Andrei VOLODIN

Chief Researcher Institute of World Economy and International Relations

Russian Academy of Sciences Ph. D. (History)

Each country that cares about its future needs a pattern to stir up imagination and stimulate key forces of society to make conscious efforts at the strategic routes of development. Outlines of the future are a preliminary condition of the long-term concord between various forces; it is an important stage of the national development strategy where different authority levels, key production agents, businessmen at large, public organizations etc all have a clearly determined position. A must-have part of a strategy is assessment of potential risks and barriers to development, as well as 'construction' of mechanisms able to mobilize people to eliminate various 'modernization crises'. And last but not least, the fundamental instrumental objective of the national strategy is bringing up responsibility and confidence in

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people, as well as will and decision to fully reveal individual and collective potential of society.

Achievements on the path of reforms require precise activities aimed at the future, with today's India being a suit to follow in this respect.

India is characterized by on-going and deep intellectual tradition that has influenced, in particular, the political elite formation in the country. Theoretical thinking, a constant feeling of the national "ground', idealism striving into the future - probably, these are the three circumstances that help tackle intellectual challenges Indians have to face all the time. Every year the country's population increases by 20 million people, current President of India A. P. J. Abdul Kalam wrote at the turn of the century. So what is their idea of the future? Can we give up the development idea and switch to the position of the upper social class who suggest that the rest of the population should entrust their lives to the 'market behavior' or 'competition'? Or probably we should commit ourselves to the globalization forces?

Questions that blunt convey the motion of ideas in the Indian society as well as willingness to engage the masses in the development process. This happens for the first time in the Indian history, yet it is the conscious efforts of the masses that can turn this country with a billion population into the subject of world development and global politics. Abdul Kalam sympathetically quotes Amartya Sen, a Nobel Prize Laureate in Economics (1998), who thinks that India can become a truly developed society only through expanding social self-expression opportunities for the masses: "Creation of equal opportunities for everybody assumes something more than just 'releasing' the markets from the state

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custody. It particularly requires expanding people's access to the education and health care spheres irrespectively of their incomes and means of living, as well as state care for food and social security of ordinary people. Equal opportunities also assume a systematic political, economical and social program aimed at reducing inequalities that impede self-realization for the public well-being of hundreds of millions of Indians".

According to Abdul Kalam, "Nations' formation is influenced by ideal projects of social structure and results from the conscious activities of generations.... A nation that possesses no vision of the future is similar to a ship out in the open sea sailing with no crew and no compass. It is a clear national vision that constantly moves people toward achieving their goal"¹ . At the same time, India needs a new vision, i. e. the change of development paradigm, to make its path toward the future more successful.

The paradigm of sovereignty and independent economical development has fulfilled its historic mission. Now the time has come for the new paradigm, or the second national vision. The backbone notions of the idea under formation appear to be the following: qualitative transformation of the national economy as well as its intellectual and ethical rationale; realistic and systematic concept of national security; industrial and post-industrial manufacturing culture; implicit acceptance of Knowledge as a fundamental force of the social development; understanding that independent development has no alternatives; acceptance of the leading role of the state interventionism in the stimulation of technological progress.

¹ Abdul Kalam A. P. J., Rajan Y. S. India 2020. A Vision for the New Millennium. New Delhi, 1998, p. 21.

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According to Indian scientists, imperative of the independent choice of development priorities is a 'trademark' of any developed country. Thus, the USSR successful space development has mobilized the USA where the state controls research and production in the intellectual industries such as defense industry, space navigation, atomic energy etc. which accumulate clusters of auxiliary high-tech production companies. Besides, the US military strategic concepts are focused on achieving maximum independence from any aid in realizing defense initiatives coming from foreign governments; as a result high-tech tools became the US choice for military operations ("war of the future"). Long-term vision of the technological perspective is also typical of countries such as UK, Japan and Germany. In India, France is believed to be a classic example of the state interventionism being effective in determining strategic priorities of development: "In France, the state has always offered guidelines for breakthrough technology development, especially in industries such as military, aerospace, electronics, biotechnologies and agribusiness, and still does. So France remains a key player thanks to its effective use of advanced technologies".²

Successfully developing countries, such as China, Malaysia, South Korea, Israel etc also declared choosing a long-term national development strategy. Probably the key feature of their long-term strategies is integrated approach to modernization and perception of development as an integration of its economic, political, social, cultural and intellectual aspects. Experience of the late start countries such as Japan demonstrates that efficiency of the modernization spurt also depends on consolidation of the

² Abdul Kalam A. P. J., Rajan Y. S., op. cit., p. 30.

