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‘India might translate (its) economic influence into political and perhaps even military power…’

Gateway House recently hosted Dr. Eberhard Sandschneider, the Research Director of the Deutsche Gesellschaft fur Auswartige Politik or the German Council on Foreign Relations, Berlin. On his visit to Mumbai, Dr. Sandschneider engaged leaders of Indian industry on the growing Indo-German relationship. His trip comes on the eve of the visit of Germany’s top two cabinet ministers representing foreign affairs and finance, to India.

Sandschnieider talked about Germany’s expectations from India, the complexities of the European economic crisis and Germany’s role in Afghanistan.

1. Asia is an important business destination for Germany. But as far as India is concerned, German investment in India is neither very large nor growing rapidly. Is Germany slow in recognising the opportunities here?

Perhaps yes. German businesses have developed a great interest in Asia where the role of China has been pre-dominant in all spheres for several reasons. Meanwhile, there is a debate in Germany that Asia is more than just China. This will not lead to a major retreat from the Chinese market which will continue to be a strategically important market for Germany. The debate has intensified, that German business should look more to Indian markets for a variety of reasons –excellence in educational background, the fact that the legal system is more reliable, stable and a little bit “more European” with a more British influence than we find in China. The fact that India is an important domestic market and Indian growth is not only driven by exports but also by domestic consumption has helped raise the interest of German industries in Indian markets.

2. With this realisation, where do you see Indo-German engagement? Will it translate into real policy in terms of visas, outsourcing, investment, etc? What are the other possible areas of co-operation?

Europeans tend to sign Memorandums of Understanding (MOUs) for strategic partnerships and we do have such an MOU with India. In reality that does not necessarily translate into real policies. Based on the experiences of the last decade, one can certainly say that the economy comes first and with growing engagement of business, there also comes growing attention by politicians. For example, in German activities, I understand that our minister for Economic Affairs, Rainer Brüderle, and our minister of Foreign Affairs, Guido Westerwelle, will visit India in the next month. This is an indication that our politicians are waking up to the growing importance of India. India has seen a considerable phase of enhanced economic growth despite the economic crisis. If that processes continues, then India might well be in a position to translate this economic influence into political power and perhaps even military power. And in that respect, German politicians are very clear that as democratic structures go, India is a natural partner for Germany.

3. Germany is known for its multinational companies, large manufacturers and excellent education. Yet not many Indian students choose Germany for higher studies. Why? How can Germany attract Indian students to study there and vice versa?

The attraction of the quality of education you get [in India], the quality of education in Indian universities will attract students from Germany. However, the other way around it has been very difficult and with a very specific reason. We have realised that the language barrier is an important one. For an Indian student wanting to study in Germany, learning German is a must and German is not the easiest language considering our wonderful grammar. That is one of the major barriers and obviously there is no good remedy for it. One can only hope that more and more Indian students realise that learning German is not the hardest thing in the world. The second major barrier is the German education system which may not be compatible with most British influenced systems. We now have a Bachelor of Arts and Master of Arts structure which we are trying to integrate into global patterns of education. But bilateral cultural exchanges are now increasing in art, music and painting. India will have a Germany year in 2011.

4. What are the prospects for Germans and Indians to work in tandem vis-à-vis global issues like climate change?

First of all if you take climate change as the example, we have completely different perspectives which came out openly in Copenhagen with your prime minister sitting together with his Chinese and Brazilian counterparts together with President Obama and the Europeans remaining out of the door so to speak. So there will be lot of debates that try to bring both positions –the Europeans want to reduce in quantitative terms, the Indian side will continue to say that this is blocking our development with China and Brazil joining in. We have somewhat conflicting positions. It will be a difficult process of debates, discussions and compromises. But that is the case in any bilateral relations.

5. Europe is in the throes of an economic and currency crisis. Germany has come out of it relatively unscathed but not unaffected. Can you tell us a bit about this and look into the future?

Who knows! If I would know, I would be certainly happier than I am right now. There is a hope that the major currency crisis is over and what the European Union has done in terms of providing stablisation may be sufficient. But that is no guarantee. This crisis is characterised by the fact that minor changes and events might have dramatic effects which are impossible to foresee today. The risk is still there and these days we are debating the risk of a double dip recession in Europe and perhaps in the global markets.

