{"id":242808,"date":"2023-05-17T20:19:34","date_gmt":"2023-05-17T14:49:34","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=242808"},"modified":"2023-05-17T20:19:34","modified_gmt":"2023-05-17T14:49:34","slug":"new-delhi-and-the-new-washington-consensus","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/new-delhi-and-the-new-washington-consensus\/","title":{"rendered":"New Delhi and the New Washington Consensus"},"content":{"rendered":"\n

Source-<\/strong> The post is based on the article \u201cNew Delhi and the New Washington Consensus\u201d published in the \u201cBusiness Standard\u201d on 17th May 2023.<\/p>\n

Syllabus: <\/strong>GS2- International relations<\/p>\n

Relevance<\/strong>– India and changing economic order<\/p>\n

News- <\/strong>Prime Minister Narendra Modi will attend the G7 summit in Hiroshima this week, the Quad summit in Canberra the week after. There are bilateral visits to Washington and Paris in June and July.<\/p>\n

The restructuring of the global economic order will be high on India\u2019s bilateral and multilateral agenda.<\/p>\n

What are geoeconomic changes being unleashed by the competition unfolding between the US and China?<\/strong><\/h2>\n

The geoeconomic competition<\/strong> between Washington and Beijing had begun to develop in the Trump years. President Joe Biden has intensified it and provided an ideological framework.<\/strong><\/p>\n

In a major speech late last month, US National Security Adviser Jake Sullivan outlined a set of policy initiatives <\/strong>to pursue the geoeconomic contestation with China.<\/p>\n

The US is seeking wider international consensu<\/strong>s on the new economic approach<\/strong> from its allies and partners, including India. Some are calling the Biden initiatives as efforts to build a \u201cNew Washington Consensus\u201d. <\/strong><\/p>\n

Sullivan\u2019s speech criticises conventional economic wisdom<\/strong> and a call for a transformation of the global economic order.<\/strong><\/p>\n

What are several challenges highlighted by Sulivian that have arisen from the old Washington Consensus and inflicted damage on the US economy?<\/strong><\/h2>\n

\u201cMarkets know best\u201d approach<\/strong> led to the hollowing out of the US industrial base.<\/strong> There is importance of the markets. But, in the name of oversimplified market efficiency<\/strong>, entire supply chains of strategic goods <\/strong>along with the industries and jobs moved overseas.<\/p>\n

There was a notion that \u201call growth was good growth\u201d<\/strong>. This led to the privileging of some sectors<\/strong> like finance and neglected other essential sectors<\/strong> like semiconductors and infrastructure. US industrial capacity<\/strong> took a real hit.<\/p>\n

Old assumption that economic integration<\/strong> would make nations more responsible and open<\/strong>, and that the global order would be more peaceful and cooperative.<\/strong><\/p>\n

The integration<\/strong> of a \u201clarge non-market economy<\/strong>\u201d like China into the WTO created many problems. Economic integration<\/strong> didn\u2019t stop China from expanding its military ambitions<\/strong> in the region.<\/p>\n

Emphasise on \u201cjust and efficient transition<\/strong>\u201d to green economic growth<\/strong> and reducing economic inequality<\/strong> at home that has undermined American democracy.<\/strong><\/p>\n

What are the solutions offered by Sulivian?<\/strong><\/h2>\n

Sullivan offers a five-fold policy framework. <\/strong><\/p>\n

Return to industrial policy <\/strong>that was responsible for US economic development historically but was dismissed by economic neoliberalism<\/strong> in the last few decades.<\/p>\n

He advocates the US\u2019s friends and partners to look beyond traditional trade policies<\/strong>. The US-proposed Indo-Pacific Economic Framework<\/strong> is not a free trade agreement.<\/p>\n

In today\u2019s world, trade policy needs to be about more than tariff reduction.<\/strong> The focus should be on developing diversified and resilient supply chains<\/strong>, promoting clean energy transition, and massive infrastructure<\/strong> that supports the rapidly expanding global digital economy.<\/strong><\/p>\n

The US should mobilise investment into emerging economies with local solutions<\/strong>, but with capital enabled by a different brand of US economic diplomacy. <\/strong><\/p>\n

This involves offering an alternative to China\u2019s Belt and Road Initiative, addressing the global debt crisis, and<\/strong> reforming multilateral development banks.<\/p>\n

There is a need to develop a new set of export controls on sensitive technology<\/strong> that will limit national security threats from China and other rivals.<\/p>\n

What are the choices for India?<\/strong><\/h2>\n

The US is ready for substantive engagement<\/strong> with its partners. India must be ready to respond.<\/p>\n

There are many common areas of engagement, like China\u2019s geoeconomic challenge<\/strong>, the dangers of dogmatic commitment to globalisation<\/strong>, technological cooperation<\/strong> among like-minded partners, building resilient supply chains<\/strong>, addressing the economic concerns of the Global South<\/strong>, and reforming the global financial institutions.<\/strong><\/p>\n

There will also be many disagreements on the identification of priorities<\/strong> and the details of the specific outcomes<\/strong> in rearranging the global economic order. <\/strong><\/p>\n

It must be viewed as a historic opportunity for India. As one of the world\u2019s leading economies, India can and should actively reshape the global economic order.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Source- The post is based on the article \u201cNew Delhi and the New Washington Consensus\u201d published in the \u201cBusiness Standard\u201d on 17th May 2023. Syllabus: GS2- International relations Relevance– India and changing economic order News- Prime Minister Narendra Modi will attend the G7 summit in Hiroshima this week, the Quad summit in Canberra the week… Continue reading New Delhi and the New Washington Consensus<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,212],"class_list":["post-242808","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-2","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/242808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=242808"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/242808\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=242808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=242808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=242808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}