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OBAMAS VISIT IN INDIA

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					           OBAMA’S VISIT IN INDIA




                                      Klaus Julian Voll


                                      November 2010




Any further information can be obtained through FEPS Secretary General, Dr Ernst Stetter, at
   ernst.stetter@feps-europe.eu or through FEPS Junior Policy Advisor, David Kitching at
                              david.kitching@feps-europe.eu




          FEPS Rue Montoyer 40 B-1000 Brussels +32 2 234 69 00 | www.feps-europe.eu
THE USA CONSIDERS INDIA AS A WORLD POWER

Barack Obama’s visit to India between the 6th and 9th of November 2010 has been overall positive,
irrespective of an earlier skepticism in the media.1 The expansion of economic relations had been a
priority. Trade relations between the United States of America and the third largest economy in Asia
can be further expanded. Politically, Obama surprised with his statement, that his government would
welcome India’s membership in a reformed UN Security Council “in the years to come.” Altogether
he tried to strengthen the bi-lateral relations and acknowledged India’s role as a world power. 2


“BECOMING AN APPRENTICE BIG POWER”3

The relations between the largest and the oldest democracy in the world would become “the most
defining ones in the 21st century”, according to Obama. Irrespective of the still huge gap in the size of
the economies4, the US President described India as a world power and as a global partner, in order
to face jointly the global challenges, such as, for instance, poverty in Africa5 and even joint civilian
projects in Afghanistan.


With greater power India’s responsibility would also increase. Rather undiplomatically Obama asked
that India condemn the human rights violations in Burma (Myanmar), particularly since “in
international fora you are shying away from doing so.” After his departure, the Indian Ministry of
External Affairs referred to the strategic and economic interests vis-à-vis Burma, alleging a
convergence in basic aims but differences in methods. Critics posed the question, if the US President
would link India’s attitude towards Iran, where it has energy- and security interests, with its UN
Security Council seat.


The US committed itself to India becoming a member in some of the US led cartels6, in order to
prevent nuclear proliferation. India should play a bigger role in prevention – also through a tightening
of its own export controls – as mentioned in the joint statement of both governments. The delivery
of dual-use technologies will be facilitated in future, since major public sector enterprises (Defense
Research and Development Organization and Indian Space Research Organization) have been
removed from the so-called Entities List.




1
  George Perkovich: „The special treatment of India (under Bush) was unrealistic and therefore unsustainable.“ in: „Towards
Realistic US-India Relations“, Carnegie Endowment for International Peace, 2010
2
  Kanwal Sibal: Grading the President. Between Indian Hopes and American Reticence. The Telegraph, 11. 11. 2010
3
  Compare Manoj Joshi: „The art & science of being an apprentice power.“ Mail Today, 10. 11. 2010, p. 10
4
  The American GDP is $ 14 trillions, the Indian BSP $ 1.3 Trillion.
5
  But the Indian Government has also to demonstrate successes in its own country, since according to the latest Human
Development Report India is ranked 122 amongst 138 countries (Pakistan: 116, Bangladesh: 112)
6
  Nuclear Suplliers Group, Australia Group, Wassenaar Arrangement, Missile Technology Control Regime


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Besides Pakistan (cross-border terrorism as well as composite dialogue)7, Afghanistan and maritime
security, China naturally played an important role in the discussions, particularly also with regard to
its increasing role in South Asia. But India does not understand itself at all as a corner-stone in any
strategy of containment with regard to China.


Strobe Talbott8, President of the Brookings Institute, emphasized that the relationship between
America and India must rely on itself. The rise of China would certainly lead to a deepening of
existing consultations about developments in East Asia, since the region is set to become the
economic, energy and strategic hub of the coming decades. Yet New Delhi will have to carry out a
balancing act between maintaining its relations with Washington and exercising its strategic
autonomy.9


POTENTIAL FOR ECONOMIC EXPANSION

According to leading Indian experts Obama acted too much as a “salesman of American economic
interests”10, emphasizing the creation of jobs in the United States and thereby “diminishing the
stature of the US President.”11 Indian industrialists maintained that the US would currently need
India more than vice versa. More critical voices opined that Indian industry, still too protected and
suffering from a “protectionist mindset”, should increasingly compete in the most open economy in
the world.


Obama retracted indirectly from his earlier attacks about the out-sourcing of jobs to India: “There
exists still a caricature of India as a land of call-centers and back-room offices, which costs American
jobs.” The Indian IT industry earns 60% of its income in America and increasingly opens offices with
employment for Americans.


Bi-lateral trade in 2009-10 consisted of $36.4 billion (2008-09: $41.8billion).12 For 2010-11
approximately $50billion are expected. If one does not count the European Union as a whole, then

7
  Obama demanded, that all terrorist networks, including Lashkar-e-Tayyeba, which is above all directed against India, must
be defeated. Manmohan Singh made it clear, that without an end of cross-border terrorism there could be no constructive
discussions with Pakistan. - Yashwant Sinha, a former BJP-Foreign Minister,opined: “We cannot expect much from the USA
with regard to cross-border terrorism from Pakistan. “
8
  After the Indian nuclear tests in 1998 Strobe Talbott negotiated in various rounds the rapprochement between America
and India during the second Clinton administration.
9
   Yashwant Sinha, BJP, demanded, that, irrespective of different opinions, discussions should take place on the basis of
“sovereign equality”. He warned of one-sided Indian concessions and demanded to revise imbalances in the bilateral
relations.
10
  The US Indian Business Commerce (USIBC), led by Ron Sommers in Washington, conducted the business interactions and
not like in the past the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and
Industries (FICCI)
11
    According to Kanwal Sibal, former Secretary in the Ministry of External Affairs and Non-Executive Vice-President
European Aeronautic Defence and Space Company (EADS / Indien), op. cit,
12
    Trade between China and the US is about $ 500 billion India’s economic performance is less than 25% of China’s, which
holds $ 2.5 trillion in American securities. Yet Chinese consumption is counting only for 35% of its GDP.



