Month: July 2021

Of Western Prejudice and Chinese Victimhood

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Hemant Adlakha, Honorary Fellow, ICS

Image: The forgotten history of the campaign to purge the Chinese from America
Source: newyorker.com

Much before Trump-Pompeo combined “assault” on China and its ruling communist party, an article penned by a Singapore-based US researcher in Asia Times five years ago accused the communist party leadership of China of taking “victimhood” card to dizzying heights. Richard A. Bitzinger, the author, further claimed “every nation in the Asia-Pacific can claim, with some justification, to be a victim. Even Japan can declare its victimhood, as it was the first (and so far, only) target of nuclear weapons.” A well-known and globally respected scholar in South Korea wrote a decade ago: “the global community must speak with one voice and send China a clear message that it no longer views China as a victim of modern history.”

To most Chinese, including of course the ruling communist party, the above Western narrative demonstrates “the ignorance and prejudice its creators” have long held towards China. However, what Bitzinger and the South Korean professor Jongsoo Lee have been emphatically pointing out over the past decade or so is something new: it’s time China must shed a “victim” mentality. The Western “irritation”, as well as “impatience” with China playing victimhood or “century of humiliation” card, had started following China’s unprecedented economic rise a couple of decades ago. More recently, the worldwide anti-Chinese victim mentality buzz, which was re-launched half a decade ago with China’s “aggression” and “assertiveness” in the South China Sea, reached a crescendo with the global spread of the Covid19 pandemic.

Image: “They thought Jesus and Confucius were
Source: Cambridge.org

This explains why according to the Western narrative, in recent years China’s acute sense of “victimhood” has been more pronounced in the international political arena. In June 2016, as the legal verdict was being awaited on China’s sweeping claims to SCS, the WSJ published a story entitled “The Danger of China’s Victim Mentality” and warned the international community of “Beijing lashing out if a ruling on SCS claims goes against it.” Suddenly, the global media was filled with similar “China against the world” op-ed commentaries. While some genuinely advised China to stop its obsession of playing the victim if the country seriously wished to advance as a society. Others were less charitable and warned China must shed a “victim” mentality. 

At another level, as according to Mark Tischler, a researcher at the Department of East Asian Studies, Tel Aviv University, the fundamental flaw in the Western narrative is, it often overlooks the fact that “China is the first power to challenge the United States” that truly rose from its post-colonial past. (Emphasis added) Perhaps oblivious of how much of China’s modern-day policy is driven by the collective trauma of “victimhood,” a former Indian foreign secretary opined recently “to avenge the ‘Century of Humiliation’ that China endured in the hands of western imperial powers from roughly 1839-1840 to 1949,” the Chinese are pursuing unilateralism instead of compromise in SCS. Moreover, their new brand of “wolf warrior” arrogance is replacing diplomacy of humility of the Zhou Enlai-Deng Xiaoping style, observed the veteran Indian diplomat who also served as ambassador in Beijing. In contrast, Tischler argues the major difference between Beijing’s and Western narrative on “century of humiliation” is the following. For China, it (century of humiliation) means “not just a grim lesson of the past, but also a warning about a possible future.” Hence, the (Chinese) narrative has created “a never again mentality.”

Image: “China and Japan” Source:  factsanddetails.com

Much has been written and published in both Chinese and in English, on China’s victim mentality. Yet the issue has not only not whittled away over the decades since the foundation of New China, instead under Xi Jinping “century of humiliation” has acquired the new meaning of “Chinese rejuvenation” or “Chinese dream,” as it were. Interestingly, in an attempt to twist the “one hundred years of humiliation” narrative into post-Mao or post-Tiananmen Chinese nationalism, some scholars in the West are calling it anti-Western or anti-US Chinese nationalism. Applauding Zheng Wang’s highly acclaimed (Columbia University Press, 2014) Never Forget National Humiliation: Historical Memory in Chinese Politics and Foreign Relations, Edward Friedman described the work as “a vivid and well-informed study of post-Mao nationalism and Chinese foreign policy…” 

