India has made great progress in terms of economic growth but there is still much the government can do to strengthen the country's prospects, Dr. Meg Lundsager and Mr. Richard Rossow told Pacific Council members during the third installment of the BRICS Summer Teleconference Series. The discussion was moderated by Ms. Nishtha Mishra, a Ph.D. candidate in economic policy and an assistant policy analyst at the RAND Corporation.

Dr. Lundsager is a public policy fellow at the Wilson Center and a former U.S. executive director of the International Monetary Fund (IMF). Mr. Rossow is a senior fellow and Wadhwani Chair in U.S.-India Policy Studies at the Center for Strategic & International Studies.

India can play a constructive role on the global stage but it should be less fearful of trade with other economies.

Out of the five BRICS economies, India’s alone stands out with annualized GDP growth north of 7.5 percent. As one of the world’s fastest growing economies, the country continues to be an attractive market to foreign investors. However, Rossow pointed out that while Prime Minister Narendra Modi is pro-investment, he is also anti-trade, which could hinder further growth. He said that India can play a constructive role on the global stage but must be less fearful of trade with other economies.

"In two years Modi has lifted about 40 different foreign equity restrictions, which is very significant, and much faster than any of his predecessor governments have done," said Rossow. "He courts investment from foreign CEOs, which is a new tactic for India. But we’ve seen no steps by the Modi government to integrate themselves in terms of trade with other major economies. They’ve shown no interest in joining the Trans-Pacific Partnership, our attempts to negotiate an investment treaty with India have gone nowhere, and all the Regional Comprehensive Economic Partnership members say India’s the reason those negotiations are slow."

Rossow said that in the years just prior to Modi’s tenure, India experienced declining economic growth and a lack of interest in initiating new economic reforms. When Modi took office, international expectations were high that he would enact a business-focused agenda and initiate powerful reforms early on.

"Two years on, most say it’s a mixed record," said Rossow. "You can see signs of things they’ve done and want to do, but relatively few of the big reforms people wanted. One good example is the major tax overhaul passed by parliament last week called the Goods and Services Tax (GST), which is going to help create more of a national market in India for production."

"Among the BRICS, when there are similarities in terms of their international objectives, they can work together and become a lobbying force."

- Dr. Meg Lundsager

Modi has also pushed for states to compete, according to Rossow. India is comprised of 29 states, each of which has power over their own electric grid, labor, and land acquisition.

"Modi is getting them to compete to attract investment, and states govern far more of what investors actually face than the federal government does," said Rossow.

Lundsager commented on the evolving role of the BRICS countries, including India’s place within them.

"Among the BRICS, when there are similarities in terms of their international objectives, they can work together and become a lobbying force," she said. "But beyond that, because their economies are so divergent, in terms of that translating into any real binding cooperation, there’s much less of that. You’d think they’d each be a regional leader and try to pull together the emerging market/developing country world, but that’s not the case."

Economically speaking, Lundsager said that "South Africa can’t deliver other African countries; Brazil certainly can’t deliver all of South America, much less Mexico; Russia doesn’t really bring along the former Soviet Union or Eastern Europe; India doesn’t really have a significant role in leading any particular group; and of course China, the big guy, is unto itself. They all want deeper cooperation with China, but each one of these countries has different kinds of tensions with China."

Lundsager said that the five BRICS countries have very little trade and investment amongst themselves, but they do have influence among international organizations such as the IMF. All five BRICS are IMF "creditors," which means they are strong enough that the body draws on their quotas, resources, and commitments to the IMF to lend to other countries. In other words, the BRICS have contributed to the pool of money that the IMF has used to contribute to Greece, Portugal, Ireland, Ukraine, and others over the years.

Listen to the full conversation below:

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Justin Chapman is the Communications Associate at the Pacific Council on International Policy.

The Pacific Council’s BRICS Summer Teleconference Series continues with discussions about China on August 31 and South Africa on September 14. Read summaries of our teleconferences on Brazil and Russia.

A perfect storm of internal and external factors – from falling oil and gas prices to Western sanctions – have contributed to the sustained decline of the Russian economy, Sergey Aleksashenko and Jennifer Harris told Pacific Council members during the second installment of the BRICS Summer Teleconference Series. The discussion was moderated by Agnia Grigas, a nonresident Senior Fellow at the Atlantic Council. 

Dr. Aleksashenko is a nonresident senior fellow of Global Economy and Development at the Brookings Institution. Ms. Harris is a senior fellow at the Council on Foreign Relations.

After Russia annexed Crimea in 2014, the West imposed sanctions on Putin’s government. Then oil prices dropped, sending the Russian economy spiraling into a recession in 2015, with the value of the ruble falling about 127 percent and gross domestic product shrinking 3.7 percent. The International Monetary Fund anticipates a 1.8 percent decline this year.

