Domestically and internationally, politically and economically, India knows it is a sleeping giant. But as it begins to awaken, it must now learn to dream. Before it takes its place on the international stage, India needs to confront the challenges it faces at home. By reevaluating the role and size of its government and embracing the idealism of a common dream, the country can craft a more ambitious foreign policy worthy of the influence it will soon wield abroad.

Image courtesy of francediplomatie, © 2011, some rights reserved.

Without internal stability, India can only aspire to modest goals abroad. It wants an arm’s-length alliance with the United States and a shrewd relationship with China, but it appears ill-equipped to maintain either indefinitely. The interests of the world’s largest democracy and the world’s strongest democracy do not always line up, and whenever they do, it is not because it seeks to join the fold of the West. After all, India has long been at the center of the Non-Aligned Movement, of which China is an observer country. The two most populous countries on the map have grown increasingly wary of each other, but for now India and China maintain healthy economic ties. By 2015 trade between them may be worth as much as $100 billion. In the long term, however, India is likely to help balance, rather than directly clash with, the far superior economic and military might of China.

Most countries dream of having such a prudent and straightforward foreign policy, one that allows it to ally with other developing nations without losing relevance among greater powers, but India is not like most countries. Until it stops punching below its weight in international affairs, India will risk losing its opportunity to shape the political landscape, or as Prime Minister Manmohan Singh recently put it, to make “new global ‘rules of the game’”.

While visiting the country in late 2010, US President Barack Obama famously said, “India is not simply emerging; India has emerged.” Since then, poor economic news has silenced Mr Obama’s words of praise. Growth is dwindling, inflation and the deficit are growing, and inequality is expanding. Meanwhile, its credit rating is at the lowest threshold for investment grade, and a downgrade back to “junk” status would threaten the foreign financial backing that finances many of the basic services it struggles to deliver to its people. Its poverty crisis has continued to deteriorate: a third of all Indians now live under the poverty line, and out of all the impoverished people on the planet, over a third live in India.

The worst news of all came in July 2012. At a time when its government was producing more heat than light, India went dark. Tremendous power outages robbed over 600 million people of electricity, affecting half the national population—nine percent of the world total. This has drawn greater attention to the country’s endemic domestic problems, including poor infrastructure and an inefficient government that lacks the political will to improve it.

Only comprehensive reforms can sustain the headway India has made in securing its national interest across the world. While the country’s problems are many, varied, and easily identifiable, the government’s reforms are far less so. Policymakers have often relied on education and economic growth to lift people out of poverty, but enrollment in secondary and tertiary education is well below that of Brazil, Russia, or China, and the World Bank’s ease of doing business index ranks India as 132nd out of 185 economies. Systemic reforms are rare. Due to the “striking ethnic and linguistic diversity” of the country’s one and a quarter billion people, politicians focus “less on questions of efficiency than on spreading benefits across competing constituencies and servicing multiple political patronage systems.”2 As a result, when it comes to solving major crises and expanding the economy, the government is often its own worst enemy.

It is time for India to reconsider the size of its government and role bureaucracy should play in managing the economy. Reform efforts in recent years have primarily centered on reining in the state. It’s no wonder that in a World Economic Forum survey of Indian businessmen, nearly fifty percent cited either “inadequate supply of infrastructure,” corruption, or “inefficient government bureaucracy” as the factor that most hinders business in their country. Certainly the government ought to take its hand out of places where it does not belong—for instance, it should reduce its corrupt influence in land acquisition and end the coal mining monopoly it insists on propping up—but in many cases the problem is a lack of government where it counts most.

The government must change the nature of India’s bureaucracy, clearly defining its responsibilities and the limits of its authority; but it has been conspicuously absent, it must also build up its presence in order to fulfill fundamental promises to “raise revenues, adjudicate disputes, uphold law and order, and provide public goods.”3 It needs more personnel to collect taxes and enforce regulations, more doctors and nurses to staff hospitals and deliver public health services, more civil engineers and architects to raise infrastructure from the ground up, and more lawyers and judges to sift through the backlog of 32 million pending legal disputes. When India won its independence from the British in 1947, its principle of self-determination relied on Mohandas Ghandi’s old aphorism, “That State is the best governed which is governed the least.” Today it must forget these words. Sound governance doesn’t necessarily mean less government.

Domestic reforms will free policymakers to craft the more ambitious foreign policy that India deserves, but only a common dream can sufficiently motivate the country to expand its influence abroad. More than India’s generous foreign aid, the world needs its ability to unite diverse populations. More than Bollywood movies and other means of soft power, the world needs its prudent policy sensibilities and its enduring commitment to the rights of developing nations. And more than innovative responses to age-old problems, India needs a dream. In the past reform has been presented as an “unpleasant medicine necessary to fend off economic illness rather than as a means of fulfilling a dream.”4 The articulation of this Indian dream may involve such values as civic duty, the freedom of self-determination, or economic liberalism,but whatever future India decides on, the salient point is that the people and their representatives must make a choice and work towards it. To the benefit of the world, a dream of the future will awaken the sleeping giant.