Furthermore, it is not incorrect to say scholarly claims of “victimhood” being described as the new Chinese fig leaf for anti-West nationalism and to create post-Mao/pre-Mao “victimhood” dichotomy – as the current Western narrative wants us to believe, are fundamentally flawed. A recent article, for example, accuses the Communist Party of China (CPC) of manipulating the so-called victimhood as nothing less than a cynical ploy to exploit Chinese history and the feelings of Chinese people. It is pertinent to mention, though intangible, such a narrative has been receiving a lot of traction in the international media recently. Consider for example some of the following popular writings: “China doesn’t have to keep playing the victim” in Foreign Policy (2018), “China playing victim after attacking Indian soldiers in Galwan” in theprint.in (2020), “The Danger of China’s Victim Mentality” in TWSJ (2016), “China’s dangerous sense of entitled victimhood” in Asia Times (2016), “China’s New Diplomacy: Victim No More” in Foreign Affairs (2003) and so on.

Image: The Victim politics
Source: openthemagazine.com

Though perhaps understudied in the West, like most intellectuals in the late Qing and Republican eras, Mao Zedong too was not only deeply disturbed by the Chinese “century of humiliation,” several of his foreign policy decisions in the early to mid-1950s were heavily influenced by the “victim” mentality. In a seminal paper jointly authored by China’s widely respected historian, professor Yang Kuisong, and his young protégé and a Ph.D. candidate in Chinese history at the Pennsylvania University, Sheng Mao, have highlighted how Mao’s victim mentality impacted his decision which led to two Taiwan Strait crises in 1954-1955 and 1958 respectively. From both crises, according to Yang and Sheng, Mao’s gains were remarkably rewarding and psychologically productive. The first Taiwan Strait crisis – the shelling of Jinmen in 1954 – resulted in Mao succeeding in “forcing the United States to begin ambassador-level talks with China.” The outcome of the second Taiwan crisis in 1958 enabled Mao to declare: “The United States has put itself into our noose.” “The other thing Mao claimed to have achieved from the crises was confirmation of America’s nature as ‘paper tiger’,” Yang and Sheng pointed out. 

Finally, as we talk of prejudice and victimhood, and as the scholars in the West have firmed up their resolve to force Beijing to “give up” playing “victim” card, one thing is crystal clear in the minds of the current party leadership, i.e., riding on the past success of Mao’s playing “victim” mentality, the current Chinese leadership is too aware of how well the victimhood narrative has been serving China in its diplomatic strategies to put it aside anytime soon. Analyzing how China’s victimhood strategy was on full display at the Anchorage summit in Alaska two months ago, Drew Thompson, a visiting senior research fellow at the National University of Singapore, views the Chinese “victim” mentality narrative aimed more at the domestic audience than at the world populace at large. 

Image: China must shed ‘victim’ mentality
Source: South China Morning Post

Well, speaking of prejudices and biases, Michael Barr, author of Who’s Afraid of China (2011) argued a decade ago that “fears of China often say as much about those who hold them as they do about the rising power itself.” The book has been described as holding a mirror to Sino-Western relations in order to better understand ideas about modernity, history, and international relations. It is indeed true the Western bias against China predates the “century of humiliation.” What is also historically undeniable is “on no other major civilization do self-regard, self-congratulation and denigration of the ‘Other’ run as deep, as they have in Western Europe and its overseas extensions,” observed a professor of economic history in a recent article “A Eurocentric Problem.” Not at all a surprise, historian Jeffery Wasserstrom wrote in his review of the book above: “This short book provides a clear-eyed critique of the latest versions of Sinomania and Sinophobia.”

