Ideas

Peace

In a world set to reach nearly 10 billion inter-connected people, power will come from creating peace, prosperity and freedom so that we can make breakthroughs in how we live together, and this requires a transformation in the very definition of power, and the purpose and principles by which it is exercised

GPC’s Macro Thought Leadership

GPC’s research focuses on the geostrategic changes in the world and the implications of for peace, prosperity and freedom. Our analysis seeks to find the patterns and identify the new forces that are the signs of our times and will determine the future of the world


The world is in a historic transition of great power hegemony, world order, population and resources which will change the very nature of civilisation. These transformations create discontinuities and a dynamic canvas on which the world’s future will be written

The 21st Century has been widely predicted to be the Asian Century, in which the continent, home to 60% of the world’s population, will become the world’s dominant economic, political and even cultural force. Within this continent of 49 countries, two will disproportionately impact the trajectory of the 21st Century on account of their scale and growth potential: China and India. The relationship between these two countries as well as the trialogue with the world’s current hegemon, the United States, will will be critical to shaping global economic and political trends for generations to come.

 

A modern India lifting a billion people out of poverty will need a large, modern and diversified economy to not only realize the aspirations of people but also to clothe, feed, employ and educate what will become the world’s largest population within the next five years and this will require an India that is open to the world and dedicated to unlocking the potential of its people and its assets

 

We bring our network of business leaders, entrepreneurs, influencers and thinkers who are at the frontline of change across to provide insights into the global issues that are rapidly changing the world and how they see an impact being made for good

 

We recognise the complex and rapidly changing nature of India’s markets and economy as it grows and expands internationally and have focused the firm’s thought leadership on detailed research to generate insights into the macro-environment, market strategy, investment opportunities and challenges to generate attractive risk adjusted returns

We live in revolutionary times. Increasingly political, economic and social volatility is driving change on a global level, creating both risks and opportunities for international investors. Greater Pacific Capital’s thought leadership and investing strategy placed it at the forefront of global change

Selected news that makes the difference

IMF Projects Indian Economy to Grow by 11.5% in FY22

The IMF revised its projections for India’s GDP growth in FY22 upwards to 11.5% from 8.8% earlier, reflecting a carryover from a stronger-than-expected recovery in 2020 following the easing of lockdowns.

India, Japan Sign Information Technology (IT) Agreement on 5G, AI

India and Japan signed a new agreement on the IT sector that seeks to increase cooperation between the two countries in 5G, Artificial intelligence (AI), and submarine cable network.

India Inks Pact with International Energy Agency (IEA)

India signed a strategic partnership framework with the IEA, which is expected be a stepping stone towards India becoming a full member of the organization that will provide the country additional heft to its dealings with the Organization of the Petroleum Exporting Countries (OPEC)-plus grouping.

Foreign Portfolio Investment (FPI) Inflows in Indian Equities Highest Among Emerging Markets

Foreign institutional investors invested over US$30bn in Indian equities between April to December 2020, five times the amount invested in 2019 and the highest among peers in emerging markets.

Reserve Bank of India (RBI) Unveils Guidelines for Payments Infrastructure Development Fund (PIDF)

RBI announced operational guidelines for the PIDF scheme, in order subsidize banks and non-banks for deploying more payment infrastructure across tier-3 to tier-6 centres.

Government to Increase Foreign Direct Investment (FDI) Limit in Insurance Sector From 49% to 74%

Finance Minister Nirmala announced the increase in the FDI limit from the existing 49% to 74% for the insurance sector in order to attract more overseas capital inflows.

Spotlight on the key monthly news events shaping media coverage in India

Media coverage in India this month covered the launch of India’s nationwide Covid-19 vaccination drive, farmers’ protests against the new agricultural laws passed in September, which turned violent at a tractor rally this past month, and fresh clashes between Chinese and Indian troops along the Himalayan border.

 

India Launches Covid-19 Vaccination Drive Across the Country

Prime Minister Narendra Modi launched India's Covid-19 vaccination drive on January 15th with over 370,000 healthcare workers receiving shots of the vaccine by January 30th. During the first phase of the vaccination drive, the government is planning to inoculate c.300 million high-risk groups by July 2021, including healthcare and frontline workers, the elderly and those with comorbidities.   Media publications focused on India’s potential to be a leader in the global vaccination drive and the challenges in carrying out vaccination on this massive scale.

