Saturday, November 26, 2011

New developments in South China Sea - Who will talk first?

Various Claims on South China Sea
Being in a status of big and powerful league of countries can be turn out a liability. Who understands this better than that of China? The growth started on 1970’s took her to rapid industrialization and economic progress; people suddenly started saying about the rise of China and her economic as well as military might. Books stores where filled with the analysis reports regarding to the events in China. Now-a-days people even started thinking about a bipolar world where one pole is fixed on Beijing. It is true that, today China has the potential to exert its influence not only on its immediate neighborhood, but also on South Asia, South East Asia, Africa and as far away as South America; but it will take some more decades to acquire an influence close to that of US. That too will happen if it’s able to solve the problems in her immediate neighborhood – South China Sea.

It’s quite natural that, a giant neighbour in the vicinity can make others uncomfortable. It will be sorer if the relation carries bitter memories from the past and the conflicts of present. In such a situation if someone is demanding something extraordinary then it will only make the problem worse. This is what happened when China added the entire South China Sea to its core interest list. Panic suddenly spread across the capitals of South Chinese littoral states. The problems – fishing boat incident - with Japan in Senkaku/Diaoyu and with Vietnam and the Philippines in Paracels and the Spratlys group only added fuels to it.

Now to resolve these issues, the interested parties have to sit around the table and talk. Here comes the problem, China may be ready to speak with the nations individually in which case it holds enormous bargaining power not only in size but also in economic and military might but the small nations will not be agreeable to this idea as they know their weakness. They may be more comfortable with to talk with China in a multilateral framework like ASEAN, when as a combined group they have considerable power. But China will not be comfortable with the idea, as it will reduce its bargaining power and there is a possibility to bring the US to the equations. So other than rhetoric and some meetings here and there any speedy resolution is not in the horizon.

Vietnamese hold a rare protest in Hanoi
 But who will be the beneficiary in this situation? Certainly it will not be China. The open problem involving her in the neighborhood will restrict her freedom in playing a global role. Same thing will happen with India too. The ongoing problems with Pakistan will slowdown her rise to from South Asian framework to that of an Asian framework and them to a global framework. The beneficiary will be US, as it will get an opportunity to come back to South East Asia that too an invitation!!! Already US plans to create a base in Australia is in full swing. A place away from the range of Chinese anti-ship missiles as the existing bases like Guam is close to Chinese missile ranges.

Each aggressive move by China will be watched all over the world, these actions will not help her in creating a smooth international profile. So it will be better for China to sit with South East Asian nations and try to solve the problems peacefully under UN conventions on High Seas or according to any regional frameworks. They can also extract a guarantee from the littoral states for a safe passage of all supplies to China through Malacca Straits on all circumstances. Under any circumstances sea lanes should be open to international commercial navigation.

If China is able to work out the problems in South China Sea with littoral nations peacefully, it will not only assist in creating a peaceful SE Asia but will certainly raise China’s image. In that scenario more and more assignments will wait for her – Middle East crisis, African problems…


Photo Courtesy: Voice of America

Friday, November 25, 2011

Splitting Uttar Pradesh - Moving back to pre-independence era of numerous states

Varanasi - On the banks of Ganga
The recent proposal by Mayavati, which was later accepted by Uttar Pradesh(UP) assembly by voice vote, to split the state in to four different parts - Poorvanchal (East UP), Paschim Pradesh (West UP), Bundelkhand and Awadh (central UP), is the latest demand for making the states shorter in the name of increasing administrative efficiency (or to increase the options available for politicians?).

But above the rhetoric, how good the demand is? With a population of 20 crores, UP is bigger than Brazil - which is the 5th largest country in the world by land area. Uttar Pradesh contributes more MPs (80, next is Maharashtra with a distant 48) to the parliament than any other state in India. The number is big enough that there is a saying 'UP will decide who will sit in New Delhi'. What more, 8 of India's 14 Prime Minister's were from UP.

Is population a reason?
Iconic TajMahal on the banks of Yamuna in Agra

Is being big, a reason to raise request for spliting the state? Lets consider the facts. Other than UP, 9 states of India have a population of 6 crores or more. Even though UP has close to twenty crore people I don’t think there will be much problem for a person in western border of UP to understand the language of the one from east. Even if there is a difference in dialect, it is not be as big as the one between Malayalam in Kerala and Kannada in the neighbouring Karnataka.

