Published by the New Indian Express on 9th Sept 2008 as an op-ed

Who lost India?

By Rajeev Srinivasan

One of these days, the New York Times will run a story titled “Who lost India?” Pundits will pontificate about what caused India to be irretrievably ‘lost’ – that is, it no longer functions as a viable and friendly ally of the West, particularly of America. Though they will never admit it, the Indo-US Nuclear Agreement currently being shoved down India’s throat would have been the tipping point that did India in.

Given the parlous security situation in the neighborhood, as well as the various separatist movements gaining strength from external sources, this may well be the first step in the unraveling of India. That would be a disaster not only for India and Indians, but also for America, because India is just about the only friend it has in that giant arc from East Africa to Southeast Asia, full of failed and failing states. Adding India to that list is not going to help anyone.

What is not known to most Americans is the extraordinary goodwill that ordinary Indians have towards America. At a time when the US is regularly pilloried as anywhere between monstrous and appalling by large numbers of people, India is demonstrably the country where the average person on the street has the most positive perception of America. A Pew Trust survey on global attitudes in 2006 showed this: Indians were the most pro-American, far more so than Chinese, Saudi Arabians, and Pakistanis, to pick a few American allies.

Perhaps that’s not such a big deal to Americans accustomed to basking in the sunshine of admiration and envy from all quarters, based on both hard and soft power. But consider this: India, with all its problems, is no banana republic. According to the widely followed reports from Goldman Sachs, India may well overtake the US as the world’s second largest economy by 2050.

Besides, odd as it might sound when you hear it for the first time, India is a lot like America. That is my gut feel after having spent half my life in India and the other half in America. There are many similarities, but the most striking one is the openness and friendliness of the people. Whatever you may think of their respective governments, it is a fact that the people of America and of India are warm, friendly and hospitable. This carries over into many things: plurality, tolerance for different ideas, innovativeness.

In fact, I’d be so bold as to claim that India’s core competencies are quite like America’s: fertile land, soft power, innovation. What India has lacked is the financial resources of a vast virgin continent and what’s been termed ‘strategic intent’ by management guru C K Prahalad – the ability to imagine itself as Numero Uno, and to act accordingly.

There are historic reasons to believe that superpowerdom for India is not a wet-dream. India was, throughout most of recorded history, the richest country in the world, astonishing as this may seem. According to economic historian Angus Maddison, India was the world’s largest economy from 0 CE to 1500 CE; China was its closest competitor towards the end of that period. Then the land was ravaged by colonialism, which destroyed many of the wealth-generating systems that had emerged over millennia, notably the innovative small businesses in textiles and light engineering goods.

Indian prowess in intellectual property is not given due credit: some of the greatest inventions in history came from there, including the Indian numeral system, the cornerstone of all mathematics; the context-free grammar of Panini from 500 BCE, which underlies all computing; the infinite series of Madhava from 1300 CE, which provides the underpinnings of the differential calculus and thus of the Industrial Revolution.

But these are in the past, one might say. What has India done lately? That is fair criticism. I am forced to ask you to take it on faith that, just as India appeared out of the blue in high-technology, it has the intellectual capability to be a partner in the knowledge economy of tomorrow. Sociologist Joel Kotkin remarked that “engineering is the oil of the 21st century”; and that is what Indians are strong at.

There are the ingredients, then, of a successful rapprochement between India and the US. Why hasn’t this worked for so long? There are many who share the blame; some of it can be attributed to the knee-jerk anti-Americanism of the Nehru dynasty which lectured the US and propped up the comical non-aligned movement. America’s explicit support of Pakistan has also been an irritant; so has the derision made most explicit in the Nixon Tapes.

Those days are past, though, and there are the glimmerings of a beautiful relationship. But the so-called Nuclear Deal has the potential to be a huge thorn in the flesh. The deal is a bad one. It is such a bad deal for India, and it is being railroaded through with such deceit and opaqueness by the Manmohan Singh administration, that it will almost certainly be revoked unilaterally by a future Indian government. Given the contours of the NSG waiver, this will invite serious punitive sanctions on India.

