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Sunday, 19 December 2010

Working Together for New Glories of the Oriental Civilization

Working Together for New Glories of the Oriental Civilization
Address by H. E. Wen JiabaoPremier of the State Council of the People’s Republic of ChinaAt the Indian Council of World Affairs
New Delhi, 16 December 2010
Your Excellency S. M. Krishna, Minister of External Affairs,Ladies and Gentlemen,
I want to thank the Indian Council of World Affairs for its warm reception and thoughtful arrangements. It is a great pleasure for me to meet you, distinguished representatives of people from various sectors of India. I know that hundreds of millions of Indians are watching the live coverage of my speech, as are hundreds of millions of Chinese. Standing on this podium, I feel deeply honored and a strong sense of responsibility. First of all, please allow me to extend, on behalf of the Chinese people, warm greetings to the hard-working, talented and great people of India.
China and India are two ancient civilizations in the East. We are friendly neighbors sharing common mountains and rivers and our combined population exceeds 2.5 billion. I believe, when our two nations have heart-to-heart communication, the whole world will pay attention and listen to what we say. We have reason to be proud of it.
My last visit to India was in 2005 and India’s fast development left a deep impression on me. Over the past five years, India has maintained robust economic growth and made major headway in science and technology. In particular, you have done an exceptional job in tackling the severe international financial crisis. The rise of India has caught the eye of the whole world and added to the confidence and strength of all developing countries, China included. I want to take this opportunity to offer you my sincere congratulations.
The Upanishad says, “The truth is above all and is the common foundation of conception.” Prime Minister Singh and I are old friends. We have had long discussions on a dozen occasions and forged a sincere friendship. We both believe that independence, self-ownership and self-improvement are the soul of a nation, and only by staying open and inclusive can a country be strong and prosperous. And we agree that there is enough space in the world for the development of both China and India and enough areas for our two countries to cooperate. Such important consensus is deeply rooted in the time-honored cultural traditions of the two countries and our long history of exchanges. It comes from our correct reading of the international situation and keen understanding of our national interests.
For thousands of years, numerous ties have linked China and India closely together. The famous Silk Road witnessed many touching stories. Buddhism from India enriched the Chinese culture, while the traditional Chinese culture left its imprint in India. India’s sage poet Rabindranath Tagore forged a deep friendship with many famous Chinese scholars. Chinese Sanskrit master Ji Xianlin devoted his whole life to the study and teaching of ancient Indian culture. The long history and profound impact of the exchanges between our two countries are truly rarely seen in the history of world civilization.
In pursuing the just cause of fighting colonial rule for national independence and liberation, the Chinese and Indian people sympathized with and supported each other. India’s assistance to China’s anti-Fascist war has been written into the annals of history, and the heroic deeds of Dr. Dwarkanath Kotnis will be forever engraved on our mind. India was one of the first countries to establish diplomatic relations with the New China, and an ardent advocate for restoring the lawful seat of the People’s Republic of China at the United Nations. Together, our two countries initiated the Five Principles of Peaceful Coexistence and played an important role at the famous Bandung Conference, making outstanding contributions to upholding the independence and solidarity of Asian and African countries and promoting world peace.
China and India are two big neighboring countries with different historical and cultural background and social systems. It is hardly avoidable that we may have some disagreements and differences. China-India relations experienced major twists and turns. But they were only a short episode in our 2,000-year history of friendly exchanges. From our rich cultural heritage, we can draw wisdom and courage to face history squarely and work together for the future. Nothing can shake our firm conviction to pursue good-neighborly relations and friendship.
Entering the 21st century, both China and India have moved onto the fast track of development, and our bilateral relations have made important headway. We have established the strategic and cooperative partnership for peace and prosperity and set out the “Ten-Pronged Strategy”. Bilateral trade has grown by nearly 20 times within ten years. China has become India’s largest trading partner and India is China’s largest trading partner in South Asia. We have intensified exchanges, and jointly held a series of major activities. We now have a stronger desire to know more about and learn from each other. China and India have worked in concert to meet global challenges such as climate change, advance the reform of the international financial and economic systems and promote regional cooperation. We have strengthened cooperation within the BRIC and G20 mechanisms, and effectively safeguarded our common interests. Our endeavors have attracted the attention of the entire world.
As a Chinese saying goes, “When drinking water, one should think of its source.” The current sound momentum of China-India good-neighborly relations has not come easily. We will always remember the dedicated efforts of the older generations of Chinese and Indian leaders. I wish to take this opportunity to express heartfelt thanks and pay high tribute to people from all sectors who have long been committed to China-India friendship and cooperation.
Ladies and Gentlemen,
The world today is undergoing major development, major adjustments and major changes. Peace, development and cooperation remain the theme of our time. The overall strength of developing countries is rapidly rising, and the trend towards a multi-polar world is gaining momentum. On the other hand, factors of insecurity, instability and uncertainty still exist. The prevailing situation has brought both major opportunities and severe challenges to developing countries, China and India included. Our two countries are at a crucial stage of development. We should seize the opportunities and lose no time in expanding and deepening our converging interests and actively advance strategic cooperation and practical cooperation. Only in this way can we speed up development, meet challenges together, share development
achievements and usher in a bright future. I believe that China and India have the responsibility and the ability to fulfill this historic mission.
— To accelerate economic development and improve people’s livelihood represents the most ardent hope of the two peoples. We have made remarkable achievements, but we are still under the huge pressure of population, resources and the environment. We both have a long way to go before we can realize modernization. Similar experiences, similar national conditions and common challenges have deepened our mutual understanding, and made it necessary for us to support each other.
— Both China and India have made hard yet successful exploration in the endeavor for national rejuvenation, and each has developed unique advantages in the economic, scientific, technological and social fields. Close cultural and people-to-people links, geographical proximity and the huge market potential have given us many favorable conditions to enhance exchanges and mutual learning and expand mutually beneficial cooperation. In the past, our two great civilizations advanced side by side. Looking to the future, I am convinced that we will achieve common progress and prosperity.
— China and India share broad consensus and common interests on major international affairs. We both follow an independent foreign policy and a win-win strategy of opening-up. We both stand for a multi-polar world and diversity of civilizations. We both are influential members of many important regional and international institutions and mechanisms. Through closer coordination, we will be able to better uphold and advance our common interests.
— China-India relations have gone beyond the bilateral scope and assumed increasing global and strategic significance. The combined population of our two countries accounts for two fifths of the world’s total. To enable our two peoples to lead a peaceful and prosperous life is a great undertaking unprecedented in human history. It is also the biggest contribution that China and India can make to the world. The common development of China and India will give a strong boost to Asia’s revitalization. And better coordination between China and India will greatly enhance the strength and confidence of developing countries and contribute to a more just and equitable international order.
Ladies and Gentlemen,
This year marks the 60th anniversary of China-India diplomatic ties. It is a new starting point for our relations. My visit to your country has been successful and fruitful. I had candid and in-depth discussions with Prime Minister Singh. We reached broad consensus on furthering China-India strategic cooperation. The pressing task now is to turn consensus into reality.
We have decided to launch the mechanism of regular mutual visits by heads of state and government to provide stronger political guidance to the development of our relations. China stands ready to work with India to intensify exchanges and multi-level consultations between political parties and in the military field to enhance political and strategic mutual trust. China always views India’s development and growing strength in a positive light and regards India as an important partner and friend. China and India should always be partners and friends. We should never be rivals. We should tell this to everyone. Let this be our shared conviction.

