The Left's Chimera

We have maintained from the very outset, that the Left alone has opposed the nuclear deal based on a coherent principle, though wrong-headed. However their opposition is so wrong-headed and blinkered that they are seriously endangering our national interest. The Left sees US as a major negative force in global politics and have hence opposed the nuclear deal because it will help bring India and the US closer together. The politburo statement of August 18 and the Left parties statement of August 7 make that clear.

Serving Chinese interests

This does not mean that the statement and the positions are well reasoned, they are not. They are a mishmash of blinkered ideological rants and cynically argued half-baked positions, some are not even based on fact. One lamentable conclusion does come through—the CPI(M) is not really concerned by India’s national interest, its idea of national interest is so distorted that it usually ends up serving China’s national interest. This is the Chinese take on the nuclear deal:

“Judging from the (Indo-US 123 Agreement) text, however, the US has made big concessions and met almost all Indian requests, including full supply of nuclear fuel to India and allowing it to dispose nuclear waste. India's right to continue conducting nuclear testing will depend on "circumstances". According to the text, if India can satisfactorily justify its nuclear testing, the US would acquiesce. That is, Washington has actually acknowledged India's right to retain nuclear testing......

....It is quite obvious that the US generosity in helping India develop nuclear energy is partly due to its hegemony idea, which made it regardless of others' opinions, and partly due to the intention of drawing India in as a tool for its global strategic pattern.” (“Prospects of Indian-US nuclear cooperation misty,” People’s Daily Online August 14, 2007)

So even the Chinese concede we have a good deal, even though they are clear that they don't like it.

Hyde Act Red Herring

Critics in the Left and the right are making a deliberate attempt to insinuate the Hyde Act into the deal. This act is US domestic legislation and binds the US Administration. The Bush team believes that the 123 Agreement it negotiated with India meets all the requirements of the act. There is a simple principle of international law, enshrined in the Vienna Convention on the Law of the Treaties, that an international agreement always trumps domestic legislation. Article 16 (4) of the Indo-US 123 Agreement notes, “This Agreement shall be implemented in good faith and in accordance with the principles of international law.” While the US and India have not ratified that convention, both have operationally abided by it because it codifies customary international law. International diplomacy would become infructous if states began to cite domestic law to overwhelm their international commitments. Article 27 of the treaty notes, " A party may not invoke an internal law as justification for its failure to perform a treaty. "

Misreading the documents

August 7 statement: “Serious concern had been expressed by the Left Parties about various conditions inserted into the Hyde Act passed by the US Congress. A number of them pertain to areas outside nuclear co-operation and are attempts to coerce India to accept the strategic goals of the United States. These issues are:

· Annual certification and reporting to the US Congress by the President on a variety of foreign policy issues such as India’s foreign policy being “congruent to that of the United States” and more specifically India joining US efforts in isolating and even sanctioning Iran [Section 104g(2) E(i)]

· Indian participation and formal declaration of support for the US’ highly controversial Proliferation Security Initiative including the illegal policy of interdiction of vessels in international waters [Section 104g(2) K]

· India conforming to various bilateral/multilateral agreements to which India is not currently a signatory such as the US’ Missile Technology Control Regime (MTCR), the Australia Group etc [Section 104c E,F,G]”

Are the US strategic goals towards India merely those ? All that one can see here is an effort to serve the Iranian and North Korean national interest, as well as that of any country that wishes to make missiles, chemical and nuclear weapons.

August 7 statement: “The termination clause is wide ranging and does not limit itself to only violation of the agreement as a basis for cessation or termination of the contract. Therefore, these extraneous provisions of the Hyde Act could be used in the future to terminate the 123 Agreement. In such an eventuality, India would be back to complete nuclear isolation, while accepting IAEA safeguards in perpetuity. Therefore, the argument that provisions of the Hyde Act do not matter and only 123 clauses do, are misplaced.”

My reading is that the termination issues are just two 1. a unilateral resumption of Indian nuclear tests (which incidentally is only implied and not mentioned in the Indo-US 123) and 2. As per the 123 Agreement’s Article XIV Section 3 which says the agreement will be at an end if India materially breaches the IAEA safeguards agreement. The article goes on to note that what constitutes the material breach will not be decided by the US, but the IAEA Board of Governors. What could be fairer and more reasonable ?

What it is all about

Why beat about the bush (pun unintended) and deconstruct a confused and confusing argument. Let’s ask the straightforward question : Does the US have an agenda in pushing the nuclear deal? Of course it does.

But that’s not quite the same thing as accepting that India will slavishly serve that agenda. What it will do, is what it has always done-- utilize the opportunity to move its own agenda forward. India has its own agenda and sees in the present global conjuncture an opportunity to strengthen its own position relative to the major powers.

What is remarkable about the Left’s self-view of India is as to how weak they think the country is. India with its nuclear-tipped armed forces, 8 per cent plus growth rate and burgeoning foreign exchange reserves has never been stronger than before. It has beaten back the challenge of US-led containment, as well as its most dangerous internal insurgencies. India may have been amenable to US tuition thrice in its history—when we became free and were reeling from the effects of partition, in 1962 when our forces were defeated by the Chinese and in 1991 when our economy crashed. But a glance back at all the instances will show that the Americans did not display and particular interest in “taking over” India. An India run from Washington is a chimera of the Left’s creation.

The only loophole I can see for the continuation of the Left's support for the United Progressive Alliance government is the paragraph four of the August 18 statement which notes,

“Till all the objections are considered and the implications of the Hyde Act evaluated, the government should not take the next step with regard to negotiating a safeguards agreement with the International Atomic Energy Agency.”