The problem is that India is being sold a bill of goods. The deal is being sold to Indians as a guarantee of energy security and a harbinger of close co-operation with America. But it is obvious that this is neither; it is about non-proliferation, and about the bringing to heel of the one big nation that has challenged the apparently divinely mandated monopoly the P-5 have arrogated to themselves. India is being conned into signing the NPT as a non-weapons-state, with no guarantee that anybody will supply uranium for the obsolete fission reactors India will buy at, undoubtedly, vastly inflated prices.

Losing its small nuclear arsenal is not an option for India, which is threatened by two bellicose nuclear-armed neighbors: China and Pakistan. China has almost certainly proliferated nukes and missiles to Pakistan. And Pakistan’s nuclear Wal-Mart is well-known.

Being unable to deter China in its adventurism, India will not also be able to adequately deter its proxies Pakistan, Bangladesh or Nepal. The result of this is could even be a extinction of the India nation, as Bangladesh pursues its lebensraum, China pursues the diversion of the Brahmaputra, Pakistan pursues the death by a thousand cuts, and Nepal’s newly emboldened communists pursue their Pasupati-to-Tirupati corridor.

This is no way to treat a partner and an ally. In the long run, the US faces China, an implacable and ruthless foe. To subjugate the one nation in Asia that can match and counteract China, just to satisfy a bunch of non-proliferation fundamentalist Cold Warriors, and for the benefit of GE and Westinghouse, is not sensible. If I may be so bold as to say so, America doesn’t want to lose India.

Rajeev Srinivasan is a management consultant. His blog is at https://rajeev2007.wordpress.com

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Published by rediff.com on 8th Sept 2008 at http://www.rediff.com/news/2008/sep/08rajeev.htm

We have energy security in our time. Praise the Lord!

Rajeev Srinivasan on the misinformation campaign about the nuclear deal

There have been hosannas and hallelujahs aplenty about the fact that the Nuclear Suppliers’ Group has decided to provide a waiver of sorts to India. The fine print is yet to be deciphered, but already the usual suspects are taking credit for having brought about “energy security in our time”.

I am reminded of Neville Chamberlain, a British prime minister (his other claim to fame was his ever-present umbrella) returning to the UK from a conclave in Munich, where he had participated in appeasing Germany by giving away the Sudetenland. Chamberlain said:

“My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honour. I believe it is peace for our time…
Go home and get a nice quiet sleep.”

He said this on September 30th, 1938. Alas for him, on September 1st, 1939 Germany invaded Poland, and two days later, Britain declared war on Germany. Famous last words, indeed.

But I am being unfair to poor Chamberlain. He honestly believed that he had achieved something for his country. Not so with the bigwigs of the UPA. It has been abundantly clear for a very long time that the so-called nuclear deal stinks to high heaven, and that interests wholly unrelated to India’s energy needs are driving it. The UPA knows what they are getting into, and they have been lying continuously to the Indian people.

It would be unseemly for me to name names (not to mention unwise, given the propensity of the UPA to cry ‘libel’ at the drop of a hat – fortunately, a New Jersey court just threw out a wholly frivolous case filed by overseas acolytes of the UPA, who I do hope will get slapped with large punitive damages), but circumstantial evidence suggests that Jaswant Singh was not far off the mark when he talked about American ‘moles’ high up in the Indian government.

The confidential letter from the US State Department to the House Foreign Relations Committee, as publicized by Rep. Howard Berman, is refreshingly candid about the real facts behind the deal: to use pithy Americanisms, the Indians are being taken to the cleaners. Being sold a bill of goods. Led to the slaughter. Being totally sold snake-oil, with the active connivance of their leaders.

Perhaps the apt historical analogy is not Chamberlain, but the East India Company. Or better yet, the capitulation to China over Tibet. India gave away its substantial treaty rights in Tibet to China in return for… vague promises of brotherhood. Here India is giving away its hard-won nuclear deterrent, the one thing that prevents the Chinese from running rampant in Asia, in return for… honeyed words from the Americans about strategic partnership!