The China-India boundary question is a historical legacy. It will not be easy to completely resolve this question. It requires patience and will take a fairly long period of time. Only with
sincerity, mutual trust and perseverance can we eventually find a fair, reasonable and mutually acceptable solution. In recent years, we have put in place the special representatives’ meeting mechanism and formulated the political parameters and guiding principles. We have had good dialogue and communication, and expressed the sincere desire to work together to resolve the boundary question. In the face of difficulty, the most important thing to do is to press ahead along the right track, narrow differences step by step, build consensus and increase confidence. We should step up consultation and coordination on border affairs and maintain peace and tranquility in the border areas.
We should work together to hit the target of US$100 billion in two-way trade by 2015. During my visit, the business communities of the two countries have signed over 40 economic and trade cooperation agreements with a total value of over US$16 billion. Before that, the Shanghai Electric Group of China and other two Chinese companies signed with their Indian counterparts contract of 59 coal-fired power generating units worth up to US$8.3 billion. These units are installations of efficient and clean energy. During this visit, China has agreed to provide over US$4 billion in buyer’s credit for the implementation of
this project. A number of well-known Indian businesses have obtained considerable orders from the Chinese procurement mission. All this shows that our business cooperation enjoys huge potential and broad prospects. China understands India’s concern over the bilateral trade imbalance. We are ready to take measures to facilitate access of Indian IT products, pharmaceuticals and farm produce to the Chinese market. Meanwhile, our two sides should handle appropriately trade frictions, oppose all forms of protectionism, and jointly create conditions for the launch of regional trade arrangement negotiations.
Trans-border rivers are a source of livelihood for the people living along the rivers. To properly preserve, utilize and manage the trans-border rivers is our shared responsibility. Over the years, in order to help the downstream areas with disaster prevention and mitigation, the Chinese technical personnel have defied the hostile natural conditions in the upper reaches, overcome tremendous difficulties and even risked their lives to handle emergencies and to collect flood season hydrological data that are shared with India. China takes seriously India’s concern about the trans-border rivers, and we are ready to further
improve the joint working mechanism. We will do whatever we can and do it even better. I would like to assure our Indian friends that all the upstream development activities by China will be based on scientific planning and study and will take into consideration of both upstream and downstream interests.
Prime Minister Singh and I have announced that next year will be the Year of China-India Exchange. The two sides should take this opportunity to enhance mutual understanding and friendship. We should focus our efforts on youth mutual visits by 500 young people from both countries next year. We should earnestly implement the agreements in culture and education. In this regard, China will provide US$1 million for the reconstruction of the Nalanda University. We should encourage greater exchanges between local governments and give full play to the role of people’s friendship organizations. And we should promote more interactions between the media with a view to enhancing the understanding and friendship between our two peoples.
China and India have shared interests and common views on the issue of the UN Security Council reform. We both maintain that priority should be given to increasing the representation of developing countries. Closer cooperation between our two countries on Security Council reform will help uphold the interests of developing countries and promote democracy in international relations. China understands and supports India’s desire to play a bigger role in the United Nations, including its Security Council. As a fast-growing big country with over one billion people, India should and can play an increasingly important role in international affairs. Our two countries should also step up coordination and collaboration on other major international and regional issues, work together to advance regional and sub-regional
cooperation in Asia, and devote our efforts to promoting world peace and development.
Ladies and Gentlemen,
This morning, I went to the Raj Ghat and laid a wreath in great reverence. I walked around the tomb, spreading petals to every corner of it. I felt as if I could see Mahatma Gandhi’s unyielding image and clear eyes. For peace and justice, Mahatma Gandhi travelled from one village to another with firm steps, knowing no fatigue. He was intrepid, and so much so that no force or individual could make him stop. This celebrated leader of India’s independence movement gave valuable support to the national liberation endeavor of the Chinese people. This great man, a man of love and integrity, has always lived in my heart.
In history, the Chinese and the Indian civilizations added radiance to each other, and had a profound impact on the course of human civilization. I am convinced that in today’s increasingly globalized world, China and India, two great nations that have gone through so many trials and tribulations, will, as always, remain vibrant, live up to the important mission bestowed by history, and work together for new glories of the Oriental civilization.
Thank you.

Saturday, 11 July 2009

What India must do if it is to be an affluent country

Transcript: India Budget speech http://enbworldeconomy.blogspot.com/2009/07/transcript-india-budget-speech.html
What India must do if it is to be an affluent country

By Martin Wolf
Published: July 7 2009 18:49 Last updated: July 7 2009 18:49

Much of the answer will be provided by the performance of the two Asian giants, China and India. Rightly or wrongly, it is widely accepted that China will continue to grow very rapidly. But what is the likely future for India?
I attended debates on this question in Mumbai and Delhi two weeks ago. The occasion was the launch of a report prepared by the Centennial Group for this year’s Emerging Markets Forum.* It addresses a provocative question: what would need to change if India were to become an affluent country in one generation? The answer is: a great deal. But one thing is clear: after the performance of the past three decades, the goal is not laughable.
Since 1980 the average living standards of Chinese and Indians have, for the first time in the histories of these two ancient civilisations, experienced a sustained and rapid rise. In one generation, India’s gross domestic product per head rose by 230 per cent – a trend rate of 4 per cent a year. This would seem a fine accomplishment if China’s had not increased by 1,090 per cent – a trend rate of 8.7 per cent. Yet even if India has lagged behind, the change has been large enough for aspiration to replace resignation as the ethos of a large and rising proportion of Indians.
The recent past offers at least four further reasons for optimism. First, the rate of growth has been accelerating: over the five years up to and including 2008, the average annual rate of economic growth was 8.7 per cent, up from 6.5 per cent at the previous peak in 1999. Second, vastly higher savings and investment underpin this acceleration, with gross domestic savings up to 38 per cent of GDP in the financial year 2007-08. Third, India’s economy has globalised, with the ratio of trade in goods and services up to 51 per cent of GDP in the last quarter of 2008, up from 24 per cent a decade before. This was not far behind China’s 59 per cent of GDP (see chart below).N/AFinally, the democratic political system, for all its frailties, works. Indian democracy is a wonder of the political world. What happened in the past election seems a big development – the re-election of a Congress-led government, with a big increase in the party’s seats. It is widely believed that this reflects a choice of competence over caste and secularism over sect. Not least, the electorate registered approval of the competence and integrity of Manmohan Singh, the prime minister. I have been lucky to have known Dr Singh for three and a half decades. I admire nobody more. I only hope he is prepared to his possibly final period in office boldly.
So what needs to happen if Indians are to enjoy an affluent lifestyle? The answer, suggests the report, is that India must sustain growth at close to 10 per cent a year over a generation. This is not inconceivable:
China has managed that, from a lower base, over three decades. But it is a massive task, particularly for so huge, diverse and complex a country. Extraordinary change would have to occur, inside India and in India’s relationships with the world.
For this to be conceivable, at least four things would have to happen: the world must remain peaceful; the world economy must remain open; India must avoid the stagnation into which many middle-income countries have fallen; and, finally, the resource and environmental implications of its rise to affluence must be managed.
Moreover, India itself must overcome three big challenges: maintaining, indeed strengthening, social cohesion at a time of economic and social upheaval; creating a competitive and innovative economy; and playing a role in its region and the world commensurate with the country’s size and rising importance. In fundamental respects, India must turn itself into a different country.
Not least, as the report makes clear, India would have to be governed quite differently. In India a vigorous, albeit too often corrupt, democratic process has been superimposed on the “mindsets, institutional structures and practices inherited from the British Raj”. India has prospered despite government, not because of it. It is a miracle that the giant has fared as well as it has. But if this country is to prosper it must create infrastructure, provide services, promote competition, protect property and offer justice. The country must move from what the report calls “crony capitalism and petty corruption” to something different.
The quality of government, widely believed to be deteriorating, must, instead, radically improve.
Just how far the transformation would have to go is shown by the “seven inter-generational issues” on which this report focuses: first, tackling disparities, not least among social groupings, but without further entrenching group-based entitlements and group-based politics; second, improving the environment, including the global environment; third, eliminating India’s pervasive infrastructure bottlenecks; fourth, transforming the delivery of public services, particularly in India’s ill-served cities; fifth, renewing education, technological development and innovation; sixth, revolutionising energy production and consumption;
and, finally, fostering a prosperous south Asia and becoming a responsible global power.
I take two big things from the analysis in this report, one for India and another for the world.
For India, I conclude that even sustaining recent performance is going to be very hard. The era when the country could prosper just by stopping government from getting in the way is ending. India now requires efficient, service-providing government by competent technocrats and honest politicians. Of course, many foolish interventions still need to be removed. The government also needs to refocus its limited energy and resources on its essential tasks. But it must be able to perform these tasks far more effectively than it can today.
What I take for the world is that India, for all the huge challenges it confronts, is likely to continue its rise, if more slowly than the report assumes. The job of adjusting the familiar western ways of thinking about the world to the new realities has hardly begun. Within a decade a world in which the UK is on the United Nations Security Council and India is not will seem beyond laughable. The old order passes. The sooner the world adjusts, the better.
* India 2039: An affluent society in one generation, Asian Development Bank 2009
martin.wolf@ft.com

Thursday, 31 May 2007

India, US to hold talks on nuclear deal today

India, US to hold talks on nuclear deal today
Thursday, 31 May , 2007, 09:09 New Delhi:

India and the US will hold high-level talks in New Delhi on Thursday on the proposed agreement to operationalise the civilian nuclear deal amid keen interest on both sides to conclude the pact as soon as possible. Editor's Choice India, US hold talks on 123 agreement India's list of demands may scuttle nuclear deal
With 90 per cent progress already reported on the talks on '123 Agreement,' US Under Secretary of State Nicholas Burns will be in New Delhi for three days to hold talks with Foreign Secretary Shiv Shankar Menon to sort out the remaining differences.
The two sides will seek to wind up the year-long negotiations ahead of the meeting between Prime Minister Manmohan Singh and US President George W Bush in Germany next week on the sidelines of the G-8 Summit.
US Ambassador David C Mulford on Wednesday said that 'considerable work' was to be done on a 'very technical and detailed agreement.'

'We want to finish as soon as we can and both sides are positive we can do this,' the Ambassador said in a statement.
The key negotiators of the two sides will aim at resolving differences on aspects like reprocessing right and continuity of civil nuclear cooperation if India were to conduct an atomic test in future.
The meeting between Menon and Burns was expected to take place last week but was postponed as the US had sought some technical clarifications on a draft text presented by India, sources said.
The clarifications were provided by India at a two-day expert-level meeting in London from May 21 after which the two sides reported 'further progress' towards finalising the mutually-agreed text of the agreement.


