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India and Global Economic Policy Making

By Arvind Subramanian
09.04.2007

Lord Meghnad Desai put a dampener on India's global aspirations when he recently prophesied that "China will be a great power, but India will just be a great democracy." Indians will chafe at this prognostication. But one key question is this: suppose, as Indians will no doubt hope, that the future is unkind to the Desai prophecy. How then should India prepare itself for being an important and influential player in current and new global economic policies and institutions? In other words, what should India's attitude and approach be when it gets-literally and metaphorically-a seat, even if not the head place, at the table?

Start first with India's historic role. In the post-war period, what was India's role in three of the most important global economic institutions-the International Monetary Fund (IMF), World Bank and the GATT that subsequently became the World Trade Organization (WTO)? There have been important differences in India's role in the Bank and the Fund compared to the WTO.