February 19, 2006

Indo-U.S. Relationship : New Dimensions

related articles here and here
also here

(Visualisation of conversation during Dinner party to be given by Mr. Manmohan Singh in honour of Mr. Bush (Big B) on March 2, 2006. )

Full backing

Big B: Hey Man, I wanna have a word with you in private, if I may.

(Both Manmohan and Mantek move closer to Big B. Mulford gestures to Mantek that Big B. wants to speak with Big Man, not him. Mantek moves back, disappointed.)

Mulford:(whispering to Big B) Mr. Prez., please do not address him as Man.
Big B: Why do you say that, he is Man all right.
Mul: No, no, I mean if you say Man, it confuses them whether you mean Manmohan or Mantek..
Big B: Oh, ok, get your point Dave, thanks.

(Big B talking to Mr. Manmohan Singh.)

Big B: So what's up? Tell me about the Nuke deal, how’s it goin on your side?
M: We are moving in the right direction Mr. Bush. I assure you I will carry everyone along. We will deliver on all our promises before you do.
Big B: Yeah, that’s important y’know. I have a tough task ahead convincing all those guys back home.
M: We appreciate what you said you were going to try to do for us Mr. Bush.
Big B: Sure will. I can do business with you, I told you when you came to the U.S.
M: (Smiles)
Big B: Talking of business, that reminds me. You know the Senators from Arkansas ain’t convinced yet. I am afraid; they are going to be tough nuts to crack. I told you about them back in US already.
M: But we are going to separate all our facilities as you told us.
Big B: Yeah, they know it too. But the folks from Arkansas are concerned about their own State, you see. They are getting impatient and they have to see a few Wal-Mart stores opening in Kolkata, Delhi and Mumbai. I have to show that I have done something for their state too, not just India. Don't forget, Wal-Mart want to come here in India's interest. They can very well go elsewhere and that will be your loss, not theirs.
Mulford : (interjects) I hear they already have invitations from other countries. Ethiopia, Uzbekistan, Lithuania......others..
Big B: Speed in decision making counts a lot.
M: I get your point Mr. Bush. Let’s hear Mr. Nath too on this.
Big B: Nut, who?

Mulford : (again whispers) Not Nut, Mr. Prez, Mr. Nath, their Commerce Minister.

(Big B nods that he has understood.
K. Nath joins the group.)

Mulford: Look here, Nath, the Prez. wants to know what has been done since Wal-Mart team met with you last year. It is nearly a year, you know.
Nath: Yes, we are working on it. I am confident that we shall overcome all the resistance. There is the usual problem with Mom and Pop shops that I need to tackle. I am going to convince them that what we are doing is for their own good. They will be able to sell their shops and get good money.
Mulford: So?
Nath: The Left parties are also making some noises... I have been trying to convince them too that it will help India in a big way. There will be backward linkages, cold chains and so on. Farmers will benefit. Above all, they will bring down prices by importing stuff from China and our manufacturers will also improve to meet the Chinese competition. Consumers will benefit. The lowering of prices will help our Finance Minister too who has been struggling to keep inflation under check. And also....
Mulford: (menacingly) See 'ere, you are only repeating what WE told you to enlighten you. The Prez. is not interested in all these stories. Enough is enough. Just do it that's all. Don’t fool around with us if you know what’s good for you.
Nath: (nervously looks at Manmohan Singh who avoids his glance)
Big B :(nudges Mulford) Let me handle this Dave, if you will.

