Tag Archives: India

An India-Japan alliance


For most of the last half century, Washington “visioners” have been trying to cement relations between Japan and India. The match seemed natural: Japan’s highly industrialized economy needed markets and raw materials from a still industrializing India. That, it has always been argued, would reinforce a political, and perhaps eventually military alliance, between Asia’s two largest democracies. After the 1949 collapse of China’s Nationalists, such a combination seemed an important contribution to The Cold War effort to halt Communist expansion in Asia. After all, it was reasoned, Japan shared India’s Hindu origins of Buddhism as well as a contemporary dedication to representative democracy.

Washington’s planners even went so far as to include such calculations in the massive economic aid programs to India, South Korea, Taiwan and South Vietnam in the 1950s and 60s. But a special fund set up for regional collaboration – essentially Japan and India — extended year after year, only produced one project. That was a development of an iron ore deposit, a railroad, and a port – originally intended to replace Calcutta as India’s then major commercial center, on the Bay of Bengal.

When Prime Minister Shinzo Abe toured India this month, it appeared that after all Washington’s huffing and puffing, the two countries were on their own settling into the kind of elaborate cooperation Washington geopolitcians hypothesized. The growing specter of Chinese economic as well as military expansion certainly played a role [China is, ironically on of both countries’ largest trading partners.] Leading the new effort is a $15 billion dollar low-interest Japanese loan to finance a favorite project of Prime Minister Narenda Modi, a new fast railway from Bombay, India’s commercial capital, to Ahmnebad, capital of Modi’s native Gujerat state – and eventually to the Indian capital of New Delhi.

Modi, trying to break the mould of a half century of Indian state capitalism, is using Japan to expand the country’s weak infrastructure which most economists see as its greatest barrier to the kind of economic take-off in China in the past three decades. India has the theoretical capacity not only to repeat China’s “miracle” but to go far beyond it with its enormous raw materials resources and one of the youngest – and soon to be largest – populations. Snuggling Japan into the Indian economic picture also could be the wedge needed to defeat the ever present “East India Complex” – the paranoia of India’s enormously powerful “babus”against foreign investment. These bureaucratic clerks whom politicians have relied on in post-British India are one of Modi’s most difficult problems.

Given the long history of Tokyo’s effort to achieve a breakthrough, it is still early to predict its ultimate success. Probably no two international negotiators have larger cultural differences than the Japanese and Indians; the first with their mania for an almost sexual satisfaction from extended negotiation, and the Indian tendency for talk for its own sake.

A shadow, too, hangs over Modi’s political following. He does represent new entrepreneurial tendencies among smaller Indian businessmen – India’s big brandnames often have chosen to go abroad rather than fight through local problems. But his party’s origins in Hindu chauvinism are dangerous at a time when the Islamicists are attempting to infiltrate India’s Muslims. [With 180-million, they are the world’s third largest the world’s third largest Islamic community, much of it mired in poverty and ignorance.] India’s blood links to the political disorder in neighboring Muslim Pakistan, carved too out of British India, make such a threat all the more real.

Still, the new Japan-India ties are a welcome development in an Asia where the Obama Administration’s “pivot” has failed to materialize, and Beijing’s aggressive intent is manifest all around – including India’s disputed Himalayan frontier with Tibet..

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A vicious circle tightens



The globalized economy’s undertow is ripping all around the world.

Even the economic optimists’ two darlings, China and India, are now troubled. Seen as the world’s growth machine [along with a now overheated Brazil] in a period of advanced economies’ stagnation, their downturn produces a universally grim world outlook.

India, now the world’s largest population, had promise to overtake

China – perhaps more stable with its veteran private sector and representative government. But inflation threatens with food almost half its consumer index rising to more than 9 percent last month. Prime Minister Manmoham Singh, after all a graduate of Soviet-style Indian planning, has his foot on the brake and gas pedal at the same time. Reserve Bank of India rates force lending for preferred firms to 13 percent and notorious paper-shuffling babus [clerks] hobble initiative, sending Indian coal companies, for example, despite some of the world’s largest reserves, chasing projects from Australia to North America. A spate of influence peddling scandals, including $16-billion in telecommunications, further clouds the scene.