If the CPI(M) is willing to go through the motions of having these considered, it could raise its objections. The government has no doubt considered the implications of the Hyde Act. To suggest otherwise is to believe that the Manmohan Singh government, its negotiators and top nuclear scientists like Anil Kakodkar are working as agents of the US. But given the Left’s demonology anything is possible.

Incidentally, whose game is the CPI(M) playing by insisting that the deal be stopped before going to its logical stage? That is the point we will get an exemption from the Nuclear Suppliers Group. Once that happens, India will be able to make deals with countries like France and Russia who will not insist on the kind of conditionalities that are there in the Indo-US 123 Agreement. Again, incidentally, the US will give us in writing that it will not insist on a Right of Return clause in any NSG agreement.

Some more thoughts on the India-US nuclear deal

The slow and deliberately choreographed movement towards revealing the text of the Indo-US 123 Agreement has now reached it’s penultimate stage. Next week, in all likelihood, it will be made available to all. The Indian government has worked to build up opinion across the board through selective briefings (voluntary disclosure: I was in one of them). Two important public briefings have also taken place in New Delhi ( you will have to look in the press briefings for July 27, 07 for the text) and Washington DC. In New Delhi, National Security Advisor M.K. Narayanan, Department of Atomic Energy Chief Anil Kakodkar and Foreign Secretary Shiv Shankar Menon were the briefers, in Washington DC it was US Undersecretary of State Nick Burns.

They are targeting the political class which has been largely ignorant of the issues involved. The Markey riposte was par for the course for the "non-proliferation ayatollahs" in the US. In India, the Left’s reaction has been muted, because it knows that only by bringing down the government can the agreement be blocked. The BJP’s ‘sensible’ wing is for the agreement, though as of now they have merely commended the government’s negotiating prowess. But it has been equally important to get the Congress party on board, and that has been done in Congress-style, by a briefing to the Congress Working Committee and a congratulatory resolution hailing the PM.

There is still a great deal of confusion about the nature of the deal. Let us take up the issues one by one.

Prior Consent for reprocessing: The US has provided such consent to the EURATOM and Japan, and now India. The essence of the arrangement is the belief that leakage of material in the reprocessing area is a far more serious problem than a breach in other safeguards procedures. They are based around the “timely warning” principle. This is what a US State Department publication has to say on this, “ While the assurances of peaceful use that safeguards provide cannot be absolute, it is vital that such safeguards be as robust and effective as possible, for the risk of detection makes diversion more difficult and helps deter the pursuit of illicit nuclear programs. It is essential to the integrity and the objectives of the NPT regime that safeguards be able to provide timely warning of diversion, enabling an effective international response to be mounted.”

Towards this end, India offered the US a dedicated national facility, that will not only come under IAEA safeguards, but one that that will, be built to their specifications. When a batch of US-origin fuel is ready for reprocessing, India will call for a meeting, which the US will have to convene within 6 months, and the modalities and safety issues will be discussed. The US will okay the plan, or provide reasons as to why it cannot do so, all within the space of another year. The presumption is that subject to safety and security and non-diversion, the reprocessing permission will be available.

The fact is that such a situation remains in the realm of the future as of now. India will first have to acquire a US reactor, fuelled by US-origin fuel and run it till it accumulates a certain amount of spent fuel so as to reprocess it. An optimistic process would see this happening in 10-15 years from now. In the meantime, India will have time to build the promised facility and build up US confidence levels that the procedures in the plant are transparent and diversion proof.

Termination of cooperation: The US is bound by law to terminate cooperation with India if it conducts a nuclear test. As the Prime Minister told the CWC, India retains the right to conduct nuclear tests, just as the US reserves the right to react to an Indian test as per its laws. At the same time the US has agreed that it is committed to the “continuous operation of reactors” it may supply. In other words, it will not block India’s efforts to keep the reactor going with fuel from other sources. In that sense, the termination of the Indo-US cooperation will really mean the cessation of Indo-US cooperation, not that with the NSG. In any case there could be loopholes here too, because the Bush administration is no admirer of the Comprehensive Test Ban and would not like to hold the sword of sanctions over India should, say, China resume testing, or more piquantly, the US itself decided to resume testing.

Fallback safeguards: This has been a contentious issue between the two parties. The US Congress which is asked to cough up funds for various world bodies is worried that if the IAEA goes broke, it may suspend inspections on Indian facilities. So there were calls for “fallback” safeguards, possibly by the US itself. This is anathema to India which has since accepted the possibility that it may, in such a circumstance, provide the funds to the IAEA to carry out it’s Indian inspections !

Some larger issues:

In the July 18, 2005 agreement “ President Bush conveyed his appreciation to the Prime Minister over India's strong commitment to preventing WMD proliferation and stated that as a responsible state with advanced nuclear technology, India should acquire the same benefits and advantages as other such states.”

By and large the US has kept this promise. India is now getting the treatment that EURATOM, Japan or Switzerland get. One important aspect of the negotiations is that this has not come to India as a right. As a non-signatory to the Nuclear Non-Proliferation Treaty (NPT), India could not demand that it be treated as a signatory. The Nuclear Suppliers Group cartel has effectively embargoed India and squeezed our programme enormously—we have more installed wind energy than nuclear energy despite huge expenditures in the nuclear front.

It is our fortune that the geopolitical trends impelled the US to lead the effort to lift the embargo. But to extrapolate that this means that we were always “right” and they were “wrong” is to miss the point. International politics is rarely about rights and wrongs. They need us geopolitically, and we need them, if we are to have a viable nuclear power programme, to provide us nuclear materials and technology. This is a fair exchange.

