Explaining the Longevity of India's Open Economic Policy

[ 216 ] asia policy Explaining the Longevity of India’s Open Economic Policy Pradeep Taneja A review of Jalal Alamgir India’s Open-Economy Policy: Globalism, Rivalry, Continuity New York: Routledge, 2008 u 192 pp. Although India’s economic reform program and subsequent growth story have not received as much attention from scholars as China’s opendoor policy, enough has been written to give us a fairly good idea of the key elements of the reform agenda that have transformed India’s international image from a poverty-stricken country into that of a land of opportunities. As Jalal Alamgir writes in the preface to India’s Open-Economy Policy: Globalism, Rivalry, Continuity, “economic openness has come to be accepted in society as a core national value” (p. xii). The focus of his book, therefore, is not so much on the substance of India’s open-economy policy as it is on the reasons for the policy’s endurance. In trying to explain why the external economic policies, adopted by the Indian government in the wake of the 1991 balance of payments crisis, have continued despite political protests and changes of government, Alamgir argues that the reforms were justified and continued on the basis of the idea of openness, which was in turn informed by the twin concepts of globalism and rivalry. The ideational motivations for the open-economy policy arose, the author argues, from national ambition (“what do we want to achieve as a nation”) and national placement (“where are we placed relative to other nations”). According to Alamgir, globalism, or the desire to play an important role in world affairs, has been a continuing theme in Indian policy circles and can be traced to the country’s struggle for independence. India’s globalist ambitions, however, underwent a major shift from “a normative to a material claim to globalism” (p. 76) in the 1960s. The earlier normative globalism was based on a desire to influence world politics “according to values cherished in India’s nationalist struggle: peace, democracy, self-determination, and nonalignment ” (p. 74). However, the 1962 war with China, Alamgir argues, threw the rivalry with China into sharp relief, such that by the 1990s China was pradeep taneja is a Lecturer in Asian Politics and International Relations at the University of Melbourne. He can be reached at . [ 217 ] book reviews seen as India’s main political, economic, and military rival, requiring a “multidimensional and strategic policy response” (p. 46). The external economic policy changes introduced since 1991 are an integral part of that response. Having witnessed China’s international stature and influence rise rapidly following the success of its open-door policy, the author suggests that India’s policymakers consciously cultivated a perception of a long-term strategic rivalry with China to sustain the support for their globalist agenda. China was “constructed” as a rival “within the broader imperative of globalism” (p. 128). In short, in order to compete with China for global influence, India must follow China’s example by opening its economy to foreign trade and investment. Alamgir cites India’s emulation of China’s special economic zones (SEZ) policy as an example. He overlooks, however, the fact that China’s SEZs were created not just to boost exports; they were also to act as laboratories for market-oriented economic reforms in a largely centrally planned economy. India’s SEZ policy is qualitatively different from the framework governing the development of China’s SEZs.1 But Alamgir is right about the value of China as an exemplar for India’s policymakers in selling the merits of their own liberal trade and investment policies to the Indian public. Moreover, the regular comparisons with China that the Indian media has drawn when reporting on India’s own progress, or lack thereof, in various fields has made the job of these policymakers easier. In attempting to provide an explanation for the continuity of openeconomy policy despite the “politics of causes and consequences” (the title of chapter two in the book), the author somewhat overstates the resistance to economic reforms. Indeed, the adoption of liberal economic policies by the Indian government was frequently accompanied by protests and walkouts in the parliament and...