People of UP, are not in continuous strike for splitting as compared to Telengana or Gurkha areas of Paschim Banga. For the last 6 plus decades of independence, how it did they manage with this much population? In the first five decades it was even bigger, as Uttarkhand was also its part.

Is geography a reason?

If it is about geography, then four states in India are even bigger than UP. In fact being big is beneficial in many situation, for example some parts of the state may be blessed with natural resources or developed as part of British India while some other parts may not be. So if a state includes both the areas, through the effective distribution of wealth it is possible to make sure in bringing over all development. Isn’t it better for both Gangetic plane and Vindya Hill areas be together than as separate entities?

Ramabhar Stupa Kushinagar - Built over Buddha's ashes
Is there any formidable geographic barriers in between the states which restricts the smooth traffic of goods and services in UP, as in the case of Western Ghats in between Kerala and Karnataka or Thar desert in Rajasthan or the jungles of MP? In fact the splitting will only add much more baggages to the shoulders of small and medium scale industries in the form of extra taxes which they have to pay if their goods have to travel from say, NOIDA in western extent of UP to West Bengal, but the taxes are not limited to the entry tax.

Moreover in the days of mobiles and internet no one can blame that the communication is difficult between two ends of the state. If Chandragupta Maurya can rule Afghan from his capital in Pataliputra (currently in Bihar) in second century BC, what problem can happen in communication now-a-days?

Administrative reasons

If administration was the problem, then it is everywhere. In fact there are many areas in India - for example the Maoist corridor of central India - where the states machinery is not able to run its writs. With eight thousand plus kilometer of railway network, 31 national highways, expressways, National Waterways (600km of NW1 is in UP) UP can be governed much easily than many other states of India. If it is not working properly then it is the failure of State bureaucracy. Even if it becomes a new state the condition will remain the same.


UP clocks lower ranks in many criterias. Taking a look at the Human Development Index - 32nd (followed by only 3 States - MP, Orissa and Bihar.), but the fertility rate is one of the highest in the country - 3.8 (only Bihar is above with 4.0), a skewed sex ratio but scored better than Punjab, Haryana, Delhi etc; Literacy rate is 69.7% - lower than the national average 74.04%, only 42.8% of houses have electricity (lower than national average of 67.9%), UP have a media exposure of just 76% for males and 52% for females (Kerala ranks first with 97% and 90% respectively).
Bhool Bhulaiya - Lucknow

All these are due to the size only? Awareness will do better in reducing the fertility rate than making the state smaller. Same reason goes with literacy also; to improve state requires a motivated government with a dedicated mission, not a small state which always requires grants from central government. At the same time UP has the largest transport network in India along with, sixth highest power generation capacity. Despite all these problems UP clocked impressive growth rates during the 11th plan period (2007-11), GSDP grew by 7.28% against the planned target of 6.10%.

What is the point of splitting the state to four regions, creating four big beaurocracies and four new governments?  This will create a four brand new states, without much resources, it will requires more funds from central government to sustain themselves for some time. Will the added expenditure for the new bureaucracy and government justify the partition, which will otherwise go to the development? Surely it may be good for political parties, since in a big state only one party can came to power at a time, but if divided to four there is a chance that four different parties can came to power. So at any point of time they will be in power in any one of the four states.

Why this idea didn't come in 2007 when the current government came in to power? Why now? To make this an election issue? If that is the case then it’s not a good thing to do, election should be fought and won on real issues, not on  building statues and park. People should think about the success and failure of current system viz. economic growth, corruption, law and order, educational system, industrial development etc to come to a conclusion on deciding their representative.

Buland Darvaza - Fatehpur Sikri - Agra India 
These types of requests will only encourage more requests in the future, adding more oil to the fire. The development of the state can be done by concentrating on the problems not on rhetoric.  Give more authority to the administrations working at the low level like Gram (Village) Panchayats, Municipal Corporations etc. Give them more resources and bring in effective performance appraisals and accountability to the system.


PS: One of my friends - working in Bangalore for a reputed company-  from UP was back in his state during a vacation - a town on the banks of Ganges. The story goes like this, One day he accidentally met one of his acquaintance - a local politician, he asked what are you doing in Bangalore. He told - I am working for a technology company. Then he asked about his salary? After hearing the number he started laughing. why don't you settle here and joining politics you can make much more than that?

Another incident goes like this. One guy went to polling station, but he was stopped in the door and people started questioning him. the reason - someone else already done that job for him!!! And he is not alone in suffering the fate!!!

