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India-US Relations Blog

The Surge Recedes

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President Obama’s announcement of far larger and more rapid withdrawals of U.S. forces from Afghanistan than many had expected affects Indian security interests and the U.S.-India relationship in significant ways. While it is unfair to characterize the decision as a rush to the exits, it is clear that a deliberate pace is being set.

Obama Speech

Beyond the immediate numbers and timetables involved, the speech’s most memorable line – “America, it’s time to focus on nation building here at home” – signals a new era in South Asia’s geopolitics. U.S. involvement in regional security affairs has oscillated between deep engagement (as in the 1950s, 1980s and the post-9/11 decade) and relative indifference (the 1960s-1970s, and the 1990s). Mr. Obama’s remarks confirm that the pendulum has now begun its swing toward the latter position.

The address will set in motion a train of momentous events for all of Afghanistan’s neighbors. And it is noteworthy that Mr. Obama’s decision was driven more by the exigencies of domestic politics than by a careful assessment of U.S. security objectives in South and Central Asia. As the Washington Post comments , Obama “failed to offer a convincing military or strategic rationale for the troop withdrawals.” The debate inside the administration was reportedly intense but brief, and White House political operatives have not even tried to disguise the fact that the President ignored his top Pentagon advisers.

Parallel to the troop drawdown, President Obama sounded the end to U.S. nation-building efforts in Afghanistan, stating that “we won’t try to make [it] a perfect place.” He underscored Washington’s burgeoning disenchantment with Hamid Karzai’s government in Kabul by once again prodding it to “step up its ability to protect its people, and move from an economy shaped by war to one that can sustain a lasting peace.” Both objectives, however, will prove impossible in the absence of strong U.S. support. A new report by the Democratic majority staff of the Senate Foreign Relations Committee offers a very bleak assessment of Afghanistan’s economic viability in a post-withdrawal era. Yet a day after Obama’s remarks, Secretary of State Hillary Rodham Clinton gave notice that the “civilian surge” – which dispatched a thousand U.S. officials to work on governance and development projects in Afghanistan – has likewise peaked.

Karzai’s antics have played a role in this fundamental shift in Washington, with one analyst concluding that “the United States has now clearly washed its hands of the Karzai government.” Tellingly, there was nary a word of praise in Mr. Obama’s remarks for the Afghan president, and one wonders how committed Washington will be to his regime’s survival in any political settlement with the Taliban.

Of course, this is the same government in which New Delhi has invested so much over the last decade. Only six weeks ago, Prime Minister Manmohan Singh traveled to Kabul with the aim of broadening India’s engagement in Afghanistan . He unveiled a significant expansion of Indian aid, with a further commitment of $500 million over the next few years. He and Karzai also issued a joint declaration that the two countries intended to move towards a strategic partnership. According to one analyst , Singh’s purpose was to demonstrate that, unlike Washington, New Delhi has no “exit strategy” in Afghanistan.

The diplomatic process leading to a possible political settlement of the Afghan conflict is only just beginning. But as it unfolds, it is likely that key differences will emerge between the United States and India. Looking towards the exits, Washington may not be too picky over the settlement’s exact details, while New Delhi will be all too focused on how the strategic terrain in its neighborhood is shifting.

Speaking of political settlements, Obama assured all that “the light of a secure peace can be seen in the distance.” But he was virtually silent on the principles he would pursue in the diplomatic endgame. What would constitute such a peace and how the United States would seek to effect it were items left unmentioned. Nor did Obama address how the Taliban and its Pakistani benefactor could be persuaded to support such an outcome when he has so plainly telegraphed America’s disengagement from Afghanistan.

The coming period will witness an intensified regional scramble for influence in a post-withdrawal Afghanistan. India has strong strategic interests in ensuring that any government in Kabul is strong enough to be a bulwark against Pakistan as well as a gateway to trade and energy links in Central Asia. Both goals would be undermined if a Taliban-dominated regime were to come to power. Yet India’s own capacity to shape the course of events is quite limited in a country with which it shares no borders. For this reason, India will seek to move closer to Iran, whose interests in Afghanistan are roughly congruent.

