27 June 2009

NSA to NSA: India is more than AfPak

American NSA James Jones in Delhi for consultations... U.S. President Barack Obama invites Manmohan Singh to visit in fall...

27 June 2009
The Hindu

NSA to NSA: India is more than AfPak


Siddharth Varadarajan

New Delhi: Against the backdrop of declining Indian expectations about the future of the bilateral relationship with the United States in the post-George W. Bush era, the seniormost Obama official to visit here to date delivered a big message tailored to make his hosts happy: “We intend to continue where the previous administration left off.”

In his first visit to India, U.S. National Security Adviser General James L. Jones (retd.) held extensive discussions on Friday with M. K. Narayanan, National Security Adviser, besides meeting Prime Minister Manmohan Singh and Defence Minister A.K. Antony. He also formally conveyed President Barack Obama’s invitation to Dr. Singh to visit the White House this fall.

In his meetings, Indian officials told The Hindu, Gen. Jones’s focus was on the big picture. “The broad message General Jones brought with him was that they want to continue what was done earlier and build up the relationship,” an official said. Topics covered included the situation in Afghanistan, Pakistan and terrorism. A U.S. embassy release noted that the two sides also talked about the post-election situation in Iran, energy and developing closer economic and trade links as well as defence ties between India and the U.S.

Asked whether the U.S. side had also sought to push India towards a dialogue on Kashmir with Pakistan —something the Pakistani Prime Minister’s office had advertised General Jones’s mission to include — the officials said this was not the case. “I think the American effort, in fact, was to bracket us with the larger set of global issues and see what we can do together, rather that to narrow the bracket to the region,” said an official. “Afghanistan and Pakistan also came up, but mainly because of our security concerns.”

Expanding bilateral ties

The official press release issued after the visit said General Jones had conveyed President Obama’s commitment to “expanding bilateral relations in all areas, and the importance attached by the U.S. Administration in working with India in shaping events in the twenty first century at the regional and global level.”

Speaking to The Hindu, Mike Hammer, spokesman of the U.S. National Security Council — the White House inter-agency coordination body and ‘think tank’ which General Jones heads — said the NSC had recently been restructured to enable a more focused approach to India.

The region of South Asia had been split with a separate director now responsible for Afghanistan and Pakistan and another, Donald Camp, looking after India.

Apart from India, Russia is the only other country to be subject to such specific focus, with most NSC directors responsible for broad regions, the U.S. officials said.

During the Bush years, the NSC was the hothouse from which many of the ‘big ideas’ for strategic cooperation with India emerged. And it was Stephen J. Hadley, who was NSA at the time, who helped pilot the Indo-U.S. nuclear agreement through the thicket of inter-agency obstacles, especially in the final stages.

17 June 2009

India, Pakistan set talks ball rolling

The Yekaterinburg encounter between Manmohan Singh and Asif Aliz Zardari has set the stage for the eventual resumption of a new dialogue process...




17 June 2009
The Hindu

[In the print edition, this story was split into two. The link for the original second part is here]

India, Pakistan set talks ball rolling
Terror remains 'primary issue' but dialogue freeze ended


Siddharth Varadarajan

Yekaterinburg: Terrorism was the “primary issue” five months ago when India suspended high-level interaction with Pakistan and remains so today. But Prime Minister Manmohan Singh broke the dialogue logjam on Tuesday, meeting President Asif Ali Zardari on the sidelines of the SCO summit here and agreeing that their Foreign Secretaries should discuss the T-word so that the two leaders could decide how to take the bilateral relationship forward when they meet again mid-July at the Nonaligned summit in Egypt.

With one eye presumably focused on those back home who might see the resumption of contact with Islamabad as a softening of India’s stand, Dr. Singh began what was meant to be a one-on-one meeting with Mr. Zardari in the full glare of the media which had gathered to capture the ‘photo-op.’ “I am very happy to meet you,” he told the Pakistani President after the two delegations had greeted each other and reporters, including this one, were still in the room clicking away.

“But I must tell you quite frankly that I have come with the limited mandate of discussing how Pakistan can deliver on its assurances that its territory would not be used for terrorist attacks on India.”

The message duly noted by the media, officials from both sides rushed to clear the room, leaving the two principals alone for their private interaction without note takers. “The Prime Minister does not do anything by chance,” a senior Indian official told The Hindu when asked if this departure from protocol was by design or happenstance.

Whatever its impact on domestic public opinion, Dr. Singh’s “public” airing of Indian concerns runs the risk of making Mr. Zardari’s life back home more difficult, though Pakistani Foreign Minister Shah Mahmud Qureshi took the awkwardness of the moment in his stride.

Asked whether he felt Dr. Singh’s remarks were acerbic, he told reporters he did not think so. “We all agree that we should condemn terrorism and fight against it, no matter where it comes from,” he said, adding, “Be it from India, Pakistan, Britain or Africa.”

In a statement issued after the meeting, Mr. Zardari’s spokesperson, Farhatullah Babar, said the “stalled peace process [had] got a fresh lease of life.” He omitted any reference to terrorism in describing the mandate of the proposed Foreign Secretary talks but said the Pakistani President had “reiterated the desire of [his] government to cooperate with India in bringing the perpetrators of the Mumbai attacks to justice.”

Briefing the media about the 40-minute long meeting, Foreign Secretary Shiv Shankar Menon said the two leaders reviewed the bilateral relationship which “remains under considerable stress, the primary cause of which is the terrorist attacks on India from Pakistani territory.”

Potential untapped

If his much-awaited encounter with President Zardari tended to overshadow Prime Minister Singh’s participation in the Shanghai Cooperation Organisation and Brazil, Russia, India and China summits in this Russian city on Tuesday, the bilateral meeting was also not without a certain sense of historical irony.

The last time Indian and Pakistani leaders met on the soil of the Eurasian superpower was in Tashkent in 1966, when Lal Bahadur Shastri and Ayub Khan signed a declaration formalising the end of the 1965 war.

Since Tashkent, India and Pakistan fought each other twice, in 1971 and 1999, and nearly went to war again in 2002. Sabres were rattled again following the terrorist attacks in Mumbai of November 2008 only to be left in their scabbards, but the peace process went into suspended animation.

In line with his remarks to Parliament in Delhi last week, Dr. Singh told Mr. Zardari that he was all for resumption of talks and that there was a vast untapped potential to the bilateral relationship that had so far remained untapped by the dialogue process, Foreign Secretary Shivshankar Menon told reporters. “But since we can’t wish away the factors that have disrupted the dialogue, they decided on this discussion between the two Foreign Secretaries,” he added.

The reference to untapped potential holds out the prospect of a potential expansion in areas of bilateral discussion, including those like water which Pakistan is deeply concerned about, provided conducive conditions are created for the resumption of the peace process.

The Prime Minister reiterated “the full extent of [India’s] expectation” that Pakistan would take “strong and effective action” to prevent its soil being used to stage attacks on India, that it act against the perpetrators of past attacks and dismantle the infrastructure of terrorism on its territory,” Mr. Menon said. On his part, Mr. Zardari described some of his government’s efforts to deal with this menace “and also explained the problems that Pakistan faces in this regard,” the Foreign Secretary added.

In Islamabad, the Pakistani foreign office said Mr. Zardari had suggested reactivation of the joint terror mechanism the two countries had established in 2006.

“Clear mandate”

Mr. Menon refused to predict what would happen next in terms of the wider dialogue process. The two Foreign Secretaries now had a very clear mandate, he said. “We’d like to hear what they’ve done [on terrorism]. Let’s see what they come back with. Let’s have this discussion.” “All I can say is that the leaders will take stock when they meet at Sharm-el-Shaikh in July. The rest would be astrology.”

Asked whether he agreed that Islamabad was also a victim of terrorism, Mr. Menon acknowledged that there was terrorism in Pakistan but said that was not the issue here. “What has paused our dialogue is terrorism from Pakistan against India … We are supposed to discuss what Pakistan has done about that, whether it’s the previous attacks, Mumbai or whatever. We will tell them what concerns us. We will then report to our leaders and they will then take stock of this when they meet. I am trying to be very precise, without getting into the larger philosophical questions of where it might lead, what it could mean in terms of whether Pakistan is a victim or not.”

“Useful exercise”

While the two principals were meeting, Mr. Qureshi told reporters the outcome should not be prejudged. But he said both countries stand to gain from resumption of dialogue. “Pakistan feels it was a useful exercise and we made good progress, slow but steady, and it was sound progress.”

Asked if the resumption of dialogue would help Pakistan to move troops to its western frontier where the country’s armed forces were battling the Taliban, Mr. Qureshi said there was no link.

