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Mainstream, Vol XLVI No 34

Nuclear Deal and Some Strategic Considerations

A South Asia perspective

Sunday 10 August 2008, by S G Vombatkere

The Indo-US nuclear deal (N-deal), called the 123 Agreement, is for cooperation between India and the USA concerning peaceful uses of N-energy. The UPA Government claims that it is meant to ensure India’s energy security through assured sources of uranium supply from the NSG to operate to-be-constructed N-power reactors, by liberating India from the sanctions (“nuclear apartheid”) that were imposed following India’s N-tests, Pokharan I and Pokharan II. It has been noted elsewhere that it was precisely these sanctions that have resulted in India’s independent N-programme, and it goes to the credit of our nuclear scientists and engineers that India has indigenously constructed N-power reactors and made advances in fast-breeder reactor technology in pursuance of Homi Bhabha’s three-stage long-term N-programme. With having exploded two N-devices (and having perhaps triggered off a South Asian N-arms race) India is a de facto N-power, but with the great advantage that it has an impeccable record of non-proliferation and an internationally acclaimed policy of no-first-use of its N-weaponry.

The India-US Nuclear Agreement

The Left parties had been critical of the N-deal from the outset, pointing out that it was not a part of the agreed Common Minimum Programme, which was the basis for their support to the UPA Government. They maintained the following main criticisms:

1. N-energy will not provide energy security because, with the declared target of 20,000 MWe of N-power by 2020, India will increase its n-component of total generated power from the present 2.9% to merely eight or nine per cent.

2. The high financial costs of this small augmentation could be better spent by using other cheaper sources that will be operated on fuels already available in India.

3. The N-deal was overshadowed by the provisions of the Hyde Act enacted by the US Congress in January 2006, which is an India-specific legislation (titled “Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006“) that visualises India having a foreign policy congruent with that of the USA and actively participating in the USA’s efforts even to implement sanctions against Iran if that country should not conform to the USA’s checks on acquisition of N-weapons.

The first two objections of the Left parties concern India’s energy security which is the main reason for which the UPA Government states that it is pushing the N-deal, and which is a matter internal to India. However, it is not without its global effects in the form of $ 100 billion worth of business in India in the next ten years for US business houses in the nuclear industry like Westinghouse Electric and GE Energy. The third objection of the Left parties was widely seen as a manifestation of their antipathy to all things American, and hence needs to be viewed from a careful reading of the text of the documents.

The following are quotes from the Hyde Act:

It is the sense of Congress that ... (6) it is in the interest of the United States to enter into an agreement for nuclear cooperation arranged pursuant to section 123 of the Atomic Energy Act of 1954 (42 of U.S.C 2153) with a country that has never been a State Party to the NPT if ... (B) the country has a functioning and uninterrupted democratic system of government, has a foreign policy that is congruent to that of the United States, and is working with the United States on key foreign policy initiatives related to nonproliferation.

The Hyde Act also states in Section 103, Statements of Policy:

The following shall be the policies with respect to South Asia: ... (4) Secure India’s full and active participation in United States efforts to dissuade, isolate, and, if necessary, sanction and contain Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability and the capability to enrich uranium or reprocess nuclear fuel, and the means to deliver weapons of mass destruction.” [Emphases added]

In the first part of the quote, the US Congress believes that striking a deal with a country that has a foreign policy congruent to their own would be beneficial to the USA. Obviously, if there was no real benefit to the USA, it would not be entering into the N-deal for India’s benefit alone. India, as a founder of the Non-Aligned Movement (NAM) has had a foreign policy essentially crafted by PM Jawaharlal Nehru, and it has been the argument of the USA that India has been cool towards them while warming up to the erstwhile USSR. [This ignores the fact that India signed a mutual defence treaty with the USSR in the months leading up to the birth of Bangladesh because of the USA’s support to Pakistan, displayed in the threatening US military presence of its Seventh Naval Fleet in the Bay of Bengal during the 1971 liberation war. Fortunately the Indian Army succeeded in obtaining the unconditional surrender of the Pakistani General in East Pakistan before the US Fleet actually interfered, else the politics of South Asia might have been substantially different today.] This clause in the Hyde Act apparently seeks to nudge India’s foreign policy into one that is more in keeping with, if not actually congruent to, their own. That the USA is applying pressure on India to mould its foreign policy is borne out by three incidents: one, when the USA put pressure on India, as a result of which it voted against Iran at the IAEA when it could have just as well have abstained; two, when the USA “advised” India against making a contract with Iran for the IPI gas pipeline; and three, when Nicholas Burns said that the current N-deal would have been unthinkable in Jawaharlal Nehru’s time. It remains to be seen in what time-frame the congruence in foreign policy will be engineered and achieved.

The second part of the quote from the Hyde Act is a statement of policy of the USA. It aims to secure India’s full and active participation in acting against Iran with respect to that country’s nuclear programme. Of course, the USA’s wanting India to join it is to thwart Iran’s acquisition of a N-weapon, but IAEA chief El Baradei has stated after the IAEA’s inspection, that there is no evidence of a N-weapons programme. At this stage, it must be recognised that Iran has a right to enrich uranium for its N-power programme as part of Article IV of the NPT to which Iran is a signatory, and also that India has historically had mutual cultural ties and good relations with Iran. Any attempt by any country to change friendly ties for the worse can only be seen as malafide interference in a world that is already suffering enough from animosity and conflict between countries. India worsening its diplomatic position with Iran for a better position with respect to the USA, would place another one of the countries in the region against India and worsen the already tenuous position of India that is today completely surrounded by nations that are failed or failing states, and which have relations with India that are not of the best. The advisability of the N-deal needs to be carefully re-considered in a strategic South Asian context even if it is actually in the interest of India’s energy security.