In conclusion, as mentioned above, not only China is not going to stop playing victim and behave like a “normal country” as was recently on display during the first top level bilateral summit between the world’s two largest, hostile economies since President Biden took office. On the contrary, as many in the West fear, and as Beijing perceives the US power as well as dominance continuously declining, China is likely to pursue expansionist policies unchecked. Unlike what many in the West see as the nature of Chinese diplomacy is changing, China knows it is pursuing the same Maoist strategy to trap the US in the Chinese noose. As regards the “wolf warriors,” a seasoned Chinese ambassador Liu Xiaoming, flaunting “victimhood,” recently offered a tongue-in-cheek explanation: where there is a “wolf”, there is a “warrior”.

*This is a slightly edited version of the article published under the title Of Prejudice and Victimhood. https://moderndiplomacy.eu/2021/05/18/of-prejudice-and-victimhood/

Shadow Banking and the Real Estate Bubble: Is Financial Crisis a Real Possibility in China?

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Anushka Maheshwari, Research Intern ICS

Image: Property-hungry Chinese millennials and shadow banking could fuel a financial crisis
                    Source: South China Morning Post

The Chinese economy, due to the strict measures adopted by the government to curb the spread of the Covid-19 virus,  is back on track, with output back to pre-pandemic levels and a surge in credit activity. China’s financial regulators are having a hard time containing risks at home while limiting disruptions from abroad as the economy is opening to foreign investment. The fear of missing out has stoked the investors’ expectations and many people are now buying property for investment or speculative purposes, which Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, termed as “very dangerous”. The household debt in China had reached 150 percent of its disposable income in December 2020 driven by a rise in property prices and seems to be concentrated among the millennials. The youth of China is clearly banking upon the government to sustain this growth in real estate prices, but a major portion of this debt is financed by shadow banking. People’s Bank of China (PBOC) defines China’s shadow banking as “credit intermediation involving entities and activities outside the regular banking system”.Since this sector is outside the formal banking sector, it lacks a safety net that comes from being financially backed by the government through deposit insurance publicly guaranteed or ‘lender of last resort’ facilities by China’s central bank. This raises an important question: Is China on the verge of a financial crisis like the one faced by the US in 2008-09?

China escaped the 2008 financial crisis primarily because of its booming domestic market and little exposure to the overseas market for wholesale funding. But the contraction in capital inputs through foreign direct investment during the crisis and fall in exports made the government announce a $586 billion stimulus package to provide a boost to the economy. Major infrastructural activity, constituting 72 percent of the package was undertaken, and only 30% percent of this was financed by the central government. The rest had to be funded by the local governments, and since they couldn’t borrow funds themselves, local government financing vehicles had to take on debt on their behalf from banks. But banks had severe restrictions in terms of lending such as caps on lending volumes imposed by the PBOC, mandatory bank loans to deposits ratio, restrictions on lending to certain industries, reserve requirements, among others. Due to this, shadow banking activities grew along with an increase in fixed investment, driving economic growth but at a high cost, so much so that the corporate debt to GDP ratio reached a record 160 percent in 2017 as compared to 101 percent 10 years prior to it. 

The Chinese leadership claimed that it had successfully defused the housing bubble that had formed in China by the end of 2014 due to these shadow banking activities. So, in order to uplift the dampening economy in 2015, it eased restrictions on second-hand home purchases and the property market since then has been booming, with more households buying houses and property developers borrowing more to engage in construction activities. There are many factors causing an increase in shadow banking activities, which in turn contribute to the growing real estate bubble. Firstly, Chinese authorities are trying to sustain high GDP growth rates through credit borrowing which puts strain on financial institutions of the country. Secondly, zombie companies that have little to no productive use, are borrowing more and more simply to meet their current obligations. Thirdly, many state-owned and private companies in China have property subsidiaries, and property loans made to these subsidiaries are sometimes presented in the books as going to the parent company. This results in the share of property-related debt being much higher than what is available in the official data. The overall impact was that the amount invested in Chinese housing hit $1.4 trillion in June 2020, while the total value of houses and developers’ inventory, according to a Goldman Sachs report, had reached $52 trillion in 2019.