New Delhi’s geopolitical rival, China, has turned its back on its 25-year strategy to prevent destabilization of one-party dictatorship with maximum growth. With incipient inflation, Communist leadership enters a generational succession next year trimming its investment-led behemoth’s sails. Widespread civil violence – despite enormous expenditures for the most elaborate hi-tech suppression machine in the history of authoritarianism – jeopardizes any new tactics. In fact, all the Chinese boom’s contradictory chickens simultaneously are coming home to roost: vast overexpansion of infrastructure feeding the boom [along with subsidized exports] has produced marvels for photographers but a real estate bubble including, literally, empty new cities. There’s growing resentment over second class citizenship and lack of services among more than 200 million migrant labor from rural areas stampeded to coastal cities employment. Declining foreign markets, roaring imported commodity prices [ironically brought on in part by speculation on “unlimited” Chinese demand], wage pressure, competition from export-led cheap-wage producers, monumental corruption, all now threaten “the Chinese model”. Consumption continues to decline as a percentage of domestic product mocking talk of redirecting a growth strategy. A combination of nonconvertibility and hot money chasing an undervalued yuan demonstrates how empty talk of it as an international reserve currency is. Beijing’s capacity for foot in mouth disease is epitomized in its increasing hoard of dollars and Treasury debt [again on the upswing] while officials continuously publicly denigrate the dollar.

So much for “the emerging markets”.

Turning to the developed world, there, too, crises are escalating.

A bureaucratic hassle over the Euro with divergent views in Berlin, Paris, Brussels and Frankfurt is turning into a dragged out effort to save the 17 European Union members’ common currency. Meanwhile other integration efforts — a free labor market and common defense and foreign policy — are faltering. A Greek default could produce a European banking crisis [even contagion for North America]. In other words, a fiscal and monetary crisis is turning into a major political upheaval threatening accepted European patterns. Half-baked intervention in Libya, dragging in NATO and the U.S., was announced in idealistic terms by Europe’s leaders. But it encapsulates European concerns – unlike the increasingly hot American debate over Obama Administration’s opting for “a war of choice”. For Europe “Libya” is linked directly to falling birthrates and need for imported labor and unemployed North African, Middle Eastern and Black African youth almost literally swimming the Mediterranean at a time Muslim immigrant assimilation is increasingly questioned.

Europe faces, too, the fact the world’s window to the U.S. consumer maw which supplied the post-World War II economy not only with unlimited markets but revolutionary technology has a “closed for repairs” sign with no reopening time indicated. Whatever happens after decades of drunken sailor’s spending, there will be no substantial U.S. economic strategy in place until after November 2012. Current Washington debate, if it can be dignified with that title, over raising the debt limit and reducing government spending, is simply a foretaste of the pain necessary to get the U.S. economy – perhaps now sliding into a double-dip recession — back to its historic miraculous production of jobs and expanding markets.

It’s going to be a long hot summer and a grim fall — despite the American sideshow of political shenanigans with the curtain only temporarily coming down on the first [Weiner] scene.

The Pakistan conundrum


Everything about Pakistan from its very beginning has been anomalous.

It was dreamed up by romantic poets but survival has depended on a stolid military drawing on British Indian Army professionalism. Its parameters were defined by Islam but its secularist elite sought a nation-state where none had ever existed. Its ethnic and linguistic diversity matches the Indian subcontinent’s endless array of races and cultures. Originally it grouped noncontiguous areas – East Bengal [Bangladesh], 1500 miles across India, seceded in 1971. From the beginning disputed borders included the world’s bitterest dispute, Kashmir.

Pakistan survived the first decade’s chaos after the 1947 British Indian Empire Partition with a million deaths and 25 million “population swaps” and began to modernize. Laissez-faire economics and signing on American anti-Soviet military pacts contrasted sharply with India’s Moscow alliance and catastrophic Soviet planning. But grasping feudal elites intertwined with repeated military takeovers brought on by near breakdowns — plus three and a half wars with India — generated a descending spiral.