Indeed, this process has already started. A year ago, Foreign Secretary Nirupama Rao (now slated as India’s new ambassador in Washington) highlighted the “unique” civilizational ties and “the instinctive feeling of goodwill” between India and Iran. She spoke of how links with Tehran are a “fundamental component” of New Delhi’s foreign policy and how there has been a recent “convergence of views” on important policy issues. Regarding bilateral cooperation in Afghanistan, she argued that India and Iran “are of the region and will belong here forever, even as outsiders [read the Americans] come and go.” A senior Indian official described the outreach to Iran as a policy “recalibration” necessitated by the “scenario unfolding in Afghanistan and India’s determination to secure its national interests.”

Earlier this year, India’s national security advisor, Shivshankar Menon, visited Tehran seeking to shore up strategic ties. In early June, the deputy secretary of Iran’s National Security Council was in New Delhi to continue the talks. New Delhi now has even less incentive to go along with U.S. economic sanctions directed against Tehran, and both countries may go so far as to revive their cooperation during the 1990s that provided critical support to the non-Pashtun militias battling the Taliban regime. The Americans will surely grumble about the cozying up with Iran, but the geopolitical logic of the Obama withdrawal leaves New Delhi little choice.

As the United States progressively takes leave of Afghanistan, its dependence on the (epically dysfunctional) security relationship with Pakistan that the 9/11 attacks brought about will correspondingly lessen. The impact of this development on India is variable. The drawdown in U.S. forces will decrease the logistical requirement to run critical supply lines through Pakistani territory. And as the commando assault on Osama Bin Laden and the marked ramp-up in drone strikes testify, Washington is increasingly willing to do without Pakistani cooperation and conduct military operations on its own.

As the need for Islamabad’s collaboration diminishes, Washington will begin to pull back on the significant military assistance – nearly $20 billion so far – that has caused so much consternation in New Delhi. The Bush administration’s “de-hyphenation” policy – one that pursued relations with India and Pakistan independent of the other – will also re-emerge. Seeing Pakistani cooperation on Afghanistan as a function of addressing its acute security anxieties, the Obama administration put the policy on hiatus and started making noises about the Kashmir issue and discouraging New Delhi from too deep an involvement in Afghanistan . With Washington’s solicitude vis-à-vis Islamabad’s sensitivities coming to an end, the U.S.-Indian security partnership will more and more run on its own dynamics.

On the other side of the ledger, however, the Pakistani military establishment could try to offset the loss of U.S. support by entering into an even tighter security alliance with China. This prospect, which would exacerbate India’s strategic concerns, cannot be ruled out, though Beijing so far has shown a reluctance to be encumbered by Pakistan’s deep internal problems . The rather bizarre trip Prime Minister Yousaf Raza Gilani undertook to Beijing in late May is a case in point . Despite Gilani’s profession that Pakistan and China “are like two countries and one nation,” Beijing appeared discomforted when Islamabad put out the word that the Chinese navy was welcome to take up residence in Gwadar, a strategic port at the mouth of the Persian Gulf.

A more worrisome possibility is that U.S. strategic disassociation with Islamabad will also be expressed in a sharp reduction of economic assistance, leading to even greater volatility in Pakistan. In that event, India would find that Pakistan as a failed state is much more of a security headache than it ever was at the peak of its national power.

As the United States markedly reduces its presence in regional security affairs, some hard choices await New Delhi policymakers.

India-US Relations Blog

The Voice of the Majority – 3 – Religion & Government Legitimacy

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Our second article in this series was based on the proposition that:

  • A regime that is seen, felt and recognized to be respectful and supportive of the majority religion tends in turn to be supported by the majority of the people.

In this article, we examine the related hypothesis:

  • A regime that is seen, felt and recognized to be disrespectful and unsupportive of the majority religion tends to be opposed by the majority of the people.

Think back to America in 2008 and 2009. Remember the 2008 election and the now famous quote of Candidate Obama about people in small towns “clinging to their religion and guns”? Though denied and explained away, this quote lives on as one of the more visible symbols of disrespect of religion and belief systems of the American majority.

