Indo-US South Asian Futures Conference

20 Mar, 1998    ·   75

Report of the INDO-US SOUTH ASIAN FUTURES CONFERENCE held on the 20th and 21st of March 1998

This conference was held on the 20th and 21st of March between the Institute of Peace and Conflict Studies, New Delhi , and the Program for Arms Control, Disarmament and International Security, University of Illinois , Urbana-Champaign. The discussions were spread over six sessions devoted to:



The Future of the International System, and the Place of South AsiaThe Stability of the South Asian Nuclear/Conventional Balance



Impact of Global and Regional Economic Developments on Policy



Nuclear Energy and Economics



Technology Transfer as an Area of US-Indian Cooperation



Group Discussion of Proposals that Emerge from Sessions and other Fora





The proposals emerging from the last session have been separately recorded. A brief summary of the discussions in the other sessions is attempted below seriatim, and in the order in which they were held.



The Future of the International System, and the Place of South Asia



Perceptions of the manner in which the international system would evolve revealed sharp differences. A benign view held that democracies would prevail, free markets prosper, and that economics would remain in command; hence the US dominance of the international system would be a factor promoting peace. An alternative view suggested that real politik would dictate the emergence of a world in which political and economic nationalisms would grow and presage conflict. And a third view held that these divisions were altogether too deterministic, and that the emerging international system would exhibit elements of both the benign and real politik visions.



It was separately held that the contention between internationalism and nationalism within the US could radically alter the direction of US foreign policy, especially if the Republicans came to power. This view was challenged on the assumption that internal political changes in the US would not be apocalyptic since there was a fair bipartisan consensus on foreign policy issues obtaining. The view was also expressed that the place of the Russian federation was generally ignored in all such calculations. But it could react very adversely to Nato?s eastward expansion and disrupt the stability of the international system.



Coming to India , an American interlocutor felt that its future role and activism would derive from its either joining or contending with one or other Great Power. India could, of course, evolve an independent role for itself by exercising its nuclear option. It was, in any case, stepping out of South Asia . This was the foreign policy implication of its " Look East" policy, its current emphasis on deepening relations with Central Asia , its reaching out to countries in the Indian Ocean rimland, and so on,



Moving, thereafter, to Indo-US relations the view was expressed that South Asia was marginal to US interests, which had no compelling interests in India . The current US interest in India was largely obtaining due to the impending Clinton visit, whenever it takes place. Another view aired was that the US had no grand vision informing its future role in the international system. Nevertheless a longer-term bilateral Indo-US cooperation was possible in areas like prevention of drugs and arms smuggling, and peacekeeping operations. The US also had an intense interest in South Asia in the proliferation area. India?s continuance of the opacity of its nuclear option worked in favour of maintaining Indo-US relations.



A considerable amount of attention was devoted to China . An interesting opinion was that it was becoming as cacophonous as India . A social contract was obtaining between its power elite and its people in that the latter had agreed to forego the lack of political liberalisation in return for economic growth and a better life for themselves. The preponderant opinion was that China will be stable, and will not perturb the international system. Incidentally, the preponderant view in this seminar was also that India was too pre-occupied with its internal problems of political stability and economic reconstruction to seek a hegemonic role in South Asia . The majority view also held that India would continue to pursue the Gujral doctrine of beneficial bilateralism with its smaller neighbours, although Indo-Pak relations seemed destined to remain problematical in the foreseeable future.



Reverting to China the general agreement reached was that it was risk-averse. The deployment of Theatre Missile Defences and Taiwan were the only two issues that could lead to Sino-US discord. China?s policy was designed to deflect formation of a coalition of forces like the US , Japan and Taiwan coalescing against it. This was the rationale underlying its seeking improved relations with Russia and India . Also its recent steps to recalibrate its relations with India and Pakistan , notably on the Kashmir issue.



Explaining the conundrum of China?s military modernisation programme, it was noted that it was oriented towards giving priority to the Navy and Air Force. This was explicable because it was disputing its maritime boundaries. Its land forces were still equipped, however, with 1950s equipment, which might explain why it was keen on negotiating a settlement of all its land border disputes. Its current steps to sophisticate its nuclear forces were motivated by its need to compensate for the overall weakness of its conventional forces. In this milieu, India?s deployment of the Agni missile was important for Sino-Indian relations, but there were considerable uncertainties here. This pointed to the need for a bilateral dialogue on this specific question.



The Stability of the South Asian Nuclear/Conventional Balance.



