Posted by: John Elliott | April 24, 2010

India’s scam-ridden IPL cricket is a national celebration

India is of course a country of scams. To many abroad it is seen sentimentally as Mahatma Gandhi’s country of khadi cloth, good ethics, and care for the poor. To some it is an economic miracle and a future super power, while to others it is an unkind cruel place of caste, ethnic and rich-poor divisions and violence. Above all however, and not far below the surface, India is a maze of unethical, unlawful and illegal swindles that link most politicians, many bureaucrats, and a large number of businessmen and others.

It is scarcely surprising therefore that there is a scam surrounding the IPL, which has grown in just three years to a massive $4bn wealth-creating package of sponsorships, broadcasting and other franchises, fees and other takings.

Cricket is not just a national sport in India but also a passion, and people have watched in awe as the rupee and dollar figures have grown to such an extent that over $300m has recently been bid for new franchises, raising the total from eight to ten teams.

A lot of the IPL activity has been alleged in the past week or so to be unethical, unlawful and sometimes illegal. Politicians and others are said to be laundering black money via Mauritius and other tax havens which, though officially recognised, hide investors’ identities through shell companies and benami (false) names. There are suggestions that matches and bids for team franchises have been fixed, and that there have been bribes, tax evasion, illegal betting, and breaches of foreign investment rules.

At the centre of the growth, and the controversy, is Lalit Modi (above), creator and chairman of the IPL and vice president of the highly politicised Board of Control for Cricket in India (BCCI), who is facing calls for his resignation [and was suspended on April 24] .

“Overlord of a national passion” was the headline on a Financial Times profile of Modi two years ago. More details of his business career appeared in the India’s Mail Today newspaper a few days ago headlined “Modi and controversy go a long way back”.

The national celebration of the lucky few getting rich in a poor country is one of India’s many curious contradictions. The poor have (up to a point) always admired the massive illicit personal wealth of some politicians, such as chief ministers Mayawati and Jayalalitha in Uttar Pradesh and Tamil Nadu, because it shows what can be achieved from a deprived background. Similarly, the successes of the IPL organisers, cricketers, and the business and film star cricket team owners, have been enjoyed as a symbol of hope for what might be, as well as a spectator sport (now switched to tracking the leaks and scandals).

Earlier scams and political corruption have also been celebrated to a lesser extent, and some have even done the country good for a time. While stock market fraud primarily makes the price-fixers rich, it also benefits private investors and boosts company capitalisations, and the country has revelled when the Bombay Sensex has soared in past scams. Also, as an ex-army friend has reminded me, the Bofors gun at the centre of 1980s corruption allegations won India a border war with Pakistan at Kargil in 1999 – though it has also stymied defence purchases for 20 years.

This celebratory reaction probably partly explains why the workings of the IPL were not looked at earlier by the government’s financial and criminal investigations agencies, nor the media, even though rumours of illicit deals and links between politicians and investors have been around for some time. It was just too big a tamasha (party), with too powerful hosts, to be interrupted.

Club of friends

As one of those involved said to Tehelka weekly news magazine last week, “It’s common knowledge that ….politicians running across aviation, agriculture, road transport and the Opposition, are minting money and have undeclared stakes in every cricket pie”. Last September, Outlook weekly news magazine noted that “the IPL is largely a club of friends with mutual interests, and often conflicts of interest”.

The main reason for the lack of investigations is of course that, as in virtually all scams (not just in India), politicians are so deeply involved that few officials would dare start inquiries. And most of the Indian media does not begin to investigate until it is fed information.

This suddenly came unstuck earlier this month because of the involvement of Shashi Tharoor (left), an ambitious former top United Nations official who last year became an MP and a gaffe-prone external affairs minister. Tharoor helped a consortium based in his home state of Kerala to bid for one of two new IPL franchises on offer this year, and a woman friend, Sunanda Pushkar, was promised a $15m sweat equity stake on account of future consultancy work.

Known as Kochi, the consortium put in the highest bid of $333m, which apparently upset Lalit Modi’s plans for who should win. The consequential row went public on Twitter and exploded in the past two weeks into a scandal that has led to a stream of media leaks, presumably from the government and political parties and mostly directed against Modi. There have been rows in parliament, tax and other raids, and calls for an official inquiry. Tharoor has been forced to resign from his minister’s post, and Pushkar has given up her $15m.

Companies involved

Anyone looking at some of the leading businessmen and companies involved in the IPL would surely have noted long ago that virtually all of them are at the wrong end of India’s corporate respectability spectrum. There is Vijay Mallya of United Spirits and the Kingfisher beer and airline businesses, infrastructure operator GMR that has grown miraculously fast in recent years and grabbed massive land holdings along with airport franchises in Delhi and Hyderabad, and the secretive Subrata Roy of the Sahara group that is famous for its chit (small savings) fund and real estate activities.

Also owning a team is Mukesh Ambani of Reliance Industries (RIL) who has been a strong Modi supporter from the beginning of the league. Those trying to win teams this year include commodity trader Adani, which has been in legal trouble over non-payment of customs dues and monopolising coal imports, and the Videocon electrical white goods and oil exploration company run by Venugopal Dhoot.

Lalit Modi comes from the Delhi-based Modi family business group headed by his father, K.K.Modi. Lalit Modi was not regarded as a success until he started the IPL, and his earlier business ventures include a controversial lottery franchise in the north-eastern state of Manipur.

Modi’s friends and relatives

His relatives crop up as both IPL stakeholders and franchisees. His brother-in-law is a part-owner of the Rajasthan Royals team, which has several shell company investors plus Lachlan Murdoch, son of Rupert Murdoch, the international media tycoon. His step son-in-law, Gaurav Burman, runs Elephant Capital, a private equity company, along with brother Mohit Burman who is also an investor in the King’s XI Punjab team. Elephant has a stake in IPL’s on line and broadcast licensee Global Cricket Ventures. (The Burman family control the Delhi-based Dabur health care and food company).

Bharatiya Janata Party (BJP) politicians are deeply involved. Lalit Modi has close links with Vasundhara Raje, the BJP’s former Rajasthan chief minister, which are now being challenged on the fringe of the IPL story by Congress politicians. Modi faced tax and other charges after Raje lost power last year. He has sought help from Narendra Modi (no relation), the BJP chief minister of Gujarat. Adani is based in Gujarat and Lalit Modi reportedly wanted it to win the Kochi bid that was secured by Tharoor’s Kochi team. Kochi was allegedly offered a $50m bribe to back off by Lalit Modi (who has denied the charge), so that Adani could take over.