Image: Shadow banking in China has ballooned into a $10 trillion ecosystem that connects thousands of financial institutions with companies, local governments and hundreds of millions of households.
Source: Bloomberg Quint

The shadow banking system in China works independently of its monetary policy, amplifying increases in the money supply but working opposite when the restrictive interest-based policy is imposed. Thus, it can be inferred that in spite of the Chinese policy changes to curb the real estate sector, the negative role of shadow banking is why the bubble continues to build. President Xi Jinping’s statement in 2017 that “houses are built to be lived in, not for speculation”  clearly indicates that the PLA government is sensitive to this issue. The government in China has adopted stringent measures to stop the rise in property prices over the past few years, and the latest mandate in August 2020, restricted credit supply to both developers and investors. These new regulations that mandate all lending institutions to decrease the quantity of loans given to this sector are going to stay in place until the real estate cools off. There are two forms of shadow banking in China, one is the channel business of Chinese banks that hide some of their lending activities to keep them outside the purview of the auditors and regulatory bodies. The other is P2P(Peer-to-Peer) lending platforms like trust companies, factoring companies, etc. In order to contract both these forms, the Supreme Court in China has lowered the interest rates on microlending, which will make it unprofitable for lenders while the CBIRC(Chinese Banking and Insurance Regulatory Commission) has forbidden trust companies to finance developers that do not meet the necessary requirements of shareholders and capital or lack necessary licenses.

The PBOC has significant control over lending activity in China as compared to the independent decision-making possible in the U.S. markets, which implies that the situation in China is more stable. There are many structural differences between the shadow banking systems in China and the United States, such as in China, market-based financial instruments do not play as significant a role as they do in the USA. Also, in China, smaller banks went off-balance sheet as they were constrained by liquidity requirements as compared to the larger banks in the US that were constrained by capital requirements. All these factors considerably lessen the chances of a financial crisis like that of 2008-09. Also, the Chinese real estate market has higher-than-normal down payments, sometimes as high as 40-50 percent of the transactions as compared to the 10-20 percent in most western markets. This implies that the debt to transaction price ratio is low, which discourages people from the lower socioeconomic strata of Chinese society to purchase high-priced properties, thereby reducing the risk of defaults. The PBOC and the CBIRC stepped in to take over the Baoshang bank when it collapsed in 2019, whichhas both positive and negative implications.  On one hand, it indicated that the Chinese government may intervene in case of any crisis-related situations caused by defaults in the shadow banking sector, but on the other hand, it may also encourage risk-seeking behaviour from creditors depending on the government to back the financial system. The Chinese government is caught between trying to curb shadow banking activity in order to reduce system risk in the country due to the real estate bubble and ensuring liquidity in the economy. Thus, although the possibility of a financial crisis is low, China does need to reduce risks posed by its shadow banking sector and ensure financial stability.

How Nepal’s Immediate Neighbour Takes Opposite Approaches to its Political Crisis

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Shreha Gupta, Research Intern ICS

Source: Myrepublica

On 20 May 2021, the Supreme Court of Nepal intervened and overturned the decision of dissolving the Parliament in another landmark verdict. The verdict ordered the appointment of Sher Bahadur Deuba, Nepali Congress President, as Prime Minister.  Deuba was sworn in as Prime Minister on 13 July, 2021. Earlier, on 21 May, President Bidya Devi Bhandari, on the recommendation of the then Prime Minister K.P. Sharma Oli had dissolved the Parliament and announced mid-term polls on 12 and 19 November, 2021.

Nepal had plunged into political turmoil twice after Oli’s contentious recommendation to dissolve the Parliament on 20 December, 2020 and again on 21 May, 2021. In February, Nepal’s Supreme Court intervened and ordered the reinstatement of the Parliament that was dissolved on 20 December, 2020. This came as a setback to Oli who was already preparing for snap polls. Nepal’s highest court reinstated the Parliament for a second time in just five months.

