Friday, January 27th, 2023 09:58:53

Who won Mr Obama or Dr Singh?

Updated: November 27, 2010 10:55 am

Quite interestingly, during his short stay, Mr Obama appeared to be satisfied with the business he could generate in India. After all the quantum was ten billion US dollars, and along with it, according to his ‘own’ estimates, around fifty thousand jobs for the hapless Americans.

                President Obama’s November 6-9 visit to India engendered expectations in both the camps; although for different reasons. India was expecting a friendlier America, which could help it consolidate on the world podium. And the US naturally sought a wider opening of Indian markets in order to uplift its sagging economy through a boost in exports. In fact, that is what essentially happened through Obama’s visit. He bargained quite clearly. He asked for ‘job-deals’ and wider access to Indian markets on one hand and offered a far greater role to India in the international rostrum on the other.

                The Indo-US joint statement was also reflective of the above fact. It ended thus: “Prime Minister Singh and President Obama concluded that their meeting is a historic milestone as they seek to elevate the India-US strategic partnership to a new level for the benefit of their nations and the entire mankind. The two leaders looked forward to the next session of the US-India Strategic Dialogue in 2011.”

                Hopefully, Indians shall not be duped in the long run as Mr Obama did vouch to provide us a ‘permanent seat’ in the Security Council. The American President, through his overtures, unequivocally declared that if India relents on certain matters, then the US is also willing to ‘walk that extra kilometre’.

                At present, the US sees the conferment of the permanent seat in the Security Council, at least in rhetoric, as a simple trade-off with the Indian signature at the Convention for Supplementary Compensation and helping the Americans in battling their worst economic slump since the Great Depression of 1929.

                Much to the joy of Dr Singh, Obama did not utter anything spectacularly embarrassing for India regarding Kashmir. However, all these were rather ‘denting’ for our ‘childhood enemy’ Pakistan and the information one could gather indicated that the Pakistani Foreign Office was quite flabbergasted with the content of Obama’s speech delivered to the Indian parliamentarians.

                Pakistan, however, has nothing to really worry about. The US still has to fight the ‘war on terror’ and unless India takes a pro-active stance in Afghanistan, that is, unless South Block peregrinates in some sort of hardball diplomacy by getting involved in the war on terror, a post-US Afghanistan, if not fully, then at least partially will be for Pakistan to enjoy.

                One thing though, is quite clearly embedded in the wall. Obama is no fool to alienate India as the latter remains one of the ‘prospective’ partners for the US in Asia. In fact, Obama’s speech should be interpreted as an open offer for the Indian establishment. Now, it’s for South Block to take a firm decision. Both Washington and New Delhi are wary of Chinese national chauvinism. The Americans are always assertive, at least since 1917, on the platform of realpolitik. However, the question is, shall the Indians equally reciprocate in that domain?

                Without denial, science, technology, agriculture, civilian nuclear energy and defence are some of the key components in the Indo-US relationship and shall continue to be so. Obama had to grab some ‘jobs’ very badly in the backdrop of the dismal mid-term and hence inked the business deals. He, along with his associates, offered to ‘proffer’ more to India, only if India responds. By conservative estimates, the Indo-US relationship in the coming decade would rotate about the quid pro quo axis and the geopolitical significance of China shall not be centrifugally missed in that motion.

               OBAMA’S Visit Will Strengthen US Economy

Can Obama’s recent visit to India be symbolised as an end of America’s economic empire? The collapse of the British colonial economy after the World War II and the loss of its crown jewel India spelled the end of England’s empire and the mantle passed to America. After the economic mess in 2008, the US will remain a military superpower for an indefinite future, but its days as the economic super power and the epicentre of the world economy are numbered.

Current economic scenario of US

The financial experts and politicians from President Obama, who are talking about the recovery of the US economy, seem rather ignorant of the big global economic picture. The genie of globalisation cannot be put back in the bottle by the US President as the approximate average net worth per American family now is negative USD 50,000. The US government must ‘borrow and spend’ trillions every year, for as long as the eye can see. Even if families are forced to swallow a huge drop in the standard of living (e.g. no healthcare), that changes nothing. It has nothing to do with Republican or Democratic ideology either; the gaping hole in the budget is structural and cannot be plugged. There are 2 million new foreclosures every year, slated to increase and not decrease, as unemployment stays high and more defaulted mortgages stuff the foreclosure pipeline. The real unemployment rate is over 15 per cent and rising, far more than the official number because they deliberately choose not to count many by tinkering with the definition. Too-big-to-fail banks are still very sick but showing big accounting profits to justify big bonus payments, only because US regulators have now allowed them to legally publish fraudulent balance sheets. Ever wonder why you never hear about USD 3 or 4 trillion of toxic assets any more? Is it believable that overnight they have started smelling like rose? The so-called reform of health care will do nothing to contain cost inflation at 15 per cent 20 per cent annually, doubling every 5 years, soon spiraling out of middle class affordability.

                Greying of America will necessarily bankrupt all government and public retirement programmes, including Social Security, since not a penny has actually been set aside or invested. All of these entitlement programmess have always run as a giant Ponzi scheme, with pensions and health benefits for the old being paid directly from the general budget, i.e. taxes paid by the young, who are lucky enough to be employed.

                The US took over both the oil exchanges in London and New York and all three oil markers. So, every one of nearly 200 oil importing countries have no choice but to hold dollar reserves up to 5 years worth of oil import. For China, it is about USD 1 trillion and about USD 300 billion for India. As dollar devalues over time, the USD price of oil will go up as well, requiring even more reserve.