Patel and Pawar

Praful Patel, India’s urbane but under-performing aviation minister, who I described as the government’s “Teflon man” in an earlier blog, has also been a target of leaks to the media. He frequently issues smooth denials of any problems, and of his own lack of responsibility for the worsening state of Air India and India’s over-crowded and potentially dangerous skies and airports.

This week he was rebutting leaks by denying any involvement in the IPL, even though his 24-year old daughter works for the league and, with him, reportedly sent an e-mail to Tharoor about cricket teams’ potential profitability. “Children should not be targeted,” said Patel a few days ago. He is closely involved with India’s cricket in other ways because he is a senior member of the Nationalist Congress Party, which is led by Sharad Pawar, once one of India’s most powerful politicians but now a not very effective agriculture minister. Pawar is former president of the BCCI and is at the centre of a row over what should happen to Modi. He is in line to become president of the International Cricket Council.

It is not clear whether Pawar and Patel are being targeted by the Congress Party as a warning not to upset the stability of the governing coalition, or by the opposition BJP to embarrass the government.

A writer in the Indian Express the other day said that “in many ways, the IPL is a confirmation of what India really is – an emerging economy”. He is correct. The scandal shows how far the country has to go before it can claim to have moved on from being under-developed in terms of market regulation and ethics.

As the economy has been liberalised over the past 20 years, brilliant entrepreneurship has been generated, but unparalleled greed has grown at all levels of society. People from the top of the government down to a village headman use cronyism, patronage, bribery, coercion and generally low ethics to build status and wealth. That looks like continuing for generations because there are still some 700m or more people clambering to enter the economy and reap the benefits of new riches.

On the IPL, the current furore will no doubt lead to one or two resignations, but inquiries will be controlled to protect many of those involved. Some new regulations might be introduced to control the league. The flow of news leaks that is fuelling blanket media coverage will slow down soon and the fuss will almost certainly die away, maybe in a week of two, when it will be neatly swept from headlines by other news.

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Posted by: John Elliott | April 16, 2010

Manmohan Singh and Sonia Gandhi should lead policies on growing Naxalite crisis

A controversy currently raging in India over whether the growing problem of Naxalite (Maoist) rebels should be tackled with force or through development of the tribal areas involved is unnecessary. The answer is clearly both – at the same time, and with equal energy and commitment, by both state governments which have constitutional responsibility for security, and by the central government which should give a national lead.

The fact that this dual approach is not happening, and that there are splits within the governing Congress Party, is an indictment of the government’s weak  leadership, notably by Manmohan Singh, the prime minister, and Sonia Gandhi, the leader of the Congress Party and of the coalition, plus at a different level her son and heir Rahul Gandhi.

The situation is now dire. The Naxalites recently killed 76 paramilitary troops in an ambush, and their activities now cover nearly a third of India’s 600 administrative districts. They control large swathes of remote and often densely forested areas – especially where tribal people risk losing land to development projects – that stretch from the Nepal border down through West Bengal, Jharkhand, Chhattisgarh, Orissa and Andhra Pradesh. They are also now moving towards more urban areas of some states, notably Bengal, and their long-term aim eventually is to encircle strategic districts and urban centres.

Because of the lack of government leadership, Palaniappan Chidambaram, the home minister who has brought focus and order to the ministry since he took over at the end of 2008, has been publicly attacked from many quarters. The most recent – and serious – attack came two days ago in a newspaper article written by Digvijay Singh, a senior politician and a general secretary of the Congress Party who is close to the Gandhis and has a political base in Chhattisgarh, one of the Naxalite-ridden states.

Digvijay Singh wrote in the Economic Times that “we should be paying more attention to their (tribal peoples’) livelihood and governance rather than converting the serene and calm environment of Bastar (one of the Naxalite areas) into a battleground”. He criticised Chidambaram for his “intellectual arrogance” and for being “extremely rigid” though admitting he is also an “extremely intelligent, articulate, committed and sincere politician”.

The key words the quote above are “more attention” because they amount to a criticism of Chidambaram’s security-oriented paramilitary approach. They are especially significant because Digvijay Singh works closely with the Gandhis. An article about him in the India Today weekly news magazine recently (Feb 22 2010) said that he is “sharp enough to gauge the mood of the leadership and he would never speak without first clearing his lines with the famed high command” – which means Sonia Gandhi.

He is therefore presumably reflecting Sonia and Rahul Gandhi’s unease about Chidambaram’s hard line. I heard yesterday they were anxious to stop the article triggering a pubic row, but Rahul Gandhi did make similar remarks about the need for development some weeks ago.

They and Digvijay Singh are of course right because Chidambaram is being unbendingly single minded in his approach – and his arrogance is widely recognised and tolerated. But, as home minister, Chidambaram is only doing his job to try to mobilise the states’ security operations and support them with the central paramilitary, while trying to turn the ramshackle ill-trained, ill-equipped and often undisciplined troops into fighting forces.

He is criticised by Singh and others for not at the same time focussing on development and, as a result, alienating tribals and others who get caught up and killed in the fighting. He says that development is the job of the states, not his.

Up to a point he is right. But it is the job of the government as a whole to mobilise development through various ministries such as human development (education, rural development, environment and others.

That this is not happening is the responsibility of Manmohan Singh as prime minister and Sonia Gandhi as party leader. They should months ago have set up a group of ministers, led by the home ministry, to galvanise the central government, and the states into parallel security and developmental operations.

That has not been done, so it is grossly unfair to blame Chidambaram for the current security focus and to allow him to become the scapegoat for attacks by soft liberals such as Arundhati Roy, the novelist and campaigner, who has ludicrously accused the government of fighting the Naxalites in order to protect mining companies’ leases.  Mining companies frequently operate illegally in tribal areas, with scant regard for local people, and several mining projects are held up because of tribal and environmental objections, but that does not justify Roy’s linkage of the security operations with leases.

India’s tribals are the innocent victims in the middle of this verbal and military war. They have been abominably treated – or ignored – for decades by central and state governments that have done virtually nothing to protect their remote habitats and encourage sympathetic economic and social development.

This has opened the way for the Maoist-inspired Naxalites to move in as the tribals’ saviours. However, the Naxalites are not primarily interested in helping the tribals: their primary aim is to overthrow India’s established parliamentary democracy.

Chidambaram has unrealistically said that security operations can clear out Naxalites within two or three years, with development taking place as they are defeated is unrealistic. As has been seen in places as far afield as Iraq, Afghanistan, Pakistan and the Indian state of West Bengal Andhra Pradesh, defeated rebels and terrorists re-occupy areas once troops move on, thus preventing follow-on development.

Indeed, it looks more like a battle that will last decades rather than two or three years, and the only way to tackle that it surely for the government to adopt a three-pronged approach – tough security operations, widespread developmental work, and continual attempts to open behind-the-scenes talks with Naxalite leaders at all levels.