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country's elite (i. e. politicians, management and executives, diplomats, businessmen, scientists and financiers) around objectives and tasks that the national project puts forward. In the context of the world experience, long-term planning in India considers priority of three fields, namely stability and predictability of the external geographic space and national security, satisfying social and economic needs, understanding and use of the comparative advantages factor in the world economic space.

The coming future, i. e. formation of contemporary society is viewed in India as an ongoing interaction/creative competition between the principles of the state interventionism and creative impulses of individual initiative on the one hand, and wide introduction of the neoclassical economic principles suggested by Amartya Sen, on the other hand. The selected strategy will logically lead to defeating poverty (i. e. involving all able-bodied population in the economic process) by 2010 to 2015, providing effective and affordable health care services to the entire society, providing education and vocational training to everybody willing to receive it, eliminating unemployment, turning India into a net exporter and establishing unconditional independence of the country in the national security field.

Undoubtedly, the key role in successful modernization progress is played by science and education. Indian authorities suggest clear and natural logic: state investment in the human resources will help the masses more easily adjust to the changing market and be more willing to sustain the existing political system than try to turn it down.

Political stability is directly linked with the final resolving of the food problem by 2015 to 2020. The important thing is that besides

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tackling the traditional task of improving the transport system that provides non-stop exchange of agricultural products between regions, two fundamental problems are expected to be simultaneously resolved by 2020, the first being agricultural and industrial specialization of the regions/states considering their environmental specifics, and the second problem being spurred improvement of agricultural product storage technologies (due to backward infrastructural elements, around 10% of cereal crops, up to 25% of fruit and vegetable crops and around 5% of the general dairy output are currently lost every year).

According to forecasters and analysts, India's viability in the mid - and long-term run will depend on the ability of the national economy to use 'new' materials such as composites, titanium, rare earth elements, ceramic compounds, polymers, superconducting alloys etc. Nuclear production plays a special strategic role in this economic niche. Not only will nuclear industry development help solve the problem of the country's energy security (specialists forecast that by 2050 25% of the total energy output will be produced by atomic power stations and low-power plants) and depressive influence upon world prices on traditional energy sources such as oil and natural gas, it is also able to stimulate industries such as industrial space use, jewelry etc.

Current India's President put forward a thesis that became really popular in the country: "Force will respect force". In order to win respect in the territorial and intellectual space of Realpolitik, in the nearest 15 to 20 years India will also have to develop strategic industries, i. e. segments of economy (besides the military industrial complex) that will let the country's political elite be on a par with the leaders of 'traditional' super powers when discussing a wide

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range of issues, including world development prospects. In other words, we are talking about a cluster of industries whose products comprise a high share of intellectual added value. Besides the military industrial complex, strategic industries in India include the aerospace cluster and atomic industry, as well as aircraft engineering, high-end electronics, IT, telecommunications, artificial intelligence development etc. Such unification is characterized by the ability of the above industries to create crucial products and technologies appropriate for multi-purpose use both in defense and non-military fields.

Indians realize that that the key political factor required for successful realization of the 'new vision' and new development paradigm should become overcoming the dual existence of contemporary Indian society. This dualism manifests itself in different patterns of material and spiritual consumption, in the level of social and material inequalities that are unacceptable for most of the population, which was explicitly confirmed by the 2004 general election. The above inequality currently looks as follows: according to rough sociological estimation, several tens of millions of people possess the living standards of the highest strata in the most developed societies (whereas the total population exceeds one billion people). Another 200 to 300 million people make the Indian middle class, where existence models for various segments range significantly depending on the income received. This big group, especially its lower segments, is largely subject to the 'shocks' of modernization and globalization, with its political behavior directly depending on the economic growth dynamics. This is understandable, as middle class forms the main social space of the Indian political system, just as it does in any other country.