Wal-Mart says its entry will benefit India
Suman Guha Mozumder in New York May 31, 2007 09:40 IST

Wal-Mart, the world's largest retailer, says that its goal in India is to establish a relationship with the small business community by partnering with them and helping them lower costs and increase profits resulting in benefits for multiple aspects of the country's economy.
"As per current guidelines, Wal-Mart will enter into a joint venture with Bharti for our wholesale cash-and-carry business in India that will sell goods to retailers, including small store owners -- or kirana stores -- at very low prices," Kevin Gardner, senior manager, international corporate affairs, Wal-Mart, told rediff.com.
Gardner's comments came in reaction to a protest organised by ACORN India and its affiliates during last weekend's Bollywood awards ceremony in Nassau County in Long Island. The protestors were urging awards chair Kamal Dandona to drop Wal-Mart's sponsorship of the event for the company's alleged human rights abuses.
Although the actual protest boiled down to just a handful of people distributing fliers outside the venue denouncing Wal-Mart's involvement with the event, ACORN officials had earlier told this correspondent that the company's entry into India would have devastating impact on the country's agricultural and rural sectors as Wal-Mart would displace small and medium businesses and farmers, vendors and consumer cooperative stores.
But Wal-Mart said such misgivings were totally unfounded.
"While Bharti, our joint venture partner in cash-and-carry, has announced its intention to enter into retail, it needs to be clearly understood that this is a separate, wholly owned and managed Bharti venture. Unfortunately, wholesale and retail are often confused resulting in unwarranted speculation and misinformation," Gardner said.
He said Wal-Mart also works with its global suppliers to improve workplace conditions, including educating workers, training factory managers to comply with the highest ethical standards, and some other basic business functions such as improving production planning and supply chain management.
"When we find a problem, we fix it. But instead of halting our work with a supplier factory that is not doing well, our ethical standards team works with them, so they can improve their performance. The ethical standards community endorses this approach, and we think it's better for those factories and the people who work there," Gardner said in response to a question.
He said while factories are given the opportunity to improve their working conditions, certain violations are not tolerated and will result in an immediate banning of factory production for Wal-Mart.
In 2005, he said, 141 factories were permanently banned from doing business with Wal-Mart, primarily because of underage labour violations. In addition, Wal-Mart disapproved another 23 factories as a result of multiple instances of non-compliance with the Standards of Suppliers, he added.
Denouncing the protest, Gardner said that it was a shame that this group would choose an event like the Bollywood Awards, which celebrates India's vibrant film industry, to 'make irresponsible and nonfactual allegations about Wal-Mart's business in the United States and abroad.'
"Just to let you know Wal-Mart has a strong history with India, having established a direct sourcing operation in India since 2001 as part of our global procurement operations. We currently source goods worth over $600 million directly from suppliers in India, which translates into thousands of jobs," he said.
"Many of these suppliers have grown and developed with Wal-Mart over the years and today supply not only to Wal-Mart stores around the world but many other major global retailers," Gardner said.
He said direct sourcing from the region will continue to grow as suppliers are innovative and respond quickly to new trends for apparel and goods found in Wal-Mart stores around the world. "Wherever Wal-Mart is around the globe, we go to great lengths to ensure that our international operations reflect local needs and this will be no different in India," he said.
"We look forward to working with communities in India to be a good citizen and provide the same excellent service and convenience that we provide in 13 other countries around the globe," Gardner added.

Friday, 25 May 2007

Why the United States Promotes India’s Great-Power Ambitions

by the Research Unit for Political Economy

In March 2005, U.S. Secretary of State Condoleezza Rice announced Washington’s decision to “make India a global power.” No doubt U.S. arms manufacturers can now look forward to large contracts from India; but this course is dictated by broader strategic considerations.


First, the United States is not worried by India’s ambitions: it knows that India is unable to project power across Asia independently. For example, India’s plans for a rapid-reaction force which could be deployed immediately in countries along the rim of the Indian Ocean cannot be pursued without fast long-range aircraft with aerial refueling capabilities, airborne early warning and command aircraft, attack helicopters, and a carrier in addition to the INS Virat. A significant share of this would have to be imported from the United States. Any drawn-out intervention abroad would require even greater infrastructure, which India lacks. (In fact, even the European Union countries are not equipped with the infrastructure for sustained projection of military force independent of the United States. This was demonstrated during the Balkans crisis, when they were forced at last to turn to the United States to intervene.)
Moreover, given the balance of military strength, India’s attempts to project power cannot be sustained in the face of U.S. opposition. Indeed, in 2003, then prime minister Atal Bihari Vajpayee reportedly confessed that strategic partnership with the United States was essential to his twenty-year program to attain great-power status; “otherwise India’s ability to project power and influence abroad anywhere would be greatly compromised.”


The second reason for the United States to promote Indian ambitions is that it suits U.S. interests to do so. This is spelled out with brutal candor in at least three important U.S. sources.
The first is a report commissioned by the U.S. Department of Defense in October 2002, titled The Indo-U.S. Military Relationship: Expectations and Perceptions. The report is based on interviews with forty-two key Americans, including twenty-three active military officers, fifteen government officials, and four others; as well as with ten active Indian military officers, five Indian government officials, several members of the National Security Council, and outside experts advising the Indian government. The second source is the writings of Ashley J. Tellis, a former aide to Robert Blackwill during 2001–03 when Blackwill was ambassador to India; he is considered at the moment a key U.S. policy analyst on India. The third source is the October 2005 study by Stephen Blank of the Strategic Studies Institute of the U.S. Army War College, Natural Allies?: Regional Security in Asia and Prospects for Indo-American Strategic Cooperation.

Context: U.S. Strategic Perspective Worldwide
The context for these studies is the situation of U.S. imperialism today and its current strategic perspective worldwide. We have written about this in Behind the Invasion of Iraq (New York: Monthly Review Press, 2003) and hence will merely summarize that argument here.
On the face of it, it would appear that after the collapse of the Soviet Union, the United States faces no serious challenge to its global hegemony. Its military expenditures are half of world military spending; around 3.5 times the total of the remaining members of the UN Security Council (China, Russia, Britain, and France); and double the total of the world’s next six largest spenders (Russia, France, Japan, Germany, Britain, and China—even taking China’s actual military expenditure to be double the official figure). The United States is the only country with the infrastructure and forces to project military force over long distances, and thus to fight sustained wars abroad, as it is doing in Iraq and Afghanistan at present. (Countries such as France and Britain are able to mount relatively small intervention forces to carry out operations against second-rate forces in, say, Africa.)

Yet it is economic power that ultimately sustains military power, and U.S. power is fragile at its economic base. The U.S. share of world income has fallen from half in 1950 to 21 percent today; its share of manufacturing from 60 percent in 1950 to 25 percent in 1999; its share of the world’s stock of foreign direct investment from 47 percent in 1960 to 21 percent in 2001.
No doubt the U.S. economy is said to be “doing well.” However, U.S. economic growth today is being maintained only by a systematic and massive expansion of consumer borrowing and government borrowing. An increasing share of goods and services are imported. Thus the U.S. current account—the balance of a country’s earnings and its expenditures from trade in goods and services, and investment income—has been in deficit for two decades, and it is now out of control, touching $668 billion in 2004. The figure for 2005 will be much higher. This gap has been covered by borrowing from abroad, making the United States by far the world’s largest debtor.


The giant U.S. current account deficit is funded by soaking up more than 70 percent of the world’s savings. Other countries place their savings in the United States for three reasons: the United States is the world’s dominant imperialist power; the U.S. dollar is still the leading currency for international payments; and many of these countries want to prevent the dollar from declining, since the United States is their main export market.


However, this game cannot continue endlessly, as the debt would have to be serviced by larger and larger shares of the U.S. national income in the future. International investors and central banks are aware of this, and they are contemplating shifting their investments elsewhere. If this were to happen, the U.S. dollar would fall, U.S. interest rates would rise, and the U.S. economy would be in danger of collapse.

The U.S. military plays a key role in staving off this eventuality. It protects the United States’ status as the dominant imperialist power worldwide and hence safe harbor for the world’s capital. It ensures (for example, by the invasion of Iraq and the threatened invasion of other countries) that the bulk of the world’s oil trade continues to be carried out in U.S. dollars. It maintains physical control of much of the world’s crucial resources (such as oil) as well as of trade routes—trump cards to be used against potential rivals for hegemony. It can also challenge potential rivals in an arms race such that it can undermine their economies.


However, U.S. military power too is increasingly vulnerable. First, it must cover the whole globe and check resistance anywhere, for its supremacy rests precisely on the inability of any power to defy it; it is in a state of permanent war. Indeed, precisely because it intervenes everywhere to protect its supremacy, it is the number one target of anti-imperialist forces around the world.
Second, while the U.S. military is well-equipped to knock down conventional standing armies, it has a poor record against guerrilla resistance and popular upsurges. The earlier liberation of Vietnam and the current Iraqi resistance have proved this amply. (In such cases its only hope lies in the manipulation of ethnic tensions.)


Third, one of the legacies of the great Vietnamese struggle is that the U.S. ruling classes now fear the domestic political consequences of large military casualties and of military conscription. Thus the U.S. armed forces are much smaller than would be required by its global hegemony. The United States may indeed finally institute conscription, but it would have to pay a heavy political price internally for doing so.
New U.S. ‘Global Defense Posture’


It is in order to maintain its hegemony over diverse and shifting potential adversaries that the United States has set up a vast network of military bases. The proliferation of new bases has spread U.S. forces even thinner. In 2003 the Pentagon announced a new basing policy, whereby it would close down 35 percent of the large Cold War–era bases (geared to war with the Soviet Union) and shift troops to a large number of small bases along what it calls the “arc of instability” in West Asia and Central Asia. These “lily-pad” bases (forward operating sites) would have minimal permanent facilities and limited permanent detachments, and they would serve mobile forces dispatched from the United States as required.

