Treasury secretary Timothy Geithner had extensive talks with Pranab Mukherjee and a host of others. Then came national security adviser James Jones who met PM, defence minister A. K. Antony, NSA Shiv Shankar Menon, Chidambaram and chiefs of staff committee's Pradip Naik. This was followed by interaction at envoys' level in both capitals. A look at the US demands and India's wish list reveals certain interesting facts. The first is a clear shift in priorities by the new US administration. Clearly, Obama's emphasis is more on trade expansion, opening of more sectors for US business, strategic infrastructure investment in India and direct sales of military hardware without open bid.
Military alliances or grooming India into a regional power and as a counter weight is indeed not on Obama's radar. It is so at least as of now. Instead, pressures are mounting on India to open gates for retail giants like Walmart. Geithner sought concessional investment for US firms in areas like ports, airports, mining highways and banking. He took special interest in rural or mobile banking. Indian side responded by revealing its plans for $600 billion worth infrastructure investment in the next five years. Geithner's arguments truly reflect Obama's economic philosophy. The US is in dire need of curbing consumption and India and China must step up their domestic consumption to help the former wade through its acute financial crisis.
A joint forum - India-US Financial and Economic Partnership - was launched to facilitate the US FDI. In an apparent departure, the new US visitors avoided the usual lectures on the economic reform. On military ties, the shift in emphasis is more striking. True, the US has intensified its push for India signing the military-to-military agreements under the ten-year framework accord. Among them are Logistics Support Agreement (to allow US use Indian military bases), Inter-operability Agreement (to have same kind of hardware), and the one to permit US to inspect sold equipment. The last one with some changes was signed. But due to stiff resistance from Antony, others remain blocked. Under US law, it cannot sell military items to countries that do not sign these NATO-style agreements.
Thus the Obama administration's renewed push is aimed at several billion dollar worth arms sales. Compare this with the Bush administration's structured programmes to involve India in its regional naval buildup. As part of the framework agreement signed by Pranab Mukherjee in 2005, India was to post military officers at Pacific command in exchange for US officers here. India had joined a series of naval exercises with US and its allies as part of a regional line-up. Then there was a 'democracy alliance'. Obama's aides, including the NSA, evade references to such Bush plans. Instead, the concentration is on sale of US aircraft and sophisticated equipment.
The Indian side is making honest efforts to meet the US demands. Yet the Obama visit comes amidst many a bad omen. Watch the sudden US retort on compensation for Bhopal gas tragedy, the IT blow on India where it hurts most, veiled warning on CTBT and continuing curbs on technology transfer. We may wish to play these down but these are compulsions of a besieged president struggling to win the crucial November elections to the US Congress. He is under immense pressure to resort to populism in a highly adverse domestic climate.
We in India rant against the US decision to burden Indian IT firms with heavy imposts. The very fact that the voting in the Congress was unanimous shows its populist appeal in US. For the Indian establishment, this is the hardest blow because job prospect for the middle classes has been its main argument to justify its globalization policy. The Nasscom is so upset about India's timid response to the US action. Some of its bosses have even suggested 'shelving' of the liability bill and insisting on global bids for nuclear plants. Then came another shock. A senior Obama aide has made clear that if India 'rakes up' the issue of seeking compensation to Bhopal gas victims, it will hurt the relationship. Clearly, the kind of cordiality and spirit of mutual accommodation that had marked the Bush ear is missing.
Why this cordiality deficit? Herein lay some unpleasant truth we would love to ignore. Temperamentally and ideologically, the present Indian establishment is inclined towards Republicans. They are not as 'deeply in love' with Obama as with Bush in 2008. Diplomatic compulsions apart, the present team in Delhi is more with the US corporate bodies that are in a fierce battle with the Obama administration. Obama blames 'three decades' of financial liberalization and irresponsibility by the 'too-big-to-fail' banks for the sufferings of millions of bankrupt Americans. He introduced sweeping reforms to reform the classical neo-liberal reform. As against this, we here are still talking of the 'next generation' financial sector reforms.
He says: 'You cut taxes for millionaires, you cut rules for special interests groups, and you cut working folks loose to fend for themselves'. This is what exactly we here did even in the current budget. Obama has to fight the vested interests on each of these reforms: healthcare bill to help the left-out millions, additional rules to check lobbyists' opaque intrigues with officials, bill forcing disclosure of political funding by the corporate giants, stopping $68 billion payments to middleman and making direct payment to the students. All this acutely disturbs those of us who remain entrapped in the pre-meltdown reform mindset.
The November election will mark the first real test in the ensuing confrontation between Obama and the corporate and financial interests aligned with the Republicans. Sections in the establishment here compare Obama with the anti-corporate V.P. Singh of 1989. For them, Obama is not a hero. Hence we played down or totally ignored his swimming in sea to prove there was no more any old slick. The belief here is 'Obamasim', like V.P. Singh, is going to be a brief phenomenon. They presume that his kind of 'socialism' can never survive in the traditional American milieu. He will have to either change himself or face doom. Despite this conviction, the dilemma over treating the Obama visit remains. (IPA Service)
India
DELHI CONFUSED OVER DEALING WITH OBAMA
SPIRIT OF MUTUAL ACCOMMODATION MISSING
Special Correspondent - 2010-08-21 10:28
On the eve of Bill Clinton's visit to India, the Vajpayee government had relaxed import of as many as 1,400 items which had prompted the then Japanese prime minister to warn US that China, not Americans, will be its real beneficiary. Such financial tribute to big power visitors has been an essential part of our post-1991 foreign policy. In the case of Barack Obama's state visit in November next, preparations had begun April last with a series of diplomatic exchanges to identify areas of cooperation. The nuclear liability bill to exempt the US suppliers from paying for damages is on top of the list.