The political crisis in Nepal has created a measure of uncertainty in the Indian and Chinese policies towards Nepal. The two countries have followed different trajectories in their response to Nepal’s domestic developments in the recent past. China, despite their claim of non-interference in domestic affairs have shown a keen interest in Nepal’s political crisis, whereas India, despite having been accused of interfering in Nepal’s internal matters in the past, has decided to step back and wait for the situation to unfold.

In December last year, Hou Yanqi, Chinese Ambassador to Nepal met with Nepalese President, party chair Pushpa Kamal Dahal and Standing Committee member, Barsha Man Pun after dissolution of the House of Representatives.  Earlier in May and July, she had held a series of meetings with top party leaders including Oli and Dahal in a failed attempt to reunite the Nepal Communist Party (NCP).

On 27 December 2020, China had sent Guo Yezhou, a vice-minister of the International Department of the Chinese Communist Party to Kathmandu to take stock of the political situation. The visit came at a time when China was concerned over the political stability in Nepal and the unity of the NCP. China was also concerned that the political crisis in Nepal could threaten to reverse the gains made after President Xi Jinping’s visit in October 2019 as it was instrumental in taking China-Nepal bilateral relations to a new height.

The Guo-led delegation had met with President Bhandari, Prime Minister Oli, Nepali Congress President Deuba and chair of the other faction of the NCP, Pushpa Kamal Dahal. The Chinese delegation reportedly wanted to explore the possibility of a reunion between the two warring factions of the NCP, the reasons behind its spilt, its impact on Nepal-China relations and the possible road ahead for the future political course in Nepal. The Chinese team had to return empty-handed after the NCP factions failed to bury the hatchet.

While China sent a high-level delegation to Nepal to persuade the rival factions of the NCP to stay together, India stated that Nepal’s political developments are its internal matter and it is for the country to deal with them under its domestic framework and democratic processes.

On 6 February 2021, the Chinese Foreign Ministry issued a press statement in the context of a telephonic conversation between Nepalese Foreign Minister, Pradeep Gyawali and Chinese Foreign Minister, Wang Yi. According to the statement, Wang Yi said that China adheres to the principle of non-interference in the internal affairs of other countries and respects the path towards development chosen by the people of Nepal.  “As a friendly neighbour, China hopes that all parties and factions in Nepal will bear in mind the fundamental and long-term interests of the country and its people, seek common ground while shelving differences, and maintain unity and stability, so as to create favourable conditions and environment for its own development and prosperity,” the statement added.

Although Wang Yi claims China’s adherence to the principle of non-interference in the internal matters of other countries, observers in Nepal don’t agree with it. Political analyst Uddhab Pyakurel criticised China for meddling in Nepal’s internal matter. “No matter what the Chinese side say to justify their visit to Nepal, we all know that they are trying to interfere in Nepal’s internal affairs. For this, NCP leaders and Nepali media, which helped build the narrative that Chinese leaders had played a role in unifying the erstwhile CPN-UML and CPN-Maoist Centre, are responsible,” he said. He was concerned that Chinese activities would turn Nepal into a strategic playground in its tiff with India and other western powers including the United States of America.

Analysing China’s recent actions, Political scientist, Dev Raj Dahal stated that China is using its soft power by sending CPC leaders to influence Nepal. He added that China was alarmed about the security and stability in Nepal as Nepal shares its border with the Tibetan Autonomous region, ‘the geopolitical loophole of China’. He said that China is concerned about stability in Nepal also because it is interested in doing business with India’s vast market through Nepal. This would be possible only if Nepal remains politically stable.

China’s meddling in Nepal’s domestic politics has drawn international attention. Some foreign diplomats in Kathmandu viewed China’s brazen interference as a demonstration of its growing influence in Nepal’s internal matters while India’s decision to steer clear has been appreciated by former diplomats. “India, which is usually the whipping boy of their politics is correctly staying out of the picture, while China attempts to involve itself in their politics,” said Manjeev Singh Puri, former Indian Ambassador to Nepal.

