President Bill Clinton ended the historic U.S. tilt toward Pakistan in its protracted conflict with India over Jammu and Kashmir. President George W. Bush has sought to resolve the long-standing U.S. dispute with India on nonproliferation with a civil nuclear initiative that integrates India into the global order on terms favorable to New Delhi. Such a partnership is important for both countries, the South Asian region, policy toward Iran, and the management of China's rise.

by C. Raja Mohan, The Washington Quarterly

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Normally, the Pearl River Delta, a manufacturing hub in southern China, whirs with the sound of commerce. Alongside massive new highways, clusters of factories churn out toys, electronics, and other consumer products for the world; in Pearl River cities like Guangzhou, nouveau riche businesspeople cut deals at swank hotels.

But in recent months, the Delta has started to seem more like Allentown, circa 1980s. As the global financial crisis hits Western consumers' wallets, orders for the Delta's products have dried up. And angry factory workers, many owed back pay, have taken to the streets. In one recent incident, some 300 suppliers and creditors "descended on the River Dragon complex [a factory where the owners vanished] looting warehouses in the hopes of salvaging something," As USA Today reported.

2005, for the first time in over 100 years, emerging economies accounted for more than half of the world’s GDP in purchasing power parity terms.  This is hardly an inconsequential milestone; indeed, economic shifts of this scale can eventually entail transformation in the security landscape as well. The subtext here is that Europe and North America’s relative global economic power is waning and this, in turn, will have myriad implications for the way the international system is structured and maintained.

Change on this scale, however, also brings opportunity for the West. It suggests that there may be emerging engines of growth that could lighten the burden of global economic management. This is already apparent in the Far East where China’s growth is generating tremendous economic opportunities for its regional trading partners, while keeping a lid on global prices, at least in manufactured goods. India increasingly shows signs that it too may soon play this role.  Global economic leadership is hardly a new phenomenon for either of these ancient cultures.  One economic historian has suggested that over the 18 centuries prior to 1820, India and China collectively generated 80% of the world’s GDP.  By 1950 that share had fallen precipitously, but it has begun to rise over the last 15 years. The Chinese economy grew at 11.4% in 2007 (EIU) and the Indian economy at 9.4% (Economy Watch).  If current trends continue in these two giant economies and in other rapidly emerging economies, the developing world will account for two-thirds of global output within 20 years (“The New Titans,” The Economist). One important question that immediately arises is whether these countries are preparing themselves for global stewardship.

This relative shift in economic power implies that current OECD countries will eventually be operating in a global order in which they will need to heed the concerns of those rising powers. Countries like India, China and Brazil are not only growing at a far greater pace than developed countries; they are doing so by deepening their integration in global commercial and financial markets.  Their relative weight in the system has accordingly risen, and this was very evident in the Doha Round. It is precisely for such reasons that this subcommittee has produced three reports on developments in Asia over the past three years and why this year’s report is focusing on India, a country which is playing an ever more important role in the international system and, importantly, in South-West Asia where NATO troops are engaged in a high stakes anti-insurgency campaign.