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Defence And Strategic Affairs Blog

BRICS – India is the biggest loser

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Guest post by Sumantra Maitra

Among other interminable dross that were churned in the recently concluded 5th annual BRICS summit in South Africa, was the idea of a Development bank, by the five ever-rising economic powers. Although the details are vague, like any other diplomatic summit declaration trying to obfuscate the deep fissures within this coalition of unequals, the fact that India agreed to this disaster in the making is a new low in the foreign policy of a country, which is not much known for rational and realistic choices. The idea behind the development bank is indeed noble, “to address…the infrastructure gap in developing countries…”, especially in Africa. But the intention to make it successful or meaningful or the national interest of each member of the coalition is not clear. One thing, which is however clear, is Indian ambivalent skepticism about bandwagoning with any power simultaneously coupled with the Nehruvian idea of being a “messiah of the mass” and trying to be a leader of the third world, which reflects the mindset of Indian bureaucracy and ruling elite, is increasingly drawing India into a dilemma.

The BRIC leaders

The BRICS is not an alliance. It is an arbitrarily formed group, mentioned in passing by an ex-banker, which was so captivating to the ruling elite of the grouped nations that they thought of formalizing it in an institution. Initially starting as rising economies, a perceivable counter balance to the G-8, these economies are no longer rising, with deep structural and institutional flaws, different modes of governance, deteriorating law and order situation and freedom of expression and censorship issues, different economic fundamentals and most importantly, absolutely different and divergent world view and interest. Joshua Keating pointed out why the BRICS couldn’t be more different than each other. The last addition to this coalition, South Africa, is the messiest of them all. The selection of South Africa is ofcourse controversial and political, regarded often as a quota position from the African continent, as it leaves out far more competent and growing economies like Indonesia, Turkey and South Korea. This comes when BRICS are accused of neo-imperialism, and banners like “don’t carve out Africa” were found everywhere near the summit in Durban.

It is well known, that the primary drivers behind the ideation in the BRICS are Russia and China. Russia wants to bandwagon with China to balance the influence of United States. The motivation and Great power nostalgia of Russian elite is simple enough to fathom. The Chinese interest is however far more complex. As a growing hegemon, China actually has interest in Africa, both geo-politically and economically. The resources of Africa are mostly still unexplored, and the market potential of cheap Chinese manufactured goods is enormous. This however comes at a time, when China is increasingly viewed with suspicion in Africa. The last couple of years have seen the murder of Chinese engineers by disgruntled and exploited African labourers, incessant strikes in Chinese operated industries and mines, and the now infamous op-ed by Lamido Sanusi, the governor of Central Bank of Nigeria, where he accused China of having neo-colonial ambitions. China now wants to portray itself as a benevolent and altruistic force, and therefore wanted to soothe Africa under the BRICS front. India, for all its independent and non-aligned foreign policy, is legitimizing Chinese actions.

It is puzzling to fathom why India is following Chinese and Russian lead. For a start, Russia is not what it used to be. It clearly views China as a far superior partner than India, and a market for superior weapons and technology, ironically at the same time when India received massive aid grant from Japan. India and China are not really partners, and as I wrote here before, will probably not be in the near foreseeable future. Nor is Indian business interest in Africa that important, scalable or maintainable. For example, assuming that India invests in some African country under the BRICS development bank, tomorrow if there is some kind of unrest, is India capable or willing to defend its business interest? India never showed any willingness to aggressively promote or defend its business interests, be it Afghanistan, Maldives, or South China Sea, and there is no reason to believe India would do that in Africa. India also lacks such far off power projection capability. Which brings us to question the wisdom; do the benefits of Indian investment in Africa outweigh the cost? What is the incentive of pledging tens of billions of dollars, all Indian taxpayers’ money, in a region which is beset by uncertainty, instability and conflict, or starting a monetary organization, potentially rival to IMF/World Bank which will not be of any direct benefit to the already slowing economy and growth rate?