There could be several reasons why India preferred to keep a low profile and refused to take sides in a political tug of war between different parties in Nepal. In the past, India has been seen as trying to meddle in Nepalese politics which hasn’t been received well by people in Nepal.

To reiterate, China had invested in buttressing the Oli government which has now been ousted. In the short term, recent developments in Nepal could result in a limited setback for the Chinese policy towards Nepal. However, these developments have not fundamentally undermined China’s position in Nepal. China’s ambitious Belt and Road Initiative (BRI) and its ongoing and proposed involvement in hard infrastructures, including highways, bridges, airports, hydroelectric projects have significantly helped China entrench its presence in Nepal. China has also built up its soft and sharp power in Nepal in recent years. The latest change in government is unlikely to have a major impact on China’s position in Nepal.

India’s present policy of non-interference with regard to Nepal’s political crisis is serving India well. The change in government will help India to some extent in developing its equities in Nepal as it has been given credit for not interfering in Nepal’s domestic affairs. Durable political stability in Nepal augurs well for India whereas, instability will only pave way for inimical external influences. India must encourage the strengthening of a people-driven polity, invest in reinforcing its considerable linkages and synergies in Nepal and work towards improving its image that has been hampered in recent years. It is important for India to avoid being perceived as partisan and adopt the strategy of detached pragmatism rather than proactive involvement.

China’s e-commerce boom: How do Indian policies compare?

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Raj Trikkha, Research Intern, ICS

Image: China, in spite of gaining access to the internet after India has managed to have a 50.4% share of the global e-commerce market, while India’s share is at 1.29%
Source: Businessworld

China has been dominating the world in e-commerce since 2013, when it overtook the US to become the world’s largest market. Ever since the growth in this sector has been on a double-digit spree. According to a report by eMarketer, the revenue accrued to Chinese companies from their e-commerce sector in 2020 stood at 2296.95 billion dollars, almost triple that of the US. 

Now, the first question that pops in our head is, ‘Is it because of the huge population of China?’. If it were so, then India, which has a population almost equal to China’s, should also be topping the list or at least be close to topping the list, which it is not. Hence the more important question arises, ‘What holds back India from leading the world in the e-commerce sector?’. 

Several factors, like demographics and consumer trust, might be taken into consideration while answering the question. To narrow down our focus, we will only look into the government policies and regulations of the two countries and compare their effectiveness. The policies will pertain to two domains, namely, internet development and domestic e-commerce. 

China embraced the internet in 1994, and quickly realizing its importance, began developing the internet sector at an incredible speed. While only 6000 computers and 40,000 users were connected to the internet in 1995, by mid-2001, 10.2 million computers and 26.5 million users were online. The credit for this achievement goes to the initiative taken by China’s government in the promotion of the internet. They launched 13 “Golden Projects” in order to build the information infrastructure of the country and developed their internet in three phases – Asteroids (1996-2003), Bees (2004-2010), Coliseums (2010-present). Along with this, the Chinese also focused on growing their technological infrastructure which led to an expansion of telephone networks, PC manufacturing, and internet awareness. 

While the internet came to India in 1986, much before China, it could not climb the stairs of development as quickly. Its first action towards internet development, the IT Action Plan 1998, was several years after the introduction of the internet. It also eventually laid down new laws, the IT Act 2000, to deal with cybercrime and e-commerce. While India was still formulating policies and laws, China worked on building infrastructure for e-commerce under the Golden Projects. The strategy followed by India was thought to be better in the long run, while China’s strategy paid off instantly. It is 2021, and the anticipated success from India’s long-term strategy is yet to be gained, as China enjoys an internet penetration of 70.4%, while India is only at 45%. 

The vast differences in their approaches to regulating the market affected the market and its players to a large extent and thus, became an essential factor in determining the growth of the market. 