This new “global defense posture” is related to the new requirements of U.S. global hegemony:
“During the Cold War we had a strong sense that we knew where the major risks and fights were going to be, so we could deploy people right there,” Douglas Feith, the undersecretary of defense for policy, said...“We’re operating now in a completely different concept....We need to be able to do that whole range of military operations (from combat to peacekeeping) anywhere in the world pretty quickly.” The Pentagon is seeking maximum flexibility in the decades ahead in responding to terrorism and other potential threats, including those to oil supplies. So the military wants a range of basing and access agreements with as many countries as possible and in as many regions as it can.Apart from main operating bases and “lily pads,” there will be even more skeletal sites, called “cooperative security locations.” With little or no permanent U.S. presence, these may be maintained by “contractor or host nation personnel.” The United States wants a free hand to use these sites as it wishes:


Feith said the Pentagon wants to avoid the kind of environmental or political constraints that have limited U.S. military training and deployment options in Europe in recent years. “If countries are going to subject us to the kinds of restrictions that may mean we’re not going to be able to fulfill the purpose of having troops deployed there, then we’re going to have to think whether to have troops deployed there,” Feith said. The Need for Indian Bases and Training Facilities


The U.S. War College study, which draws on discussions its author had with representatives of different military services at the U.S. Pacific Command, states bluntly:
We need tangible Indian support because our strategic interests and objectives are global, while the military and other means at our disposal to pursue them are not keeping pace....American force posture remains dangerously thin in the arc—many thousand miles long—between Diego Garcia in the Indian Ocean and Okinawa and Guam in the Pacific....The United States’ Quadrennial Defense Review (QDR) of 2001 openly asserted the need for more forces and bases in Asia “due to the expansion of threats there across the spectrum of conflict.” Deputy Assistant Secretary of Defense Peter Brookes told Congress in 2002 that


Distances in the Asian theater are vast, and the density of U.S. basing and en route infrastructure is lower than in other critical regions. Moreover, the U.S. has less assurance of access to facilities in the Asia-Pacific region than in other regions. The QDR, therefore, identifies the necessity of securing additional access and infrastructure agreements.... American officers, says MacDonald,are candid in their plans to eventually seek access to Indian bases and military infrastructure. India’s strategic location in the centre of Asia, astride the frequently traveled Sea Lanes of Communication (SLOC) linking the Middle East and East Asia, makes India particularly attractive to the US military.U.S. lieutenant generals told MacDonald that access to bases in India would enable the U.S. military “to be able to touch the rest of the world” and to “respond rapidly to regional crises.” Moreover, in case U.S. relations with traditional allies (e.g., Japan, South Korea, and Saudi Arabia) ever become more acrimonious, or collapse, or in case U.S. access rights to bases are restricted, “The US needs to develop alternatives in Asia. India is the optimal choice....”


An American colonel told MacDonald that
The US Navy wants a relatively neutral territory on the opposite side of the world that can provide ports and support for operations in the Middle East. India not only has a good infrastructure, the Indian Navy has proved that it can fix and fuel US ships. Over time, port visits must become a natural event. India is a viable player in supporting all naval missions, including escorting and responding to regional crises.India has already provided port facilities for U.S. forces engaged in the invasion and occupation of Afghanistan and Iraq. Moreover, it has given the green signal for the United States to use Sri Lankan bases:

Despite years of trying to prevent any foreign state from getting near Diego Garcia and Eastern Sri Lanka’s base and port of Trincomalee, India has acted on behalf of the US Navy to secure its access to these ports and offered Washington access to its own ports for the GWOT (Global War on Terror). In return, Washington successfully pressured the Tamil Tigers in Sri Lanka to persevere in peace talks with the Sri Lankan government....[A]ccess to these bases in the Indian Ocean...is extremely valuable for operations and missions from the Middle East to Southeast Asia and could thus also serve as a check on Chinese naval ambitions in the Indian Ocean....Moreover, at the moment, US ships and planes now enjoy a case-by-case access to Indian bases. The September 11 attacks in the United States, and India’s eager offer of its bases for the invasion of Afghanistan, marked a turning point. Before that point, a U.S. Navy ship visited India approximately every three years; now, according to U.S. Pacific Command officers, there are regular trips. Before September 11, the Indian government would not allow U.S. troops with weapons on the ground when responding to the Gujarat earthquake. “Today, after September 11, the US military has full access,” says MacDonald.
The United States also wants facilities for training in India; according to MacDonald, “India has a
variety of landscapes, from ice-clad mountains to deserts, and it would help the Americans because military training ranges are shrinking and becoming increasingly controversial in the United States.” And for the U.S. Navy, training with the Indian Navy is the best way to become “proficient in the Indian Ocean region.”

Indian Armed Forces to Do the ‘Low-End’ Tasks
The United States needs not only Indian facilities, but the services of the Indian armed forces themselves. According to Ashley Tellis, their role would be lowly, but useful to the United States:in those Asian areas of critical significance to vital US interests that would warrant the commitment of US resources, including force on a unilateral basis if necessary, India will remain a peripheral actor. But as its capabilities grow, so will its influence even if it is limited. And that influence can help advance shared bilateral interests if relations with New Delhi are adroitly managed.In these critical areas, he writes, “the enormous disparity in power capabilities and resources between Washington and New Delhi will be so stark as to render Indian preferences entirely irrelevant.” Yet even in such matters, “Indian power could be dramatically magnified if it were to be applied in concert with that of the United States. In such circumstances, Indian resources could help to ease US operational burdens....”


Moreover, he emphasizes that Indian forces can be assigned tasks in areas/issues which the United States feels are not worth its direct intervention:
Indian power will be most relevant in those geographic and issue-areas lying in the ‘interstices’ of Asian geopolitics....In those areas, great power interests are neither obvious nor vital. Consequently, their incentives to enforce certain preferred outcomes unilaterally are poor. In such circumstances rising powers like India can make a difference because their substantial, though still not dominant, capabilities can swing the balance in favor of one coalition or another....MacDonald suggests Indians could be assigned “low-end operations”:
[The] US military seeks a competent military partner that can take on more responsibility for low-end operations in Asia, such as peace-keeping operations, search and rescue, humanitarian assistance, disaster relief and high-value cargo escort, which will allow the US military to concentrate its resource on high-end fighting missions.The most immediate candidate for such “partnership” is the Indian Navy. Cooperation between the two navies took off after the September 11, 2001, incidents in the United States. For six months the Indian Navy undertook joint patrols with the U.S. Navy to escort commercial ships and patrol the busy sea lane running from the North Arabian Sea to the Malacca Straits.


That episode set a useful precedent. MacDonald says that “naval cooperation represents one of the most promising areas of service-to-service cooperation.” For one, “The Indian Navy is the only Indian service that is organised to operate outside of India’s borders.” It would invite less political opposition within India; in the words of an American admiral, “The Navy may be the easiest service to move forward with cooperation because the US Navy leaves no footprints in India. Exercises are conducted out of sight, with no US troops on the ground in India.”
The “New Framework for the U.S.-India Defense Relationship,” agreement of June 2005 specifically mentions, among other things, that Indian and U.S. militaries would conduct joint and combined exercises and exchanges; conduct joint responses to disaster situations; and collaborate in multinational operations and “peace-keeping” operations. Note that there is no mention of the United Nations; these operations will evidently not be carried out even nominally under its banner. This is part of the systematic U.S. effort to use disasters and regional conflicts as a means to introduce its troops and those of its allies in situations to which they earlier had no access. The July 18, 2005, joint statement between Manmohan Singh and George Bush speaks of a new “US-India Disaster Relief Initiative that builds on the experience of the Tsunami core group.” That group, which included India, was later dissolved and its efforts were placed under the UN, but the United States nevertheless managed to use the disaster to introduce its troops and equipment into Indonesia’s Aceh province and Sri Lanka (in the latter case it sent 1,500 Marines and an amphibious assault ship for “humanitarian purposes”).
Proliferation Security Initiative: Violation of International Law


The “New Framework” agreement of June 28, 2005, also mentions that the United States and India would collaborate “to combat the proliferation of weapons of mass destruction.” In fact, India is set to become a part of the U.S.-led Proliferation Security Initiative (PSI), a dangerous and illegal development. The PSI is not a treaty or an organization, but an informal coordination among a group of states, without binding terms or regulations, under the banner of preventing the proliferation of weapons of mass destruction (WMDs). Discarding the United Nations route, the PSI calls for the participating states to arrest (the term used is to “interdict”) the transport of WMDs, WMD delivery systems, and “related materials” to or from states or others who may be proliferating them.
“Delivery systems” presumably mean missiles and the like; the term “related materials,” however, is so vague that even materials for manufacture of fertilizer could be seized on the ground that they could be used for making WMDs. During the operation of the sanctions regime against Iraq (1991–2003), Iraq was prevented at one point from importing pencils on the grounds that they contained graphite, which could be used in weapons manufacture.
At their own initiative, and without the sanction of international law, the PSI participants may board and search any vessel in their waters or even on the high seas (i.e., beyond the territorial waters of any state) that is “reasonably suspected of transporting such cargoes,” and seize such cargoes. Even aircraft “reasonably suspected of carrying such cargoes” to or from proliferators of WMDs could be required to land and have their cargoes seized. (What would be the consequences if such aircraft refused to land? Presumably they could be shot down with their alleged cargoes of WMDs.)

