Friday, 28 February 2020

Obama & Some Uncomfortable Questions

Updated: November 13, 2010 12:05 pm

Gurum R Narayanappa is an upset man these days. The middle-aged Bengaluru-based weaver had a dream presenting his handicraft to US President Obama and his wife during his forthcoming visit to India. That dream has been shattered because Obama is not coming to Bengaluru, the IT capital of India, despite relentless efforts of Indian foreign minister SM Krishna, who hails from the city and who, as Chief Minister of Karnataka had promoted IT industry a lot.

                The idea of gifting a silk handkerchief and silk saree to the first couple of US dawned on Gurum when he learnt of Obama’s India visit early this year from newspaper reports. He decided against using any dye for the pure silks he wishes to gift. Adding colours, explains this man with 55 years experience, would result in loss of some percentage of silk. “I have used gold thread or zari for the handkerchief to render it a grand look. For the 5.5-metre-long, light-weight saree, I used the natural colour that I get from the cocoon. If I try using a dye, the saree will not last more than three years. The purpose behind gifting a saree is because it represents Indian culture,” he says.

                While it took him 20 days to ready the handkerchief, the saree, he said, took him two months or more to weave. Whether Indian officials will help Gurum now send him to any of the cities—Mumbai and Delhi—that Obama will cover during his four-day visit, commencing on November 6, to present his gifts to the American first couple is now in the realm of speculations. But it is a second personal setback for Krishna that his request has not been entertained by the Obama Administration.

                As Karnataka Chief Minister, Krishna had tried hard to bring the then US President Bill Clinton to Bengaluru in 2000. But on that occasion, Chandrababu Naidu, the then Andhra Pradesh Chief Minister, was successful in taking Clinton to Hyderabad. Naidu’s successor, the late YS Rajasekhara Reddy used his clout with the Manmohan Singh government to see that George W Bush visited Hyderabad during his 2005 India visit.

                Be that as it may, Obama not coming to India’s IT hub also underscores the deeper problem of “outsourcing” what Obama Administration thinks of American jobs to Bengaluru, notwithstanding the fact that American companies have benefited immensely in the process. In fact, Obama will be in a country about which he has been consistently warning his younger countrymen. He might not have said so in so many words, but he has indicated enough that India is one of the leading countries that have exploited the fruits of neo-liberal economics by draining the American economy of its jobs. Perceptible Indians have noticed how Obama has stepped up his campaign against outsourcing by envisaging tax benefits only to those firms which will create jobs in the country, a move that will hit Indian IT firms in a big way. This move closely follows another controversial legislation that increased H-1B and L1 visa fees, hitting India’s over USD 50 billion IT industry.

                The Indian business community is most worried over Obama’s policies, though this community had expressed great optimism when Obama had assumed Presidency in 2008. So much so that Federation of Indian Chambers of Commerce and Industry (FICCI) had identified five areas that it hoped the American President would address to deepen India-US engagement. These included “deepening Indo-US nuclear cooperation, move from a technology denial regime to a technology facilitating regime, engagement of Indian industry in President Obama’s plans to spend large amounts for infrastructure development, IT and skill formation in the US, engagement of Indian industry with US in the healthcare and software domains and engagement of Indian companies and government with the US for launching a second green revolution”, according to FICCI secretary general Amit Mitra.

                However, two years later, with the Obama regime adopting protectionist policies, the initial enthusiasm of the Indian business has lost much charm. Says Harsh Pati Singhania, President, FICCI, “The recent moves of the Obama Administration, if implemented, would constrain US companies as they move ahead to benefit from the advantages with regard to production, distribution and marketing offered in different parts of the world. In this era of globalisation, a much more meaningful measure would have been to evolve a consensus on harmonising the national taxation systems.”