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As for the rest 700 mln of Indian people, so far they have to go on satisfying only their basic needs. The problem for prevailing authorities, however, is that over the years of sovereignty the masses were largely politicized by democracy, so now, at the last election in particular, they do not hesitate to declare, "We do not want to live the old way".

There is a clear understanding in India that a modern economy is in the first place a space reined by Knowledge. A simple but succinct thesis that follows this understanding is as follows. Strategic prospects of the country are determined by the two factors, i. e. creative efforts of all and sundry, and well-established cooperation within the 'golden triangle' with its sides being industry, state/Government and R&D. It is the interaction of these three forces that brings to motion hi-tech oriented business activities, solves employment problems imminent in the period of growth, and helps the business community switch to industrial and post-industrial pattern through an adjusted industrial strategy. Inner balance within the 'golden triangle' is vital both for successful activity on the world markets and for making it to the self-sustained economic growth course. Effectiveness of the long-term development strategy is determined by the ongoing competition between the state and private/corporate sectors of economy for the best production solutions, optimal choice of own 'individual' behavior strategies, creative ability to incorporate own efforts into the general idea of the country's long-term development. Pragmatism of the 'Indian wit' is not about choosing a particular form of ownership, it is rather about management efficiency that in fact determines viability of the company, industry and economy in general.

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However, any society faces a question of how to turn vision into reality within a fairly short period of time. Indian elite adopted the 'integrated action' concept, which assumed concerted efforts in five key fields of economy that were supposed to set the pace for moving forward and make transformation of the Indian society irreversible. The chosen fields initially possessed strong horizontal corporate ties, so a breakthrough in one industry had a required demonstration effect, i. e. simultaneous responses in related industries. Interlinkage of the key fields looked as follows.

1. Agriculture and agro production: there was a plan to bring annual cereal production to 360 mln tons by 2020, which would stimulate internal consumption, especially with the poor groups, and enable to expand India's export opportunities. The basic conditions of a historical turning point in the agricultural sector included 'revolutionary' increase of research studies conducted within the field, advanced development of the essential technologies, providing the rural population with respective goods and micro loans, fundamental reorganization of the marketing system, storage and distribution of agricultural products.

2. Electric energy production: this segment was viewed as the most important part of the economy's infrastructure, whose effectiveness eventually determined progress in both traditional industries and in the 'new' economy (IT, telecommunications etc), not to mention transport system, which is fundamental for India's vast territory.

3. Education and health care: the role of this field is believed to grow following a complex accelerated social transition to the

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new quality, as well as India's increasing integration in globalization.

4. IT cluster: there are two key aspects that determine its role in India: a need to drastically increase viability of the Indian economy in the international competitive environment and sector's potential ability to integrate traditional and innovative productions assuming a prospect of their transformation into a single 'new high-tech structure' of the economy.

5. Strategic industries: their activities are supposed to help sustain India's sovereignty and viability; efficiency of this segment and its ability to perform political functions devolved to it eventually depend on the raise in its intellectual capacity and economic effectiveness in the market environment.

As in any rational society, national discussion in India formed a 'social order' for the strategic project 'India 2020', with execution of this project being devolved to the Planning Commission. Basically, the idea of this institution lays in strategic planning of social development, overcoming historical disparities between states, reducing acute social and material disproportions and last but not least, making the Indian society more homogenous. Generalization of the ideas of the future continued for several years, until in 2003 project 'India 2020' was made publicly accessible in India.

The document prepared by the Planning Commission is called 'India. Vision 2020'³ . A key feature of this document is that it describes development of the country in general and its individual states up until 2020 - 2025, which enables to see methodological and empiric bases the authors used when working on the long-term course of the country's development.

³ India. Vision 2020 and Vision Documents of Some States. New Delhi, 2003.