I exaggerate, of course. There must be more. Nehru, being naive, believed in the bhai-bhai thing with China. But today’s leaders are hard-boiled, and are doing this for other, very good reasons. What these reasons are, we shall never know, notwithstanding the Right To Information Act. The Indian government is extremely good at obfuscation.

What is being celebrated as a Great Victory (over what I am not sure) at the NSG is a little puzzling. I hate to be the little boy who asked about the Emperor’s new clothes, but what exactly is India getting? After all the huffing and puffing, India has now been granted the privilege of spending enormous amounts of money – absolute billions – to buy nuclear fission reactors and uranium? This is a good thing? Let us remember that the NSG was set up in 1974 as a secret cabal to punish India for its first nuclear test.

There is an old proverb in Malayalam about spending good money to buy a dog that then proceeds to bite you. India is now going to spend at least $50 billion to buy all these dangerous fission reactors from the US and France and Japan, only to be left with the possibility of Australians and Americans holding the Damocles’ Sword of disruptions in uranium supplies over us? This is better than being held hostage by OPEC over fossil fuels?

And if all goes well, India will be left holding the bag for mountains of extremely dangerous and long-lived (10,000 years, say) radioactive waste, which we will not be allowed to reprocess lest we extract something useful out of it. Of course all the reactors and the radioactive waste must be making our friendly neighborhood terrorists rub their hands with glee in anticipation. Did I mention something about giving someone a stick to beat you with?

I think it should be obvious by now that India has been coerced into de facto accession to the NPT, the CTBT, the FMCT, and all the other alphabet-soup treaties that were set up to keep India muzzled. America’s non-proliferation ayatollahs, barring a last-minute reprieve like the US Congress voting down the 123 Agreement (I am tempted to chant “Berman saranam, Markey saranam”, etc.) have accomplished ‘cap, rollback, and eliminate’.

The letter leaked by Berman, as well as the fact that Article 2 of the 123 Agreement explicitly states that “national laws” (read: the Hyde Amendment, with the clever little Barack Obama Amendment – yes, Virginia, Obama did get his fingers into this pie too) govern the 123 Agreement, clarify that India is at the mercy of any US administration that sees fit to unilaterally abrogate the thing. Remember Tarapur? There was a similar little artifice of domestic legislation that was used by the US to weasel out of a binding international treaty. The 123 Agreement is really not worth the paper it’s written on.

Let us note that of the other hold-outs to the NPT, nobody is putting any pressure on Israel to sign anything, and they are getting all the fuel they need from sugar-daddy America; and Pakistan gets everything, including their bombs and their missiles, from their main squeeze China, while minor sugar-daddy America beams indulgently.

The sad part is that none of this does a thing for the only issue that matters, India’s energy security. While the rest of the world has, rightly, looked upon the nuclear deal as a non-proliferation issue, the propaganda experts and spin-meisters in India have sold it to the gullible public as a way of gaining energy independence. Alas, this is not true at all.

Here are a few facts about energy. I am indebted to, among others, the Center for Study of Science, Technology and Policy (STEP) in Bangalore for this information.

Present world energy use: 15 terawatt-years per year

Potential availability of energy from different sources (in terawatt-years) [Source: Harvard]

  • Oil and Gas: 3000
  • Coal: 5000
  • Uranium (conventional reactors): 2000
  • Uranium (breeder reactors): 2,000,000
  • Solar: 30,000 (per year)

Do note that last two numbers. One, solar energy accessible per year far exceeds the sum total energy available from fossil fuels and uranium-fission reactors in toto, ie. by completely exhausting all known oil and gas and uranium. Two, breeder reactors can leverage thorium (turned into uranium-233) endlessly by creating more fuel than is exhausted, but the technology will take time.