The early policies and the tone of the Obama Administration persuaded the American majority that its core belief systems were being trampled. The result was the rise of the Tea Party, a movement that sprung like a geyser from the core of the American majority. The American Elite derided the Tea Party as backward, uneducated, right wing, prejudiced and overtly religious. That did not work.

The emotional and loud protest of the Tea Party culminated in a sweeping victory in the 2010 mid term election. The 2010 victory cooled down the temperature of the country. Gone are the rallies, the placards and the hot emotion that bubbled in 2009 and 2010.

This is why America is a shining validation of our hypothesis. On the other hand, India represents a seemingly perfect counterexample.

Last month New Delhi, India’s capital, witnessed a vicious attack in the dead of night by hundreds of baton charging policemen on a crowd of 50,000 people sleeping peacefully. This crowd had gathered to support a fast until death by Baba Ramdev, an Indian Guru with a national and international following. His fast was a protest against the deep corruption that has reportedly engulfed parts of the Indian Government including Cabinet Ministers.

Unlike another protest by Anna Hazare, a secular “Gandhian” activist, the protest by Baba Ramdev, the Indian Government believed, could become a religious “Hindu” movement. And, based on the 60-year track record of the Congress Government, a “Hindu” nationwide protest was deemed intolerable by the Congress Regime. And so the Indian Government behaved exactly like the minority Bahraini Government and launched a vicious night attack on a large group of peaceful, non-violent sleeping protestors.

This brings to fore the decades long suppression of core Indian belief systems by the Indian Elite. Much like American Elite Liberals, the self-proclaimed “modern”, “secular”, “progressive” Indian Elite have waged a coercive battle against India’s “Hindu” majority. This suppression of India’s majority is organized and planned with the full resources of the Congress Regime. The list of other deliberate legislative, executive acts against India’s majority religion would fill several such articles.

This might surprise many but the American and Indian people are very similar in their belief systems. Both societies are deeply religious and spiritual. In contrast, European and Asian societies are not. Both American and Indian societies are multi-religious, multi-ethnic and tolerant at heart. But their belief systems run deep. This is why foreign films, books and culture do not make inroads into these societies. This is why global Hollywood has not been successful in making inroads into India and US TV Networks have to create purely Indian channels to become financially successful in India.

Then, unlike the American majority, why does the India’s majority tolerate the trampling of its religion and belief systems by its governing regime?

  • One reason is that India’s majority has been under the rule of India’s minority religions for the past 1,000 years. So the behavior of the Congress regime is a continuation of the British and Mughal Regimes.
  • Secondly, India’s majority is totally focused on raising its economic standards. That is today’s top priority for the Indian people. So all other issues are being put aside. But they are not ignored.

But the calm you see on India’s surface is covering up the deep anger within India’s majority. Jim Yardley of the New York Times used the term “visceral rage” to describe the sentiments of India’s Middle Class. This Middle Class is the new factor in Indian society, a factor that will come to dominate India’s Society, Government Policy and its relationship with America in years to come.

India’s middle class is becoming broader, richer and more secure in demanding its rights. It is also much more religious and conservative than the Indian Elite who run India’s Government, NGOs and Media. It is beginning to feel confident in expressing its views in the terms and framework of its religion, culture and belief systems. This will put it in direct conflict with the self-proclaimed mission of India’s Elite to suppress India’s majority religion at the altar of a “modern, secular, progressive” culture.

As we saw in its reaction to the attack on Baba Ramdev, the Indian-American community is beginning to participate in the struggle of the Indian Middle Class. And this community understands the lessons of America’s Tea Party.

Will the Indian-American community succeed in helping India’s Middle Class attain the confident fighting spirit of the American majority? Will India’s majority and its driver, the Indian Middle Class, succeed in changing the regime of India’s Ruling Elite? The answers will drive both India and its relationship with America.

