Wednesday, March 5, 2014

SAsia (mostly India) and the USA


Pakistan is a major non-NATO ally of the USA and managing that relationship will be in the best interests of the USA in order to ensure a smooth passage out of Afghanistan (not to mention the real motivation/fear: Taliban will capture the nuclear complex). Accordingly today we have the announcement that $280 million in military aid and $446 million in civilian aid (reduced from $703 million in 2013) will be directed to Islamabad for 2014 (this information is as per Times of India, Dawn confirms $280M mil budget but states $720M for civilian aid). The announcement from the US State Department (excerpt below) is curiously worded to say the least (suggesting perhaps that the lower amount of civilian aid will help improve US-India relations).

"The OCO (Overseas Contingency Operations) resources will support critical US activities such as sustaining close cooperation with Pakistan, ensuring the safety of Pakistani nuclear installations, working with Pakistan to facilitate the peace process in Afghanistan, and promoting improved relations with India," the State Department said as it proposed USD 446 million in civilian aid to Pakistan.





Sri Lanka and Nepal are probably too deep in China’s embrace. The dark horse is Bangladesh and how long the Hasina govt is expected to survive (perhaps with Indian backing), the opposition BNP won 43-34 in the local elections held in February.

The Election Commission has just announced the schedule for the Lok Sabha polls- April 7 to May 12 in nine phases over 34 days. India (right now) is very much in a cold embrace with the USA, perhaps because (a) it has proven difficult to mobilize India against China and (b) due to lack of faith in the present regime. The question of interest is how regime change will help improve market access for US companies (unlikely, all parties against FDI in retail for example). Even if NaMo wins, there may be a tilt towards China and (depending on how the west reacts to his rise) a frozen relationship with the USA.

Japan, China and Korea (and perhaps France and old-timer Russia) will IMO outpace USA both in the commercial and government sectors. The real bottle-neck is infrastructure development, right now the Japanese are involved in building the transport corridors.  The Chinese have expressed interest as well (30% of total!!! what do they want in return???).  Regardless of all the sweet talking editorials (see excerpt below) the USA is not proposing to sign up for any such initiative. There lies a hope that the hammer blow on IT exports will be softened (unlikely). There are in addition a number of other trade fights looming on patents (see below) and solar PV installations. Finally, Hillary is rumored to having a soft spot for India so the next administration may be more receptive to Indian concerns (but still no special relationship).

Our successes are significant: a nearly fivefold expansion of US-India trade between 2000-12 to reach almost $100 billion, a thriving defence relationship that is founded on a common strategic vision and a commitment to expand our partnership across most fields of human endeavour — from education to innovation, intelligence sharing to counterterrorism, space collaboration to energy cooperation — including in areas that once seemed impossible given where our relations were just a few short years ago......It is becoming widely accepted that our converging interests will shape Indo-Pacific strategic and economic geography, and with it the future of the 21st century and half the world's population that call this region home.

all this sweet music composed by Neha Biswal above to be contrasted with the grim reality below

US drug companies complain that India has rejected patents for some blockbuster drugs (like Novartis’ Gleevec), while issuing a compulsory licence (which ignores patent rights) for Bayer’s anti-cancer drug. They say India is flouting established norms on intellectual property rights (IPR), cheating patent owners of billions, and conferring a bonanza on Indian producers of cheap substitutes (generic drugs). US companies want the US International Trade Commission to investigate India’s treatment of IPR, and recommend sanctions (under Section 301 of US trade laws) if required.....Few countries stand up to the threat of US sanctions : the costs typically exceed the benefits. But India has refused to co-operate even in a USITC visit to New Delhi, saying its bureaucrats are too busy with other things. India has told the US that WTO rules provide for all members to settle patent disputes through that body, not through unilateral action. India is confident that its IPR rules are WTO compliant. For that very reason, the US has avoided WTO, and is attempting bilateral pressure instead.  

Silver Lining: Indian companies claim to have invested 11 billion dollars in the USA and created 100k jobs. If true this is quite promising. Indian (private sector) lobbying is also ramping up (but still small) and may be in the long run more effective in managing the relationship than any govt initiated lobbying.


One trend that is expected to continue is the induction of more and more Indian Origin Persons (IOP) to the royal court. All appointments are (a bit) political in nature, the above may then reflect favorably on the persuasion powers (aka fund-raising skills) of the Indian-American lobby. This is certainly a good thing (in and of itself) but the I-A lobby may find itself to be a divided house re: NaMo (reflecting divisions within expat Indians).

Top IOPs in Obama administration (total now exceeds 50):  Rajiv Shah (administrator of USAID), Nisha Desai Biswal (assistant secretary of State for South Asian Affairs), Azita Raji (member, President’s Commission on White House Fellowship), Islam Siddiqui (chief agricultural negotiator, US trade representative), Vinai Thummalapally (executive director, Select USA, department of commerce), Vivek Murthy (surgeon general). Awaiting appointments: Arun Kumar (assistant secretary of commerce and director general of the US and Foreign Commercial Service) and Puneet Talwar (assistant secretary of state for Political- Military Affairs). If confirmations proceed as expected, two assistant secretary of state positions at the state department would be held by Indian-Americans.

regards