As with the farcical U.S. claim of WMDs in Iraq, which formed the U.S. justification for invasion, the PSI’s claims would not be subject to the scrutiny of any international body, but could be based on U.S. “intelligence” (note the phrase “reasonably suspected”). Since in international law such actions as described above are understood as acts of war, India’s joining the PSI could have grave consequences.


A little over a year ago, when U.S. Secretary of State Colin Powell was pressing India to join the PSI, senior Indian officials had expressed serious reservations regarding its legality. Now, however, India appears on course to become a participant in PSI. At the Seventh Asian Security Conference in January 2005, Defence Minister Pranab Mukherjee claimed that proliferation of WMDs through the sea lanes was “one of the biggest problems,” and he proposed that “initiatives such as the PSI” would “need to be examined in greater detail.” He said that the Indian Navy and Coast Guard could play a significant role in dealing with such threats. On May 21, 2005, the Chief of Naval Staff Admiral Arun Prakash said that if India were to join the PSI, “India’s status in world affairs warrants that we should be one of the core countries.”
In September 2005, the Indian Navy carried out its biggest-ever joint exercise with the U.S. Navy. Led by aircraft carriers and supplemented by guided missile destroyers, frigates, helicopters, spy planes, and fighter aircraft, the navies practiced interdiction on the high seas as well as visit, board, search, and seizure (VBSS) of vessels. Senior Indian officials denied that this was related to the PSI.Missile ‘Defense’: An OffensiveAlliance with Grave Consequences
The “New Framework” agreement says that the two countries’ militaries shall “expand collaboration relating to missile defense.” This harbors profound peril for the Indian people.
In May 2001, George Bush announced a “new strategic framework” for the United States, including that the United States would proceed with its plans for “national missile defense” (NMD), that is, a system aimed at defending the United States from incoming missiles by knocking them out before they descend toward their targets. Bush announced his intention to “move beyond the constraints” of the thirty-year-old Anti-Ballistic Missile (ABM) Treaty. The logic of the ABM Treaty was that if a nuclear-armed country were to achieve an effective defense against other countries’ nuclear weapons, it might feel freer to use its own nuclear weapons on others, without fear of retaliation. Other powers would multiply their missiles to ensure that the sheer number of missiles pierced the shield; and thus a dangerous new arms race would begin.


Bush’s declaration met with widespread criticism. The official China Daily said Bush’s plans appeared aimed at establishing “absolute military supremacy” in the world. Pursuit of that aim would “break the present fragile global security equilibrium” and “trigger a new arms race in the international arena and destroy what has been achieved so far with international disarmament efforts.” A Russian foreign ministry spokesman said “The US has been unable to give us arguments to convince us that they see clearly how to solve the problems of international security without damaging disarmament agreements which have stood for 30 years.” Germany remained unconvinced and raised “very, very serious questions” over the project. Public opinion around the world was even more hostile.


The Vajpayee government was one of the few countries in the world openly to welcome Bush’s announcement, justifying it strangely as a step toward nuclear disarmament. Talks began with the United States on how India could join the system. On January 1, 2004, Bush announced the “Next Steps in Strategic Partnership” (NSSP) with India, including cooperation in missile defense; the Indian official response was ecstatic: the NSSP was “unique...completely out of the ordinary.”


However, the Vajpayee government fell five months later, and the new Congress Party-led United Progressive Alliance (UPA) government was guarded at first in its statements regarding missile defense. After all, the “Common Minimum Programme” of the UPA included a few general statements about maintaining an independent foreign policy. The Indo-U.S. Defense Policy Group, the forum through which U.S.-India strategic ties are being implemented, nevertheless met at the end of May, shortly after the new regime assumed office. The U.S. delegation made a presentation regarding missile defense, but the response of the Indian side was not made public. Over the next year, several more exchanges took place on this issue, including a visit by an Indian team to the missile defense exercises in California during April 2005.


In an address to a meeting of the Delhi Policy Group in August 2004, Satish Chandra, deputy to India’s national security adviser, laid bare the real import of missile defense. Missile defense, he said, was part of the “paradigm shift [in the United States] whereby it could consider the use of nuclear weapons in a pre-emptive mode.” In his address Chandra lamented the fact that instead of striving for a nuclear weapon free world, the United States had been “advocating new rationales for the retention of nuclear weapons and developing new types of nuclear weapons.” “The annulment of the Anti-Ballistic Missile treaty and the US moves to develop ballistic missile defenses are clear indicators that the strategic thinking in the US is undergoing a paradigm shift whereby it could consider resorting to the use of nuclear weapons in a pre-emptive mode. Thus, while the nuclear weapon build-up of the 1970s and 1980s was justified mainly on grounds of deterrence, the Nuclear Use Theorists (NUTS) envisage the actual utilisation of these weapons in situations short of nuclear war...” (emphasis in original).
Chandra’s dissent was irrelevant; the decision had already been taken. In October 2004, U.S. ambassador Mulford told Force magazine that the United States and India had already gone beyond merely talking about missile defense: “There has already been a discussion about technology and systems....The only problem that I see is that it is a technically complicated subject and there are different generations of systems available. So the issue is to figure out which system is needed where. This is a complicated process.”


The systems being set up for Japan’s missile defense give us an idea of what may be planned for India: ground-based interceptor missiles deployed in Japan itself, and sea-based interceptor missiles deployed on U.S. Aegis destroyers around Japan. The third element is still being developed, namely, laser beams mounted on the nose of converted Boeing 747 jets, which would fly round-the-clock around China’s coast, and would fire at any missile launched by China or North Korea. (The airborne laser program, however, has huge technological development problems.)


Even assuming the missile defense system works, it is obvious that Japan is much smaller than India; the latter would be more difficult and expensive to defend. It is possible that in India’s case the system is not intended to defend the whole country, but only select locations—military sites and metropolises. At any rate, China will most probably respond by building more missiles in order to overwhelm the system, as it is doing with Taiwan already; and India would probably respond by building more Agni-3 missiles and arming them with nuclear weapons, in order to retain the ability to retaliate against China. The Indian public needs to be made aware of the insanity of such a path, its huge costs, the grave peril it invites, and whose interests it serves.
India as the linchpin of a proposed ‘Asian NATO’
Meanwhile, the Indian public is unaware that their country may be made the linchpin of a broader U.S.-sponsored military alliance for Asia:
during 2003, if not since then, American and Indian officials discussed a possible ‘Asian NATO (North Atlantic Treaty Organisation)’ although the content of these discussions and of India’s significance for them has not been made public.An alliance is meaningless unless it is against something. NATO was originally fashioned as an alliance against the Soviet Union; the principal target of an Asian version would be China. Toward that end the Indian armed forces, particularly its navy, have been active. According to the new Maritime Doctrine, the Indian Navy is to dominate the Indian Ocean Region (IOR) “choke points, important islands, and vital trade routes.” By late 2004, it was to have started policing the IOR together with the Singaporean, Thai, and Philippine navies. Accordingly, the Indian Navy has embarked on a “Look East” program, sending goodwill missions to Southeast Asia (during which Indian vessels took part in naval maneuvers with Japan and Vietnam); making port calls in Vietnam, the Philippines, South Korea, and Japan; and conducting joint patrols with Singapore, Malaysia, and Indonesia. The purpose is to build links with countries near China, to familiarize the navy with the South China Sea as a potential theater of operations, and to develop the navy’s ability to operate far from home.

The Indian government’s stepped-up plans for the Indian Navy and its massive expansion of the Andaman and Nicobar bases should be seen in this light. According to one report,
The plan to set up the Far Eastern Naval Command (FENC) was set in concrete in 1995 following a closed-door meeting in Washington between then Indian prime minister, P. V. Narasimha Rao, and [then] US president, Bill Clinton....The US is expected to partly fund FENC because it is considered part of a US-led security arrangement for Asia in which India plays a key role. US funding was cleared in 2000 when Clinton visited India.India has built a particularly close relationship with Vietnam. Once a heroic fighter against U.S. imperialism, Vietnam has now been made, tragically, an indirect U.S. ally:India is increasing military sales to Vietnam, providing spares for overhauling its...aircraft...sending its officers to Vietnam for training in counter-insurgency and jungle warfare operations, while India’s coast guard and Vietnam’s sea police would cooperate to fight piracy. India is also providing help to build up the Vietnamese Navy....India has also agreed “in principle” to sell Vietnam the...Prithvi missile, train Vietnamese scientists in Indian nuclear establishments, and help Vietnam establish its own arms industry for small arms....The Indian Navy has also conducted combined exercises with the Vietnamese Navy.It is reported that, in exchange for transfer of missile technology, India may ask for an option to use Vietnam’s Cam Ranh Bay, the finest natural deep-water harbor in Asia.



India’s ties with the close U.S. ally Japan are growing. Japan’s navy, known as the Maritime Self-Defense Force, is now operating in the Indian Ocean region in support of the U.S. occupation of Afghanistan. The special significance of this operation (which was extended in April 2005 by a special act of legislation) is that it marks an important precedent: Japan’s first participation in an overseas military operation since 1945. The term “Self-Defense Force” for the Japanese military is clearly outdated. Japanese naval ships have used Indian port facilities during this period. In May 2004 Japan made a public offer to establish a “global partnership” with India to balance China’s rising power. In April 2005 the Indian and Japanese prime ministers met, reaffirmed their “global partnership,” and pledged to work as partners “against proliferation” of weapons of mass destruction. They announced that the Indian Coast Guard and the Japanese Coast Guard would establish a framework for effective cooperation, as would the two countries’ navies.