Now, take a look at the amount of energy India generates, and how it is used up [Source: CSTEP and Lawrence Livermore Labs]

Total consumption: 5,721 billion kwh, of which:

  • Lost energy: 3,257 billion kwh
  • Useful energy: 2,364 billion kwh

Generation is from:

  • Hydro: 84
  • Wind: 5
  • Solar: 0
  • Nuclear: 58
  • Bio-fuels: 1682
  • Coal: 1852
  • Natural Gas: 225
  • Petroleum: 1645

Usage is by:

  • Unaccounted electricity: 99
  • Agriculture: 301
  • Residential: 1511
  • Commercial: 132
  • Industrial: 1548
  • Light Vehicles: 132
  • Heavy Vehicles: 330
  • Aircraft: 65
  • Railways: 43

I believe the data is for 2005. What is startling is the enormous amount of wasted energy: more than the amount of useful energy. Besides, unaccounted for electricity is almost the same as the amount of energy used up by all air and railroad traffic in India! Thus, the very first thing that can pay huge dividends would be to get better accounting for energy use and to reduce wastage (as for example due to traffic congestion in cities).

Consider the capital costs of various types of energy: [Source: CSTEP]

  • Natural Gas: $600/kW with 4-10cents/kWh in fuel costs
    • Plus cost of pipelines and LNG terminals
  • Wind: $1200/kW
    • Plus cost of transmission lines from windy regions
  • Hydro: n/a
  • Biomass: n/a
  • Coal: $1135/kW and 4c/kWh in fuel costs
    • With CO2 cleanup: $2601/kW and 22c/kWh in fuel costs
    • Plus cost of railroads and other infrastructure
  • Solar Thermal: $4000/kW
  • Solar Photovoltaic: $6000/kW
  • Nuclear Fission: $3000/kW and 8c/kWh in fuel costs
    • Plus cost of radioactive waste disposal
    • [Source: World Nuclear Association, “The Economics of Nuclear Power”]

It can be seen that the cost of nuclear power is very high, even if the costs of waste management are discounted: and this number is from the cheer-leaders of nuclear energy. In addition, there has to be a substantial risk premium for the fact that the raw material is in short supply and is under the control of a cartel. A “uranium shock” can be far more painful than the recent oil-shock, because it will simply mean the shuttering of a lot of the expensive plants acquired at extortionate prices.

All things considered, including the environmental impact and the carbon footprint, solar is the most sensible route for India. The capital costs for solar will come down significantly as new thin-film technology reduces the manufacturing cost, and conversion efficiency rises – 40% has been accomplished in the lab. Besides, if you look at the fully loaded cost, that is taking into account the gigantic public outlay already incurred for fossil fuels (as an example, there is a pipeline running 20 km out to sea at Cochin Refineries so that large tankers can deliver oil without coming close to shore), solar is currently not very overpriced.

And of course, you cannot beat the price of fuel: free, no need to get any certificates from the NSG, available in plenty for at least 300 days of the year. If large solar farms are set up in a few places (they may be 10km x 10km in size, and surely this can be put up in arid areas like the Thar Desert), then solar energy is likely to be attractive. Besides, there will be economies of scale in manufacturing once demand is seeded by subsidies and tax breaks. Large-scale solar plants are becoming a reality: two giant solar farms, totally 880 MW, have just been approved by Pacific Gas and Electric in California: this is a huge step considering the largest solar plant in the US now is just 14 MW.

In addition, there are technological breakthroughs just around the corner in solar energy, as venture money is flowing into alternative energy. If only India were to invest in solar research and subsidies the billions that the UPA wants to spend on imported white elephant fission technology, India will truly gain energy independence.

The entire nuclear deal is a red-herring and a diversion. It is a colossal blunder; and when this is coming at such an enormous cost – loss of the independent nuclear deterrent and intrusive inspection of the nuclear setup, which happy proliferator China is not subject to – this is perhaps the worst act any government has taken since independence. The UPA is subjecting India to colonialism. The beneficiaries are China, Pakistan, and the US.

This deal may well mark the tipping point that causes India to collapse: without a nuclear deterrent, India is a sitting duck for Chinese blackmail including the proposed diversion of the Brahmaputra, for Pakistani-fomented insurrections, and Bangladeshi demographic invasion. India must be the very first large State in history that has consciously and voluntarily decided to dismantle itself.

Comments welcome at my blog at https://rajeev2007.wordpress.com

2000 words, September 6, 2008