The Desi Factor in U.S.-India Relations

According to a new Gallup survey, more than two-thirds of the U.S. public has a positive impression of India, a score that even edges out Israel’s traditionally-high favorability rating.  This is the latest indicator of how decisively American perceptions about the country have changed.  Not too long ago, India was regarded as the very epitome of what the term “Third World” meant – decrepit, destitute and pitiable.  Yet in a relatively short period of time, the popular view of India has changed in critical ways.

For many decades most Americans were inclined to the views of President Harry S. Truman, who dismissed India at its birth as an independent state as “pretty jammed with poor people and cows wandering around streets, witch doctors and people sitting on hot coals and bathing in the Ganges.”  His Secretary of State, Dean Acheson, had an even more incisive perspective: “by and large [Indians] and their country give me the creeps.”  When Daniel Patrick Moynihan was U.S. ambassador to India from 1973-75, he regularly lamented that Washington was utterly indifferent to the country’s fate; writing in his diary, he confided that it “is American practice to pay but little attention to India.”  In a cable to the State Department, he complained of dismissive attitudes, “a kind of John Birch Society contempt for the views of raggedly ass people in pajamas on the other side of the world.”

Public opinion kept close track with official attitudes in Washington.  Harold Issacs’s classic 1958 survey of U.S. elite opinion, Scratches on Our Minds, revealed that influential Americans held very negative perceptions of the country, associating it with “filth, dirt and disease,” along with debased religious beliefs.  A State Department analysis prepared in the early 1970s found that U.S. public opinion identified India more than any other nation with such attributes as disease, death and illiteracy, and school textbooks throughout this period regularly portrayed it in a most negative light.  This view was again underscored in a 1983 opinion poll, in which Americans ranked India at the bottom of a list of 22 countries on the basis of perceived importance to U.S. vital interests.

So, what accounts for the significant shift in perceptions?  An obvious part of the answer lies in the dramatic turnabout in Indian prospects launched by the 1991 economic reforms.  For all the attention lavished on China these days, Jim O’Neill, the progenitor of the BRICs acronym, contends that India still “has the largest potential for growth among the BRICs countries this decade.”  A recent Citibank report concludes that India will likely be the world’s largest economic power by 2050 and, according to International Monetary Fund data, India supplanted Japan as Asia’s second-largest economy last year.  President Obama routinely points to Bangalore as a threat to America’s competitive advantage while Lawrence H. Summers, his former chief economics adviser, touts the virtues of the Indian development model.  And the jugaad concept, once seen as a sign of backwardness, is now viewed as an innovative approach to business management.

Another prominent piece of the explanation lies in U.S. admiration for India’s durable democratic traditions.   The concept of democratic India had particular appeal to George W. Bush, who engineered a remarkable transformation in bilateral affairs.  Robert D. Blackwill, who served as Bush’s first ambassador to New Delhi, recalls asking Bush as he geared up his presidential campaign in early 1999 about his special interest in India.  Bush immediately responded, “a billion people in a functioning democracy. Isn’t that something? Isn’t that something?”

But a less obvious, though equally important, factor is also at work: The increasing stature of Indians in American society has changed how all Americans think about India.  Consider the following examples:

  • The election of Bobby Jindal and Nikki Haley to the governorships of Louisiana and South Carolina (respectively), states in the heart of the Old Confederacy.
  • The entertaining television ad Intel ran a few years back lauding the rock star status of Ajay Bhatt, the co-inventor of the USB computer connection.
  • The ubiquitous presence of Sanjay Gupta, CNN’s chief medical correspondent. In 2003, he was named as one of the world’s sexiest men by People magazine and a “pop culture icon” by USA Today. And in 2009 he was mentioned as President Obama’s choice as Surgeon General of the United States, the country’s top public health official.
  • The winner and the two runners-up of last year’s national spelling bee were Indian-American children.  It was the fifth consecutive year, and the tenth time in the last 14 years, that an Indian American won.  The top four positions in the 2012 National Geographic Bee were also Indian-American kids.
  • Last summer witnessed a high-profile Desi clash– the successful prosecution on insider trading charges of Rajat Gupta, McKinsey & Company’s former chief executive and an iconic figure in the Indian diaspora, by Preet Bharara, the U.S. attorney responsible for Wall Street.  Bharara was named last year to TIME magazine’s roster of the world’s 100 most influential people and Bloomberg Market’s “50 Most Influential” list.

