Analysis: Did Hillary Clinton's feel-good visit leave India feeling bad?

Browbeating India on Iran undermines talk of 'strategic partnership.'

By Jason Overdorf

GlobalPost May 10, 2012

NEW DELHI, India – Washington's feel-good mission to India this week was long on browbeating and short on substance, analysts here say, signaling that America has yet to understand its supposed strategic partner.

Landing first in Kolkata, US Secretary of State Hillary Clinton came to India with a substantive agenda. She acknowledged the importance of regional leaders to Prime Minister Manmohan Singh's coalition government by meeting with West Bengal Chief Minister Mamata Banerjee — the biggest impediment to opening India's multibrand retail sector to investments from foreign companies like Walmart — in Kolkata Monday.

Then, she moved on to meet Singh and Congress Party President Sonia Gandhi, as well as Foreign Minister SM Krishna, in New Delhi later in the week.

But whatever groundwork for cooperation Clinton might have laid in her private meetings with these leaders in advance of next month's strategic dialogue in Washington was undermined by her public speeches browbeating India on Iran and mouthing the same old platitudes on Pakistan, Indian policy experts say.

“She's overplaying her hand on Iran,” said Kanwal Sibal, former Indian foreign secretary. “Knowing the complexities in India and the political sensitivities involved, for her to publicly pressure India to reduce its oil purchases from Iran, I don't think it sits well with the larger political establishment in New Delhi. I don't think she's winning any arguments in favor of her case. On the contrary, she's causing a degree of resentment.”

From the outset, Clinton's visit was awkwardly timed. Apparently designed to encourage India to further reduce its oil imports from Iran, in compliance with US sanctions, it coincided with the visit of a trade delegation from Tehran.

“It is too difficult to tell at the moment” if she was able to establish any common ground, according to Sumit Ganguly, political science professor and Indian cultures expert at Indiana University. “Also, India may have trouble trying to reduce its dependence [on Iranian oil] too drastically.”

Other observers are pessimistic.

Already, India's oil imports from Iran plunged 34 percent in April, as Indian refiners are expected to cut volumes from Iran by more than 20 percent this year. However, India is reluctant to rely too fully on oil from Saudi Arabia, which is a staunch supporter of Pakistan.Despite its public rejection of US sanctions on Iranian oil, India has been quietly reducing its imports, and has negotiated a deal to make half of its purchases in Indian rupees — which Tehran can only spend on goods made in India.

By using the bully pulpit to make her case (and speak over Indian heads to poll-bound Americans), Clinton may therefore have alienated a government that was already convinced and taking action, some argue.

In Kolkata, for instance, Clinton “played up” Tehran's alleged involvement in the attempted assassination of an Israeli diplomat in New Delhi this February, asserting that Iran is a terrorist state. Meanwhile, she went no further than to repeat Washington's usual formulations on Pakistan — that Islamabad “should do more” to ensure that terrorists don't use the country as a launchpad, Sibal said.

“From our point of view, Pakistan has been involved in terrorism for years and years and years, and there's this terrible thing that happened in Mumbai. But Pakistan is not declared a terrorist state ... The United States doesn't even talk politically of Pakistan as a terrorist state,” Sibal said. “In this background, based on this one-off incident, to tell us that Iran is a terrorist state, I don't think is going to win her points.”

Indian and American interests converge more today than ever before. Washington would like New Delhi to become a stronger player in the region to offset some of Beijing's growing power. America's ongoing pivot toward the Pacific coincides with India's "Look East" policy aimed at broadening its trade and influence in Southeast Asia. And America's historical alliance with Pakistan is now barely limping onward as a marriage of convenience.

But that doesn't mean that the Indian and American agendas converge on every point.

In proceeding directly to India from her visit to China, for instance, Clinton underscored Washington's position that it views both countries as of equal importance. Yet amid support for India's move into Southeast Asia, the US also continues to entertain China's ambitions in India's backyard.

And whatever avowals Washington is willing to make privately about the desire to balance China with another rising power, when it comes to issues like the dispute over the borders of Kashmir and Arunachal Pradesh, America wisely retains a studied silence.

“If things turn hot with China, we can't really rely on the US to back us,” said Rajiv Sikri, a former Indian ambassador to the US. “So how can India be burning its boats with China, or Iran, or any other country? The US attitude in moments of crisis will be determined by US national interests which may or may not coincide with India's.”

In a nutshell, that's why Indian policymakers are reluctant to give up the country's historical stance of “non-alignment” and stake the country's future on a full-fledged alliance with the US.

But perhaps more importantly for Clinton's visit, for any Indian leader to publicly kowtow to American dictates in India's neighborhood — however desirable the intended outcomes may be — would be tantamount to political suicide. So while Clinton spoke as though her administration is the only one with an upcoming election to worry about, her interlocutors in India's Congress Party forged full speed ahead to push new trade agreements with Tehran across town.

It was as clear a sign as any that Washington is still somewhat in denial about the nature of this strategic partnership.

“India will never be in the kind of position that Japan or some of the other allies are,” said Sikri. “The US is not offering the kind of security umbrella to India that it does to these countries, and it never will. Nor will the Indians accept it, I think. Nor is it a feasible proposition. So for the US to expect India to accept blindly whatever the Americans say is extremely naive.”

According to Indiana University's Ganguly, India's move to boost trade ties with Iran in the midst of Clinton's visit sent a “very bad” signal in that context, suggesting that New Delhi's response to American policies will continue to be a kneejerk no to preserve a “hackneyed” idea of India's strategic autonomy.

But insiders from India's foreign policy establishment like former ambassador Sikri argue that India's “feisty” response to US pressure on Iran marked a maturation of the strategic partnership, rather than its decay.

“There is a genuine friendship with the United States, a desire for closer ties, through trade, commerce, people-to-people relationships, which makes for a very deep, across the board Indo-US partnership,” Sikri said. “Even when government-to-government relations are not the best, these sustain it. We can have a dialogue with the US that enables us to have a candid exchange of views without derailing the relationship.”

India: School revolution on the way?

India's Supreme Court upholds law forcing private schools to admit poor students.

By Jason Overdorf
GlobalPost (April 15, 2012)

NEW DELHI, India — In a landmark judgment this week, India's Supreme Court upheld the constitutionality of a law that requires almost all private schools to reserve 25 percent of their seats for poor students.

The decision potentially paves the way for huge changes in primary and secondary school education here.

In a country where a quarter of the population is illiterate and the caste system is still alive and well, the move is lauded by some as an equalizer on par with the decision to desegregate American schools in the 1960s.

“I see this entire process as the beginning of a revolution,” said Ashok Agarwal, a lawyer affiliated with an organization called Social Jurists, who says previously fewer than 1 percent of private schools made a sincere effort to admit poor students.

According to a recent survey conducted by Pratham, an NGO, 96.5 percent of Indian children between the ages of 6 and 14 are enrolled in schools.

But with private players charging as much as $200 per month compared to less than a dollar in fees at those run by the government, there are vast differences between the schools they attend.

Though India has more than a million goverment-run schools and only around 250,000 private ones, with rare exceptions only the very poor attend government institutions. The division reinforces a broad socio-economic gap between the haves and have nots. And some argue that the failure to educate the poor threatens to derail India's economic miracle before it really gets rolling.

A recent survey conducted by The Program for International Student Assessment, an Organisation for Economic Co-operation and Development (OECD) unit that tests students' literacy reading, mathematics, and science, for instance, ranked India's 15-year-olds second from the bottom among some 74 countries.

While the 25-percent quota will be difficult to implement — and some argue that it impinges on the rights of the private schools that have previously refused government aid — the move would see some of the nation's wealthiest students sitting side-by-side with the poorest.

The Right to Education Act, passed in 2009, guarantees free and compulsory education for all children between the ages of 6 and 14. Answering a challenge to the act, the court directed all privately run schools to admit at least 25 percent students from socially and economically depressed families beginning this academic year. Only boarding schools and minority institutions that don't receive government aid are exempt.

The right to education act places “an affirmative burden on all stakeholders in our society,” the court wrote on Thursday, in a 2:1 majority judgment upholding the provision.

High cost of reform

The Supreme Court's move is causing tremors. Parents worry that admission to elite private schools will get even tougher. Schools worry about the administrative and financial burden of admitting more poor children.

But even the most optimistic proponents of the right to education law warn that there are still many hurdles ahead.“The judgment removed the uncertainty about the 25 percent, and we now know where it applies and where it doesn't,” said Parth Shah, president of the New Delhi-based NGO, Center for Civil Society. “The hard work of figuring out the design, implementation, monitoring and assessment now has to be done.”

Already, for instance, private schools have argued that the plan to reimburse them only for the amount charged by the dismally failing government schools will expose them to a huge financial burden. Some are threatening to raise fees for paying parents. And nobody has thought too hard yet about the intricacies of integrating children from such dramatically different circumstances – like bringing poor children who only speak Hindi or Tamil into a school where classes are taught in English.