On the other hand, India will eventually be viewed as just another neo-colonial resource grabbing power like China, if it continues to be with the BRICS. The respect that India enjoyed in Africa, and the goodwill as a potential democratic competitor of China will fade away, with India just being a satellite of Chinese ambitions, a satisfied mid level power in an institution guided by Russian and Chinese geo-political interests. Nor is Indian interest, in the BRICS assisted conflict resolution in Central African Republic understandable. Again, the question is geo-political, what IS India’s interest? Tomorrow if Russia leads the BRICS into conflict resolution in Syria, will India be willing to commit its resources?

As this Economist essay explains, India is utterly confused about its growing clout and new found respect as a rising power, lacks a political will, strategic culture, a status-quo bureaucracy, and timely and fast decision making infrastructure. Added to that is the notorious ambivalence towards aligning with the West, even though being perfectly aware that in the great scheme of the game, China stands as the largest potential rival. This ambivalence and skepticism stems from the utterly discredited NAM mentality which is still somehow widely followed among the Indian foreign policy circles, and the moral, altruistic, socialist Nehruvian world view, without any long term planning or Realist Raison D’etat. With the BRICS now attracting countries like Egypt, a slow and painful repetition of the outdated Indian NAM policies are in the process. Everyone knows how NAM turned out. One can only hope that India’s policymakers realize soon where her interests lie.

(Sumantra Maitra is a freelance journalist from India and a tutor of New Zealand Foreign Policy and Theories of International Relations, at the University of Otago, New Zealand. You can follow him on twitter @dailyworldwatch.)

Defence And Strategic Affairs Blog, India-US Relations Blog

A Rocky Road Ahead

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Since the United States has announced its intentions to withdraw its troops from Afghanistan by 2014, leaders in the White House have been looking toward India as an ally in facing the coming strategic and military challenges in the region. For the U.S., the choice of India is an obvious one. Its growing geopolitical presence and commitment to democracy is a strong force among unstable countries, and deep economic ties with Afghanistan (last year, India gave Afghanistan almost $2 billion a year alone in economic and development aid!) all make India a prime candidate to manage postwar reconstruction. Yet what has been heralded as “a full-blown strategic partnership” in shepherding the region’s development is drastically falling short.

On one side is the growing diplomatic tension between the U.S. and India, which has forestalled bilateral commercial trades and sharply highlighted differences in priorities. To be clear, the U.S. and India have dramatically improved their relationship following the Cold War, when the U.S. sided with India’s rival, Pakistan, and India maintained economic and military relations with the Soviet Union. Since then, economic interests were better aligned, as bilateral trade has reached almost $100 billion just last year alone. Still, India is defiantly opposed to complying with U.S. demands if they were to compromise its own economic interests. In Iran, for example, the U.S. has called for sanctions against Iran’s growing nuclear capabilities, and has asked India to cease its commercial transactions with the country. But India views things differently, stating that oil and natural gas purchase from Tehran are vital to its economy. Moreover, Indian diplomats assert that it is “in India’s interest to maintain good ties with Iran, with whom it shares deep historical, cultural and religious connections.” They also believe that purchasing Iranian oil will “strengthen ties with Iran as a hedge against an uncertain future in Afghanistan after the U.S. withdrawal,”, and are thus reluctant to rebuke Iran’s nuclear purchases.

Differences in priorities in China are also a source of contention between Indian and U.S. lawmakers. The U.S. has made strides in containing what it perceives to be a geopolitical threat by China, due to its growing military strength and influence in Asia. Indeed, leaders in Beijing have even suspected that the U.S. is attempting to partner with India in containing China, claims that the U.S. staunchly denies. But India is not interested in upsetting China and has worked very hard in cooperating in areas of mutual interest and opportunity and believes than an alliance with the U.S. will fracture that relationship.

Finally, currency problems in India are hampering its ability to provide stable finances for Afghanistan’s reconstruction. High interest rates have destabilized India’s investment climate, forcing it to focus inward and shrink expenditures.

The future of the U.S.-India relationship will depend heavily on who wins this November. The Democratic Party will likely continue on its current trajectory, gently pushing India to open its markets for investment and to align with the U.S. The Republican Party’s foreign policy is traditionally more aggressive, and will probably reiterate demands for Indian liberalization and compliance with Iran sanctions.