That is the job of the government as a whole, led by Manmohan Singh and Sonia Gandhi, working with Chidambaram instead of letting their colleagues snipe at him from the columns of a daily newspaper.

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Posted in environment, India, Manmohan Singh, Naxalite, Nehru-Gandhi dynasty, Rahul Gandhi | Tags: , , , , , , , , , , , , , , , , ,

Posted by: John Elliott | April 14, 2010

An epic Souza exhibition begins to open up the elite world of modern Indian art

One of Delhi’s oldest galleries, the Dhoomimal, is this week staging an impressive and exciting exhibition of 200 works by Francis Newton Souza, one of India most famous and successful modern artists who died in 2002.

More importantly, the Dhoomimal has linked up with Fourth Dimension, which ran last August’s highly successful Art Summit in Delhi (later renamed the India Art Fair) to make the show more accessible and relevant than is usual in this city where the cultural elite rarely show much interest in widening access to art events.  

‘Head’ – 1964

Dating from the 1940’s to the 1990’s and demonstrating the dramatic range of Souza’s moods and art, the works have mostly been hidden away in the collection of the Jain family who run the Dhoomimal.

Like other collectors, the family acquired many works decades ago from Souza and other members of the 1950s Progressive Group such as M.F.Husain and Krishen Khanna, often as gifts or for miniscule prices compared with the hundreds of thousands of pounds realised today.  

Uday Jain and his mother Uma plan to build a museum behind their gallery in Delhi’s Connaught Circus, where the Souza’s and more of family’s total of 2,000 works will eventually be on display. In the meantime, a taste of what will be available can been seen with this week’s show at Delhi’s Lalit Kala Akademi, curated by Yashodhara Dalmia. With Fourth Dimension, the Jains organised events around the launch at the end of last week, plus walks round the gallery, a poetry session and talks.  

a very early water colour – 1944

This evening Ebrahim Alkazi, a veteran art historian and theatre director, and Krishen Khanna talked about their memories of Souza and his often angry and tortured paintings and drawings, along with another modern artist, Anjoli Menon.  

Alkazi remembered Souza “seemed quite destructive because he couldn’t come to terms with society”, and wondered if he would have felt “more at home” in his native Goa rather than moving to New York where he was far from successful or happy. Khanna said Souza had explained to him that artists “gravitate to where the money is”. When Menon once asked him why he stayed in New York where he lived in a tiny scruffy flat, Souza replied: “I have a bordello upstairs and a sandwich bar below so never need to leave the building!”  

Few public or privately run museums try to broaden the appeal and appreciation of modern art with such conversations. The Government’s National Gallery of Modern Art does little, even though it opened a new extension a year ago that is crammed full of exciting modern and contemporary works, while the Ministry of Culture adds little beyond official prestige. There are hundreds of privately owned art galleries in India’s major cities, but scarcely any do much more than stage shows and focus on ramping up prices.  

another early work – 1951

Consequently, little if anything has been done to widen public appreciation of modern and contemporary Indian art, which became internationally recognised by collectors and investors during the past decade’s boom with auction prices peaking in 2008 at $2.5m for a Souza painting.  

The best work by artists such as Husain, Tyeb Mehta and S.H.Raza, as well as Souza, are now again fetching good auction prices from top collectors. General and sustained growth in the market however needs a much broader base of potential buyers, and therefore of public understanding and interest.  

That is why the Art Summit, which  is to be repeated next January, and this week’s Dhoomimal show are important. Other initiatives have included FICA, an arts foundation and reading room launched by Delhi’s Vadhera gallery, and a foundation and photographic collection developed by Alkazi. Osian’s, an auction house that diversified into other activities, has built an enviable art collection, but now has financial problems and its works are not easily accessible.

a typical Souza head – 1995

One of India’s leading collectors, Anupam Poddar, runs the Devi Art Foundation with his mother Lekha. Devi has outreach programmes but the gallery, which houses an impressive collection of contemporary art, is remotely located in the concrete canyons of Gurgaon, a satellite city on the edge of Delhi. Similarly Kiran Nadar, whose husband founded HCL, a leading software company, has recently opened a museum of modern and contemporary art, but that also hidden away in the satellite city of Noida. 

Religare Arts Initiative , founded two years ago by Malvinder Singh, an art collector whose family used to control Ranbaxy pharmaceuticals, has a gallery that is better located near the Dhoomimal in central Delhi. Singh now runs Fortis and Religare healthcare and financial services businesses, which include investment advice on the art market. 

A quieter mood in 1982

 Mukesh Panika, Religare Arts’ director, is planning a series of events to coincide with Delhi’s Commonwealth Games in October.

“The process of public engagement in art has scarcely begun,” says Panika. “We need to build participation by more people, including public displays of art in streets and on the metro, as well as inter-active projects”. 

Centred around a first-ever show of India’s top 20 contemporary artists, there will be symposiums and talks, and a book of the artists’ work. Panika hopes to co-operate with the cultural centres of the UK, US and German embassies that are located nearby, possibly including street displays. 

Opening up the elite world of India’s modern and contemporary art has therefore begun. But there is a long way to go before it becomes significant and involves more than a lucky few.

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Posted in Contemporary art, India, Indian contemporary art, Indian modern art, Religare | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Posted by: John Elliott | April 5, 2010

Fatima Bhutto pitches for vengeance but not dynastic succession

India loves icons and Delhi loves visiting celebrities, and if they come from neighbouring Pakistan and are opposed to the government in power, then they are really feted. It’s happened in the past to the late former prime minister Benazir Bhutto when she was at her least-significant politically, and it happened to former president General Pervez Musharraf, who was hailed as some sort of sub-continental power guru once he was out of office. 

This weekend it’s happened to Fatima Bhutto, 27-year old niece of the former Pakistani prime minister. She has been was in Delhi to promote her new book, “Songs of Blood and Sword, a daughter’s memoir”, which traces the country’s blood-letting and appalling governance as it tells the story of the assassination 14 years ago of her father, Murtaza Bhutto – in which her uncle Asif Ali Zardari, Pakistan’s current president, was allegedly involved.  

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A highly self-confident journalist, the vivacious and attractive Fatima Bhutto (left) has wowed newspaper and magazine editors in the US, UK and elsewhere for several years with the same ease that Benazir Bhutto charmed the same people.

Benazir conned them, along with many politicians, into accepting her as a significant political figure when she was out of power, even though her reputation as a capable politician was near zero. 

Fatima’s success – and she is a capable writer – has been to persuade editors ranging from Tina Brown’s Daily Beast website in the US to the New Statesman in London to run her articles highly critical of Pakistan’s rulers as if she was an independent journalist, which she is not. What she is, understandably, is a committed campaigner out to avenge her father’s death and, therefore, to damn Zardari who, as Benazir Bhutto’s husband, is her uncle by marriage. 