Big B: Relax, Nath. They told me all about you. You are a nice guy. I know I can rely on you to do what we want you to do in your country's interest.
Nath: I am doing my best Mr. President. I won’t disappoint you. It is just that these Moms and Pops and Left parties..
Big B: I understand all that. Let’s put it this way: Can these small shops or the Left parties give you a nuke deal? Can they help India by doing what Wal-Mart and Boeing and other American businesses will do?
Nath: You are absolutely right, they can't. You can count on me to get Wal-Mart in. I think the Left parties also want us to do it because of Buddha, the Enlightened One, amongst them. So they would actually like it if we ignore them. We have already ignored the opposition because they are also supporting it by not opposing strongly.
Big B: So when do you think you can do it?
Nath: Very soon. We have finalized the concessions for them. In confidence, I can tell you that but for the objections from the Left, we were in favor of treating all Wal-Mart stores in the country as a single Special Economic Zone and giving them exemption from all Indian laws, tax breaks etc. We will still do the best without inviting trouble from the Left.
Big B: (smiles) That’s good then.
Nath: We are counting on Wal-Mart to transform the face of our agriculture. Our Agriculture Minister also feels that Wal-Mart can easily do what he could not do.
Big B: Hmmm
Nath: We are looking to them to export also our agro products in a big way, especially fruit.
Mulford: What fruit, Mango?
Nath: Yes, but we can offer Bananas too in a big way.
Mulford: You grow Bananas too?
Nath: Oh YES. You will be surprised to know, we are the largest Banana producers in the world. We produce 23% of the world’s production.
Big B: Wow, isn’t that something? Hey Dave, why didn’t we think of it before? The largest Republic in the world is the largest producer of Bananas. Makes a lot of sense. (laughs)
Mulford: Yes Mr. Prez. That’s it then Nath. Good luck to you. Let’s have a drink together and leave the Prez. with your PM.

(both move away)

Big B: (to Manmohan Singh) Nice guy, Nath. But needs a bit of a push from the top, I think.
M: I have been doing it but this young blood, you know how they are.
Big B: If he can do it, it will be a load off my head and I can convince the Arkansas folks. You know what?
M: What, Mr. Bush?
Big B: The Wal-Mart people in Bentonville have great confidence in your party President. They have a lot of hopes about her because of the enlightened economic policies like allowing Wal-Mart.
M: I am glad they think so of our party President.
Big B: Sure, they do. In fact, they are appreciative of the help they are getting from you guys. I am sure they will be happy to see your party win the next elections too. You could count on their goodwill.
M: I am happy to hear that.
Big B: Good work is always appreciated. Tell me how far have you come on your aircraft fleet orders. The people at home were a bit concerned that Airbus will walk away with the remaining orders.
M: That portfolio is handled by another of my coalition partners as you know. But I am sure, we prefer Boeing.
Big B: I hope so. Minister Patel knows a lot about US. Patels have a lot of motels out there. His boss Power is also quite practical. I do not see any real reason to worry. But Boeing is important for your economy. The people in Seattle and Chicago think so too.
M: Sure, we recognize it is in our interest to give preference to Boeing. We only give some orders to Airbus to keep Mr. Chirac in good humor.
Big B: Things are certainly changing since your government came in power. You are also establishing your party's credibility. It is evident from the way your party took actions on the Volcker Report. Condie told me it has had a lot of positive impact on your foreign policy too. It has helped in giving a new meaning to our relationship. By the way, I don’t see your computer man around. Where is he?
M: Computer man?
Big B: I mean the number cruncher, PC. A PC has all the figures, haha.
M: Oh you mean Mr. Chidambaram.
Big B: You got it right.
M: He is busy trying to think of explanations and reasons for the Budget proposals he just presented.
Big B: Yeah, its always difficult to convince people to see sense in the Budget proposals.
M: He can make himself sound convincing.
Big B: Tell you what, I’ll tell Aly to call up PC and give him advice on how to handle the economy. India is going to be a big economy and you’ll need a lot of expertise now.
M: Aly?
Big B: Greenspan. He can be a good ally.
M: Oh. We would surely appreciate that Mr. Bush. Shall I send PC over to meet with him next week?
Big B: Let me get back first and brief Aly what we would like him to suggest.
M: I understand.
Big B: Always happy to be of help to friends like you.
M: (raises his voice) Mr. Bush, I want to tell you something important.

(Others around them come closer)

Big B: What is it Mr. Prime Minister?
M: (raises his voice further) Let it be clearly understood. I do not want any misunderstandings later on. I want to say it with all the emphasis at my command. You should not think that we are going to do whatever you say.
Big B: (alarmed) Please calm down Man.
M: Don’t you Man me. Listen to what I say. I have told everyone about this in my country. Whatever we do is going to be strictly done in the light of the changing situation. We make our own policies. All our policy decisions are going to be taken in our own enlightened national interest. We will agree to do everything you suggest only because it is in our national interest and for nothing else. I hope I am making myself very clear.

(applause from the Indian side present)

Big B: (relieved) Oh that. Sure Mr. Prime Minister. I know you are very strong and firm about that as you told me back in the US. You can rely on me there. I always think of that and whatever we suggest is only in India’s interest. Have we not always done that? I worry about India’s interests just as I worry about Indiana’s interests. You know that.
M: I just wanted to make it clear once again. I will NOT do anything that is not in India’s enlightened national interest. Most certainly not.
Big B: I admire your firmness in saying this. That's how it should be. I sure am glad that you want to do everything in the interests of your state...er...I meant nation.

(raises a toast) Cheers to strengthening of our new relationship.

Break for dinner…….

February 16, 2006

Retail FDI - Selling India short



One of the most provocative interpretations of globalisation comes from former U.S. secretary of state Henry Kissinger, who has said the process "is really another name for the dominant role of the United States." [read here]

The Government has been talking a lot about FDI transforming not only the Retail business but also thereby, virtually the entire economy.

So far, the Government has NOT been able to show any single concrete and undeniable evidence of these benefits accruing to any economy of significance.

The way in which the entire issue has developed till date raises certain doubts which have to be clarified:

  1. Everyone has been talking of benefits of organised retail. The modernisation of retail trade is going to happen as a natural evolution as other parts of the economy are also modernising. This will happen without government doing anything and just leaving things alone.
  2. Modern retail may result in some advantages but there may be disadvantages too. In any case, the advantages of modern retail DO NOT mean that the country needs FDI. The Government is deliberately trying to confuse people by mixing the two. It has been misrepresenting and misleading and not working transparently.
  3. Allowing FDI in Retail is clearly going to give benefits to the foreign countries without corresponding benefit to the host country viz. India. Therefore, it would have been appropriate to use this as a bargaining point in multilateral trade negotiations. Instead, government is just giving away the bargaining strength.
  4. There is no worthwhile benefit to the country and this is a low priority area for FDI. The investors are going to reap huge benefits relative to their negligible investments by pulling out large dividends year after year. The present government has no right to place this heavy burden on the balance of payments which will have to be faced by future governments and the people.
  5. It is very clear that the Walmart lobby has very effectively 'handled' and 'tackled' those who matter viz. political parties and government administration as well as certain business interests. All of them are virtually pleading the case of Walmart while Walmart lets these parties and individuals work for them and goes about its planning for entry into India.
  6. As stated in an earlier article(see here), the Left parties are just making a show of protesting and getting upset. If they were really serious, instead of waiting for the Government to announce the decision, they would have mobilised protests already beforehand, which they have been only threatening. The Left parties have proven themselves to be as hypocritical as other parties. Their Chief Minister in West Bengal has already publicly stated that he would welcome Walmart and other FDI in Retail. The FICCI Secretary General further let the cat out of the bag by saying that SITARAM YECHURY,a CPIM politburo member is convinced about bringing FDI in Retail(read here). This means that CPIM is fooling the people and not capable of looking after their interests. The CPI is, in any case, too weak to take any firm stand at variance with CPIM or against the Congress.
  7. There is a serious doubt in the minds of some that allowing FDI in Retail is somehow also linked by the U.S. Government as part of the nuclear deal. Even if this condition may not be explicit because this is a trade matter and distinct from nuclear deal, this must have been told to the Indian government in an informal way.
  8. This decision of the government clearly shows that it has been heavily influenced and sucked into the sweet talk and pressure tactics of other countries mainly USA, even as the Indian government keeps talking of always looking after national interest etc.

February 01, 2006

FDI and the Left Parties

The Left parties have been consistently raising basic objections to the UPA governmment's moves to open FDI in Retail.

Despite these objections, the government coolly ignored them and went ahead doing what they wanted to do.

The dillema of the Left Parties came to the fore in an interview given by a CPI leader, Mr. Bardhan on a TV channel earlier this week.

When asked pointedly and repeatedly as to what they would do, the answer was that they would keep protesting.

There are two reasons why they would not like to go beyond making protests.

First, the government would simply overlook their objections, knowing full well that the Left Parties under no circumstances can rock the UPA boat.

Second, perhaps, they do this for a tactical reason. They will keep putting pressure on the Government at the Centre not to open FDI in Retail. At the same time, knowing that FDI in Retail will be opened, their West Bengal Chief Minister who is waiting in the wings, will be the first to take full advantage of the opening up by inviting some groups in the State, including Walmart.

This should be a pointer to the people to understand how political parties find strange ways to take advantage of policies that they resist and still manage to keep up their public face.