Tag Archives: economics

The Next Ten Years

27 Tue Jun 2017

Posted by in India, Israel, Middle East, Opinion and Response, South Asia

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As Narendra Modi embarks on his trip to Israel, many await the outcome of this historic trip. Modi will be the first Indian prime minister to ever visit Israel and symbolically, the Indian prime minister will not stop to visit the Palestinian Authority while in Jerusalem. Benjamin Netanyahu, the Israeli prime minister, is rumoured to share a good personal chemistry with Modi and has tweeted warmly, welcoming the Indian leader to Israel. Netanyahu has cleared his schedule for the two days Modi is in Jerusalem and plans to spend the entire time in discussions with him.

Ahead of Modi’s visit, the Israeli cabinet has proposed several measures to strengthen relations with India. They include a joint fund to encourage Indo-Israeli business cooperation, an expansion of cooperation in water management and agriculture, and the promotion of tourism. There is already some speculation about the several arms deals the Indian prime minister will also be signing during his trip.

There is no question that relations between India and Israel have been on an upward trajectory for at least the past decade and have achieved an even steeper gradient since the Bharatiya Janata Party came to power in 2014. Trade has increased as has cooperation in the realm of security and neither show any signs of slowing down in the near future. As Israel’s ambassador to India, Daniel Carmon, prophesied about his country’s ties with India, the best is yet to come.

However, the ambassador also made a perceptive point in an interview with the Indian media: for relations to become truly strategic or special, they must move beyond the purely transactional sphere. Towards this end, Carmon pointed to the cooperation between his country and his host country in agriculture and water management. Such interactions bring what Israel has to offer to the doorstep of every Indian. Nonetheless, there is yet tremendous scope for the blossoming of Indo-Israeli relations at the non-governmental level.

The truly special relationship between two states in the modern era must be the United States and Britain. Srdjan Vucetic, a professor at the University of Ottawa, makes a compelling case that this relationship was based, at least initially and for a substantial period, on racial affinity than a congruence of interests and values. India does not share any racial kinship with Israel or the Jewish people. Regardless, the Anglosphere is a good example of what harmonious relations should look like. Despite their differences, the five countries – America, Australia, Britain, Canada, and New Zealand – have supported each other diplomatically on the international stage; Australia has even provided soldiers for every major conflict the United States has found itself in.

Not bound by race or even a shared history, India and Israel can nonetheless base their bond over the fact that the former remains one of the few, perhaps the only, major country that has never had anti-Semitism in its history. This, combined with the obvious strategic imperative and economic opportunities should serve to foster people-to-people relations between Indians and Israelis. While political pressures will motivate strategic cooperation and economic realities will propel trade on their own, both governments must take an effort to encourage cultural connections. This is best done through education, tourism, and the arts.

India may not have too many universities that Israeli students might be interested in but it still has a few good medical and engineering colleges, at least at the undergraduate level. Scholarships should be created for Israelis wishing to study at these institutes, with opportunities for work-study and internships. There is no substitute for living in a country for four years or more to become familiar with its work ethic, politics, and culture. Similarly, avenues should be created to facilitate Indian students who wish to study at Israeli universities or intern at their think tanks. Already, hundreds of thousands of Indians seek intellectual enrichment in the United States, Britain, Canada, and Australia; there is no reason Israel cannot be a destination for Indian scholars, especially given its reputation in information technology, trauma medicine, artificial intelligence, and robotics.

University exchange programmes – for lecturers as well as students – may well serve in improving Indian education. An inflow of foreign students could increase pressure to update curricula, spark off research programmes, improve university governance, and ameliorate financial woes. The power of educational exchanges must not be underestimated – the role played by the British Rhodes scholarship and the American Fulbright Programme in influencing young minds world over in the Anglo-American way of thinking comes to mind.

Another important industry that is open to more than just young scholars is tourism. Both Israel and India are ancient cultures with histories that go back at least five millennia. Several historical sites in both countries are even dated several millennia earlier. More than for just history buffs, India also offers a bewildering array of cuisines and terrain that will excite and entrall tourists. Israel’s beaches and adventure sports are similarly a powerful draw for visitors. While Israel has already started to entice Indians to tour its treasures, there is much for India to do on this front. Cleanliness, adequate bathroom facilities, and protection of the monuments from the picnicking masses would be a start; accurate information in multiple languages available online and multilingual tour guides would be another measure to bring Indian tourism to even basic standards. On the larger scale, lodging and transportation need to be improved to tourist destinations.

About 40,000 Israelis visit India every year. Most of them are young people who have just finished their mandatory military service, have financial constraints as they are yet to start working, and prefer the peace and quiet of remote towns in the foothills of the Himalayas than Ellora, Khajuraho, or the Taj Mahal, at least initially. Better connectivity and infrastructure in these areas might not only persuade more Israelis to visit India (rather than South America, the other favourite destination after military service), but entice them to stay longer. Better upkeep of tourist destinations may not immediately interest this crowd but it will attract their parents – who may have spent six to twelve months of their youth in India too – to make a second trip to India. More importantly, development of tourist places is not an Israel-specific project but will make India’s attractions bearable for people all around the world.