                According to Singhania, at a time when the world is becoming a borderless entity with the developments taking place in the fields of communication and transportation, taking measures that force companies to restrict their economic activities in one region and not in the other is a retrograde step. “In any case several US corporations have come and set up operations in India because of the several advantages our country has to offer. Our large and growing market, large pool of skilled manpower, reasonable labour costs make investing in India an attractive proposition. While this move would certainly have some impact on US investments abroad and into India, in the long run this would only run counter to the interest of US corporations desirous of cost efficient operations across the globe,” argues Singhania.

                Sajjan Jindal, President of Associated Chambers of Commerce and Industry of India (ASSOCHAM), another business association, has urged the Obama Administration not to deny tax incentives to those US companies which create jobs overseas like in Bengaluru and Hyderabad. “Not only America but the entire world has become the victim of current meltdown and at this crucial juncture taking resort to protectionism tendencies will kill the spirit of competition and dilute the spirits of World Trade Organisation”, says Jindal. On the other hand, he argues, citing a recent Survey brought out in America, that as a result of outsourcing assignments of American companies to overseas countries including India, US benefited at least 10 times more than those countries in which it outsourced its jobs.

                In fact, it is argued that a booming economy in India could help in the revival of the American business, not the other way around. This is particularly true in the case of the American military industrial complex. In March 2009, the Obama Administration cleared the US$ 2.1 billion sale of eight P-8 Poseidon (Maritime Reconnaissance Aircraft) to India, the largest military deal between the two countries so far. And during Obama’s visit, it is highly likely that a bigger contract worth US $3 billion will be facilitated by which India will buy 10 C-17 Globemaster-III giant strategic airlift aircraft. Boeing Company is also in the strong contention of bagging Indian order of 126 multi-role fighter aircraft. As it is, the US is now increasingly cornering a major chunk of the lucrative Indian defence market, particularly in the areas of missiles and aviation sectors. It may be noted that Indian defence market is estimated to be as big as 150 billion dollars over the next 10 years. Says Abhijeet Bhattacharya, a noted security analyst, who, until recently had occupied high positions in the Indian government, “I may not be personally happy as importing weapons and weapons systems from America or others reflects poorly on our indigenous capability, but then that is a hard reality we have to live with. The US is going to be benefited immensely because of our defence needs and the Obama’s visit will strengthen that trend.”

                As it is, by keeping the military equipments, particularly their efficacy and suitability, past few years have seen a number of joint Indo-US military exercises in India. Indian officials reveal that the emerging military ties influenced Obama’s decision to visit India, which was formally announced in June. In fact, Obama, like Jimmy Carter, is a US President who is visiting India in his first term, within the first 24 months of his tenure. It undoubtedly denotes the position India occupies in the American foreign policy calculus. Yet, as TP Sreenivasan, a retired Indian diplomat, argues, “The strategic partnership envisaged in June, when the White House announced the summit, has not yet taken off, as the wish lists on the two sides differ substantially”. For example, the US would like India to sign several pending agreements to facilitate the sale of American defense equipment, but India would like to move cautiously precisely because of the strategic nature of the agreements, which will cover communications and information security, geospatial cooperation and logistics sharing. Defence Minister AK Antony visited Washington early October to push these deals forward.

                Similarly, the much talked about civil nuclear programme is, still another big sticking point. President Obama backed a reprocessing agreement in June, a major gesture, considering the conservative position he holds on enrichment and reprocessing technologies. But India has not been able to reciprocate by enacting liability legislation consistent with the relevant international regime, in which liability for nuclear damage is only for the operators, not the suppliers. The US business community, particularly spooked firms such as General Electric Co. and Westinghouse Electric Co., eager to sell nuclear wares to India, is disappointed. However, if Prithviraj Chavan, Minister of State in the office of Prime Minister Manmohan Singh and the Official who ushered the nuclear-liability law through India’s Parliament, is to be believed, the rules being written to implement that law will alleviate the concerns of foreign suppliers. He has said that during Obama’s visit, “we could announce that we’re going to place two reactor orders from company A or company B. We may even go further than that, but let’s see”.