“Pakistan is already doing that, it has deployed troops where they are required and the Pakistan Army is doing its job.” The problem of terrorism was not country-specific, he said. “We in Pakistan are victims of terrorism, our people and our economy are affected, and we as a people have decided to deal with this in a decisive manner.” The Pakistani government has moved “in a very effective manner and there has been a lot of internal dislocation,” he said, referring to the more than two million civilians who have fled the Swat valley since major military operations began last month. “We are paying a price but it is a price worth paying.”

Mr. Qureshi directed enquiries on the legal case against the Lashkar-e-Taiba leaders involved in the Mumbai conspiracy to the Interior Ministry. He described the recent release from house arrest of LeT chief Hafiz Saeed as a court decision but said an appeal was being considered by the provincial government.

‘BRIC should create conditions for fairer world order’

Dateline Yekaterinburg: Brazil, Russia, India, China stress financial, agricultural and strategic aspect of new grouping ...





17 June 2009
The Hindu

‘BRIC should create conditions for fairer world order’

Siddharth Varadarajan

Yekaterinburg: Unveiling a collective agenda ranging from food security and financial reform to the creation of a “more diversified international monetary system” and a “more democratic and just multipolar world order,” Brazil, Russia, India and China launched a new strategic vector with the potential decisively to influence global affairs in the years and decades ahead.

For all its global significance, the first-ever summit of the BRIC countries was a short affair, conducted behind closed doors. The world’s media was given the briefest of glimpses when President Dmitri Medvedev of Russia took the stage with Prime Minister Manmohan Singh, Chinese president Hu Jintao and Brazil’s president, Luis Inacio Lula da Silva to provide details of the interaction that he said was a “historic event.”

The four leaders met first in a restricted and then expanded format with aides on Tuesday evening, formally approving a joint statement that officials said was only finalised at 4 a.m. that morning.

The 16-point statement said the BRIC countries were committed to advance the reform of international financial institutions so as to reflect changes in the world economy. In a more or less direct attack on the Western domination of Bretton Woods institutions like the IMF and the World Bank, the statement said emerging and developing economies must have greater voice and representation and the “heads and senior leadership” of these bodies “should be appointed through an open, transparent and merit-based selection process.”

The statement also contained a veiled attack on the dollar, whose role as the primary international reserve currency Russia, China and, to a lesser extent, Brazil have questioned. “We also believe there is a strong need for a stable, predictable and more diversified international monetary system,” the four leaders noted.

Among the other goals flagged: opposition to protectionism, the need for a “comprehensive and balanced” outcome to the WTO’s Doha Development Round, cooperation in the energy field “including amongst producers and consumers of energy and transit states,” and food security, for which a separate declaration was issued.

On India’s initiative, the statement strongly condemned terrorism in all its forms and manifestations and reiterated “that there can be no justification for any act of terrorism anywhere or for whatever reasons.” Calling for “comprehensive reform” of the United Nations, the BRIC quartet reiterated “the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the UN.”

In his speech at the summit, Dr. Singh hailed the cooperation already achieved by BRIC at the G-20 deliberations on the international financial crisis. The important issue today, he said was to implement the decisions that had been taken. He also said cooperation in the

G-20 process must be backed by cooperation in the real economy. “The volume of trade among BRIC countries has grown rapidly in recent years, Intra-BRIC investments have also grown.” In line with the joint statement, he endorsed the creation of a BRIC Joint Business Forum which could cooperate in areas as diverse as agriculture, aviation, energy, pharmaceuticals and services.

The BRIC nations, said, Mr. Medvedev, want to have a fair world order and ensure the safety and security of our countries and people. “All the decisions important for the international community — economic, security and political — should be taken on fairer basis,” he said.

“And this fairness is the key word for our interaction. BRIC should create conditions for a fairer world order.”

Officials said Russia favoured an annual summit format, something the Chinese side opposed. Brazil was keen to host the next summit in 2010, during the tenure of President Lula. India then came up with a flexible solution: the summits will be “periodic,” allowing for annual or less frequent meetings. Mr. Medvedev also stressed the need for interaction at other levels such as foreign, agriculture and trade Ministers.

The BRIC joint statement on global food security said attempts to explain the food price hikes by an increase in consumption in developing countries obscured the true causes which had a “complex and multifaceted nature.” The statement also called for the Doha round to be accelerated “in order to find compromise solutions for radical reductions of multibillion dollar subsidies in the agricultural sector, which distort terms or trade and prevent developing countries from increasing their agricultural production.”

16 June 2009

Dateline Yekaterinburg: Manmohan, Zardari set to break the ice as SCO, BRIC meet

Manmohan Singh has arrived in Yekaterinburg (nee Sverdlovsk) for three days of hectic diplomacy centred around the Brazil, Russia, India, China summit and the Shanghai Cooperation Organisation. But those interactions are likely to be overshadowed by his much-anticipated meeting with the president of Pakistan on June 16, the first since Mumbai put a halt to the bilateral peace process...

16 June 2009
The Hindu
[This is the combined version of a story I split into three for the print edition. The links for the other two stories are here and here]

Manmohan, Zardari set to break the ice
BRIC debut puts the “political” back into economy


Siddharth Varadarajan

Yekaterinburg: With the world‘s eyes riveted on this Russian city on the Asian side of the Urals where the potentially system-shaping international interactions of the Shanghai Cooperation Organisation and the Brazil, Russia, India and China (BRIC) quartet get under way on June 16, Prime Minister Manmohan Singh arrived on Monday with an additional target in his sight: his first encounter with Pakistani President Asif Ali Zardari since last November’s terrorist attacks in Mumbai put bilateral relations into cold storage.

Though the format of the half-hour meeting scheduled between Dr. Singh and Mr. Zardari for Tuesday afternoon has not yet been finalised, senior officials told The Hindu they hoped it would be a one-on-one affair. “That way, there can be the freest possible exchange of views,” an Indian official said. The meeting between the two leaders, which was requested by the Pakistani High Commissioner in New Delhi last week, did not mean India no longer stood by its expectation that Pakistan must act against terrorism emanating from its soil.

“We will express our expectations. This is not a question of presenting a list of demands … But we are clear that terrorists are not going to be given a veto” over the bilateral relationship, a senior official said.

The Prime Minister will hold separate bilaterals with his Chinese, Kazakh and Russian counterparts. Yekaterinburg will also mark the international re-entry of Iran’s President Mahmoud Ahmadinejad, fresh from an election victory the West regards as tainted. Fittingly, a bilateral with Russian President Dmitri Medvedev has already been arranged, and the Indians do not rule out a “pull aside” with him.

Indian officials refused to speculate about what might emerge from the Manmohan-Zardari meeting. “We are against setting markers because all we do is feed the enemies of peace, who then know what they have to do to stop the process,” said an official. At the same time, officials cautioned against the Yekaterinburg encounter being elevated to the status of a “structured dialogue.” While expressing their unhappiness over Islamabad’s “legalistic” handling of the case of Lashkar-e-Taiba chief Hafiz Saeed, freed from house arrest by a Lahore court earlier this month, they conceded that the Pakistani Army offensive against the Taliban in Swat was a “major, major battle.”

India and Pakistan became observers of the SCO in 2005 but Delhi has so far refrained from attending its summits at the highest level, preferring to deploy ordinary ministers instead of the Prime Minister. This year, that pattern is being broken. The Indian side says this is because the Russian hosts changed the format of the interaction, granting observers a voice in the SCO’s restricted sessions. But officials also concede that India today has a greater appetite for interacting with a grouping that is seen as a reflection of big power rivalry in the Asian landmass.

Stakes up

What has changed is the geopolitical terrain following the victory of President Barack Obama in the United States, as well as the deteriorating situation in Afghanistan and Pakistan, both of which have increased India’s stakes in the SCO game. India, they said, was not averse to even joint SCO-level military exercises, especially with an anti-terror focus, once the grouping came up with a suitable format.

If the SCO is a body with an essentially Asian, security-centric footprint, the Brazil, Russia, India, China summit being held here the same day is being seen globally as a grouping whose political interactions could help to alter the shape of the international financial system and the global economy that it underpins.

Writing exclusively in The Hindu today, Brazil’s president, Luis Inacio Lula da Silva, says the BRIC summit “marks a major turning point in how our countries engage in a world undergoing profound change and … [beset by] broken paradigms and failing multilateral institutions.”

With 40 per cent of the world’s population and output (in purchasing power parity terms), “the BRIC grouping has the potential to lead global economic growth,” Prime Minister Manmohan Singh said in a statement before leaving New Delhi.