Towards bettering tourism traffic, both countries could take several steps in making travel easier. First, visas can be made easier to apply for via an online application process that accepts scanned documents as well as the application form. Two, criteria for tourist visas can be relaxed. Three, keeping in mind the nature of Israeli tourism to India, the period of e-tourist visas can be extended to a year. All these steps would be towards the eventual goal of eliminating the requirement for visas for tourist travel between the two countries. Admittedly, some of these measures have been partially put in place. However, there remains much progress to be made.

Additionally, connectivity between India and Israel stands to be substantially improved. There is only one carrier that flies directly between Israel and India – that is the Israeli airline El Al, with two weekly flights between Tel Aviv and Bombay. Such things are largely commercially influenced but it is not inconceivable that additional carriers operating at least weekly from India’s IT hub, Bangalore, and Delhi might find passengers.

On the cultural front, Delhi and Jerusalem must do more to promote their music, art, literature, and language in each other’s countries. There is some very intelligent Israeli cinema and theatre that have not made it to India except, perhaps, on torrents, because of the language barrier. Sponsoring tours by theatre groups and promoting foreign language films can be a great way to expose Indians and Israelis to each other’s societies. As the French have their Alliance Française and the Germans their Goethe-Institut, Israel could promote Hebrew via its literature and philosophy. Stronger business and educational ties will spur an interest in learning Hebrew among Indians. Similarly, India can promote Sanskrit and Indian philosophy in Israel, which, for some odd reason, seems to have a fair number of people interested in Indian thought and literature.

It must be remembered that culture is by its very nature an elite preoccupation and will not have too many takers. However, the rewards will be ample from those who do take advantage of the new options and become ambassadors of their culture to the other. What makes it worse is that unlike defence or economics, culture remains ambiguous both in its promotion and reception. It is not possible to have clear metrics of investments to results, it is perfectly possible that some visitors either to India or to Israel had some personal experiences that left them with a bitter taste of the other’s culture. One only hopes that familiarity breeds brotherhood.

Over the next decade of Indo-Israeli ties, both Delhi and Jerusalem must indeed strengthen defence cooperation in terms of sales, joint ventures, and manufacturing. On the economic front, the free trade agreement that has been languishing in the doldrums since 2004 would be a welcome catalyst to increasing trade. However, the absolute numbers will not be much – Israel is only slightly larger than Nagaland with the population of Bangalore – but the value will be in the reliability of the relationship. It is the people-to-people connections that will ultimately be the bedrock of ties and give meaning beyond the mundane. Unlike security and trade, culture needs support, encouragement, and nurture. This should be the next focus in both capitals.

India’s (Russian) Bear Problem

24 Mon Dec 2012

Posted by in India, Security, South Asia

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It is a historic day in India – for the first time, a Russian head of state is visiting New Delhi and will be greeting by booing crowds rather than by the usual, choreographed cheers and waves. Vladimir Putin’s visit comes at a time when Russo-Indian relations are at their lowest ebb (except for perhaps in the mid-1960s when the Soviets threatened to sell tanks to Pakistan) and he will have some hard talking to do in his 18 hours in India. India’s grievances against the Russians are many – the anti-nuclear brigade, PMANE, is unhappy over Moscow’s role in Kudankulam and has accused the Russian Ambassador to India of interfering in the internal affairs of the country; the business community is upset with Russia for making access to Russian markets difficult for Indian goods; the military is frustrated with their old patron for the increasing costs of weapons systems and repeated delays in the delivery of equipment; and lastly, even the cultural Right is outraged at Russia for the 2004 demolition of an ISKCON temple and recent threats to remove it from even the makeshift premises that had been promised it. Furthermore, the recent petition to ban the Bhagavad Gita in a Russian town has not made the world’s largest country any dearer to many Indians.

Russia has its difficulties with India too, in large part the slow shift of the latter towards the West. Not only has India embraced the Western market ideology more fully than Russia, it has also started to drift closer to the Western orbit on several critical issues for the Kremlin such as ballistic missile defence. India’s increased joint military exercises with the United States and its coy response to the US pivot to Asia, its unassuming development of relations with Israel, along with its strengthening ties with Australia has left the oligarchs in Russia wondering about India’s true intentions. Delhi has also looked westwards for a few of its big-ticket defence purchases recently, and the Kremlin is not happy at the prospect of having to share a growing market. Nonetheless, Moscow accounts for about 70% of the military hardware that India buys and is still Delhi’s largest arms supplier.

The staleness in the Indo-Russian relationship is the direct result of the end of the Cold War. The collapse of the Soviet Union coincided with the downfall of India’s Nehruvian fantasy; for a while, both states were too busy with internal issues to pay attention to a rising US hyperpower and China, the new power on the block. Things stabilised by the late 1990s, but neither country had a clear understanding of the new world order or where they fit in it; and while Russia knew it wanted to remain at the table of great powers, India repeated its trite mantra of non-alignment even in a post-Cold War world. The expansion of NATO and of the European Union into Eastern Europe put Russia on its back foot with regard to the West in general, while the computer revolution and an opening economy pushed India closer to the West. These tectonic shifts were bound to cause difficulties sooner or later.