Meanwhile, in Delhi, where the battle is a little older because the state had earlier tied land grants for private schools to an agreement to take on poor students, streetfighters like Social Jurists' Agarwal have already confronted schools that try to game the system.

Because the rules require schools to admit 25 percent poor students only in the first year, for instance, some schools dramatically reduced the total number of first graders they admitted, and then added double or triple the number of full-tuition students in the second year. Others took a more direct approach, simply offering parents of poor children cash — as much as $4,000 — to pull their kids out of class.

Teaching poor kids about McDonalds

“In India, people have the attitude of 'How can my son sit on the same bench as my driver's son?' That's what's scaring me,” said Anouradha Bakshi of Project Why, a non-profit that runs supplementary afterschool education programs for the poor.

To prove that poor children could excel, Bakshi sent eight slum kids to an elite boarding school. But it took more than the money for tuition to ensure they excelled. She first rented a flat and moved the kids in with her, going the extra mile not only to teach them English but also skills that they'd need to fit in — such as how to eat with a knife and fork and find their way around the menu at McDonalds.

“In one of these uber-rich schools where the child has to go back to his slum or his little house in the evening, it's easier said than done,” said Bakshi. “Who's going to help that little child with homework and hold his hand?”

That's a fair point, and implementation has never been India's strong suit. But even a bad experience at a good private school is likely to be better than the grim reality of the government-run alternative — which is why more and more of the poorest Indians already send their kids to grassroots private schools in the slums that cost a few dollars per month.

“In Delhi, for instance, the schools run by muncipality are really in a bad state,” Bakshi said. “There's practically no teaching. The classes are overcrowded. There are schools with no buildings. Those that have buildings have no bathrooms, or no bathrooms for girls, and the teachers are not interested.”

In rural areas, students at government schools are lucky if the teacher even shows up.

Yet with private schools already receiving as many as 1,500 applicants for 25 seats in a class, there's also a chance that desegregating the posh institutions will allow the government to continue to shirk its responsibility to the vast majority of parents and children.

“As usual, laws are made without thinking,” said Bakshi. “It's time that we started thinking about these children longterm, not just jumping up and down and saying now these poor children are going to go to these rich schools. Why is the government putting so much money into private schools?”

School choice advocates like the Center for Civil Society's Shah say that the answer is to empower parents and facilitate the building of more private schools. Through a school voucher system, for instance, the government could help to identify qualifying students and give them power to choose the school where they send their kids — creating a financial incentive for schools to teach the poor.

And by streamlining a system that requires some 36 different licenses to open a school in Delhi and creating incentives for banks to finance education startups, the government can help private players bridge the gap between supply and demand.

“All the things we are talking about how to make businesses easier to open and operate can be applied to schools,” Shah said.

Maybe. But if private schools emerge as the backbone of India's education system, this will be the first country where that has happened.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/120413/school-education-supreme-court-poor-students

India's Gen. V.K. Singh alleges massive bribery scheme

Indian army chief's whistleblower turn looks more like fragging.

GlobalPost (April 3, 2012)

By Jason Overdorf--NEW DELHI

As the world's arms suppliers trickled into New Delhi for India's largest ever weapons trade show last week, the country's army chief delivered a bombshell of his own, claiming that he was offered a massive bribe on behalf of a Czech vehicle maker soon after taking office in 2010.

Gen. V.K. Singh, who is set to retire in a few months after taking the defense ministry to court in a failed attempt to prove he was a year younger than the army records showed, clearly timed his supposed revelation for when it could do the most damage.

The fear of such corruption allegations is notorious for derailing Indian defense purchases, and experts say these new charges will hardly initiate a new golden era of transparency and efficiency.

“These allegations will only make the Indian defense bureaucracy more risk-averse and Indian procurement plans will once again suffer,” said Harsh V. Pant, professor in the department of defense studies at King's College, London.

But in the short-term, the general's unorthodox whistleblowing appears to have gotten results. The Central Bureau of Investigation (CBI) on Monday requested government permission to investigate the officer who the army chief accused of attempting to bribe him. And the defense minister granted “in-principle approval” to the army's long-delayed five and 15 year procurement plans.

Nevertheless, questions remain whether the army chief did more damage than good with his supposed revelations – by widening an existing rift between and military and the defense ministry and (perhaps) exposing the country's military weaknesses to its enemies.

“For India to break through the procurement logjam will require more than a general with credibility problems [due to his failed suit against the defense ministry] calling out the government,” said the Brookings Institute's Sunil Dasgupta, co-author of "Arming Without Aiming: India's Military Modernization."

Last week, Gen. Singh claimed that he was offered $2.8 million to approve a shipment of 600 substandard trucks from Tatra Sipox (UK), for which India ultimately paid double the going rate in Eastern Europe, according to press reports.

Days later, as if to counteract any negative impact on India's enthusiasm for arms purchases, a letter the general wrote to the prime minister revealing the sad state of India's military was leaked to the media.

Not only are the troops fighting with outdated gear, they are also running out of bullets thanks to bureaucratic sloth, the general wrote in the letter. India's air force is “97 percent obsolete,” the general claimed, while the army is in an “alarming” state and the tank battalions are running out of ammunition.

“Clearly, the leak is meant to be incendiary,” said Dasgupta. "Many of Singh's complaints are probably correct, but it is predicated on his view of threats to India. Not the views of the political leadership."

As Brajesh Mishra, a former Indian national security adviser, phrased it in an interview with the Indian Express, the general appeared to have gone “berserk” after losing his court case, and was now firing in all directions. But for insiders, including Mishra, the general's supposed revelations could hardly have come as a shock.

India has struggled to equip, much less modernize, its forces ever since the so-called Bofors scandal of the 1980s — in which then-prime minister Rajiv Gandhi and other prominent politicans were accused of taking kickbacks from Swedish weapons maker Bofors AB in exchange for selecting the company's 155 mm field howitzer.

Though those charges were never proven, the scandal was so toxic that India has failed to induct a single new artillery weapon for the past 25 years, despite emerging recently as the world's largest importer of other armaments. Indeed, a tender for a program to develop an Indian-made artillery gun was canceled three times — in 2007, 2009 and 2010 — simply because Bofors emerged as the winning bidder, according to India's Sunday Guardian newspaper.

“All the talk of India as a rising military power, especially in light of India's much touted defense modernization program, has been an exaggeration,” King's College's Pant said. “These inadequacies have been known to everyone, the military and the policy makers for a long time now.”

Already the world's largest weapons importer from 2007 to 2011, according to the Stockholm International Peace Research Institute think-tank, India plans massive military spending over the next five years to address a perceived threat from China. Apart from a nearly $20 billion contract for 126 medium multi-role combat aircraft recently awarded to France's Dassault Aviation, India plans to buy two aircraft carriers and billions of dollars worth of tanks, artillery guns and other equipment.

In that context, for American defense companies there could be a silver lining hidden in the general's step backward into the old corruption morass — even as bitter infighting continues this week.

Despite the world's best technology and experience tailor-making products in consort with the American military, US weapons makers have so far failed to capitalize on the warmer bilateral relations resulting from the 2005 Indo-US nuclear deal, according to California-based consultant Gunjan Bagla of Amritt Inc.

“If you look at who's got the good stuff, 15 of the [world's] top 20 defense contractors are American,” Bagla said. “The upside I see is that 13 of those 15 have yet to sell more than a billion dollars into India.”

Used to operating in the Washington DC beltway, US manufacturers have been slow to understand the importance of the Indian bureaucracy in decision-making.

Memories of US sanctions following India's nuclear weapons tests linger on. And though precious few in the American defense sector even remember the incident, many in India still remember the US decision to deploy the USS Enterprise to the Bay of Bengal to end an Indian naval blockade of Pakistan during the Bangladesh war of 1971.

With that uncomfortable historical legacy undermining talk of a budding “strategic partnership” and with India's cost-consciousness hitting US firms' claims of technological superiority, India's fears about bribery allegations could well become US weapons makers' biggest market advantage.

“No American company can think about violating the foreign corrupt practices act (FCPA), and no American company in defense can think about violating the international traffic in arms regulations (ITAR), so in a sense that makes it easier for American companies,” said Bagla.

“Everybody knows that's the case. FCPA and ITAR apply not just to the companies but to the individuals. If you violate the law, you go to jail, regardless what your company did.”

For gun shy Indian bureaucrats and politicians, that could turn out to be a big selling point.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/120402/indian-army-chief-v-k-singh-military

India: Rivalries won't undo the BRICS

At a New Delhi summit, five key emerging nations forge a platform at odds with the West on Iran and Syria.

By Jason Overdorf--NEW DELHI
GlobalPost (March 29, 2012)

As Indian business leaders pushed for measures to double trade between and among the so-called BRICS nations of Brazil, Russia, India, China and South Africa to $500 billion over the next few years, a host of mostly western naysayers stepped forward to claim that the BRICS are too deeply divided to emerge as a coherent negotiating bloc.

Wishful thinking? Perhaps.

“That's always been said, but they're actually moving forward,” said Raja Mohan, a senior fellow at the New Delhi-based Center for Policy Research. “The problem is the supporters and critics. You highlight those who fear it's going to be an anti-western bloc and those who say it can never amount to anything.”