Photo Courtesy: Wikipedia

Wednesday, November 23, 2011

Importance of having hard military assets in India

Brahmos Missile - successful product of a Joint Venture
Now-a-days global tenders for high ticket military purchases are not rare. We saw big deals like MMRCA, Scorpene, Gorshgov, C17, heavy lift aircraft's, long range helicopters etc. These off-the-shelf purchases and attached service contracts will effectively transfer a huge amount of money from Indian government accounts to that of foreign partners (offset clauses may allow some money to stay here). But how far these activities will take us in the realm of sophisticated defence technologies? Will it help the Indian companies to acquire the technologies overtime?

If you are thinking that, I am also advocating for 100% indigenous production, I beg to differ, I am not. I am not a fan of that. We may be able to produce a-z of defence equipment indigenously, but at the cost of quality and profitability. What we have to focus is on differentiating the sectors where we can compete and where we need help. Isn’t better to study Newton’s laws of motion in school text than reinventing it every time?

But the catch here is the word ‘Differentiation’. We have to find the sectors where requires many years to catch up with the current level of sophistication and to implement the schemes to fix the problems. If we are going for off the shelf purchases like the ones we are doing in the case of Gorshgov Carrier or C-17 Globemaster we are not going to reach anywhere other than just plugging the gaps. It is as simple as paying 6000Rs rent when your salary is only 10000Rs. The scenario may be better, if we are doing the manufacturing through HAL or any other government companies under licensed production but certainly not enough.

The name of the game is creating hard assets in the country, no matter whether it belongs to us or to foreign companies. Once you have hard assets (in the areas where we are struggling) in the form of manufacturing plants, assembling hubs by foreign companies then it will be matter of time for people to acquire experience and take the initiatives to replicate the success.

Considering the fact that India will remain one of the biggest buyers of defence equipment for atleast next two decades we have considerable bargaining power. After all a country which faces both asymmetric warfare on land and potential threats in sea will end up buying more - a potential opportunity for defence firms.

But the million dolor question is how to attract them to come here and setting up the factories? For this to happen we have to rewrite our procurement procedures. The current offset clauses may be a good start, but it’s not enough for the foreign companies to come here and invest. By forcing them to shed some of their return here, we may have something to start with. But it won’t be enough as nobody will like to distribute their priced technological sophistication to win some contracts, after all it's the secret of their survival. How can we create a win-win situation?

The best way is to offer good terms to the foreigners, allow them to build manufacturing plants here with majority ownership (say 75%). Offer good terms to both eastern - like Mitsubishi Heavy Industries, Toshiba etc and western - BAE Systems, GE, Lockheed Martin, Boeing etc - to come and invest. Good offer doesn’t mean cheap land but strict patent protection laws, good operating environments, protection from nationalization, strict enforcement of contracts, quick dispensation of justice, excellent infrastructure, reliable supply chain etc.

At the same time we have to force them to build hard assets like main factories, assembly hubs, service centres etc in India. The last mentioned things are very important for us, we need them to build factories here - instead of mere marketing offices, we need the assembly lines - instead of technicians coming here on demand, we need service centres - instead of waiting indefinitely for spare parts.

For all this to happen we need to remove some of the red tapes. There is no point of limiting foreign partner’s ownership to 25%. Will you ever invest huge amounts to beautify your room, if you are only entitled to 25% of ownership? Won’t you think about accumulating that money for a new home in the future? If majority of technologies are coming from foreign partner, how we can restrict their ownership to 25%? What the logic of stopping a foreign company from acquiring majority ownership in their joint ventures with Indian companies in the name of making our defence industry indigenous, if we are buying hundreds of weapons, missiles, launchers, avionics etc from abroad that too off the shelf. Let them have joint ventures - with majority ownership - with native companies without any string attached.

One of the good case in point - even though the foreign investment is limited to statutory 25% - is the recent announcement of joint venture (JV) between 'Mahindra and Mahindra' and Telephonics Corporation. Telephonics Corporation is an experienced player in integrated, advanced sensor and communication systems technology sectors; serving aerospace, defence and commercial markets. They are very much active in the fields of - Surveillance, Radar, Identification Friend or Foe Surveillance Systems, Mixed Signal IC, Wireless Communication Products etc.