But many, especially the old scientists who had borne the brunt of the US embargo, allowed the bitterness to overcome rational thinking. They began to place demands that would be tantamount to the US and the NSG community eating humble pie and admitting that they had been “wrong” and India “right.”

Fortunately, Prime Minister Manmohan Singh and his officials realized that a “need- based” approach works better than a “rights- based” one, especially since the rest of the world doesn’t feel we have the right to anything as non-signatories to the NPT. It is this need-based approach that finally persuaded the US to give us prior-consent for reprocessing and saving the agreement. India explained that we need reprocessing rights, not only because we need plutonium to use in our fast-breeder programme, but also to take care of accumulations of spent fuel that will result from the burgeoning of large-size reactors that could come in the wake of the agreement.

Indo-US Nuclear Deal: The last lap

(This has been revised in the past 12 hours)

As readers of this blog know, I have been, and remain, a strong supporter of the Indo-US nuclear deal. Many of my articles of the past two years can be found in this blog archive. I was 100 per cent sure that the US will concede all the major issues—right to reprocess nuclear fuel, accepting the concept of perpetual supply of fuel for reactors in exchange for our placing our civilian reactors under perpetual safeguards, linked to this ensuring that the deal is not automatically held hostage to the consequences of another Indian nuclear test, and the issue of fallback safeguards that would be needed if the IAEA failed to carry out it's duties.

My reasoning is that the US is not motivated by a desire to get a slice of the Indian nuclear power industry pie, or on capping India’s nuclear weapons programme. It based on a strategic calculation that requires a friendly India. This is not because we are ‘good’ and ‘deserving’ or even a democracy, but because our size, economic potential and location makes us just about the only large country that can offset the powerful gravitational pull being exerted by China. Our political ethos, not dissimilar to that of the US and the western world is a bonus. The problem for the US was that not only was India was subject to a host of US technology restrictions, but that most of the history of Indo-US relations was one of the Americans seeking to contain India, in alliance with Pakistan and even China. (see the previous post) You cannot befriend a country you also embargo and contain.

An awareness of the need to change this made the many US concessions possible. As for India, it sees the deal as a huge “confidence building measure” on the part of the Americans, or a token of atonement of the many wrongs they have inflicted on us in the past. India's new breed of realpolitik leaders don't want ritual apologies, they prefer to follow the Chinese style of extracting what you can when the situation is in your favour.

Now India has nothing to complain about the nuclear deal, and everything to celebrate. It's not surprising that on Wednesday, the Cabinet Committee on Political Affairs and the Cabinet Committee on Security met jointly and quickly approved of the draft agreement. External Affairs Minister Pranab Mukherji declared that all of India's concerns had been met in the recent round of talks in Washington DC.

Now, the world's sole super-power, one is willing to loosen the tight nuclear embargo it had placed on the civil part of our nuclear programme. The effect of the Indo-US nuclear agreement will be that while India remains a non-signatory to the Nuclear Non-Proliferation Treaty the US has agreed to resume nuclear cooperation in trade in the civil nuclear side, even while giving a specific commitment that it will not hamper India's weapons' programme. It has agreed to actively work to persuade the rest of it's cartel, the Nuclear Suppliers Group to do the same.

"It's too good to be true," said a senior official involved in the negotiations who spoke on background to this blogger earlier this week. The US decision has rescued the Indian civil nuclear programme as well, because India lacks natural uranium and its three-stage programme aiming at self-sufficiency through using the Thorium-Uranium cycle was in serious jeopardy. As it is, the American-led embargo had seriously crippled the programme both in terms of size and technology.

Because, say officials who went for the talks, the deal was wide open on all the three counts listed above when the team led by Indian National Security Adviser Narayanan and Foreign Secretary Shiv Shankar Menon went to Washington on July 17. There, in addition to the official-level talks, the Indian team leaders held parallel discussions with top US officials, Cheney, Hadley and Rice. By all accounts the talks were extended for a fourth and fifth day because of these discussions and in the end we have a “frozen text”—a draft agreement which, though already approved formally by India, must now be approved by the the US system.

The political push so vital for the agreement came from the very top-- President George W. Bush in the US and Prime Minister Manmohan Singh in India. Note the key role played by US Vice-President Dick Cheney and US National Security Adviser Steve Hadley and Secretary of State Condoleezza Rice in breaking the log-jam in Washington.

The latest report by one of the agreement’s more knowledgeable and balanced critics Siddharth Varadarajan of The Hindu indicates that the ‘frozen text’ now with the Indian and US governments has met all the many requirements that were set for it and more.
Already two nuclear scientists, Placid Rodrigues and M.R. Srinivasan who attacked the July 18 Agreement have come out to declare it a success. See this report.

A senior official involved in the negotiations says that the deal meets India's goals because:

1. It places no hindrance on our strategic or military programme. 2. It does not hinder our cherished indigenous three-stage nuclear power programme and finally 3. It is in consonance with all the assurances given by Prime Minister Singh in Parliament.

The senior official says that the agreement now contains “specific language” declaring that the aim of the agreement is not to hinder any “unsafeguarded nuclear activity” on the part of India-- in other words the military part of our programme. In fact he says the deal has ‘no language on nuclear tests’ . While the US is required by it’s law to halt all cooperation with countries that conduct nuclear tests, the Hyde Act has given an exemption that covers the May 1998 tests. While India is aware that another test will have consequences, the Indo-US 123 agreement remains silent on the issue, a fact that tells it's own story.

