Does India really need APEC?

Smita Mishra What is APEC? Founded in 1989 with the initiative of the then Australian Prime Minister Bob Hawke, Asia Pacific Economic Cooperation is a group of Pacific rim countries formed with the objective of cooperation in the fields of economy, trade, investment and related issues. The APEC currently has 21 members that represent nearly 60% to 70% of the world’s economy. The heads of governments of all APEC members (except Chinese Taipei) meet annually at different locations to discuss economic issues. The most striking feature about these meets is the tradition of having the attending leaders of various countries dressed in the national costume of the host nation. Why was India denied membership? When India was denied the membership of APEC in 1989, it suddenly awoke to the reality that it was perhaps the only regional power left out by this newly formed group, even as many small and insignificant nations became APEC members. The reason for this isolation must have been the difficult financial situation of the country during that time. India was going through a bad economic phase which ultimately resulted in the devaluation of the currency in 1990-1991 and the adoption of several reformist measures. At a time when no country, no financial institution was ready to give India even a small loan, there was no question of any regional group welcoming India. India first applied for APEC membership in 1991 but APEC at that time was more interested in including Hong Kong and Chinese Taipei whose economies were on an upswing and hence rejecting India’s application. But the gates of APEC soon opened to include Peru, Vietnam and Russia. India was still out. The logic behind admitting these countries may not have been clear and just but the reason for shutting India out was very obvious. India was not a booming industrial nation like China and Hong Kong, and its newly adopted liberal policies were being viewed by scepticism by all quarters as a momentary affair. Winds of change When the financial crisis of 1997 hit almost all the economies of Asia, India remained proudly untouched. Earlier in 1991 when the Indian economy had suffered a setback, the Indian government, led by PV Narasimha Rao, was active in responding and was able to correct the situation by adopting the New Economic Reforms. The new reforms adopted new mantras- liberalization, globalization and marketisation. The dribble of change gradually began to seep in and the Indian economy slowly turned buoyant. The graph of development ceased to revert and there has been no looking back for the Indian economy since then. Does India need APEC now? APEC no doubt is one of the most economically dynamic regional set up. Constituted of some of the most well to do and powerful nations, its membership would no doubt be both prestigious and economically viable for India. Becoming part of APEC will certainly improve its relationship with the member countries. At a time when “free trade” and “globalization” are the watchwords, India or for that matter any country will definitely want fewer trade restrictions. But India is no longer at the receiving end now. The association with APEC no doubt will be a happy affair with a number of positive consequences to look forward to but the issue of membership is no longer vital for India. The best thing about Indian economy is its independence. Unlike its other neighbours it has never remained dependent on foreign aid to feed its population. This is the reason why it generally remains stable during most global economic hiccups. APEC on the other hand stands to benefit more from its association with India, which is a growing economy with a huge workforce. It is a potential market with increasing purchasing power parity. Its liberal trade and economic policies have made it an important foreign investment destination. And last but not the least India shares a more or less cordial relation with all the 21 member economies. The 10-year moratorium of not including new members is ending this year and APEC may or may not open its doors for India, but this time the loss will not be India’s…