Large-scale Indian migration to the United States did not begin until the late 1960s and though the community remains relatively small – less than one percent of the overall U.S. population – it is one of the country’s fastest-growing ethnic groups.  But the community’s growing success has given it an influence and impact wholly disproportionate to its size.  As one analyst puts it, “Indians in America are emerging as the new Jews: disproportionately well-educated, well paid, and increasingly well connected politically.”

According to a recent Pew Research Center report, 70 percent of Indian immigrants to the United States have at least a college degree, compared to the national average of 28 percent, and Indians lead all other Asian sub-groups in income and education levels.  This finding echoes another PRC study that Hindu Americans possess the highest socio-economic accomplishments of any U.S. religious community.

Indians have become a driving force on the U.S. business landscape.  According to a new Kauffman Foundation report, Indian immigrants established one-third of Silicon Valley start-ups in 2006-2012, up from about 7 percent in 2005.  Indeed, Indians founded a markedly greater number of engineering and technology firms than did immigrants from other countries, including those from China and the United Kingdom.  And a RAND Corporation study reports that Indian-American entrepreneurs have business income that is substantially higher than the national average and higher than any other immigrant group.

The success and prosperity of the Indian community has had a real impact on U.S. foreign policy.   First, it has helped change public opinion on India in relatively short order, since it is difficult to dismiss or disparage a country that has produced immigrants who have become so rapidly admired in U.S. society.

Second, the growing impact of the Indian American community catalyzed stronger interest about India on Capitol Hill beginning in the mid-1990s, helping in turn to reverse Washington’s traditional disregard of the country – recall, for instance, how the U.S. ambassador’s post in New Delhi was vacant for the Clinton administration’s first year. Pro-India caucuses in the U.S. Congress played an important role in the lifting of U.S. economic sanctions levied against India in the wake of its 1998 nuclear tests, and in securing the ratification of the landmark U.S.-India civil nuclear agreement a decade later. Today, a third of the members of the U.S. Senate and House of Representatives belong to these caucuses.

Third, the Indian-American community has been at the forefront in building critical societal linkages between its native and adoptive countries. Consider, for example, the dynamics at work more than a decade ago. At the same time as Washington was imposing sanctions in response to the 1998 nuclear tests, concerns about the “Y2K” programming glitch led businesses on both sides to set the foundation for today’s strong technology partnership. The significant role played by these societal bonds leads Fareed Zakaria to compare U.S.-India ties to the special relationships the United States has with Great Britain and Israel. And Shashi Tharoor, formerly India’s minister of state for external affairs, has likewise remarked that “in 20 years I expect the Indo-U.S. relationship to resemble the Israel-U.S. relationship, and for many of the same reasons.”

Although they are often overlooked by national policymakers, non-governmental ties fostered by the Indian-American community will be one key in securing the long-term growth of the new bilateral partnership.  As Shivshankar Menon, now Prime Minister Singh’s national security advisor, remarked a few years back, “[I]f anything, the creativity of [American and Indian] entrepreneurs, engineers and scientists has sometimes exceeded that of our political structures.”

This commentary is cross-posted on Chanakya’s Notebook. I invite you to connect with me via Facebook and Twitter.

Aneesh Chopra to run for Lt. Governor of Virginia

Aneesh Chopra, the country’s first Chief Technology Officer (CTO) appointed by President Obama, recently announced his plans to run for Lt. Governor of Virginia. Among the most prominent Indian-Americans in U.S. politics today, Aneesh Chopra had been strongly supported by USINPAC to facilitate his appointment as the CTO. As he begins his campaign for the new office, USINPAC once again pledges its wholesome support to his efforts.