The ghost of Tarapur

In the frozen agreement according to the senior official, the US has agreed to give India “prior consent” to reprocess US-origin nuclear fuel. This is an issue that had bedeviled the past couple of rounds of talks because, first, the US did not understand India’s need for reprocessing (this is linked to making plutonium to fuel fast-breeder reactors for stage II of India’s power programme). The US prior consent is conditional on India creating a dedicated national facility for reprocessing fuel which will be safeguarded by the IAEA to it’s declared standards on reprocessing, storage, safety and security.

Such a consent was available for the US-supplied Tarapur reactors as well. But when India called for consultations on the issue of reprocessing in the 1970s, the US simply refused to sit down and talk and the result was that India has had to bear the cost of storing the US-origin spent fuel.
To ensure this does not happen the current agreement has a provision which requires consultations to begin within 6 months of the Indian request, and within a year an agreement will be reached.

Cessation of cooperation

Any agreement worth it’s salt must have some way of coping with a breakdown. In this case, the guiding star is again the Tarapur agreement. The US Atomic Energy Act insists that should this happen, it should get back all the equipment and materials supplied. This seems logical, but is impractical. Uprooting a nuclear power plant is simply not possible. The only option is to entomb it. As for materials, especially spent fuel, most suppliers would rather not have it back because of problems of storage.

The current agreement contains an elaborate schema for any “cessation of cooperation” situation. According to the senior official, it will have a “many-layered” process of consultation after the cessation. This will focus on safety and compensation, with US commitment to the “continuous operation of the reactor” of US origin. In other words, the US government will not seek to uproot or halt its’ operation. It could demand the return of US-origin fuel, but only after India was satisfied that it had made up the deficit from alternate sources. Here again the process would not be interminable. The US would be committed to stating what it wants back within a year and compensating India for the return.

What the draft agreement has not given us

The “frozen agreement” does not as yet enable trade in enrichment and reprocessing(ENR) technologies. The US prohibits their export to all countries, but says the senior official, India already has these technologies. What India wants, however, are components but this can only happen through an amendment to the current agreement. Parliament is also bound to question the “prior consent” framework for reprocessing saying that there is always a chance that the US may renege at the last moment. Officials say that the issue will really come up after a decade and more because this presumed that India will, first, have to buy a US reactor, then use it for several years and accumulate sufficient spent fuel for reprocessing. At the same time it would have to build the dedicated facility for reprocessing it. So why hold the agreement hostage to speculative possibility, namely that India will indeed buy a US reactor ?

The Real Prize

India now needs to work out an agreement with the International Atomic Energy Agency and get the approval of the 43-member Nuclear Suppliers Group cartel. This should happen by October or November. Then the draft agreement, the IAEA India-specific Additional Protocol and the NSG's new rules on nuclear trade with India would be together sent to the US Congress and the 123 Agreement would be subjected to an "up or down" vote. This means that there will be no discussion or amendment, simply a vote on whether the Congress approves or disapproves of the agreement.

The NSG is the real prize. The Indo-US Agreement is merely the key that will unlock the global embargo on our programme. When the embargo is lifted, India will have the option of nuclear trade with several countries who are not as finicky as the US on nuclear issues. It is not that they are less committed to non-proliferation and will not insist on stringent safeguards on us, only that they will not have onerous rules of the type listed in the US Atomic Energy Act. Further, and perhaps more important, they have more advanced nuclear power technology-- Russian reactors are cheaper and the French more sophisticated.

Could the US use the NSG to pin India down on issues it has conceded in the ‘123 Agreement’?
Unlikely, say Indian officials, they have tried in the past but failed. Indeed, they are actually obligated by the July 18, 2005 agreement to push India’s case in the NSG. The US will give it in writing to India that it will not press the NSG to cut off cooperation with India, should the Indo-US agreement be terminated in some future date for some unspecified reason.

Domestic fallout

“Success has many fathers, but failure is an orphan”. You will soon be reading about those who played a sterling role in working out the Indo-US nuclear deal. The actual fact is that barring Prime Minister Manmohan Singh himself, no senior political figure backed the deal openly, though External Affairs Minister Pranab Mukherji played a key behind-the-scenes role in promoting it. One reason was that many in the ruling coalition did not understand the deal and its implications and some didn’t bother to think about it. Among political parties only Left understood what it meant—the route to closer Indo-US ties—and so opposed it vehemently.

The BJP’s hostile stance is part of its addled post-2004 politics. The opposition of the “retired nuclear scientist” lobby ranged from senility to xenophobia. Many of those involved forgot their own record of incompetence and disservice to the Indian nuclear programme whose true history remains to be written. The mendacity of some of them has been truly astonishing.

And as for our bomb programme....

Those who claim that the deal will undermine our minimum credible deterrent should read the article here written by K. Santhanam, the DRDO scientist who steered the Indian nuclear weapons programme through the 1990s. He says "The accumulated weapons-grade plutonium in about 40 years of operating the CIRUS reactor (40MWt) and the relatively new Dhruv reactor (100MWt) has been estimated to be sufficient for the MCD (Minimum Credible Deterrent)."

Beijing Conundrum

This article appeared in Mint, June 21, 2007. (Mint is Hindustan Times' new daily, brought out in collaboration with The Wall Street Journal)




Is there a chill in India’s relations with China? While actions such as denying a visa to an officer from Arunachal Pradesh, an area claimed in its entirety by China, seem to suggest so, Indian leaders say there is nothing new about this. But what are we to make of a statement by Chinese foreign ministerYang Jiechi to his Indian counterpart Pranab Mukherjee at the Asia-Europe meeting in Hamburg in May that the presence of settled populations in regions under dispute would not affect China’s claims on those regions?