There were arguably no big bang developments at Thursday's BRICS Summit in New Delhi. But several small yet significant steps forward suggest that the BRICS may indeed be a powerful bloc when it comes to issues where they share a common interest – such as increasing their power in economic institutions like the World Bank, protecting themselves from costly measures to deal with climate change, and fighting trade barriers in the US and Europe.

“In economic matters, alliance is possible since there is still a strong developed/developing country divide,” said Jabin Jacob, assistant director of the New Delhi-based Institute of Chinese Studies, an independent think tank. “Overall, however, if groupings such as BRICS aim to do more than economic cooperation, then ideological divisions will come to the fore.”

The nations were not able to agree on a candidate for the top job at the World Bank – which some claimed was needed to signal that the grouping had arrived as a new force in global economic relations. But they reasserted their call for reforming the World Bank and International Monetary Fund “to better reflect economic weights and enhance the voice and representation of emerging market and developing countries by January 2013,” according to a joint statement issued Thursday.

They laid some groundwork for an alternative financing agency of their own along the lines of the Asian Development Bank, directing their respective finance ministers to set up a working group to study the plan and report back at the next meeting. And they reached an agreement to allow members to extend loans to each other in local currencies that will send a clear-enough message on the grouping's dim view of the continued dominance of the dollar and the euro.

Perhaps most significantly, at least for those who fear that the BRICS may become an anti-western block, they also came together to resist US and European sanctions on trading with Iran, and they termed interference in the conflict in Syria “unacceptable.” On Iran, too, the BRICS explicitly opposed a military strike. Moreover, they asserted Iran's right to maintain a civilian nuclear program, and stated that any measures to prevent Tehran from developing nuclear weapons should be imposed through the International Atomic Energy Agency or the UN – a thinly veiled rejection of the present US and European sanctions on oil purchases.

“We respect UN resolutions,” Indian commerce minister Anand Sharma said Wednesday. “None of our [BRICS] countries are in violation of what the UN resolution says. The UN resolution does not forbid countries engaging in trade in essential commodities.”

As various pundits have pointed out, there are as many differences among the BRICS countries as there are similarities. Brazil, India and South Africa are committed to democracy, and, to varying extents, socialist-style programs to lift their peoples out of poverty, while China and Russia are richer, more authoritarian, and more laissez-faire in their economic policies. Similarly, China and Russia are already members of the United Nations Security Council, and, despite public noises to the contrary, appear to be keen to keep Brazil and India out. And China and India, at least, are in direct competition for natural resources and (soon) export markets, even as Beijing props up New Delhi's nemesis in Pakistan.

But while none of those problems are going away, the incremental progress made at the BRICS Summit this week suggests that those issues will not necessarily derail other efforts where there is more common ground. Moreover, as economic problems continue in the US and Europe, the two most significant players in the BRICS grouping – India and China – are coming into closer alignment not only in obvious areas like climate change and emissions caps but also in economics.

“It's a very diverse group,” said Mohan. “It's not constructed in a regional framework, so it will necessarily take a global perspective. The agendas of Russia and China are different. For Russia it will be geopolitics.... China is focused on money, which the Indians are quite happy to accept.”

Apart from their regional competition for political influence and resources ranging from oil to iron to water for irrigation, China and India can seem to be headed on a collision course economically. China's dominance of export markets in the US and Europe is so absolute that it appears to threaten India's bid to build its own manufacturing sector and thus bring its massive population from the farm to the factory. And because those same export markets are already saturated, the massive increase in bilateral trade between India and China over the past five years has been accompanied by an even more severe increase in India's trade deficit.

“There are huge asymmetries between India and China,” said Shrikanth Kondapalli, a professor of Chinese studies at India's Jawaharlal Nehru University. “China is a $6 trillion economy and India is a $1.7 trillion economy. Meanwhile, China is the largest exporting country in the world today, with nearly $1.6 trillion in exports, and India has only $250 billion in exports. There's no comparison.”

For the first eight months of 2011, India-China trade topped $48 billion — growth of about 20 percent over the same period last year. But India's trade deficit also widened to $16.8 billion. As a point of comparison, consider the figures for 2008 — when bilateral trade for the year was about the same as the total for the first eight months of 2011, at $52 billion, but India's trade deficit was only about $10 billion. In other words, assuming that ratio holds true for the full year, India's trade with China has grown some 40 percent over the past three years, but its trade deficit has increased 60 percent.

That leaves India with a huge challenge.

“For the Indian manufacturing sector to increase from 14 percent of GDP to 29 percent of GDP, India needs to cooperate as well as compete with China,” Kondapalli said.

Nevertheless, recent developments suggest that the faltering of the western economies has not only increased the relative might of India and China on the world stage, but also increased their interdependence and equalized them to some extent. Without anyplace else to expand its sales, China now needs India's market, and as it strives for a larger voice in world economic affairs it needs India's greater political legitimacy to temper concerns about its growing dominance.

“The Chinese needed this multilateral grouping,” Kondapalli said. “Their economy is much more dependent on exports than India's. Given the financial crisis, they are more desperate than India, so they need the BRICS position on trade protectionism [in the US and Europe].”

In return, India aims to leverage its trade deficit to complete the process of industrialization. An ever larger portion of its imports from China are capital equipment used to build power plants, roads, railways and other infrastructure that India needs before it can match China's price points in the export market. And a decision this week to allow Indian firms to take yuan-denominated loans will not only help China internationalize its currency but also help India source the trillion dollars it needs for infrastructure investments.

“What India is having to give up in terms of an import deficit it can make up by investing more in infrastructure,” said Amitendu Palit, a researcher at the National University of Singapore's (NUS) Institute of South Asian Studies and the author of an upcoming book on India-China economic relations. “If India's infrastructure improves, its cost of production will come down and it will become more competititve with the rest of the world.”

And that would make the BRICS all the more powerful.

http://www.globalpost.com/dispatches/globalpost-blogs/india/india-rivalries-wont-undo-the-brics

Analysis: Iran sanctions threaten US-India ties

In India, as well as Iran, Obama's sanctions could be more than counterproductive.

By Jason Overdorf
GlobalPost (February 4, 2012)

NEW DELHI, India — The West's quest to impose a painful embargo on Iran is slamming into a harsh reality: India is declining to cooperate.

Without the participation of major importing nations like India, the sanctions are far less likely to succeed in forcing Iran back to the nuclear negotiating table. The standoff means that the West's initiative could backfire, harming US-India ties more than it thwarts Iran's apparent nuclear ambitions.

Some experts even contend that, considering regional geopolitics and particularly India's relations with its neighbors, the sanctions' failure has been written in stone from the outset.

As the prospect of war with Iran mounts, the West has resorted to unusual measures to promote the success of its economic offensive. To coerce other nations to comply, the US has issued extra-territorial sanctions against any entity doing business with Iran's central bank, a move that complicates all potential trade with Tehran.

Any bank that engages in a “significant financial transaction” with Iran's central bank — necessary for facilitating the currency conversion in oil purchases — is barred from doing business in the US.

To Washington's dismay, this week, India announced that it wouldn't cut back on oil imports from Iran. When doubts arose over how India would pay for its oil with sanctions in place, Iran said they would allow India to pay in rupees, circumventing Washington's embargo.

And so the deal was done.

“We've been at pains to explain to the US that we have a special problem here,” said Lalit Mansingh, a former Indian ambassador to the US. “On the issue of Iran acquiring nuclear weapons, we have a clear stance: We are against it. But we are also dependent on Iran for 12-15 percent of our oil supplies and that can't be wished away.”

Despite the much ballyhooed “strategic partnership” between the US and India, Washington doesn't seem to be listening.

Desirable as it may be to slow Iran's acquisition of nuclear weapons, and however appealing these sanctions might sound to US voters, this is not the way to go about it, many experts say.

Harsh economic sanctions are as likely to drive Tehran to “double down on its quest for the ultimate deterrent” as they are to lure President Mahmoud Ahmadinejad to the negotiating table, as Brookings Institution fellow Suzanne Maloney argued recently in Foreign Affairs.

“[With the] ratcheting up of sanctions, and clearly now an attempt to wage economic warfare against Iran and force a regime change, plus the continuous threat that all options, including military action, are on the table, any sensible nationalist would say the only protection that Iran has is to develop nuclear capability,” said former Indian Foreign Secretary Kanwal Sibal.

Perhaps more importantly, the banking mechanism that Obama has adopted to impose these sanctions allows countries like Japan, South Korea and China — which consistently opposes US foreign policy interventions — to circumvent the blockade.

And it singles out India — which has supported Washington's call for an end to Iran's nuclear program before the International Atomic Energy Agency — for special punishment.

How so? China and other nations from which Iran makes significant purchases have already set up a barter system of sorts that allows them to pay for oil with goods, rather than cash, thereby cutting out Iran's central bank. But because Iran is not a big customer for India's outsourcing sector, or a significant buyer of any other Indian commodity, India must settle its oil bill in cash.