An article in Livemint focused on how India could be a global leader in the vaccination drive through its plan to scale up vaccine manufacturing to supply to as many as 60 nations in the coming months, as global vaccine makers fall short on promised deliveries, leading to a growing number of countries facing challenges in their vaccination efforts. “Requests, both formal and informal, for vaccines have been received from 60 countries so far… After a careful study of domestic supplies such as manufacturing capacities and internal needs, decisions on exports are taken… The US, UK and Israel are seen as countries that have had a head start on vaccinations with news reports saying that the EU has fallen far behind the US, UK in the race to vaccinate people… India’s role as the “pharmacy to the world", which will be reinforced by its supply of vaccines, will win it goodwill that will stand New Delhi in good stead as it looks to carve out a bigger role for itself in world affairs.”

An joint op-ed in Indian Express by the chairman and assistant consultant of the Economic Advisory Council, both writing in their personal capacity, covered the various problems states will potentially face in carrying out vaccination on the massive scale required, including adverse events following immunisation, patient prioritisation strategies as well as the need for involving the private sector in vaccine delivery and administration. “States should be prepared for adverse events following immunisation (AEFI)… States should immediately address this issue, otherwise this will undermine public confidence in the vaccine. Therefore, a team of specialist doctors should be placed at every vaccination site to deal with AEFI... initially, states should also prioritise vaccinating people with comorbidities and elderly residing in clusters affected most by COVID-19… those who have been vaccinated can potentially carry the SARS-CoV-2 virus and unwittingly spread the disease to others, especially to their family members who are caregiver… there is also a need for involving the private sector… This would reduce the burden on public healthcare facilities. Doctors in the private healthcare system can be a great asset in carrying out a vaccine program at such a large scale... at the same time, whoever can afford these vaccines should be allowed to buy from the open market. For example, Pfizer has sought permission to import the vaccine for sale and distribution in the country.”

Another op-ed in Hindustan Times outlined that even as the government micromanaged every aspect of the drive to vaccinate 300 million people, it needed to plan ahead to identify and approve other vaccines, institutions and organisations in order to vaccinate India’s entire population. “That India got to this point in a little over 10 months since the first local Covid-19 cases emerged is an achievement that needs to be recognised, appreciated and cheered. That it did so with one locally made version of a vaccine developed by a multinational company and a university, and a locally developed one, makes the achievement even more significant... India shouldn’t have a problem with vaccination drives. It has an immunisation programme that covers more people than similar ones in other countries, although the Covid-19 vaccination drive is clearly many times larger... One, India’s health ministry and regulator need to work on identifying and approving other vaccines. For instance, it has now emerged that Russia’s Sputnik V vaccine— like Covaxin, this too was initially under a cloud, although in its case, some efficacy data was available — is very effective in combating the virus…. Two, the government needs to take a call, if not now, then at least by the middle of February, on open-market availability of the vaccines… Three, the government should also make it possible for institutions and organisations to launch vaccination drives for their students, employees, or members by defining the protocols for sourcing, financing (for instance, can corporate social responsibility funds be used?) and administering vaccines.”

 

India’s Republic Day Farmer Protests Turn Violent

Following two months of peaceful protests on Delhi’s borders and 11 rounds of negotiations with the central government, violence erupted across India’s capital city of New Delhi on the 26th of January, when thousands of farmers protesting the government’s agricultural reform bills clashed with officers and broke through barricades to storm the country’s historic Red Fort and hoist a religious flag. Media publications condemned the violence and focused on the reasons for the continuing farmer protests and the importance of resolving it quickly.

An op-ed in Indian Express by a former agriculture secretary of West Bengal (writing in his personal capacity) outlined why if the farm laws are to be repealed, it would negatively impact the efforts to improve the agriculture sector, and no political party in government would ever try to carry out agricultural reforms again in the future. “Indian agriculture grew at about 1 per cent per annum in the 50 years before Independence. It has grown at about 2.6 per cent per annum in the post-Independence era to become the world’s second-largest food producer. This transformation has been possible through increasing the area under cultivation and adoption of modern production technologies.… World over, it is the farmer who decides the market price of his produce, but in India, it is decided by intermediaries. During harvest, agricultural production centres see a glut of produce at throwaway prices whereas shortages and high prices rule the roost at consumption centres…. The three Farm Acts intended to break the logjam in the agriculture sector. How they hamper farmers’ interest has not been explained by any of the agitating farmers’ organisations or their political sympathisers. The argument that these laws would result in loss of state revenue is absurd as the state cannot earn revenue by keeping farmers in perpetual poverty.”