Aneesh Chopra

Indian-American Aneesh Chopra is running for the office of Lt. Governor of Virginia

The son of immigrant Indian parents who worked hard to achieve the American dream, Aneesh Chopra is an example of the caliber, dedication and hard work of the Indian-Americans. The community’s growing participation and importance in American politics is personified by the likes of Chopra.

Chopra is uniquely placed to work on some of the most important issues such as health care that face the people of Virginia. Having previously worked in the health care sector, he has studied and understands the working of the health care system in Virginia as well as in the US. He has worked extensively on the Medicaid and believes that the health care system should be upgraded to improve the quality and lower the costs. His record in improving education during Gov. Kaine’s administration had been impressive and promising and portends innovative solutions to Virginia’s educational challenges.

Aneesh Chopra, during his previous stint as the CTO “helped design the President’s National Wireless Initiative, including the development of a nationwide public safety broadband network, establish a set of Internet Policy Principles including the call for a Consumer Privacy Bill of Rights, and led the implementation of the President’s open government strategy focused on unlocking the innovative potential of the federal government to solve problems and seed the jobs and industries of the future.” He looked for ways to engage people in using technology, such as electronic health records for veterans, access to broadband for rural communities, and modernizing government records. Prior to being the CTO for President Obama, Aneesh Chopra led the charge in Virginia and was noticed by the President for the work he did. Commenting upon his work in Virginia, Eric Schmidt (Google) said, “Aneesh built one of the best technology platforms in government in the state of Virginia.”

Today, as more and more Indian-Americans seek elected office and participate enthusiastically in the political process, USINPAC understands that more work is required to bolster and inspire these young Indian-Americans. Over the past 10 years, USINPAC has untiringly supported several Indian-American candidates for local, state and federal office. The support has been an elaborate involvement in the candidate’s campaigning process and included organizing fundraisers, awareness drives and grassroots activities to maximize the candidate’s reach. Prominent names among those elected, who were supported by USINPAC, included Ami Bera (only Indian-American in the U.S. Congress today), Bobby Jindal (Louisiana Governor), Nikki Haley (South Carolina Governor), Kumar Barve (Majority Leader, Maryland House of Delegates), Kamala Harris (California Attorney General) and Swati Dandekar (former Iowa Senate member).

As Aneesh Chopra works on his campaign for the race of Lt. Governor of Virginia, USINPAC wishes him well and looks forward to working with him towards his election.

H1B applicants not the best?

Guest post by Madhu Nair

By definition, the H1B is a non-immigrant visa issued by the U.S. allowing companies to recruit foreign nationals in specialty occupations under the Immigration and Nationality Act. The act, practiced by a number of multi-national companies, has been their gateway to some of the best talents in the world. Aspiring workers from emerging economies like India and China have been quick to catch in on the rush. The practice gave companies an edge over their peers as it reduced their working capital, increased efficiency and scaled up their businesses. For employees, on the other hand, this was an opportunity to realize and live the American Dream.

But if a recent report is to be believed, the quality of H1B workers does not fit the category of “the best and the brightest”. Norman Matloff, professor of computer science at the University of California in Davis along with the Economic Policy Institute, published a study which compared U.S. and foreign IT workers’ salaries, rates of PhD awards, doctorates earned and employment in research and development to determine if H1B visa holders had skills beyond those of U.S. IT workers. As per Matloff, the study did not give any indication of exceptional talent among the H1B holders. He says, “We thus see that no best and brightest trend was found for the former foreign students in either computer science or electrical engineering,” He further writes, “On the contrary, in the CS case the former foreign students appear to be somewhat less talented on average, as indicated by their lower wages, than the Americans.”

Nevertheless, managers at top companies insist they still are not able to source the best minds domestically, forcing them to look beyond boundaries. For Peter Cappelli, professor of management and director of the Center for Human Resources at the Wharton School, this does not sound reasonable enough. In a Wall Street Journal article in October 2011, he argues, “Some of the complaints about skill shortages boil down to the fact that employers can’t get candidates to accept jobs at the wages offered. That’s an affordability problem, not a skill shortage.”

