May India Ride the Trump Wave


May India Ride the Trump Wave

Illustration: Juergen Dsouza/ Arré

Ihave been pondering the use of the word “upset” while reading the news these days. Be it elections or sports, the term seems to gather currency every time things don’t go according to what the general perception is built up to be. It’s a word I have heard/read frequently since morning, following the results of the US presidential election on major American news channels today. Nearly everyone has labelled Donald Trump’s victory a “stunning upset”.

But, I believe, upset is a rather strong term to use. Like in sports, you never know the result before it happens. Similarly, all the exit polls don’t tell you which way the real vote will swing. And in a democracy, elections mean a vote by the people for a government of the people. So, Trump did win. It is not an upset, unless we are talking about the predictions of liberal media outlets (and the feelings of several anchors on those channels). It just reflects the popular will.

So, what does this Trump victory tell us?

First, it means that the experts misread actual sentiments. Ironically, it also proves that high-decibel Arnab has a point: The national mood is not reflected in the cosy confines of a capital city or in the drawing rooms of the rich and famous where celebrity intellectuals debate. India proved that Arnab was right in 2014, and this year, so did the United Kingdom and the United States. Political experts’ misreading of the situation is akin to economists’ off-by-a-mile forecasts. That happens when one lets opinion take the place of hard facts and data. Analysts will do well to remember this.

Second, democracy has come a full circle in the United States. A country that abolished slavery and moved away from segregation suddenly finds itself divided. You might ask how it came to this, but the answer is not difficult when you think hard about it. In a world riven with borders, ideology, and religion, open borders in the name of free speech and freedom cannot subsist for long without checks and balances. Both Europe and the United States have paid the price. Too many wars and controversies add to the muddle of bad politics trumping good economics and society. History is again witness to this fact.

Third, there is a new dawn for both the extreme Left and Right. Mind you, this push is not coming from politicians alone, but from people who have been left out of the benefits of economic progress of the last few decades. Rise in income inequality in the West coupled with the advent of strong emerging economies has led to calls for protectionism, once heard only in the corridors of power in developing economies. Recent events in the Middle East and the large influx of people from there and Africa have added to the confusion. The result? The extreme Left and the Right have come together, not consciously, but nevertheless in an unsaid and unhealthy coalition. The centre is no longer sexy, nor is the current establishment.

The dominance of the Republicans and the Democrats in the United States has made democracy less acceptable to those who want the best of both.

Fourth, Western capitalism and democracy would do well to take some lessons from Asia. The simple rule of a free market economy is that competitive forces must persist to keep the system efficient. The West has forgotten that rule, which they often used to preach to Asia with abandon. So, if you are high on debt, cut down spending. If your labour markets are rigid, make them free. If your regulations are restrictive, strike them down. Asia did that, raising its share in the global economy. It’s high time governments in the West practice what they preach.

The same goes for democracy. The dominance of the Republicans and the Democrats in the United States has made democracy less acceptable to those who want the best of both. Maybe it’s time for Americans to learn something from India and its chaotic polity.

Finally, to all those who have been asking me, “What does it mean for India?” There are fears that H1B visas will be curbed and will affect Indian workers’ entry to the US, software and manufacturing jobs outsourced to the Indian market, and who knows what will happen with Pakistan? But over and above that, the overwhelming fear that I sense is that his election as the leader of the free world, will only aggravate the vulgar xenophobia his campaign has been premised on. (You only have to take a look at the rest of the world to know that some of these fears are already being manifest across the globe.)

But maybe we should refrain from pushing the panic button just yet. India-US relations are dependent on how well our leadership navigates the choppy waters of international diplomacy, and there just might be an opportunity here if we proceed with caution.

General perception dictates that American democratic presidents have never proved to be India’s best friends. Even though Trump’s stance on H1B visas and immigration might have put Indians on the back foot, his pro-business attitude might eventually align with Indian interests. (Let’s remember that a lot of anti-immigration rhetoric is aimed at Mexicans and Muslims.)

Trump’s Penny Plan to cut federal spending would mean a more prominent role for private businesses in creating jobs. Which means more opportunity for big and small Indian businesses to invest in the US. Also, with key markets weak and volatile, we have yet another chance to attract a large chunk of global capital and emerge as a highly competitive economy. Investors will be looking for returns and India can oblige.

We have to play our cards smartly now. I think it is a good time to take the US-India economic relationship forward while keeping China and Russia interested. Remember, China did that earlier and succeeded.

“Make in India” Modi will never have it this good. He should ride the Trump wave and Make India Great Again.