But if Dr. Singh spoke coyly of the BRIC “coordinating international efforts to overcome the ongoing financial and economic slowdown,” Mr. Lula was more blunt about the political economy of the quartet’s first summit agenda. “Are rich countries willing to accept supranational oversight and control of the international financial system, so as to avoid the risk of another global economic meltdown? Are they willing to forfeit their stranglehold on decision-making at the World Bank and the IMF? Will they agree to cover the costs of technological adaptation required for people in developing countries to also benefit from scientific progress, without harming the global environment? Will they eliminate protectionist subsidies that make modern agriculture in many developing countries unviable, leaving poor farmers at the mercy of commodity speculators and generous donors?”

Declaring that “the time for politics” has come, he said these are “the questions that the BRICs want answered.”

Indian officials said the summit would also focus on the emerging challenges the financial crisis posed, adding that the National Security Advisors or equivalent officials from the four countries met recently to review the issue.
“Supranational” currency

Among the four members, Russia has been the most forthright about the need for the world’s rising economies to push for the creation of a new “supranational” currency to replace the dollar as the primary international unit of account for foreign reserves.

China and Brazil favour an expansion of the IMF’s Special Drawing Rights (SDRs), with Brasilia recently offering the IMF a $10-billion loan towards this end. India remains noncommittal, with Foreign Secretary Shiv Shankar Menon describing these discussions as “academic” and “premature.”

Senior officials told The Hindu that Russia had since clarified that it did not intend to use the BRIC forum to press the debate on a shift away from the dollar.

Manmohan, Hu review ties

Against the backdrop of heightened rhetoric on the border issue in recent weeks, Prime Minister Manmohan Singh and Chinese President Hu Jintao met here on Monday night to review the bilateral relationship, reiterate their intention of pursuing closer ties and give a fresh push to their high-level dialogue on the disputed boundary between the two countries.

Speaking to reporters, Indian officials said the next meeting of the Special Representatives tasked with resolving the boundary question was slated for August 7 and 8 in New Delhi.

Asked about the recent statements by the outgoing Indian Air Force chief and other IAF commanders on the threat from China and the internal situation in Tibet, the officials said Defence Minister A.K. Antony had ordered serving officers not to make public comments.

“In our system, policy statements are the preserve of ministers and duly authorised officials,” the sources said, adding, “Unauthorised statements do not constitute Indian policy. They remain the individual view of whoever makes them.”

The officials said these statements were unhelpful. “They muddy the waters … The Chinese read them and then they react … and this prompts further statements.”


14 June 2009

The road to justice in Mumbai might well lead from Swat

When they meet in Yekaterinburg on June 16, Manmohan Singh and Asif Ali Zardari need to find ways of engaging each other so that the common enemy of terrorism is defeated...

15 June 2009
The Hindu

NEWS ANALYSIS

The road to justice in Mumbai might well lead from Swat

Manmohan Singh and Asif Ali Zardari need to find ways of engaging each other so that the common enemy of terrorism is defeated.

Siddharth Varadarajan

New Delhi: When Prime Minister Manmohan Singh meets Asif Ali Zardari in Yekaterinburg this week, the first point on his agenda will be to form an opinion on how serious Pakistan is in dealing with the jihadi terror that is destroying the very foundations of that country. Based on what the Pakistani president tells him about the conduct and future course of the war being waged against extremist forces in Swat, Dr. Singh’s next step would be to devise a strategy of flexible engagement that can help Pakistan – or at least those sections of its establishment that see this as a joint problem – take the fight against extremism to the finish.

Justice for Mumbai and the ending of cross-border terrorism may be the immediate contexts for India’s interest in the nature and outcome of this war but these goals pale in significance compared to the objective the Pakistani army seems finally to be pursuing. For the past few weeks, the fight against the Tehreek-e-Taliban Pakistan (TTP) has moved from the stage of phony war to serious battle. The regular Pakistani army is taking casualties and, despite the suffering and displacement which has affected millions, Operation Rah-e-Rast has popular sanction within the country. A search on Youtube turns up ample news footage of the funerals of these soldiers, complete with grieving parents saluting the martyrdom of their sons, in what is obviously an officially sanctioned marshalling of public opinion against the jihadis.

India’s goals post-Mumbai may not yet have been reached but policymakers here need to recognize the terrain in Pakistan today is far more propitious than what it was even a month ago.

Indian policy towards Pakistan over much of the past decade has suffered from a fundamental flaw. We have been clear about our goal – the stopping of cross-border terrorism -- but our preferred instrument for action – suspension of official dialogue and, at times, civil society engagement as well – does little to advance our “core issue”.

Thanks to the false sense of security provided by this misguided approach, we have neglected the one strategy crucial for fighting terrorism – intelligent homeland security – even as our own reluctance to engage Pakistan when opportunities present themselves means we end up on the same side as the hawks across the border who insist there should be no normalization until their favourite “core issue”, Kashmir, is settled.

A break was made with this approach in January 2004 with the resumption of the composite dialogue, and again in April 2005, when India and Pakistan declared the peace process “irreversible”. Irreversibility meant recognizing that while there would be setbacks and differences on a wide variety of issues, the two countries would not undo the gains of engagement. It meant not allowing terrorists to hold the bilateral relationship hostage to their actions. Irreversibility also meant recognizing that the enemies of peace, whether they are state or non-state actors, would not be deterred or weakened by India and Pakistan suspending their pursuit of the fruits of the dialogue process – trade, cultural exchange and dispute resolution.

The theory was fine, except there was no accounting for politics. The Mumbai train blasts of 2006 led to the first test of irreversibility. It took the creation of the joint terror mechanism, now unlamented on the Indian side, to get the process back on track. And then came the terrorist attacks of November 26-28, 2009. India suspended the composite dialogue process, though other sorts of official interaction continue.

Today, as it considers its options anew, India has to ask itself whether the war being waged in Swat and Malakand is a real war. The answer is that it seems to be. Is it then in India’s interest that the TTP is fought and defeated? Yes. Do the TTP have links with groups involved in targeting India? Yes. As the TTP’s allies take the war into the Punjab heartland, is there a likelihood that the Pakistan army will need to extend its war against jihadis to the radical extremists in Punjab? Again, the answer is yes. Wouldn’t such an outcome put the Pakistani security forces on a collision course with anti-India elements operating on Pakistani territory? To the extent to which these elements side with the Taliban rather than with their mentors in the establishment, the answer is yes.

Even if this scenario doesn’t play out in a linear or logical way, it is clear that India should do everything possible to encourage the process. Maintaining a posture of diplomatic hostility and a military high-alert do not help. Nor do high-decibel or frequently repeated public demands for Pakistan to do more to fight terror contribute anything substantial. This does not mean an immediate resumption of the composite dialogue is needed or will help either. But diplomacy abhors a vacuum. If India and Pakistan do not signal to each other their intention to resume normal contact, other, less benign players and outcomes have a way of imposing themselves.

One problem Indian policymakers have faced in the past is the dissonance between the military and civilian sides of the Pakistani establishment.

President Zardari wanted high-level intelligence contacts immediately after Mumbai but the Army there opposed him. The Federal Investigation Agency appears to have taken its probe into Mumbai fairly seriously but it is not clear whether the Inter-Services Intelligence will allow action to be taken. And then there is the house arrest fiasco of Lashkar-e-Taiba chief Hafiz Saeed. Has the military offensive of the TTP in the aftermath of the Nizam-e-Adl process in Swat brought the military and civilian establishments on the same page? And if so, for how long? Dr. Singh should press Mr. Zardari on these and other issues. India needs some way to be able to judge the credibility of the process under way in Pakistan over the next few months. Tracking any milestones President Zardari reveals to them will allow Indian policymakers to judge the extent to which he wields power or not.

In the interim, the back channel between the two principals needs to be revived, and perhaps even augmented with a dialogue between intelligence chiefs. This will allow the two sides to rework and strengthen the format of their dialogue when it is resumed a few weeks down the line.

13 June 2009

Class prejudice in reporting

Reporters and editors make tough decisions about what's news all the time but this one should have been a no-brainer. A minister uses his clout to get his son upgraded on Air India from Economy to First Class and his maid from Economy to Business. The son's upgrade is the bigger news point surely? Think again.

The Times of India in Delhi carried a story on June 12, 'Despite ban, AI lets neta’s help get an upgrade'. The online edition headline is 'AI flies mantri’s domestic help business class'.