In 2000, then Indian defense minister George Fernandes declared that Vietnam and Japan were emerging as India’s strategic partners for countering piracy from the Indian Ocean to the South China Sea. “By doing so,” said the U.S. War College study, “they also serve notice on China that they will contest its efforts to dominate that sea.” Further, “India might find possibilities for enhanced defence cooperation with Thailand, Australia, Singapore, and the United States....” Indonesia may join the list.

In a speech to the Confederation of Indian Industry–World Economic Forum conference in New Delhi, India’s foreign secretary Shyam Saran made a fairly explicit statement of the plans for an “Asian NATO.” “In the context of Asia, there is no doubt that a major realignment of forces is taking place,” he said. China was emerging as a “global economic power” with significant military capabilities. The United States and India could “contribute to creating a greater balance in Asia.” In managing the security situation of the region, he said, there is a need for bringing “more and more countries within the discipline of a security paradigm for this region.”
The U.S. War College study spells out the benefits of an “Asian NATO”:


What’s in it for the United States? For one, the proposed security system is principally an in-region solution for dealing with two of the biggest international security threats—an over-ambitious China and the spread of Talibanised Islam. Second, this scheme being entirely indigenous, there is none of the odium that attends on US troops deployed locally as in South Korea and Japan....And, finally, it in no way precludes the presence in the extended region of the US armed forces or limits US military initiatives. However—and this is crucial—the entire scheme will fall apart if India does not nurse great power ambitions. Only if India sees itself as a great power, a “counterpoise to China in the region,” will it want to promote a broad anti-China alliance. And so the United States must push India to pursue its “manifest destiny”:


But crucial to making this system work is India’s being convinced of its ‘manifest destiny’ and for it to act forcefully. It will require in the main that New Delhi think geostrategically and give up its diffidence when it comes to advancing the country’s vital national interests and its almost knee-jerk bias to appease friends and foes alike. The corrective lies in the Indian government expressly defining its strategic interests and focus and, at a minimum, proceeding expeditiously towards obtaining a nuclear force with a proven and tested thermonuclear and an ICBM reach. Nothing less will persuade the putative Asian allies that India can be an effective counterpoise to China in the region, or compel respect for India in Washington.India’s great-power ambitions, then, are crucial to the success of U.S. plans for Asia. Indeed, the further Indian foreign policy is subordinated to U.S. strategic designs, the better India’s chances of winning U.S. backing at last for its single-minded drive to become a permanent member of the UN Security Council. While admitting that the United States had not supported India’s claim to UNSC membership, Manmohan Singh told Parliament that “when the time comes, I have reason to believe that we will not be ignored.”



In Conclusion
The prospects for a U.S.-India alliance seem attractive to the Indian rulers. First, because the United States evidently enjoys military superiority without precedent in world history, and therefore it seems in a good position to guarantee India a new global status. Secondly, perhaps more than ever before, the Indian upper classes, and even considerable sections of the urban middle class, by now identify with the United States’ world hegemony: Many have relatives in the United States; growing numbers of them work for U.S. firms or firms serving the United States (e.g., in the IT sector); and the explosion of foreign and domestic media during the last fifteen years has heightened this sense of identification. Official U.S. backing to India’s “great power” project will no doubt further consolidate support among these sections for a U.S.-India strategic alliance. Though a small minority, these sections play an important role in shaping “public opinion,” that is, in influencing broader sections.



However, there are several reasons why all will not go smoothly for the U.S.-India alliance now unfolding.
First, U.S. military superiority is overrated. It is by no means unchallenged. Even now it has been unable to suppress the resistance forces of just one country, Iraq. And it is overstretched globally and showing signs of strain. More significantly, the economic base of U.S. hegemony worldwide is fragile. Given this, its guarantees of “making India a global power” are even more fragile.



Secondly, the internal political difficulties of the Indian ruling classes are unlikely to be solved by India being deemed a “global power.” This is for the simple reason that while the upper sections of the class hierarchy have prospered from the changes that have taken place in the last two decades, the large majority have seen their conditions worsen. It is the latter sections, at the bottom of the pile, that are behind the turbulence in the domestic political scene. These sections live in such grinding misery that they are by and large not susceptible to propaganda about India’s “global status.”
The current trajectory of the Indian economy is not likely to change that fact. The growth of what is called “national income,” when accompanied by even faster growth of inequality, is of dubious benefit to the working sections. Had employment genuinely grown, the working sections would have benefited, but there has been negligible employment growth and thus (given the growing numbers seeking work) there has been rapid growth of unemployment. Further, major changes are in the offing that, in the process of creating opportunities for the foreign and domestic corporate sector, will wreak havoc with India’s small-peasant agriculture. With these changes, unemployment in the country is likely to become even more acute, and the political scene even more turbulent.
Thirdly, the United States today is set on a course of extraordinary military adventurism to shore up its declining imperialist power. We do not have space here to discuss this topic in the detail it deserves. Suffice it to mention a few examples. The invasion and occupation of Iraq, as it is now well known, is part of a broader U.S. scheme to grab physical control of as much as possible of the world’s oil. The well-known American investigative journalist Seymour Hersh writes that the U.S. government has been conducting secret reconnaissance missions inside Iran since summer 2004 in order to prepare for bombing strikes and commando raids “to destroy as much of the [Iranian] military infrastructure as possible” (“The Coming Wars,” New Yorker, January 24, 2005). Perhaps the main obstacle to the execution of this plan has been the continuing resistance in Iraq tying down the U.S. military.



Military plans to check China are longer-term, but no less adventurist. The Pentagon’s thinkers envision a new Cold War, writes Robert Kaplan approvingly in a piece titled “How We Would Fight China” (Atlantic, June 2005). Russia too is to be checked. The United States (with European help) has recently sponsored “revolutions” in Georgia and the Ukraine in order to construct a network of U.S. allies ringing Russia; in fact, the United States is pushing a specific proposal for a “security organization” in the region of the oil-rich Caspian Sea excluding Russia and China. The National Security Strategy of the United States of America (September 2002) declared that the United States would not tolerate the emergence of a competitor, not only for global hegemony, but even for regional hegemony in any part of the world.



Because it needs support in this task, the United States must encourage elements among its allies to entertain dreams of great-power status under U.S. aegis. Japan, with which the United States has concluded a broad-ranging strategic agreement in October 2005, is a striking example. The United States has been systematically encouraging Japan in recent years to abandon constitutional restraints on its armed forces and to dispatch them abroad. It has supported a prime minister (Koizumi) who has repeatedly paid homage to Japanese war criminals at the Yasukuni shrine, in a blatant appeal to reactionary sentiments in Japan and in deliberate provocation of China. It has made Japan the key partner of its program to militarize space.



The United States went so far as to adopt a “Nuclear Posture Review” in March 2002, directing the military to prepare for use of nuclear weapons against at least seven countries (China, Russia, pre-occupation Iraq, North Korea, Iran, Libya, and Syria). Further, it directed that the military should build smaller nuclear weapons for use in certain battlefield situations: against targets able to withstand non-nuclear attack; in retaliation for attacks with nuclear, biological or chemical weapons; or “in the event of surprising military developments.” The document said the United States would be prepared to use nuclear weapons in an Arab-Israeli conflict, in a war between China and Taiwan, or in an attack from North Korea on the south. In a nutshell, nuclear weapons would no longer be considered merely a “deterrent,” but could be used pre-emptively against a wide range of countries—even those without nuclear arms. The very announcement of this policy is intended to put potential adversaries on notice.



Thus it is no exaggeration to say that the United States is on a course of belligerence and terrorism against the people of the world. Various forces, of diverse character, have recognized this and are gearing up for the confrontation.



At the level of important military powers, China and Russia are moving closer. They have issued a joint “Declaration on the World Order” opposing unilateralism and the use of force and calling for multilateralism and reliance on the United Nations, peaceful use of outer space, and a world order “free from any claims to monopoly or dominance in international affairs.” They have formed a military alliance (the Shanghai Co-operation Organization) with four Central Asian countries. Most significantly, they have recently carried out their first joint military exercises, involving 10,000 troops in all.



However, Chinese and Russian opposition to the U.S. designs is confined to areas of their direct strategic interest. It is at the level of the world’s people that the opposition to U.S. designs is sharpest and broadest—a fact confirmed not only by several public opinion surveys, but, more importantly, in popular struggle the world over. In Latin America, which the United States considers its backyard, the United States faces unprecedented isolation, as George Bush discovered during a recent visit there. Similar is the case among the people (as distinct from the rulers) of West Asia and North Africa, Europe, and parts of East and Southeast Asia as well.
Therefore as the Indian rulers sign on to the U.S. military alliance, they tie India to the world’s most reactionary power and place it at the receiving end of the response of diverse anti-U.S. forces the world over. The negative consequences of that tying will be felt by the Indian people, in one form or the other: for example, through bloated military expenditures and increased danger of war and other retaliatory acts. So the Indian people must come to register their opposition to this subordination to U.S. designs and to the bogus “great-power” status, which can neither feed, nor clothe, nor house them.India’s Place in the US Strategic Order
The US and India have entered a new era.-- Opening words of the “New Framework for the US-India Defense Relationship”, June 28, 2005.