An op-ed in Hindustan Times criticised the violence especially given how close the farmers were in getting the government to concede to most of their demands and delay the implementation of the farm laws by up to 18 months, following two months of peaceful protests at the borders of the capital. “The farmers, after all, represent more than 30 small and large unions, different jathas, and come from varied groups across different regions. A call for repealing farm laws may have united them, but their political ideologies stretched across the spectrum… To have then expected thousands of tractors to conform to a rigid plan of action was always being unrealistic.… If the police perhaps underestimated the tractor rally, the farm leaders overestimated their ability to rein in such a large and diverse grouping. For two months, the farmers, quite remarkably, kept their peace, perhaps hoping that the sheer symbolism of their peaceful protest would force an all-powerful Centre to relent... For now, the violence has seriously dented the credibility of a protest movement that seemed genuine and spontaneous while the majesty of the Indian State has also taken a hit.”

Finally, another op-ed in Indian Express by a former president of the Centre for Policy Research, a New Delhi-based think tank, was critical of the Government’s handling of the farm laws as well as the subsequent protests and covered why the farmers’ protest shows loss of trust in the processes of governance. “For now, the violence has seriously dented the credibility of a protest movement that seemed genuine and spontaneous while the majesty of the Indian State has also taken a hit... But this attitude should not disguise the fact that we were all trying to find a respectable way of expressing our deep authoritarianism and unleashing another round of repression.... But the real darkness on the horizon is not the protest, or the turn it might have taken. It is the turn Indian democracy is taking, almost as if it is on the road to perdition. For almost two months, the farmers’ protests were not just peaceful but a model of disciplined civic expression and cultural articulation… All the institutions of the state that could have acted as redressal mechanisms, from Parliament to the Supreme Court, abdicated their core duties. But the farmers were not provoked… The government may have won the battle of perception by playing on a disingenuous language of order. But the open wounds it has created will fester and create long-term problems. The cycles of repression, protest and more repression will continue.”

 

Fresh Border Clash Between Chinese and Indian Troops 

Amid continued tensions between the two countries following a conflict in the Galwan Valley in June 2020, Chinese and Indian troops clashed once again along the Himalayan border. While there were no casualties, the violent clash resulted in injuries on both sides, including around 20 Chinese soldiers and four Indian Army soldiers. Media publications focused on the continued souring of relations between India and China, engaging in an increasingly violent and costly face-off along their 2,100-mile-long border.

An op-ed in Indian Express covered India how needs near-term actions to hold off Chinese aggression as well as long-term strategies to secure India’s territorial integrity and strategic autonomy from China. “Unlike the recent military crises on the northern frontiers in 2013, 2014 and 2017, the current military confrontation that began in April last year has lasted much longer. Multiple rounds of negotiations are nowhere near finding a framework for disengagement and de-escalation... The combination of military and economic imbalance and an ambitious political will for hegemony in Beijing has produced an adverse set of circumstances for India. This new dynamic is evident not only on India’s northern frontiers but also in the subcontinent and its waters as well as in regional and international spheres... Since Independence, India has allowed political illusions about solidarity with China to mask the depth of real problems with the northern neighbour, underestimate Beijing’s growing power, and misread its political intentions.”

An op-ed in Hindustan Times outlined how the budget will play a role in framing India’s long-term China policy given the challenge India faces to provide adequate funds for deployment of troops along the Line of Actual Control (LAC) for an extended period. “The ninth round of talks between the military commanders from both sides, held on January 24, has remained inconclusive. But the silver lining is that even if there was no breakthrough, there has been no breakdown as regards the dialogue process. The severe constraints imposed by the pandemic will be unveiled soon, when the Union Budget is presented. Delhi’s challenge will be to provide adequate funds for the deployment of troops along LAC for an extended period. Long-term planning must go beyond urgent procurement of some inventory items and focus on enhancing India’s neglected trans-border military capabilities in an astute manner… And the abiding lesson is that diplomacy and political resolve, however refined, acquire appropriate efficacy only when backed by credible composite national capability, both economic and military. The Covid-19-scarred budget will play a role in framing India’s long-term China policy.” 