Immigration Blog

New Survey: Indian Graduate Student Enrollment in U.S. Not Growing, While Enrollment from China Grows Rapidly

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An overlooked development is that Indian student enrollment at U.S. graduate schools has not been growing over the past four years. At the same time, Chinese student enrollment has been skyrocketing. This is the conclusion of the latest survey of U.S. graduate school programs by the Council of Graduate Schools. (Find the survey here.)

Nathan Bell, director of research and policy analysis at the Council of Graduate Schools, authored the report. Bell found, “Offers of admission to prospective graduate students from China increased 21% in 2011 following a 15% gain in 2010 and a 17% gain in 2009; this is the sixth consecutive year of double-digit growth. Offers of admission to prospective graduate students from the Middle East & Turkey increased 16% in 2011 following a 10% gain in 2010 and a 14% gain in 2009. Offers of admission to prospective graduate students from India rose 2% in 2011, the first increase to occur for students from India since 2007. This year’s 2% increase follows a 5% decline in 2010 and a 14% drop in 2009. Offers of admission to prospective graduate students from South Korea fell 2% in 2011, marking the fifth consecutive year of declines. The most recent declines for South Korea were a 7% decrease in 2010 and a 14% drop in 2009.”

Indian Student Graduate Admission Falling

However, the 2 percent rise in first-time graduate enrollment in the U.S. by Indian students from 2010 to 2011 India masked a longer-term trend. From 2007 to 2008, Indian student enrollment fell by 2 percent. From 2008 to 2009, first-time graduate enrollment from India fell again by 16 percent. Then, from 2009 to 2010, Indian student first-time graduate enrollment declined by 3 percent. Finally, from 2010 to 2011, it increased by 3 percent.

Change in Indian Student First-Time Graduate Enrollment in U.S.

2007 to 2008  -2%

2008 to 2009  -16%

2009 to 2010  -3%

2010 to 2011  +3%

 

Chinese Student Graduate Admission Rising

At the same time Indian student enrollment at U.S. graduate schools has been falling (or at least growing little in 2010 to 2011), Chinese student enrollment has increased significantly. From 2007 to 2008, Chinese graduate student enrollment in the United States rose by 14 percent. From 2008 to 2009, first-time graduate enrollment from China increased by 16 percent. From 2009 to 2010, Chinese student first-time graduate enrollment rose by 20 percent. And for 2010 to 2011 it rose again, by 21 percent.

Change in Chinese Student First-Time Graduate Enrollment in U.S.

2007 to 2008  +14%

2008 to 2009  +16%

2009 to 2010  +20%

2010 to 2011  +21%

 

Conclusion

This survey of major U.S. graduate school program does not include responses from all programs. However, it is useful as a way to evaluate trends, particularly in technical fields. The survey notes, “The majority (63%) of all international graduate students at U.S. institutions are enrolled in one of three broad fields: engineering, physical & earth sciences (which includes mathematics and computer science), and business. Life sciences and social sciences & psychology also account for large numbers of international graduate students at U.S. institutions.”

The survey does not offer an opinion as to why Chinese student first-time enrollment at U.S. graduate schools has increased at the same time that Indian student enrollment has declined. It will take further examination to know if the reason is additional recruitment efforts by U.S. universities in China, economic trends in India and China, U.S. immigration policies, or other factors. Whatever the reason, a continuation of this trend could potentially have a major impact on future immigration patterns among employment-based immigrants to the United States.

India-US Relations Blog

Is Nancy Powell the right choice for India?

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Although fluent in honeyed words, in substance, the Obama administration is proving to be a disappointment for India. None of the promises of the George Bush years has been realized: neither hi-technology cooperation nor an effort to ensure that the Indian military be given access to sufficient equipment in order to maintain parity with an expanding PLA.

Now, the choice of a career foreign service officer, Nancy Powell, as the new U.S. ambassador to India underscores the fact that President Obama has left U.S.-India relations with the Secretary of State Hillary Clinton, while he focuses on the far more consequential relationship between China and the U.S.

In Beijing, Gary Locke (a former Cabinet-level official known for his antipathy towards Delhi and sympathy for Beijing) has a direct channel of communication with the White House, unlike Powell, who on occasion may find it difficult even to reach Hillary Clinton, given her relatively modest status in the ranks of power players in Washington.

