By Mahendra Ved
The well-known English phrase “money makes the mare go” aptly describes the Commonwealth’s thrust towards closer economic ties, particularly in trade among its 53 member-nations, as leaders hold their summit in London.
The Commonwealth Heads of Government Meeting (CHOGM) is being held amid preparations by Britain, the “mother member”, to exit the European Union. When it joined the EU over four decades back, smaller Commonwealth members had felt orphaned.
Whether Britain, the global body’s chair for the next two years, will return to them will depend on how well it makes the “mare go”, ensuring the necessary push with help from other members. Indications are that Britain wants to play a subtle midwife.
Even the developed Commonwealth nations like Australia, Canada and New Zealand may play enthusiastic participants in a marriage procession, and applaud.
The bridegroom to ride the mare is India, the obvious choice as one of the world’s fastest growing economies and which could be more than useful to the Brexit-bound hosts.
India skipped the last two CHOGMs. Besides being preoccupied with domestic affairs, then-prime minister Manmohan Singh wanted to shun the chorus against then-Sri Lankan president Mahinda Rajapakse on alleged human rights violations. This was despite India’s own deep concerns about the plight of the island nation’s Tamil populace.
This time around, Prime Minister Narendra Modi will be attending. Prince Charles and the Duchess visited last year and Commonwealth Secretary General Patricia Scotland held in-depth discussions with the Indian government.
“It is a great time for India and it is exciting to see the energised way in which new opportunities are being taken up,” Scotland said at a pre-summit briefing.
India raring to go
India has accepted, as it is the largest market for imports and exports, take any commodity. It is already engaged with all major and middle and modest-level economies. And yes, it is raring to go wherever the other big Asian power, China, is going.
“It is important for India to seize this moment and shape what the Commonwealth will look like. It should seize the discussion on renewal,” urges ethnic Indian Vijay Krishnaryan, director general of the Commonwealth Foundation, a platform for Commonwealth civil society.
For long years, members of this Old Boys’ Club have traded without feeling the need of the body’s label — not even when they traded among themselves. The idea of boosting intra-Commonwealth trade is recent, essentially post-Brexit vote, to stay relevant in times when economy is driving diplomacy across the world.
For several reasons, the economic and trade potential has not been realised. Shall we say, the collective was coy about it? This has been despite the fact that the Commonwealth countries together account for 2.4 billion people.
If an economic path leads to Commonwealth’s salvation, the net would need to be spread wide. But, much will depend upon how other member-nations perceive this.
For instance, South Asia is where most Commonwealth numbers are. But, bilateral trade balance is already heavily tilted in India’s favour so far as Bangladesh and Sri Lanka are concerned.
The India-Pakistan trade is a mere US$2 billion. Although Indian High Commissioner in Islamabad Ajay Bisaria recently projected a US$30 billion turnover in the next decade, mutual suspicions have discouraged a sustained effort.
Understandably, there is a great deal of focus now on how to increase trade and business ties within the Commonwealth. It has been firmed up after a study that was commissioned by Ambassador Kamalesh Sharma, an Indian diplomat and the immediate-past secretary general. According to this study, trade between members, around US$592 billion in 2013, is projected to rise to US$1 trillion by 2020.
Outside the bloc, too, the potential is immense: total Commonwealth exports to China between 2000 and 2013 increased more than 14-fold to US$268 billion; imports from China rose almost eightfold to US$359 billion.
Race with China
A more recent study says that intra-Commonwealth trade and productive greenfield investment is expected to reach US$1.6 trillion by 2020, in spite of the global trade slowdown caused by the 2008 financial crisis.
There are voices within the Commonwealth, however, warning against shaping the group as a trading bloc. They are aware of the ground reality that Britain and Brexit cannot be allowed to dominate the entire discussion and the London resolve.
Then, India and the Commonwealth cannot operate in a vacuum when both geopolitics and geo-economics are becoming more complex by the day.
Some analysts surmise that India is ready to lead the Commonwealth’s trade and economic initiative because in this forum it would not need to confront and compete with China. But, the China factor, so far as South Asia is concerned, is emerging so fast and strong that a Commonwealth move would seem a case of too little, too late.
Most Commonwealth nations that have enthusiastically joined the China-led Belt and Road Initiative await not just trade, but an all-round economic boost. Leading the pack in South Asia is Pakistan, with its China-Pakistan Economic Corridor that is the flagship of the BRI as per Chinese President Xi Jinping’s declaration.
Can India and the Commonwealth match it? The China factor is already present in a big way. But, while on average 12 per cent of Commonwealth imports of goods are sourced from China, there is scope in that there are 35 members for whom China accounts for less than five per cent of exports.
There is also this dichotomy. More trade with countries like India would inevitably mean more “people flows” and more business visas, Tariq Ahmad, Foreign Office minister for the Commonwealth has said.
Of course, India and Indians are not the sole criterion. But, the Theresa May government, during its interaction with Indians last year, declined to place Delhi and Beijing on a par.
Trade tops national agendas. But, with a new cold war knocking at the door and with the threat of protectionism, the “mare” has an uphill ride ahead.
Mahendra Ved is NST’s New Delhi correspondent. He is president of the Commonwealth Journalists Association and a consultant with Power Politics monthly magazine.