Finally another op-ed in The Print focused on how the armed forces needs increased allocation to meet their modernisation plans in order to successfully counter China, who have already moved away from a manpower-intensive force towards a technology-driven force. “The armed forces are up against China, a country with the second-largest defence budget in the world. In 2020, China’s official defence budget stood at $179 billion, three times that of India’s. While India’s defence budget for 2020-21, including pensions, constituted 15.5 per cent of the entire expenditure plan of the central government, China’s official defence allocation was 36.2 per cent of the country’s budget…. The China challenge has made it important for India to decide what war it wants to fight. Does it want to pump in billions of dollars in acquiring new generations of existing systems or does it want to invest in technology of the future?… The recent war between Azerbaijan and Armenia showed how modern technology can really pulverise traditional defence systems. There are many such questions. And hence, it is important for India to have a coherent forward-looking policy on defence procurement and modernisation… The Chinese are investing in the technology and service of their future – Navy. The People’s Liberation Army (PLA) Navy is the fastest-growing naval force in the world.”

Key insights and forecasts that show us what is to come

Biden’s Cabinet Picks Will Hold India-US Relations in Steady Course

A move away from “America First” stands to help deepen security relations between the two countries.

Democracy and the US-India Relationship

While their shared democratic nature has not been the only driver, it has certainly contributed directly and indirectly to the development of the U.S.-India partnership over the last two decades.

Nature and Nurture: How the Biden Administration Can Advance Ties with India

An Asia Society policy paper outlining the blueprint for how the Biden administration can actualize what previous presidents have deemed a “natural partners.”

Biden, Xi, and the Evolution of Cooperation

The only way to prevent Sino-American relations from deteriorating further is for either US President Joe Biden or Chinese President Xi Jinping to offer a goodwill gesture, and then respond in kind to the other’s subsequent moves.

Biological Risks in India: Perspectives and Analysis

India faces a host of biological risk factors. Drawing lessons from the coronavirus pandemic and prior biological disasters, India’s government should pursue new safety protocols and develop new institutions to manage future biological risk.

India Should Structure a Development Financial Institution (DFI)

With the potential to extend infrastructure investments by up to 5x for every rupee of equity infusion from the government, the establishment of a DFI can play a truly transformative role in bridging India’s infrastructure financing gap in the coming years.

Europe’s China Gambit

The new EU-China agreement underscores a fundamental question on whether strategic and economic relations between major powers with very different institutional and political arrangements can be successfully managed in a post-pandemic world order.

India and Indonesia Push Ahead with Defense Relationship

The growing realization by both India and Indonesia that the two can have significant synergies when it comes to maritime security including countering the threats China poses in the maritime domain has led to the recent deepening defense relationship between the two countries.

China’s Debt Grip on Africa

Since the 2008 global financial crisis, China has steadily increased its direct lending to developing African countries, which has resulted in several projects bound by draconian lending conditions, expensive to operate, and unlikely ever to produce decent returns.

India-Japan Cyber Cooperation

In the wake of increased tensions with China, cooperation between India and Japan in the information and communications technology (ICT) sector is seen as a countermove to China’s growing influence in the telecommunications and digital infrastructure.

The Indian Ocean as a Region of Future Contestation

With China’s near-permanent presence in the Indian Ocean likely in this decade, and the growing rivalry with America, India has to pro-actively invest in developing both military and legal expertise in order to create a multilateral framework that maintains its supremacy in the Indian Ocean.

India’s Opportunity to Champion Solar Energy as a Cause

India’s bid to become a lead member of the World Solar Bank (WSB) could galvanize domestic efforts and give the country a global voice in the push for a clean planet.

The Key Events Driving Global Instability & Opportunity

Big Picture TEST Metrics for the US, India and China, February 2021

The Indian economy continued its strong recovery with the PMI expanding at 56.4 in December from 56.3 in November signalling a sustained turnaround in industrial activity following the relaxation of Covid-19 restrictions and better market conditions. While imports grew by 10%, exports saw a decline by 2% over the same period last year as major global economies continue to restart their economic activities only gradually. No further rate cut was announced by the RBI during this month.

 

The official China manufacturing PMI slowed modestly in December to 51.9 from 52.1 in November but continued operating in the expansionary territory for ten months in a row indicating the overall manufacturing industry has continued to pick up.  Additionally, trade metrics have continued to improve driven by holiday demand and the reopening of businesses and schools in US and Europe, with China’s exports and imports increasing by 18% and by 6% respectively over the same period last year.