NaMo, The International Prime Minister

Our Prime Minister, Mr Narendra Modi, has seen a remarkable rise in his overall popularity and perception as a leader on the international stage. This has been done by partly some aggressive and bold diplomacy, firm positions and tough negotiations at various stages and with various players on the international stage. This has been further supported by his extensive touring abroad, so much so that I recently read one article asking when is NaMo in India, or words to that effect. 

Let us not forget a simple reality : we are a developing country with limited financial resources of our own. The fulfilment of the need can be either internal through home grown capital or external through FDI-FII etc.  And that is where the positive international perception of our leader is so vital. However, international perception of a leader, and of a nation is not entirely based on diplomacy; rather, in some ways, achievements in diplomacy are in reality based on a few internal factors.

International Perception is driven primarily by : 

1) Returns to be had from investments into that nation, 

2) The safety of those investments, 

3) The strategic utility of relations with that nation, 

4) The depth & breadth of the financial markets and currency markets, 

5) Internal legal setup, 

6) Conformance of laws with international standards, 

7) Ease of enforcement of laws and contracts and 

8) Stable political atmosphere. 

Note that Democracy is not a pre-requisite; equitable income distribution is also not a factor.Strong diplomacy is also not mandatory. In many ways, these two are intertwined - the internal strength of a leader gives potency to the diplomatic moves; the successes in diplomacy tend to strengthen the leader domestically. But the base of the leader is his or her own bastion, the mother country. 

It is inarguable that Narendra Modi's international reputation is very favourable at this point in time; further, this favourable impression has actually improved India's standing and image as well, as also his reputation of being a strong, tough, aggressive and pro-business leader.  A strong leader gives a hope, a direction and a clear vision - and, as of now, Mr Narendra Modi has brought all three to the table on the international relations arena, which bodes well for India especially since that vision is largely in line with the interests of international money. 

Analysing the points above, we can easily see that 1) - 8) all points are hugely in Narendra Modi's favour. Hence, the perception of India is bound to rise in the global race. Add to the above one additional point : the ability of the nation to propound, present and enforce its views and interests in international negotiations. As we have seen in Trade, Climate and Indo-US talks, India is in no mood to compromise on anything, period.  Our successes in that sphere have been driven primarily by the points enumerated above; thus supporting the hypothesis that our international standing has improved; while simultaneously further buttressing the standing of NaMo!

On a global scale, it is all all about trade and money, pure and simple. The modern world is a connected world, and money drives the world. Further, we are an investment starved nation, and need investors - who will need a return on investment. From a trade perspective, money put into India will get superior returns to the tune of several percentage points over and above investments in the developed world, given the interest rate differential. That is the single most vital factor driving investments into India - be it NRIs, PIOs or FIIs or MNC Firms FDI Investments. 

In a finite world, it is primarily a question of attracting surplus funds in the global economy. Few people do it for patriotic reasons, or developmental reasons, or for strategic relations. Money drives money. Even our own NRIs and PIOs {exceptions only prove the rule} invest in India only and only due to better returns, driven by more attractive special packages for them, and the better returns from the economy; not patriotism. 

It thus becomes a question of creating a conducive internal atmosphere for investments and economic growth. Given that atmosphere, even sworn enemies will trade, like India - China - Pakistan. And when we the matter view from that perspective, this government has taken steps, or offered promise/s like : 

1) Giving a chance of a stable future, given its majority in Parliament 

2) Taken steps perceived as pro-business, like easing of Land Acquisition Laws, GST, roll back of Taxation problems, negotiation on peripheral matters 

3) Taken steps to simplify trade, with steps like  the promise of the GST and action starting on the same

4) Shown firm intent, as demonstrated by the Ordinance on the Land Bill recently

5) Taken steps to improve governance w.r.t. to the matters above

This is not to state that there aren't real and present worries regarding any number of issues related to the Economy, Social matters, Politics and other issues in India. I myself am on record raising a few of these in no uncertain terms. But credit where credit is due; let us understand and appreciate the good that is happening while pointing out the negatives, in the highest traditions of our democracy. 

I respectfully submit that the points raised by the critics are thus not relevant to the international public at large, and Governments in particular. Particularly since their time-frame in the short to mid-term. And the true impact positive or negative of the points raised by others will show up in the long term, unless something is done now. And between then and now, a lot can happen, there are other internal social and economic parameters to be considered that are not relevant to this discussion. These parameters may curdle it, or may solve the issue; but that is another story...

All {or at least some of the points} are {or may be} accurate; granted. But I was talking from the external POV, or, in other words, how much will Rs 10 fetch if an international investor invests in India, in what level of security of the capital investment, under what economic / demographic conditions vis-a-vis investment in other nations for the same parameters. That is what will drive investment in India, which will benefit us as a nation given our finite resources

It is a question of attracting excess liquidity in the Global Economy, and offering a better return on investment vis-a-vis other comparable nations, nations with a higher chance to reach middle-income levels. And on that, with our professional legal, financial and currency setup, with the current status of the economy combined with the demographic factors - is where we are scoring under the current political dispensation, with their aggressive approach on the international front, building relations while providing, or trying to provide a conducive atmosphere at home for the business community. 

It is too early to take any call on these matters yet; this Government is only 7 months old. While on some other matters 7 months is more than enough time to gauge direction and intent; on these matters, it will take a little time to see and gauge the results, and see whether the signed agreements and promises convert into tangible gains for us as a nation. Our Prime Minister has made an excellent start by getting these in place through his extensive touring and outreach to other nations, now the task for us as a nation is the conversion of these promises into results and tangible benefits for all of us...



Note & Disclaimer : These points are my own analysis; having said that, my views are formed on the basis of my study of the following reference material :

1) Breakout Nations - Ruchir Sharma {Book Review Here}

2) Pax Indica - Shashi Tharoor {Book Review Here}

3) Fault Lines - Dr Raghuram G Rajan {Book Review Here}

4) Assorted business newspapers and diplomatic and political analyses in various news media both in print and on the digital medium