6. Given the level of European Union’s expansion, what do you foresee for the Euro in the coming years?

The Euro has been debated very, very critically. The Euro has had a tremendous impact in the processes of integration in Europe and that was the idea when introduced. But this is a currency which comprises different countries with different economies. There are risks growing in countries which come under pressure like Portugal, Spain and Greece. In the end, I am quite sure that Europe will march to its strength to stabilise its own currency. And the Euro will be as significant as the US dollar, Japanese yen and sooner or later the Chinese yuan.

7. After German resistance to Greece’s economic bailout plan, has Germany become more inward looking?

No, certainly not. No one doubted that there was a definite necessity to help Greece. I completely understand and subscribe to our government’s policy which tried to do its best to help stabilise Greece and that the money is not given away without any guarantee that things in Greece will improve. This took time and heavy negotiating with some internal confrontation even among European partners and was a necessary process from our perspective. Even if Germany took the initiative in this debate, it will certainly help the Euro in the long term perspective and Greece.

8. Chancellor Merkel considers her energy plan which will extend the life span of Germany’s 17 nuclear power plants, as the most efficient and environment friendly in the world. Is she right? What bearing would this have on Germany’s environmental policy and its ability to export such technology?

First of all, the debate about nuclear energy has been the most controversial debates domestically in Germany over the last 20 years. The first implication is purely an economic one –those companies like RWE that are running these plants do earn a lot of money. The government expects these companies to reinvest this money into the promotion of renewable energy which might help push the technological advantage that German industries
have today considerably in the right direction. But on the other hand there is of course the global competition –France, China, Japan and South Korea. They have a competitive advantage of dealing with nuclear energy worldwide. We do not even train engineers who know how to deal with these issues properly in Germany. So there is a shift in policy which might be compensated by our technological capacities in renewables. Nuclear energy obviously has the innate capacity of really bringing people into the streets and demonstrating against any broad nuclear decision. People in Europe favour nuclear energy much more than they do in Germany.

9. What are some of the big social issues that Germany is facing today?  

Well, our employment is always a social issue. The integration issue is also one of the most hotly debated social issues in domestic German politics. In a more general perspective, there is a big difference of course between Germany’s social problems and India’s social problems. Some parts of India’s population are on its way up –people are getting richer and people work hard to stay on this path. In Germany, we have had a similar development two generations ago. Today’s generation are all ready to defend what our fathers and grandfathers worked for. So we are in different cycle of distribution problems.

10. With unfavourable opinion of the war in Afghanistan and America’s inability to extricate itself from this quagmire, where do you see Germany’s role in Afghanistan considering it is the third largest contingent in the security coalition?

Well, there is no way but to accept that the original idea of bringing Taliban out of power, stabilising Afghanistan and even turn it into a half-way stabilised democracy did fail. Western countries are striving to find a way out of Afghanistan without losing too much face and without leaving the country in such a situation that the Afghan government cannot able to stablise it. If Afghanistan were to become a failed state, the old problem of harbouring terrorism and all the other evils of our times would return. But the big problem for a country like Germany is that 90% of our members of parliament annually vote for the extension of this mandate while 70% of our people are against it. In the longer term perspective, no democracy can afford such a situation. Therefore, moving our troops out of Afghanistan is high on our agenda but as everyone knows that that will not happen from one day to the next. It is a process that is full of all kinds of political and military risks which is difficult to forecast.

11.  Is Germany open to doing deals with the Taliban?

Perhaps, we do not find it as difficult as some of our American friends find it. But that is part of our public debate; people have understood that if you want to find a somewhat consolidated situation in Afghanistan, there is no way but to include the Taliban and not exclude them and drive them underground and into terrorist activities which is what the coalition planned to do when it started the war in Afghanistan. But reality is reality and thank god the Bush years are over and we can take a new approach.

Dr. Eberhard Sandschneider is Research Director, German Council on Foreign Relations, Berlin.

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