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Putin's Billionaires And The Global Economic Weapon That India Won't Use

18/01/2016 8:22 AM IST | Updated 15/07/2016 8:25 AM IST
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MOSCOW, RUSSIA - DECEMBER,24: (RUSSIA OUT) Russian President Vladimir Putin (R) listens to Indian Prime Minister Narendra Modi (L) during their meeting in Grand Kremlin Palace, in Moscow, Russia, December,24,2015. Narendra Modi is having a two-days state visit to Russia. (Photo by Mikhail Svetlov/Getty Images)

In 2015, during the latter phases of the Ukraine Crisis, Russian President Vladimir Putin played an incendiary global economic card against the West.

His strategy was seemingly simple on the surface but very complex within its core.

Knowing that dozens of Russians have billions of dollars floating around in the global financial system, he compelled them to pull out their cash from the West and bring all of it home into the Russian financial system.

To some, that might have seemed like a clumsy and insensible demand. But to others who looked closely at the details, it didn't take so long to understand the card that Putin was actually playing.

With Russian oligarchs having an average 5% cash stake in the evolving global financial system, Putin knew that removing even 2% of it and bringing it into Russia would swiftly create a potentially damning financial crisis for many vulnerable European and Asian countries that are allied to Western influence.

India has remained the only big player that has never used this economic game card on the global scene.

In such a case, Russia would have opened a Moscow-controlled floodgate for European and other Western-allied nations wanting to save themselves from a financial drought.

One of the most affected victims of a similar (unrelated) German-controlled strategy was Greece, a mainstream European Union partner that subsequently defied the rest of Europe and went to Russia begging for cash to save its economy since the EU was not in a position to rescue Athens without stringent pre-conditions.

But since Putin did not have the cash at that time, he had to send the Greeks back to Europe empty handed.

Nonetheless, it certainly showed him how fragile the global financial system was.

Hence, he hatched a plan and issued a threat against the West's financial network by instructing Russians in the diaspora to bring home their cash.

And though less than 0.4% of them initially complied, that was more than enough to create global market fears, which pushed several smaller economies into a further state of recession, with a growing desire to take up Russian help.

This scenario had since forced several Western nations to consider the vulnerability of the global economy to Russian influence, thus bringing France and Germany, two of Europe's richest economies, to Moscow's bargaining table, as others followed cautiously.

India wields a much stronger economic weapon in the global financial arsenal than Russia, with far reaching abilities to bring more nations to their knees...

So to some extent, the Russian intimidation of the global financial system had worked.

After all, throughout modern history, it has always been proven that any nation that is capable of making a real destabilisation threat of the global financial system can potentially use that strategy as an economic weapon if it has to get its way.

And while almost all of the larger economies such as China and the United States have also used this strategy to squeeze opponents into their corner, India has remained the only big player that has never used this economic game card on the global scene.

So the first obvious question is whether India truly has the clout to do such a thing in order to influence the direction of the global economy or the economic position of its opponents.

While the answers can be varied, it certainly seems possible.

Compared to Russia, the Indian diaspora has a larger 7% stake of cash input and almost 8% technological control of the global financial system - that's considerably more than Russia.

If this data is accurate then India wields a much stronger economic weapon in the global financial arsenal than Russia, with far reaching abilities to bring more nations to their knees than was previously conceived.

If New Delhi were to make a similar call out to the Indian diaspora, and even if just 0.4% heeded it, then the scale of economic chaos in the global financial system would be far greater.

While India may certainly have a much larger economic weapon than Russia, the world will be extremely disappointed if New Delhi decides to use it.

This would then bring us to the second obvious question: why is India is not using this global economic weapon to influence its position on international matters or to enforce its own foreign policy?

Ramesh Malik, an independent researcher of diaspora matters, had an insight to share. He said India is a much more mature state than Russia, with deep democratic values. Thus, it's unlikely that India will ever play such a "dubious game with the global economy".

In addition, India is an important ally of the West on many matters. This certainly means that it is a trusted nation that the United States, Europe and their allies would want to rely on for support against the destabilisation of the global economy.

So while India may certainly have a much larger economic weapon than Russia, the world will be extremely disappointed if New Delhi decides to use it.

So, while some may continue to question India's reasons for not showing its clout, it is certainly clear that she has more than enough reasons not to.

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