Global Themes

On Globalization & Venture Capital

Of India, Japan and “Client States”

A few weeks ago while I was in Japan, a mini-storm was brewing up in the blogosphere precipitated by the somewhat careless choice of words by Daniel Altman on the IHT blog.

In a piece on the occasion of Japanese Prime Minister’s visit to India, Daniel wrote:

“…Not so long ago, there were only two countries that collected client states around the world: the United States and the Soviet Union.

These days, it seems like anyone with some economic clout can join in the fun. China has Sudan, Venezuela has Bolivia, and now Japan has India.”

Predictably that kicked up a furore (and not just because of the ill-considered comparisons).

Our friends at Wikipedia describe “Client States” as:

“Client state is one of several terms used to describe the subordination of one state to a more powerful state in international affairs. It is the least specific of these terms and may be treated as a broad category which includes satellite state, puppet state, neo-colony, protectorate, vassal state and tributary state.”

Clearly this was not a flattering description.

Daniel went on to say that, “One day, India’s economy may be bigger than Japan’s. But for now, the Japanese government is happy to underwrite India’s growth, in return for a share of spoils.”

The brief post elicited several comments with readers pointing out that:

  • Japan’s increasing interest in India was also at least partly due to its growing suspicion of China
  • A $100bn investment does not make a client state make
  • On a PPP basis, India’s economy is now larger than Japan (link courtesy Suraj Swami on the IHT blog)
  • Sino-Japan economic trade and ties dwarf the relationship between Japan and India (A related piece on IHT had noted Japan’s trade with India was about $6.5 billion in 2006…about 4 percent of Japan’s trade with China)

On the Indian Economy Blog, Shefaly posted a more balanced perspective. In her post she pointed out several flaws in Daniel’s hypothesis, notably:

  • …the assumption that investing in infrastructure is going to produce spoils worth sharing, and produce them post haste
  • Daniel’s diregard of the “strategic” reasons for such a investment and the influence that sovereign states wish to exercise through such measures

Shefaly had kindly asked me for my take on all this. I decided to wait for the dust to settle down before jumping in.

Here is what I think (in “ugly” bullet points; sorry for not crafting this more elegantly – I am fast loosing whatever skills I had learnt in the diplomatic service!):

  • Whatever Mr Altman might think, India is unlikely to become anybody’s client state – ever
  • Daniel’s piece was meant to provoke – which it did. It was not meant as a serious expression of opinion – hence it is best ignored beyond a point
  • Financial aid is – almost always – linked to political objectives (however strenuously denied) and rejecting it also sends political signals
  • Japan’s increasing (and belated; in my opinion) interest in India has as much to do with geo-politics as it has to do with economics & trade
  • Japan’s investments in India – as elsewhere – are based on economic as well as political considerations and a combination of perceived political & economic benefits
  • No doubt many people see the shadow of China looming over this relationship – but clearly that is not the only factor driving trade and commerce between the two countries

I will stop here.

P.S. For more on client states, read “We are now a client state” by David Leigh and Richard Norton-Taylor that talks about how “Britain has lost its sovereignty to the United States”

Will we ever see that kind of relationship between India and Japan? I think we all know the answer.

September 6th, 2007 Posted by | China, Economics, India, Japan | 6 comments

6 Comments »

  1. Shantanu: Thanks for the link love and your thoughts.

    I think Altman might have learnt that if even 2% of India’s population reads and reacts, his unconsidered thoughts would not last under the attack of counter-arguments: both of the well-argued and the emotive kind. 🙂

    Thanks.

    Comment by Shefaly | September 7, 2007

  2. Shefaly, I loved this bit!!

    “I think Altman might have learnt that if even 2% of India’s population reads and reacts…”

    🙂

    Comment by Shantanu Bhagwat | September 11, 2007

  3. I am always curious how foreign people think about Japan, and I think it is interesting to know the word “Client State”.
    However, Client State does not fit well with my understanding regarding the relation between India and Japan. Japanese people simply hope to have a mutual peaceful relationship, never intending to subordine anybody. A long term relationship with foreign countries is vital for Japan since Japan is too small to feed 130 million people.
    USA and China are the most important countries in this sense, however Japanese people want to have another good relationship so that Japan would not rely too much on these 2 countries.

    Comment by Yasuo | September 12, 2007

  4. Nice site…

    Comment by ajayprabhu | September 13, 2007

  5. I think the comparison to Sudan and Bolivia is certainly not valid, and it is wrong to think that purely economic clout is sufficient to “collect client states”. The Indo-Japanese relationship is certainly nothing like a client state relationship, with the connection between the two nations not nearly strong enough compared to other relationships which involve the two nations.

    As for “Japan’s increasing (and belated; in my opinion) interest in India has as much to do with geo-politics as it has to do with economics & trade” – There was of course a premature (hindsight is always 20/20) Japanese interest in India more than a decade ago. Mainly for what I believe were structural reasons, that didn’t go very well (I’d say there was a compatability issue between what Japan does well and what India required at the time, also). But certainly, the renewed interest does have a lot to do with geopolitics.

    It should not be forgotten that the Indo-Japanese relationship is not something which has sprung up suddenly in the last decade or two in any case.

    But in any case, there are not enough competent people in the relevant positions in Japan to formulate and execute a plan to subjugate even the smallest nation and make them a client state of Japan, unless that nation was so strategically and economically devoid of value that the usual perps of projected power and enslavery were totally uninterested.

    And finally I would submit that if one were to use “client state” and “Japan” in the same sentence it would include the words “USA” and “lapdog” as well.

    Comment by fukumimi | September 14, 2007

  6. Yasuo: Thanks for your comment.

    Ajay: Thanks for the compliment.

    Shin: Your comments are perceptive – as always.

    In the context of the above discussion, some of you will find this brief note by one of my ex-bosses (from the Diplomatic Service) interesting: http://www.india-seminar.com/2000/487/487%20jaishankar.htm

    See also: http://japanfocus.org/products/details/2514

    Comment by Shantanu Bhagwat | September 15, 2007

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