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The Rediff Special/ Karl F Inderfurth

'One of the best kept secrets of the 1990s was the emergence of the Indian economy into a free market'

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Economic development is the second area of great promise. One of the best kept secrets of the 1990s, except for those with the foresight to pay attention, was the emergence of the Indian economy from the socialism of its past into a free market -- or at least a much freer one. This has unleashed Indian talents and energies, yielding sustained growth rates of over 6 per cent every year, the creation of software and other selected high-tech industries to rival any in the world, and the emergence of what is arguably the largest middle-class population on the planet.

A few years ago, Microsoft's Bill Gates paid a visit to India. He knew something then that a lot of us are learning today. India will be a major player in the new world of information technology. One reason Y2K turned out not be a problem was that Indian software engineers were so directly engaged in the international effort to solve it.

This is obviously good news for India, but it is also good news for us. The US is already India's top trade and investment partner; our bilateral trade more than doubled during the 1990s. And yet, until a couple of years ago, we traded more with Singapore's three million people than with India's one billion plus. Clearly, the economic potential of better US ties with India is enormous.

And just a few months ago, India took major steps to realize more of that potential by opening up its insurance and telecommunications sectors to foreign investors. This is all part of an ongoing 'second wave' of major Indian economic reforms, one that the American government and the American private sector are united in supporting enthusiastically. Is India doing this for our benefit? No -- for its own sake, but both countries will come out ahead.

As with democracy, India is the largest but not the only country in the region undergoing this kind of positive economic transformation. Bangladesh, for example, is another case in point. This country while still poor; is taking steps to move into the global economy. With the right policies in place, it could make a quantum leap forward by developing vast energy reserves, particularly in natural gas.

Regional co-operation in this area would provide Bangladesh with a huge market for this valuable natural resource, just across the border in India. Nepal, too, is looking at the new economic policies and projects needed to take advantage of its abundant energy resources -- in this case hydropower cascading down its majestic mountains. This will raise Nepal's own standard of living while linking it productively with its neighbors.

Social Development in South Asia

Social development is naturally related to economic development, but has its own dynamic. Economic growth is not always equitable or socially constructive. It will be crucial, in the long run, that the benefits of economic growth extend to all segments of South Asian society. For similar reasons, and also because we share with the countries of the region an adherence to the Universal Declaration of Human Rights, it is just as crucial that literacy, education, public health, and respect for women's rights and minority rights be extended to all.

In this respect, South Asian countries -- with the notable and tragic exception of Afghanistan -- have made some significant strides, even if by their own accounts they still have a long way to go. Sri Lanka is a fascinating case in point. This nation, which is still in the grip of civil conflict, has somehow managed to sustain a literacy rate of over 90 per cent. Moreover, its infant mortality and life expectancy rates are among the best in the world.

Another area of unexpected success, in this case across most of South Asia, concerns women's advancement. It is noteworthy that even though ancient forms of discrimination and oppression still persist in many places, four of the five countries in the region -- India, Sri Lanka, Pakistan, and Bangladesh -- have elected women to the highest political office in the land. In Bangladesh right now, not only is the prime minister a woman, but so too is the leader of the main opposition party.

South Asian Integration into the Global Mainstream

Integration into the global mainstream is a fourth area of considerable promise for South Asia. The last few years have witnessed a much higher level of involvement by the nations of this region in international organizations. Examples can be found everywhere in the alphabet soup of international acronyms. Most South Asian states are now active and constructive members of the World Trade Organization. India, Pakistan, and Bangladesh are working harder to curb abusive child labor through the International Labor Organization.

All three countries are also working hard to reduce heroin trafficking by working with the UN Drug Control Program. Nepal has stepped up its engagement with other specialised UN agencies, including UN Development Program, and the UN High Commission for Refugees.

Sri Lanka has hosted successful conferences on globalization in conjunction with the World Economic Forum, which wrapped up its annual summit meeting in Davos. India now belongs to the Asian Regional Forum which links it to the Association of South East Asian Nations. And, as if to complete the global circle, India is also interested in affiliating with the Asian Pacific Economic Co-operation group -- to which we also belong. We have a Pacific coast, too!

South Asia: Realising Its Potential

In all four of these promising areas -- democracy, economic and social development, and global integration -- the full potential of our growing engagement with South Asia can be realised only if that region addresses some of the tough issues including: proliferation of weapons of mass destruction, terrorism, and regional and social conflict. Those are the subjects that grab the headlines today.

But my hope is that there will soon come a time when such issues no longer dominate our thinking about South Asia. I hope we will become deeply engaged on an agenda of economic growth, science and technology co-operation, cultural and educational exchange, joint efforts to combat infectious diseases, and many other areas.

This is an ambitious but attainable agenda. I truly believe that in this new century South Asia, by virtue of its growing political and economic dynamism as much as its sheer size, will play an increasingly important role on the world stage.

Assistant Secretary of State for South Asian Affairs Karl F Inderfurth delivered this address at the twenty-third Annual Merze Tate Lecture in Diplomatic History at Howard University.

President Clinton's visit to India

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