Geithner: Differences? What Differences?

Geithner: Differences? What Differences?

“Although we start from different positions,” U.S. Treasury Secretary Timothy Geithner said at his Delhi press conference today, “we face some problems in common.”

With his counterpart Finance Minister Pranab Mukherjee sitting nearby, Geithner went on to list how to extend financial services to people outside the banking system and how to finance infrastructure needs as two of them. He later referred to the U.S. and India as “two of the world’s largest economies.”

However much Geithner might have been trying to stress the commonalities between the world’s richest and largest democracies, the key phrase in all this was really, “we start from different positions.”

One can hardly compare the size of the economies or per capita income. The CIA World Fact Book ranks the U.S. as 11 and India as 164 in its GDP (per capita) index. Yes, much of the U.S.’s infrastructure is in need of an upgrade but can anyone really compare America’s needs with India’s when it comes to, say, building hard-topped roads or a national highway system? And, yes, there are people in the U.S. outside the banking system just as there are outside the insured healthcare system, but still….

The Treasury Secretary and Finance Minister clearly felt the need to stress what they shared not what divided them: The purpose of the event at the Taj Palace hotel was to “launch” an economic and financial partnership between the two nations.

But the pervasive sense was one of distance. When a Pakistani delegation visited Washington recently, much was made of the fact that the seating arrangement interspersed officials from both sides. Here, the Indian delegation sat primly on one side of the room, the U.S. on the other.

There was even confusion over whether the economic and financial partnership already existed – some said it was actually launched when Prime Minister Manmohan Singh visited the White House in November, so this was really a launch of an “expanded” partnership. Whether it’s new or not, it chiefly appears to consist of a few high-level meetings in coming years.

And when it came to the biggest area of cooperation that was on people’s minds – whether Geithner tried to enlist India’s help in pressuring China to let the yuan appreciate – there was no evidence of common purpose at all. Geithner managed to answer a question about the yuan without uttering the words “China” or “yuan,” in fact. Later, in an interview with NDTV, he did manage to say that it was China’s choice and judgment whether it adopted a more flexible exchange rate.

Meanwhile, India on the same day was making its own diplomatic overtures about shared common purpose with none other than the Great Neighbor to the North. On an official visit to Beijing, Foreign Minister S.M. Krishna said the world’s two most populous nations need to stop viewing each other as competitors and start working together to influence global issues such as climate change and trade, according to the Associated Press.

“India and China have only begun to impact seriously on the world,” Krishna told a think-tank in Beijing.