That means, first of all, it had to convince Iran to accept 45 percent of its money in rupees at a time when the Indian currency is bouncing back from an all-time low against the US dollar — a feat that it reportedly achieved this week, according to the Indian Express.

But it also leaves India's future oil purchases in doubt, as the shaky payment mechanism could break down any time. And it sets up America's newest strategic partner to bear the brunt of US criticism simply for doing what its neighbors are doing in a more direct way.

“It's a bit unfair that you come up with sanctions on the eve of elections and make it appear that it's a matter of great urgency,” said Mansingh. "Work with the United Nations and the IAEA ... is basically what India is saying." Mansingh also emphasized that this was India's stance the last time Washington forged ahead agressively against supposed weapons of mass destruction: the invasion of Iraq.

In calling attention to that debacle, India is being more than a little disingenuous. China or Russia would be almost certain to veto any UN resolution mirroring America's current economic sanctions. But India's position is consistent and pragmatic, as well.

New Delhi has for decades refused to ratify the Non-proliferation Treaty (NPT) because, it argues, it is designed to help the small club of nations with nuclear weapons retain a dominant say over world affairs, and has no provisions for disarmament.

At the same time, its own history in acquiring nuclear weapons, as well as the contrasting fates of Iraq and Pakistan after Sept. 11, provide strong arguments suggesting that no measure will be sufficient to convince Iran to abandon its nuclear program. And, as a result, it is wise to prepare for the day Tehran gets the bomb by establishing some common ground.

“For the US to singlemindely focus on one single aspect of the problem Iran presents in terms of its nuclear ambitions is narrowing the larger strategic geopolitical considerations that must go into any decision making involving such a volatile region,” said Sibal.

India is already hedging its position and moving to scale back its dependence on Iran's oil, according to a report by the US Congressional Research Service.

But that will take time. And India still hopes to use those “larger strategic geopolitical considerations” to angle for a temporary waiver or an exemption for its oil imports.

Scuttling its relationship with Iran, the argument runs, would cut off India's access to Afghanistan. Therefore, an end to the oil trade might also spell an end to India's aid in the post-war reconstruction effort — where, despite Pakistan's objections, India's functional-if-chaotic democracy may offer the best hope for creating effective civil institutions.

Moreover, weakening New Delhi's influence in Tehran will increase Beijing's, not Washington's.

But Obama should be looking further toward the horizon — beyond the upcoming election or the withdrawal from Afghanistan. The US strategic partnership with India could be very important for the US' future in Asia, if Washington treats India as an ally and not a vassal.

“Washington must not take a litmus test approach, in the sense that if you don't get a fighter contract or nuclear liability law then the relationship is doomed,” said Mansingh.

“As I see it, we've had the strategic partnership for about a decade now, and it's doing quite well. But if you take each of these high profile cases as a test, it's not going to work.”

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/120203/iran-sanctions-us-india-ties

China vs. India: the battle for Buddha

China and India seek to leverage their ties to Buddhism for soft power in the region.

By Jason Overdorf
GlobalPost (January 19, 2012)

LUMBINI, Nepal — For a few short hours, as dancers imported from Kathmandu leapt and twirled for the bemused president of this tiny Himalayan republic, the sleepy, provincial town of Lumbini, in western Nepal, became the focus of the great chess game underway between India and China.

After a sudden, unannounced, and brief visit from Chinese premier Wen Jiabao in Kathmandu, Nepalese President Ram Baran Yadav had flown in to take the stage here — at the birthplace of Buddha — to inaugurate “Visit Lumbini Year 2012” on behalf of Nepal tourism.

But as he set fire to a symbolic, Olympic-style “peace flame,” more than a few observers were wondering about the fortuitous timing of the event, which coincided, like the flourish of a magician's cape, with the preventive detention of hundreds of Nepalese Tibetans in the capital.

The detention of Tibetans is nothing new, of course. And Nepal is always rife with rumors and conspiracy theories. But for the past several months a curious mystery has unfolded around Lumbini — the latest beachhead in the quiet battle for Buddha underway between China and India.

With competing conferences, organizations, and cultural tours, both China and India have sought to leverage their historical ties with Buddhism for so-called soft power in the region.

India seeks to use its common cultural heritage to overcome China's ethnic ties to the overseas Chinese in Southeast Asia, and China seeks to limit the damage from its repression of religious freedom in Tibet and its incessant sparring with the Dalai Lama.

“This is part of China's effort to use Buddhism to gain an entry into Nepal, [and] to show to their Buddhists that they're showing equal attention to Buddhism outside the country,” Jayaveda Ranade, formerly additional secretary for East Asia with the Indian government, said of a Chinese proposal for the development of Lumbini.

Yadav, Nepal's president, made no mention of China before the crowd gathered at Buddha's birthplace, though in Kathmandu Wen pledged more than $140 million in aid for the building of infrastructure and other projects. Wen also agreed to consider Nepal's request to extend the 1,200 mile Qinghai-Tibet railway onward to Kathmandu and Lumbini.

“Both sides started worrying about this once the Dalai Lama started giving intimations of mortality, shall we say,” said Jabin Jacob, assistant director of the New Delhi-based Institute of Chinese Studies, an independent think tank.

“If the Dalai Lama is disappearing from the scene or he is going to be stepping back from the political scene, as he already has, then there is this huge resource lying out there untapped,” he said.

India and China: their claims to Buddhism

Born Prince Gautama Siddhartha in what is today Nepal, the Buddha achieved enlightenment, gained his spiritual following, and died (or achieved final nirvana) in India. As a result, Bodhgaya, Sarnath and Kushinagar, located in the north Indian state of Bihar, remain major pilgrimage centers for believers from around the world.

But in India Buddhism was subsumed by Hinduism, and New Delhi has done little to spread the wealth from tourism to Lumbini — which most view as less significant than the three pilgrimage sites in India. So as Nepal's tourism ministry seeks to lure 500,000 visitors to Lumbini in 2012, expectations of Indian support are not too high — though India claims to be “more than happy” to contribute.

“Most of the inter-governmental bodies are dysfunctional,” said Aditya Baral, director of the publicity department of the Nepal Tourism Board.

At the same time, even though China is notorious for its suppression of Tibetan Buddhism, and India is home to the exiled Dalai Lama, in its other forms Buddhism is reportedly the fastest-growing religion in China and accounts for only a tiny, neglected minority in the land where it originated.

And China's largesse, at least on paper, or in rumor, appears to know no bounds.

“Nearly 40 percent of Chinese believe in Buddhism. Several of the Chinese leaders themselves are practicing Buddhists, despite being members of the Communist Party,” said Shrikanth Kondapalli, a professor of Chinese studies at Jawaharlal Nehru University.

“So from that point of view it's quite natural for China to be interested in Buddhist projects,” he said.

According to Ranade, China held its first World Buddhist Forum in 2006 in an effort to project its handpicked candidate, Gyaltsen Norbu, as the legitimate Panchen Lama, after secret police allegedly kidnapped and spirited away the boy chosen by the Tibetans in 1995.

A second conference in 2009, for which the concluding ceremony was held in Taiwan, was aimed at convincing neighboring Buddhist nations that China had embraced the religion, despite its continued opposition to the Dalai Lama.

Similarly, Beijing has undertaken other cultural intiatives, such as the displaying of tooth and hair relics of the Buddha in a traveling exhibition in Myanmar.

“All of this is to keep the Dalai Lama in his place,” said Jacob. “It's to ensure that they have a handle on his succession, an influence on his succession, and that they will be seen as legitimately intervening in that succession.”

At the same time, India has sought to build on the goodwill it receives naturally as home to the exiled leader of Tibetan Buddhism and reach out to other sects.

In 2007, for instance, the loan of an extensive collection of Buddhist art and artifacts from India's National Museum subtly reinforced the message that the religion traveled from India to China and beyond in conjunction with an East Asia Summit where Beijing had sought to shoulder out New Delhi.

Together with representatives from Singapore, China, Japan and Thailand, India has undertaken a $1 billion project to develop a modern university in the ancient Buddhist learning center of Nalanda, in modern day Bihar, under the leadership of Nobel Prize-winning economist Amartya Sen.

Beginning this summer, however, the struggle for soft power has begun to seem as though it were scripted by John Le Carré.

The plot thickens in Lumbini

For Lumbini, the story begins in July, when China's state-run People's Daily reported that a peculiar Hong Kong-based outfit called the Asia Pacific Exchange & Cooperation Foundation (APECF) had signed a memorandum of understanding with the United Nations Industrial Development Organization (UNIDO) to create a “special cultural zone” in Lumbini.

Touting a planned investment of $3 billion, APECF claimed to have the full support of the Nepal government for its scheme to build roads, telecommunications networks and tourist facilities in the area.

The dusty, one-horse town of Lumbini could certainly use the money. But at nearly one-tenth of Nepal's entire gross domestic product, $3 billion was a stupendous sum — and, some suspect, a wholly fictional one: a carnival barker's cry, crude propaganda, or a “trial balloon” to gauge how Nepal might react.

