The economy factor

Ashwini Phadnis | Updated on August 21, 2011 Published on July 29, 2011


The Eagle and the Elephant — Strategic Aspects of US-India Economic Engagement, by Raymond E. Vickery Jr. ( Oxford University Press) raises three questions: What is the impact of economic engagement on strategic relations? What should this impact be? What should the US government do to make the impact of its economic engagement benefit its national interests? These questions are answered in the context of US-India relations over the period 1991-2010, or from the time that India started the process of economic reforms till the time that there was the “cementing of a multi-faceted US-India strategic relationship.”

The author concludes that “US-India economic engagement is the engine of strategic cooperation.” The reasons he gives for this include the American and Indian economies being central to their abilities to act on the international scene. Following a case study approach, the book shows that the economic engagement between the two countries has had a huge impact on their abilities to cooperate strategically.


Drawing on his vast experience as Assistant Secretary of Commerce and Trade Development in the Clinton Administration and currently Senior Director of the Albright Stonebridge Group, Mr Vickery argues that the opening up of India's economy in 1991 played a pivotal role in the way the relationship between the two countries developed over the next two decades. led to an impressive growth in trade and investment between the two countries.

This growing economic engagement further opened up a whole new milieu for cooperation on strategic interests between the two countries. He cites the example of the US-India civil nuclear initiative as “an iconic” case for studying how economic engagement impacted on the strategic cooperation between the two countries. Legislative approval for the civil nuclear initiative in both the US and India has had other spin-off effects as well. There is greater cooperation in the field of energy and security.


Coming to the second question, the author maintains that though economic engagement can have both harmful and beneficial impacts, in the case of America, its economic engagement with India can be a valuable tool for it to further its strategic interests both with India and elsewhere. The benefits of this economic engagement go much beyond immediate economic gains and should be used by the US to put in place effective economic engagement programmes in the rest of the globe. According to the author, economic engagement is and should be the engine for promoting international cooperation on a range of strategic issues. The US has to recognise this principle and incorporate economic engagement as a fundamental factor in implementing its foreign policy.


Finally, coming to the third question, Mr Vickery concludes that the US needs to improve its abilities so that it can make economic engagement work better for its national interests. America needs to see that all its strategic planning identifies salient economic aspects and then formulate a policy which uses economic levers to achieve the desired goals. Of course, this is not going to be easy as the US doesn't have sufficient economic and business expertise throughout its government machinery. The author suggests making the private sector an integral part of the American strategy of using economic engagement to further its strategic interests.

Published on July 29, 2011
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