Image: While India remains far behind China in e-commerce sales, it is growing at a rate faster than any other country on this chart
Source: eMarketer

For instance, China’s e-commerce policies aim at strengthening the construction of an e-commerce credit system that includes the credit information of all stakeholders. The government monitors companies with poor credit ratings, which helps avoid counterfeiting and other malpractices. Along with this, the government ensures that all e-commerce enterprises operate in accordance with information security protection regulations and technical standards. To increase security, the government has promoted the use of digital certificates and their verification among electronic certification authorities. Of course, it might be argued that such progress has occurred at the cost of citizens’ privacy. 

China has promoted tax and financial incentive programs for high-tech SMEs by replacing business tax with a value-added tax and nurturing a multi-channel financing mechanism to support e-commerce companies. The government also motivates banks and other financial bodies to launch security over intangible assets, real estate pledges, and other financing services for e-commerce SMEs. This makes it easier for SMEs to raise finance, as Intangible Asset–Based Lending leverages a portfolio of Intellectual Property or other intangible assets to secure a loan. It also guides investment funds to strengthen support for E-commerce startups.

The Indian government, on the other hand, is working towards integrating traditionally offline markets, like vegetable markets, into digital e-commerce platforms. The government has also launched flagship initiatives like Digital India, Make in India, Start-up India, and Skill India, which are responsible for the growth of the sector. 

Although India is making considerable efforts in developing its e-commerce market, there are many areas with scope for improvement. Integration of stakeholders is a key shortcoming. Government stakeholders like policymakers, taxation authorities, and the Registrar of Companies should be woven into a single system to increase efficiency and transparency for the players in the Indian e-commerce market. The absence of a centralized mechanism to provide rating or accreditation to the numerous e-commerce sites adds up to the inefficiency. This makes it difficult for people to trust such websites. If a standardized procedure for the same is developed, it will positively impact the quality of online services.

On comparing the policy approaches of the two countries, it is evident why China holds 53.64% (as of 2020) of the global e-commerce market, and India is at 1.29%. It is also clear that a large population by itself cannot translate into a thriving e-commerce market in the absence of supportive policy. Hence a more careful dissection of China’s experience can be instrumental in realizing the full potential of the Indian e-commerce market. 

It’s high time that BRICS should work towards Youth Empowerment

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Dr. Sushmita Rajwar, Assistant Professor, Maharaja Agrasen College, University of Delhi


Image: BRICS 2021 Summit logo
Source: BRICS Youth Energy Agency

We have come a long way from when the term BRIC was coined by Jim O’Neil in 2001 which later included South Africa in 2010. We should remember that BRICS nations came together at a time when there were many changes in geopolitics. It was a time when the 9/11 attacks were changing world politics, China had joined the WTO in 2001, Russia was recovering from the 1998 financial crisis, and India also coming out of the sanctions imposed after the 1998 Nuclear test. The BRICS nations were seen as quite different from each other but there was a great deal of complementarity that existed – China was seen as the ‘manufacturing factory of the world’, India was seen as ‘pharmacy of the world’ and IT Power, Brazil as the ‘granary of the world’ and Russia was seen as the ‘energy hub of the world’ and later South Africa was included as it was the most significant country in the African continent. India also had most of the young population and China is the most populated country among all.

There are many expectations from this year’s BRICS Summit. 2021 marks the 15th anniversary of BRICS and hence, it is an opportune moment to review its work, as the theme suggests “BRICS@15: Intra BRICS Cooperation for Continuity, Consolidation & Consensus”.

One should also understand that the BRICS represents is not just a political configuration but the economic potential to give greater voice to the developing world. The young population of India has had to face many challenges during the pandemic in matters of education and training, finding decent jobs, mental well-being, and the digital divide and it is the right time for BRICS to prioritise these issues.

How can BRICS help?