This hefty 450-page book is part of that campaign. It tells of a traumatic family history. Her grandfather, prime minister Zulfikar Ali Bhutto, was hanged in 1979 by a military dictator, General Zia-ul-Haq. Both her father and his brother died violently, and Benazir Bhutto was assassinated. 

The physical similarities with Benazir Bhutto, who I first knew in the mid-1980s, are amazing. Watching and listening to Fatima on television the other evening as she fenced in lilting tones with her interviewer, it was if I was listening to her aunt protesting her and Zardari’s innocence of corruption, murder and other allegedly “trumped up” criminal charges. 

Fatima, understandably, hates the comparison, which she says has been made since she was a child. “I was told I was much like my aunt, both as a compliment and as an admonishment. Now the comparisons are grating,” she says. 

She certainly is much more directly focussed on detail than her aunt, who generally dealt in slogans and platitudes. This was evident at two book discussion sessions in Delhi where, in a more Americanised accent than on television, she dealt with questions openly and directly. “She doesn’t seem so much like a convent girl,” commented the wife of an admiring Indian politician, caustically. 

I had planned to write this blog post on dynasty, noting how both Pakistan’s and India’s established ruling families now have relatives ready to challenge them. I would have set Fatima up as a future political challenger to Zardari’s and Benazir’s 21-year old son, Bilawal, in the same way that Varun Gandhi, a nephew of Sonia Gandhi, the current head of India’s Nehru-Gandhi dynasty and the Congress Party, has become a general secretary of the Hindu-fundamentalist Bharatiya Janata Party and thus a political opponent of Rahul, Sonia’s son and heir. 

But Fatima Bhutto, who lives in Karachi where her book (amazingly) was launched a few days ago, will have none of it. She has denied political ambitions many times in the past, and repeated that when I spoke to her on Saturday evening. Might she be tempted, I wondered, if Pakistan were one day to return to some sort of peaceful politics? 

“Definitely not!” she replied, adding that there was a need to “break the musical chairs” sequence of Pakistan’s feudal and military governments being passed from the Bhutto’s to the family of Nawaz Sharif and then to the army, and back again, as has happened for the past 40 years. 

That certainly needs to be done – but I wonder whether one day, if or when Pakistan emerges from its current turmoil, she will be hoisted into politics as a new face with a new style, even if not a new name.

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Posted in dynasty, India, Nehru-Gandhi dynasty, Pakistan, Pakistan politics, Rahul Gandhi | Tags: , , , , , , , , , , , , , , , , , , , ,

Posted by: John Elliott | March 21, 2010

China out-guns the US in friendliness at a Delhi conference

China has managed to present a surprisingly more friendly and forward-looking face than the US at an Asia Society conference in Delhi, where the theme was “India – Powering Asia’s Ascent”.  

You’d have expected the US to be the cheer leader for such a theme, but it was Victor Zhikai Gao, a westernised Beijing adviser, who enthusiastically called yesterday for China and India to see their disputed Himalayan mountain border “not as an insurmountable barrier” but as a “bridge linking these two ancient civilizations together, for mutual benefit, and for mutual enrichment” – while a senior US official merely recited a years-old list of economic reforms that American business wants India to implement.  

Gao (below) appeared to be sticking to Beijing’s firm negotiating stance on the border dispute, but his remarks nevertheless contrasted sharply with a warning on a Beijing website last year that “China and India cannot really deal with each other harmoniously”. So today I emailed Gao, now back in Beijing, asking him to repeat and expand on what he said yesterday.  

Explaining the context of his remarks, he replied that Chinese people came to India “many many centuries ago …. as eager and humble students in search of enlightenment and spiritual richness…and brought Buddhism back to China”.:  

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“To the extent that Hinduism and Buddhism share many basic tenets and principles today, the Chinese and the Hinduists in India are more or less soul-mates, or at least quasi soul-mates to say the least,” he added.
 
“For me and many Chinese, coming to visit to India is the equivalent of a spiritual pilgrimage. From the Chinese perspective, India still remains a land of saints and a plethora of gods and divinity, and we see from all the faces among the multitudinous crowds the shadows of those Buddhist monks who have been immortalized in numerous Chinese Buddhist temples and Chinese minds”.  

Coincidentally, links between the two countries were also extolled by Jairam Ramesh, India’s environment minister and India’s chief international negotiator on climate change issues. He told the conference about “remarkable co-operation” between the two countries in climate change negotiations at Copenhagen last December, and on studying shrinking glaciers.  

He admitted that both countries were using each other for their own reasons, but added: “Partnership with China is a strategic message that we can collaborator and co-operate,” even when the media was polarising differences. “Negotiating with China is a headache for the United States. But negotiating with both India and China together is a nightmare”, he added with a grin.  

Gao had the same theme. “Rather than confronting each other, we need to find ways to work together,” he said, adding (without actually mentioning the US) that “India and China should avoid being used as pawns by forces from outside the region”,  

Compared with that, the US contribution was unimaginative. Robert Blake, America’s assistant secretary of state for South and Central Asia, made a speech that could have been delivered any time in the past 15 years, focusing on economic reforms that would benefit American companies. He also notably avoided mentioning Wal-Mart, the US retail group that engenders opposition in many countries, and used instead its Indian joint venture name of Best Price when calling for India to open up its supermarkets to more foreign direct investment.  

Timothy J. Roemer, the US ambassador, had made a more substantive speech earlier in the conference about education and how much he loved India, but memories of that were outweighed by Blake’s shopping list which ended with the hackneyed cry: “India should continue to increase market access for American businesses, finance, and people”, dangling the lollipop that “the United States will do the same” (which, as everyone knows, would never happen).  

Note that he was not preaching how India would benefit from opening its economy to the world, but just to the US. Nor, more importantly, did he show any awareness of the pushes and pulls of Indian democracy, which he does in fact know well and fully understands, having been a well informed and involved deputy ambassador in the mid 2000s. Such, apparently, is American public policy today.  

Deng Xiaoping’s former interpreter  

But to return to Gao, should India see what he said as a serious message from Beijing, or was it simply an instinctively effusive line from a man who runs private equity funds, is as well connected in capitalist Hong Kong as he is in communist Beijing, and is a member of the US-centric Asia Society’s global council?  

Gao’s base however is more than that. He has a direct link with the Chinese government because he runs a Foreign Ministry-sponsored policy think tank, the China National Association of International Studies. He also worked in China’s foreign ministry in the 1980s when he was a translator for former Chinese leader Deng Xiaoping.  