Telephonics - a wholly owned subsidiary of Griffon Corporation – also had a contract with Boeing to supply Multi-Mode Radar (MMR) for India’s P-8i aircraft. This also includes systems for (8) P-8i Aft Radar installations, integration and support services. They are also responsible for the installation of sophisticated intercommunication systems in C-17 Globemaster contracted for Indian Air Force.

Let’s come back to the joint venture, according to the reports,
"...JV to provide the Indian Ministry of Defense (MOD) and the Indian civil sector with radar and surveillance systems, Identification Friend or Foe (IFF) devices and communication systems. In addition, the JV intends to provide systems for Air Traffic Management services, Homeland Security and other emerging surveillance requirements..."
"...envisages establishing a plant in India which would manufacture and service airborne radar systems that are already being supplied to Hindustan Aeronautics Ltd (HAL) and to support airborne maritime surveillance systems for the Indian Navy and Coast Guard. The JV will license technology from Telephonics for use on a wide range of products that have both defense and civil applications."
Just imagine the potential of having a factory or hard asset in land. It will certainly create a win-win situation  for the nation as well as for the partners. Partnerships with foreign companies will certainly raise the standards, discipline, better financing, spread of technological know-how etc. We don’t have to go anywhere else to see the examples - just look at Indian IT service companies.

In this open world we should utilize the opportunities, especially in defence sector. It’s sweet hear about 100% indigenous production, manufacturing A-Z equipments etc. In practical, it’s not only difficult but also has the potential to become white elephant. If the companies like Mitsubishi etc are struggling to design a new generation aircraft on their own, even after having much technical know-how and experience, it will be much more difficult for us. Even if we made one, it won't guarantee the success of the project as it very much depend on the demand side too (otherwise it will end up as B2 bomber contracts).

Partnership with Sukhoi is one of the successful examples for joint production, but the point we missed in this case is bringing the Sukhoi (Physical assets) to India instead of contract manufacturing at HAL.

As I earlier said we need to differentiate where we are good and where we need assistance. We have to concentrate on our core areas and leave the rest to reliable foreign partnerships – as I mentioned earlier their physical assets should be on India. Consider the case of naval ship building; one of the areas where we are good, so concentrate in this area. Also consider the case of manufacturing engines for fighter planes; here we have to improve a lot. So instead of buying a GE engine outright, ask GE to build a plant (with ownership ratios of their choice) here for engines. If it’s not commercially profitable for them give incentives.

A joint venture with foreign companies will bring in expertise, discipline, new ideas etc. So for having better returns tomorrow we should concentrate on our strengths, rest can be outsourced – to the companies who have plants here. We have to make sure that we will not end up in buying the products off the shelf and then indefinitely wait for spare parts. Let them come to India and create factories here...

Tuesday, November 22, 2011

Rising costs of shelter, cities are not for common man?

Rising rent for rooms in Bangalore
I still remember that kid sitting on a small stone in front of a newly rising residential building. He was smiling after decorating his face with cement powder. After finishing with face he was searching for something to play. Unfortunately there was nothing other than stones, cement and iron rods. Slowly he raised his head and looked towards his father and mother; alas, what could they do? they were sweating under the November sun so that they could earn something towards the mounting living expenses. After looking towards them for some time he turned left and started looking towards the sunny sky. Suddenly the question came to my mind - "where does he stay?" It didn’t take much time to know where he stays - in a small temporary shed made of hollow bricks, which he possibly share with at least 7-8 other people.

As I was already late, I simply walked past him, but the scenario was very much alive in front of my eyes. Suddenly another question came to my mind, how long it will take for him to stay in the residential complex for which his father and mother works? I don’t know, I really don’t know. It's a hard truth in the suburban Bangalore - a place which was not even present in the city map some two decades ago. Now for the same place we have to pay close to 10000 INR for a two room, one hall one kitchen flat, that too excluding the current bill. The situation may not be different in other cities. If this is the case in a sub urban area where buildings are constructed like sticks in a match box then what will be the condition in the centre?

Every day I am seeing people who are always on the run. People from the nearby places coming with their families and working in the construction sites, often lives in a temporary one room shed. Life is too heavy for them, work will start early in the morning and sometimes extends to late night. Many are often working in the night shifts to get get some extra money.