                Americans do have a point when despite covering extra miles for the historic Indo-US civilian nuclear deal, the Indian government really disappointed them by legislating a nuclear-liability provision that defied international standards and practices on damages and compensations flowing from nuclear commerce. Mercifully, the situation seems to have been retrieved now that India has signed the multilateral “Convention on Supplementary Compensation for Nuclear Damage” (CSCND) on the eve of Obama’s visit. India has thus assured the potential American nuclear suppliers that liability, if any, would be in line with international norms.

                However, Indian officials here are also keeping their fingers crossed over the outcome of the forthcoming elections to the US Congress, immediately after which Obama will be in India. “The results will have an impact on the outcome of the visit”, said an official on the condition of anonymity. His point is that be it the matter of protectionism or the Afghan-Pakistan, the Congressional elections will influence the future policies of the Obama Administration. As it is, Obama’s commitment to withdraw troops by next year has created concern in Delhi that the US will leave before the country is fully stabilised. Delhi has also been dissatisfied with how little it’s been consulted over strategic matters pertaining to Afghanistan and Iran. To top it all, the Wikileaks scandal earlier this year confirmed something many Indian analysts already suspected: that Islamabad is working in collusion with the very Taliban it was supposedly fighting. The US pooh-poohed the scandal publicly, but Delhi took note. Pakistan has also, in the meantime, stirred up trouble in the state of Jammu and Kashmir, over which some of the senior officials of the Obama Administration have given conflicting signals. And that has not exactly pleased New Delhi.

                No wonder why the US leadership has fallen to its lowest since 2008 in India where the decisions of his administration to hike visa fee for professionals and outsourcing have grabbed the headlines. The approval rating of the US leadership has dropped by 13 per cent—from 31 per cent in 2008 to 18 per cent in 2010, according to the latest Gallup Poll on the subject. Incidentally the approval rating of the American leadership in India and Pakistan is one of the lowest in the 18 Asian countries where the Gallup Survey has been conducted recently.

                However, there is a huge difference between Indian and Pakistan feelings towards the United States, or for that matter the Obama Administration. Unlike an average Pakistani, an average Indian considers the United States a natural ally, even if the American policies towards India do not please him or her at times. Hardly one comes across an Indian, who, unless of strong ideological orientation, has any ill-will against the US. “The relations between the two countries are built on deep, shared values, and the commitment to democracy and secularism and now there are important economic inter-connections, based on trade, investment and the movement of people”, said a senior Indian bureaucrat whose two children are settled in the USA.

                Indian officials point out how Obama, or for that matter any American President cannot afford to ignore the presence of the 2.7 million strong Indian American community in the United States whose growing affluence and political strength has developed into a force for closer and stronger ties between their adopted country and their nation of origin.

                Obama’s decision to spend a night at Mumbai, India’s business capital and where the ghastly 26/11 attack by Pakistani Islamic terrorists had taken place in 2008, killing at least 173 people and wounding at least 308, is explained by the Indian officials in terms of his strong desire to show solidarity with India “in fighting international terror, whose nerve-centre happens to be Pakistan, which, in turn, is blessed by China”.

                This view is shared by Bharat Verma, Editor of the influential Indian Defence Review magazine. “The spread of two authoritarian streams, Chinese communism and the Islamic fundamentalism, in combination or otherwise, threatens the survival of democracies in Asia. President Obama’s visit to India primarily will attempt to boost democracy to democracy relationship to counter the dark forces led by China in Asia. Twenty-first century will witness a robust partnership between India and the United States due to the extraordinary synergy of purpose. The former to protect its democratic fabric and the territorial integrity, and the latter to defend its global stakes in Asia, which includes access to this huge market. This relationship between the two democracies can effectively compel Beijing to abandon New Cold War started by it in Asia and revert to ‘Peaceful rise of China’. President Obama in New Delhi will strive to create the necessary synergy while visiting New Delhi”, he said.

By Prakash Nanda

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