Last August, the belligerent piece on a Beijing website gained considerable traction because it seemed to fit the mood of the times, when China was confronting India on several fronts including the two countries’ mountainous border.  

“There cannot be two suns in the sky. China and India cannot really deal with each other harmoniously,” said the article, adding that China could “dismember the so-called ‘Indian Union’ with one little move”. That was seen as reflecting Beijing thinking, even though the founder of the website claimed the writer had no known government links.  

The author of that message remained anonymous, but now we have a very different line from a far from anonymous source, and one directly linked with the foreign ministry – so does this also fit the mood of the times? Though it is unthinkable that China has changed its long policy of encircling and containing India, does it indicate a change of tack when its relations with the US are souring?  

When I asked Gao at the conference yesterday how he could be so positive, he avoided detail and took me to see a satellite photograph that was on display of China and India with the high Himalayas between them. How, he asked, could a war could be fought in such steep terrain?  

Easily, I said, by air over the mountains peaks. And anyway, China was constantly crossing the border in moves that reminded India uncomfortably of its humiliating defeat in a 1962 border war. Gao reminded me that China had retreated to its pre-war positions, but I countered that by pointing to China refusing to recognise India’s sovereignty over its border state of Arunachal Pradesh – a problem that Gao indicated should not be taken too seriously.  

The McMahon Line  

“We should refuse to be held hostage by some recent unfortunate events for which neither China nor India should be held responsible, since they originated in the British rule of India before,” he said in his e-mail today. He was referring, without naming it, to the McMahon Line that was set in 1914 by the British long before India’s independence. India now regards the line as its rightful border but China disputes it.  

That statement reduces some of the diplomatic significance of Gao’s remarks because it seems in effect to be asking for the McMahon Line to be ignored, which India will not do. It reinforces the general view of people I spoke to at the conference that he was not indicating a dramatic change in Beijing’s approach.  

But his friendly message was surely not without significance, so let’s give him the last word. 

The Chinese, he said, “share a collective sense of gratitude for India for having provided the spiritual richness which has so splendidly filled the spiritual void in the traditional Chinese civilization. This should be the foundation upon which China-India relations should be built upon and thrive”.

Earlier posts on India-China issues: 

China aims to block India’s place in the sun Aug 13, 2009 

New Delhi in lockdown over Olympic torch run April 17, 2008 

Demand from China kills India’s vanishing tigers Feb 13, 2008

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Posted in India, India China, India China war, India economic reforms, India foreign policy, India US relations | Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

Posted by: John Elliott | March 11, 2010

Inclusiveness in Indian theatre contrasts with a guru’s intolerance over MF Husain

In a week that has shown India at its violent uncaring worst, with a near-riot in parliament over an historic bill on women’s rights, and a supposedly peace-loving guru calling for “a limit to tolerance” over painter MF Husain’s new nationality, it is good to be able to write about some theatre awards which illustrate the inclusiveness that holds together India’s basic unity with its dozens of national and regional languages. 

On Sunday night, while film stars in Los Angeles were preparing for the Oscar film awards, a modest but elegant ceremony was held in the gardens of Delhi’s Taj Mahal Hotel. The occasion was the fifth Mahindra Excellence in Theatre Awards (META), with winners chosen from ten plays short listed out of 233 entries submitted from around India. 

The play that carried off most prizes was “Spinal Cord”, performed by the Oxygen Theatre Company from the southern state of Kerala. Inspired by Gabriel Garcia Marquez’s “The Chronicle of a Death Foretold”, it was a harrowing and often violent story (below) of an honour killing, recounted through the memory of an 80-year old mother. 

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 But the most significant point for me was that none of the six judges could speak Kerala’s language of Malayalam in which the play was performed, nor were there any sub-titles to help them through the plot. 

They had a detailed synopsis to read in advance and that, coupled with the power of the drama, was sufficient for them to give the play ten awards – including best actor and best supporting actor – in preference to the other plays, six of which were in India’s official languages of Hindi and English and in Marathi, the language of Maharashtra, spoken by one of the judges. 

“I can’t see Robbie Burns being made poet laureate,” commented a friend from Britain, suggesting that judges in London would not so happily tolerate a broad Scottish accent. Ravi Dubey, a former hotel executive who created and runs the META awards for Anand Mahindra, the sponsor, diluted the point somewhat by pointing out to me that poetry travels across languages and dialects less easily than theatre, where the drama is all important. 

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 Deepan Sivaraman, the Keralite director of the play, had however refused an English sub-title screen that had been used by the other plays because, he told me, “it distracts from the flow of the plot” – and that call proved to be right. Trained as a theatre director and designer, Sivaraman (right) is currently doing a PhD in theatre and drama and India’s popular theatre forms and rituals at Wimbledon College of Art in London. 

He himself won three META awards for best stage design, choreography, and director, and “Spinal Cord” won the best production. The production was indeed unusual because Sivaraman blocked-off the main seating area in the theatre and placed the audience on the stage in specially constructed seating in a “U” shape around the action. 

This no doubt helped, but it does not distract from the significance of judges in Delhi, who could not speak Malayalam, giving  it so many awards. 

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 Wouldn’t it be good if Sri Sri Ravi Shankar (left), a high profile globetrotting guru, who adds the prefix His Holiness to his name and portrays himself as a man of peace, was able to show the same sense of inclusiveness over M.F.Husain, India’s most famous veteran painter. As I wrote last week, Husain has opted for Qatar citizenship because of the harassment he and his work has received in India from Hindu demonstrators. 

Yet just as the furore over Husain’s decision was dying down, the guru’s Art of Living office issued a damning statement that accused him of “double standards, bias and hatred” because he depicted Hindu gods in the nude. “One cannot accept blatant insult to the heroes of its land….. It is the intention behind a man’s creativity which is questionable…..his intention is to humiliate…… there is a limit to tolerance and taking insult,” it stated.
 
This flies in the face of a seminal judgement from the Delhi High Court in April 2008 which dismissed cases against Husain. The judge noted that nudity is part of contemporary art and plays a significant role in India’s cultural heritage, adding that India should resist conservative extremists misusing the law to harass artists. “Pluralism is the soul of democracy,” said the judge. 

That surely calls for the sort of inclusiveness shown by the META judges for the Malayalam play – and it totally rejects Sri Sri Ravi Shankar’s view of “a limit to tolerance”.