For countries such as India and China, who account for a major share in the H1B program, this should set alarm bells ringing as it may affect their nationals directly. Coming to India, the number of H1B visa approvals saw an upward trend for the year 2012. In the fiscal year 2012, 130,000 H category visas were issued as against 114,000 issued in FY 2011, an increase of 15%. The year, however, saw a 26% increase in denial rate with respect to the number of applications. The rise in denials was mainly attributed to the growing concerns over the business models used by Indian IT consulting companies. This led to heightened scrutiny by the consulate officials which saw the number of approvals go down.

With U.S. still recovering from the 2008 crash and Eurozone yet to come out of the sovereign debt crisis, the current scenario does not look good either. While there is no immediate threat to H1B workers, a relook at the quality of education may perhaps save them the axe. India and China both boast of a large number of highly skilled workers. However, with the current report out, officials and analysts in the U.S. may hesitate to hire anybody from these countries.

The solution, however complex it may be, lies in accurately nipping the problem at the source. There is a need for governments to work together towards a future void of any such conflicts that may lead to a human resource problem. The interests of US’ domestic workers need to be protected, whereas those of H1B applicants also need to be carefully studied. A pragmatic and sensible solution will not only prevent discontent among many, but also lead to a better environment at workplaces.

 

Sanjay Puri’s testimony before the House Committee on Foreign Affairs

CONGRESSIONAL TESTIMONY
THE REBALANCE TO ASIA: WHY SOUTH ASIA MATTERS
Testimony by Mr. Sanjay Puri
President and CEO
Alliance for U.S. India Business (AUSIB)
House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
March 13, 2013
Alliance for U.S.-India Business (AUSIB)
Testimony of Sanjay Puri
Founder and Chief Executive Officer
Alliance for U.S.-India Business (AUSIB)
Before the House Committee on Foreign Affairs
Subcommittee on Asia and the Pacific
“The Rebalance to Asia: Why South Asia Matters (Part II)
Wednesday, March 13, 2013

Mr. Chairman, Ranking Member, and members of the Subcommittee:

Thank you very much for the opportunity to testify before you today.

From energy security to defense cooperation to bolstering our economic ties and increasing opportunities for high-skilled workers to come to the U.S. or go to India, there are serious obstacles facing the U.S. as we re-rebalance to Asia. However, I believe our mutual interests and shared values can get us where we need to be if the U.S. is committed to deepening the U.S.- India partnership which is one of the most defining of the 21st century.

For purposes of this hearing, I will leave it to others to delve into counterterrorism and intelligence cooperation, military-to-military exchanges and defense trade. My objective is to focus on four broad issues which deserve our consideration.

The four are:
1) Enhanced education collaboration which can change the dynamics of this relationship
2) STEM teacher exchange which can be a game changer for the U.S.
3) The need to allow exports of natural gas to an energy starved India
4) Why we should look beyond New Delhi to different states in India

Enhance Education Collaboration: A Hindu proverb states that you can change a nation through education. I am a firm believer in this proverb and I think it holds a key for changing U.S.-India relations. For all the short-term fixes we might talk about today, I believe education is the long-term solution which is required for the U.S.-India partnership to thrive.
The Alliance for US-India Business (AUSIB) – a not-for-profit trade organization – has been at the forefront of enhancing dialogue between both countries to create opportunities for building higher quality education because we believe that building global partnerships between U.S. and Indian universities will strengthen the bonds between our two nations. Some of the top CEO’s and policy leaders in India today are educated from U.S. Universities. They take with them the knowledge, values and experiences of the United States. They take back the generosity of the American people. This automatically creates economic and cultural bridges between the two countries. It is not a coincidence that Indian companies, led by U.S. educated CEO’s, are much more active in the U.S.-India economic relationship.

Students from India form the second largest group coming to the U.S. for higher education. But demand for higher education in India is also increasing. The Indian Higher Education sector is rising to meet global benchmarks although further efforts are needed to enhance the accessibility, funding and the quality of higher education in the country. India needs at least 500 Universities and 33,000 more colleges in the next 8 years. This alone is a $50 Billion market. India also has a great need for vocational and technical institutes which is another $2 Billion market opportunity.