Still, although among the world’s poorest, Pakistanis have produced brilliant entrepreneurs and talented professionals, many prospering in a 10-million diaspora [now suffering jihadist infiltration, particularly in Britain.] They remit more than $10 billion annually helping keep the country afloat.

But now, for all the U.S.’s satisfaction and strategic and tactical gain in ending Osama Ben Ladin’s career, one outcome is further erosion for Pakistan. Whatever your favorite conspiracy theory, Islamabad looks weak, incompetent and conflicted to its own people and the world. A fanatical jihadist minority had already been murdering its most popular secular politicians – including former prime minister Benazir Bhutto, wife of President Asaf Ali Zardari. Xenophobia arising from poverty and instability grows. [Only hours after the American raid, Karachi, Pakistan’s megapolis port-city of 20 million – and pivot for U.S. Afghanistan logistics — was paralyzed by political assassination only tangentially related to Ben Ladin.]

Nothing so characterizes these problems as “a victim syndrome” dominating Pakistan’s collective psyche — as it does the rest of the Muslim world. With some justification, Pakistanis see themselves used by Washington during the early Cold War [including as a base for U2 spy Soviet Union overflights], abandoned until time came to scotch Russia’s age-old drive to the Indian Ocean through Afghanistan, abandoned after the Soviet Union’s implosion until Islamabad’s cooperation again became essential to blowing al Qaeda’s Afghan Taliban sanctuary.

Current American withdrawal speculation feeds this old complaint and, although whispered, emphasizes Islamabad’s reliance on its “all weather” alliance with China. From Pakistan’s perspective, even the purportedly unofficial A.G. Khan nuclear proliferation network, a major friction point with Washington, bought Chinese missile technology [much of it “borrowed” from the U.S.]. That gives Pakistan at least a temporary advantage facing much larger, better armed India, always at the heart of Pakistan nightmares — and strategies. It’s reciprocated: before the Abottabad blood dried, Indian Chief of Army Staff V.K. Singh publicly claimed India could replicate the American raid. Pakistan’s Chief of General Staff Pervez Kayani’s immediate rejoiner: further American incursions would not be tolerated. Others threatened an Indian foray would be “catastrophic”; Pakistan recently talked of tactical nuclear weapons deployment.

Not only has Washington waffled, but it has fantasized. In the Bush II years, Sec. of State Condoleeza Rice announced henceforth Washington would treat each country separately without regard to their relationship. But when the Obama Administration named Amb. Richard Holbrooke as the essential coordinator for Afghanistan, Pakistan and India, Washington caved immediately after New Delhi demanded his purview exclude New Delhi.

These complications show why Capital Beltway blather about Pakistan is not only irrelevant but dangerous. Yes, it would be satisfying to end massive U.S. aid — $7 billion in non-military since 1951, $1 billion arms and training annually since 2005. But then what?

Conspiracy theories – ranging from top level Pakistanis having safehoused Osama Ben Ladin to complicity of those same officials in the raid – will continue to proliferate. Soon Pakistan’s vast population [250 million] could again retreat to the edge of the U.S.’s consciousness. Yet Pakistan would be sidelined only at the world’s peril as the long-arm of 9/11 and other terrorist events, many including Pakistanis, have proved. Washington policymakers must help formulate how to prevent a nuclear-armed Pakistan turning into a failed state, threatening everyone — not least India’s 1.3 billion and its own Pakistan-size Muslim minority.

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The riches of the Indies goes on the bloc


David Cameron, the UK’s novice prime minister, couldn’t have expected to reestablish “the raj”. But he hoped to burnish the British commercial image during a summer doldrums India visit. He came loaded for the proverbial tiger – the biggest delegation since Indian independence 63 years ago including cabinet ministers, businessmen and sports stars. It would take all that to halt the slippage in UK trade and investment being displaced, in part by the U.S., and others [not the least, ironically, the Chinese].

But like other commercial [and diplomatic] hopefuls making the pilgrimage, Cameron ran into “The East Asia Company Syndrome” — fear investment will lead to untoward foreign influence. Not least, too, he walked into the India-Pakistan feud which dominates every decision. Despite elaborate apologies for “colonialism”, he committed a public gaff – as some of his American cousins too often have – criticizing, in this case Pakistani links to terrorism, before an Indian audience. Not only would it muddle his Pakistan stopover [where he hopes to talk eventual withdrawal from Afghanistan] but delicate ties to monitor the UK’s two million South Indian Muslims too often linked to domestic terrorism in all three countries.