Previous posts on Indian modern and contemporary art:

Two icons in their 90s – Michael Foot has died but MF Husain paints on March 5, 2010

Enthusiastic literary and art events celebrate India’s success Jan28, 2010

Big sales and big attendance at India’s Art Summit Aug 25, 2009

Husain paints in London as fanatics block his works at India’s art fair Aug 19, 2009

Has the modern Indian art market found its bottom? – updated June 18, 2009

Christie’s has a good India sale as art auctions adjust to tougher times June 10, 2009

Religare broadens the business base of modern Indian art Oct 13, 2008

Nehru was lost for years in a trunk ……… Oct 7, 2008

Tina Ambani pays record $2.5m at Christie’s Indian art auction June 12, 2008

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Posted by: John Elliott | March 5, 2010

Two icons in their 90s – Michael Foot has died but MF Husain paints on

Michael Foot, one of Britain’s most respected parliamentarians and Labour Party politicians, died this week aged 96. Maqbool Fida Husain, 94, probably India’s most famous modern painter, has opted for citizenship of the Gulf state of Qatar, which means giving up his Indian passport, so that he can continue to paint unfettered by Hindu extremists.  

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  It may seem odd to write about these two men together, especially when it is a time to mourn the death of one and celebrate the amazing energy and creativeness of the other. But the world would have been a poorer place without Foot’s (left) parliamentary career, his principles, and his idealism, which touched India as well as Britain, and the world would also be poorer if Husain does not feel free enough from India’s religious bigotry to continue to paint his vast canvases.  

Husain has lived abroad since 2006 because of court cases against him that stem from Hindu chauvinism. The cases allege that he has offended the Hindu religion, public decency and Indian nationhood with nude depictions of goddesses and a map of India. Exhibitions of his work have been closed by fanatics, and there is a risk if he returned to India that he and his paintings would be attacked.  

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 I doubt whether many people in India’s commercial capital of Mumbai, where I am this week, will be noticing Foot’s death. I also sense a more cynical approach to Husain’s (right) plight and Qatar citizenship than is apparent in politically-obsessed Delhi, where television chat shows have been treating the painter’s Qatar move as if it were a national crisis, and opposition parties have been criticising the government for failing to provide him with a safe passage home.  

In Mumbai there are suggestions that he has made the decision partly to keep himself in the news, to bolster the price of his paintings, and to upstage his slightly younger peers at a time when there is more quantity than quality to his art. “He’s really now a court painter,” one collector told me yesterday, picking up on Husain’s commission from Qatar’s ruling family to paint a series depicting the history of the Arab civilisation for a new museum in Doha.  

I interviewed Husain for this blog in London (where he also lives) last summer, and I firmly believe that his main motivation in staying abroad, and anchoring himself in Qatar, is to be able to paint the Arab saga and two other large-scale series (depicting Indian history and cinema) without being diverted by the risk of violence and harassment.  

Husain himself said in an NDTV interview this week: “At 40, I’d have fought [the extremists] but at my age I just want to work”. Though the attacks on him undoubtedly hurt emotionally, he denied feeling rejected by India but added: “It’s impossible for me to work there without disturbance”.  

“He surely wants the Qatar citizenship so that he is not just a vagabond travelling from city to city,” another collector told me.
  
Foot’s relationship with India was also complicated, but in a different way. A strong supporter and admirer of India’s independence movement, he was close to Indira Gandhi and even broke with his political principles to support the State of Emergency that she decreed in 1975. Whether that stemmed from the socialist authoritarian streak that ran through Foot’s Left-wing politics, or whether it was just a case of standing by a friend during a crisis, is not clear.  

Writing yesterday for Tribune, the UK’s left-wing Labour weekly, my old friend and colleague Geoffrey Goodman, who was close to Foot, said: “The great cavalcade of his life was the essence of that word ‘radical’: tempestuous, full of a courageous integrity, which sometimes may have seemed a touch eccentric; unyielding in its moral code and, even in old age, astonishingly vigorous in its execution……..he offered the gift of honest enlightenment to enhance the quality of British political and cultural life.  Goodman also wrote to me, saying that Foot had become “a sort of national treasure”, echoing what he wrote in the Daily Mirror.

I knew Foot when he was Secretary for Employment in the early-1970s Labour Government. He did not take easily to that job, just as he was uncomfortable later as party leader. But his friendliness, sincerity, and allegiance to the cause of strong trade unionism and the protection of workers’ rights, shone through. His oratory sometimes got the better of him – once he was supposed to make an important statement in the House of Commons but got so carried away with his speech that he sat down, forgetting to make the announcement!  

He led his party to a disastrous defeat in 1983 with a manifesto dubbed “the longest suicide note in history” by an unkind colleague. Foot insisted on sticking to party conference resolutions (never wise for any party), and the manifesto called for unilateral nuclear disarmament, abolition of the House of Lords, re-nationalisation of key privatised industries, withdrawal from the European Economic Community, an end to council house sales and a five-year national plan.  

Nearly 20 years later, that list doesn’t look quite so suicidal. Nuclear disarmament would still pull a lot of support. The House of Lords is being radically reformed. There is a strong case for renationalising some industries such as the railways, and virtual withdrawal from the Europe is now a right-wing cause.  

What a pity Foot is not 40. Britain’s coming general election would be the richer if he were. But we do still have Husain, painting his historical series at his main homes in London’s Mayfair and Dubai, and now in Qatar.

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Posted by: John Elliott | February 26, 2010

India’s finance minister drives the Opposition onto the streets

Pranab Mukherjee on his way to parliament

 Pranab Mukherjee, India’s finance minister, has long been recognised as a compulsive politician and the Congress Party’s most able political tactician and fixer. But he could never have imagined that he would score such a hit as he achieved today in his annual Budget speech when he unintentionally flushed out how bereft the opposition, led by the Bharatiya Janata Party, is of constructive ideas and even constitutional etiquette.   

The BJP has been in a mess since it lost the 2004 general election and it lacks policies and effective leadership. But no-one thought it had sunk to the level of walking out of parliament during an annual budget speech. Yet that is what it did today, along with other opposition parties, after noisily trying to drown out the finance minister’s words when he had announced hikes in diesel and petrol excise duties.   

The Congress Party frequently stalled parliament when it was in opposition, lowering the standards as much as the BJP has done in the past. But the opposition went further today, with what was the first ever budget speech walk-out – even though the BJP raised fuel prices many times during its 1998-2004 period in power.   

The parties hope of course that the walk-out will increase the political pressure on the government, which is being widely criticised for recent hikes in food prices that it should have avoided – but this surely was not the way to do it.  

Later in the day, the government announced consequential fuel price increases of 6-7.75% that will fuel inflation and are likely to lead to widespread political protests.

Mukherjee’s budget was otherwise uninspiring. Last July, when he presented his first budget after the May general election, I wrote that he had no apparent reform agenda , and little has changed.   

He announced substantial income tax concessions that benefit lower income earners, and projected recovery of economic growth from the current 7.2% to 9% or more, targeting reductions in the fiscal deficit from the current  6.9% of gdp  to 5.5% in the coming year and around 4% after that.   