                Iraq under Saddam broke ranks with OPEC and discontinued dollar invoicing in 2002 and was promptly invaded. Iran has done the same and even tried to establish a third oil exchange in Luxembourg with the help of Russia and Venezuela, along with a Euro-denominated fourth oil marker, and must be punished for its sin under the pretext of their nuclear ambition. Not surprisingly, American politics in the West Asia has always been linked with oil and maintenance of IRC status of the US dollar.

                It is not difficult to see how all this will be adversely affected in case the US defaults, which the US will desperately try to avoid at all costs, including military intervention, because when hammer is your only tool you see all problems as nails. The future holds a lot of surprises. Oil itself may lose its predominant role as renewable energy becomes economically competitive perhaps within this decade.

                Revaluing Chinese currency is not going to open up the mothballed plant in Pennsylvania and stopping Indian outsourcing will not revive Silicon Valley to its past glory because it moved to Bangalore, when no one was looking.

The mutual benefits of the two countries

Manmohan Singh and Obama agreed to take mutual steps to implement a four-part export control reform programme, including support for India’s membership in the multilateral export control regimes, removing India’s defence and space-related entities from the US Entity List, port licensing policy realignment and export control cooperation. As the US-India economic relationship will deepen, investment from India will contribute to the growth and vibrancy of the American economy and in the creation of jobs in the US. At present only 2 per cent of India’s imports are from the US and 10 per cent of the US exports is to India. Obama announced to double the amount under National Export Initiative in next five years. The United States sees an opportunity to sell our exports in one of the fastest-growing markets in the world. For America, this is a jobs strategy.

                Over the last decade, investment capital from India grew at an annualised rate of 53 per cent reaching an estimated USD 4.4 billion in 2009. On the other hand, the Entrepreneurs Roundtable introduced the president to the next generation of Indian entrepreneurs and showcased innovative partnerships between US and Indian businesses that are creating new markets for US-manufactured technologies. According to the US media, President Barack Obama’s India visit has been successful in creating thousands of jobs for Americans; which was one of the major factors for the shellacking received by his Democratic party in mid-term polls.

                The best diplomatic exchanges are those marked by pragmatism overlaid with optimism. The US President Barack Obama’s maiden visit to India was not about reshaping but reiterating the improvement in relations between two countries that are learning to trust each other. This builds the right atmosphere to do business, where one can expect the other side to disagree but not disconnect from it, if problems arise.

By Samarpita Roy

Recently, the author came across something apparently innocuous; nevertheless explicitly dangerous and disastrous for India in a long-term perspective. One Chinese website was offering an anti-virus for free download! Yes, a Chinese website… And Yes, software…

                We are fully aware that Sino-India bilateral trade has been skyrocketing. At the same time, India is on the negative side of the Balance of Trade. Yes, the Chinese are good at manufacturing, their labour is cheap as they can control that sector because they have an autocratic form of government and that gives them the edge to flood the markets of other countries with inexpensive goods.

                But, how about the Chinese in software? We better be uneasy regarding that.

                Well, the author very well appreciates the concern of the skeptics regarding the progress in Indo-US camaraderie. Americans are neo-imperialists. They have decimated Iraq and now producing blizzards in Afghanistan. If India aligns with them, it shall endanger its position in the world in the long run.

                However, some arguments may be posited, which not necessarily shall counter the viewpoints of the skeptics, but shall definitely attempt to chart a clear path for India’s foreign policy.

                Even if China may go for a currency evaluation by relenting to US pressures, that would not preclude the scenario of a power-conflict between the two. In fact, such a Chinese move would rather accentuate the conflictual scenario. Chinese national chauvinism shall simply not vanish by making a whimper.

                Undoubtedly, India is at some ‘loggerheads’ with China and considering the 1962 ‘scar’, it does not seem to transform into “Chindia” soon.

                Amidst such a backdrop, what is the best possible solution for India? Well, there are a few paths:

  1. India can remain frozen in the foreign policy regime and deal on a case-by-case basis. But that shall be difficult in the coming period as India is now a part of the Security Council, though as a temporary member. Furthermore, if India seeks a permanent position in the Council, then it has to yield to some US tantrums, i.e. on the Iran issue or chastising North Korea and Myanmar.
  2. Else, India can take a pro-active stance and essay to forge an alliance with China to counter the American-backed western threat in Asia. That seems highly unlikely keeping in mind the misgivings both the countries have for each other as well as the Chinese stance of belligerence toward India.
  3. Third, India can take a pro-active stance and attempt to forge a ‘covert’ alliance with the US to counter China and Pakistan; in fact, mainly China. Offering to train the Afghan National Security Forces (ANSF) can be part of that bigger strategy as merely speaking; India does not have any geopolitical significance in Afghanistan, at least in ‘real’ terms. Furthermore, such a move thwarts Pakistani designs in Kabul in a post-US scenario and corners both Islamabad and Beijing for the time being, at least psychologically.

                Whether Dr Singh and company discussed such things with Mr Obama behind closed doors is a matter archived in classified documents.

                Well, let’s take a decisive step in foreign policy. Let’s come out of the shackles of a ‘defensive’ foreign policy zone; which rhetorically harbours an unrealistically liberal ‘Sulh-i-kul’ approach and falls flat on the platform of realpolitik. Let’s emulate Chanakya and Bismarck. And let’s de-institutionalise India’s foreign policy.

                The foreseeable future in Indo-US partnership appears to rest on simple ‘give and take’ approach. And Mr Obama’s visit was a signature of that. The notion of victory in diplomacy is nebulous. Both Mr Obama and Dr Singh know that very well.

By Uddipan Mukherjee

Comments are closed here.