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| The Global Economic Model Is Unstable and Unjust |
Interview by EAM, Dr. S. Jaishankar to leading German
February 20, 2024
The Global Economic Model Is Unstable and Unjust
CV:
The top Diplomat: Since 2019 the 69-year-old Indian is the Foreign Minister of his country. Behind him is a decades-long diplomatic career. Amongst others, he was Ambassador to the United States, China, and the Czech Republic. He has also worked in the Indian Embassy in Moscow and Jakarta. He is a member of the ruling government party, the BJP.
The Author: In 2020, he published his book "The India Way: Strategies for an Uncertain World”. His latest book "Why Bharat matters” on India’s strength is now also out.
Minister Jaishankar, you have just spoken with foreign and defense ministers from all over the world about the threats to the rules-based international order. What is India doing to strengthen it?
The global order is currently facing multiple kinds of stress. Due to shocks like Covid, the war in Ukraine, the war in Gaza, the NATO withdrawal from Afghanistan and disruptive climate events that are happening more and more frequently. That is our challenge. However, it is not just about strengthening the international order, but also about changing this order. Who shapes it and on what basis? The international order must evolve further.
How and in which areas?
Take the United Nations as an important part of the international order. The UN started with 50 members, now it has almost 200 - but the management of the UN has not changed. The group of the world's top 20 or 30 economies has changed a lot in the past two decades. Ten years ago, India was the eleventh largest economy, now we are number five. In a few years, we will be the third largest.
You and others have been calling for reforms at the UN for years. Do you think the current blockade could be resolved?
The countries blocking reform are in denial about the changes that have taken place in recent decades. The real issue is: how do we refresh the international order, how do we renovate and reform it and its institutions? There is no point in saying to international institutions: "Do your job better" if they are not capable of doing so. Look at how the international order simply collapsed during a historically large problem like Covid. Every country acted in its best interest.
There was the UN Covax vaccine campaign…
It was good, there was some collaboration, but most countries didn't help each other. If we are leaving out large parts of the world, we urgently need to change the international order. Even today, many, many countries are angry that they received vaccines so late that they were subject to entry restrictions, that their economic development was seriously undermined.
What exactly do you think should change?
That depends on which area you look at. Climate protection needs to be taken much more seriously. And then you can look at the imbalance in global production.
What do you mean?
We have created an economic model that is unstable and unfair. In the name of globalization, we have seen over-concentration in the world. Production has been shifted to a limited number of countries. The economies of many countries have been hollowed out. They depend on other countries for very basic things - and we notice this immediately when we have disruptions like Covid, like the climate or the problems in the Red Sea at the moment. The problem is so profound that it's not so easy to say: "Let's do these three or four things - and things will be fine again."
Europe's current priority is to push back the Russian troops in Ukraine because they see Vladimir Putin as the biggest threat to the international order. India recently agreed on more arms cooperation with Russia. The country is still the most important arms supplier for you.
In terms of inventory, yes, because many Western countries have long preferred to supply Pakistan and not India. But that has changed in the past ten or fifteen years with the USA, for example, and our new purchases have diversified with the USA, Russia, France and Israel as the main suppliers.
India buys a lot of the Russian oil - in Germany there is criticism that this is detrimental to the effectiveness of the sanctions against Russia. Is the Indo-Russian relationship a burden on the India-Europe relationship?
Everyone conducts a relationship based on their past experiences. If I look at the history of India post-independence, Russia has never hurt our interests. The relations of powers like Europe, the US, China or Japan with Russia, they have all seen ups and downs. We have had a stable and always very friendly relationship with Russia. And our relationship with Russia today is based on this experience. For others, things were different, and conflicts may have shaped the relationship. We, on the other hand, had a politically and militarily much more difficult relationship with China, for example.
Would you have liked support from Europe in the border conflict with China in 2020?
My point is: just as I do not expect Europe to have a view of China that is identical to mine, Europe should understand that I cannot have a view of Russia that is identical to the European one. Let us accept that there are natural differences in relationships.
Do these differences in relations with Russia put a strain on India-Europe relations?
Both sides have communicated their positions clearly and have not emphasized their differences. But yes, there are differences. You mentioned the energy issue. When the fighting started in Ukraine, Europe shifted a large part of its energy procurement to the Middle East - until then the main supplier for India and other countries. What should we have done? In many cases, our Middle East suppliers gave priority to Europe because Europe paid higher prices. Either we would have had no energy because everything would have gone to them. Or we would have ended up paying a lot more because you were paying more. And in a certain way, we stabilized the energy market that way.
In what way?
If no one had bought the crude oil from Russia and everyone had bought the crude oil from the other countries, prices on the energy market would have shot up even further. Global inflation would have been much higher - and that would have been a huge political issue in lower-income countries.
In this way, however, India is undermining the effect of the sanctions against Russia.
If Europe had wanted to maximize the damage at the time, it would have had to stop all economic relations with Russia completely. But it didn't. If Europe was so convinced and the principles were so important, why did it allow relations to end gently? Why were there exceptions for pipeline gas, for individual countries and so on? That's what governments do, they manage politics with an eye on the consequences for their people.
Did the Russian invasion of Ukraine two years ago change the Russian-Indian relationship?
We are deeply convinced, and are publicly committed to bringing the conflict to an end. Everyone is suffering from this conflict. I don't know exactly how it will end, we're not deep enough into the process to know.
Isn't that why you could be a mediator?
Theoretically, yes. We have already helped with very specific issues. When Turkey negotiated the corridor through the Black Sea, for example. And we were very supportive of the inspections by the International Atomic Energy Agency, IAEA, of the Zaporizhzhya nuclear power plant. Wherever we can help, we are happy to do so. We are open when we are approached. However, we do not believe that we should initiate anything in this direction on our own.
Let's talk about India's relations with Europe. The EU and India resumed negotiations for a free trade agreement in 2022. Will it work now?
Free trade agreements are very complex, and one with the EU is the most complex in the world for any country because it also discusses many non-trade issues. Only the EU does that. In addition, the negotiations had been dormant for years in the meantime. We have built on what was negotiated in the past, but many things have changed since then.
Do you believe that the free trade agreement can still be concluded this year?
I know a lot of people are working on it and I know it's very complicated, so I wouldn't make a prediction. It's not that I don't think it's possible. It's just that it's so complicated that I wouldn't just give a timetable. But our relations with Europe are really developing well in various areas.
Which areas do you mean?
We are also working with the EU in the Council for Trade and Technology, which deals with the important issue of strategic technologies. There is also a great need in Europe for skilled workers in this area. We have therefore concluded mobility agreements with Germany, Portugal, France and some others. We consider relations with Europe to be one of our most important relationships. When we talk about a multipolar world, there is no question for us that Europe is a pole and, as a pole, must be involved not only in economic but also in political and strategic issues. One of our recent successes is that we have reached an agreement to build a connectivity corridor from India to Europe through the Middle East.
India is trying to buy more weapons from Germany. Do you see a change in German policy?
Germany has long been cautious when it comes to security and defense. In contrast, we have had robust cooperation with France for a long time and to a more limited extent with Spain and Italy. But I have seen a development in Germany's attitude in recent years; my interlocutors now understand that you can't completely exclude one part of a relationship. It is developing - and that is good for both sides.
Specifically, India wants to buy six submarines, among other things. Thyssen-Krupp is one of the last suppliers in the race. Is there any progress?
The talks are ongoing. I think these things take time.
Minister Jaishankar, thank you very much for the interview.⍐