Three years ago, in explaining why our journal, which is devoted to analysing the Indian economy, was producing a special issue on the invasion of Iraq, we wrote: "India has become an important part of the US strategic order. That order is now focussed on seizing Iraq and some other states in West Asia; tomorrow it will shift its focus to [the rest of] Asia, which it sees as a region of increasing strategic importance."



In Asia, we argued, one of the US’s principal targets was China: "The integration of India into US military targeting of China will increase the risk of war for the Indian people.... The Indian public, however, is unaware that it is being thrust into this dangerous strategic chess-game by its rulers.” Thus, we explained, our special issue was about “the current US strategic agenda and its implications for the rest of the world. As the Indian rulers have placed India within that US agenda, it is necessary for us to understand its implications in depth." (Behind the Invasion of Iraq, Aspects no.s 33 & 34)



Developments have rapidly borne out this analysis. No doubt, the then Vajpayee government was defeated in the May 2004 elections, and was replaced by a Congress-led United Progressive Alliance, backed by the CPI, CPI(M) and other parties. No doubt the Common Minimum Programme of the UPA made vague noises about pursuing "an independent foreign policy keeping in mind past traditions", maintaining "the independence of India’s foreign policy position on all regional and global issues", opposing "all attempts at unilateralism", and so on.
For a year after the UPA assumed office, this pretence was kept up to some degree. Progress was made on talks with China on the border question and other issues; Manmohan Singh declared that relations with Russia have "never looked better" and claimed he saw "immense possibilities" in the "strategic triangle" of India, Russia and China; the petroleum minister negotiated for a pipeline to carry natural gas from Iran to India, in the face of blunt warnings by US officials; and no public commitments were made on certain pending deals with the United States, such as on the missile defence system and the Proliferation Security Initiative (described elsewhere in this issue).



Then, in rapid succession, three developments occurred; none preceded by any public discussion. On June 28, 2005 the Indian defence minister signed the "New Framework of Defence Relations" with the US. On July 18, 2005, the Indian Prime Minister issued a Joint Statement with the US President on a wide range of issues, including India’s nuclear programme. And on September 24, 2005, India voted against Iran in the meeting of the Board of Governors of the International Atomic Energy Authority (IAEA). Of course, these were not three independent developments: they were expressions of a single development.
US domination over India’s foreign policy has never been more starkly apparent. Former external affairs minister, Yashwant Sinha, who himself presided over unprecedented growth of US influence and control, now terms India a "client state of America". That term has long been applied to Pakistan; yet even Pakistan abstained on September 24 from voting for the US’s resolution in the IAEA.



In the following we address four questions: What sort of "global power" is India? What impelled the Indian government to take the three steps mentioned above? What is the global context in which these steps have been taken? What are the implications of these steps for the Indian people?





India as a 'Global Power'
One can hardly open a newspaper today without reading about India emerging as a 'global power'. This is not a spontaneous phenomenon.
The country's rulers have actively promoted this notion. Since the mid-1990s it was the BJP's favourite theme, and even Hindutva was made subsidiary to (in fact merged into) this theme. Thus the 1998 nuclear tests – christened 'Operation Shakti' (Strength) – occasioned a great display of chauvinistic breast-beating. The press was filled with editorials to the effect that India was now a power to be reckoned with in the world. The Prime Minister declared that India was now a 'nuclear weapon State', ready to stand up to western sanctions.



Of course, the reality was entirely different: Following the tests, the Indian government hastened to negotiate with the US to rehabilitate itself "internationally", that is, in the US's eyes. This began with a secret letter from Vajpayee to Clinton on May 11, 1998, the very day of the first set of tests, pleading for his understanding and assuring him that India "will continue to work with your country in a multilateral or bilateral framework to promote the cause of nuclear disarmament... In particular, we are ready to participate in the negotiations... for the conclusion of a fissile material cut-off treaty." Soon defiance of the US, even for public consumption, disappeared entirely from the rhetoric of the Indian government, to be replaced with assurances that the US government was now coming to "understand" and "appreciate" the Indian position.



Yet the theme of India's alleged new international status persisted. The BJP-led coalition indeed fought the last (2004) general elections on the slogan that it was making India a 'great power', even a 'superpower'. Its 'vision document' declared: "We have set the stage to reclaim our rightful inheritance as a Great Power", "India is now impatient to get to the top", and "The BJP is committed to making India a Developed Nation and Great Power on the global stage."1
At first, till 1999, the US government debunked this theme in often humiliating language. For example, in the wake of the May 1998 nuclear tests, the US Secretary of State said India's leaders lacked "maturity and responsibility"; she called their decision "reckless", "rash", and "dangerous". The Undersecretary of State said the tests "will gain [India] isolation and retribution". The US State Department spokesman spelled out several steps India would have to take to "get themselves out of the hole they've dug for themselves", failing which sanctions "would sting India for a long time to come". He specifically dismissed India's potential for emerging as a great power, and said that it would never be allowed to be a permanent member of the UN Security Council.



US shifts stanceBy January 1999, however (for reasons discussed later in this article), the US's public stance began to change. During the 1999 Kargil crisis, the US compelled Pakistan to withdraw its forces, allowing India to claim a victory. The April 2000 Clinton visit to India marked the turning-point to active celebration of US-India ties.



As the new Bush administration assumed office in January 2001, the US Secretary of State-designate testified at his Senate confirmation hearing that India was a "powerful country" which the US had to engage "more broadly": "We must deal more wisely with the world's largest democracy.... India has the potential to help keep the peace in the vast Indian Ocean and its periphery." Then US National Security Adviser Condoleezza Rice told India's external affairs minister in April 2001 that "we have watched India prove to the world that she deserves a place at the table of great powers."



Since then the theme of India's global importance has been repeated over and over by various agencies of the US government. A report of the National Intelligence Council of the USA, "Mapping the Global Future" (December 2004), predicts that India will emerge, like China, as a "new major global player" in the next 15 years. Meeting with India's external affairs minister in April 2005, US President Bush "spoke about India as a global power with which the US wanted to work very closely..." On his November 2005 visit to India, US treasury secretary John Snow pronounced that "India is emerging as one of the great economic powers of the world."



Historically, over the past two centuries, several countries such as the United States, Germany, and Japan have risen as great powers, unsettling the existing world order as they did so. Today, a (prospective) united Europe and China are talked of by many as potential future contenders for global hegemony. The rise of some powers and receding of others is inherent to capitalism, which develops unevenly. Indeed all capitalist powers, by their nature, strive for hegemony on the strength of their respective capital. The basis for the change in the world order is the decline in the strength of some power or powers, and the growing economic strength of new powers, which makes possible the latter's military rise. No country was made a great or global power by any other power; rather, in each case of a rising power, other powers have been compelled to acknowledge the new entrant as it forced its way to the imperialist dining-table.
It is revealing, then, that US Secretary of State Condoleezza Rice, during her March 2005 visit to New Delhi, offered to "make India a world power". This was not a vague promise: in a confidential briefing on March 25, US State Department officials outlined to Indian officials the US "plan" to make India a world power.2 The Indian side shared this perspective: On March 30, 2005, Prime Minister Manmohan Singh said, "India needs help from the world community, including the US, to emerge as a global power."
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Speaking on an earlier occasion, Manmohan Singh thus confessed that
We have to recognise that the US is a superpower. International relations are, in the final analysis, power relations. And we are living in a world of unequal power. We cannot wish away the realities of this situation. We have to use the available international system to promote our interests. And, therefore, we have a necessity to engage the US. The US plays a very important role in the world economy, the political world system and we cannot wish that away. (7-11-04)



Text of Indo-US Agreements
THE DEFENSE FRAMEWORK
Signed on June 28, 2005 in Washington DC by Minister of Defense of India, Pranab Mukherjee& Secretary of Defense of the United States, Donald Rumsfeld