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In my opinion, the authors of the forecast were particularly successful at distinguishing 'painful issues' in the country's development and offering a solution to structural problems with a special focus on increasing the quality of the country management. For example, according to forecasts, by 2020 the urban population is expected to increase almost twice, from 28% in 2000 to 40%. Traditional management models proposed by contemporary management theories, i. e. decentralization, increased role of institutional financing and financial resources mobilization through capital markets, may increase the gap between large cities and small towns in terms of the living standards and availability of public goods, with this gap having already become somewhat politically dangerous. Specialists believe that development disparities can be reduced by means of the activated interventional function of the state that is supposed to be "an effective facilitator to compensate for the deficiencies of market mechanisms in the delivery of public goods.³ .

The document proceeds from the need to achieve an 8% economic growth (10% in industry and 6% in agriculture) to complete transition of the Indian society to the new quality by 2020 and at the same time remove the problem of political stability for good. (However, some experts tend to somewhat reduce performance expectations to 5,5 - 6% annually). Another important thing is that the formula enabling to turn a 'traditionally stratified society into an egalitarian one' is focused on retaining democracy and 'advisory' politics.

Economic growth and development (i. e. involving all able-bodied population in the economic process) also pursue broad

³ India. Vision 2020 ..., op. cit., p. 24.

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political objectives. It is a well-known fact that economic development swings often contribute to conflicts between ethnic, linguistic and confessional groups, as well as create a favorable environment for negative things such as politicization of religion (i. e. communalism). As a results we get a systematic approach toward changes, perception of development as an integration of its economic, political, technological and spiritual aspects. Furthermore, this contributes to the understanding of the inextricable connection between science/education, employment and incomes as equal tools of domestic security and effective parrying of eventual external challenges.

The link between the state and the civil society currently coming into shape is becoming stronger, reminding to the political elite that educated electors obviously prefer transparent and effective governing, where single authority and decentralization form a constantly developing dialectic whole.

Success of the long-term development strategy is believed to hinge on the foreign experience in changes-making and management, however this experience should receive creative yet critical interpretation. It is impossible to achieve your goals without being confident, without being able to take independent action and without determination to make the ideal model a reality. The key landmarks of India's development strategy are: sustaining unity and territorial integrity of the country; food and nutritional safety; full employment; building a Knowledge-based society; health care accessible to everybody; spurred creation of new technologies and rapid infrastructure development; participating in the globalization process 'on a par'; effective social management; formation of professional

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ethics that would be adequate to rapid modernization imperatives.

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"Vision is neither a project nor an objective. Vision is an end result clearly expressed in wide philosophic categories", says Indian President Abdul Kalam. To my mind, Vision is synonymous to a large national project able to unite the country's key social and political forces or, if we use Samir Amin's terms, it is synonymous to the 'positive Utopia', which, when even partly realized, can change the society and people, breathe a development impulse into life. Thinking of 'positive Utopias', I would like to name the 'Japanese project' that followed Meiji Restoration, the 'Russian miracle' of 1945 - 1950, and last but not least, the 'Malaysian phenomenon' (after 1969). Each of these concepts indeed contains pretty much idealism, which, as we see, is a must-have for social development. Today this thesis is becoming increasingly understandable and aspirational for the mankind that in the nineties survived 'the greediest decade in history', as Joseph Stiglitz, a Nobel Prize Laureate in Economics, described it. His concept of the 'democratic idealism' clearly conveys the key landmarks: balanced social role of the state; social justice at all levels from global to local; democratic values restoration; mutual responsibilities of individuals and society at large, etc.⁴

To my mind, value of the "Indian lesson" for Russia cannot be overestimated. Transitional economies have never ever developed spontaneously. It is only through the change of colonial model of economy, economic diversification and 'intellectualization' that

⁴ Stiglitz J. E. The Roaring Nineties. L., 2004, p. 281 - 319.

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can expand Russian freedom of action in the global context and justify its 'super-power' ambitions. After all, it does not really matter which force is going to facilitate 'scientification', whether it is going to be the enlightened part of the fuel and power sector⁵ or 'independent' sci-tech state interventionism influenced by the demographic collapse approaching in Russia. However, the important thing is that we have a lesson to learn. And we have to learn it as soon as possible; after all, this is part of our national interest.

⁵ See: Yury Shafranik; Russian Oil and Gas Complex: Innovative Model, - Analytical Notes, Issue 5, March 2003, p. 9 - 16.