Where will this additional capacity come from? If it comes from Indian universities partnering with universities and colleges in the States you represent, I believe we will be on our way to making the kind of difference that needs to be made. Through AUSIB EduNext, a higher education initiative which mobilizes organizations and drives tangible results to empower and make educational institutes more capable and future ready for purposes of preserving and promoting the values that India and the U.S. share, we have created a platform for Indian Colleges/Universities to interact and establish long term relationships with visiting U.S. universities. We focus our efforts in the fields of medicine, pharmacy, engineering, business, hotel management, energy, technology and agriculture.

Our results have led to student and faculty exchanges, joint R&D and we have created an online platform that academics on both sides can use to exchange best practices. We have hosted two of the largest U.S.-India education conclaves in 2011 and 2013 which were attended by over 100 education and policy leaders from the U.S. and over 1,000 from India. All three Provosts of Public Institutions in Iowa were represented at the highest level at this year’s conclave besides other Universities.

Governors, Members of Congress from India and the U.S., University Presidents, Provosts, Chancellors, Deans, Department Heads and senior faculty have participated in AUSIB- led delegations and we encourage universities in your district to collaborate with us or the Indian Higher Education sector so that together we can promote the highest standards of education, value systems and governance. All of our conclaves have had a strong corporate participation from the U.S. and India and I believe it is important for Universities to understand what kind of educational capability that companies need and also for companies to form a Public-Private partnership model with the Universities.

Create a STEM teacher exchange program: The second point I would make is regarding STEM education. The United States has a tremendous shortage of STEM teachers at the K-12 level. It is especially very acute in rural, inner city and remote areas. How can we expect our kids to have strong science, math skills when they do not have good teachers? India has a tremendous pool of science and math experts that also speak English. We should consider a specialized short term program that qualifies trains and brings these teachers over to the U.S. for a short duration so that we can create our own pool of STEM experts for the future. AUSIB is currently working with several states to establish a pilot program.

Allow exports of gas to an energy starved India: Currently India competes with China and Japan for buying LNG from Qatar and Australia. Generally it ends up on the short end of the stick as the growing appetite by China has made China much more aggressive. The U.S. only exports Gas to FTA countries and since India is not it needs approval. If the U.S. can find a way to have an economically viable and environmentally clear mechanism to export gas to India it would do three things: increase economic opportunity in the U.S. through exports, reduce India’s energy dependence on the Middle East and thirdly build a more strategic relationship with India given the country’s tremendous need for energy independence.

Look beyond New Delhi outward to various dynamic states in India: As India has entered a period of coalition politics, the states are much more assertive and powerful. The U.S. should build strong economic and cultural ties with these states since they will get away from the policy paralysis that sometimes affects New Delhi. AUSIB just took a delegation to the state of Punjab where the Chief Minister wants to start a Farmer to Farmer exchange with the U.S. since his state is an agriculture state and he wants to learn best practices from U.S. farmers.

There are several dynamic states in India like Maharashtra, Gujarat, Andhra Pradesh, Tamil Naidu that we should engage with. I would like to make a point about the U.S. relationship with the State of Gujarat and especially its democratically elected Chief Minister Narendra Modi. His state is one of the most economically dynamic and has attracted a lot of investments from U.S. companies like Ford and GM. I have participated with other delegates from around the world at one of the premier economic summits in India hosted by the State of Gujarat called Vibrant Gujarat. However, the U.S. Government has boycotted him. While all of us stand for human rights and deplore any violation, the fact remains that after ten years of investigation, India’s Supreme Court has found no evidence against CM Modi regarding the 2002 Gujarat riots and he has been elected democratically thrice, representing more than 60 million constituents. Therefore, in my opinion, it is time for the U.S. to begin the process of engagement with CM Modi.

I thank you for your time and for holding this important hearing, and I look forward to answering your questions.

To download the PDF version of this testimony, click SanjayPuri_testimony.

Check out the video of the testimony here.