India-US Relations Blog

Lights, Camera, Action

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Bollywood & Hollywood
Among the latest tranche of WikiLeaks cables released by The Hindunewspaper is one that throws light on an under-noticed dimension of U.S.-India relations: Their compatible strengths and convergent interests in the area of global entertainment and media. For all the glamour attached to Hollywood and Bollywood* in their home countries, their potential in fostering bilateral ties has been scarcely appreciated.With the United States and India possessing the world’s largest entertainment and media sectors, both in terms of sheer output and global popularity, the opportunities for collaboration are large for jointly producing new content, forging new creative collaborations and accessing new markets. With a growing middle class, a large English-speaking populace, a booming number of multiplexes and television channels, and a cinema-obsessed popular culture, India is a natural destination and partner for Hollywood studios.

Besides a burgeoning market, India possesses another alluring if sometimes overlooked quality: It is Asia’s most liberal market for foreign media companies, both in terms of investment regime and political climate. On both counts, Star Network relocated its Asia hub from Hong Kong to Mumbai last year (see here and here ), and India has become the most important country for News Corporation’s Asian regional business. As a recent PricewaterhouseCoopers report suggests, India – not China – is emerging as Asia’s media hub.Bollywood firms are similarly expanding their global reach, including in the United States. Reliance ADA Group, one of India’s headline industrial houses, is aiming to create a world-wide entertainment conglomerate. It has entered into a high-profile joint venture with Steven Spielberg to form a new movie studio and has cut deals with a number of Hollywood heavyweights to fund the development of scripts and jointly present proposals to studios. Last year, the company also entered into talks with Universal Studios about creating India’s first film-themed amusement park, as well as purchased a majority stake in IM Global, a Los Angeles-based company specializing in foreign-rights sales.Yet, as a February 2010 dispatch from the U.S. consulate in Mumbai makes clear, greater effort is required in order to exploit synergistic possibilities. Despite Hollywood’s growing interest in the Indian market as a way of offsetting its own sluggish box office sales, the cable notes that the U.S. movie industry has still not found a good working model for partnering with Bollywood. Hollywood films face constrained revenue potential in India, due to much lower box office prices compared to the U.S. but also because cinema-goers prefer big-budget action movies over Hollywood’s other fare.

U.S. and Indian studios have entered into a number of high-profile co-production deals, though to date none of them have enjoyed much commercial success. Given its vital market, U.S. studios will continue searching for the right formula for success. But the cable casts doubt that co-productions will pay off anytime soon given that Bollywood fears opening the door too widely to Hollywood’s presence.

Still, the cable points to useful synergies in a number of behind-the-scenes areas. The Indian film industry, which has rarely enjoyed global success beyond diasporic communities , would profit from Hollywood’s expertise in international marketing and distribution, as well as from sourcing U.S. production and technical talent. In turn, Hollywood would benefit from shipping animation and post-production work to India, taking advantage of its modern facilities and affordable workforce. One might add that Indian studios, which are leaders in experimenting with innovative ways of film distribution, like the Internet and mobile applications, could also be a valuable source of new business models for their Hollywood partners.

Yet even if bi-national movie collaborations have yet to live up to expectations, other interactions in the entertainment and media space are bearing fruit. India is one of the world’s fastest growing entertainment and media markets; a new forecast by the KMPG consulting firm puts its size at $28 billion by 2015 . The number of television-viewing households has exploded in recent years. The country also has the second largest pay-television market after China, with an estimated 105 million Indian households currently subscribing to terrestrial analogue cable, satellite and digital networks.

These headline numbers explain why so many U.S. media companies, including Walt Disney, News Corporation, Time Warner and Viacom have joined up with Indian partners to launch channels over the past several years. Last August, CBS Corporation likewise jumped into the game, hooking up with Reliance ADA Group to launch several English-language channels.

Although many of these venues simply offer a platform for U.S.-made fare, jointly-produced content is also beginning to emerge. Indeed, TV productions that combine U.S. and Indian strengths present a large opportunity, both in India and far beyond. According to the consultancy Media Partners Asia, there is a huge, largely untapped global market with a cultural affinity to television content from India, including Mauritians who watch Hindi-language TV and people in Saudi Arabia, which does not have a local media industry.