Cameron could be excused for stumbling. The terrain is rocky with Indian Prime Minister Manmohan Singh balancing a constantly shifting coalition, with the heir of the Nehrus, the widow Italian-born Sonia Gandhi, backseat driver as leader of his National Congress Party. She grooms her son, 39-year-old Rahul, for the fourth dynastic generation founded by his great grandfather, the sainted Jawharlal Nehru, followed by his daughter, Indira Gandhi [assassinated b y her Sikh bodyguard], her son Rajiv [martyred by a Sri Lankan Tamil Tiger suicide “black widow”], Rahul’s father. Cameron didn’t manage to see either.

Cameron was exploring abiding hope the massive 2009 win of Singh’s Congress against the Hindu-revivalist but business friendly Baharat Janata Party  would bring a major overhaul of the Soviet-styled Indian economy. Singh, a planning bureaucrat until his conversion to market economics on the road to the 1990 Soviet implosion, promised to sweep away the babu [British Indian clerks] and socialist protectionism in his own leftwing. But more than one foreign investor is still waiting – not least major retailers [such as Walmart] who have played an enormous role in China’s export onslaught on world markets. Over the past year Singh shelved opening retail, pension and insurance sectors, not able to play host to any and all investors which has been so much the key to China’s success.

Still, Asia’s third largest economy hasn’t done badly. The International Monetary Fund projects 9.4% growth for 2010, slackening to a still-impressive 8.4% for 2011. New Delhi, like Beijing, had hoped to escape the worldwide recession. But exports crashed; there was capital flight [not the least India’s oligarchic capitalists heading for secure Western investments, particularly in the UK]. The government went to stimulus to prop up the 6.7% in 2008-09. That has brought a growing inflation challenge now running at over 10% and even higher food prices.

But the return to growth points up overwhelming long-term geopolitical questions: is India the tortoise against China’s hare? Can its more modulated program – governed by minimum accoutrements as the world’s largest democracy – produce sustained long-term development now that China’s rickety high-pace structure is under increased pressure?  And, never stated openly, can an alliance between a rapidly industrializing India and the U.S. and its partners [Cameron out front] counter what is increasing suspicion of Chinese intentions?

Debate often ignores India’s problems, even though they are constantly ventilated by a free media and no surfeit of domestic critics. However, only a few note the backwardness of China’s vast majority in capital-starved rural areas. But the horror of India’s 650,000 villages, including 410 million Indians living at subsistence level [out of a population of some 1.2 billion, soon to surpass China’s 1.3 billion] is constant. Singh’s subsidies to bankrupt farmers [egging on the inflation] and the leap-frogging technology – well over half a million cell phones and 130 million TVs for villagers who often do not have safe drinking water – ameliorates but only highlights inequities of one of the world’s most skewed income distributions.

But that is only the beginning of India’s woes. Nihilistic self-styled Maoists — that the Prime Minister has labeled India’s greatest security risk, replacing the usual “Pakistan” – are building in a dozen Indian states with a confused government  alternately seeking federal and state solutions. A half dozen local independence guerrilla movements operate in the northeast – too close to Chinese-occupied Tibet where New Delhi had a short and disastrous war with Beijing in 1962. As China’s growing naval forces encroach in the Indian Ocean which New Delhi considers home grounds, a massive military buildup is underway. [U.S. manufactures hope to cop the $11 billion fighter plane ticket.]

Cameron’s old school try – Eton and Oxford, doncha know – probably wasn’t up to more than denting all this. But he did make the effort and is likely to be followed soon by others, the U.S. and the Germans.

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Not a clean breast of it!


Agents for Britain’s MI5 intelligence service have discovered that Muslim doctors trained at some of Britain’s leading teaching hospitals have returned to their own countries to fit surgical implants filled with explosives, according to a report from Joseph Farah’s G2 Bulletin.