Saturday, September 20, 2008

Plants and Implants

Byline By M J Akbar: Plants and Implants

You never know what you can pick up from the shambles of a large edifice, and little could larger than the financial architecture of American capitalism. Here is a nugget from Tom Friedman's column as he talks about America's energy planning and the economy. His particular reference is to Republican candidate John McCain's idea that nuclear plants can meet America's energy needs. Friedman writes: "McCain talks about how he would build dozens of nuclear power plants. Oh, really? They go for $10 billion a pop. Where is the money going to come from?"

Good question. An American columnist is convinced that nuclear energy is too extravagant for an economy as rich as America's, but Dr Manmohan Singh insists on foisting it on the Indian taxpayer. To put the comparison in perspective, at over $1 trillion, the combined value of around half a dozen major American companies that collapsed in the last fortnight was near India's GDP of $1.4 trillion.

As each deception is exposed, the goalposts keep changing. Now that people are becoming aware that even in thirty years nuclear energy will not contribute more than six or seven per cent to the energy mix, at prohibitive cost, a new fudge is in the works. Another energy plan will be formulated to increase, on paper, the share of nuclear energy. As for the cost, let those in charge in 2020 worry.

Former Prime Minister Vishwanath Pratap Singh has been asking the government for clarity on the cost to the consumer of this nuclear energy. He has still to get a satisfactory answer.

Almost every argument used by the government to sell the nuclear deal has been upturned by revelations. Dr P.K.Iyengar, former chairman of the Atomic Energy Commission, summed up the American position in a statement on 4 September: "if India conducts a nuclear test, America will immediately abrogate the 123 Agreement, and take back all nuclear materials, including fuel, it has supplied;there are no guarantees of perpetual fuel supply or provisions to stock for lifetime; there will be no transfer of sensitive nuclear technology such as reprocessing technology;the US does not consider the 123 Agreement as the only document governing civil nuclear cooperation with India – its actions will also be dictated by the provisions of the Atomic Energy Act and the Hyde Act."

The White House cited India's vote against Iran at the IAEA as evidence of a pro-US Indian tilt in conformity with the provisions of the Hyde Act. Under pressure from the United States and Israel, we have also abandoned the Iran-Pakistan gas pipeline, which would have provided much cheaper energy than nuclear power. Moreover, even in the event of the abrogation of the treaty by the United States, the mandatory inspections of India's nuclear facilities will continue in perpetuity.

When such details became public, Delhi argued that we could always ignore Washington and buy from countries like France. On the evening of 18 September the French ambassador to India, Jerome Bonnanfont, clarified that the proposed Indo-French nuclear agreement is going to be on par with the American agreement – there will be no transfer of enrichment and reprocessing technologies to India. The Times of India printed this pithy comment: "Certainly, it's a blow to all those who trumpeted that if the US wasn't prepared to give things, let's go to the French."

Some long-time supporters of the nuclear deal, who accepted Delhi's assurances about the negotiating process on good faith, like former Indian ambassador to Washington Lalit Mansingh, have now advised Prime Minister Singh greater caution before committing the nation. They have even suggested that he avoid a visit to Washington during his tour to America for the United Nations General Assembly session. But facts are unlikely to deter Dr Manmohan Singh from inking a one-sided agreement.

We might note that Americans, who are so anxious to sell nuclear plants to India, has not built a single new plant domestically since 1979, when the Three Mile Island accident took place. They do a more careful cost-benefit analysis when it comes to their own money.

One of the more interesting items lying in the debris of collapsing business reports is the only economic success story that George Bush can boast of during his eight years. He has been an unqualified triumph in arms sales. Eric Lipton wrote in the 15 September issue of the International Herald Tribune, which carries stories from the New York Times, "From tanks, helicopters and fighter jets to missiles, remotely piloted aircraft and even warships, the Department of Defense has agreed so far this fiscal year [March to mid-September 2008] to sell or transfer more than $32 billion in weapons and other military equipment to foreign governments, compared with $12 billion in 2005…Deliveries on orders being placed now will continue for several years, perhaps turning out to be one of President George W. Bush's most lasting legacies…" And just in case you thought that Bush was not a good salesman, "most arms exports are paid for by purchasers without US financing."

Who are the greatest benefactors of the American arms industry? Those fighting alongside America in its strategic wars. Between 2006 and 2008, Saudi Arabia bought $8.6 billion worth of American arms; Iraq, $4.4 billion; Afghanistan, $11.4 billion; Pakistan, $4.2 billion; Australia, $6.5 billion. Saudi Arabia and Australia can afford their defence budgets, while Iraq has an $80 billion surplus, and Pakistan gets cash handouts from America. The truly appalling statistic is Afghanistan's, among the poorest nations in the world. Next year's figures should show a marked improvement, since India will be on the top of the shopping list. The architecture of an US-Indian military alliance is already in place, and construction has begun on various outhouses.

Will the Manmohan-Bush signatures be irreversible? If the UPA returns to power, in some variation or the other, the strategic pact will deepen. If the UPA is voted out, the next government will have to negotiate a difficult tightrope between perceived obligations and the need to protect good relations with America. It is going to be a complicated inheritance.

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