"[Russia has] a presidential election in 2018 but everyone knows the outcome even today."

Harris believes, however, that the "economic downturn seems to have found its bottom. Russia is beginning to get its confidence back. Last month the federal bank decided to cut interest rates for the first time since August 2015, and the IMF came out with statements suggesting comfort with Russia’s current exchange rate, calling it appropriate for the current environment."

Aleksashenko said that as long as the world continues to consume oil and gas, which account for about half of Russia’s export revenue, then the country’s economy will not collapse. He added that the state-run energy company Gazprom is limited in terms of what it can or cannot do in the face of falling oil and gas prices.

"Gazprom is not a commercial company – it is a political instrument of the Russian government," said Aleksashenko. "In many cases it is used as a weapon against neighbor countries and others."

"We’ve seen Russian money try to prop up or bar candidacies in the heart of Europe. This has gone unaddressed for far too long."

When asked about the recent scandal regarding the U.S. presidential election, in which Russia was accused of hacking into and releasing Democratic National Committee emails and encouraged by Republican candidate Donald Trump to continue to do so, Harris pointed out that "this is certainly not the first foreign election that Russia has tried to meddle in. We’ve seen Russian money try to prop up or bar candidacies in the heart of Europe. This has gone unaddressed for far too long. We need to pass campaign finance reform, now that it is a matter of national security."

How will the future of the Russian economy impact the stability of Putin’s control? Harris argued that the Russian leader’s reign is directly linked to the country’s economic performance. Aleksashenko disagreed, saying he does not think Putin is going anywhere anytime soon.

"We have a presidential election in 2018 but everyone knows the outcome even today," he explained. "Putin is not scared of the economic situation. In order for Russia to be great, he believes the Russian people have to make sacrifices."

Meanwhile, he said, expect to see Putin increase Russian activity in the international arena as he tries to make the West less united and more vulnerable.

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Justin Chapman is the Communications Associate at the Pacific Council on International Policy.

The Pacific Council’s BRICS Summer Teleconference Series continues with discussions about India on August 17; China on August 31; and South Africa on September 14. Read a summary of our teleconference on Brazil here.

As severe droughts and other water-related crises increase around the world, no group has been affected quite as much as women and girls in developing countries.

Varsha Deshpande, a lawyer and women's rights activist in Maharashtra, India, a state hit hard by drought, told the Thomson Reuters Foundation that women are especially vulnerable in droughts because it is their responsibility to fetch water.

"She is the first to wake up, she walks the farthest to fetch water, she eats last – and probably the least – and she sleeps last," Deshpande said. "This takes a toll on her health, her menstrual cycle, and affects her reproductive cycle."

United Nations Secretary-General Ban Ki-moon said water challenges go beyond questions of access.

"In many countries, girls are forced to drop out of school owing to a lack of sanitation facilities, and women are harassed or assaulted when carrying water or visiting a public toilet," he said.

As the 2015 report Water for Women, published by UN Water, points out, "without access to clean water, the world’s poorest people will stay poor." This is because the time spent walking to, waiting, and collecting water is time not spent "carrying out income generating activities, caring for family members, attending school or simply looking after women’s needs and aspirations."

According to an article by Alix Lebec on womeneffect.org, the numbers are staggering:

• Every day women and girls without toilets spend 266 million hours finding a place to go to the bathroom.
• Women and children spend more than 125 million hours a day collecting water for their families.
• More people have access to cell phones than toilets.
• 2.4 billion people still live without proper sanitation, while 660 million lack access to safe water.
• In Africa and Asia, women and children walk an average of 3.7 miles a day just to collect water.
• Every 90 seconds a child dies from a water-related disease.
• 160 million children suffer from stunting and chronic malnutrition linked to water and sanitation.
• Involving women can make water projects 6 to 7 times more effective.
  
   

The last point is especially important. Since water issues disproportionally affect women, they must be part of the conversation to come up with solutions. 

One potential solution is WaterCredit, a small, affordable loan averaging $178 provided by microfinance institutions to families earning between $1 and $8 a day so they can afford a water connection or toilet in their home.

"The human right of access to clean water, close to home, can unlock a woman’s potential – economically, educationally, and socially," wrote Jane Wilbur in the Water for Women report. "Its absence can lock women in a cycle which is repeated from mother to daughter."​

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Justin Chapman is the Communications Associate at the Pacific Council on International Policy.

Want more on water? Read an interview with the Pacific Council’s Global Water Scarcity Project Fellow Rachel Cardone, and the takeaways from the Council’s 2015 National Delegation on water issues.

Learn how you can directly contribute to the Pacific Council's work on global water scarcity. Support us now.