All of these developments signal a new era in global entertainment. Although U.S. and Indian government officials would not naturally think of it, enhanced partnership in the entertainment and media sector has important policy implications. Since Hollywood and Bollywood are successful exporters of cultural content, the two countries have a major shared interest in keeping global markets open for their products. Washington and New Delhi should thus craft a common approach on cultural market access and use their combined weight to advance it in international trade negotiations. True, the two governments have been at loggerheads in the Doha Round of multilateral trade talks. But a joint proposal on cultural access would focus U.S. and Indian energies on discrete, easily-managed trade issues in which the mutuality of economic benefit is self evident. Beyond its commercial ramifications, the initiative would have political value, further solidifying the U.S.-India partnership and providing an important example of joint leadership in the global economy.

With broadband penetration continuing to accelerate worldwide, the private sectors and governments in both countries similarly have a common interest in advancing the digital transformation of the global media industry. Washington and New Delhi should thus convene a summit of all relevant parties in both countries to consider implementing this objective on a joint basis. Real-time creative and production partnerships could also be enhanced by the development of advanced fiber-optic networks capable of transmitting data at a rate of one gigabyte per second between the two countries. Efforts now underway by U.S. and Indian universities to create collaborative network tools need to be encouraged by adequate government funding on both sides. Such networks would not only spur interactions in the entertainment and media field but in other innovation economy sectors as well.

Policymakers gathered at next month’s U.S.-India Strategic Dialogue in New Delhi will no doubt concentrate on matters like defense cooperation, the endgame in Afghanistan, and Pakistan’s volatility. But a focus on things like global entertainment collaborations is also worth their while, given the importance of private-sector and societal linkages in helping bind the bilateral relationship together .

* With apologies to the vibrant local-language film industries in southern India, Bollywood is used here as a shorthand signifying the Indian entertainment sector writ large, though strictly speaking it refers only to the Hindi-language movie industry centered in Mumbai.

Immigration Blog

Call Centers, Outsourcing, and Immigration

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Globalization is not a one-way street. It’s really a multi-lane superhighway with multiple entry and exit ramps. Contrary to the view that globalization means the loss of US jobs, we see that trade and immigration that involves Indians and Americans means jobs in both India and America and an increased variety of products and services for consumers.

The Anti-Outsourcing Hysteria of 2004

During the 2004 election campaign Democratic presidential candidate Sen. John Kerry famously declared that U.S. executives who set up operations in India were, in essence, committing treason. He labeled such executives “Benedict Arnold,” after the colonial officer who switched sides and joined the British during the American Revolution. Kerry said, “When I am President, and with your help, I’m going to repeal every benefit, every loophole, every reward that entices any Benedict Arnold company or CEO to take the money and the jobs overseas and stick the American people with the bill.”

It wasn’t just rhetoric. Local lawmakers began introducing anti-outsourcing legislation at a furious pace. In 2003 state legislators introduced fewer than 10 bills to restrict work from being performed overseas. By 2004, that number increased to over 100 such bills. State lawmakers who would never otherwise receive national attention suddenly found that by introducing a bill they could garner appearances on national television with Lou Dobbs on CNN.

The vast majority of the bills did not pass and the pace of such legislation eventually diminished. However, New Jersey passed legislation that forbids work to be performed outside the United States on contracts with the New Jersey government. A legal analysis by the National Foundation for American Policy found such state bills, including New Jersey’s, were likely unconstitutional because only the federal government, not individual state governments, possesses the authority to regulate international trade. (That study can be found here.) However New Jersey’s law was never challenged in court, in part, because the state provided a generous “grandfather” policy that allowed existing contract arrangements with the state to continue.

What’s Happened Since 2004?

The past 7 years have seen changes to globalization. Indian companies have continued to thrive with US-based customers but have adopted an approach that seeks to maintain a U.S. presence with more US workers, according to recent news reports. The goal is not to mollify critics, although that might be a side effect, but rather to be close to customers and supply better service at a reasonable cost.

A lengthy Washington Post article recently detailed the efforts of India call center operations to place more employees in the United States. The key part of the article explains: “India’s outsourcing giants — faced with rising wages at home — have looked for growth opportunities in the United States. But with Washington crimping visas for visiting Indian workers, some companies such as Aegis are slowly hiring workers in North America, where their largest corporate customers are based. In this evolution, outsourcing has come home.”

