Sol Sanders | Follow the money No. 82 -- India: a perfect storm

Latest from uncle Sol.  A version of this column is scheduled to be published in The Washington Times, Monday, Labor Day, Sept.5, 2011 -- Chris
 

Follow the money No. 82 -- India: a perfect storm

Sol Sanders <[e-mail]>

Pollyannas had looked to“the emerging economies” – China, India, Brazil, etc. -- for growth to help ward off worldwide economic recession, as the Western economies and Japan stumbled.

It’s clear that isn’t going to happen. China is trimming its sails to dampen inflation, braking unlimited infrastructure expansion at any cost to produce jobs while trying to meet increasing constraints on its subsidized exports. Brazil, with a new administration enmeshed in traditional corruption, faces a commodities export crash while fighting off devastating import competition for its domestic manufacturing from its major customer, China.

But largely ignored -- what with the dramatic Euro crisis and a threat of double-dip American recession –   is the more important emerging economy, India, now slipping back into its traditional morass. At stake was the hope 1.5 billion people, almost a quarter of the human race, could move with democratic values into a modern society. That possibility was long seen as counter to “the Chinese model” which economically successful, possibly temporarily, is essentially oldstyle Oriental despotism.

Heading the list of New Delhi’s woes is a leadership deficit. Italy-born, 64-year-old Mme. Sonia Gandhi, widow of a former prime minister and backseat driver to the ruling Congress Party, has been secreted away to New York for cancer surgery [if by a noted Indian émigré physician]. She leaves behind a power vacuum, not only in her ruling Party but in government. Prime Minister Manmohan Singh, a technocrat, increasingly is drowning in massive corruption, growing inflation and a flight of capital escaping crippling bureaucracy.

Rahul Gandhi, Mme. Sonia’s 41-year-old son, has yet to prove he has the charisma of three generations of independence leader Pandit Jawaharlal Nehru’s family who imperiously have dominated politics – if, arguably, preserving national unity. Caught in India’s worship of priestly figures, a traditional hunger strike by an anti-corruption hero, Anna Hazare, was mishandled. [Mr. Singh has had to backtrack from Mr. Hazare’s arrest.] The government, correctly, is terrified Mr. Hazare’s high-minded tactics could be appropriated by mushrooming anti-government, anti-business campaigns, further paralyzing governance and the economy.

India’s international role, too, is in jeopardy. Naïve Washington hopes for a U.S.-India alliance against Beijing’s growing aggressiveness have been dashed. American forgive and forget efforts have dawdled in extending nuclear and other advanced technologies after New Delhi defied the world to build atomic weapons -- matched by Pakistan with Chinese and North Korean assistance. American vendors recently were shockingly left off the short list for a $10 billion fighter plane bid. There’s suspicion stricter American anti-bribery laws than notorious European “incentives” played a role. A 25-year-old case against Mme. Sonia’s deceased husband, Prime Minister Rajiv Gandhi, for a Swedish purchase was recently shelved, more or less indecisively.

Meanwhile, decades of addiction to a Moscow alliance continues among India’s diplomats, illogical as it might be what with growing Russian arms delivery failures and Moscow’s massive military sales to China. Furthermore, India’s proposed huge overseas defense purchases may not meet its security requirements. Mr. Singh has called India’s greatest threat “Maoist” insurgencies in a dozen Indian states. New Delhi and state governments have passed responsibility for their suppression back and forth with little success. These social conflicts grew out of pro-Chinese proclivities of Bengal’s Communists whose 30-year hold on Calcutta, India’s second city, was recently broken, probably only temporarily.

After three and a half wars, negotiations continue fitfully to reach a compromise with Pakistan, the twin regime bloodily carved out of British India over half a century ago. With its own Muslim population as large as Pakistan’s, Indian leaders increasingly appreciate an implosion there would threaten its own breakup. But terrorists with tentacles leading from Pakistani military through the perennial dispute over Indian occupation of Kashmir are torturous, made even more dangerous by occasional clashes of regular forces such as took place in early September. Washington, after fitful attempts, has failed to mediate the feud, caught between aiding a bankrupt Islamabad and attempting to warm post-Soviet Cold War relations with India.

This picture is clouded further by New Delhi’s fishing in troubled ethnic waters in Afghanistan, and Pakistan itself. The Pushtoon terrorist hotbed on the Afghan border is where Pakistani, Indian and Chinese interests conflict. China, meanwhile, continues a campaign of seduction of Pakistan, a massive Tibet buildup, including missiles and probably nuclear weapons, as well as infiltration in the Himalayan border states of Nepal and Bhutan and at both eastern and western ends of the 1500-mile frontier.

sws-09-02-11

Comments

[Pay Day Today]

India has a three thousand year cultural tradition of many different ethnicities and religions working and living together. Many wars and conflicts along the way, but they know how to do it successfully.

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just learned some useful things from your post ..... thanks

[chindit13]

Thanks, but you hit so fast I didn't have time to correct my typos! I've got a poor internet connection here, so I sometimes have to rush and post while the system seems to be working.

[HD]

I too enjoyed this post - reminds me not to be quite so myopic with regard to China.

 I did however, watch every episode of "Outsourced" on NBC - so clearly I'm not completely ignorant of  the current geopolitical status of India.

[fl3tch3r]

Mingala Ba chindit13, and good post.

Similarly, India has driven another neighbour, Nepal, towards the Chinese for petty reasons. For example, businesses that set up in Nepal, with a view to exporting to India, soon find rules implemented that block the exports. Not a smart way to treat a neighbour, especially one that has the greatest possible natural barrier in the Himalayas, which the chinese are now negating with the construction of relatively decent roads.

India might be growing, but it really needs to grow-up if it is to realise its potential.

[EhKnowKneeMass]

In my opinion, there are three things most Indians in India lack: respect of time, accountability and discipline. Unless the nation changes on those areas, India will eventually Balkanize. Wage arbitrage as the source of job growth is only going to last as long as the currency is weaker. Once that appreciates, watch those jobs rush out. Organic growth is lacking, infrastructure is piss poor, talking heads on TV with familiar platitudes which hypnotize the plebes into a stupor, the divide between the haves and the have-nots, etc., etc., etc., is eating the country from the inside. The facade can last only so long, before the structure folds. Only a matter of time, only a matter of time.

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an unvarnished view for sure.

Some other sources for regional, non-American dominated views more regionally nationalistic:

Asia Times      www.atimes.com   (it was their senior Islamabad reporter who was murdered near the beginning of the year ... that should tell you how 'deep' he had gotten); home of the weekly Spengler column

South Asia Analysis    www.southasiaanalysis.org   written by initial leader of Indian counter-intelligence .... a USA cynic, partial for historical 'ties' to Russia, an Indian nationalist (no issue with that .... 'nationalism' is so World War 1 and such a dirty word in our globalized, understand the reasons, if any, of your enemy, 'modern' 'western' view ala NYTimes Tom Friedman/CNN Fareed Zakaria ...  nice & interesting men but arguably naive)

both the above were telegraphing, in their reporting/analysis regarding Afghanistan,  that 'something' was 'coming' the Summer of 2001.  The snake had coiled but it was unclear to what purpose, intent or specific act.