WASHINGTON--In recent years, the outside world's idea of India has been tied almost exclusively to its glorious economic rise. The tragedy of Mumbai reminds us that severe religious, ethnic and nationalist differences remain. And these differences weigh heavily against India's definitive rise.
There is no denying the leap forward (pardon my Maoist slip) made by India since the bold changes unleashed in 1991 by Manmohan Singh, then the finance minister and now the prime minister. India has become the world's fourth-largest economy and its middle class has grown by a factor of four.
Unlike other Asian nations, India's economic coming of age was based on high-tech industry and therefore an increasing ability to produce more with less. In 2006, comparing India and China, Gurcharan Das, author of the book "India Unbound," described the country as "the world's back office" as opposed to "the world's workshop."
No less worthy is the fact that in India democracy preceded economic liberalization. It has been said--and Chile, South Korea and Taiwan seemed to play into that narrative--that only autocracies could enable the painful process of opening up an economy to competition because democracies, with their conflicting demands and political divisions, tend to reverse free-market reform before it reaches a critical mass of people. India, with a 60-year-old democracy, throws cold water on that premise.
But for many Indians, development is still an elusive goal. The country is socially stratified and millions of citizens, led by wily politicians, define their identity in religious or ethnic--i.e., collectivist--terms. This holds India back from catching up with modern liberal democracies in which rights are by and large based on the individual.
Much of India's terrorism, which has claimed about 12,000 lives since 1970, has been fueled by identity politics, whether it is Hindu fanaticism of the sort that demolished Ayodhya's mosque in 1992 and massacred Muslims in Gujarat in 2002, or the heinous crimes committed by Islamic groups such as the Indian Mujahideen in New Delhi and Bangalore. Indian nationalism is reflected in the strength of the Bharatiya Janata Party, which stands to gain from the Mumbai attacks, and in the shortsightedness with which the Indian establishment has handled Kashmir, two-thirds of which is under New Delhi's control, in the past two decades.
Citing the fact that Pakistan has been a dictatorship for much of its history and that its secret service has collaborated with terrorist groups, all of which is indisputably true, Indian leaders have tended to act defensively, letting the infection fester to the point at which external forces with broader agendas, such as al-Qaeda, are now making matters much worse.
Despite all this, relations between India and Pakistan have recently been improving. The democratically elected government of Pakistani President Asif Ali Zardari has condemned Islamist terrorists in Kashmir and is in the process of purging the country's Inter-Services Intelligence agency. India's Singh seemed to respond positively to those moves.
The terrorists who attacked Mumbai, probably belonging to the Kashmir-based group known as Lashkar-i-Taiba, were aware of this new dynamic and wanted to throttle it. With many Indians now understandably calling for retribution, and with a general election looming, it will be difficult for Singh to decouple the pursuit of the perpetrators from the cross-border dialogue that was gaining momentum. The tragedy of reversing that dialogue will not be measured in the lives lost recently in Mumbai, but in those that will burn in the pyre of religious and ethnic hatred in the future.
All of which reminds us of something that many Indians never forgot, even as their country became the "world's back office"--that the transit from backwardness to development is only in part an economic one. It also involves a profound change in people's idea of identity. In India, that change will be doubly onerous because it will have to take place in the context of neighbors that are far less democratic, and under the pressure of sophisticated Islamic terrorists determined to stoke up hatred among groups from the outside.
But other countries have moved beyond identity politics or are in the process of doing so. India, which has already achieved so many wondrous things, can do it too. Until it does, the glory of its modern rise will not be complete.
Alvaro Vargas Llosa is a senior fellow at the Independent Institute and the editor of "Lessons from the Poor."
By Alvaro Vargas Llosa