The story tells us how a minister misused his clout to get Air India to violate its no-free-upgrade rule:

"Air India recently banned passenger upgrade [sic] to end that free jump from economy to business class for employees, directors, frequent flyers and the influential. On Wednesday, its chairman and managing director’s office – which issued the ban – had to upgrade a 34-year-old woman who could not read or write English from economy to business class on a Mumbai-London flight.

So why was she upgraded when even directors of the airline fly economy these days? Well, she happened to be a minister’s servant and the orders to upgrade her came from the ministry of civil aviation, officials said on Thursday."
I read this and thought, fair enough, even though I really didn't see what her being unable to read or write English had to do with story. So imagine my shock when I get to the end of the story and find the minister also upgraded his son...

For the Times of India tells us, at the very end, that the minister's son, who was on the same flight, was bumped up from Economy to First Class, a complete and utter violation of airline policy:

"It’s not only economy-to-business class upgrades that are being done. Flight 131 had a minister’s son who was moved from economy to first class, the absolute no-no of upgradation. ‘‘Jumping two classes is not allowed and AI has a policy against it. Many ground staff have been chargesheeted for the double upgrade in the past. But this person was a minister’s son and the order came from the ministry and so it had to be obeyed,’’ an official said."
Not only was the main news point about such a story relegated to the last para, it was inexplicably deleted from the online version. I had to find the full original story from the epaper archive at the TOI site. I guess the reporter and the newspaper's editors thought their readers would get more worked about the maid "who doesn't read or write English" flying Business Class than about a spoilt and undeserving but English-speaking baba making a nuisance of himself in First Class! Another instance of the paper's class prejudice: the unfortunate domestic help is named but not the minister or his son.

Postscript: When I read the story, I also had a sense of deja vu.

Many years before, when I used to work for the TOI, I overheard a conversation involving somebody whom I will only describe as being part of the upper management of the newspaper. Very upper. The person was upset that on a recent flight to Europe, he had booked himself and his family in Business class and found the person seated next to him was... the maid of Kumaramangalam Birla, who was, of course, flying with his family in First Class!

BRIC is not a bloc but a soft balancer

Brazil, Russia, India and China will make their debut as a joint political act next week. Here’s why the world may never be the same again...



13 June 2009
The Hindu

BRIC is not a bloc but a soft balancer

Brazil, Russia, India and China will make their debut as a joint political act next week. Here’s why the world may never be the same again.


Siddharth Varadarajan

Fresh from my first visit to Brasilia and bang on the eve of the G8 summit in Heiligendamm for which the Indian Prime Minister was preparing to travel as an ‘outreach partner,’ I wrote an article for The Hindu in June 2007 called “Forget the G8, it’s time for a BRICs summit.” The reaction in Delhi was positively underwhelming. A senior Indian official who read it poured cold water on the idea and said the last thing the coun try or the international system needed was more alphabet soup.

Those were the heady days of the Bush era when Indian elites thought their strategic partnership with the United States meant the end of history, and of diplomacy. A lot of water has flowed down the Amazon, the Volga, the Ganges and the Yangtze since then. On June 16, leaders of the four countries dubbed ‘BRIC’ by Goldman Sachs because of their rising economic weight will meet in the Russian city of Yekaterinburg for their first-ever standalone summit. The meeting will take place against the backdrop of the severest financial crisis the world has seen in several decades, caused by the actions and inactions of the U.S. and other leading western economies known collectively as the G7. Together with Russia, an outlier among advanced market economies, the G7+1 or G8 have tended to act as if they are the ultimate arbiters of the world’s economic fate. At the best of times, their ability to “manage” the world economy was simply an illusion; today, when their greed, incompetence and dogmatism have brought the global economy to a standstill, the idea that they should set the agenda on behalf of the rest of the world is preposterous.

During the Heilegendamm summit itself, the Outreach countries invited from the four corners of the world for a glorified photo-opportunity with the G8 got to reflect on the irony that collectively, they, plus Russia, had equal or arguably greater system-shaping power in the world than the U.S., Britain, France, Germany, Italy, Canada, and Japan.

Taken together, the BRIC countries account for a substantial share of world growth and output. By 2020, their output will be 40 per cent of global GDP. They account for 25 per cent of the earth’s land mass and 40 per cent of its population and will play an ever increasing role in strategic sectors such as energy. And yet, when it comes to working out the future rules of the global game, it is the G8 that sets — or tries to set, or believes it sets — the agenda and priorities.

Since June 2007, when President Lula of Brazil floated the idea of a BRIC meeting, the BRIC foreign ministers have held their first standalone meeting. More importantly, the BRIC finance ministers met last November and again this March in the context of the world financial crisis and the G-20 stabilisation process. And now, a full-fledged summit will be held.

After a hesitant, somewhat tentative, start, then, BRIC can be said to have arrived on the world stage. But there is not enough clarity about how it should evolve and grow, what issues it should take up and what form its future interactions should take. Each of the four countries comes to BRIC with differing levels of disaffection with the global system as it exists today. And that is why identifying a common denominator is essential.

Russia’s disaffection is largely security-centric and it would like BRIC to play the role of a strategic counterweight to the U.S. and NATO. China’s disaffection is with its lack of representation in the global circuits of economic decision-making. For Beijing, therefore, BRIC is most useful as a platform to raise the profile of the country as a setter of global economic norms. India’s disaffection with the world is economic and status-centric, for it finds no place at either the political or economic high tables of the world order. Brazil’s source of disaffection is, like India’s, both political and economic.

Given these different agendas, the key to working out the future role and structure of BRIC institutional engagement lies in correctly understanding what BRIC is and what it is not.

First, Yekaterinburg must demonstrate that BRIC is not ‘SCO-plus-minus’ or ‘RIC-plus-1.’ In diplomacy, the physical proximity of meetings can sometimes convey the wrong impression. The fact that BRIC foreign ministers met last year on the sidelines of the Russia-India-China (RIC) trilateral and that the BRIC principals are meeting on the same day as the Shanghai Cooperation Organisation next week has led to some confusion about whether the three groupings are similar. RIC and SCO may have similarities but BRIC and RIC are totally different in geographic and strategic scope. RIC and the SCO are the best forums for Asia’s big powers to discuss political and strategic issues relating to the Asian land mass. BRIC, on the other hand, is best suited to dealing with issues of global architecture that are geography-neutral. And the most important issue there is the global economic and financial system, including trade, credit, capital movement, currency flows, millennium development goals, and migration.

Second, BRIC must not be defined negatively as a club of countries which should be in G7/8 but which are not. It is not a halfway house for aspirants to the G8. BRIC needs to realise the geopolitical and domestic political realities and contexts of each of the four member countries place them in a position to provide non-dogmatic solutions to global economic problems. Brazil and India, for example, have already realised the need to look at the question of Intellectual Property Rights from the standpoint of effectively providing cheap treatment to millions of poor citizens rather than as a device for the enrichment of pharmaceutical companies. BRIC would also look at the issue of labour mobility and human development in a way that is fundamentally different from the G8.

Third, BRIC should not be seen as IBSA-plus-2. In many ways, India, Brazil and South Africa set the ball rolling in creating the first grouping to link three continents in the post-Cold War world. IBSA is, in many ways, the nucleus of a new Afro-Asian-Latin American solidarity, a reinvention of the Bandung process with the politics of the post-colonial era taken out and the globalised economics of the post-Cold War world brought in. IBSA and BRIC would complement each other but the unique geographic and political complementarity within IBSA means the trajectory of its development would be quite distinct.

Fourth, BRIC should not be seen as an adversarial “pole” in a multipolar world. The most important bilateral relationship each country in BRIC has is with the U.S. and that is unlikely to change in the near future. At the same time, this should not prevent the four countries from working together for better global outcomes in both the economic and political spheres, treading on American toes if need be. Though BRIC will not and should not develop as a ‘bloc,’ the U.S. may still view its evolution with wariness, especially as it moves in the direction of proposing financial solutions that could undercut American financial and political power. American pre-eminence today is partly the product of seignorage provided by the role of the dollar as primary reserve currency of the global system. With huge national dollar reserves, the BRIC countries will not want to undermine the value of the greenback. But an orderly move towards a new financial architecture is bound to be on the future agenda.

Fifth, BRIC cannot be a substitute for bilateral ‘outreach’ within and outside the group. The efforts of member countries to build a strong web of relationships with each other and the wider developing world — such as the China-Africa summit or the India-Africa summit — will complement BRIC outreach rather than hinder it.

