After accessing the World Trade Organisation in 2001, the rise of China as a global economic and military power, on the back of dramatic economic liberalisation it undertook in the 1990s, proved to be irresistible.
Not only has it become global economy number 2 after America. It is busy building up its military strength in the South China Sea, defiant of the global superpower which America claims to be. In some quarters, it is said that the recently concluded agreement called the Trans Pacific Partnership grouping together America and a dozen Asian countries, not including China, is intended to contain China’s expanding economic power and influence.
India was similarly isolated from key global forums. It did not and has not yet secured a permanent position on the Security Council of the United Nations, despite unceasing efforts. But it has asserted itself as a major global economy on the strength of its skilled manpower and successful economic transformation. It has not found a place in exclusive clubs like the G7 but it has become a member of the G20, an intermediate grouping including members of the G7. It has secured a stronger international voice thanks to its rapid economic growth during past decades. It has, today, the highest projected rate of economic growth of 7.5% for 2016 among the economic majors of the world, higher than China’s 6.5%.
The world’s traditional successful economies, while still dominant, have conceded the rise of countries like China and India. Faced with the incessant turmoil in the Middle East, America which used to play the role policeman in the region, has preferred to stay behind. Europe, it is claimed, has done little to beef up its defence systems and is currently facing a potential threat of being torn apart and faced with loggerheads between countries forming part of the Euro group, as of old, were countries to go their own separate ways as implied by the current debate about ‘Brexit’. On the flanks of Europe, Russia is taking aim at the integrity of Europe: it has taken over Crimea unharmed and is happy to see waves of migrants moving to destabilize Europe further.
Things have changed in international diplomacy, and this process of change is going on.
People here may say that all this is not the concern of a small country like Mauritius and that all we should do is to adapt to the great geopolitical changes taking place. But let’s face the reality. Despite all the usual talk about long-standing affinities with Mauritius, the 10th May 2016 saw the tax treaty between Mauritius and India overturned putting under grave threat a whole global business sector of Mauritius that had got used to relying heavily on that treaty to do international financial business.
On the government side, it is stated that there was no alternative than to concede to the pressures being put against Mauritius by India in this regard. An arrangement that had worked beautifully well for both countries at a time India was in need of FDI appears to have been suddenly emptied of its essence, with our complicity. The Prime Minister himself stated that he was unable to get a meeting with the Indian Prime Minister to sort out this burning issue before it was too late, when we well know that it is at the level of Prime Ministers of the two countries that the extra zeal of Indian officials was contained in the past so as not to mortally hurt this important sector of activity in Mauritius. If it has come to this, it means other interests would be having a bearing on customary affinities and relations. India has other pursuits and is now in the company of the mighty of this world.
A government Minister even claimed that Mauritius was placed under threat of unilateral revocation of the treaty by India unless it conceded to the demands being made by the official Indian side. The Indian High Commissioner in Mauritius was subsequently at pains to rebut the statement that Mauritius would have been subjected to such bullying by India, according to the Minister’s version, in this case. Be that as it may, the revision of the treaty is a fait accompli in favour of India, to Mauritius’ great detriment.
In fact, since after becoming enjoined with the G20, India has been voicing out to whoever wants to listen to it that it favours action taken at the level of the OECD group, another alliance of the richest and most powerful economies of the world, to introduce the Base Erosion and Profit Shifting (BEPS) rules to make more accountable countries like Mauritius. It has been constantly reminding weak states like Mauritius that it is to introduce shortly General Anti-Avoidance Rules (GAAR), which can be effectively employed to nullify Treaty benefits. It is difficult to contemplate Mauritius vying for fairness against the implementer of the GAAR. Mauritius finds itself in such a situation of weakness today. We sapped our public service of its efficiency due to political interferences over years. We failed to read through the international diplomatic decisions which have been reshaping global geopolitics and taken positions accordingly. How could we when in situations which demanded mature and experienced diplomats to take up issue for us, we were content to appoint those close to power – irrespective of whether they had the necessary skills – to take the place that would have been justly held by mature career diplomats? How could we when, out of short-sightedness, we even neglected to formulate a strategic economic plan for the country in a changing world and the foreign policy alignments such a plan would have called for to produce expected outcomes for the country?
This is what happens when a country loses sight of inroads sought to be made on its economy by others, being totally absorbed in infighting at the local level. What for? For securing political power. What for? For ending up with the kind of mess we’ve landed into concerning our global business sector. How can we, after having so weakened ourselves, effectively champion our territorial rights over Diego Garcia which the British have unlawfully alienated from us in the full sight of the UN?
Given the poor condition we’ve put ourselves into for having failed to focus on the state’s interests – focussing instead on personal vendetta — we have to work it up again. The recent imbroglio with India has had the merit of highlighting the continuing deficiency in our midst of sharp perception about evolving situations we have become victim of. It has shown there are no permanent friends but, as the cliché has it, there are permanent interests which override all other considerations. This said, we should not despair. We may, in an élan of national solidarity, once again create a strong voice for ourselves in the concert of nations so as to be respected. We have the necessary resources to rise above complaining or posing as a victim of others’ doings.
* Published in print edition on 20 May 2016