How fast the old motto roti, kapada, makan (food, cloth, and shelter) become history!!! Now parties are not preparing their manifestos based on the living standards of the voters but based on the religion, caste they are in. Liberalization certainly helped many poor Indians to break the threshold line and entering to the booming array of middle class. Unfortunately it didn’t make us an industrialized country. Main Industries prospered here - not the one which makes engines for cars but the real estate, not the one which creates toys for export but the one which exploits the unprocessed iron ore from virgin forests.

The rise in the property value may be much higher than that of yellow metal. Rise of the cities also raised the income of common man but so (or more) as the cost. Indians may not paid this much amount of money simply to 'stay' at any point in History.

Still I shocked when I heared about a 54% increase in rent. It took some time for me to digest the facts - this increment is over and above the 10% we already suffered over the last two years. The case is not so different for many other people; slowly the cost of living is overrunning cost of other two basic requirements of life - cloth and food? This is not limited to renting a home, story is same if you are going for an outright purchase of a flat. People need to pay tens of lacks of rupees to small room apartments, which hardly provides any breathing space. The easy money available from the banks made the situation worse. Option of living in credit made it possible for people to buy real estate for bind blowing prices (and able them to spend the rest of their life by repaying the loans).

To where we are going? The days of affordable housing are already over? Are we paying too much for the rooms? I am not a person who supports government's micromanagement in every sector of human activity. Still I am forced to ask, will the administration come up with some upper limits? Such high rents are difficult for Small and Medium Enterprises too. But the difference is, they can relocate to other places, but for people it is not so easy!


Sunday, November 20, 2011

Exploring Bangalore - Through the arteries of the city

Hosur Road Elevated Highway
"It’s Devali tomorrow, let’s see Bangalore", I told to Nixon - my roommate. After three years in Bangalore this question is supposed to be ridiculous, we are supposed to see each and every corner of the city by this time. Only yesterday I was remembered by a Karnataka Government official that 'by three years you should have learned Kannada' in not so friendly way. Well Nixon was ok with the idea. As one of our friends was enjoying his vacation, his bike was getting bored in the shed, why not give it some job? So we took it and checked the oil level - it’s just above the reserve, well we have to pour some more Petrol to its thirsty tanks.

Hosur main road - NH7 - is the longest national highway in India connecting Kanyakumari- the southern tip of mainland India, with the holy town Varanasi on the banks of Ganges. Elevated highway offers a bird's view of Electronic City and its neighbouring areas. We thought of visiting the Lalbagh first, but the criss-cross roads in the city - like a beautiful woman's hair -  lead us to some other places. Finally we dropped LalBagh for the time being and thought of going to St. Patrick Church - one of the oldest Churches in Bangalore.

Mayo Hall, Bangalore
But it was Mayo Hall, on the side of MG Road, where we reached first. According to descriptions Mayo Hall is considered as one the finest pieces of British architecture in Bangalore. We stopped in front and I moved close to this white building to take a photo. After seeing my camera one person suddenly started walking towards me and made some gestures. Is it towards me? I turned back, no one was there; so I waited there for him to come. After coming close he started asking so many questions about why I am taking photo of the building etc. All are familiar questions; after hearing the same for so many times my answer it was very easy to answer. But I don’t understand what is the problem in taking photos of a road side monument using camera? If it’s using a mobile there is no such questions. In these days of Satellite photography, Google Earth etc nobody can stop anyone from seeing or taking the photos of a building. Still I appreciate their alertness.

Ulsoor Lake
Just like it is famous for gardens, Bangalore also has a good number of Lakes. Ulsoor lake is one of the important water bodies in the city, but be careful when you are here some sides of the Lake are defence areas. In short keep your camera inside whenever you are near to defence lands. Lake was calm and quiet, so as the people watching it. Some couples are sitting on the sides, families are waiting for their turn to get in to the peddle boats. I looked towards the calm waters and stand there for some time. Near to the lake there is Gurudwara too, an elevated white building in one side of the road. After giving two litres of oil to the thirsty engine we restarted our search for St. Patrick church.

We asked about St Patrick church to many people, as many people as many opinions. In the process we saw many churches in Bangalore and reached the Metro station too. After going through many roads, we reached St Patrick Church. Nixon went for mass and I slowly walked towards the front, renovation was going on. The old architecture of the outer walls many no longer visible.

St Patrick's church
Lalbagh was not very far from there, close to 4km. It was my second visit to Lalbagh, not many changes. After having some refreshment we walked across the park and reached the lake. It’s indeed a good place for the people to spend their evening with loved ones - no matter whether it is young, old or couples. Even in the middle of the crowds Lalbagh offers some moments of privacy.