The initiatives taken up by BRICS countries should prioritise issues of the youth. One of the most important outcomes of BRICS has been the establishment of the NDB in 2014. China hosts the headquarters of NDB & regional offices have been set up in member countries and there is a demand for opening a regional office of New Development Bank (NDB) in New Delhi also. The NDB has funded 18 development projects in India, providing assistance for      Covid-19 emergency relief,  the rapid rail transport network, metro, roads, bridges, irrigation, renewable energy, etc. India has already been granted a US$ 1 billion loan from the NDB for the Mahatma Gandhi National Rural Employment Generation Scheme (MGNREGA). The NDB’s regional office in India would allow young people to gain employment opportunities as well as participate in the decision-making process in the new project proposals too. India can certainly focus on empowering youth by promoting new and nascent start-ups by the young population in India. The Make in India campaign of the Indian government has sought to encourage young entrepreneurs.

If we look in terms of challenges for the youth, there are many, but the China-India Galwan conflict in May 2020 has also raised tremendous challenges to BRICS solidarity and created a huge trust deficit. There has been a rise in strong anti-China sentiments among the youth. The results of the conflict was a series of economic sanctions against China by India – for example, the canceling of a contract by the Indian Railways and opposition to contracts being given to Chinese firms for the construction of the Rapid Railroad Transport System between Delhi and Meerut (this is the same development project that has been granted funding by the NDB in India). The Indian government banned 52 Chinese Apps in India including Tiktok, We Chat which was a huge business loss for these firms. Having around 200 million users of Tiktok in India meant that a sizable portion of this is youth. Indian influencers on apps like Tiktok were adversely affected and had to look for other applications,  losing around US$ 15 million last year.

A large number of young people also lost either one or both their parents to Covid-19. While the government has brought out some schemes to provide free education to such children or youth, we all know that it isn’t going to be enough. There can be many ways through which such people can be provided help. There is a need for the governments of the BRICS countries to look into providing adequate education and training to the younger population. India already has a strong network in providing tele-education to many countries. Therefore, an idea of starting a BRICS Virtual University where young people can choose to study from a variety of courses from different disciplines in hundreds of Universities in BRICS countries can be proposed. This would also enable them to gain suitable employment too. BRICS countries can also come together to help young people find suitable employment in these countries.

There are many Indian medical professionals working around the world. Many young people go to Russia for medical education and become trained doctors and paramedics. These young people can be provided employment in BRICS countries through a substantial framework.

Mental health needs special focus in India through education. The social structure of families, peer groups, religious associations, and caste associations have done little to address mental health issues. Despite the Central Board of Secondary Education (CBSE) making it compulsory to have counselors at schools, only 3 percent of private schools have done so. Solutions should firstly point out the need to recognise the problem and then make efforts to remedy it. Introducing mental health as part of the curriculum would really help school-going youth to understand the fundamentals and seek help when they need it.

India has a huge shortage of healthcare services. As per the WHO the density of doctors per 1000 people should be 1, while only 6 states in India have been able to achieve this. There is a huge shortage of doctors in many other states. Most doctors are also concentrated in urban areas, creating a shortage of medical professionals in rural healthcare. Suggestions to the  BRICS countries could be to create a pool of medical healthcare professionals that can help the youth.

BRICS countries can help in supporting the rural areas of India to enhance IT technology. Specialised training in IT for people living in rural areas should be initiated. NDB can also fund such training programmes to set up IT infrastructure in rural villages so that school and college-going students can undertake online classes. Since the pandemic is here to stay and online courses are becoming more and more feasible, IT centres can be established in rural areas with fibre broadband internet services that can provide space and services to students to undertake their lectures. 

The implications of the pandemic on a country like India are immense. Despite the help that India has been able to provide to different parts of the world, India needs support from the global community. By the time India hosts the G20 Summit in 2023, India should be able to boost its economy. Being part of the BRICS grouping would mean benefits for each other. Therefore, this is the right time India can push for BRICS to help support each other to recover from this pandemic.