During Powell’s stint in Islamabad, the soft-spoken envoy became very close to President Pervez Musharraf and her “See-No-Evil” reporting ensured that the Bush administration saw both Musharraf and the Pakistan military as reliable assets of the U.S. in the region. She believed that the Pakistan army could be relied on to faithfully implement the policies cooked up in the Departments of State and Defense, and raised very few red flags. So complete was her trust in the suave commando whom she clearly admired, the coup-leader who became the President of Pakistan.

It is no secret that decision-makers on the South Block (location of the Ministries of Defense and External Affairs and the Prime Minister’s Office) share with the North Block (the Home Ministry) a deep distrust of the Pakistan military, especially the army. Administrations in India have not seen any improvement in the ground situation, where irregular elements continue to infiltrate the Line of Control in Kashmir, besides entering India via road from Bangladesh and Nepal. During her period in Islamabad, Powell almost totally ignored such ISI activities against India, concentrating on the situation in Afghanistan and satisfying herself (after briefings from President Musharraf) that Pakistan was fully on board as a major non-NATO ally of the U.S. Doubts about such an assessment began only long after she left her post in Pakistan’s capital. After that, she moved on to Nepal, at a time when the Maoist groups were gaining in strength, thanks to the short-sighted policy of the former monarch in clandestinely backing them against democratic forces in Nepal, whom King Gyanendra regarded as a bigger threat than the Maoists.

Although in the course of her career in the State Department, Powell has had the distinction of being ambassador to both Ghana and Uganda. Her preferred region of interest has remained South Asia, where she evolved a distinctly Pakistan army-centric view of the overall situation. Not surprisingly, her appointment as envoy to India has been welcomed by U.S. experts such as Steven Cohen, Michael Krepon, and Teresita Schaffer. All three of them have vigorously praised the Pakistan army in the past, including the military’s quest for a resolution of the Kashmir issue on lines favorable to itself. In an op-ed in a newspaper in India, Shaffer has called Hillary Clinton’s choice “admirable”. No doubt President Musharraf too would agree, given his close personal friendship with the diplomat. Certainly, he will be ready to proffer her advice on how she should go about her task, something that he is known to do whenever he visits Washington.

Although some within the strategic community in India have delusions of grandeur about the role played by Delhi in the Obama calculus; the Powell appointment has once again shown up the differential treatment between approaches towards China and India. While the first country is a personal priority of President Obama, such that he closely monitors policy to that emerging superpower, in the case of India, Obama confines himself to mere words. The actual policy is left to Hillary Clinton who seems to regard Europe (and in particular the U.K. and now France) as not merely experts on India, but as useful interlocutors. While the expertise of the Secretary of State is most pronounced in the matter of specialty restaurants at the Maurya Sheraton hotel in Delhi (her favored haunt while visiting the country), she has very definite views on India’s role. It is that Delhi needs to behave in the manner that the U.S. and the EU decide is proper for it and forget about seeking parity with China. In that sense, the Powell appointment illustrates the much lower position of India in the strategic calculus of the Obama administration, as compared to China which has always had high-powered envoys, beginning with George H W Bush.

Nancy Powell knows the Pakistan military well and she has kept up her contacts with top generals in India’s western neighbor. However, she has cultivated far fewer links with the Indian establishment, except at the formal level. While key elements of the strategic community in India would like the Obama administration to give up its Euro-centric view of India (as a country that needs to be guided and led by the hand, in the manner of a frisky adolescent), such a development seems remote under Powell’s watch. She has been steeped in the State-Defense culture of seeing India near-exclusively from the prism of India-Pakistan relations and can be expected to follow Hillary Clinton’s instincts and insert herself into the subject almost from the day she assumes office in Delhi from Peter Burleigh, the acting envoy, who too shares with Nancy Powell close ties with the U.S. intelligence community and is a distinguished professor at the University of Miami, which has one of the best International Relations programs in the U.S.

It is no secret that the road map of the Indian-strategic community in Afghanistan and Kashmir is very different from that of the Pakistan army. Seeking to bridge this gap has been a task that Powell’s admirers in the U.S. academic community have been trying for decades to accomplish. In the final year of his present term in office, President Obama’s most urgent priority seems to be an orderly retreat from Afghanistan. Powell is among those who have long regarded it possible to enlist the Pakistan army in such a mission, if only India were to make enough concessions. Her task in Delhi may be to follow the example of another Clintonite envoy, Frank Wisner, who spent much of his tenure seeking to persuade India to make concessions on Kashmir.