After checking with some auto drivers about Tipu's Palace we were again on the roads, Nixon was complaining about the call of stomach but we didn’t have much time, so the call remained unanswered. Tipu's Palace is a two storey rest house built in Teak wood, decoration inside the rooms are faded overtime. Other than the building there is nothing much to see. Here you can see the model of one of the famous toys in Tipu's darbar - tiger attacking an English soldier and his cries (I think the original is in British museum).

Tipu Sulthan's Summer palace, Bangalore
According to our plan we should go to Tipu's armory and next to Bull's temple, both are close to Tipu's summer palace. Near to palace one person told us that Bangalore Palace will close by 5pm. There was not much time left so we hurried to towards Bangalore Palace. Close to Tipu's palace we saw the big (but about to fell down) fences of Bangalore fort Originally Built by Kempa Gowda - the founder of Bangalore - as a mud fort. Later it was converted to stone fort by Hyder Ali. Fort remained in the hands of Tipu Sultan till it was captured by English East India Company during the third Mysore war (1790-1792).

After having sugarcane juice we moved towards Bangalore palace. In fact the word 'towards' was not exactly correct, all we know was there is a Palace somewhere in Bangalore. As happened in the morning this time too we lost in the jungle of roads.

Bangalore Palace
Cubbon Park is a good place to spend morning and evenings, a spacious greenery to escape form the chaos of the city. Before becoming famous as India's Silicon Valley and IT capital, Bangalore was famously known as Pensioner’s paradise, Garden City etc. It is another matter that as the city is expanding fast to the adjoining areas it is more of concrete jungles than actual jungles!!!

We travelled further and on the left side the alphabets - Freedom Park - was written in big fonts. From here we travelled according to the traffic, and reached the gates of Karnataka Raj Bhavan next turn took us to Nehru Planetarium, which is close to Raj Bhavan.

If it was another time I will certainly go inside the planetarium, but this time we need to finish some more entries in our list. We went on and reached Sankey's road - a wide one with golf course on one side and famous hotels like Le Meridian and ITC Windsor on other side. From here we finally reached the palace road and then to Bangalore Palace.

Considered as a smaller replica of Windsor castle of England, Bangalore palace was not only good in its looks but in its charges also!!! I get down from from the bike some metres away from the building to take pictures of the palace from a distance, took some pictures and then slowly started walking towards the building. In the front yard an old lady was sitting in a slowly moving horse drawn cart, its look like a picture from the old English movies. I went ahead and tried to take a picture of the palace. Suddenly a whistle blow near to me and a security guard walked towards me. "Photography not allowed, you have to buy a camera pass from inside to take photos".

I went inside and asked about the camera charges. "600Rs for digital camera, 100Rs for Mobile camera, 175Rs/person" the lady sitting in front of a computer told me!!! I simply said "my friend is waiting outside, will call him and come" and then slowly started walking outside. "you will get an audio guide too!!!". I said "Thanks" and started walking outside.

Lalbagh lake
The charge of 600 Rs for camera is the highest I came across till now and this is the first place where I saw a separate charges for mobile cameras too. We went to the front yard of the place to get an over view of the entire structure. It's a beautiful building - just like a smaller version of palaces in "Arabian Nights". Beautiful colours, evening sky appearing in the background added some type of mysticism to the surroundings. I can hear the blow of whistles to stop others from taking the pictures. For my astonishment most of the people are not buying the tickets for camera and a good percentage of them are taking at least one photo before security guard stops them. After spending some more time there we decide to go back, slowly boarded our bike and started our return journey. Still the sounds of whistles were coming from the back.

Karnataka High Court
On the return journey we stopped in front of Vidhan Saudha and spend some time there by looking to these magnificent building. Opposite, decorated in red paint stands Karnataka High Court; other government buildings like Lokayukta office etc are also there.

As the sun is getting sleepy in the western mountains we called it as day


For more photos  please visit Flickr

Thursday, November 10, 2011

India - Vietnam: Revival of old ties

Halong Bay in Vietnam - UNESCO World Heritage Site

Recent agreements between India and Vietnam already generated much attention for all the wrong reasons. China feels threatened that India in collusion with Vietnam is working against their core interests. The relationship is getting evaluated in Indian media circles as a reply for Chinese support of Pakistan. But how far all these allegations and counter allegations are true? Lets look at the India - Vietnam relations in general and the new agreements in particular.