In order to be successful, BRIC needs a combination of top-down and bottom-up initiatives: Summit level interaction is essential to send a signal globally and to all stakeholders in each of the respective member countries that the political leadership attaches great importance to the new grouping. For the immediate future, the ‘sherpas’ of this political interaction would initially be the finance ministers, who need actively to discuss a joint approach on the design of new financial architecture and regulations that can prevent a recurrence of the present crisis and not only mitigate its effects on the BRIC countries but actually see the latter emerge stronger. The BRIC finance ministers’ dialogue should be accompanied by interaction of trade officials, to deal with the threats of protectionism and curbs on labour mobility. Redefining globalisation to include the movement of labour should be a key strategic goal of BRIC.

Though BRIC is primarily geo-economic, the inability of the U.S. to lead, and of the G8 and the U.N. Security Council to stabilise world order, means the group could increasingly be called upon to shoulder global political responsibilities. Track-II interaction and political dialogue at the officials’ level focussing on issues of common concern such as terrorism, nuclear issues and disarmament, energy security, global rules on the use of force and intervention, U.N. reform should take place annually, but without the pressure to try and produce a comprehensive communiqué. Since differences exist between the BRIC members on questions like Security Council expansion — Russia and China are status quoist permanent members while Brazil and India are aspirants for a permanent seat — striving for conformity on positions where there are known and even sharp bilateral divergences at the BRIC may be counterproductive.

Manmohan, Zardari to meet in Russia

Don't look for a dramatic breakthrough yet. But the process of resuming the process will finally start...

13 June 2009
The Hindu

Manmohan, Zardari to meet in Russia

Siddharth Varadarajan

New Delhi: In what is to be the first high-level contact between India and Pakistan since the terrorist attacks in Mumbai, Prime Minister Manmohan Singh will meet President Asif Zardari on the sidelines of the Shanghai Cooperation Organisation summit in Russia next week.

“They will be in the same room at the same time and they will shake hands and meet and have a conversation,” Foreign Secretary Shiv Shankar Menon told reporters here on Friday when asked about the possibility of the two principals meeting in Yekaterinburg on June 16. “But what kind of meeting it will be is hard to predict.” Mr. Menon said separate time had not been kept aside and that the Prime Minister was on a very tight schedule.

Asked whether India was now open to the resumption of the bilateral official dialogue, suspended since last year, the Foreign Secretary said, “There can be nothing more authoritative than what the Prime Minister said on the floor of the House earlier this week.”

On June 9, Dr. Singh had told the Rajya Sabha India can choose its friends but had to live with its neighbours. “When I look at the relations between the United States and Iran, I think, they have gone through difficult periods extending over the last 30 years, but, ultimately, even a mighty power like the U.S. has found it is necessary to come to terms with the reality of the Iranian situation, and, therefore, there is no other alternative but to pursue the path of dialogue.”

Confirming the Prime Minister’s inclination to find a way of engaging Pakistan, senior officials said there would likely be no dramatic breakthrough in Yekaterinburg. The government intends to make haste slowly, they said, giving Islamabad the opportunity to demonstrate its seriousness in investigating and prosecuting the Mumbai case before proposing concrete ways of picking up the threads of the peace process.

Dr. Singh and Mr. Zardari will likely meet again in Sharm-el-Shaikh, Egypt, scheduled for July 11-16.

SCO and BRIC both crucial, says India

The Indian foreign secretary on why the Prime Minister is going to the SCO and BRIC summits in Russia...

13 June 2009
The Hindu

SCO and BRIC both crucial, says India

Special Correspondent

New Delhi: Exploring avenues for regional cooperation in Asia and formulating a joint approach to the world financial crisis will be top of the agenda for Prime Minister Manmohan Singh when he attends back-to-back summits of the Shanghai Cooperation Organisation and the new Brazil-Russia-India-China grouping in Yekaterinburg next week.

Briefing reporters here on Friday, Foreign Secretary Shivshankar Menon said that although India had participated in all summits of the SCO since joining as an observer in 2005, the Prime Minister’s decision to attend this year demonstrated the importance New Delhi was attaching to the group and the issues it took up. Dr. Singh’s participation was important not just because Russia was the host but because the SCO decided last year that the observer nations — India, Iran, Mongolia and Pakistan — should participate in all the organisation’s deliberations, he added.

The SCO summit would take place on the morning of June 16, to be followed by the BRIC summit and a joint press conference the same afternoon.

Mr. Menon said the BRIC meeting was important at three levels. First, there was tremendous value in the four leaders exchanging views on the global financial and economic situation. Second, some amount of preparation had been made at the Track-II and academic level to flesh out a broader agenda for the group and that India hoped some avenues for economic cooperation would emerge. Third, he said, there was a broad convergence of views between the BRIC countries on a number of political issues and there would be a discussion on these though not necessarily any policy decision.

In response to a question about BRIC dissolving into “America bashing,” Mr. Menon said that was an extreme phrase. “There is no reason whatsoever to characterise what BRIC has done or will do as bashing of any kind.” What would emerge would make a positive contribution to global stability, he said. “It is not in any way directed at any one.”

On BRIC working against the position of the dollar as a reserve currency, the foreign secretary said there were a number of “academic” ideas floating around. “I’d rather not get ahead of ourselves.”

12 June 2009

China is upping the ante on Arunachal Pradesh

The Global Times, a sister publication of China's Peoples' Daily, has just published an editorial attacking India for planning to beef up its military strength in Arunachal Pradesh...







Beijing is upping the ante on Arunachal Pradesh
Chinese media asks if India can “afford consequences of potential confrontation” with China


Siddharth Varadarajan

Using unusually harsh and direct language, a leading Chinese newspaper has described the Indian decision to station 60,000 troops in Arunachal Pradesh as a “military provocation” and warned India that it “needs to consider whether or not it can afford the consequences of a potential confrontation with China”.

In a triple whammy of sorts, the June 11 edition of Global Times, the influential world affairs daily of the Communist Party of China, published an editorial entitled ‘India’s unwise military moves’, a news item about the crash of an Indian Air Force plane in Arunachal Pradesh in which analysts say “the continuous Indian military expansion along the border” is creating tension, and the results of an online survey under the headline “90 per cent … believe India threatens China’s security”.

Although the newspaper on Wednesday had correctly but critically reported the Indian decision to station two divisions in Arunachal Pradesh as a prospective rather than immediate deployment, Thursday’s editorial began by saying, “In the last few days, India has dispatched roughly 60,000 troops to its border with China, the scene of enduring territorial disputes between the two countries”.

The editorial linked this move to a statement by Prime Minister Manmohan Singh that his government would “make no concessions to China on territorial disputes” despite cooperative India-China relations. This “tough posture” may win Dr. Singh “some applause among India’s domestic nationalists,” the newspaper said, but warned that this “is dangerous if it is based on a false anticipation that China will cave in”.

“India’s current course can only lead to a rivalry between the two countries. India needs to consider whether or not it can afford the consequences of a potential confrontation with China”, the editorial noted.

Global Times has a very large circulation in China and recently launched an English edition as well. Though the newspaper’s comments on the proposed Indian deployment is very much in keeping with Beijing’s heightened rhetoric on Arunachal Pradesh, what has raised eyebrows in diplomatic circles is the hyped-up packaging of the issue as well as the harsh editorial tone in which the superiority of China over India in terms of power and global influence is openly celebrated.

If in the past, officially-sanctioned commentary would charge India with buying in to the “China threat” theory of the West, the Global Times editorial now finds fault with New Delhi’s unwillingness to gang up with other countries in an attempt to contain China:

“Indian politicians these days seem to think their country would be doing China a huge favor simply by not joining the “ring around China” established by the US and Japan”.
Taking note of India’s rise, the Chinese newspaper said this growing power would have “a significant impact on the balance of this equation” and this had led India to believe China would defer to it on territorial disputes out of “fear and gratitude for its restraint”.

This was pure “wishful thinking” on India’s part, it noted. “China won’t make any compromises in its border disputes with India. And while China wishes to coexist peacefully with India, this desire isn’t born out of fear”.

India, it argued, was “frustrated” that China’s rise has captured much of the world’s attention. The country likes to brag about its “advanced political system” and “sustainable development” but “can’t actually compete with China in a number of areas like international influence, overall national power and economic scale” as well as domestic stability. “India apparently has not yet realized this”, it said, but still feels superior to China.

In the online poll reported by Global Times, 74 per cent of respondents believed China “should not maintain friendly relations with India anymore after its military provocation”. And 80 per cent said China should provide either open or covert support to “anti-Indian separatist forces”. The newspaper said 65 per cent of those who took part in the poll felt India’s “unfriendly attitude towards China” would hurt New Delhi more than Beijing. Half the respondents said the “recent anti-China voices” in India catered to the interests of “international anti-China groups in order to gain more political capital for the country”.