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the US is India’s third largest trading partner behind China and the United Arab Emirates, whereas
India figures behind The Netherlands as No. 12 amongst America’s foreign trade partners. Only 2% of
American exports go to India.


The US is the third largest investor in India with $1.9 billion of altogether $25.8 billion of foreign
direct investments in 2009-10. One fifth of the rather remarkable Indian FDI went to the US between
2005 and 2009. There have been $ 5.5 billion investments and nearly $ 20 billion in fusions and
acquisitions by Indian companies in the US. Till now, there exists no bi-lateral trade-agreement with
the US, like it exists between India and Japan as well as with South Korea and as it is currently
negotiated with the EU.13


Prior to this visit there have been sales, amongst them civilian and military planes, for about $10
billion and during the visit further agreements for $10 billion, thereby creating about 50,000 jobs in
America. Particularly in the defense sector American companies, with their “cutting-edge
technologies”, envisage bigger contracts.


In the field of civil nuclear technology American companies are competing in a market of $120 billion,
together with Russian, French, Japanese etc. companies. India committed itself to ratify the
“Convention on Supplementary Compensation” in the coming year.


During the 12th Five-Year-Plan from 2012-13 until 2016 the demand for investments in infrastructure
is estimated to be $ 1 trillion. Both governments set up an infrastructure fund for $ 10 billion
A joint Research and Development Centre for clean energies (solar, bio-fuel, energy efficiency) has
been agreed upon.


In the medium and long run the United States endeavours to quadruple their exports to India. As a
follow-up to this visit increasing US-pressure is expected on the Indian government, in order to open
up retail trade (supermarkets) as well as the insurance and defense sectors for bigger foreign
participation.


PERSPECTIVES

Obama, on his way to Jakarta, the G20 summit in Seoul and to Japan, underlined the leading role of
America in Asia. According to Indian experts there will be in future a bigger US focus on Asia and less
on the Islamic world. Obama demanded from India, “not only to look to the East, but also to engage
itself there.”14


13
   Trade and industry Minister Anand Sharma propagated after Obama’s visit the swift signing of such an agreement, which
should comprise trade, investments and services.
14
   US Ambassador Timothy J. Roemer referred in a NDTV-interview with Dr. Prannoy Roy to India’s growing influence in Asia
and that his government regards India “as a cornerstone of its foreign policy”.


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The renowned Pakistani security expert, General (rtd.) Talat Masood, conceded that “this visit
established India’s status as an internationally acknowledged player.”


Pakistan’s Foreign Minister Shah Mehmood Qureshi, who otherwise occasionally antagonizes India,
said in a conciliatory manner: “Pakistan is willing to engage with India. The country has a constructive
approach and we feel collectively we can dismantle the terror machine“15


Obama stated several times that India should have an interest in a stable Pakistan. The moderate
(Mirwaiz) and the pro-Pakistan (Gelani) wing of the All-Party Hurriyat Conference in Kashmir showed
content with Obama’s diplomatic reference to Kashmir as a “long-standing dispute between India
and Pakistan”.16 The new Indian army chief General V. K. Singh stated in a TV-interview, that Jammu
& Kashmir are militarily under control. Kanwal Sibal opined, that “Obama had given Pakistan too
much cover.”


Obama, like his wife Michelle, stressed in a discreet manner, that besides his shining example
Mahatma Gandhi he also mentioned explicitly Dr. B. R. Ambedkar, the historic leader of India’s
“Untouchables” (Dalits or Oppressed), demanding to recognize their common humanity.17 The
relations between the US and India should be based on the partnership of the people of both
countries.


The economically very successful approximately three million Non-Resident Indians and the more
than one hundred thousand Indian students in America will also in future contribute to even more
intensive relations between both countries. Karl Inderfurth, a former Assistant Secretary of State for
South Asia, referred to the joint support of Democrats and Republicans for the special relations
between America and India.


Manoj Joshi, Consultative Editor, Mail Today, highlighted the economic distance between China and
India, the latter’s still lacking will to power and America’s role in Asia:
“America’s main engagement remains Sino-centric. The same could be said of the attitude of Japan,
Australia and the ASEAN. India is a good hedge, but China is where the principal bets remain. - India is
a hedge against its (US) China relations turning sour, an insurance policy for the future.”




15
   The argumentatively very good and sober Air Vice-Admiral (Rtd.) S. Choudhry, a former Pakistani Ambassador, referred in
NDTV to a“Pakistan fixation of the Indian mass media” particularly ahead of the visit.
16
   Naseer Ganal: Obama’s K-words are music to the ears of separatists., Mail Today, 9. 11. 2010, p. 15
17
   Already a decade ago, the Rockefeller Foundation supported the Indian Institute of Dalit Studies in New Delhi, which had
been at that time under the patronage of India’s first Dalit President K. R. Narayanan.


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