Conclusion

The bottom line is important. To remain profitable employers, including Indian companies, most compete both on price and the quality of service. The idea that employers hire only employees who will work the cheapest is belied by experience. A company will soon lose customers and profitability if it hires people whose only virtue is to work for little money. Such employees are unreliable and result in labeling a company as unreliable as well. Most importantly, companies will place employees where customers can be served most effectively.

The marketplace is addressing concerns about jobs going to India and U.S. workers “losing” in the process. Globalization is a boon to Americans, who enjoy great products and services made possible by globalization, such as iPods, iPhones, Androids, flat screen television sets, gaming devices and computers that be serviced with a phone call. New restrictions on either trade or immigration that inhibit the growth of such products and services will only make Americans poorer.

India-US Relations Blog

Is America Achieving The Improbable in Afghanistan, India & Pakistan?

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Recently I returned from a trip to India. The biggest story during my visit was the spectacular raid inside Pakistan to get Osama Bin Laden. It was pure shock and awe. There was an instantaneous burst of applause for America’s brilliant action.

Unfortunately, within a day or two, the sentiment changed. India, like Afghanistan, had always maintained that Pakistan provides sanctuary to terrorists and in many cases actively encourages, aids and provides material support to terrorists. This reality, Indians thought, was ignored by America either because of America’s self-interest or gullibility.

The discovery that Bin Laden was hiding in the open in a Pakistani military town confirmed to Indians that they were right and America was wrong for all these years. Indian society then compared the execution of Osama Bin Laden to the complete freedom provided within Pakistan to the terror-masters of the horrific 2008 Mumbai attack.

Indians have always accused America of a double standard for terrorists. This feeling morphed into certainty after the Bin Laden raid. Then came statements by American officials exonerating Pakistan’s Top Leadership and proclamations about how Pakistan was still America’s ally.

The insult and the injury cut very deep. The people I spoke to were quietly livid. I was stunned by the intensity of their feelings against what they see as America’s duplicitous dealings with Pakistan.

These were Lawyers, Doctors, Teachers and others in India’s middle class, the heart of India’s educated society. They understand the good about America. They understand the need for Indo-American partnership. But gone is their euphoria about the heady Bush days of Indo-US Strategic Partnership. Today, their anger and contempt towards America seemed unanimous. As one said simply, “this country (America) cannot be our friend”.

The India-Pakistan relationship has been a zero-sum game. So this sentiment within India should translate into a vote of confidence for America inside Pakistan. Right?

But the anger against America seems to be even more intense within Pakistan. From reports in the New York Times and the Washington Post, the rank and file of the Pakistani Army is “seething with anger” against America. Most Pakistanis seem convinced that America is trying to bring mayhem and terror to Pakistan to meet its own objectives in Afghanistan.

What about Afghanistan? America is pouring billions into Afghanistan every year to protect Afghans from the Taliban. This seems more and more like a waste of money and more importantly lives of young American soldiers.

credit: static.guim.co.ukThis week, the Taleban launched attacks in the northern cities of Herat and Taloqan. Also this week, about 200 Afghan militants crossed into northwestern Pakistan and engaged in a gun battle with Pakistani security forces. Rather than work even more closely with American forces, President Hamid Karzai of Afghanistan issued an ultimatum this week to American Forces and NATO to cease all strikes against Afghan homes. Why?

As Stratfor, the widely respected geo-strategy firm wrote this week “Opposition to the ISAF and the counterinsurgency-focused campaign across the country is on the rise among even anti-Taliban elements of the government and general population…… the trajectory of declining patience and tolerance of and increasingly virulent opposition to ISAF military operations across broader and broader swaths of Afghan society continue to worsen,…..”.

America is deeply involved in these three countries in different ways. American leadership would like to be a mediator between these countries and facilitate accommodation between them, if not peace. Unfortunately, America seems to be achieving just the opposite.

These are three societies at conflict with one another. When you are a friend or enemy of one society, you automatically are not an enemy or a friend of the other society. But today these vastly different societies have developed the same image of America.

If this isn’t an improbable achievement, I don’t know what is!