The answer was swift.

Soon afterward UNIDO and Nepal, by turns, disavowed the project. It surfaced that both Pushpa Kamal Dahal, the Maoist leader popularly known by his nomme de guerre Prachanda, or “Fearless,” and the controversial Paras Bir Bikram Shah Dev, Nepal's former crown prince, held positions on APECF's board of directors.

The United Nations Educational, Scientific and Cultural Organization (UNESCO) blasted APECF's scheme as a threat to Lumbini's status as a World Heritage site. And Culture Secretary Modraj Dotel resigned in protest over alleged pressure to approve the project.

“What to me was worrying was the wheeling and dealing through which they had managed to get both Prince Paras and Prachanda, an unholy alliance from opposite ends of the spectrum,” said Kul Chandra Gautam, a former assistant secretary general of the UN who has publicly criticized the project.

“All kinds of shady deals happen in Nepal, and for our most influential political leader to be made part of this venture to me sounded very fishy.” (Prince Paras is no longer listed as a board member by APECF's website).

For Indian foreign policy think tanks, APECF — nominally a non-governmental organization (NGO) — was an obvious clandestine arm of the Chinese government.

Its Lumbini project was a transparent attempt to leverage Buddhism to station platoons of People's Liberation Army engineers within a stone's throw of the Indian border. And the bizarre snafu of the fake agreement with UNIDO was simply another example, apparently, of the inscrutability of Chinese espionage.

So, too, it goes in New Delhi.

This week, Beijing's special representative Dai Bingguo is in New Delhi hoping to flag off a “golden period” for India-China relations. But it's lucky he made it at all, in the wake of the latest Indian salvo in the battle for Buddha.

In November, Beijing scrapped Dai's planned visit to discuss an outstanding dispute over China's borders with Arunachal Pradesh and Kashmir in protest over an Indian rival to its own World Buddhism Conference. Organized by the Asoka Mission, another NGO that receives government funding, the meeting brought Buddhist leaders from around the world together with the Dalai Lama the same week that Dai was to arrive for talks.

“Clubbed with the South China Sea dispute, clubbed with the Yellow Sea incident where the Chinese opposed the USS George Washington into that region and a host of other problems that China had with the US and their neighbors, including even with India, it did cost [Beijing] some soft power,” said professor Kondapalli.

“The convention decided to set up an international Buddhist institution somewhere in India, to codify the Buddhist scriptures and so forth,” he said.

Coincidence? Representatives of the Indian government say so. But just as in Lumbini, there are plenty of people ready to concoct a master plan behind the chaos.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/120118/nepal-buddhism-dalai-lama-china-tibet

The Shiva Rules: Is growth enough?

India's economic boom has widened the gap between rich and poor – and now it's slowing down.

By Jason Overdorf
GlobalPost (December 31, 2011)

Editor's Note: The Shiva Rules is a year-long GlobalPost series that examines India in the 21st century. Correspondents Jason Overdorf and Hanna Ingber examine the sweeping economic, political and cultural changes that are transforming this nascent global power in surprising and sometimes inexplicable ways. To help uncover the complexities of India's uneven rise, The Shiva Rules uses as a loose reporting metaphor Shiva, the popular Hindu deity of destruction and rebirth.

NEW DELHI, India — For the past two decades, policymakers have been banking on rapid economic growth to lift millions of Indians out of poverty.

But even as the boom has made it easier for the country's poorest people to afford refrigerators, televisions and mobile phones, the spending power of the rich has grown many times faster.

Now, the widening gulf between those at the top and those at the bottom is steadily increasing the pressure on the many fissures in this highly fractured society — and a looming slowdown could hit the poor harder than anybody.

“We have to see this in the context of a country that already bears a huge burden of stratification, but also caste and gender and all these things compounding each other,” said development economist Jean Dreze, who played a key role in designing and implementing India's largest social welfare scheme.

“The fact that there's a new, rising dimension of inequality, that is income inequality, reinforces something that's already a big issue for Indian society and the Indian economy,” Dreze said.

Despite boasting the world's second-fastest economic growth, India has made little progress in eradicating poverty since it began liberalizing its economy in 1991, according to a new study by the Organization for Economic Cooperation and Development (OECD). Instead, the gap between the incomes of the rich and poor has doubled, so the top 10 percent of workers now earn 12 times the amount earned by the bottom 10 percent — while 42 percent of the country's 1.21 billion people survive on less than a dollar a day.

Consider 36-year-old Indu Devi. Only semi-employed, she works from home sewing dupattas — the scarf-like complement to a woman's salwar kameez, or loose pajama-like trousers — for a local factory.

In a good month, she earns $30; in a bad one, only $10. In the past 10 years, she's acquired luxuries like a television and a mobile phone — partly because she “owns” her tiny room in an illegal structure in one of New Delhi's many “unauthorized colonies.”

Devi shares a space the size of an American bathroom with a man and four children. There's no bathroom or sink. Water comes from a hand pump outside, shared with the neighborhood. The stove is a burner attached to a gas cylinder, and everything the family owns is hanging from half-a-dozen hooks on the wall: two sets of clothes for the adults, one to wash and one to wear; four sets for the kids, along with their school uniforms.

Her thoughts about India's economic boom?

“Sometimes I feel frustrated, as I can cannot meet the demands of my kids all the time."

Nobody will be surprised to hear that India's new wealth has been slow to trickle down. But as debate rages over government programs designed to provide more equal opportunities to the poor — or simply to ease their suffering — the bald facts beg the question: Is growth enough?

Many economists point out that an increase in inequality is inevitable with rapid economic growth — though the OECD found this was not the case for Argentina, Brazil or Indonesia over the past decade or so. In those three countries, the economists found, income growth of the bottom and middle groups outpaced that of the highest earners. And at least in Brazil — where inequality remains much higher than in India in absolute terms — higher taxes and a new focus on social programs seems to have been a factor in making the difference.

Some argue, as well, that rising inequality is not an evil in itself, so long as life also improves for the country's poor. The real problem is absolute, not relative poverty, they say. And the best way to address that is to make the pie larger, not to change the way you slice it up — especially where government programs are hampered by corruption and inefficiency.

“This is inequality in outcomes, either in terms of consumption expenditure or in terms of income,” said economist Bibek Debroy, a professor at the New Delhi-based Center for Policy Research.

“If you are talking about inequality in terms of access to health services, education, financial products, technology, the law and order system, then I'm prepared to buy the argument that we should be concerned. But that's not what this inequality is about.”

It's not that the benefits of economic growth don't trickle down at all. Debroy believes, for instance, that the biggest reason for the increase in inequality is geography, not class or caste.

While the trickle has missed some parts of India altogether, he would argue, poor people like Indu Devi have seen marked improvements in their lives over the past 20 years. The trouble is that rapid growth and runaway consumption by the burgeoning middle class has simultaneously increased the aspirations of the poor and driven up prices.

“If I perceive that inequality is increasing, but I also perceive that over a period of time the prospects of my standard of living improving are getting enhanced, then I think I'm less concerned about inequality,” said Debroy. “But if I perceive that inequality is increasing, but my standard of living is not improving, then I tend to be more concerned.”

Right or wrong, many of those at the bottom see the glass as half empty.

Despite a shortage of skilled labor, for instance, 25-year-old machinist Rajesh Kumar, who lives a few houses away from Devi, earns only about $150 a month. Based on India's erstwhile economic forecasts, he should be poised for great changes. Yet he's pessimistic about his prospects.

"Even if the number of companies are rising, unemployment is also on the rise,” Kumar said. "If the country progresses, the poor will only become poorer, as things will get more expensive. We can never progress."

Now, India's booming economy is slowing down, perhaps dramatically.

With inflation hovering around 10 percent, the central bank has raised interest rates 13 times since March 2010. But today India Inc. faces a drop in foreign investment and skyrocketing fuel costs resulting from a 20 percent plunge in the value of the rupee.

As a result, a manufacturing sector that had only just begun to take off is gearing down — as signaled by a 5 percent drop in industrial output for October, the last month for which data is available. And, at least in private, investors and entrepreneurs are beginning to think the unthinkable: That GDP growth might just dip below 6 percent.

Inequality problem solved, you might be tempted to say. But it looks like the poor will likely bear the brunt of the slowdown, too. They lack savings to carry them through bad times, of course, and they fight for work where competition is the toughest.

But the downturn has also resulted in new criticism for the current government's social welfare programs, such as a planned expansion of the distribution of subsidized grain to cover two-thirds of the population.

“If I am able-bodied and in the working age group, I am not voluntarily poor,” said Debroy. “I am poor because I don't have access to the roads, I don't have access to health [care], I don't have access to education. So the right public policy intervention to me is the provision of those goods and services.”

In terms of access, too, however, the vast gulf between India's rich and poor appears to be acting as a multiplier, worsening the country's long-standing problems while preventing action from being taken against them.

The rapid growth of high-quality, private hospitals in India's cities means that the most vocal and influential citizens no longer complain about public facilities. All but the poorest Indians have abandoned the government's free schools, even as the current administration strives to make education a basic right.

