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- GS 2 || International Relations || International Organizations || Miscellaneous
Why in news?
- The Digital Data Revolution will shape the new global order. It would give Asia a strategic advantage in the world. India must also prepare itself to play a key role in the hyper-connected world.
- There has been a shift of global power from the Atlantic to the Indo-Pacific in recent times.
- This shift is marked by advancement in the “Digital Data Revolution’ while the earlier order was created by the Industrial Revolution.
- The earlier Industrial Revolution restructured the global manufacturing order to Asia’s disadvantage.
- But in the ‘Digital Data Revolution’, algorithms requiring massive amounts of data determine innovation, the nature of productivity growth, and military power.
- However, this data revolution has created some strategic implications.
Strategic Implications of the Data revolution
- Data has created a symbiotic (mutually beneficial) relationship between military and civilian systems. Today cybersecurity has become national security. Thus, it demands a new military doctrine and a diplomatic framework.
- Data has blurred the line between domestic and foreign policyand calls for establishing new global rules.
- Further, a growth in smartphone-based e-commerce is generating massive amounts of data. It would give asustained productivity advantage to Asia.
- Data streams have acquired a central position in global trade. Further, a country’s economic and national power is dependent on data.
- These factors allow India to negotiate new rules as an equal with the U.S. and China. Formulation of the rules must be by keeping in mind the new dynamics.
- Huge market
- It has made use of data streams and emerged as the second-largest economy.
- It also has a $ 53 trillion mobile payments market and acquires a global share of 50%.
- Furthermore, It has formed a joint venture with SWIFT for cross-border payments. The country also suggested foundational principles for interoperability between central bank digital currencies at the Bank for International Settlement.
- Dependent on semiconductors
- However, it is still highly dependent on semiconductors and unable to avoid US sanctions on banks, 5G, and cloud computing companies.
- Thus, it is trying hard to overcome this weakness by Distorting dollar-based trade through its e-yuan
- Launching a $1.4 trillion science and technology strategy.
- China’s digital technology-led capitalism is moving fast to utilize the economic potential of data, pushing the recently launched e-yuan and shaking the dollar-based settlement for global trade.
- China has a $53-trillion mobile payments market and it is the global leader in the online transactions arena, controlling over 50% of the global market value.
- China’s technology weakness is the dependence on semiconductors and its powerlessness against U.S. sanctions on banks, 5G, and cloud computing companies.
- The conventional deterrence capabilities of the US have been reduced. It now puts more focus on diplomacy than military power to resolve conflicts with China.
- Innovation based on data streams has contributed to China’s rise as the second-largest economy and the “near-peer” of the U.S.
- The U.S., in contrast, lags, with only around 30% of consumers using digital means and with the total volume of mobile payments less than $100 billion.
- India’s UPI volume is expected to cross $1 trillion by 2025.
- In the mobile payments market, only around 30% of consumers use digital means and the total volume of mobile payments is less than $100 billion.
- The country appears to be losing its dominant position to China in the global order.
- Retrenchment of US:
- The prominent feature of the current world order is the US’s retrenchment from global affairs. This can be reflected by the withdrawal of the US the Paris Climate deal, JCPOA, etc. This retrenchment has led to a severe blow to multilateralism and globalisation.
- In the mobile payments sphere, the Unified Payments Interface (UPI) volume is expected to cross $1 trillion by 2025.
- The goal is to create a $5-trillion economy by 2025.
- It faces the challenge of
- Balancing engagement with major powers and
- Retaining its data for innovation and competitive advantage.
- Mobile digital payment interconnections impact society and the international system, having three strategic implications.
- First, because of the nature and pervasiveness of digital data, military and civilian systems are symbiotic. Cybersecurity is national security, and this requires both a new military doctrine and a diplomatic framework.
- Second, the blurring of distinctions between domestic and foreign policy and the replacement of global rules with issue-based understanding converge with the growth of smartphone-based e-commerce, which ensures that massive amounts of data give a sustained productivity advantage to Asia.
- Third, data streams are now at the center of global trade and countries’ economic and national power.
- India’s UPI volume is expected to cross $1 trillion by 2025.
- India, thus, can negotiate new rules as an equal with the U.S. and China.
- While the country is fast-tracking its digital rupee, the challenge is promoting engagement with major powers while retaining its data for innovation and competitive advantage.
