Monday, May 14, 2018

India Optimizes Engagement By Reducing The Deficit, Or Something Like That

The Vice President of India will be visiting three Latin American countries in an effort to boost trade ties. Here are his inspiring words.

"India's sub-optimal engagement with these three countries is to a large extent due to high-level contact deficit."

This is semi-robotic in tone. Anyway, he is going to better optimize engagement by reducing the deficit. Now, which three countries will be so optimized? First, the criteria.

The vice president explained that the three Latin American countries offered significant opportunities for India given their high level of engagement with the US and the other North and South American economies through regional arrangements and free trade agreements, besides being logistic and financial hubs in the region.

In short, you choose countries not because they are important per se, but rather because they are conduits to something else. This finally means the choices make sense because otherwise they would be head scratchers: Guatemala, Panama, and Peru. These are not what you call powerhouses, but the first two offer CAFTA connection and the latter MERCOSUR. Panama itself is a financial center through which all kinds of money flows. Panamanian President Juan Carlos Varela welcomed his country's role as doorway.

"Panama has put its geographical position at India's disposal to become its gate to the rest of the region, as a hub for logistics and air connectivity," Varela said during a joint press conference with Naidu, Efe reported.

This is quite different from China's approach, which is to swoop in and fill the vacuum left by the United States. India is trying to leverage the remaining U.S. ties rather than fill the void. Either way, Latin American leaders are nervous about the U.S. pulling out of the region and are eager for new global partners, or for the renewal of past ones.


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