In other words, bringing into question a key agreement of 2005 that observers have believed would be the basis of a Sino-Indian settlement of their vexed border dispute.

Speaking in Jakarta on Tuesday, Mukherjee said that “outstanding differences” with China on the boundary issue could not define the agenda of the bilateral relations. He reiterated New Delhi’s belief “that there is enough space and opportunity in the region and beyond for both India and China to grow together”. New Delhi has been firm in reiterating its own claims, even while refusing to get rattled by Chinese remarks. Officials, speaking on the background, have said that the recent meeting between Prime Minister Manmohan Singh and Chinese President Hu Jintao on the sidelines of the G8 summit in Heiligindamm was a routine event with no evidence of any special tension between the two countries.

There is a certain value in taking some remarks and actions at face value. In this category would be Singh’s comment in Heiligindamm, declaring that China was India’s “greatest neighbour” and that New Delhi would do everything to improve ties with it. As a statement of fact, it is unexceptional. It should be possible to view China’s claims on Arunachal in the same way. Like it or not, the Chinese dispute India’s ownership of the state and have done so actively since the mid-1950s.

The two sides are involved in intense negotiations to resolve this dispute that led to a war between them in 1962. The situation there is no longer what it was at that time. India has strong defences along the entire 4,000km line of actual control (LAC) that constitutes the Sino-Indian border, and has adequate surveillance and other mechanisms to ensure that it will not be taken by surprise. Some Indian positions in Ladakh and North Sikkim are such that China worries more about an Indian surprise attack, than the other way round.

Yet there are legitimate questions about the pace of the Sino-Indian border negotiations. While the strategy of setting aside the border dispute and building ties on the trade and commerce front is sound, it has its limits. There are several points where India and China dispute even the location of LAC and these can be used to quickly ratchet up tension. We need not take too seriously a false claim made by a BJP MP from Arunachal that the Chinese have intruded 20km into the Indian side of LAC. While there are agreements of 1993 and 1996 to keep a lid on any potential conflict because of this, quiet borders are not the same thing as settled borders.

What appears disturbing is Yang’s statement to Mukherjee. In April 2005, the two sides signed an 11-point agreement on “political parameters and guiding principles” of a settlement, which indicated that they would resolve the dispute on an “as is, where is” basis—China would keep the Aksai Chin region of Ladakh and we would keep Arunachal Pradesh. Yang’s statement appears to undermine the crucial Article VII that says: “In reaching a boundary settlement, the two sides shall safeguard settled populations in border areas.” The area in question is the Tawang tract that contains the town of that name housing an important monastery.

So what is Beijing up to? The Chinese have always displayed an enormous sense of timing in dealing with foreign and security policy issues. They seem to be calculating the pros and cons of settling the border dispute. They will want to ensure that the settlement occurs when the balance of power remains in their favour, but not so soon that it aids India to become the regionally dominant country. What they see is a country that is slowly getting its act together in the South-Asian region, but is still some way away from being able to handle the complex compound of hard and soft power to assert itself, as the Chinese themselves have done. China will most certainly not help India achieve regional pre-eminence, but they do not want to be on the wrong side of an India that has done so either. Therefore, the complicated choreography.

Shaking down the money-makers

Today India faces no shortage of money, tax revenues are bouyant, the savings rate high and foreign investment pouring in. The big challenge is to ensure that it is well spent. This is not as much an issue of the private, but of the public sector. To be precise, the government. Failure of delivery systems, essentially the governmental machinery is the biggest problem that our war against poverty faces. Bashing the rich is a lazy response to the challenge, but most favoured by politicians. This article was published in Hindustan Times May 29, 2007




Mohammed Akram Khan’s 86 per cent marks in his Class 12 Board exams may not strike you as being unique. But everything else about him is. First, he is a student of an Urdu-medium school, of a kind that routinely underperforms at the Boards. Second, he is the son of a semi-skilled labourer. Third, he is a Muslim, now accepted as a socially and economically deprived community in the country. But one thing that marks this young man as part of a growing majority in the country is that his role model is steel tycoon L.N. Mittal.

Khan’s aspirations do not have much of a political voice in the country where the wealth creators have just been told by their Prime Minister to curb conspicuous consumption, avoid ostentatious expenditure and display of vulgar wealth, and check executive compensation. In our populist democracy, where Oxbridge-educated socialists-turned-Marxists like Mani Shankar Aiyar determine the discourse, Khan is not ‘aam aadmi’. He is probably a misguided neo-liberal or, worse, a neo-conservative.

Manmohan Singh’s reversion to the sterile rhetoric of the era of faux socialism at the annual summit of the Confederation of Indian Industry last week took the assembled captains of industry by surprise. That wealth creation is at the heart of wealth redistribution is on spectacular display everyday in China, a party ruled by an orthodox Marxist-Leninist party.

The proposition is really quite simple. High economic growth rates mean the generation of more wealth. High growth comes from high savings and investment and is manifested by the magic of compound arithmetic. An annual growth rate of 3.9 per cent, as we had in the 1970s, doubled our per capita income once in 18 years, whereas an average annual growth rate of 8.5 will do the same thing in about nine years. For philosophers, ideologues and the well-off, that difference does not matter. But for the young and the poor like Akram, it does.

Economic growth ensures that more resources can be harnessed through direct and indirect taxes by the government for public health, education, employment generation and even outright subsidies to aid the poor. Low-growth rates mean that you have less and are unable to create that critical mass of assets — physical and intellectual — for the poor to break the cycle of poverty. The battle between the concept of wealth creation and redistribution has long been over. The collapse of the self-consciously distributive State, the Soviet Union, coincided with the other much more egalitarian-minded revolutionaries, the Chinese, changing direction almost 180 degrees.

