SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : New India

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: Sam Citron8/22/2007 9:06:19 AM
   of 608
 
India's Singh Faces Biggest Test [WSJ]
Nuclear Ambitions Of Prime Minister Threaten Coalition
By PETER WONACOTT
August 22, 2007; Page A7

NEW DELHI -- Manmohan Singh has always tried to separate passion from his politics.

As India's finance minister in the early 1990s, he helped stave off a national financial crisis by mapping out pragmatic market-opening policies. As prime minister for the past three years, he has given speeches heavy on technical details and light on political rhetoric, sounding more like the cost-benefit analyses of the sober economist that he is.

But a very different Indian prime minister has emerged in recent weeks as he faces the biggest fight of his political life. With opposition hardening among his government's coalition partners against a nuclear deal with the U.S. that was supposed to form the bedrock of a new U.S.-India relationship, Mr. Singh is finding that his quest for nuclear power has unexpectedly endangered his political power.

Allies from the Left Front, who support Mr. Singh's governing United Progressive Alliance, have stood up against the deal, throwing the government into turmoil. While the pact doesn't need parliamentary approval, Mr. Singh's Congress Party relies on these politicians from four Communist parties to give the UPA a voting majority.

In the face of such opposition in the past, Mr. Singh has backed down. But this time he is talking tough. The new persona -- a cross between statesman and political combatant -- reflects how gravely he views the consequences of a collapsed nuclear deal, for his government and his country. Without the Left Front's support, Mr. Singh's government could collapse, precipitating national elections.

In a speech to Parliament last week that called the deal "good for India, and good for the world," the prime minister spoke over a shower of catcalls. Lawmakers from the Left Front walked out. "I am neither given to exaggeration nor am I known to be self-congratulatory," Mr. Singh said toward the end of his speech. "I will let posterity judge the value of what we've done."

In an interview with an Indian magazine, the 74-year-old prime minister said his rivals never expected him to last in the job. "But I have faith in a higher force," he told India Today. "I believe it was my destiny to be the prime minister."

His opponents believe Mr. Singh's political denouement is near nonetheless. The divisions over the nuclear deal are only the latest sign of an ineffective government that has also failed to stem food-price inflation or narrow urban-rural income gaps, said Mukhtar Abbas Naqvi, vice president of the Bharatiya Janata Party, which vies nationally for votes with Mr. Singh's Congress Party. "This government isn't going to last long," he predicted.

Leftist politicians that the Congress Party relies on are demanding the nuclear deal be frozen. Coalition members are meeting this week to try to find a way through. Late Monday, the Left Front reiterated its opposition but also raised the possibility that a compromise could be worked out. The Left Front would consider a committee that was set up to study their objections to the deal as long as India doesn't move forward on it for now, according D. Raja, a senior leader of the Communist Party of India.
[Combo]

"If the government falls because of its own folly, then we aren't responsible," he said in an interview.

The current impasse is testing Mr. Singh's political mettle. Mr. Singh, who earned honors from Cambridge University in economics and a doctorate from Oxford, has long been regarded as one of India's most talented technocrats. But it took Sonia Gandhi, the Italian-born widow of slain Prime Minister Rajiv Gandhi, to elevate Mr. Singh to the government's top spot after the Congress Party's strong showing in the national elections in 2004. Ms. Gandhi, the chairwoman of the Congress Party, has continued as chairwoman of the UPA and is still seen as the country's most powerful politician.

Although Mr. Singh enjoyed Ms. Gandhi's support in pursuing the nuclear deal, his backers say he was caught off guard by the depth of opposition elsewhere. After months of scrutinizing technical details of the agreement, a national debate erupted, bringing to the surface old sensitivities rooted in a British colonial past. Many remain deeply suspicious of India entering any sort of alliance with a Western power, especially one as controversial now as the U.S. For decades, India maintained a "nonaligned" stance in world affairs but was more closely associated with socialism than with the West.

"There was a lot of euphoria initially," said one retired senior government official of the feeling after the deal with the U.S. was struck. "We sort of forgot the reality."

However, the nuclear agreement, forged in meetings between Mr. Singh and President Bush, is seen by many as a watershed for India's emergence as a world power. After India tested nuclear devices in 1998, the U.S. government imposed sanctions on the country.

The "strategic partnership with India," which is also viewed as a signature achievement of U.S. foreign policy under Mr. Bush, is expected to help remove many of the remaining technical trade barriers between the two countries. A final draft of the deal, reached last month, allows the U.S. to provide nuclear fuel and technology to India for the first time in three decades, since Washington barred such sales after India tested a nuclear device.

As Mr. Singh gets blasted at home for selling out Indian sovereignty, Mr. Bush is facing fire from critics in Washington for caving in to Indian demands. U.S. arms-control experts and a loud contingent within Congress argue that Mr. Bush agreed to terms that wouldn't punish India if it went ahead with another nuclear test. Critics also claim the deal's one-off concessions to India will weaken the international system meant to stem the proliferation of nuclear technologies.

Capitol Hill foes have also seized on another issue to push their cause: India's ties to Iran. New Delhi has maintained warm relations with Tehran, including military ties and a potential natural-gas pipeline project, despite the growing international feud over Iran's support for radical groups and alleged pursuit of a nuclear weapon.

Still, the criticism in the U.S. is minuscule compared with the din in India. One big difference is that the Bush administration has the heavy backing of U.S. industry, which sees the deal as paving the way toward a slew of potential deals ranging from fighter planes to power plants and airport construction. Bush administration officials say they are confident that Congress will approve the cooperation deal when it comes back for a final vote, possibly around the end of the year.

India, meanwhile, must still reach separate agreements with the United Nations's International Atomic Energy Agency and the Nuclear Suppliers Group, a group of nations that sets rules on exports of nuclear materials.

The government's Left Front allies have said such a partnership with the U.S. will entangle India in "a complex web of political, economic and military relationships" that could undermine its sovereignty, according to a joint statement of leftist political parties earlier this month. The statement also pointed to India's recent votes to isolate Iran's nuclear program and U.S. arm-twisting of India to buy expensive weapons as evidence of how America will manipulate the partnership for its own goals.

The battle with the Left Front is significant because Mr. Singh is often accused of backing down to its opposition on steps to open India's economy. Liberalization of India's banking, insurance and retail sectors has proceeded slowly, as has the selling of stakes in government companies. But the nuclear deal is seen as different, a fight Mr. Singh can't afford to lose because of what it means for his country's nuclear program and India's standing in the world.

"This is an ideological confrontation," said the retired official who remains close to the prime minister. "He had to take a stand."
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext