Monthly Archives: April 2011

India-US Relations Blog

Fighter Shoot-Down

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India’s elimination of Boeing’s and Lockheed Martin’s bids in its $11 billion fighter aircraft competition – one of the country’s largest-ever defense deals – is bound to have negative repercussions for the U.S.-India relationship. Analysts had expected at least one of these bids to advance to the final selection round; that neither did is being perceived as a deliberate snub of Washington. John Elliott, a long-time observer in New Delhi, interprets the move as an effort aimed at “keeping the U.S. firmly in its place.”

http://www.usinpac.com//images/stories/F-16IN_AT_AeroIndia2011.jpgThe Indian decision will add to Washington’s growing list of bilateral frustrations and is yet another sign that ties between the two nations continue to fall far short of the promise that glistened just three short years ago when the landmark nuclear cooperation accord was concluded.  That news of India’s action coincided with the (unrelated) announcement of Timothy J. Roemer’s resignation as U.S. ambassador in New Delhi only heightened the sense of disillusionment and fatigue.

The decision makes some sense on the basis of technical merits. The F-16 aircraft proffered by Lockheed Martin is a widely-used workhorse but also a 30 year-old platform; that Pakistan is one of the 26 air forces flying the plane also could not have endeared the Indian defense ministry. Boeing’s F/A-18 is a much newer system but it reportedly did not perform well in flight tests over the Himalayan ridges in Ladakh.  Eurofighter’s Typhoon aircraft – which New Delhi has shortlisted for possible selection – has much to recommend it technically. Additionally, the four-nation Eurofighter consortium (composed of British, German, Italian and Spanish defense companies) – along with France’s Dassault Aviation SA (whose Rafale fighter also was advanced to the final round) – also was more generous than the U.S. companies in terms of technology transfer.

American companies (including Boeing and Lockheed Martin) have snapped up a number of recent contracts from the Indian military, and one can expect New Delhi to award additional deals in the coming months as palliatives for U.S. disappointment at losing out of this highly lucrative transaction.

Some Indian commentators are of the view that, with bilateral ties now so multi-dimensional and mature, Washington’s sense of letdown will be fleeting. But this is likely to prove wishful thinking.  The Indian decision will certainly not derail bilateral affairs. But given the Obama administration’s aggressive lobbying on behalf of the American bids, it will only deepen the perception in Washington that New Delhi has not lived up to its side of the bargain by reciprocating the huge commitment the United States has made over the past decade to bolster India’s great power prospects.

As Siddharth Vadarajan, the strategic affairs editor of The Hindu, notes, Washington came at the fighter deal with “all guns blazing.” The U.S. campaign included President Obama, who made a personal intervention with Prime Minister Manmohan Singh during his state visit to India last November and then followed up in February with a letter underscoring “the strategic importance the United States attaches to the selection of a U.S. proposal in India’s Medium Multi Role Combat Aircraft competition.”  Ambassador Roemer was tireless in pressing the same message.  And to sweeten the pot, the United States granted India the opportunity to participate in Lockheed Martin’s program to develop the advanced technology F-35 fighter aircraft – an offer that New Delhi effectively rebuffed last December when it opted for a joint arrangement with Russia to develop a separate fifth-generation fighter aircraft.

As an earlier post argued, Washington is becoming increasingly weary of New Delhi’s capacity for strategic engagement. The political soap opera accompanying the Indian parliament’s debate about the nuclear cooperation agreement in the summer of 2008 was disheartening from the U.S. perspective and could hardly inspire confidence that India was ready to move ahead with full-throttle cooperation. Adding to the list of sorrows is that the nuclear liability law adopted by India last year has the effect of all but blocking the involvement of U.S. companies in India’s nuclear energy sector – one of the things that the nuclear deal was supposed to bring about. (And following Japan’s nuclear disaster, U.S. hopes that New Delhi would revisit the law anytime soon are stillborn.) And despite numerous suggestions for bi-national endeavors at producing clean energy technology, Washington is miffed that Indian restrictions on imports of solar-power technology are thwarting the entry of U.S. firms into one of the world’s fastest-growing solar-energy markets.

Boeing's F/A-18 at the Aero India 2011 air showTroubling as well are reports that a major factor in India’s elimination of the Boeing and Lockheed Martin bids was the military’s continued wariness of the United States as a full-fledged strategic partner. In contrast to institutional memories of past U.S. technology embargoes that still linger throughout the security establishment, the military supply relationship New Delhi has forged with Paris – Dassault’s Mirage 2000 fighter has long been in service with the Indian air force – seemed to play an important role in the decision to shortlist the Rafale. The Obama administration had worked hard to ease these memories, including advancing the F-35 offer and the further easing of U.S. export controls on India that were announced in February.  Mr. Obama’s letter to Prime Minister Singh also made promises on this score.

While India’s decision will certainly not produce a bilateral rupture, its consequences may be more pronounced than the rosy scenario sketched by the optimists. At a moment when the Obama administration has begun to turn its attention back to New Delhi, it will reinforce nagging doubts in Washington about India’s willingness to make the big decisions necessary to dramatically advance the relationship.  Such doubts could even break into the open given the bilateral frictions likely to ensue as the United States approached the endgame in the Afghan conflict. There may be solid technical reasons behind the fighter decision. But the soundness of its strategic logic is about to be put to the test.

India-US Relations Blog

How to lose friends and alienate people

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India’s decision to reject U.S. fighter planes is strategic stupidity.

New Delhi, it is reported, has shortlisted two European vendors for its long-drawn procurement of fighter aircraft for the Indian Air Force. Now, military analysts can have endless debates and even objective opinions on which among the American, European and Russian aircraft is technically superior and better suits the stated requirements of the IAF. Financial analysts can have similar debates and objective opinions on which is the cheapest or the best value for money. These opinions may or may not converge. But when you are buying 126 planes worth more than $11 billion dollars, you are essentially making a geostrategic decision, not a narrow technical/financial one.

The UPA government’s decision to reject both American proposals, of the F-16 and F/A-18, demonstrates either a poor appreciation of the geostrategic aspect or worse, indicative of a lingering anti-American mindset. While the U.S. ambassador has resigned, whether or not it will prove to be a setback for India-US relations remains to be seen. Damaging the careers of pro-India American officials is a silly thing to do.

This move will most certainly reduce India’s geopolitical leverage with the U.S. military-industrial complex, at a time when India needs it most. From the unfolding dynamics in the Afghanistan-Pakistan region, to the changing balance of power in East Asia, to UN Security Council reform, to a number of geoeconomic issues, the United States can take positions that can have long-lasting consequences for India’s interests. Is the United States more likely to be sympathetic to India’s interests after a $11 billion contract—which means much needed jobs for the U.S. economy —is awarded to someone else? Long used to complaining that the United States doesn’t care for India’s interests, will awarding the contract to some European firms help change the situation?

The argument that the European bids were ‘technically’ superior are not entirely credible either, for two reasons. First, at sufficiently high levels of technology, the difference between the planes on offer is marginal. To suggest that the European models are vastly superior defies logic, because some of the world’s most powerful air forces are flying F-16s, leave along F/A-18s. Second, the notion that combat requirements can be perfectly defined at the time of procurement is false. It is the combination of man and machine that wins battles. The focus on machines ignores the reality that much swings on the man flying it. Moreover, given the nuclear deterrence relationships obtaining in the subcontinent and across the Himalayas, those planes might never see an aircraft-to-aircraft dogfight in their lifetimes. For other tasks like air support for ground operations, the specifications are even lower.

What about those alphabet soup agreements and fine-print contracts that the U.S. insists that India sign, that might prevent the planes from being used when needed? Those who make these arguments do not understand what war means. War means all bets are off, and India will do whatever necessary to protect its interests. While the existence of those agreements was a usual bargaining chip for India, to get a discount, to believe that such arguments will hamstring India’s military options is naivete. The government might not need to spell this out in public, but it should know it.

It has been this blog’s argument that in the contemporary geopolitical environment, India’s interests are best served by being a swing power, holding the balance between the United States and China. It must enjoy better relations with each of them than they have with each other. It must also have the credible capacity to give pleasure and inflict pain. In this context, buying fighter planes from the United States would have been an excellent move.

And who has New Delhi shortlisted instead? European companies. The European Union is a bit player in the international system, zealously safeguarding its own legacy position at the United Nations Security Council, the G-20, the World Bank, IMF and other places, against India. Italy is engaged in process of blocking India’s UNSC candidature. An order placed with Eurofighter or Rafael isn’t going to change its plans. EU busybodies can be found everywhere from inviting Kashmiri separatists to speak, to attending court hearings of Binayak Sen. Some small EU states almost wrecked the India-specific waiver that the United States was obtaining at the Nuclear Supplier’s Group. When it’s crunch time in Afghanistan, does anyone in New Delhi think that the EU will or can make any move that’ll safeguard India’s interests? Why is India being gratuitously generous to Europe when there is much to gain from giving the contract to the United States?

Yes, France, Britain and Germany are countries that India must engage. There are ways to allow them to benefit from India’s growth process—from power projects to manufacturing to services. The fighter aircraft contract need not be awarded to European firms, because it has higher strategic opportunity costs.

The downshot is that the UPA government has squandered a unique opportunity to gain leverage in Washington at a crucial time when closer ties are in India’s interests. It first took way too long to decide, dragging the procurement process even China built its own new fighter plane. It now decided to pick two vendors who might well sell a technically superior and cheaper product, but do no more than that. To put it mildly, this is strategic stupidity.

(This post originially appeared on this author’s blog at acorn.nationalinterest.in)

Immigration Blog

Are H-1B Visa Holders Really Only Hired for Cheap Labor? Let’s Look at the Law, Common Sense and Some Data

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The argument made by critics of H-1B professionals is straightforward – the only reason companies hire them is because they will work more cheaply. In fact, the argument is central to criticism of H-1Bs and will likely never be conceded by critics, since all assertions about skilled foreign nationals rest on the premise that they work more cheaply.

One can recognize the value of permitting skilled foreign nationals to work in the United States without assuming the entry of every individual results in a storybook ending. America is an immense country with large and small employers and when tens of thousands of new people enter the U.S. labor market for the first time each year it is possible some of these individuals will be taken advantage of or will not recognize their true market value. This may be more likely to occur at some small IT services companies, which have been cited in the press.

However, the law, common sense and available data indicate that, on the whole, H-1B visa holders are paid appropriately based on their age and work experience – even if this does not take place in all circumstances.

Under section 212(n)(1) of the Immigration and Nationality Act, employers must pay H-1B visa holders the higher of the prevailing wage or actual wage paid to “all other individuals with similar experience and qualifications for the specific employment in question.”

To knowingly violate this law risks heavy fines, debarment from using the immigration system for hiring skilled individuals and much bad publicity for the company. That is why one rarely hears of any company with a recognizable name found to have willfully underpaid an individual on an H-1B visa.

Think about what would be necessary for a large or even medium-sized company to (unlawfully) maintain two wage scales – one for foreign nationals, one for U.S. workers. The records would be available and accessible to government auditors on demand – and such audits are frequent these days from U.S. Citizenship and Immigration Services. Moreover, a mid-level employee in the human resources department, perhaps several of them, would have to work with a company’s general counsel office and likely an outside law firm in a conspiracy to underpay foreign nationals. All of this would risk the reputation of the company and the livelihood of the employees involved. And since employers generally pay up to $5,000 to $6,000 in legal and government fees to hire H-1B visa holders, to make this conspiracy worthwhile the amount of underpayment would have to be significant.

After all this is done, can the H-1B professional thwart this conspiracy by simply leaving the employer to work elsewhere? Yes. Do H-1B visa holders change jobs? Yes, it happens quite often, particularly when the economy is good. Immigration attorney and former INS general counsel Bo Cooper recently noted in Congressional testimony that his law firm often processes cases for clients for an H-1B professional to move from one employer to another.

Again, none of this is to deny that some individuals may be shortchanged. It’s more to explore the extent to which one can say that H-1B visa holders in general are underpaid and only hired to save money.

What the Research Shows

In a January 2011 report, the Government Accountability Office (GAO) found H-1B visa holders generally earned the same as U.S. professionals when compared in the same fields and age groups. For example, in the category Systems Analysis, Programming, and Other Computer-Related Occupations, the median salary for an H-1B professional was higher ($60,000 vs. $58,000) than for a U.S. professional in the age group 20-29 and the same ($70,000) in ages 30-39. (See Table 1 below.)

Table 1

Median Reported Salaries of H-1B and U.S. Workers: Systems Analysis, Programming, and Other Computer-Related Occupations

Age Group H-1B U.S. Workers
20-29 $60,000 $58,000
30-39 $70,000 $70,000

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

In the age group 20-39 for Electrical/Electronics Engineering Occupations, the median salary for an engineer in H-1B status was higher than for a U.S. engineer – $80,000 vs. $75,000. (See Table 2.) For some reason, U.S. workers in the age 40-50 range earn more in this field than their H-1B counterparts, but since relatively few H-1B visa holders enter the U.S. after the age of 40 (less than 10 percent) and only a portion of those enter this field it is difficult to know whether the data are significant in any way.

Table 2

Median Reported Salaries of H-1B and U.S. Workers: Electrical/Electronics Engineering Occupations


Age Group H-1B U.S. Workers
20-39 $80,000 $75,000

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

Table 3 shows in the age group 20-39, H-1B professionals earned $47,237 compared to $35,000 for U.S. professionals for jobs in college and universities.

Table 3

Median Reported Salaries of H-1B and U.S. Workers: Occupations in College and University Education

Age Group H-1B U.S. Workers
20-39 $47,237 $35,000

Source: H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program, Government Accountability Office, GAO-11-26, January 2011, Table 1.; Salaries are 2008.

What Do These Results Mean?

The data show one needs to compare individuals with similar ages and fields when comparing salaries. Since U.S. professionals tend to be older than H-1B visa holders, U.S. professionals will tend to earn higher salaries. But that doesn’t mean H-1B professionals are only hired because they earn less. Recent U.S.-native-born college graduates earn less money than more experienced native-born professionals in the same field. Does that mean recent native-born college graduates are paid less than more experienced individuals because of wrongdoing by American employers? Of course not. Salaries in America are based on a variety of factors. Individuals with greater experience should be expected to earn higher salaries.

Conclusion

There are reforms that would make the situation better both for workers and legitimate employers. First, strengthen the rules for whistleblowers and make such rules more widely known. Second, increase portability for individuals with pending green card applications so it is easier for a professional to leave a current job if necessary. Third, increase the employment-based green card quota and/or exempt from the quota individuals who received a masters degree or higher from a U.S. university, which would move many people into permanent resident status much more quickly. The green card backlog makes it even more important that Congress refrain from enacting crippling restrictions on H-1B visas, since otherwise it would be difficult for skilled foreign nationals to work in the United States.

The debate over H-1B visas is rarely civil. But hopefully more people will agree that individuals born outside the United States have much more to offer America than, as critics assert, a willingness to work for less money.

Defence And Strategic Affairs Blog

Managing India’s Borders: Tough Challenges

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Due to the proclivity of India’s neighbours to exploit the country’s nation-building difficulties, India’s internal security challenges are inextricably linked with border management because Indian insurgent groups have for long been provided shelter across the nation’s borders by inimical neighbours. The challenge of coping with long-standing territorial and boundary disputes with China and Pakistan, combined with porous borders along some of the most difficult terrain in the world, has made effective and efficient border management a national priority. India’s borders are manned by a large number of military, para-military and police forces, each of which has its own ethos and each of which reports to a different central ministry at New Delhi.

The national security decision makers need to deal with complex border management issues. India’s rate of growth has far outpaced that of most of its neighbours and this has generated unusual problems like mass migrations into India. The demographic map of Lower Assam, a north-eastern state, has been completely re-drawn by illegal migration from Bangladesh over several decades. The border security scenario is marked by increased cross-border terrorism; infiltration and ex-filtration of armed militants; emergence of non-state actors; nexus between narcotics traffickers and arms smugglers; left-wing extremism; separatist movements aided and abetted by external powers; and, the establishment of Islamist madrasas, some of which are potential security hazards.

The operationally active nature of the Line of Control (LoC) and the need to maintain troops close to the Line of Actual Control (LAC) in a state of readiness for operations in high altitude areas, have compelled the army to permanently deploy large forces along the northern borders. While the BSF should be responsible for all settled borders, the responsibility for unsettled and disputed borders, such as the LoC in J&K and the LAC on the Indo-Tibetan border, should be that of the Indian Army. The principle of ‘single point control’ must be followed if the borders are to be effectively managed. Divided responsibilities never result in effective control. Despite sharing the responsibility with several para-military and police forces, the army’s commitment for border management amounts to six divisions along the LAC, the LoC and the Actual ground Position Line (AGPL) in J&K and five divisions along the LAC and the Myanmar border in the eastern sector.

The deployment patterns of Central Police and Para-military Organisations (CPMFs) are marked by ad hoc decisions and knee jerk reactions to emerging threats and challenges, rather than a cohesive long-term approach that maximises the strength of each organisation. The major lacunae that exist in the border management process include the deployment of multiple forces in the same area of operations and the lack of well articulated doctrinal concepts. Also, border management is designed for a ‘fire fighting’ approach rather than a ‘fire prevention’ or pro-active approach.

A task force on Border Management led by Madhav Godbole, a former Home Secretary, was constituted by the Group of Ministers (GoM) in 2000 after the Kargil conflict. It had recommended that the Central Reserve Police Force (CRPF) should be designated as the primary national level counter-insurgency force. This would enable the other CPMFs like BSF and ITBP to return to their primary role of better border management. It had also recommended that all para-military forces managing unsettled borders should operate directly under the control of the army and that there should be lateral induction from the army to the para-military forces so as to enhance their operational effectiveness. These recommendations were accepted by the GoM and are being implemented in phases. Clearly much more needs to be done to make border management more effective.

India-US Relations Blog

The Ties that Bind

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Three years after the conclusion of the path-breaking civilian nuclear agreement, the U.S.-India relationship suffers from the lack of a new energizing project. In its first year or so, the Obama administration did not display much interest in continuing its predecessor’s high-profile engagement with New Delhi, turning its attention instead to expanding ties with Beijing. To be sure, the United States more recently has moved to re-engage India, as evidenced by the warm sentiment flowing from President Obama’s state visit last November. The problem is that Mr. Obama’s rhetoric during the trip made it sound like the visit was more connected to his export-promotion initiative than to any grand foreign policy objective.

For its part, New Delhi is a constrained strategic partner, one that is not well-equipped – ideologically or institutionally – to take on bold bilateral projects. While Prime Minister Manmohan Singh finally did manage to push the nuclear agreement through a balky Parliament, his victory was in important measure pyrrhic, in the end revealing just how small the consensus (see the analysis here and here) is among Indian political elites for undertaking ambitious bilateral initiatives.

Credit: thesouthasian.comThe paucity of visible leadership in both capitals is problematic. It is true that both governments are collaborating as never before at the bureaucratic level. But the U.S.-India partnership has yet to find sure footing and still lacks sufficient institutionalization to advance the new era in bilateral relations. Robert Blackwill has warned that “neither the U.S. nor the Indian bureaucracies at present are yet prepared instinctively to facilitate a deeper and more intimate degree of cooperation between the two countries….It is going to take leadership and direction from the top to change old habits and attitudes.” Ronen Sen has made a similar point: “We have not reached the point where the relationship can be placed on auto-pilot. It still needs to be nurtured.”  And the Hindustan Times noted last year that the Washington-New Delhi connection is still not yet “a machine that will move on its own steam.”

The burden of advancing bilateral affairs, at least in the next few years, will have to be borne by the key societal bonds that helped build the relationship in the first place.  Headlines about the nuclear cooperation accord and expanding military ties notwithstanding, it is important to bear in mind that the foundation for the partnership was actually forged outside the realm of government policy and far beyond the confines of Washington and New Delhi. Unlike most of the relationships maintained by the United States with other leading countries, the one with India is distinguished by the signal role played by societal ties and privatesector initiatives. As Shivshankar Menon, now Prime Minister Singh’s national security advisor, remarked last year, “[I]f anything, the creativity of [American and Indian] entrepreneurs, engineers and scientists has sometimes exceeded that of our political structures.” And Nicholas Burns, who did yeoman’s work in hammering out the details of the nuclear accord, emphasizes that societal bonds are “the greatest strength in the relationship” and that “the big breakthrough in U.S.-India relations was achieved originally by the private sector.”

Consider, for example, the dynamics at work a little more than a decade ago. In response to the 1998 nuclear tests, Washington imposed an array of economic sanctions on India and expelled visiting Indian scientists from U.S. government laboratories. Yet at the same time, concerns about the “Y2K” programming problem led companies in Silicon Valley and in India to set the foundation for today’s strong technology partnership. And as I wrote earlier, the Indian-American community, relatively small but highly influential, has lead the way in building new ties between its native and adoptive countries.

credit: charlierose.comThe significant role played by these societal bonds has caused Fareed Zakaria to compare U.S.-India ties to the special relationships the United States has with Great Britain and Israel. Shashi Tharoor 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, societal bonds give fuller texture and equipoise to the bilateral partnership than could be hoped to be achieved at the intergovernmental level alone.  And at a time when bureaucratic mechanisms are not firing on all cylinders, strengthening these ties will be one key in securing the growth of broad-based, resilient relations over the long term since they work to limit the risk that political and diplomatic frictions could escalate and disrupt the overall U.S.-India partnership.

This is particularly important as the structural dynamics of the bilateral relationship will prove challenging to manage in the future.  The basic framework of U.S. security and economic relations with a number of key countries in Europe and Asia was laid down in another era of world politics, when the national power of these states was in decline.  The resulting alliances were, and in many ways still remain, unequal partnerships.  In contrast, India’s power trajectory is upward.

Moreover, foreign policy elites in New Delhi continue to insist on the prerogative of strategic autonomy and, hence, are unlikely to accommodate Washington’s priorities as readily as other U.S. allies.  With continuing divergences over foreign policy objectives, frictions will inevitably develop on a range of issues – from global trade negotiations, climate change and nonproliferation policy, to differential approaches on Afghanistan and Pakistan, as well as India’s bid for a higher profile in world affairs. As Nick Burns cautions “the United States must adjust to a friendship with India that will feature a wider margin of disagreement than [Washington is] accustomed to.”