The hero of the war was Deng Xiaoping who confronted the issue of the bankruptcy of Marxist ideas by declaring that “socialism does not mean shared poverty” and that “to get rich is glorious”. China not only stood that Marxist-Leninist dictum on its head, but also threw out the Maoist notion of self-reliance and mastered the dynamics of export-led growth.

What is actually striking is the fact that in the past three years, the UPA has done remarkably well, in policies of wealth creation, resource generation as well as distribution. Tax revenues have been buoyantand figures show that in the last three years, government spending on agriculture has gone up from Rs 3,262 crore to Rs 8,090 crore; educational spending from Rs 7,024 crore to a staggering Rs 28,684 crore; healthcare from Rs 6,000 crore to Rs 14,000 crore; rural development from Rs 11,320 crore to Rs 29,020 crore and grants from Rs 18,269 crore to Rs 38,403 crore. These are large numbers, but look at them carefully and you can see the plot.

When the UPA came to power in 2004, it made a self-conscious effort to push what are called policies of ‘inclusive growth’. This meant not only greater investment in the social sector, but also efforts to push controversial social engineering legislation such as quotas in higher education for the OBCs and Muslims. But even while pressing these policies and expenditures, the PM clearly articulated a belief that economic growth was central to the UPA’s policies and that the economic growth path “if sustained for a decade or so, will enable us to eradicate the ancient scourges of mass poverty, ignorance and disease to a very substantial extent”.

Bashing the rich used to once make electoral sense. That age is — or should be — gone and the Congress has not quite grasped that one of the consequences of rapid growth is that it has created an aspirational surge of people for more, rather than less consumption.

Since it was a celebratory week — that of the UPA’s third year — the government did not face really hard questions about its own record of failures, first among these being the inability to move on reforming agriculture. Sunil Mittal, a businessman and currently CII President, is particularly miffed at the government’s failure to harness industry to the cause of agricultural change. Agriculture remains an insulated area, a votebank of backwardness and poverty that the political class drools over. Yet, the suffering and pain from its stagnation are manifest all over.

Perhaps a bigger failure has been the inability to get the administrative machinery to ensure that the money the government pours into a project will yield results on the ground. The most spectacular failure is that of the Sarva Shiksha Abhiyan, especially in the northern states where the enrolment ratio remains less than 50 per cent. Despite a huge increase in outlay, governments have been unable to deliver. “A child is enrolled but there is no classroom. If there is no teacher and there is no teaching, why do you blame growth?” Finance Minister P. Chidambaram asked.

Chidambaram also provided a perspective on the PM’s statement that corruption was growing like cancer in the road construction sector. Between 2000 and 2006, the government released Rs 22,527 crore for the rural roads programme. The amount that was actually spent,

Rs 21,025 crore (93 per cent), was for 220,956 kms of road, whereas only 120,577 kms (roughly 55 per cent) have been completed. The minister clarified that the difference had not all gone into someone’s pocket. It also represented half-finished roads, unused road-building material and so on. In short, managerial and governmental failure.

India stands at the cusp of history in terms of its own transformation. Losing political nerve in the face of elections and persistent incapacity of the government delivery systems will delay the process of ending those “ancient scourges” of mass poverty, disease and ignorance. They will also be a hindrance to India’s emergence as any kind of a regional or global power. India’s military power, though considerable, plays less of a role here than understood because of the country’s historical inclination against exporting it. It is economic growth that will provide India a central strategic role in Asia and the world.

Terror's Twisted Turn

An attack on a train in the Indian heartland, killing mainly Pakistani passengers traveling to Lahore is a sign that terrorism is mutating into a more virulent form. This article was published in Hindustan Times February 19, 2007

On September 11, 2006, Prime Minister Manmohan Singh declared that “Pakistan is also a victim of terrorism”, that terrorism was a threat to both nations and, thus, made it incumbent on them to work together to tackle the issue.

Immediately, a minor firestorm erupted in New Delhi. The BJP’s spokesman, Ravi Shankar Prasad, described the statement as “disturbing, worrisome and untimely”.

Whether or not the PM was conscious that he was speaking on the fifth anniversary of 9/11 is not clear. He was en route to Brazil and thereafter would go to Cuba and meet President Pervez Musharraf on the sidelines of the NAM summit.

Singh acknowledged that “As far as the past is concerned, Pakistan-sponsored terrorism has certainly been a fact of life.” But he pointed out that when former Prime Minister Atal Bihari Vajpayee and President Musharraf signed the joint statement in 2004, “[it] was in a way tacit recognition of ground realities and their solemn agreement to move forward in the reverse direction”.

The significance of his remarks became apparent in Havana where the PM and the Pakistani President agreed to “put in place an India-Pakistan anti-terrorism institutional mechanism to identify and implement counter-terrorism initiatives and investigations”. This formulation was seen as a major development. It represented the distance moved by the two sides since the joint statement of January 2004. At the time, the onus had been on Pakistan to ensure that no part of “territory under its control” would be used for terrorist acts against India.

The Havana decision was denounced even more strongly, with a clutch of former diplomats and intelligence officials joining the BJP in terming the move as tantamount to a sellout. Yet, five months later, the logic of this arrangement is tragically apparent. The Samjhauta Express may have been an Indian train, and Sunday’s attack on it took place on Indian soil. But those who carried it out knew that the bulk of the victims would be Pakistani nationals, and Muslims. This is as clear a declaration of war on both countries by the as-yet-unnamed groups of terrorists as any. This had better be understood.

