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2013: The end of illusions

Source : BUSINESS_STANDARD
Last Updated: Mon, Dec 30, 2013 22:24 hrs
Arvind Kejriwal's swearing-in ceremony as Delhi's 7th CM

This past year marked the end of illusions. From illusions of independence to illusions of international friendship to those about the unchangeable nature of politics, 2013 provided India with a stiff and salutary dose of reality. Perhaps the only advantage of difficult times is that they also provide short, sharp shocks of enlightenment.  

One such illusion that was ended in 2013: "decoupling". For years, it was fondly imagined that India's strong domestic market and a relatively insulated financial sector meant that it had been "decoupled" from the global economy.



Even the slowing of growth was primarily blamed on domestic factors. But then the governor of the United States Federal Reserve, Ben Bernanke, announced that its quantitative easing would come to an end, and pandemonium broke out in the equity, bond and especially the currency markets.

The rupee collapsed against the dollar, reflecting India's precarious current-account deficit. Now, at the end of the year, that situation seems to have stabilised somewhat. But few are likely to make the mistake again of believing that India is truly insulated from what happens elsewhere.

Another illusion that has been seen through: that India's turn towards pro-American policy in the past decade is born of shared values, and a friendliness towards the US that permeates the highest levels of the state.

The arrest of India's deputy consul-general in New York, Devyani Khobragade, in December over accusations of visa fraud led to a storm of protest in India. Even the most powerful shapers of foreign policy had harsh words for US law enforcement's treatment of an Indian consular official: National Security Advisor Shiv Shankar Menon called it "despicable" and "barbaric".

In the US, meanwhile, there was general perplexity at India's hard line on the subject. Certainly, in the US the idea that India "shares its values" has come under attack; in India, the idea that it growing towards a special relationship with the US has become similarly contested.

But the big casualty: the illusion that years of warmer relations towards the US, especially under Prime Minister Manmohan Singh is a process that will continue inevitably even as he fades into history.

One more general impression that was sadly exposed as false this year was that Indian companies, such as its strong generic drug companies, served as excellent brand ambassadors for the country worldwide. India Inc, it was said, would help build the Indian brand.

But, in 2013, the unlikelihood of that hope became apparent. In May, for example, Ranbaxy Laboratories pleaded guilty to charges of wrongdoing related to drug safety in the United States. Some evidence suggested that there were low standards of hygiene and falsification of test results; and that top management was aware of it.

Infrastructure company GMR's disputes over building the airport for the Maldives caused some election campaigning in that small island nation to have a strongly anti-India tone. In September of 2013, a year after Jindal Steel walked out on the world's largest iron-ore deposit in Bolivia following a dispute with the South American country's government, the Bolivian mining minister said the contract to develop it was "likely to be awarded to a Chinese company".

Perhaps, India's much-lauded private sector is not as much a blessing for India abroad as it was once expected to be.  

But, if these were all pleasurable illusions that were shattered in 2013, at least one darker fear was proved groundless, too. It has long been argued that even well-organised, determined people could not make a dent in India's electoral democracy - that it was too large, too chaotic or too corrupt to let that happen.

But now, in December 2013, barely a year after being founded and in spite of widespread scepticism, Arvind Kejriwal's Aam Aadmi Party governs India's capital.

Whatever his record in office, there is no question that, like Barack Obama, Kejriwal's greatest achievement is likely to remain just getting elected. Because, in doing so he threw the doors of power open, and silenced all those long-time critics of the Indian system who felt that politics was for other people.

Perhaps, of all the illusions shattered in 2013, that has been the longest-standing - and the most harmful.

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