Disturbed by the tone of today's Global Times, especially the editorial, I wrote to a leading Chinese academician, currently on sabbatical in North America, who has always been quite balanced in his approach to Sino-Indian relations.

This is what he replied:

"Thanks for your mail. It has disturbed you and it has disturbed me too. Much misunderstanding and misconception from both sides.

Anyway, don't see any writings in the Global Times as the official message. This only represents the author. But these views also react to the commentaries in the Indian media.

Our two countries are rising under the circumstances of tough international pressure.
Why Indian analysts are thinking less of this? Chinese analysts have actually not seen India as a threat and are always looking to the US...

The American, Japanese, and European officials and scholars have been selling "China threat" in India for so many years. Why? And they have come to China, selling "India unreliability". Why? But they are working hard to seek cooperation with both India and China. Please remember, China-US bilateral trade, China-Japan bilateral trade, Chia-EU bilateral Trade are the largest in the world.

Who can encircle whom in today's world? So naive, if not intentionally, for these socalled strategists! The developed world is playing India and China with their amusement. The emergence of India and China in Asia has transformed the geopolitical landscape in Asia and will eventually change the dominant position of the developed world in Asian econimic and security affairs.

India has hosted the Asian Security conference for a decade, the ASEAN-hosted ARF for 15 years, but the Non-Asian Powers have hosted the Shangri-La Dialogue which has been named the Asian Security conference. So many defense ministers are competing to go. It is a shame for our Asian leaders. The Asian security conference is being hosted by non-Asian powers. We Asian countries cannot work together for their own security!"
I think there is much food for thought here.

I do not disagree that a lot of what we might read in the media in both countries is reactive; and that editorials, even in China, should not be equated with official communiques. But they do give us a sense of the dominant mindset and discourse in society.

For me, the hardening Chinese stand on Arunachal is not surprising. They regard the state as disputed, there is an ongoing negotiation and it is obvious why they would wish to take a hard line at this juncture. India, too, is paying the price for having delayed infrastructure and defence modernisation in Arunachal all these years. But the tone of the Global Times editorial is contemptuous, especially the bit where it says don't think you are doing us a favour by not ganging up against us. In 2007, India was criticised by the Chinese for taking part in the ill-considered quadrilateral naval exercise with the U.S., Australia and Japan. But now that New Delhi is cool to any talk of containment, the Chinese media says don't think you are doing us a favour! It is almost as if the Indians are damned if they do and damned if they don't.

Asia is passing though a difficult time and India and China need to make sure they do not tread on each other's toes or allow outside powers to encourage and then take advantage of mutual insecurities and suspicions.

On Arunachal itself, some in India see the growing Chinese assertiveness as evidence of Beijing's duplicity given that China and India agreed in 2005 inter alia to safeguard due interests of their settled populations in the border areas in reaching a border settlement.

As a former Indian diplomat put it to me in an email:

"What I find surprising is that in 2005 Wen Jiabao agreed to a settlement taking into account settled populations, making it clear there would be no change in the status of populated areas like Tawang. He then goes back on his word with the Chinese assertively claiming the whole of Arunachal and saying there can be no compromise on this..."
There is plenty to object to in China's claim to and attitude on Arunachal but I am not sure I agree with the diplomat's line of reasoning.

In fact, accepting the principle of safeguarding due interests of settled populations did not mean the Chinese were relinquishing their claim on Arunachal or Tawang. If that were the case, what are the two sides still talking about? The boundary settlement could have been finalised in 2005 itself. Look at the formula in reverse: is India prepared to declare today that it is willing to give to China the uninhabited areas in Arunachal, of which there are vast tracts? Or the whole of Aksai Chin? As Ma Jiali of the China Institute of Contemporary International Relations told The Hindu in 2008 last year: “From China’s point of view, the issue of population is an important one but it is not the sole criterion for deciding anything.” Indeed, four articles in the 2005 declaration list out the factors to be taken into account:
Article IV

The two sides will give due consideration to each other’s strategic and reasonable interests, and the principle of mutual and equal security.

Article V

The two sides will take into account, inter alia, historical evidence, national sentiments, practical difficulties and reasonable concerns and sensitivities of both sides, and the actual state of border areas.

Article VI

The boundary should be along well-defined and easily identifiable natural geographical features to be mutually agreed upon between the two sides.

Article VII

In reaching a boundary settlement, the two sides shall safeguard due interests of their settled populations in the border areas.
Based on the parameters and principles embodied in these four articles, India can and will mount a compelling defence of its case in Arunachal Pradesh. But the negotations will be difficult and even nerve-wracking and the outcome will defend on a wider set of factors such as the relative weight of India and China in the Asian and global power balance. The Chinese may be contemptuous of India today; but it is clear that the economic and military gap between India and China will narrow in the years ahead.

As responsible powers, India and China must continue to respect each other's phyical possession of territory and not seek to alter the territorial status quo through any means other than negotiations. In the meantime, nothing prevents either side from creating "facts on the ground". China is is within its rights to argue about the eventual status of disputed or undemarcated boundaries but should not waste political bandwidth objecting to India stationing aircraft or troops in Arunachal Pradesh. Similarly, the alarmism we see from time to time in the Indian media about Chinese incursions is also nquite unnecessary. It is clear that neither side is interested in settling the bounday through military means.

11 June 2009

India walking away from its place in the sun

The government has to be more energetic in promoting Indian economic interests even if this means treading on the toes of “strategic partners” like the United States...




11 June 2009
The Hindu

India walking away from its place in the sun

The government has to be more energetic in promoting Indian economic interests even if this means treading on the toes of “strategic partners” like the United States.


Siddharth Varadarajan

China and Iran recently announced the signing of a $4.7 billion deal for the development of the South Pars gas field and the Russian firm, Gazprom, expressed an interest in investing in the proposed Iran-Pakistan gas pipeline but Indian prospects of consolidating a potentially promising energy relationship with Tehran appear to be receding by the day.

As if voting itself off the Iran-Pakistan-India (IPI) pipeline project were not bad enough, New Delhi has been a mute spectator to the mounting American pressure on Indian companies to stop dealing with the Islamic Republic. So diffident is the Manmohan Singh government about India’s rise and so beset are our diplomats with short-term considerations that the larger strategic picture involving Iran and the global energy linkages evolving around it seem to have completely passed us by.

India’s myopic Iran and energy policy are not so much the products of American pressure as of an institutional unwillingness to leverage economic interaction around the world for wider strategic gains. A small example will suffice. In Bolivia, the public sector company, Hindustan Aeronautics Ltd., is in danger of losing a contract for the supply of Dhruv advanced light helicopters because the Ministry of External Affairs does not want to extend a line of credit for the supply of products that come under the Ministry of Defence. India woke up to the importance of the small Andean nation in 2007 when the Evo Morales government chose an Indian company, Jindal Steel & Power Ltd., for the $2.1 billion iron ore-steel plant project at El Mutun. HAL has already sold the Dhruv to Ecuador and the Bolivian deal would help consolidate its position as a supplier of affordable helicopters to countries in Latin America that want a cheaper alternative to the American Bell.

But someone in the Indian establishment evidently does not agree. The Business Standard reported this story last month and when I asked the concerned official in South Block what the problem was, he said: “Please ask the Defence Ministry. The MEA is not in the business of selling helicopters.”

No one expects India to embrace Calvin Coolidge’s dictum that “the business of America is business.” But if the government is unwilling to fight for the country’s economic interests abroad, why should the corporate sector show more courage?

In 2007, Essar walked away from a billion dollar refinery project in Iran after the Governor of Minnessota — where the firm was interested in securing concessional bonding worth $60 million for a $1.4 billion steel acquisition in the American state — threatened to withhold support. And last week, there were reports that Reliance Industries Ltd., India’s largest private sector oil refiner and exporter of crude products, has backed out of supplying Iran with petrol and diesel under pressure from the United States.

As matters stand, there are no international or even domestic American restrictions on the import or export of hydrocarbon products from or to Iran. But in an attempt to provide greater “bite” to President Barack Obama’s as-yet-invisible diplomatic overtures to Iran on the nuclear issue, a group of influential legislators on Capitol Hill is seeking to penalise companies around the world for selling refined products to Tehran or otherwise augmenting its capacity to refine by itself.