The incident has brought out three points. First, terrorists will not hesitate to attack any target, be it Pakistani, Indian, Hindu or Muslim, to achieve their aim of preventing normalisation of India-Pakistan ties. The Samjhauta Express attack is a continuation of tactics witnessed in Malegaon,when on September 8, terrorists, including a Pakistani national, triggered bombs at a Muslim congregation on the occasion of Shab-e-Barat that killed 37 people.

Second, terrorists remain a step ahead of the authorities in planning and executing their horrendous acts. While in the cases of Malegaon and the Mumbai train blasts, the police have caught a number of suspects, they are yet to lay their hands on any significant masterminds.

Third, terrorists have now attained a great deal of sophistication in choosing their targets and weapons. At first sight, the difference between the Samjhauta attack, and that on Mumbai’s local trains was in the sophistication of the devices used in the latter strike. However, the attackers knew what they wanted, not so much a blast, but a fire which would spread in a speeding train and achieve the end of killing people. And they achieved it by placing bottles of an inflammable liquid with a simple pipe bomb linked to a timer.

Critics of the government’s strategy of working with Pakistani counterparts have not quite kept pace with the changing dynamics of terrorist violence in its epicentre, Pakistan, or the impact on the neighbouring regions of Afghanistan, Iran, India and Bangladesh. As Singh pointed out, Pakistan has certainly played a major role in lighting the fires of terrorism in the region. There is enough evidence in the writings of courageous Pakistani journalists, which suggest that elements of the Pakistani system continue to support some groups in the name of the freedom struggle in Kashmir. Yet, fact is that Pakistan is itself teetering on a slippery slope.

Of late, there have been a spate of suicide bomber attacks in and around Islamabad. On January 26, a terrorist killed himself and a security guard at a hotel where the Indian High Commissioner was to host a reception. On February 6, a suicide attacker blew himself up in the car park of Islamabad airport, injuring 10 people. Nine days later, on February 17, two suicide bombers blew themselves up in a Quetta court, killing 17 people and wounding 37.

Ever since 9/11, the draconian US-led counter-terrorist operations have led to the mutation of Pakistani terrorist groups. Older ones like the Jaish-e-Mohammed and Harkat-e-jihad-e-Islami have gone underground and newer ones like the Jundullah have emerged with deep links to the al-Qaeda and the Taliban. Pakistan’s biggest failure has been its inability to control the Waziristan region. American officials now say that al-Qaeda and the Taliban have been able to re-establish significant control over their worldwide network and create a new infrastructure of training camps in this tribal region. Over the past year, insurgent tactics from Iraq have migrated to Afghanistan, where suicide bombings have increased five-fold and roadside bomb attacks have doubled. Last Sunday, Iran’s Foreign Ministry charged that on February 16 Sunni terrorists with Pakistani links had struck at the south-eastern city of Zahedan — through which logistical aid to Afghanistan is routed.

At first sight, the simplest thing would be to pressure Musharraf to attack the camps in Waziristan and elsewhere. Washington is afraid that strikes on camps, leading to civilian casualties would weaken not just his position, but also that of the Pakistan army, already battered by its de facto retreat from Waziristan last year. New Delhi is aware of the pressures on the General and would work with him rather than pillory him. The Iranians, too, have declared that they would seek to work with Pakistan to contain the problem.

In recent testimony to a Congressional committee, Ryan Crocker, US ambassador to Pakistan, acknowledged that Pakistan’s ability to address the terrorist challenge is limited. The Pakistan army has suffered substantial casualties in taking on the Taliban and Waziri tribals; Pakistani society has been battered by the continuing sectarian strife.

India’s calculation, as that of the US and other nations, has to be based on whether the situation will improve or deteriorate were Musharraf to leave. This has to be an entirely pragmatic calculation, devoid of any sentimentality, or for that matter ill-feelings about his role in Kargil, or past Pakistani support of terrorism. Yet, there are things Musharraf can and must do — get the democratic opposition in Pakistan on-board and resist the temptation to retain the ‘freedom fighter’ option in Kashmir.

Just last week, it was announced that the first meeting of the new Indo-Pakistani anti-terror mechanism will take place in Islamabad on March 6. External Affairs Minister Pranab Mukherjee has said that the mandate of the mechanism would be to consider counter-terrorism measures and regular and timely sharing of information.

Whatever this may mean, it’s clear that we need more cooperation rather than less. Till now the terrorists have been one step ahead of those who are seeking to check them. The countries of the region need to dramatically reduce their trust deficit in each other and enhance their efforts of tackling a phenomena which constitutes nothing less than an existential threat to them.

The Sum of All Their Fears

India's national security bureaucracy doesn't really have an inspired record. It seems to lack the grit to fight the country's battles abroad and wants to stay holed up in fortress India. This article was published in Hindustan Times November 29, 2006

As 2006 draws to a close, there is some satisfaction in knowing that despite turbulence — some of it caused by our own instrumentalities — India’s most important foreign relations, that with Pakistan and China, are on track. The year began with expectations of rapid movement on the Pakistan front, only to be belied by the Varanasi blasts, the blockade on Siachen, the recriminations of the Mumbai blasts, followed by postponement of the foreign secretary-level dialogue. Towards the year’s end, a throwaway remark on Arunachal Pradesh led to another kind of turmoil, one often caused by the circulation of a lot of hot air.

