fbpx

OBAMA SECOND REGIME AND ITS IMPACT ON INDIA AND CHINA

The result of the recent elections according to my observation will yield no effect on the economy of India and its relations with the US at all. The history witnessed that both the Republicans and the Democrats were agreed to acknowledge the importance of India in the world. It was Clinton, a Democrat who reopened the talks with India after the nuclear experiments and again in 2005, it was Bush, a Republican, who signed civilian nuclear deal with India. The Indian factor is indispensible for the US to cope with the strategic challenges faced by the US in Asia particularly and in the rest of the world generally.

When Obama sworn-in as 44th president of the United States, world was suffering from deadly financial crisis. The crisis arose from the bursting of the real estate prices to the maximum and then declined dramatically. This global financial crisis culminated on July 1, 2007 when the US investors lost confidence in subprime mortgages. This compelled the US Federal Bank to influx a large sum of capital into the financial market. This situation worsened when the stock markets around the world crashed. Similarly, the collapse of Lehman Brothers added fuel to the fire which was lit by the global financial crisis.

The situation of the economy inside the US was also miserable than ever. The newly-elected president had to face the issues like unemployment, declining economy and ballooning federal financial debt. According to experts, the US experienced its worst crisis after the Great Depression. It was estimated that the total loss of the US bank reached at about one-third of the total bank capital.

Obama rightly remarked this situation at the inaugural speech of his presidency on January 20, 2009, ‘Our economy is badly weakened, a consequence of greed and irresponsibility on part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost, jobs shed, business shattered. Our health care is too costly, our school fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet. These are indicators of crisis subject to date and statistics.’

The Obama administration tried to deal with these ‘troubling legacies’ by making a number of economic reforms which included Lilly Ledbetter Fair Pay Act, 2009 Children’s Health Insurance, Insurance Programme Reauthorization Act, American Recovery and Reinvestment Act, Credit Card Accountability, Responsibility and Disclosure Act and hiring incentives. In the same way, $ 62 billion money was injected into the auto industry for its recovery. This also brought about 100,000 jobs.

 Experts believe that some of the Obama’s policies are socialist. Now as far as the policy of the US candidates regarding China is concerned, the two candidates shared mixed views regarding the second biggest economy. Mitt Romney vowed to take a harsh stance against the Chinese economy. He labelled China as a currency manipulator.
 How much the economic policy was successful in changing the situation of the people can be gauged by the mid-term elections of 2010. In the said elections, Republicans captured 243 out of 435 seats and also strengthened themselves by getting 47 seats in the Senate. This happened because of the biggest woes of the US, e.g. 10 % joblessness, sluggish economic recovery and expanding federal debt which had shaken the confidence of the voters on the Obama administration.
Now Barrack Obama representing the Democrats has won the elections. The outcome of these elections is very important for the rest of the world both in terms of economy and peace.
On the global scenario, China and India are the emerging economies. The present century witnesses the cordial relations between the US and India, e.g. civilian nuclear deals of the Bush administration. This policy was carried forward by the Obama administration also. Obama visited the India in 2010. During his visit, Obama made deals with the Indian authorities worth $ 10 billion. This deal was also meant to create about 50,000 jobs for the Americans.

The result of the recent elections according to my observation will yield no effect on the economy of India and its relations with the US at all. The history witnessed that both the Republicans and the Democrats were agreed to acknowledge the importance of India in the world. It was Clinton, a Democrat who reopened the talks with India after the nuclear experiments and again in 2005, it was Bush, a Republican, who signed civilian nuclear deal with India. The Indian factor is indispensible for the US to cope with the strategic challenges faced by the US in Asia, particularly and in the rest of the world generally.

 In order to curb the power of China, the US wants to strengthen Indian economy. Similarly, as America could not afford confrontation with China so a policy of mixed diplomacy will be carried forward by the Obama administration up till 2016.
 Experts believe that some of the Obama’s policies are socialist. Now as far as the policy of the US candidates regarding China is concerned, the two candidates shared mixed views regarding the second biggest economy. Mitt Romney vowed to take a harsh stance against the Chinese economy. He labelled China as a currency manipulator. He also said that Apple gadgets are made in China because of unfair exchange rates. He also accused President Obama for not giving tough time to China. He is also of the view that China exploits the economies of other nations by theft of intellectual property. He said, ‘We can compete with anyone in the world as long as the playing field is level. China’s been cheating over the years, one, by holding down the value of their currency, number two, by stealing our intellectual property, our designs, our patents, our technology.’

On the other hand, President Obama wanted to have a cooperative relationship with China. But at the same time the previous tenure of Obama was a mixture of good and bad comments against China. During the visit of Chinese President Hu Jintao to the US, Obama said that he wanted to have good relations with China so that they could work together. But at the same time he also criticised the policy of currency manipulation by China.  On the defence matter, the US revealed $ 5.8 billion arms scale package to Taiwan in 2011. Similarly, in this year Obama also announced the creation of trade enforcement unit to search the unfair trading practices in China.

In his previous tenure Obama also filed several complaints at the WTO about China which included unfair taxes on the US vehicle imports, China’s unfair subsidy on its auto and auto parts exports and also on its restriction on exporting rare earth metals. Despite of these minor activities there had been no serious controversy under Obama administration. What will be the future of China’s economy and its relations with the US during the second term of Obama is a big question; though not a mystery. For, there will be no shift in policy and the US will continue her relations as it is. Since China is capable enough to survive the rough course, to avoid confrontation with China is in the best interest of the US herself.

The quintessence of what has been written above is that the new regime of Obama will have more or less the same policies for India and China.  In order to curb the power of China, the US wants to strengthen Indian economy. Similarly as America could not afford confrontation with China so a policy of mixed diplomacy will be carried forward by the Obama administration up till 2016.

By: Ahmad Mujtaba

Leave a Reply

Your email address will not be published. Required fields are marked *