And though wealthy and middle-class Indians carp about “leakages” in the welfare system that distributes subsidized grain to the destitute, they do so primarily to argue against spending increases, without taking much interest in fixing the problem — even amid Anna Hazare's anti-corruption fervor.

This vast difference in perspective, incidentally, may also explain why none of the many Indian papers that reported on the OECD study mentioned its conclusion about the main reason for the dramatic increase in income inequality over the past 20 years: A widening gap between the regular, salaried workers protected by the country's labor laws and the so-called “contract workers” outside the system.

So, too, that difference in outlook may explain the silence on the OECD's recommended course of action: more flexible labor policies and higher spending on education and social welfare — funded by progressive taxes.

“There's a pervasive problem in public policy of lack of attention to the underprivileged and insensitivity to their needs, which is not necessarily out of hostility to them,” said Dreze. “It's just that the people who run the show don't relate very closely to these people.”

The result of India's gross inequity, therefore, is a vicious cycle. India spends less on social programs than the world's other large emerging economies, according to the OECD study.

Brazil and Russia spend nearly three-fourths as much on social programs, as a percentage of GDP, as OECD member countries like the Netherlands, Spain and the United Kingdom, for instance. India spends only a fourth as much as the OECD average.

The biggest reason for the discrepancy is that it has virtually no safety net for the aged or unemployed, apart from the recently created National Rural Employment Guarantee Scheme, a program that is often criticized locally as expensive and corrupt, and yet one that the OECD recommends expanding.

“It could go either way. Depending on the politics, you could see India moving toward more extensive welfare provisions and reconstructing the health-care system,” said Dreze.

“You could also see the schooling system being privatized. There's a huge lobby of insurance companies that would like to see the health-care system go in the direction of health insurance. Nothing can be taken for granted.”

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/111230/india-economy-wealth-gap-poverty-shivas-rules

Analysis: India's anti-corruption crusade far from over

India's anti-corruption bill passed the lower house, but exposes the limitations of street protest politics.

By Jason Overdorf
GlobalPost (December 28, 2011)

NEW DELHI, India — The Indian government pushed a bill designed to fight corruption through the lower house of the parliament late Tuesday, in a move that has exposed the limitations of street-protest politics.

Demonstrators can demand that a law be passed and vow to vote out politicians who oppose it. But they still cannot draft bills themselves.

The government's so-called Lokpal and Lokayuktas Bill would set up a powerful ombudsman to investigate and prosecute government officials for corruption, as the anti-corruption movement led by social activist Anna Hazare has been demanding since he first lauched a hunger strike this summer.

But the proposed law does not allow the ombudsman to initiate investigations independent of a complaint. It does not put low-level officers of the bureaucracy under the ombudsman's direct supervision, and it does not grant the office control over the Central Bureau of Investigation, India's chief law enforcement agency, or allow it to constitute its own investigation wing.

Moreover, the law gives the ruling government significant control over the selection of the members of the ombudsman's office.

All these supposed shortcomings — which Hazare's team has called “non-negotiable” — have prompted the activist to embark on yet another a hunger strike, this one three days long, in protest. And he has called on his supporters to force police to arrest them through mass acts of civil disobedience, beginning Jan. 1.

Team Hazare is hoping for a repeat of the massive, nationwide agitation that shook India's politicians out of complacency this August. At that time, tens of thousands of protesters — disgusted by corruption scandals surrounding the Commonwealth Games and the distribution of 2G telecom spectrum licenses — took to the streets in support of the activist's hunger strike.

But at least some experts argue that the government's anti-corruption law could have a salutary effect.

“We have to see how it plays out,” said M.R. Madhavan, a researcher at PRS Legislative Research. “A lot of it will depend on the personalities involved in the first few years. Many institutions at the end of the day are shaped by the people running them.”

“The Election Commission had largely been a somnolent body which was basically going through the motions of holding elections,” said Sumit Ganguly, a professor of political science at Indiana University.

“But under a man called T.N. Seshan in the late 1980s, early 1990s it became a much more formidable body, and a body that decided to take the statutory powers it possessed and genuinely implement them to make elections fair, open, honest and transparent.”

The niceties of the law notwithstanding, the Lokpal could accomplish the same transformation.

“I genuinely think that if you get a group of individuals in the Lokpal who are serious about this endeavor ... the Lokpal could become a similar institution,” Ganguly said, citing similar successes achieved by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI).

“A number of institutions in India do work, and do carry out the tasks they're expected to perform,” he said.

Before its proposal becomes a law, Prime Minister Manmohan Singh's United Progressive Alliance (UPA) government will also need to get the Lokpal bill through the upper house of the parliament — where the coalition does not have a majority. Debate is underway there as this article goes to press, but there are only several possible outcomes.

With the tacit support of two opposition parties that abstained from voting in the lower house, the bill could go through unchanged. It might be amended and returned to the lower house for reconsideration. It might be voted down, then later approved by a vote by the combined houses. Or it might be rejected and put off indefinitely, like a bill to set up a quota for women in the legislature that has theoretically been pending since it was passed by the upper house in March 2010.

Whether its Lokpal bill works or not, however, the government's success in pushing it through the lower house — where Singh's UPA enjoys a slim majority — has stolen much of Hazare's thunder.

It's easy to mobilize people who are angry because nothing is being done about all-pervasive corruption. It's far more difficult to rally the masses around a difference of opinion about the finer points of a piece of legislation — just imagine if the Occupy Wall Street movement hinged on the nuances of banking reforms.

Perhaps that's why, according to some estimates, only around 4,000 people showed up for the hunger striker's Mumbai demonstration Tuesday — compared with a daily turnout of 30,000 to 40,000 people in Delhi this summer.

But confusion and protest fatigue aren't Team Hazare's only problems.

At the beginning of the anti-corruption movement, Hazare succeeded in mobilizing people against an amorphous lot of dirty politicians he portrayed as opposing the Lokpal bill. Now, his team is attempting to shift that anger onto the government and, more particularly, the Congress party — announcing that he will campaign against the Congress during state elections in Uttar Pradesh this February.

Hazare and company maintain that the anti-corruption movement can no longer stand outside and above electoral politics. But now that Hazare has joined the fray, what will he argue? And, more importantly, who will he campaign for?

Even if the Congress-led UPA has failed to meet all Team Hazare's demands for the Lokpal bill, it can hardly be said that the Congress has taken no action against corruption — though belatedly, perhaps.

Along with its version of the ombudsman law, the government on Tuesday pushed through the lower house a law to protect whistleblowers and on Wednesday it also introduced a judicial accountability bill designed to set up a credible mechanism for investigating corruption complaints against judges.

Moreover, only some of Team Hazare's objections to the Lokpal bill, such as the decision not to grant it control over the Central Bureau of Investigation can be traced to the Congress. Other dilutions, such as the rejection of a proposed amendment to grant the Lokpal constitutional authority and a decision not to compel the individual states to create their own anti-corruption watchdogs, were concessions to the opposition Bharatiya Janata Party and Singh's allies in the Dravida Munnetra Kazhagam and Trinamool Congress.

And both of the Congress party's main rivals in Uttar Pradesh — the caste-affiliated Samajwadi Party and Bahujan Samaj Party — abstained from voting on the Lokpal bill at all.

Two things are certain. The war against corruption is far from over. And street protests will have limited usefulness in the next stage of the battle.

“At the end of the day you cannot get at something as nuanced as this with a few hundred people screaming,” said Madhavan. “The nuances have to be discussed in a civilized place, with people listening to each other. It doesn't always happen, but in some sense, parliament is supposed to do that.”

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/111228/anti-corruption-bill-anna-hazare

The Futurists: Turning India's farms into factories

Super-bureaucrat Amitabh Kant aims to reverse 60 years of history with the Delhi-Mumbai industrial corridor.

By Jason Overdorf
GlobalPost (December 9, 2011)

NEW DELHI, India — Don't bother looking for a bigger dream. Nobody has tried anything this crazy in India since George Everest set out to measure the British colony with trigonometry and a very, very long chain back in 1830.

Over the next 20 years, India will spend $90 billion to lay the foundations for 24 new cities, creating an industrial corridor stretching across the country from Delhi to Mumbai. And, for practically the first time since the 1950s, these new urban centers won't mushroom haphazardly, with roadways and drainage systems crammed in as an afterthought.

Their development will be carefully orchestrated by super-bureaucrat Amitabh Kant — an Indian every bit as ambitious as the Brit who surveyed the height of the world's tallest mountain.

“This in many ways marks a paradigm shift in India's thinking on infrastructure,” Kant said in an interview with GlobalPost. “It marks a paradigm shift in India's thinking on manufacturing. It marks a paradigm shift in India's thinking on urbanization.”

Since Mohandas Gandhi first said that India lives in its villages, this country has shunned big manufacturing and resisted urbanization, pushing farmer cooperatives and cottage industries as an alternative model for development.