No amount of cosmetics can disguise the ill-health of the Indo-Russian relationship. Russia and India share no ideological or cultural background, and their loose alliance has been based on pure self-interest – Delhi needed a superpower who could veto irritants in the United Nations, sell it weapons, and serve as an unspoken bulwark against China. It helped that the USSR was willing to conduct trade in rupees rather than hard currency and that they would offer India lines of credit (not as generous as is commonly believed). For the Soviets, India was a voice in the Third World, a balance against China, and a market for its goods. However, both countries have two important questions in the post-Cold War era which will define their future relations, ironically the same questions that they needed to find answers to during the Cold War as well: where do they stand with respect to the United States, and how do they view the rise of China?

From the Russian perspective, the aggressive pursuit of BMD by Foggy Bottom even into former Soviet provinces is a worrying development. US inroads into Iraq, however unsuccessful, has turned a former Soviet client into a neutral country at best. US presence in Afghanistan and its quest for bases in Kazakhstan and other Central Asian countries reminds the Kremlin of old-fashioned Cold War containment. The US role in Libya, and now its tactics against Iran and Syria, keep the Kremlin deeply apprehensive. China, on the other hand, may have cost Russian billions by reverse engineering its weapons technology, particularly its Sukhoi-27 a few years ago, but Beijing’s gaze is to the east and southeast. Russia’s evaluation of its southern neighbour highlights the internal problems of China and paranoia about a Chinese rise has not yet set in. Moreover, a stronger China is the Kremlin’s best bet against US adventurism in far-flung corners of the globe while Russia rebuilds its capabilities. In this context, India’s blue shift raises eyebrows in Russia.

New Delhi, however, sees the world differently. Admittedly, its defeat in the 1962 Sino-Indian War has affected it psychologically more than the eventual military results, but that does not mean Race Course Road has nothing to worry about. China continues to arm and support Pakistan – even with prohibited nuclear and missile technology – and encircles India with military assets. China is yet to make any real overtures towards solving the border dispute, and its actions along the Brahmaputra have caused some concern in Delhi. The US, however, has taken giant strides in trying to accommodate India by bringing it into the nuclear club, opening its sensitive technology market to South Block, and cooperating on intelligence gathering and other operations. India can also rely on the US to balance against China for its own interests, unlike Russia, allowing RCR to take the quieter option of not committing to alliances and chest thumping.

Of course, no relationship is without its aches – the United States and India are divided on Washington’s mollycoddling of Pakistan and Delhi’s soft touch on Iran. India also worries about what will happen in Afghanistan after the US exit in 2014. Similarly, Russia cannot but be aware of Chinese attempts to encroach into Russia’s sphere of influence through the Shanghai Cooperation Organisation and bilateral agreements with Central Asian republics, particularly in the energy sector. Nor can Russia be sanguine about weapons sales to China anymore. However, Russia is equally wary of India’s presence in Central Asia, as was evidence by its objection to India’s use of the Ayni Air Base in Tajikistan (not to be confused with the Farkhor Air Base). Like in human relationships, which bonds are worth the heartache is entirely a matter of how you see your future.

Putin went home this evening after signing deals in excess of $3 billion with India in the defence, high-tech, and nuclear sectors, and this is the carrot Moscow has to dangle before Delhi. Despite warming relations with the United States, Indo-US collaboration in defence technology is non-existent, while Russia has jointly developed the Brahmos missile with India, and a Fifth Generation Fighter Aircraft programme is underway. Furthermore, Russia seems more willing to transfer technology in these areas (even though there have been some hiccoughs with the T-90), whereas the US has been reluctant to sell India top of the shelf toys like the Javelin anti-tank guided missile. Indians may like to interpret joint production to mean an equal distribution of input, but the sorry state of India’s own projects such as the Light Combat Aircraft Tejas, the Arjun main battle tank, its nuclear programme, supercomputers, and its missile programme amply illustrates how much India relies on Russian aid in these areas.

However, these are medium-term solutions. As India develops its own technical prowess – whether by buying or developing skills – its need for Russia will reduce. The US is a more useful partner for India right now, as its views on issues critical to India – China – match. Even on Pakistan, though the US has shown great unwillingness to abandon the failed state, it has taken a much more serious position on Islamabad than it did previously. Russia, in its own security calculus, cannot offer the insurance India seeks against China and has little influence over Pakistan. yet given India’s aversion to clear policies, none of these issues will appear pronounced or exacerbated. Growing economic relations between all four powers will further serve to soften the hard edges in policy.

As two of Asia’s largest states size each other up again, it is important that they look beyond the more immediate squabbles over the Admiral Gorshkov, the stealth frigates, or the T-90S to the changed framework within which they now operate. Henry Kissinger once said that strategy is an unnatural act for democracies – they do it after they have exhausted all other options. India’s Russia strategy and Russia’s India strategy – called that only by the grace of semantic generosity – have for  over a decade been in the doldrums. If genuinely firm relations are to be cemented, both sides must acknowledge their different starting positions and do some frank talking.

This post was published at Niti Central on December 26, 2012.