Israel, India, the U.S., and the UAE), act as two institutional anchors to advance Indian foreign policy interests, with maximization of trade surplus as the focus.
This has been further reinforced by India’s ‘ G-Force moment’ exemplified by its successful conduct of the G20. The launch of the India-Middle East-Europe Economic Corridor (IMEC) is also a decisive indicator of how trade and the economy shape India’s foreign policy more than any other factor at present.
Indian businesses and corporations like Ambani Group, Adani Group, Tatas, Birlas, and the like have historically enjoyed bipartisan support on a global level, and the idea has been to largely promote wealth creation. It is assumed that being a virtuous cycle, wealth creation percolates down to the lower level and helps in poverty amelioration. Evidence to support this argument can be derived from the UNDP report based on the Oxford Poverty
Human Development Index (OPHDI), which states that India lifted as many as 270 million people out of multi-dimensional poverty between 2005–06 and 2015–16. This period incidentally coincides with the Indian economy and businesses witnessing rapid growth.
In the present times with the world order witnessing a churn, it is in India’s national interest to carve out enabling spaces for its businesses to expand and its exports in particular to flourish. The sheer impact of cognitive biases, emotional intelligence and geopolitical factors is vital for businesses to succeed. To thrive and prosper in such complexity-ridden landscapes, businesses too on their part must adopt adaptive management styles and follow cross- culture competence. By doing so they will make the job of diplomats easy in nourishing out favorable outcomes.
The two need to coalesce for successful symbiosis and thereby add value to comprehensive national power eventually.
Feedback at [email protected]