Notwithstanding the foregoing, the UPA Government has been insisting that N-energy is vital to India’s energy security while avoiding discussion on the issues of contribution to the gross power capacity and the high cost of generated N-power. It has also held that the Hyde Act would have no effect on the 123 Agreement since it was internal to the USA and was hence not applicable to India. While it is clear that the Hyde Act was legislated with India in mind (as the title suggests), it is difficult to fathom why such an Act was at all needed unless a N-agreement with India was contemplated. Any legislation by a government is meant to govern the manner in which it is to conduct its affairs, and in the instant case, the Hyde Act spells out what is the sense of the Congress with respect to India, which it views as a country with democratic values that can be induced to make its foreign policy “congruent to that of the United States”.

While there is no doubt that India is not bound by the Hyde Act, it is necessary to understand that the provisions of that legislation do and are intended to bind the USA to make efforts to implement their national policy. Such policy is part of the USA’s foreign policy to bring as many countries under its influence, if not control, for its global designs, not the least of which could be the PNAC (Plan for the New American Century) mooted in US President Clinton’s tenure. The effects of the USA’s global actions over the past decades, and particularly during the two tenures of US President George W. Bush, are available for all to see, and a wag has quipped that it is dangerous to be the USA’s enemy but fatal to be its friend.

Strategic Considerations in South Asia

Several things have happened in the recent past in South Asia. The USA’s support to Pakistan in their “war against terror” has run out of steam as democratic forces have pushed Pervez Musharraf to the sidelines, resulting in a fall in US influence in Pakistan as of now. Considering that China has very recently expressed its view that parts of Sikkim and Arunachal Pradesh are theirs, the relations between India and China are not about to improve. Bland MEA statements notwithstanding, this is a matter for the most serious concern for India. Thus, it is to the USA’s advantage to appear as India’s supporter for India’s own security against China, considering that China and Pakistan are both India’s neighbours and have had mutually close relations including China helping in Pakistan’s N-programme. At the same time, China’s Gwadar port in Pakistan at the northern tip of the Arabian Sea bordering Iran interferes with the USA’s designs in Central Asia and can pose a strategic threat to US shipping in the Gulf, while the inter-governmental mutual-security organisation among China, Russia, Kazakhstan, Kyrghyzstan, Tajikistan and Uzbekistan (called the Shanghai Cooperation Organisation of 2001) is a source of discomfort to the USA. All this, when put together with the establishment of the IOB (Iran Oil Bourse) that trades oil in euros, Russia planning to start its own oil trade in roubles or euros, and several other countries making tentative moves to start trading oil in euros, finds the USA in a state of dollar insecurity over and above growing apprehension of terrorist attack on the US homeland.

Globalisation has resulted in the US MNCs physically transferring their manufacturing infrastructure to countries where input and regulatory costs are lower, and therefore profits higher. For example, India’s environmental and land laws having been relaxed considerably in the recent past, the most basic resources like land, water and minerals are more readily available for exploitation by MNCs to repatriate profits while leaving behind the social ill-effects, pollution and environmental degradation. At the same time, since the US MNC investments are being made abroad and thereby providing less investment at home, an increasing proportion of investments into the USA are being directed to finance consumer debt, provide tax breaks to the MNCs and pay for the ruinous wars in Afghanistan and Iraq. Today the net borrowing by the USA stands in the region of a record US $ 254 billion, and countries like China and India are among the USA’s creditors, holding US Treasury Bills as security. Should a large value of US Treasury Bills be presented to the USA for the US dollars that they represent, it may create a situation leading to collapse in confidence in the US dollar and a sudden and steep rise of the already rising euro with respect to the US dollar, with unpredictable economic, political and military consequences. [The situation may not be unlike that in 1971, when several countries tried to simultaneously sell a small portion of their dollars back to the USA for the gold that the dollar then guaranteed. The USA defaulted and, on August 15, 1971, unilaterally severed the link between the dollar and gold.]

Strategic thinkers argue that the USA’s security would be best achieved by “containing” China, much like the USSR was contained in the past. To this end, India presents itself as a convenient foot-hold in South Asia where the USA can do business and also gain access to facilities for “lily-pad” bases for military transit and refuelling for military interventions in this part of the globe. Such military advantage is in consonance with the growing military cooperation between India and the USA following the pact signed in 1995 by the Narasimha Rao Government. Also, N-cooperation with India presents Opportunity for the USA’s ailing civilian nuclear industry. If the India-US N-deal goes through, as it almost certainly will, it will provide the USA with not only a reliable physical presence in South Asia (which it cannot do in Pakistan because the USA views Islamic countries as inherently unfriendly, and the sentiment is heartily reciprocated) but also an ally for its foreign policy. India’s burgeoning middle class is also a huge market for the US MNCs to make and repatriate profits.

Thus the India-US N-deal will, for the USA, kill several birds with one stone. The USA’s keeness for the N-deal has amply been demonstrated by their frequent exhortations, most recently President Bush’s message to Dr Manmohan Singh exhorting him to “soldier on” against internal opposition. What the deal will really do for India in terms of energy security, and to India in terms of independence of foreign policy, only time will tell. n

Maj Gen S.G.Vombatkere retired from active military service in 1996 and has since been engaged in voluntary work in the social, civic and environmental fields with Mysore Grahakara Parishat (MGP) in Mysore. He is also a member of the National Alliance of People’s Movements (NAPM) and the People’s Union for Civil Liberties (PUCL). He holds a Ph.D in Structural Engineering from IIT, Madras. He teaches a course on Science, Technology and Sustainable Development to students from University of Iowa, USA, and two universities of Canada, who spend a semester at Mysore as part of their programme of Studies Abroad in South India. He can be contacted at e-mail: sgvombatkere

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