Despite being one of the world’s largest producers of crude oil, Iran’s refineries are unable to process enough product for domestic use, forcing the country to rely on imports to service its retail outlets. And as the U.S. seeks to tighten the screws on Iran in its standoff over the country’s civil nuclear energy programme without pushing world crude prices up, Iranian petrol and diesel imports are seen as the Islamic Republic’s Achilles Heel. Limiting or banning the sale of petroleum products to Iran would cause tremendous hardship and generate popular unrest against the government. As a Senator, this is precisely what Mr. Obama came out in favour of in 2008. The United Nations Security Council may not easily approve such sanctions but that hasn’t stopped the U.S. from threatening unilateral sanctions on the rest of the world.

Last December, eight Congressmen led by Brad Sherman zeroed in on Reliance, demanding that the U.S. Exim bank suspend $900 million worth of loan guarantees being extended to the Indian company for expansion of its Jamnagar refinery. RIL has been a steady partner of Iran in the energy sector, purchasing its crude and selling vast amounts of refined products that amounted in some years — according to the Congressmen — to as much as 30 per cent of annual Iranian petroleum imports.

In 2007, RIL was forced out of the Iranian market after American financial pressure on Banque Paribas led to the French bank refusing to confirm the necessary Letters of Credit. The public sector MRPL stepped into the lucrative market in 2008, contracting to sell 250,000 tonnes of diesel to the National Iranian Oil Company with settlement in euros. Later that year, RIL worked out a way to re-enter the Iranian market.

The targeting of the Indian company last December represented an upping of the Congressional ante but the worst was yet to come. In April this year, Mr. Sherman and his colleagues introduced the Iran Diplomatic Enhancement Act in the House of Representatives threatening sanctions on all third country suppliers, brokers, insurers and tankers carrying gasoline to Iran. Companies building refineries in Iran would also be penalised. In May, a similar bill was introduced in the Senate. Though the new bill’s backers are not keen to push the law through immediately, they see it as providing greater muscle to Washington’s new strategy of offering the Iranians the chance of dialogue with the sword of catastrophic sanctions hanging over their heads.

Even without the U.S. law being passed, the threat of American punishment is often deterrent enough for companies. Especially those companies whose home governments prefer not to speak out against the extra-territorial application of American law.

When the controversy over Essar’s proposed Iranian refinery surfaced in October 2007, the GOI should have stepped in to protect the legal right of an Indian company to operate in both Iran and Minnesota. In the event, Essar buckled. After discussions with the Minnesota governor’s office and the U.S. State Department, the firm declared that “no investment or firm commitment will be made in Iran, unless and until permitted to do so under the applicable U.S. or international laws.”

In considering the scale of its involvement in the Iranian hydrocarbon sector, India obviously needs to factor in the prospect of Iran’s relations with the U.S. sharply deteriorating in the months ahead. But it should also be mindful of the possibility that those relations could actually improve. Tehran’s rapprochement with Washington could flow from the defeat of Mahmoud Ahmadinejad in next week’s presidential election or from a dramatic new overture by Mr. Obama. Perhaps in anticipation of dramatic change of one kind or another, international preparations seem to be under way for the smooth incorporation of Iranian energy in existing hydrocarbon networks of circulation and power. The U.S. and Europe would like to use South Pars gas as a feeder for the Nabucco pipeline so that European dependence on Russian supplies comes down. For that reason, Russia would rather help to orient Iranian supplies eastward, towards India and China. Beijing is already working on the same strategy, and is thinking both of LNG shipments as well as extending the Iran-Pakistan pipeline northward into China now that India does not seem at all enthusiastic about participating in the project.

Triple blunder

India committed a triple blunder when it deliberately stayed away from the tripartite negotiations on the IPI pipeline last year partly for fear of not offending the U.S. and partly due to its insecurities vis-À-vis transit through Pakistan. First, it is missing out on a promising source of cheap energy at a time when its own energy needs are growing and the worldwide decline in oil prices means it has a better negotiating hand. Second, it is missing out on the possibility of building co-dependency with Pakistan. For all the law and order problems in Baluchistan, the physical security of the IPI pipeline would have been guaranteed both by technological and political means, while the involvement of Russian and Chinese investors in the pipeline and downstream projects would have provided the political cover against supply disruptions by the Pakistani state. The IPI pipeline may even become a catalyst for wider energy or economic linkages between Delhi and Islamabad, which would be excellent for the bilateral relationship. Third, by staying away from the pipeline, India has effectively freed up the vast gas acreage of South Pars for competing bids from elsewhere, especially China and Europe.

If it wants to be taken seriously as a “major power,” India needs to demonstrate an ability to defend its economic interests in a dynamic, competitive environment that presents risks as well as opportunities. India is fortunate that its rise is occurring at a particular global conjuncture, when developing countries are looking for alternative linkages. It must have the boldness of vision to seize openings as and when they present themselves and not get bogged down by fear and diffidence.

Obama nominee backtracks on n-deal

Administration supports the agreement and intends to implement it, says Ellen O. Tauscher...

11 June 2009
The Hindu

Obama nominee backtracks on n-deal

Siddharth Varadarajan

New Delhi: As a Congresswoman, Ellen O. Tauscher strongly opposed the U.S.-India nuclear deal. But President Barack Obama’s nominee for a key non-proliferation post in the State Department did a U-turn on Tuesday, telling a Senate panel that the new administration supports the agreement and intends to implement it and that she would do her part to further nuclear cooperation with India if confirmed in the job of Under Secretary of State for Arms Control and International Security.

Ms. Tauscher’s views were expressed in a series of answers to written questions posed by Senator Richard Lugar.

“During the course of the [nuclear deal], there were supporters and sceptics in both countries,” she said. “However, upon its successful conclusion, both our Administration and the Government of India have resolved to continue moving forward to strengthen our important strategic relationship. I look forward to doing my part to advance that cooperation.”

She highlighted India’s “enhanced non-proliferation commitments” and said the U.S.-India 123 Agreement “has also opened new pathways for a strengthened bilateral non-proliferation relationship and for a greater Indian leadership role on non-proliferation issues.”

Reiterating India’s promise to place orders for “at least 10,000 MWe worth of new power generation capacity from U.S. firms,” Ms. Tauscher said she would “work with our counterparts elsewhere in the U.S. Government to ensure all possible efforts are being made to promote U.S. business opportunities in India’s civil nuclear energy sector.”

Asked about the impending bilateral talks on reprocessing arrangements and procedures, she said the administration was now in the process of determining what provisions should be contained in such an agreement.

“Once we have an interagency agreement on a proposed text, and have consulted with the IAEA on its needs, we will forward a draft text to the Indian side for comment and will offer to open consultations on a specific date.” This would happen before August 2, 2009, with an agreement to be finalised by August 2010.

Setting to rest Indian apprehensions about the Obama administration’s attitude towards the reprocessing of spent U.S. fuel in India, Ms. Tauscher said Washington was committed to implementing the 123 Agreement, which provided for programmatic consent for reprocessing, and that the bottom-line for America would be effective IAEA safeguards.

“While it is difficult to predict at this time all the conditions under which reprocessing would be an unacceptable alternative to other forms of nuclear spent fuel and waste management, the most likely would be situations where the IAEA, for whatever reason, concluded that it was unable to apply effective safeguards to a new national reprocessing facility, or where effective physical protection of the facility and the nuclear material therein could not be assured.”

She also conceded that it would be several years before the new Indian reprocessing facility was built.

If Indian officials are comforted by the ability of non-proliferation hawks like Ms. Tauscher to change tracks and get on with the programme, the U-turn she took on A.Q. Khan and Pakistani proliferation may not be reassuring.

In Congress, Ms. Tauscher sponsored legislation seeking to condition military aid to Pakistan on the U.S. getting access to the disgraced nuclear scientist. On Tuesday, however, she told Senator Lugar such conditioning was unnecessary.

“The United States obtained a great deal of information about the Khan network without having direct access to A.Q. Khan, and, with the assistance of Pakistan and other countries, we successfully dismantled that network.”

10 June 2009

Manmohan makes fresh pitch for Pakistan dialogue

Citing U.S. opening to Iran, offers to “try again to make peace”...




10 June 2009
The Hindu

NEWS ANALYSIS
Manmohan makes fresh pitch for Pakistan dialogue
Citing U.S. opening to Iran, offers to “try again to make peace”


Siddharth Varadarajan

New Delhi: In the clearest sign yet of India’s willingness to pick up the threads of the dialogue process with Pakistan, Prime Minister Manmohan Singh told Parliament on Tuesday that it is in the country’s “vital interest” to “try again to make peace” with its turbulent neighbour.

Making a strong pitch for engagement with Pakistan, Dr. Singh cited the example of the United States, which, after 30 years of hostile relations with Iran, had realised it needed to re-evaluate its approach towards Tehran.