As is our national wont, we have been convinced that all the problems were caused by our adversaries, real and potential. Our own actions and motives are, and have always been, as pure as driven snow. However, more than anytime in the past, there were disturbing signs of a kind of dissonance being introduced into the system by what is politely called the ‘national security bureaucracy’. This comprises members from the armed forces, the intelligence agencies, police forces and the civilian babus who believe that they have the exclusive franchise on deciding what constitutes the national interest, and the best way of preserving it.

The best (worst?) example of this was the National Security Council Secretariat (NSCS) paper warning against investment by China into certain important sectors. This was sent out to various ministries reportedly by the principal secretary to the Prime Minister and has done a great deal to needlessly roil Sino-Indian relations. Just why this was done is a bit of a mystery.

The NSCS, comprising relatively junior officials, is meant to merely service the National Security Council. The latter body comprising the Prime Minister himself and his ministers for defence, finance, home and external affairs, take the actual decisions. To advise the NSC, two additional deliberative bodies have been provided — the National Security Advisory Board, comprising experts in various fields and a clutch of retired officials, and the Strategic Policy Group. While the former is meant to be the source of external advice to the NSC, the latter, comprising all the top secretaries to the government, the chiefs of the three services and the intelligence agencies, is the top advisory and deliberative body to the NSC. Its additional value is that it is supposed to undertake what the Americans call an ‘inter-agency process’, where the views of various important departments and ministries are put forward and reconciled before becoming official policy. A parallel system servicing the Cabinet is the committee of secretaries. In the case of the Chinese investment policy, it is well-known that the finance, surface transport and external affairs ministries disagreed with the NSCS’s view. But since a senior PMO official has fired the guns from the shoulders of the NSC secretariat, what we have is an ill-considered, hawkish policy, rather than a balanced and considered opinion of the government.

The aim no doubt was to upset the government’s China policy. As indeed was the needless furore on the Chinese envoy Sun Yuxi’s remarks. While Sun could have had a better sense of timing to reiterate Beijing’s known views on the subject, it was not particularly edifying to hear the whining and sloganeering over what is a well-known Chinese position. A country aspiring to be a global player, must have the maturity to accept that if it has a point of view, so do others.

No doubt there are similar forces at work within Pakistan and China as well. But in India, we have the benefit of living in an all-too-transparent system where manoeuvres of mendacious officialdom are easily visible. Such openness is not available in Pakistan or China. The actions of Pakistan’s Inter-Services Intelligence (ISI) in using jehadis as a cat’s paw are not easy to prove, even though we must cope with their impact. The Chinese system is even more opaque. But its policy is to use Pakistan as a foil against India, rather than do anything negative frontally.

Fortunately, on both Pakistan and China, the political leadership of the country has shown a strong and steady hand. They have ensured that the momentum of efforts to normalise ties with these countries have not been derailed. At every stage of improving relations with difficult neighbours, the political class has had to lead. Rajiv Gandhi had to overrule officials before his pathbreaking visit to Beijing in 1988. Manmohan Singh, who does not have Rajiv’s clout, has had to fight every step of the way against bureaucrats and ministers who claim they are the repository of Rajiv’s legacy. It was on his insistence that the Hurriyat was permitted to travel to Pakistan without visas. He has also expended personal political capital on pushing the Indo-US nuclear deal.

The PM and his team have pushed through the anti-terror mechanism with Pakistan and the result has been a distinct improvement in India-Pakistan relations. Despite uncalled for pressure by the army, they have set the resolution of the Siachen and Sir Creek issues as a benchmark for the coming months. They are keeping their eyes firmly on the capstone of the peace process — the final settlement of the Jammu and Kashmir dispute. This process is further down the road than publicly acknowledged.

Likewise, despite Chinese procrastination, the government has steadily pushed for a final settlement of the Sino-Indian border dispute. The recent visit of Chinese President Hu Jintao gives a feel of the texture of New Delhi’s global policies. The latest Sino-Indian joint communiqué talks of the “global and strategic” significance of the relations between the two countries — a factual description of the current reality. It says that the two countries do not see themselves as “rivals or competitors but [are] partners for mutual benefit”. This sounds somewhat rhetorical, but is again true in that the unmoderated rivalry and competition between two nuclear armed States in a globalised economy is tantamount to mutually assured destruction. So the statement adds that “they agree that there is enough space for them to grow together”, a practical and forward-looking formulation. While the opacity we have referred to does cloud a better understanding of Chinese policies towards India, the facts are that Beijing is shifting towards a neutral position on the India-Pakistan issues, especially on Kashmir.

The broader Indian strategy, as probably that of China, is to enhance relations with a cross-section of important countries — the US, the EU, Japan, Russia, the Asean, South Africa, Brazil, etc. Based on the values that shape our nation and its foreign policies — secularism and democracy — it is inevitable that our ties with some countries will have a flavour quite different from those of others. But this does not mean that one set of relations will be benevolent, and the other conflict-ridden.

As long as human relationships are about power, the only way to promote restraint is to maintain a balance of power. But where in the past this was seen as a zero-sum game, in today’s inter-dependent world, it requires an appreciation of the balance of interests of various nations.

In this new vision of the world, too much is at stake to allow the national security bureaucracies to decide the direction of policies. While we must heed their views with all the seriousness they deserve, because it is their task to keep track of the family silver, we cannot allow them to run away with the agenda. They have the right to be suspicious of our real and potential adversaries. But suspicion unrelieved by any effort towards amelioration usually becomes paranoia. It breeds a ‘fortress mentality’ that takes comfort in hiding behind the high walls of national security. But the threats outside will inevitably breach the walls if not countered, through flexible and innovative strategies, at some remove from the walls of our fort.