The factors encouraging stability were the reality that pre-meditated large scale Indo-Pak conflict was in deep freeze; that short intense wars would be ineffective to achieve plausible political objectives; and that the motives and reasons for such conflict were missing. The prime cause for putative conflict between India and Pakistan viz. Kashmir was unlikely to be relevant now, because the militancy there was well under control, and might end by end-1998. A nuclear factor might also be obtaining to promote stability. There was no conflictual issues obtaining in regard to China also that could presage a future conflict. In fact, a non-use of force agreement was reached during the Jiang visit (1996), and several CBMs had either been reached or were under negotiation between India and China .



No Indo-Pak arms race was likely in future, and this could not therefore be a factor tending towards instability. But low intensity conflicts would remain the most likely form of Indo-Pak contentions in future. This may not escalate to large-scale conflicts, since the rationality of the leadership in the two countries was wholly discounted in all such prognostications of conflict in the subcontinent. This rationality was evident during the Brasstacks (1986-87) and Spring (1990) crises.



On the contrary, the factors tending towards instability in South Asia included their geographical proximity; the unresolved Kashmir dispute; and lack of any institutionalised crisis management mechanisms. Indo-Pak relations would also remain tenuous until the Kashmir confrontation ended. The low intensity conflict mode could always escalate to regular conflict. Missile deployment by either side could become the reason for tensions and instabilities escalating. But it was agreed that only desperation could lead either country to contemplate the nuclear option, and that too as a last-resort option.



Considering Indo-Pak relations in the overall it was suggested that, whereas India was a status-quoist power, Pakistan was only a mildly revisionist state. The internal threats and non-military sources of insecurity were of the essence to the national security of the two countries. The nuclear factor was irrelevant to this range of issues. Arms control and discussions on missile deployment were imperative for Indo-Pak stability. But the Indo-Pak leadership have shown enviable capacity to deal with their internal threats, and South Asia is consequently more stable now than it was in earlier decades.



It was also felt that the BJP, which had come to power in India , will act with great responsibility in matters of national security. Indeed, the composition of the Government, and its reliance on several smaller parties and outside support, predisposes it to behave essentially as a centrist party, which was favourable for South Asian stability. Understandably, there was some uneasiness in Pakistan in regard to the BJP, considering its previous party positions and current rhetoric.



Some paradoxes of South Asian security were also noted. For instance, the MOD and the Army were out of the loop in nuclear decision-making. But the civilians and its Prime Minister were out of this loop in Pakistan . Further, the Indian army was largely involved in law and order operations as part of its aid-to-civil duties. On the contrary, the Pakistan army seemed hesitant to perform these duties and had walked off the job in Karachi . Neither does it wish to get involved in the present sectarian strife in Pakistan . Scientists, it was felt, were out of control in both countries. They were obvious vested interests. In technical terms it was also noticed that the Prithvi/Agni and other SRBMs were essentially unusable in the Indo-Pak situation.



(c) Impact of Global and Regional Economic Developments on Policy



Three basic themes were suggested. First, that inadequate preparedness of the economy slows down the globalisation and liberalisation processes. This causes several deleterious effects. For instance, the Human Development Index indicators in South Asia reveal the pathetic situation obtaining in its social sectors. This promotes the re-creation of tariff barriers, protectionism, and concerns regarding level playing fields and so on. This was also true of developed nations, as witnessed in Europe . A contrary view held that the process of globalisation and liberalisation could be traced back to the 16th. Century (discovery of overseas markets), and the 18th. Century (Industrial Revolution). India had been coopted by the British into this process, which was a major cause for its poverty. The asymmetry of knowledge needed urgent redress, which currently operated to the advantage of the West, and was the true reason for India?s economic ills. Lack of re-distribution of knowledge, not wealth, would encourage nationalism, xenophobia, asymmetries and instabilities. A third view held that the problems of globalisation and liberalisation were internal. For gaining access to global markets the reform of the private sector, labour markets, PSUs and, indeed, a societal change was needed. For example the power and financial sectors had to reform fundamentally if they were to act as change agents. In this milieu the decentralisation of power to States was important; risk-taking was unavoidable as part of the growth vs. inflation debate; Foreign Direct Investment solved nothing; but it was the pain of transition that was inhibiting reform across the board.



Views were similarly polarised in discussing the East Asian crisis. A sanguine view held that this crisis would not affect the Indian economy because it was export-led and there was no capital convertibility?the latter should be avoided. Of course, India should learn its lessons from this crisis. The contrary view held that capital non-convertibility was only a cushion and not the solution to globalisation problems. The East Asian crisis would definitely affect US funding to the IMF, and this crisis might worsen if China devalues its currency.



The general opinion was that the US had a limited role in South Asia . It remained hesitant about labour mobility, but was interested in the reform process continuing. It was important for South Asia therefore to set its own house in order.