Although official interactions of a technical nature have continued between New Delhi and Islamabad — last week saw the meeting of the Permanent Indus Waters Commission, for example — the Indian side suspended the composite dialogue process in the wake of last Novembers terrorist attack in Mumbai. And until now, the government has publicly maintained there could be no resumption of dialogue till Pakistan moves to punish the conspirators of Mumbai and dismantles the infrastructure of terrorism on its territory.

Last week, highly-placed sources indicated to The Hindu that this stand was being re-examined with a view to finding ways of engaging Pakistan without diluting India’s call for action against terrorists across the border. And in a further testing of the political waters, Dr. Singh has now spoken of attempting a fresh start.

The Prime Minister did not abandon the pursuit of justice for Mumbai in his remarks to Parliament, even if the demand of “dismantling the infrastructure of terror” was recast as a more verifiable metric. “I expect the Government of Pakistan to take strong, effective and sustained action to prevent the use of their territory for the commission of acts of terrorism in India, or against Indian interests,” he said, “and use every means at their disposal to bring to justice those who have committed these crimes in the past, including the attack on Mumbai.”

These words sound familiar but there is a crucial difference: the demands are being reiterated as India’s reasonable expectations rather than as rigid preconditions for dialogue.

Setting the context, the Prime Minister outlined his vision of a “transformed South Asia” based on cooperation and lasting peace between all neighbours, without which India’s global aspirations would remain unfulfilled. It was, therefore, essential that India made a fresh effort to build peace with Pakistan but Islamabad had to do its bit. “I recognise it takes two hands to clap,” he said. “There are some disturbing trends, but I do hope the Government of Pakistan will create an atmosphere in which we can realise this vision.”

India, he added, would meet the leaders of Pakistan “more than half way” if they had the “courage, the determination and the statesmanship to take this road to peace.”

The Prime Minister spoke from a prepared script in the Lok Sabha but brought in the U.S.-Iran analogy extemporaneously in the upper House to more forcefully drive home his point.

Officials say it is too early to say whether Dr. Singh will meet Pakistani president Asif Ali Zardari on the sidelines of the Shanghai Cooperation Organisation summit in Ekaterinburg next week, and if so, with what agenda. The next scheduled occasion when the two principals could meet is the Non-Aligned Movement summit in Sharm el-Shaikh, Egypt, in July.

New Delhi would first like to receive from Pakistan an official account of the legal steps taken so far against the Lashkar-e-Taiba leaders and others involved in the Mumbai attack before announcing any concrete opening.

04 June 2009

India looking at dialogue option on Pakistan again

One big concern for Indian policymakers is the U.S. attitude...

4 June 2009
The Hindu

NEWS ANALYSIS
India looking at dialogue option on Pakistan again

Siddharth Varadarajan

New Delhi: Notwithstanding the Lahore High Court decision to release Lashkar-e-Taiba chief Hafiz Mohammed Saeed from house arrest this week, Prime Minister Manmohan Singh and External Affairs Minister S.M. Krishna have begun the process of reviewing India’s diplomatic options vis-À-vis Pakistan.

In particular, the big question being examined is how viable and desirable the strategy of suspending dialogue with Pakistan still is in the face of the increasingly fragmented nature of political authority in that country and the mounting perception worldwide that India needs to engage with its neighbour. “We should not negotiate out of fear but we should not fear negotiations either,” a well-placed source told The Hindu on Wednesday morning while providing a foretaste of the different options now under consideration at the highest levels of the government.

“We need to talk about terrorism, whether we can zero in on the question of combating terror,” the source said.

Since the Mumbai terrorist attacks of November 2008, India has stuck to the position that there will be no resumption of dialogue with Pakistan until the “infrastructure of terrorism” in that country is dismantled and the perpetrators and masterminds of the incident are brought to justice.

“It may not be possible for India to insist, in the face of pressure from other countries, that we will talk only when these two conditions are fulfilled,” the source said.

At the same time, officials cautioned against any early easing of the Indian position, especially in the light of the recent release of Saeed. The government accepts the argument that the Pakistani judiciary is independent-minded and even activist and will not easily do the bidding of the executive. But South Block will wait and see whether the government goes in appeal against the Lahore ruling and a fresh and more robust effort made to detain the LeT chief before committing itself to a new line of action.

“Our policy is continuously under review but as of today, I am not in a position to say India is ready to change its position on the resumption of dialogue,” the source said.

One big concern for Indian policymakers remains the attitude of the United States. “We have still not been able to strike a constructive relationship with the Obama administration to see if they are going to be of assistance,” the source said. “It is in this context that the visit [to India next month] of Secretary of State Hillary Clinton assumes importance. We will then have concrete exchanges, and find out where they stand.”

Apart from Saeed’s fate, the Indian side will also closely monitor developments on two other legal fronts: the criminal case against LeT activists such as Zaki-ur-Rahman Lakhvi and others for their involvement in Mumbai, and the status of official restrictions on the Jamaat-ud-Dawa, as the LeT is called now.

The JuD was banned pursuant to the U.N. Security Council adding the organisation to a list of terrorist entities subject to mandatory legal action under Resolution 1267. Though the resolution calls only for an arms embargo and assets freeze of proscribed groups and a travel ban on designated individuals, it does not require the arrest of anyone other than Osama bin Laden. In a case of non-application of mind or deliberate oversight, Saeed was held last year not under Pakistan’s anti-terrorism laws but on the basis of a preventive detention order citing the U.N. resolution, a legal position that was difficult to sustain. This error can always be rectified.

However, the JuD and its backers are likely to press ahead with a case to have the restrictions on the organisation itself lifted.

While India is more or less reconciled to the prospect of Saeed being treated with kid gloves, the question being asked is whether the mere absence of dialogue will help push Islamabad towards taking stricter action or not. So far, the assessment is that Pakistan acts only when the U.S. puts pressure on it. But with Washington confident about New Delhi not escalating the present standoff, the requisite pressure on the Pakistani establishment may not be forthcoming.

Worse, South Block is likely to find itself coming under pressure to relax what the world will see as an unhelpfully rigid stand. Rather than acting on the basis of international demands, therefore, India might see some advantage in being flexible on its own terms.

03 June 2009

U.S.-India ties a three-stage rocket, says Obama official

I was in Singapore for the IISS Shangri La Asian security dialogue last week. More than the plenaries, the closed-door breakout sessions and other occasions for informal interaction proved to be really valuable, especially the small cocktail party hosted by President S.R. Nathan, where one got to chat with sundry "VVIPs" from the Asia-Pacific region in a fairly intimate setting...

3 June 2009
The Hindu

U.S.-India ties a three-stage rocket, says Obama official

Siddharth Varadarajan

Singapore: In an informal interaction with The Hindu on the sidelines of the Shangri La Asian Security Dialogue, a senior official in the Obama administration said the strategic partnership with India continued to remain a priority for Washington and fears in New Delhi to the contrary were groundless.

The official strongly refuted the views of a former American ambassador to India, Robert Blackwill, who told an audience in New Delhi last month that the bilateral relationship was likely to stagnate or even deteriorate unless both sides actively worked to counter this. I don’t think Mr. Blackwill speaks for even the Republican party, the official said, adding that U.S.-India relations were like a three-stage rocket where the first stage was launched by President Bill Clinton, the second by George W. Bush and the third by Barack Obama.

The official denied the Obama administration was cold towards the nuclear agreement, citing the speech made by Deputy Secretary of State James Steinberg at the Brookings Institution in March which spoke of the U.S. looking forward to working with India to fulfil the promise of civil nuclear energy cooperation.

Asked about the prospects of India and the U.S. speedily concluding an agreement on reprocessing arrangements and procedures essential if there was to be any prospect of American nuclear reactor sales to India, the official said it was too early to say how the discussions would shape up. Would Indo-U.S. bilateral relations survive the bypassing of American nuclear vendors altogether in the event that the final terms on offer to India were less attractive than what French and Russian suppliers gave? Absolutely. There is a lot more to the relationship than just nuclear, was the reply.

The official was less categorical when asked about the prospects for an upswing in ties in the event that the contract for 126 multi-role combat aircraft went to a non-American company.

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Humourous postcript: A former U.S. secretary of defense who was listening keenly to this entire conversation -- indeed it was he who led me to said senior official to allay the apprehensions prevalent in India of Obama being aloof -- interjected at the very end when I asked if the U.S. would be ok if the fighter aircraft deal went elsewhere. "Wait a minute", he said. "We lobbied really hard in Congress for the India nuclear deal. It's one thing if reactors don't get sold. But if now you are saying no fighter jets either, then what's left for us?"