NEW FRAMEWORK FOR THE U.S.-INDIA DEFENSE RELATIONSHIP
1. The United States and India have entered a new era. We are transforming our relationship to reflect our common principles and shared national interests. As the world's two largest democracies, the United States and India agree on the vital importance of political and economic freedom, democratic institutions, the rule of law, security, and opportunity around the world. The leaders of our two countries are building a U.S.-India strategic partnership in pursuit of these principles and interests.
2. Ten years ago, in January 1995, the Agreed Minute on Defense Relations Between the United States and India was signed. Since then, changes in the international security environment have challenged our countries in ways unforeseen ten years ago. The U.S.-India defense relationship has advanced in a short time to unprecedented levels of cooperation unimaginable in 1995. Today, we agree on a new Framework that builds on past successes, seizes new opportunities, and charts a course for the U.S.-India defense relationship for the next ten years. This defense relationship will support, and will be an element of, the broader U.S.-India strategic partnership.
3. The U.S.-India defense relationship derives from a common belief in freedom, democracy, and the rule of law, and seeks to advance shared security interests. These interests include:
-- maintaining security and stability;-- defeating terrorism and violent religious extremism;-- preventing the spread of weapons of mass destruction and associated materials, data, and technologies; and -- protecting the free flow of commerce via land, air and sea lanes.
4. In pursuit of this shared vision of an expanded and deeper U.S.-India strategic relationship, our defense establishments shall:
A. conduct joint and combined exercises and exchanges;
B. collaborate in multinational operations when it is in their common interest;
C. strengthen the capabilities of our militaries to promote security and defeat terrorism;
D. expand interaction with other nations in ways that promote regional and global peace and stability;
E. enhance capabilities to combat the proliferation of weapons of mass destruction;
F. in the context of our strategic relationship, expand two-way defense trade between our countries. The United States and India will work to conclude defense transactions, not solely as ends in and of themselves, but as a means to strengthen our countries' security, reinforce our strategic partnership, achieve greater interaction between our armed forces, and build greater understanding between our defense establishments;
G. in the context of defense trade and a framework of technology security safeguards, increase opportunities for technology transfer, collaboration, co-production, and research and development;
H. expand collaboration relating to missile defense;
I. strengthen the abilities of our militaries to respond quickly to disaster situations, including in combined operations;
J. assist in building worldwide capacity to conduct successful peacekeeping operations, with a focus on enabling other countries to field trained, capable forces for these operations;
K. conduct exchanges on defense strategy and defense transformation;
L. increase exchanges of intelligence; and
M. continue strategic-level discussions by senior leadership from the U.S. Department of Defense and India's Ministry of Defence, in which the two sides exchange perspectives on international security issues of common interest, with the aim of increasing mutual understanding, promoting shared objectives, and developing common approaches.
5. The Defense Policy Group shall continue to serve as the primary mechanism to guide the U.S.-India strategic defense relationship. The Defense Policy Group will make appropriate adjustments to the structure and frequency of its meetings and of its subgroups, when agreed to by the Defense Policy Group co-chairs, to ensure that it remains an effective mechanism to advance U.S.-India defense cooperation.
6. In recognition of the growing breadth and depth of the U.S.-India strategic defense relationship, we hereby establish the Defense Procurement and Production Group and institute a Joint Working Group for mid-year review of work overseen by the Defense Policy Group.
-- The Defense Procurement and Production Group will oversee defense trade, as well as prospects for co-production and technology collaboration, broadening the scope of its predecessor subgroup the Security Cooperation Group.
-- The Defense Joint Working Group will be subordinate to the Defense Policy Group and will meet at least once per year to perform a midyear review of work overseen by the Defense Policy Group and its subgroups (the Defense Procurement and Production Group, the Joint Technical Group, the Military Cooperation Group, and the Senior Technology Security Group), and to prepare issues for the annual meeting of the Defense Policy Group.
7. The Defense Policy Group and its subgroups will rely upon this Framework for guidance on the principles and objectives of the U.S.-India strategic relationship, and will strive to achieve those objectives.
Signed in Arlington, Virginia, USA, on June 28, 2005, in two copies in English, each being equally authentic.
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For Immediate ReleaseOffice of the Press SecretaryJuly 18, 2005
Joint Statement between President George W. Bush and Prime Minister Manmohan Singh
Prime Minister Manmohan Singh and President Bush today declare their resolve to transform the relationship between their countries and establish a global partnership. As leaders of nations committed to the values of human freedom, democracy and rule of law, the new relationship between India and the United States will promote stability, democracy, prosperity and peace throughout the world. It will enhance our ability to work together to provide global leadership in areas of mutual concern and interest.
Building on their common values and interests, the two leaders resolve:
To create an international environment conducive to promotion of democratic values, and to strengthen democratic practices in societies which wish to become more open and pluralistic. To combat terrorism relentlessly. They applaud the active and vigorous counterterrorism cooperation between the two countries and support more international efforts in this direction. Terrorism is a global scourge and the one we will fight everywhere. The two leaders strongly affirm their commitment to the conclusion by September of a UN comprehensive convention against international terrorism. The Prime Minister's visit coincides with the completion of the Next Steps in Strategic Partnership (NSSP) initiative, launched in January 2004. The two leaders agree that this provides the basis for expanding bilateral activities and commerce in space, civil nuclear energy and dual-use technology. Drawing on their mutual vision for the U.S.-India relationship, and our joint objectives as strong long-standing democracies, the two leaders agree on the following:
FOR THE ECONOMY
Revitalize the U.S.-India Economic Dialogue and launch a CEO Forum to harness private sector energy and ideas to deepen the bilateral economic relationship. Support and accelerate economic growth in both countries through greater trade, investment, and technology collaboration. Promote modernization of India's infrastructure as a prerequisite for the continued growth of the Indian economy. As India enhances its investment climate, opportunities for investment will increase. Launch a U.S.-India Knowledge Initiative on Agriculture focused on promoting teaching, research, service and commercial linkages. FOR ENERGY AND THE ENVIRONMENT
Strengthen energy security and promote the development of stable and efficient energy markets in India with a view to ensuring adequate, affordable energy supplies and conscious of the need for sustainable development. These issues will be addressed through the U.S.-India Energy Dialogue. Agree on the need to promote the imperatives of development and safeguarding the environment, commit to developing and deploying cleaner, more efficient, affordable, and diversified energy technologies. FOR DEMOCRACY AND DEVELOPMENT
Develop and support, through the new U.S.-India Global Democracy Initiative in countries that seek such assistance, institutions and resources that strengthen the foundations that make democracies credible and effective. India and the U.S. will work together to strengthen democratic practices and capacities and contribute to the new U.N. Democracy Fund. Commit to strengthen cooperation and combat HIV/AIDs at a global level through an initiative that mobilizes private sector and government resources, knowledge, and expertise. FOR NON-PROLIFERATION AND SECURITY
Express satisfaction at the New Framework for the U.S.-India Defense Relationship as a basis for future cooperation, including in the field of defense technology. Commit to play a leading role in international efforts to prevent the proliferation of Weapons of Mass Destruction. The U.S. welcomed the adoption by India of legislation on WMD (Prevention of Unlawful Activities Bill). Launch a new U.S.-India Disaster Relief Initiative that builds on the experience of the Tsunami Core Group, to strengthen cooperation to prepare for and conduct disaster relief operations. FOR HIGH-TECHNOLOGY AND SPACE
Sign a Science and Technology Framework Agreement, building on the U.S.-India High-Technology Cooperation Group (HTCG), to provide for joint research and training, and the establishment of public-private partnerships. Build closer ties in space exploration, satellite navigation and launch, and in the commercial space arena through mechanisms such as the U.S.-India Working Group on Civil Space Cooperation. Building on the strengthened nonproliferation commitments undertaken in the NSSP, to remove certain Indian organizations from the Department of Commerce's Entity List. Recognizing the significance of civilian nuclear energy for meeting growing global energy demands in a cleaner and more efficient manner, the two leaders discussed India's plans to develop its civilian nuclear energy program.
President Bush conveyed his appreciation to the Prime Minister over India's strong commitment to preventing WMD proliferation and stated that as a responsible state with advanced nuclear technology, India should acquire the same benefits and advantages as other such states. The President told the Prime Minister that he will work to achieve full civil nuclear energy cooperation with India as it realizes its goals of promoting nuclear power and achieving energy security. The President would also seek agreement from Congress to adjust U.S. laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India, including but not limited to expeditious consideration of fuel supplies for safeguarded nuclear reactors at Tarapur. In the meantime, the United States will encourage its partners to also consider this request expeditiously. India has expressed its interest in ITER and a willingness to contribute. The United States will consult with its partners considering India's participation. The United States will consult with the other participants in the Generation IV International Forum with a view toward India's inclusion.
The Prime Minister conveyed that for his part, India would reciprocally agree that it would be ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States. These responsibilities and practices consist of identifying and separating civilian and military nuclear facilities and programs in a phased manner and filing a declaration regarding its civilians facilities with the International Atomic Energy Agency (IAEA); taking a decision to place voluntarily its civilian nuclear facilities under IAEA safeguards; signing and adhering to an Additional Protocol with respect to civilian nuclear facilities; continuing India's unilateral moratorium on nuclear testing; working with the United States for the conclusion of a multilateral Fissile Material Cut Off Treaty; refraining from transfer of enrichment and reprocessing technologies to states that do not have them and supporting international efforts to limit their spread; and ensuring that the necessary steps have been taken to secure nuclear materials and technology through comprehensive export control legislation and through harmonization and adherence to Missile Technology Control Regime (MTCR) and Nuclear Suppliers Group (NSG) guidelines. The President welcomed the Prime Minister's assurance. The two leaders agreed to establish a working group to undertake on a phased basis in the months ahead the necessary actions mentioned above to fulfill these commitments. The President and Prime Minister also agreed that they would review this progress when the President visits India in 2006.
The two leaders also reiterated their commitment that their countries would play a leading role in international efforts to prevent the proliferation of weapons of mass destruction, including nuclear, chemical, biological and radiological weapons.
In light of this closer relationship, and the recognition of India's growing role in enhancing regional and global security, the Prime Minister and the President agree that international institutions must fully reflect changes in the global scenario that have taken place since 1945. The President reiterated his view that international institutions are going to have to adapt to reflect India's central and growing role. The two leaders state their expectations that India and the United States will strengthen their cooperation in global forums.
Prime Minister Manmohan Singh thanks President Bush for the warmth of his reception and the generosity of his hospitality. He extends an invitation to President Bush to visit India at his convenience and the President accepts that invitation.
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