An important side issue that came up was the unreliability of statistics in South Asia . It was officially claimed that the Wholesale Price Index was only rising at 3 % annually, but inflation was actually running at 15 %. The black economy distorts official figures. But there was a link between infrastructure development and the black economy whose precise impact was not understood. Then, the statistics cited by government and industry differed, which was a serious matter. More disconcertingly, extravagant claims were made by the Government based on inaccurate statistics, which eroded its overall credibility. For instance, the growth rate was claimed to be over 7 %, but this might fall below 5 % in reality. Jeffrey Sachs had noted, apropos, that the Indian economy would grow at 6 %, even if the government did nothing.



Nuclear Energy and Economics



The obtaining situation was that uranium was freely available on the global market; India required Light Water Reactor (LWR) technology; India will not sign the NPT or CTBT to secure access to nuclear technology; and the Nuclear Weapon States were not about to eliminate their nuclear weapons within any rigid time-frame.



There were six possible scenarios that could effect a change in the status quo obtaining in this situation. One, that India and Pakistan gain access to state-of-the-art nuclear power generation technology. Two, they either lose or gain access to uninterrupted uranium supplies. Three, that they ( India really) decide to avoid or accelerate spent fuel reprocessing to obtain plutonium for use in breeder reactors. Four, India and Pakistan cooperate on a pipeline to obtain oil and gas from the Middle East/Central Asia. Five, an oil monopoly or cartel develops in the Middle East region. Six, that an agreement is reached between India and other South Asian countries and China on coastal protection and controlling Greenhouse Gas Emission (GGE).



In this seminar there was the greatest support for the pipeline scenario. It was believed that it should be extended to Bangladesh , Myanmar and Southeast Asia . Its security implications were downplayed. It was, in fact, noted that Pakistan would gain large transit fees by allowing the passage of oil and gas through the pipeline. Moreover, gas can be liquefied and stored, along with oil, to establish fallback reserves. In regard to the acquisition of LWR technology it was felt that India was unlikely to accept fullscope safeguards as the price therefor, which was required by the very rigid US laws operating. The GGE issue was believed to be complicated and not capable of facile solutions.



This led on to avid discussions on the future of nuclear energy. The arguments for its primacy urged that France, Germany, Japan and South Korea were continuing to depend largely on nuclear power; fossil fuels were environmentally problematical; natural gas was depleting in several regions; the cost of de-commissioning nuclear power plants was very costly; and clean fusion power was nowhere in sight. The arguments against atomic power were that its efficiency needs considerable improvement, but there was hardly any investment being made in R & D for either this purpose or to handle the waste disposal problem. Besides, several countries had given up the pursuit of breeder technology. Nuclear power expansion was also slowing down, and Japan was likely to give up its reliance thereon by AD 2050 for the reason that it was not competitive within a total power sources mix. The situation regarding R & D in India was unclear. However the very long gestation periods for setting up atomic power plants; lack of finances with the Government sector; unwillingness of the private sector to enter this area; and opposition by environmental groups to the establishment of new power plants had led to the stagnation of India?s atomic power industry.



Attention was drawn to a residual problem relating to the Tarapur Atomic Power Plant. Although the Indo-US agreement had expired in 1993 the problem of making a "joint determination" in regard to disposal of the accumulated spent fuel remained unresolved. It needed to be sorted out before it led on to a crisis in Indo-US relations.





Indo-US Technology Cooperation



A perceptions chasm was noticed in this regard, although the differences between India and the US were not dangerous in this area, and have been bridged to some extent by the private sector. The policy constraints obtaining in the United States centred around beliefs that technology transfers represented a "slippery slope" and required a "quid for quo" approach. The question whether several small steps should be taken to stimulate this cooperation or whether one big step, like Nixon?s famous visit to China , was needed or that one big step followed by several small steps would be efficacious was debated. The argument on whether an evolutionary or revolutionary approach was practicable remained inconclusive.



Technology cooperation was most easily achievable by the US investing in Indian R & D. It was important to provide the know-why through the collaboration route, rather than know-how through license arrangements. An extreme view expressed here was that the time was not ripe for Indo-US technological cooperation, until such time as their differences on Intellectual Property Rights and the World Trade Organisation were sorted out. The argument was made that 60-65 % of all requests by India for technology transfers had been approved by the US , and that the denials had only related to nuclear and missile related technologies. A case for transferring nuclear safety equipment was brought to light where India sat on the case for two years. Cooperation in the commercial satellite and nuclear waste disposal areas were mentioned as possible areas for future cooperation, as also the large range of non-nuclear and non-missile related technologies. The telecom sector was very important here, and Indo-US cooperation needed to be progressed in this sector.