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20 December, 2010

Shape of things to come

BRP Bhaskar
Gulf Today

The Big Power status which five nations nominally enjoyed at the end of World War II ended and enabled them to become permanent members of the United Nations Security Council may be irrelevant today but it is not without significance that the heads of all five governments figure in India’s 2010 guest list.

British Prime Minister David Cameron was in New Delhi in July, United States President Barack Obama in November and French President Nicolas Sarkozy and Chinese Prime Minister Wen Jiabao this month. Russia’s Prime Minister Vladimir Putin came in March and President Dmitry Medvedev is coming this week.

Business was high on the agenda of all visitors and they struck many deals. The embargo imposed on India after the nuclear tests of 1998 having been lifted, some were seeking orders for nuclear equipment and military hardware.

Britain got orders for 47 military aircraft under a $1 billion deal. The US, which was ready to provide equipment for power plants and civilian aircraft, secured orders worth $10 billion. France, which offered equipment and fuel for two nuclear plants, did business worth $13 billion.

Wen’s delegation, which included about 400 businessmen, signed 49 agreements valued at more than $16 billion. The size of the transaction testifies to the growing economic ties between China, which is already the world’s second largest economy, and India, which is tipped to take the third place in the not-too-distant future.

India has a trade deficit of about $16 billion with China, which has replaced the US as its biggest trading partner. This has not deterred it from planning to boost the two-way trade, now estimated at $60 billion, to $100 billion in five years.

The two countries have a combined market of $7 trillion. Clearly, it is in the interests of both to raise the level of economic cooperation. However, there are inhibiting factors. India complains of hurdles in the way of increased exports to China. India has not so far allowed any Chinese bank into the country although 10 Indian banks operate in China.

It should cause no surprise if Medvedev, who arrives today (Monday) pulls off even more than Wen. At least 15 pacts will be signed during his visit. While the agreements will be fewer in number than were signed during Wen’s visit, they have greater significance in strategic terms as they cover vital areas of fighter aircraft manufacture and nuclear power production. They underscore the strength of the ties built up during the Soviet days.

As early as 1961 India had opted for MiG fighter planes in preference to western aircraft as Moscow was ready to transfer technology and allow local assembly of aircraft. The new agreement will give India access to fifth generation fighter aircraft.

The first of four units of the 4,000 megawatt nuclear power plant being built in Tamil Nadu with Russian assistance is due to be commissioned shortly. Although Russia has reservations about some provisions of India’s new civil nuclear liability law, it has offered to help build a dozen more nuclear plants in the next 15 or 20 years. Agreements to set up two plants are expected to be signed during Medvedev’s visit.

While economic matters were uppermost in the visitors’ minds, the host was looking for political dividends as well. India is an advocate of reform of the UN and an aspirant for a permanent Security Council seat. Since the UN system cannot be changed without the concurrence of the existing permanent members, India has been raising the topic in all top-level meetings.

After Obama committed US support to India’s claim for a permanent seat when he was in New Delhi, China was the only P5 country still holding out. Wen signalled no change in its position. He only offered support for “India’s aspirations to play a greater role in the Security Council.” This suggests Beijing does not favour India’s elevation to the status of a permanent member with the right of veto.

From India Wen went to Pakistan and reiterated China’s desire to strengthen its strategic relationship with that country. Around the same time Japan said it was “realigning its resources” from the north to the south, indicating it views China as a greater potential threat than Russia. Evidently, geopolitical factors are as important as economic factors in determining the shape of things to come. -- Gulf Today, Sharjah, December 20, 2010

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