But it seemed as if the introduction to his speech had been drafted in a different office from the rest. There have been many calls for Mukherjee to branch out with some sense of vision and reforms, and he began as if he was going to do so.   

He set out his challenges of reverting to high gdp growth, and harnessing that to make “development more inclusive” with rural development and improved education and health facilities. There was a need to tackle “weaknesses in government systems” and the “bottleneck of our public delivery mechanisms” (presumably a reference to corruption and bureaucratic lethargy that blocks development).   

He then wisely said that the Budget “cannot be a mere statement of Government accounts”, but had “to reflect the Government’s vision and signal the policies to come in future”. It also had to be an enabler of “individual enterprise and creativity”, and a supporter of  “disadvantaged sections of the society”. That, he proudly said, was the “broad conceptualisation of the Budget that informs my speech today”.   

It sounded as if he was indeed about to deliver a great speech. But, almost with relief it seemed, Mukherjee’s tone of voice then changed and, for the next 90 minutes or so, he presented the sort of mechanical budget that he used to produce when he was first finance minister in the early 1980s – a style I remember and which television commentators also noted today.   

He announced the tax changes, the unpopular excise duty hikes, and expected boosts for defence and infrastructure spending and farm credit waivers,. But there was little new in terms of financial and structural reforms, apart from welcome plans to licence more banks. Other initiatives such as selling minority stakes in public sector businesses and loosening foreign direct investment rules were far from new. 

He ended with a catalogue of 1980-style special incentives for selected business areas such as two-star hotels and cold storage plants, which will please many vested interests and cement his reputation, as I said at the beginning, as the party’s most able political tactician and fixer.   

But at the end of it all, the stock market was happy, excited by income tax concessions. Opposition politicians were also happy, back on the streets where they seem to think they belong. They are now threatening to stall proceedings, when parliament reassembles after this weekend’s Holi festival, till the excise duty increases are cancelled.

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Posted by: John Elliott | February 25, 2010

Elephant hits a thousand centuries

Hi everyone – Riding the Elephant has just passed a total of a thousand centuries – 100,000 hits since I took it over from Fortune.com in August 2008 – the current total is in the column on the right. (Congratulations to Sachin Tendulkar for his double century yesterday!)

So thanks to all of you who followed me here from Fortune.com, and to everyone else who has piled in since then to read the total of nearly 200 (this is the 198th) posts (articles) I’ve written on both sites on current affairs in and around India (and occasionally the UK).

It took a year after August ’08 to clock up the first 50,000 hits (or views as they are called in the blog world), but just seven months to double the figure – which means there are lots of new and more frequent readers. Most of the posts also appear on the Financial Times website’s India page , bringing in readers.

Average views have gone from about 60 a day in August 2008 to 200-250 a day in the past three months. As you’ll see below, it’s not the most serious posts that always generate the most attention – and a mischievous headline can always help.

The busiest single day, with 650 views, was March 24 last year when I wrote a popularly unpopular post on Tata Motors’ tiny Nano car saying “let’s cool the hype”. Interest in  The gun that crippled the equipping of India’s armed forces is ‘innocent’   has led to over 800 hits so far since it went up two days ago.

The bulk of the hits – 33,872 – come to the home page , but the individual post which has attracted most consistent attention with 3,400 views is a piece on Jawaharlal Nehru period photographs. Readers are presumably partly pulled in by a mischievous headline – Nehru was lost for years in a trunk, which wasn’t of course quite true – find out why by clicking here.

Next with just over 3,000, is a promotional piece I wrote on an anthology of foreign correspondents’ articles that Penguin India published two years ago  to coincide with the Delhi-based Foreign Correspondents’ Club’s 50th anniversary. Following on with 2,700 hits is a post that went on Fortune.com in June 2008 on Tina Ambani, wife of Anil who runs one of India’s two warring Reliance business groups, spending a record $2.5m on a painting by F.N.Souza at a Christie’s auction in London.

So keep coming back……

There’s lots more to write about – just this week (in addition to tomorrow’s Budget) there’s been:

– A ludicrous (funny) railway budget yesterday from Mamata Banerjee, the West Bengal-centric railways (mostly-absentee) minister.

– Environment minister Jairam Ramesh’s much deserved support at a meeting yesterday called by the prime minister on banning “BT Brinjal” (genetically modified aubergine) – Ramesh is winning despite a relentless media campaign against him spearheaded, for some reason or other, by the Indian Express group.

– A probably phoney bid for peace talks from the Naxalites, which home minister P.Chidambaram is fencing with deftly – but, I hope, not too negatively.

– Today’s almost-as-phoney talks in Delhi between India’s and Pakistan’s foreign secretaries on the countries’ differences.

– and, on a different note, the launch in Delhi of a fascinating autobiography, Simply Fly- A Deccan Odyssey, by one of India’s greatest entrepreneurs – Captain Gopinath, founder of cut-price Air Deccan and of a new cargo airline Deccan 360.

All of that, and much else, should generate interest for the next lakh!

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Posted in India, India environment, Manmohan Singh, Naxalite, Tata, Tata Motors, West Bengal | Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Posted by: John Elliott | February 23, 2010

The gun that crippled the equipping of India’s armed forces is “innocent”

“It’s time to understand that the gun is innocent”. That has to be the prize quotation to come out of Delhi’s Defexpo defence show last week. It was made by Anand Mahindra who runs Mahindra & Mahindra, a Mumbai-based tractors-to-software group that is diversifying into defence equipment and is now tendering in India to sell the latest version of a Bofors gun that triggered a major mid-1980s corruption scandal here.  

That scandal has hampered the development and equipping of the country’s armed forces for over 20 years. So Mahindra was presumably trying to joke his way out of the political embarrassment of M&M having a joint venture with UK-based BAE Systems, which now makes Bofors guns following a series of takeovers.  

155mm Bofors howitzer on the Pakistan border in 1999 (pic The Hindu)

 In 1986, the Indian government headed by prime minister Rajiv Gandhi, placed a $1.4bn contract with Bofors of Sweden that led to allegations of Rs64 crore (then about $50m) bribes.  

That’s a pitifully small amount compared with today’s massive corruption levels, but the case has reverberated ever since through Indian’s political system and the courts. It contributed to the defeat of Gandhi’s government in 1989 and embarrassed the Nehru-Gandhi dynasty for years after – even though, as Mahindra also said, it has served India well (left, in use during the 1999 Kargil war with Pakistan).  

Defence ministers and bureaucrats have been scared to place large sensitive orders, fearing similar bribe scandals.  

