HVK Archives: A surfeit of double standards
A surfeit of double standards - The Observer
Rajesh Mahapatra
()
May 15, 1998
Title: A surfeit of double standards
Author: Rajesh Mahapatra
Publication: The Observer
Date: May 15, 1998
A day the Pokhran nuclear tests, Pramod Mahajan. the political
advisor to the Prime Minister, told newsmen that if sanctions
were imposed, any country would have to survive on its inner
strength and that India had "enough inner strength" to withstand
sanctions from any country. On this score, one cannot agree more
with Mahajan.
What is disheartening, however, is that this realisation has
dawned upon us so late. When it came to safeguarding our economic
interests in multilateral bodies like World Trade Organisation in
the past, we tended to believe otherwise. And today, a brave
front is raised to defend an action that has got very little to
do with the social and economic interests of the people at large.
Most deplorable has been the response from the bureaucrats.
policymakers and scores of opinion-makers. Taking cue from their
political masters, the top bureaucracy, as well as the leading
economists, and experts outside the government promptly declared
that any worldwide attempt to impose economic sanctions on India
would not cause undue harm to the country's interests.
India's dependence on external aid is negligible. Foreign direct
investment will come as long as returns are good. The Americans
need our market more than we need them and therefore extreme
trade sanctions are unlikely. Through diplomatic efforts, the
global community can be made to appreciate the rationale behind
India's action. And so goes the line of argument.
The same set of bureaucrats and opinion-makers had, on earlier
occasions, guided India to signing agreements like the GATT under
terms and conditions that were clearly not in line with the
country's interests. Among others, one of the arguments put
forward was that India had to do so in order to avoid retaliatory
action from trading partners like the US and the European Union.
As a television panellist said the other day, India could have
conducted these tests in 1995 during the tenure of P V Narasimha
Rao, but for the views of the committee of secretaries (CoS)
which said that the economic repercussions would be too heavy to
bear.
Either they are lying to us now or they lied to us before.
Nothing has happened in the last two years to make the Indian
economy more resilient and render global economic sanctions
irrelevant. In fact, with 7.2 per cent GDP growth and over 20
per cent increase in exports, Indian economy was more buoyant in
1995 than now when export growth has nosedived to a meagre 2.6
per cent and GDP growth slumped to 5 per cent.
Over the past few years, the bureaucracy and a class of opinion-
makers in this country - trained, as they are, in the Fund-Bank
school of thought - have contributed to generating a fear
psychosis among the public. That India ought to toe the line of
the advanced countries like the United States and the Europeans
if its Interests are to be safeguarded. That was done under the
pretext of globalisation and liberalisation and with the belief
that India needed the global market for its growth.
Today, they are trying to dispel the very fears they themselves
created. Quietly, they have changed the line of argumentation.
Reportedly, some of them even went to the extent of saying that
they had done a good deal of homework before the government opted
to conduct the tests. That could have been yet another lie.
It does not call for much homework to conclude that policies
aimed at promoting national interests, including those of
territorial security of any country, should not be influenced by
the fear of economic sanctions from other countries.
In our case, it is all too evident. Soon after the US President
Bill Clinton signed the documents effecting a set of sanctions
against India, three Congressmen said that sanctions should not
be imposed. The message is very clear. The interests of American
MNCs and exporters would be hurt more than that of the Indian
government and business. In fact, the US commerce secretary
William Daley went on record to say that there were $10 billion
worth projects in the pipeline for which his department would
have advocated on behalf of the US companies in India. These
projects will be jeopardised if the US did not soften its stance.
Britain, France and Russia have already stated their position
against invoking sanctions. The Russian President Boris Yeltsin
was more forthright in admitting that Russian interests would be
better served by not adopting a hostile approach towards India.
Germany put off its annual aid talks with India scheduled to
begin from last Tuesday. Japan - an important trading partner and
also the biggest bilateral donor - has decided, as of now, to
suspend the grant aid amounting to $26 million annually. The
disturbing news is that Japan decided against holding the India
Development Forum's annual meeting scheduled to be held at Tokyo
>from June 30. As per the latest reports, the World Bank has
decided not to hold the meeting. This development may give some
cause for concern, but there are also reports that much of these
would go if India signs the Comprehensive Test Ban Treaty (CTBT).
There are also indications coming from the science and technology
minister Dr Murli Manohar Joshi that the Indian government might
agree to adhere to select features of the CTBT.
In other words, it is argued that the fallout of the nuclear
tests would not cause undue harm to India's economic interests -
except for the transitory hicups like instability in the forex
market - for two reasons. Intensification of economic sanctions
worldwide can be avoided by skilful manoeuvring through
diplomatic channels or by taking recourse to signing agreements
like the CTBT. On the other hand, there may be softening of stand
of countries like the US following increasing pressure from their
respective industries.
If the latter is to be believed, it is clear that the bureaucracy
has been drumbeating another lie all these years. In the heyday
of economic reforms and liberalisation, we were told that the
country stood to gain a lot from foreign investment and that we
should learn to play the good host to such investment, critical
to achieving high economic growth. That we should sign on the
dotted line drawn by the advanced countries without any protest.
As if all those ground rules have changed with the Pokhran tests,
we are now told to espouse the cause of economic nationalism. If
only our leaders had shown this gesture before, India would have
been a different country, and a much desirable one, to live in.
The wag would have it that the current honeymoon of our
bureaucrats and policymakers with economic nationalism would not
last long. By the time the next series of jumboorees at Paris
anti Washington becomes due, they would leave learnt a new
language.
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