As a result, cities have never been planned — at least not anyplace but on paper. Slums have mushroomed as migrants streamed in. And metropolises have morphed into megalopolises.

But if Kant's paradigm shift takes, that's about to change.

India needs 30 years or so of near-10 percent economic growth if it is to bring its massive population out of poverty. Industrialization and urbanization is the only way to do it.

According to Mckinsey & Co., 70 percent of GDP will come from cities by 2030. And Kant — a suave, erudite bureaucrat best known for developing the tourism ministry's “Incredible India” ad campaign — is in the driver's seat.

The lynchpin is a high-capacity railway dedicated to freight transport. Connecting Delhi to Mumbai, the 1500-kilometer, high-speed rail network would convert the cheap labor centers of India's hinterland into viable manufacturing hubs, by slashing the time needed to move goods to India's ports and major metros.

In the process, the so-called Delhi-Mumbai Industrial Corridor (DMIC) would curb the disastrous, unplanned sprawl of India's two largest cities. It would check the daily migration of hundreds of thousands of destitute farm workers by transforming India from the world's back office into the world's manufacturing hub and creating millions of jobs. And it would solve some of the worst problems of existing Indian cities by providing green energy, clean water and affordable housing.

That is, if it materializes.

“The challenge is that since India has been a very reluctant urbanizer, how can we use good technology to make a quantum jump?” Kant said.

That's putting it mildly. The real trouble is that India is great at making plans, and terrible at executing them.

To anybody who has seen the situation on the ground, the Delhi Development Authority's (DDA) Master Plan 2021 reads like science fiction. And if the DDA's track record on its the master plans of 1962 and 2001 is any indicator, it's not likely to deliver on its new vision unless Mars attacks.

Other Indian city planners have proven just as impotent. So what gives Kant hope for this project, which is even bigger, and will depend on the goodwill of no less than seven different states?

Partly, it's blind faith. But there's method to Kant's madness, too.

Today, almost 65 percent of India's freight moves by truck, trundling down potholed, two-lane highways. It can take 12 to 14 days for a shipment from Delhi to reach Mumbai, which makes the cost of logistics ridiculously high. In contrast, his high-capacity train will put goods from the DMIC into India's ports within 24 hours.

At the same time, through the DMIC Development Corporation that Kant heads, the central government will fund and build what he calls the trunk infrastructure of the 24 manufacturing hubs along the railway.

“When that happens, you open up new areas on either side [of the tracks] which can be developed for manufacturing and feed this dedicated freight corridor,” he said.

That means Kant's team will lay out and build the roadways, drainage and sewers for the new cities, setting the framework before real-estate developers can lumber in and convert everything into residential high rises, as happened with many of India's ballyhooed Special Economic Zones.

It also means that the toughest pieces of the puzzle — low-cost housing, for instance — will be bought, paid for, and built by the central government before the industrial boom begins.

To make it happen, India has partnered with Japan to build the freight line, tapped the expertise of some of the world's biggest infrastructure, technology and architecture companies to plan the cities and sought funding and advice from international agencies.

“The important thing is to bring in a big vision, in terms of taking detailed designing and engineering to another level, and then ensuring that the project is implemented according to that detailed design,” said Kant.

Consider the first phase. By 2018, the freight line will be in place and the first seven manufacturing cities will be developed. Today, they don't even have names. They're still known as mouthfuls like Dadri-Noida-Ghaziabad and Pithampur-Dhar-Mhow, reflecting how they will merge smaller existing cities into large industrial metropolises.

But the plans already detail early-bird projects for items like a 1,000-acre integrated logistics hub in Greater Noida, outside New Delhi, an exhibition and convention center near Manesar, in Haryana, and an “aerotropolis” comprising a cargo terminal, warehouses and other facilities near Neemrana, in Rajasthan.

Map overlays depict a “Knowledge City” reminiscent of North Carolina's Research Triangle in the midst of farmland along the Delhi-Jaipur highway and skill development centers to provide technical training in places like provincial Madhya Pradesh.

Aquifer recharge systems and desalination plants, gas-fired power plants and solar-energy farms are slated for the deserts of Gujarat and Rajasthan. And so-called “smart communities” — utilizing urban planning and green technology to reduce the environmental impact of cities — have been drawn up for key locations along the corridor.

Science fiction? Maybe. Or maybe it's India's version of “If you build it, they will come.”

India: The end of Manmohanomics?

Singh's legacy could depend on drawing a line in the sand on economic reforms.

By Jason Overdorf
GlobalPost (December 6, 2011)

NEW DELHI, India — Earlier this month, India's beleaguered prime minister drew a line in the sand. This weekend, he erased it. His legacy could well be determined by what happens next.

Here's what's on the scoreboard:

With his government seemingly paralyzed by corruption allegations, Prime Minister Manmohan Singh tried to set the stage for a bold winter season, betting that the country's future depends on the government's ability to push through economic reforms. But now it looks as though he will have to backtrack on his first big ticket play since the 2008 nuclear pact with the United States, putting a plan to open up the retail sector to foreign direct investment (FDI) in a deep freeze.

That could be a big blow for the country, according to India Inc.

“The next stage of our growth cannot take place without a huge influx of capital from across the globe,” said Vijayan Krishnmurthy, who headed JP Morgan Asset Management in India before moving to social investment firm Mi-India. But that capital won't come if it looks like India is regressing to the policies of 1962, he said.

With that same line of thinking, earlier this month, Singh moved to raise the cap on FDI in multi-brand retail stores like Walmart to 51 percent and to allow wholly owned single-brand stores like Ikea or Reebok — which proponents say will both create jobs and lower prices.

But to block the new FDI policy, legislators from the Opposition Bharatiya Janata Party and Singh's United Progressive Alliance (UPA) partners from the Dravida Munnetra Kazhagam (DMK) and Trinamool Congress prevented the parliament from conducting any business through the first week of the month-long session. And now it appears that Singh will admit defeat.

An official announcement from the government is expected Wednesday. But Trinamool Congress leader Mamata Banerjee already told reporters over the weekend that Singh had agreed to suspend the issue “until a consensus is evolved.”

And Finance Minister Pranab Mukherjee reportedly told the leadership of the BJP on Monday that the policy has been put on hold, only to have it thrown back at him that the Opposition will accept nothing less than a full reversal.

That's the score. Now, for the sake of establishing his legacy in what will doubtless be his last term, Singh needs to hit a buzzer beater.

Entering his second term with a near majority, Singh raised high hopes among Indian business leaders that “Manmohanomics” — combining economic liberalization with social welfare spending for the poor — would set the stage for the decade or so of 10 percent economic growth the country needs to pull its people out of poverty. But corruption scandals have prevented his government from making any significant progress, at least on the liberalization part of the formula.

Desperate, on Nov. 22 Singh pleaded with his political rivals to ignore the smell of blood in the water at the beginning of the winter session of parliament. Investor sentiment was plunging, economic growth was slowing and, just like the European Union, India could “also go down” if gridlock continued, he warned.

Indeed, a lot more than the future of Walmart is at stake.

India's economic growth dropped to 6.9 percent for the quarter that ended in September, marking its lowest clip in two years, and there was virtually no growth in FDI. Manufacturing projects have been stalled by land acquisition problems and environmental concerns. Infrastructure projects have been delayed by government sloth. And India continues to rank poorly in international surveys like the World Bank's Ease of Doing Business Report — where it comes in at 132 out of 183 countries ranging from Singapore to Chad.

“Investor sentiment is low. There's no doubt about it,” said Dharmakirti Joshi, chief economist at Crisil, the Indian arm of Standard & Poors. “If you take macroeconomic scenario outside India and in India, there's hardly any good news”

Meanwhile, several more key reforms are slated for the docket before the session ends.

In addition to opening up the retail sector, Singh reportedly hopes to push through reforms in India's laws governing land acquisition and the mining sector, for example.

Both issues are at least as contentious as FDI in retail. A bloody battle in 2007 over the acquisition of land effectively ended the 30-year reign of the Communist Party of India (Marxist) in West Bengal last term. And rapacious mining practices lie at the root of the Maoist rebellion simmering in the jungles of central and eastern India. Yet India's industrialization cannot proceed without land for factories or the iron and coal needed to build and fuel them.

“[These issues] are actually becoming binding on growth now,” said Joshi. “The mining issue needs to be sorted out, or it will lead to constraints for the steel sector and power sector. Then you need land acquisition issues to be made more transparent and accountable.”

Before the retail FDI debacle, the word was that Singh would also push forward on reforms ranging from allowing foreign investment in India's airlines and pension funds, as well. But at present, all the signs seem pointed in the wrong direction.

Political analysts say Singh and his colleagues miscalculated foolishly in introducing the FDI measure without first selling the policy to the broader Congress Party and negotiating for the support of its allies in the UPA. So some opposition emerged simply out of resentment of perceived unilateralism. And the subsequent climbdown only confirmed that Singh and company had blundered forward with the move without first playing out all the possible contingencies.

Whether it's good for the country or not, that doesn't augur well for Singh's economic agenda. And it leaves his opponents with the upper hand.

