India: Bridging The Gap Between Perception And Reality

Editor: Ambassador Sen, you have been in the Indian Foreign Service or held high positions in government for 40 years. Would you share with us some of the high points of your career?

Sen: President Bush had remarked to me, during the presentation of my credentials to him about two years ago, that I was perhaps the only ambassador to have served in four G-8 capitals, including those of three of the Permanent Members of the UN Security Council. However, each of my ambassadorial assignments was interesting in its own way. I had a brief but enjoyable tenure in Mexico, followed by six fascinating years in Russia in the initial period of its post-Soviet transition, which was turbulent at times. I was the last ambassador to present my credentials to the German President in Bonn and to set up India's first embassy in Berlin as the capital of a reunified Germany. That move was more than of geographical significance. Being India's High Commissioner in London was a rewarding experience. I am fortunate that I am in Washington during a time when India-U.S. relations are being transformed into a strategic partnership. Looking back, my most challenging assignment was quite some time back when I was foreign and defence policy adviser to the Prime Minister of India.

Editor: I understand that was in the 1980s - at a time, during the Cold War, when India was seen as close to the former Soviet Union and relations with the United States were frosty.

Sen: Yes, this is the conventional wisdom. But it was not quite that simple. For instance, India-U.S. relations were not bad in the 1980s. I was present during Prime Minister Rajiv Gandhi's meetings with President Reagan, and the personal chemistry between the two was excellent. In the 80s, we signed an agreement for high technology cooperation; Defence Secretaries Weinberger and Carlucci visited India within a period of eight months; GE engines were supplied for India's light combat aircraft; India became the first non-NATO country or ally to get a U.S. super-computer. I could go on with such examples. The fact is that in the immediate aftermath of the end of the Cold War there was a pretty long period of benign neglect of each other.

Editor: So, when did the two democracies, with so much in common, re-discover each other?

Sen: Relatively recently, towards the end of the second term of the Clinton Administration. President Clinton's visit to India in 2000, which was preceded by then First Lady Hillary Clinton's visit, was definitely a watershed event. The relationship was, however, propelled to unprecedented heights from the time that President Bush assumed office.

Editor: What was the reason for this rapid transformation?

Sen: Well, there were several factors. India has been changing in terms of its economy and outlook - and so has the international situation - with the growing recognition of new challenges in the post-Cold War period. The global nature of some of these challenges was perhaps not fully realized in this country before the traumatic tragedy of 9/11. However, much before 9/11, President Bush perceived India not through a distorting sub-regional perspective, but in a broader perspective of an emerging global player, with which it would be in the interest of the U.S. to build a strategic partnership.

Editor: What are the challenges that you face in your position as India's envoy in this country? And the rewards?

Sen: The basic challenge I face is that of bridging the gap between perception and reality across a broad spectrum of issues. For instance, India never has, and never will, automatically follow the lead of any other country, not even the world's sole superpower. We are too old a civilization and too vibrant a democracy to permit decisions affecting us to be taken outside our country. However, we can be reliable and strategic partners in terms of our shared values and common concerns. On fundamental issues we do not differ in a long-term perspective. Some people do not yet understand that no country can reward India, since we seek no favours. We know that the best and most durable relationships are based on mutual respect and mutual benefit. Prejudice is more often than not based on ignorance or partial knowledge. I have found this evident in some debates on outsourcing. Any objective analysis will reveal facts, including the fact that we import over 30 percent more than export; the fact that the net flow of resources is not from the U.S. to India, but the other way around; the fact that our economic growth is led more by domestic demand than by exports; the fact that our market access interests are defensive and do not adversely affect U.S. interests; the fact that we are recipients of multilateral loans but are also a significant donor country; and so on and so forth.

Editor: As India plays an ever more important role in the global economy, however, there are sectors of its domestic economy - and large segments of the Indian population - that are not participating in this evolution to the same degree. Bangalore is booming; Bihar is not.

Sen: You are right. In terms of market access in agriculture, for instance, we cannot ignore the fact that 60 percent of India's population, which means more than 600 million people, is dependent on agriculture. For many, indeed the majority, farming is not a business, not even a livelihood. It is survival, increasingly precarious survival. Better productivity and employment generation in agriculture, and increasing rural income, is one of our foremost priorities. If we have more public spending on basic rural infrastructure and increasing productivity through greater technological inputs, the private sector, both in India and from abroad, will have much greater opportunities for investments in cold chains, food processing and other areas. The recently launched India-U.S. Knowledge Initiative in Agriculture, to which we have allocated $100 million for the first three years, should be helpful in this regard.

In order to make our economic reforms sustainable, we will also have to ensure more equitable growth. Some parts of India are developing faster than others. This phenomenon can be destabilizing in the longer run in terms of migration of labour and so on. However, in order to address these problems and to generate greater employment, we will not only have to sustain eight percent GDP growth rates but also to stabilize growth rates at 10 percent or more. This is doable.

The nature of the problems that we are encountering is unprecedented. We have no model to emulate. There is no other example of an incredibly diverse and pluralist society of a billion-plus people emerging from poverty in a democratic and federal polity. India's success will thus have a profound impact not just on Asian but global peace and prosperity.