Trade Liberalisation: Can Restriction and Protectionism ever be a sound policy (Part 2)

Guest post by Sumantra Maitra

Will Protectionism help?
There is an argument that the poor can be protected with trade restrictions and protectionism. Protectionism in economic terms can be explained as a tendency to stifle free trade or competition with tariffs, duties, levies, subsidies, license or quotas, and the proponents argue that protectionism is beneficial for a lot of reasons. The main reasons are that comparative advantage has lost its legitimacy and meaning, as capital is free to move across the globalised integrated world, nascent and infant industries should be protected, to a position where they can grow and compete, and finally, Laissez Faire capitalism and unrestricted competition creates social evil.

For a start, protectionism has been criticized by almost the majority of economists across the spectrum. The biggest criticism is that protectionism promotes incompetence. The infant industry idea is completely baseless as the industry will remain infantile and shelled in a cocoon, if it never faces the competition from outside. Also, one important thing which is compromised in protectionism is quality of goods and the consumers are the biggest losers. It is not clear how many jobs protectionism and trade restrictions can actually save, maybe some jobs in the short run in some industries, but it “prevents the expansion of jobs in similar industries”.   A simple but prudent example would bring us back to India, where in 1984; there was only one private car manufacturer, the “Ambassadors”, which churned horrible, technologically inferior behemoths, unavailable to the mass other than the elites. After liberalization, now not only there are innumerable choices, but great competition which assures production quality at the highest and world standard, prices low, and different domestic car manufacturing and auxiliary industries guarantying jobs for millions.

The trend of protectionism is growing however, alarmingly across the World. Director General Pascal Lamy of WTO, warned against trade restrictions, in a speech in June 2011, during the height of global recession, that the “protectionist pressures remain and are being generated by stubbornly high levels of unemployment in many countries, persistent global imbalances, and macroeconomic concerns”  Recently EU parliament called for tighter restrictions on bank’s trading activities, and opposed greater competition between clearing houses.   Also there is a growing tendency of Economic Patriotism in United States which can be detrimental for consumers.

Conclusion
To summarize, trade liberalization effects on consumer pattern and income patterns of the poor, and even though there are opposing views and ambiguity on the changes in wages and welfare of the poor, overall it should be encouraged for the following reasons. Trade pessimism never helped any country, simply because we live in a globalized world, and centralized or autarkic economy will find it hard to survive. A lot of arguments against trade liberalization come from countries like sub-Saharan Africa, which are maybe due to flawed institutional and structural systems, or due to the overall scenario of investment, materials, productivity and a lot of other factors, trade liberalization is not as beneficial for the poor as it was supposed to be. Chronic political instability is also a major factor in these countries. The assessments don’t include liberalization of services, trade facilitations, elimination of licensing and non tariff barriers, domestic reforms or markets, and most importantly welfare of workers, which can have massive repercussions for the mass and could potentially blunt any move to open up free trade.   The fact that trade liberalization worked for certain countries poor and not for others are a testimonial that it is not the concept of liberalization, but the factors and modes to liberalize is what matters for the poor. That being said, more research is needed to actually integrate the poor so that a vast majority of the downtrodden living below poverty line across the world can have equal opportunities. Identification of the problems in Latin America or Sub-Saharan Africa, and employing the solutions is the hardest challenge facing humanity. Even though the overall percentage of poverty has declined, but the number of people living under dollar two a day has increased enormously, mostly in sub-Saharan Africa. More research needs to be done to identify the causes and act for the remedy. If not provide the guarantee to feed every mouth on planet, atleast to provide the opportunity to tap in the benefits of globalization.

Download complete paper: Trade Liberalisation: Can Restriction and Protectionism ever be a sound policy

(Sumantra Maitra is a freelance journalist, currently a post grad scholar of International Studies, and a tutor of New Zealand Foreign Policy and Theories of International Relations, at the University of Otago, New Zealand. He would like to thank Prof. Robert Patman, Politics Dept. University of Otago, and Prof. David Fielding, Economics Dept. University of Otago, for their support and guidance.)