“They feel that if they paralyze the government and paralyze parliament, they will gain,” said a political analyst who asked not to be named. “Congress needs to confront them. But they're not willing to do that. For that, you have to be confident in yourself.”

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/111205/india-manmohan-singh-economic-reforms-liberalization

India: an army of ethical hackers

For the coming cyber war, an army of geeks offers India its services.

By Jason Overdorf
GlobalPost (December 5, 2011)

NEW DELHI, India — To paraphrase an old saw: It takes a geek to catch a geek. That's the logic behind a new Indian response to the growing threat of cyber war, anyway.

Indian authorities were stunned by the impact of the Stuxnet virus on Iran's nuclear facility at Natanz last year. Now, in the wake of repeated assaults on Indian company and government web sites, an organization of self-professed "white hat" hackers is recruiting its own army.

“If you see the statistics, less than 15 percent of Indians use the internet, but we are already No. 1 when it comes to virus infections and we are No. 2 in cyber crimes,” said Rajshekhar Murthy, an Indian hacker and entrepreneur.

Last month, at Malcon — the malware conference Murthy founded in 2010 — the security expert's nonprofit Information Security and Analysis Center (ISAC) unveiled plans to create a national registry of hackers with the training to protect the country's critical electronic infrastructure.

Called the National Security Database (NSD), the body will accredit and train hackers who pass an exam that will cost about $500 a whack.

“The NSD is a project to address the broader need, not just to identify the best security professionals in India,” said Murthy. The idea is to identify “where these professionals can assist the country not only in solving cyber crimes but in addressing policy issues and assisting in reforms to create better governance of IT security across critical infrastructure projects.”

Not a moment too soon, either.

“As the government is trying to spread its reach through financial inclusion and e-governance projects, it's crucial that we are able to handle cyber crime,” said Murthy.

At a curtain raiser for next year's Global Cyber Security Summit in New Delhi, Information Technology Minister Kapil Sibal called for just such a community of ethical hackers last week.

And for good reason. Already, a drive to eliminate corruption and increase efficiency through e-governance had made many government services vulnerable to attack, and Sibal aims to introduce a bill in parliament this session mandating that all government services be automated.

"To combat cyber crimes and make the cyberspace secure, there is a need for greater government-to-government collaboration on sharing of information, global vision to deal with hackers, legal framework that addresses the requirements at the global, and wider public-private collaboration," Sibal told reporters last month.

Last year, state-owned ONGC found some of its oil rigs had been infected by Stuxnet — and only narrowly escaped catastrophe because they operate on ABB, not Siemens, systems, according to a recent report in India's Tehelka magazine. Similar virus problems were detected at a power generation facility in Gujarat and a communications satellite providing the feed to state-owned Doordarshan television and several DTH broadcasters.

And researchers from the Munk School of Global Affairs at the University of Toronto claimed in 2010 that Chinese hackers had cracked Indian government computers to dig out sensitive information related to defence, foreign affairs and the Dalai Lama, according to another report.

But can a team of rogue operators compete with state-sponsored cyber espionage?

When Stuxnet hit Iran, experts immediately fingered Mossad and the CIA because the man-hours needed to create the complex worm more or less guaranteed it was a state-sponsored project. And one of the biggest failures of India's intelligence agencies is that they rarely listen to each other — much less to outsiders who literally speak in code.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/111204/india-hackers-technology-computers

India and China: Commence "cold peace"

China says muzzle the Dalai Lama. India says no. China calls off talks.

By Jason Overdorf
GlobalPost (December 2, 2011)

NEW DELHI, India — The deal George W. Bush offered the world at the beginning of the Iraq war sounded tough. But the choice Beijing has offered New Delhi is even tougher: You're either against us or ... you're against us.

Beijing called off talks with Delhi this week that were meant to address their long-running border dispute. The decision followed a spat over the Dalai Lama's planned speaking engagement at a meeting of Buddhist leaders in the Indian capital.

Despite US President Barack Obama's emphatic statements about America retaining preeminence in Asia — most recently in the form of an address at a gathering in Indonesia of the Association of Southeast Asian Nations (ASEAN) — New Delhi has held out hope that it can remain non-aligned amid China and the US' struggle for dominance.

But, according to analysts, Beijing's decision to pull out of talks with Delhi may wind up pushing India closer to Washington after all, ratcheting up tensions between Asia's largest military powers.

“The soap opera [of India-China relations] just got a little interesting,” said Jabin Jacob, assistant director at the New Delhi-based Institute of Chinese Studies. “It's not really a cold war, but sort of a cold peace.”

According to Indian media, China was unhappy that the border talks were to coincide with the conclave of Buddhist leaders, where the Dalai Lama was set to deliver the valedictory address.

Beijing views the Dalai Lama as a figure intent on undermining China's power and pushing for Tibetan independence, although the Tibetan Buddhist spiritual leader has repeatedly said he wishes for autonomy for Tibetan people rather than independence.
Beijing pressured New Delhi to cancel the conference or bar the Dalai Lama from speaking. When India refused, it cancelled special representative Dai Bingguo's planned meeting with Indian national security advisor Shivshankar Menon.

According to India's former national security advisor, America's responses to China's growing economic and military might have only made Beijing more anxious about perceived attempts at containment. “Now that there is talk of Japan, US and India sitting down and talking about [how to react to China's growing power], and perhaps getting Australia, the Chinese dream of becoming No. 1 in the world [has been] shaken,” said Brajesh Mishra, who was national security advisor to India's prime minister from 1998 to 2004. As a result, he said, “the relationship between India and China becomes very strained.”

China's claim to parts of Kashmir and Arunachal Pradesh — which Beijing likes to call “South Tibet” — have fueled the long-running border dispute between the two countries. But the cancellation of the high-level diplomatic talks had as much to do with the East Asia Summit as it did with border issues or the Dalai Lama.

“Many people in China — policy makers and analysts — are indeed concerned about Indian involvement in the South China Sea,” said Li Mingjiang, a professor at the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University.

“Some Chinese analysts believe that ... India wants to play the South China Sea card against China in order to complicate China's strategic environment in East Asia and gain some leverage in India-China relations.”

By demanding that India muzzle the Dalai Lama, Beijing established that it aims to continue to worry and provoke New Delhi under the guise of protecting itself from meddling in its internal affairs. Beijing believes a good offense is the best defense, Indian foreign policy experts say. And such protestations against purported wrongs keep India too busy parrying to make its own thrusts on issues like the reported massing of Chinese soldiers in Pakistan-administered Kashmir and alleged incursions across the disputed borders in Arunachal Pradesh and Ladakh.

At the same time, India's once-conciliatory Prime Minister Manmohan Singh has shown a new willingness to push back.

“The Indians finally discovered that they have a spine,” said Indiana University professor Sumit Ganguly. “Supineness before the PRC had not really paid off. The demands simply escalated.”

So far, statements from both sides have been carefully calibrated. Though New Delhi refused to interfere with the international Buddhist conference — which hosted some 800 Buddhist spiritual leaders Nov. 27 to 30 — India's president and prime minister avoided the event in deference to Chinese concerns. However, when China subsequently sought to compel the governor and chief minister of West Bengal to steer clear of a public appearance by the Dalai Lama in Kolkata on Thursday, the two officials refused to allow Beijing to dictate their itineraries. Moreover, New Delhi reportedly plans to register a protest with Beijing over its breach of protocol in writing directly to officials in West Bengal instead of going through the central government.

Similarly, even as Beijing blasted the Dalai Lama as a separatist and insisted it would not tolerate any nation providing a platform for his “anti-China” activities, a foreign ministry spokesman told a gathering of Indian reporters that work was already underway to reschedule the postponed border talks.

Yet, only a day or two later, Chinese officials wrote to the chief secretary of West Bengal saying that any official presence at the Dalai Lama's speech implied an endorsement of those self-same "anti-China" activities.

The postponement of the border talks itself may come at a cost to India-China relations, said Shrikanth Kondapalli, a professor of Chinese studies at Jawaharlal Nehru University.

Though progress on the border dispute was unlikely, Dai's discussions with Menon were meant to lay the groundwork for a subsequent visit by Chinese Vice-President Xi Jinping, whom observers expect will succeed Hu Jintao as the general secretary of the Communist Party of China (CPC) in 2012 and as China's president in 2013.

China bristles at US troop build up in Australia

“Xi Jinping's visit could have been useful and crucial,” Kondapalli said. “[And] if Dai Bingguo doesn't make it over the next one month or so, it would be difficult for Xi Jinping to visit.”

Meanwhile, China and India continue to jockey for influence in multilateral regional bodies like the Association of Southeast Asian Nations (ASEAN). The two nations are edging ever closer to becoming direct economic competitors.

Mutual distrust has mounted as both sides shore up their defenses. Each interprets the other's manuevers as an offensive threat. In recent months, India has declared it will raise 100,000 troops for stationing along its border with China, including a regiment equipped with cruise missiles.

“All this has led to a very uneasy situation between the two countries,” said Mishra, former national security advisor.

And there's no sign yet of an early thaw.