What can be the attractions of a relationship between a nation laying on the shores of South China Sea and another one laying on Indian ocean? Is it only because of a common big neighbour, with her rapidly expanding economic and defence power, includes the areas close to the borders of both nations in her core interest list? I beg to differ, I can't swallow the simplistic interpretation that mutual defence interests is the only relationship between India and Vietnam, security partnerships can be one of the objectives - an important one - but the relationship much more than that.

In these days of global village phenomenon, a country will lose more on declaring enmity or acting in that way with another one - which too is an active part of global economic village. If anybody believes that the relation between Vietnam and China are like the one between India and Pakistan they are viewing the relations through a narrow prism. The problems in South China Sea and the Islands in it may play a spoil sport but its not so bad.

In the same way, there is no reason for Chinese or Indian press to believe that each move by New Delhi in ASEAN is solely aimed against China. Yes, as a strategy every nation will play a balancing of power to feel more safer in the presence of a strong nation - even if it's a friendly one. So it's quite natural that South East Asian nations may like an active engagement with India just like the one with US, although in a lower level.

We are yet to touch the main question, defence pacts solely defines the relation? The answer is no, its is also economical. For example, economies needs new customers and new sources of revenue, just like cows needs fresh grazing grounds. To offset the losses in one market or to reduce the heavy dependency on one market, economies needs to expand to new regions. After all no one wants to put all their eggs in one basket.

Indian Premier Dr. Manmohan Singh
Let us come back to the question of India - Vietnam relations. These relations didn't sprang up suddenly, it evolved over a period of time. Historically Indic kingdom 'Cham Pa' had an impact on Vietnamese art and architecture, India was one of the countries strongly condemned US action during the Vietnam war. If we are considering the economic relations India granted the Most Favoured Nation status to Vietnam in 1975, signed bilateral trade agreement in 1978 etc. Both nations are part of Ganga-Mekong cooperation.

Indian Oil exploration activity in Vietnamese waters, which China objects, itself had an history of more than two decades. According to the press releases by ONGC Videsh the agreement signed by PetroVietnam and ONGC Videsh limited (OVL) is intended for

"...developing long term cooperation in oil and gas industry and shall be in force and effect for three years. Some of the key areas in which both the companies are desirous to cooperate are related to the exchange of information on the petroleum industry, exchange of working visits of authorities and specialists in various domains of the petroleum industry, new investments, expansion and operations of oil and gas exploration and production including refining, transportation and supply in Vietnam, India, and third countries according to the laws and regulations of their countries..."
The relationship itself dates back to 1980's when Hydro Carbon India limited (later renamed as ONGC Videsh Ltd) signed a Production Sharing Contract with PetroVietnam (PV) on 1988 for Block 06.1. Later, during the 2006 regular bidding process Block 127 and Block 128 in Phu Kanh basin were awarded to ONGC Videsh Ltd. In offshore Block 06.1 operated by British Petroleum, ONGC Videsh holds 45% share. Company decided to relinquish Block 127 -offshore deep water water block- to Petro Vietnam as it is unable to find any Hydrocarbon there and the drilling is differed to 2012 in Block 128. These data essentially indicates that the Indian exploration for Oil and Gas in Vietnamese waters have a long history. The new agreement talks about the expansion of that activities and more interactions in Petroleum sector, its not a declaration of an axis or nexus against any entity.

It is essential for India to increase the interactions with Vietnam as it will enable us to get a strong foothold in ASEAN. This should be followed by rapid expansion in trade (bilateral trade between the two nations is only $2.7bn) links with Vietnam in particular and ASEAN in general. Both India and Vietnam clocks impressive growth rates (Vietnam registers a growth rate of 6%+ from 1990-2005, eventhough it declined during the economic crisis (6.8% in 2010). To sustain these rates and bring more people out of poverty both nations need to expand bilateral and multilateral trade. Allowing more visas to Vietnamese to visits the Budhist sites in India, providing scholarships to students, joint Naval excercises and regular port vists are some of the ways to expand the ties.

This relation is about continuation of old political, cultural ties and expanding the baskets of cooperation to security, trade, development etc. Even though the situation in Indo-Sino border, South China Sea remains as a major irritant in the relations of India- China and Vietnam - China respectively, there is little possibility for the problems from getting out of control unless the strategists in China starts reading too much in between the lines and misunderstanding them.


Photo Courtesy - Wikipedia