Although there will be the obligatory cheers of welcome for the Powell appointment, deeper than the manufactured headlines and the anodyne statements, there is resentment that President Obama has distanced himself from the longstanding U.S. policy of sending distinguished Thought Leaders to India, rather than career diplomats such as Frank Wisner and Nancy Powell. The omens for a true India-U.S. alliance remain bleak, given Obama’s handover of India policy to his Secretary of State and her favorites. Where is the “change” that we were promised, Mr. President?

You seem to have gone back to Bill Clinton’s policy, of seeing India only within the prism of relations with Pakistan.

Immigration Blog

Indian Entrepreneurs Fit into an American Tradition

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America is a nation of immigrants. But it is historically has been a nation of entrepreneurs. Because of geography and U.S. immigration laws it was not possible for Indian immigrants to play a large role as entrepreneurs in the U.S. economy. However, the rise of Indian business people in America, especially since 1990, fits into a long tradition in America.

Early History of Immigrant Entrepreneurs in America

American history is fueled by the story of entrepreneurs. “The history of the United States lies in entrepreneurial ambition,” notes the Babson Entrepreneur Experience Lab. “The first colonies established in the New World sought to take advantage of new access to raw materials, agricultural lands and trade routes. More importantly, immigration to America offered the chance to escape class and persecution and to create opportunities for oneself; it was seen as the ‘land of opportunity.’ In particular, economic growth and entrepreneurial opportunities were found in owning land, various mercantile activities and exploration.”

Entrepreneurs Introducing New Methods and Technologies

Individual entrepreneurs, both native-born and foreign-born, have influenced how Americans communicate from the time of the telegraph up to the modern-day advent of mobile phones. In 1844, Samuel Morse won a federal grant to demonstrate the feasibility of the telegraph, though initially it could only transmit about 1,000 feet. When the federal government showed little interest in expanding the capability of the technology, Morse licensed private companies that within 6 years had built a “comprehensive network between major commercial centers.” According to Gerald Gunderson, author of An Entrepreneurial History of the United States, “Merchants extended their operations over a much wider area as the delays and uncertainty of working in distant markets fell. The telegraph took Americans a long way toward creating a national market by eliminating much of the disadvantage of distance.”

Entrepreneurs have also helped introduce new methods of operating businesses that later became common practice. Andrew Carnegie, an immigrant from Scotland, is famous for producing steel. “Carnegie’s challenge in 1870 was to develop an organization that improved efficiency as rapidly as possible,” explained Gunderson. “This turned not so much on inventing technology to produce steel, as on building an organization whose instinctive, primary focus was to reduce costs. Some of Carnegie’s innovations are so widely employed today they have become standard topics in management textbooks. One was the development of profit centers.”

Indian Entrepreneurs Emerge in America Post-1965

Between 1820 and 1959, only 13,363 Indians immigrated to America. This was due to the long distances but also because of immigration legislation passed in 1924 that severely limited immigration from eastern European, Asian, and African countries.

The 1965 Act eliminated the national origins quotas, opening the door to the immigration of Indians, Chinese and many others. The rise of Indian students in the United States helped lead to more family and employment-based immigrants and, as a result, that helped lead to more immigrant entrepreneurs.

A study I did for the National Venture Capital Association in 2006 examined publicly traded companies that had received venture capital. (See study here.) The study found, India, with 32 companies (22 percent), ranked first as the country of origin for immigrant-founded venture-backed public companies, followed by Israel with 17 companies (12 percent), and Taiwan with 16 companies (11 percent). Canada, France, the United Kingdom, Germany, Australia, China, Iran, and two dozen other countries were also among the countries of origin of the immigrant entrepreneurs on the list.

A study just released by the National Foundation for American Policy examining the top privately-held venture-funded companies. It also found India was the leading source country for immigrant entrepreneurs. (See study here.) Today’s Indian entrepreneurs are fitting into an American tradition of influencing society through entrepreneurship that goes back hundreds of years in our country’s history.