Editor: As India's economy has opened up and the country becomes an increasingly important destination for foreign investment, what is the Indian Government doing to attract investment? Is there a "right kind" of foreign investment for India?

Sen: The attractiveness of India as a business destination is being increasingly realized. This is reflected in the increase in both foreign direct investment and foreign institutional investment. We are constantly reviewing our policies. The government is seeking to bring about changes aimed at facilitating and regulating rather than trying to control economic activities. There is scope for much greater investments not only in the services sector but also in manufacturing in India. But we attach the highest priority to investments in infrastructure - in ports, airports, roads, and the energy sector in particular.

Editor: Infrastructure constraints are viewed as a major impediment to foreign investments.

Sen: Yes. But these constraints should be viewed as opportunities. It was only recently that telecom was seen as a big hindrance. Now India has the world's fastest-growing, or at the least, the world's second fastest-growing telecom industry. How many other parts of the world offer such scope for profitable investment in infrastructure sectors? If infrastructure improves, so will prospects for business. For example, better airports will mean sustaining our growing demand for commercial aircraft. This should be of interest not only to construction companies but also to enterprises like Boeing, General Electric and others.

Editor: China's economy began to expand substantially some 25 years ago, somewhat in advance of India's expansion. Are the two economies comparable?

Sen: India and China are both large countries with populations exceeding a billion each. We are neighboring countries. As you indicate, China started its economic reforms much earlier than India. Chinese policies have been pragmatic and not ideological. Its savings rate is around 40 percent, compared to less than 30 percent in India. China has also attracted about 10 times the foreign investment that India has received. Its infrastructure is superior. Its growth rate is certainly higher than India's, but thanks to our entrepreneurial spirit - and despite the disadvantages I mentioned - just a two percent increase in our savings rate will enable us to reach and sustain a 10 percent growth rate. We also have some demographic advantages, with over half our population of the age of 25 years and less, and the rapid process of emancipation and empowerment of disadvantaged sections of our society. Elements of both cooperation and competition will co-exist in our relations, and I hope that there will be increasing focus on the latter. India-China trade is growing rapidly, and it is balanced. Each country can benefit from the prosperity of the other.

Editor: You also have the advantage of the rule of law and the independence of the judiciary.

Sen: Yes, both India and the U.S. follow common law, and there are many similarities in our judicial systems. The independence and impartiality of our judiciary is internationally recognized. Governments may come and go but our institutions remain. We have a proud history of always honoring our international commitments, and contracts signed can be enforced by our judiciary. We have a regular interaction between the Supreme Courts of India and the U.S. Recently, the Chief Justices of our two countries and Judges of our Supreme Courts had a stimulating and productive dialog. The Supreme Court of India is probably the most powerful institution in the world in terms of its affirmative actions and the protection of human rights.

Editor: The increase in high-tech trade, the emerging strategic partnership between India and the U.S. and the new Defense Framework have all been much in the news lately. Would you share with us your thoughts on how this discussion is proceeding?

Sen: As I said in the beginning, India-U.S. ties are being rapidly transformed. Just in the last two years I have been here, a number of steps have been taken to take this relationship to a significantly higher level. The Next Steps in Strategic Partnership (NSSP) was concluded last year, opening the way for greater collaboration in dual use technologies, nuclear and space cooperation, and exchanges in missile defence. We have frequent joint exercises between our armed forces and envisage greater collaboration between our defence industries within a 10-year framework of cooperation signed last year. We have shared national security interests in combating international terrorism prompted by religious extremism, and preventing proliferation of weapons of mass destruction. We have taken new initiatives to enhance our collaboration in science and education, agriculture, space, other areas of high technology, energy, including civil nuclear energy, etc. We have also initiated cooperation to promote global democracy, combat pandemics like HIV/AIDS, build disaster management capabilities in third countries, and promote environment protection. These are just some instances. Thus, India-U.S. cooperation has not just been of benefit to both our countries but is becoming an increasingly positive factor in international relations.

Editor: There appears to have been a setback caused by the impasse in the U.S. Senate, leading to delay and uncertainty in the adoption of legislation in the U.S. Congress of proposed U.S.-India civil nuclear cooperation. How will this affect bilateral relations?

Sen: I do not think that it will be proper for me as a foreign envoy to comment on domestic political processes in this country. I hope that there will be bipartisan support in the U.S. Senate, of the kind demonstrated in the U.S. House of Representatives. This will generate greater investor confidence in both countries and internationally. I also hope that the final legislation will be in conformity with what was agreed upon in the July 18, 2005 Joint Statement issued during Prime Minister Manmohan Singh's visit to this country and the March 2, 2006 Joint Statement agreed to during President Bush's visit to India.

Editor: How will the reported nuclear weapons test by North Korea affect this agreement? Will it not strengthen the arguments of those who warned of the dangers of unraveling the NPT regime?

Sen: These two issues are entirely unrelated. In fact, this development only highlights the fact that India's record of nonproliferation has been impeccable, and even better than most countries in the Nuclear Suppliers' Group. Barring one exception, most violations of nonproliferation norms have been by NPT signatories. This reported test, in fact, demonstrates the need for the international community to concentrate equally on the origins and destinations of proliferation of weapons of mass destruction and means of their delivery. The sooner we get off ideological high horses and face such realities the better it will be for all of us.

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