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 That fear has reached crisis proportions under the current defence minister, A.K.Antony, (right) a Congress politician who is so scared of losing his clean reputation (and damaging his Leftist image in his home state of Kerala) that he proverbially tilts at windmills every time there is a whiff of corruption, cancelling more big contracts than he has placed in the past six years and blacklisting potential suppliers.  

Mahindra’s remark is specially relevant now because India urgently needs to shake off the Bofors legacy and modernise its armed forces, which are probably the worst equipped of any large country in the world.  

Pallam Raju, the minister of state for defence, said at an army seminar last week that history shows there are hardly any examples internationally “wherein a higher technology military power has been overwhelmed by lower technology power in the long run.”  

“Defences are obsolete”  

Yet a background paper prepared by the Delhi-based PHD chamber of commerce for the army seminar said that “most of India’s ground based air defences are obsolete” and that upgrades of basic artillery equipment were “ten years behind schedule”. The generals attending the seminar didn’t metaphorically blink at such unpatriotic statements – they knew only too well they are true.  

The chief of army staff said recently that 80% of India’s armoured tanks are night blind. “That means like the medieval times you fight morning to evening and take rest at night – Pakistan has 80% of tanks capable to fight at night,” says Rahul Bedi, a defence journalist. “Planning and strategic thinking of the Indian Army’s procurement program is in complete shambles. Bureaucrats and politicians are throttling the procurement
process.”  

A more academic critique headlined “Arming without Aiming” will be coming soon from the America’s Brookings Institution. Co-authored by Stephen Cohen, a south Asia expert, it argues that India’s arms purchasing has “lacked political direction and has suffered from weak prospective planning, individual service-centred doctrines, and a disconnect between strategic objectives and the pursuit of new technology”.  

And Ajai Shukla, a former army officer and now a defence journalist, writing in the Business Standard daily newspaper, this morning estimates that “Antony’s halo” is costing India 125% more than is necessary for half the equipment it buys because of price rises (during delayed contracts) and because tenders sometimes being abandoned in favour of more expensive negotiated deals. 

70% bought abroad  

India is the world’s largest buyer of defence equipment, with expenditure budgeted at least at $40bn over the next four years. Half of that is on capital expenditure and is likely to rise around 15% in the finance minister’s annual Budget speech on February 26 , even though not all of it is ever spent [[Feb 26 insert: the actual budget increase is only about 4%]].  

At least 70% of purchases have been made abroad for decades, mainly because the generally inefficient and moribund public sector-dominated defence establishment cannot deliver even high technology night vision goggles and modern helmets, let alone fighter aircraft or guns. Until recently, the capable private sector was mostly kept out of doing more than supplying minor components because the defence establishment enjoyed the combined benefits of protected jobs, patronage, prestige, and foreign kickbacks – and because Antony instinctively supports public sector trade unions that do not want private sector competition.  

As I wrote last October, the armed forces have been warning the Defence Ministry for years to accelerate orders for urgently needed new equipment that are mired in bureaucratic inertia, corruption, and the manipulations of competing suppliers who trip up each other’s potential orders. (The same applies to equipment needed for the Home Ministry’s internal security).  

The latest 'Bofors' - BAE and M&M's FH77 B05

How Pakistan and China must enjoy watching the self-inflicted  damage that India does to its own war readiness, relishing the thought that they themselves could not do more in a border war.  

Some progress has been made in recent years on improving defence manufacturing, but this has been dismally slow since it was nominally opened up to the Indian private sector in 2002. With a few exceptions such as Tata and Larsen & Toubro obtaining rocket launcher contracts, and L&T building the hull of a nuclear submarine, there have been few major private sector orders.  

This will gradually change following the introduction in the past year of a technology transfer-oriented “Buy and Make (Indian)” policy, and the (long drawn out and muddled) introduction of an offset programme, where foreign arms companies have to spend half the value of an order in India. This is pulling foreign defence companies into tie-ups with Indian business such as M&M’s with BAE, but offset contracts worth only Rs8,200 crore ($1.8m) have so far been signed, half with the Indian private sector.  

Less progress has been made on speeding up urgently needed defence orders, often because potential losers lobby or bribe the government to change tack. Following intense US diplomatic pressure, a $550m a pending order with Europe’s Eurocopter for 197 modern light helicopters that are urgently needed by the Army was cancelled two years ago after America realised its Bell company was losing. Inexplicably, Bell failed to tender when the contract was offered again.  

Europe complains  

Last month, Germany’s ambassador to India, Thomas Matussek, complained publicly after a $1.5bn contract for Airbus A-330 multi-role refueling tanker aircraft, made by Europe’s EADS consortium and favoured by the Indian Air Force, was rejected because the finance ministry said the aircraft were too expensive. Matussek alleged ‘”political reasons”, and one does not have to be too much of a conspiracy theorist to sense America’s hand at work again though a Russian Ilyushin was the runner-up in the 2008 tender.  

Matussek’s complaint had a wider significance at a time when the US, using clout provided by its nuclear supplies deal with India, is trying to supplant Russia as the country’s biggest arms supplier. India has begun negotiating some contracts through the US government instead of using tenders, partly to enable it to select specific equipment such as Boeing’s C-17 Globemaster heavy-lift aircraft where a $1.7bn order is being negotiated, and partly to avoid the risk of corruption scandals on competitive tendering. This sort of negotiated contract has happened for decades with Russia, but the use of America’s FMS (foreign military sales) procedure is new and is worrying European countries such as Germany, France, and the UK because they risk being squeezed out of  key contracts.  

So what does India need to begin to turn itself into a state of at least semi-war readiness to cope with potential border wars with China and Pakistan?  

First, it needs a defence minister who can shake off the Bofors legacy and cope with kick-backs, whether or not he lines his own and his political party’s pockets. He also needs the political skills, standing and determination to push through quick decisions and play diplomatic games constructively with the US, Russia and Europe so that orders are placed, not cancelled.  

Also needed are a prime minister and political leadership who can shake off some of the froth surrounding India’s peace-loving mantra and who are genuinely interested in building up the technological capability, and supporting the manpower, of the country’s fighting forces. Sadly the current dispensation, as it is called in India, does not meet that criteria.  

A slightly shorter version of this post, without the pics, is on the FT.com India page at http://www.ft.com/world/asiapacific/india
 
 

  

Earlier posts on Indian defence:  

India’s lethargy, drift and corruption escalate into crises  Oct 13, 2009
America’s payback for India nuclear deal begins  Sept 11, 2008
Lockheed leads American defense companies into India Feb 6, 2008
Tata joins forces with Boeing, EADS and others  Feb 22, 2008
Lockheed leads American defense companies into India Feb 6, 2008
India to build 10 world-leading manufacturers Oct 26, 2007
India’s defense R&D lacks talent  June 14, 2007
Doors to open for India’s defense industry jewels June 7, 2007

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