Saturday, June 28, 2008

The right deal over the wrong

If energy was the prime problem in the country today, the IPI pipeline was the no-brainer deal to go for, not the nuclear deal, for which the incumbent prime minister Manmohan Singh is willing to sacrifice his government, that too at a time, when inflation is a major problem facing Indians.

As articulated over and over again, one of the chief reasons for the US dangling of the nuclear deal to India was to tuck India into a strategic partnership to suit the geopolitical aims of the global hegemon. And that of course meant that India could be used in a web of relationships that would be positioned in opposition to whomever the US sees as a threat in the Asian region. And it does not take too much brainpower to realise that rising economic powers China in east/ s
outhern Asia and Iran in west Asia are seen as the primary poles of opposition to American hegemony in the continent.

As such, the Americans have an intertwined relationship with the Chinese, with the latter’s manufacturing base dependent upon the purchasing power of the former and the former servicing its economy despite huge fiscal deficits through Chinese holding of US treasury bonds. With Iran too, there is an indirect relationship. Having been bogged down in Iraq and having been responsible for the ethnic polarisation mess up, the Americans have relied upon Iran indirectly to curb radical Shia elements from creating headaches for the occupation forces in the country.

But despite such dependencies with both China and Iran, the US administration finds threat perceptions from both the countries (apart from Russia in the Eurasian region). No wonder, there have been several strategic moves to both threaten (in the case of Iran) and contain (in the case of China and Russia) that have been adopted by the Americans. The US in particular has used the nuclear enrichment process in Iran as a card to play up fears of a very hostile Iranian threat. That Israel, the staunchest ally of the US considers Iran as its primary enemy in the region, has only added to American hard talk as well as tightening of sanctioning regimes on Iran. Indeed sections of the US administration, especially the current Vice President Dick Cheney, have tried to create a situation that would demand full scale war against the Shia clergy state.

It is on this canvas that the nuclear deal between the US and India has been painted. No wonder, the Hyde Act which enables the Indo-US nuclear deal clearly states that the US would aim to persuade India to work with the country to isolate and sanction Iran and to prevent Iran from developing nuclear capabilities. By sanction, the US of course intends to isolate the country and from there flows the logic that any development of natural resources in the country which could be used for export is also anathema. No wonder, the US has expressed its dissatisfaction with the idea of the Iran-Pakistan-India (IPI) natural gas pipeline. And it is no mystery why there has been scarce dedication to get over the bottlenecks that have crept up in the implementation of the pipeline deal by the Indians themselves, embroiled as they are in still trying to get the nuclear deal with the US operationalised.

Recent statements by the US Ambassador to India, David Mulford, as well as US congressmen in charge of drafting foreign policy decisions, such as Gary Ackermann have clearly established the US opposition to the pipeline deal. The dubious understanding of US of the west Asian situation apart, the fact that a civil nuclear energy pact which would establish a supplier-buyer relationship between the US and India could be used to corner a sovereign nation’s foreign policy to be subordinate to a particular world view of the US, would be one reason to oppose the single agenda nuclear deal. Far from mitigating doubts on this strategic aspect of the nuclear deal, the Indian government led by Prime Minister Manmohan Singh has seen it fit to sometimes deny the implication, sometimes suggest that the strategic issues overhanging the deal are not “binding” on India and have even tried to question the viability of the pipeline project (the PM stated in the US that it was “difficult” to get a financial institution to under-write the pipeline project).

It is another no-brainer to anyone familiar with sources of energy that civil nuclear energy can be used for electrification purposes and nothing else, whereas fossil fuels are not just used for power supply (a minuscule amount) but also as transportation fuel. At a time, when crude prices are so high to create hitches for the macroeconomic management of general commodity prices in the country, it is incumbent upon the Indian government to finalise the pipeline deal to quickly mitigate their various problems in the energy consumption area. Instead, the government is prioritising the nuclear deal as a sine qua non even as every optimistic estimate establishes that the nuclear reactors sourced through the deal would be operational about a decade from now and could contribute merely 7-10 percent of India’s overall energy needs. And there is this obsession, with pushing this deal through despite the strategic caveats and the wide ranging opposition to the features of the deal from majority sections of Indian polity. It has reached a point where the prime minister is keen on even letting the government fall if required, that too when inflation is in double digits and agrarian distress is still a menace.

Why exactly is this obsessive rush to operationalise the nuclear deal even with its misgivings? The official reason given is that the deal would open up commercial transfers of nuclear technology and fuel not just from the US but from other countries. The American help could be used to influence the members of the Nuclear Suppliers’ Group (NSG) cartel to exempt India from various provisions that prevent nuclear fuel transfer to a country that has not signed the Nuclear Non-Proliferation Treaty (NPT), it is argued. And such a help can only be possible in the tenure of the current George Bush administration, supporters of the deal suggest, as any future administration cannot be relied on to adhere to the broad tenets of the agreement signed between George W. Bush and Manmohan Singh in 2005.

What is not answered is whether any future administration will evoke the provisions in the Hyde Act to terminate the nuclear commerce terms with India or if Indians themselves would find such a culmination so unfavourable and would be forced to toe the provisions of the Hyde Act itself. No wonder, opponents of the deal are not keen on operationalising this deal during the tenure of the current Bush administration as they find objectionable clauses that could tie down strategic options. For the Left parties in particular, the intent of the present government to fully establish the broad parameters of a strategic and military partnership that the US has drawn up for India along with the nuclear deal is even more problematic, as it not only goes against the grain of independent foreign policy for the country, but also militates against the parties’ stated aim to oppose imperialism, particularly that derives from the policies of the US administration.

If the government was keen on addressing energy requirements in both the short and the long term, it would have gone ahead with clearing the hurdles for the pipeline deal, easing the fuel cost burdens on the Indian consumer as quickly as possible. It could have prepared a long term strategy for energy usage in the country and could have fit the nuclear energy option within this framework. Instead, the government has willed itself to throw all caution to the wind in pursuing the nuclear deal at all costs. Admittedly, it had worked hard to reach even this point of having a 123 Agreement with the US which was devoid of many of the misgivings with the Hyde Act in the agreed text. But the implications of the Hyde Act still remain as well as the intent statements of the US administration. There is no hurry in waiting till a new administration is in power to operationalise the nuclear agreement, even as there is alacrity needed in getting the pipeline deal implemented. Besides, the government would not lose power if it did the latter and could concentrate on other pressing issues of the day, inflation in particular, till it has to face the electorate at the end of the mandated five years in power.

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