Obama politics feared to become parochial in shaping up new relationship with India and China

Obama, Cambodia's Prime Minister Hun Sen, China's Premier Wen Jiabao, Australia's Prime Minister Julia Gillard, India's Prime Minister Manmohan Singh. (Photo: Newsis)

With President Obama bouncing back in the White House after a convincing victory, and Wen Jiabao making place for the next Party chief, Xi Jinping, the changing scenario of global politics is sure to take a while before the ripples are felt in Asia.

The relationship with India is not really one of the challenges that face President Barack Obama in his second term. With his stand on out-sourcing during the presidential campaign, India can only fool itself that the rhetoric on protectionist tendencies was limited to electoral speeches. It just might turn out to be a policy that Obama is forced to follow. If Obama has to keep his promise to the American voters, he will have to look the other way when the Indian industry pushes him for greater space. Unfortunately, India did not figure in the electoral speeches made by President Obama or even by Mitt Romney during the entire campaign. This seems a clear indicator of how parochial politics is becoming in recent times.

Eminent political commentator, Mr. C. Raja Mohan writes in Indian Express, “The re-election of Barack Obama as President of US suggests that the American pivot to Asia will continue. In his first trip abroad after the elections, Obama is travelling to Cambodia to attend the EAS and making stops in Myanmar and Thailand, two continental neighbours of China. The US is quite clearly unwilling to let China neutralize its Asian periphery.”

As far as the strengthening of Indo-US strategic partnership is concerned, perhaps the only common meeting ground is the production of generic drugs and their use in the American health care system.

During the 2008 Presidential Campaign, Barack Obama promised to “prevent drug companies from blocking generic drugs from consumers.”

“Here in America — in the wealthiest nation on Earth — no illness or accident should lead to any family’s financial ruin,” Obama said. That single sentence was a compelling invocation of nearly every political theme Obama has presented on the campaign trail this year. However, he failed to include the patients/consumers of the developing world.

Obama will not be able to push Obamacare at home in isolation and ignore the voices from New Delhi.

Globally, the US is the largest market for generic drugs totalling $80 billion and with 75% of its health care system dependent on it. Indian companies have cornered approximately 10% share, or $8 billion of this market. The US will continue to depend on India for export of quality generics at affordable prices.

Sujay Shetty, leader, pharma and life sciences, PwC India, says, “Amid pricing pressures, US healthcare providers will push for an enhanced use of generics, which will increase the market for Indian pharma companies. The top 20 domestic companies are already entrenched in the US markets, and will be able to grow their volume as well as value shares, further.”

All other sectors like Nuclear Energy and Foreign Direct Investment in retail business will continue at a slow pace due to Indian domestic compulsions of fragmented politics at least till the next general elections in 2014.

As far as China is concerned, the re-elected Obama administration will have to begin afresh to decipher the new geo-political scenario that will be thrown up by China’s incoming leader, Xi Jinping. Even though Xi Jinping is likely to concentrate more on cleaning up the corruption within the Chinese administration and politics. Referring to an old Chinese proverb, Xi has already said, “Things must rot before worm grow.”

Without taking the name of any country or directly referring to the Arab Spring phenomenon, Xi Jinping said that in recent years a number of regimes collapsed because of a “long term accumulation of contradictions” of which corruption was a “very important reason.”

Clearly, the agenda of Xi is to clean up at home and only then engage with the world on an even keel. With Obama coming back to lead US global policies, Xi Jinping will not need to spend much energy to understand US stands on most issues concerning China or even other Asian countries. Both China and India are likely to lie low as far as global engagements are concerned, since they are both struggling with the rot within their own politics.

The Indian National Congress, the ruling political party, is already mired in scandals for the past few years and have taken an aggressive stand to defend the corrupt in their rank and file. Most energies are likely to be spent in winning the next general elections and staying out of judicial mess that may ensue if they lose 2014 elections.

It is clear that the three giants are not likely to open new fronts to fight outside their own local compulsions.

The key word is not global but parochial for now.