Dual Use of Global Supply Chain
- Some of the developed countries have jurisdiction and control over global supply chains. Due to the growing convergence between commercial interests with strategic goals, these supply chains enable them to have vast extraterritorial influence and has created new power asymmetries. For example:
- China through BRIis enhancing its role in global economic governance.
- The internet has become a distributed system of surveillance.
- There are fears about dual-use (commercial viability and military application) of Industrial Revolution 4.0.
India’s crucial position in shaping the new global order
- In 2022, India will mark 75 years since Independence and urged the Pan IIT movement to set an even higher benchmark for “giving back to India”.
- At the IIT 2020 Global Summit, the Prime Minister said that the post-Covid world will be about re-learning, re-thinking and re-inventing.
- The government is fully committed to its principle of reforming, performing, and transforming India in the field of technology.
- As far as technology is concerned, India is at a far better place now than it was a few years ago.
- Bringing about a change in our mindsets about Indian products and Indian technology is the need.
- With Asia at the center of the world, major powers see value in relationships with India.
- India fits into the U.S. frame to provide leverage.
- China is India’s largest trading partner despite recent border clashes. Also, both the countries are uncomfortable with:
- Treating Western values as universal values.
- The U.S. interpretation of Freedom of Navigation rules in others’ territorial waters
- The US wants to invest heavily in India and leverage the Indian markets, a strategy similar to China’s belt and initiative. Further India is seen as a reliable partner to curb Chinese influence in the Indo-Pacific.
- India’s Vision
- New Delhi’s Indo-Pacific vision is premised on ‘ASEAN centrality and the common pursuit of prosperity.
- India alone straddles both U.S. and China-led strategic groupings, providing an equity-based perspective to competing visions.
- It must be prepared to play a key role in molding rules for the hyper-connected world, facing off both the U.S. and China to realize its potential of becoming the second-largest economy.
- The EU is also determined to enhance its influence in the Indo-Pacific region. This automatically induces the grouping to improve its relation with India.
- China-India Not a rival
- China wants India, also a digital power, to see it as a partner, not a rival.
- And China remains the largest trading partner of both the U.S. and India despite sanctions and border skirmishes.
Changing World Order in the Recent Times
- New Cold-War
- With the collapse of the Soviet Union in 1991, the world order turned from being bi-polar to unipolar. However, the current world order is without a systemic equilibrium, which is essential to the maintenance of international stability.
- This is due to the emergence of a New Cold War between US & China, which amounts to a struggle for a new distribution of power—political, economic and military. Moreover, the differences between the US, China and Russia have become intractable.
- Retrenchment of US
- The prominent feature of the current world order is the US’s retrenchment from global affairs. This can be reflected by the withdrawal of the US the Paris Climate deal, JCPOA, etc.
- This retrenchment has led to a severe blow to multilateralism and globalisation.
- Indo-Pacific as a New Sub-System
- The rise of China has been redrawing the balance of power in the South-China Sea. This has led to countries like US, India, Japan, etc., colluding in framing Indo-Pacific as a new sub-system in international affairs.
- Shift from Non-Alignment to Multi-Alignment
- In the Post cold war era, Indian foreign policy has moved from a policy of non-alignment (policy of being neutral with US and USSR blocs) to the policy of Multi-alignment (India is having friendly relations with almost all great powers and developing world).
- Multi-alignment is the very essence of India’s foreign policy and the economic policy of India today.
- This presents an opportunity for India to become a global mediator and help in developing a framework on Global Issues.
How can Digital revolution/Industrial Revolution 4.0 help India?
- It can play a major role in alleviating poverty.
- Better and low-cost health care can be achieved through the implementation of AI-driven diagnostics, personalized treatment, early identification of potential pandemics, and imaging diagnostics, among others.
- Enhancing farmer’s income by providing them with the latest technologies, improvement in crop yield through real-time advisory, advanced detection of pest attacks, and prediction of crop prices to inform sowing practices.
- It will strengthen infrastructure and improve connectivity to the very last village.
- Artificial intelligence can be used to empower and enable specially-abled people.
- It will improve ease of living and ease of doing business using smart technologies.
- Recently, India has announced her drone policy, which will play an important role in security, traffic and mapping.
- India is the only country that straddles both the US-led and China-led geopolitical groups, giving opposing visions an equity-based viewpoint. It must be ready to play a key role in shaping rules for the hyper-connected world, competing with both the United States and China to achieve its goal of being the world’s second-largest economy.
Mains model question
- Examine how the changing global order has influenced India’s ambitions to lead the Digital Data Revolution.