The Telegraph
Since 1st March, 1999
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- After hitting a plateau, India-US economic relations are on the upswing

To say that India’s engagement with the United States of America has now become “all-round” may sound like a cliché. But the finance minister, Jaswant Singh, who just completed his first visit to the US since moving out of South Block, has proved just that. There was a time when an Indian cabinet minister would go to Washington and have very narrow discussions with just his American counterpart and meet a few others in the administration dealing with just his charge. Last week, Washington was besieged by more than 150 finance ministers: they had all gone there to attend the annual meetings of the World Bank and the International Monetary Fund. Singh stood out among this crowd because his presence in the US capital was not confined to the perimeter of the World Bank and IMF, which were cordoned off throughout against protestors critical of globalization.

The Americans discourage bilateral meetings with ministers and other leaders who go to the US for multilateral gatherings. When kings, presidents and prime ministers descend on New York for the United Nations general assembly, they are always told not to even try to visit Washington in the hope of going to the White House or securing other bilateral meetings. The US president meets a few chosen visitors in New York itself during his two-day stay in the Big Apple.

But last week, Singh met the US secretary of state, Colin Powell, in a departure from protocol, which is being talked about in Washington where such meetings are constantly analysed for signs of the changing contours of the only remaining superpower’s global policies. Richard Hass has a title which understates his importance in the state department’s decision-making process: he is director for policy planning. Hass called on Singh at his hotel and had a long meeting. The minister met a cross-section of Washington’s foreign policy think-tanks. And, of course, he met his American counterpart.

According to independent accounts of the meeting between Singh and Powell, it was quite unlike any other between an Indian and an American in ministerial office. Face to face with Powell, Singh must have discovered to his surprise that it was at once an advantage and a disadvantage not to hold the levers of executive authority. As a senior member of the prime minister’s team, Singh could speak to Powell broadly on behalf of the Indian government. But since he is no longer external affairs minister, he could not, naturally, go into the specifics about South Block. However, unburdened of the responsibility of conducting the nation’s foreign affairs, he was in a strangely stronger position than before to articulate foreign affairs with Powell. He found himself counselling the US secretary of state, giving him advice — at a time when good advice is very much in need in Washington.

This was particularly so when the two men approached the subject of Iraq, which has edged out practically every other issue in Washington. Singh went beyond what both the external affairs minister, Yashwant Sinha, and Atal Bihari Vajpayee had told Powell and George W. Bush respectively last month in outlining New Delhi’s opposition to a conflict in the Gulf. To say that the very first meeting between Powell and Singh in New Delhi was frosty would be an understatement. But the two men have come a long way since then. And last week, as Powell told some of his aides later, he found the Indian minister telling him about foreign policy in a spirit of greater objectivity, now that he has moved to finance.

It is another cliché to say that Indo-US friendship has climbed to that level of trust and confidence where the two sides can express their differences with honesty. But look back a few years, and who in Washington — or elsewhere in the world — really cared about what India said' Of course, it was different in the Fifties and the Sixties, but since then India and the US have only been talking at each other without much consequence. But even those in India who have been opposed to the 1998 nuclear tests must now admit that this has changed — especially in Washington.

Which is why, as in the case of the finance minister last week, when Yashwant Sinha was in Washington in early September, his meetings were not confined to the state department. Sinha met the treasury secretary, Paul O’Neill, whom he had known earlier during his tenure in North Block. But Sinha also talked to the defence secretary, Donald Rumsfeld, and his deputy, Paul Wolfowitz, in a signal that Indo-US interaction is now truly “all-round”. Singh’s visit confirmed that.

The period following Singh’s induction into the external affairs ministry saw a succession of high-level American visits to India, most of them related to foreign policy, culminating in the high-profile Clinton trip in March 2000.

Singh’s move into the defence ministry saw similar trips from the defence side of the US administration. Even if one were to exclude Rumsfeld’s Pakistan-centric foray into New Delhi, there is no doubt that Singh’s stewardship of the defence ministry, albeit temporary, saw the creation of a new architecture in Indo-US defence relations. It would appear that he is now set to do a hat-trick in India’s relations with America. The Indo-US Economic Forum, for instance, was formed with great fanfare some time ago in the full flow of expectations generated by Bill Clinton’s visit. It never met though. Steps are now under way to belatedly convene the first meeting of the forum.

With Singh in charge of the finance part of North Block, a string of high-level economy-related visits from the US is in the offing. The more high-profile of these would be treasury secretary O’Neill’s trip to New Delhi in November, details of which are being worked out. This is likely to be followed by a visit by the commerce secretary, Don Evans. Convention dictates that if the secretaries for treasury and commerce are finding their way to a country — excluding America’s close allies, of course — the president cannot be far behind.

In 1998, in the aftermath of the nuclear tests, when Vajpayee asked Singh to shoulder the responsibility of bringing Indo-US relations back on track, some of those who interacted with the then deputy chairman of the planning commission painted for him a bleak picture of what lay ahead.

There would be a run on the rupee, Singh was warned. Foreign exchange, which was in India in the form of non-resident Indian deposits — hot money — would leave the country, and there would be a flight of capital as well, he was warned. These dire predictions turned out to be misplaced. On the contrary, India now has foreign exchange reserves totalling 62 billion dollars.

Singh knows now in retrospect that what he was able to achieve with the Americans between 1998 and now would not have been possible if those gloomy predictions had come true. Strobe Talbott, Singh’s partner in the post-bomb negotiations with the US, is now on record that the objective of their talks was not to secure a roll-back in India’s nuclear program- me. Had the Indian economy faltered in 1998 or any time thereafter, Talbott would have said something else.

This experience has made Singh realize that the first security for India is provided not by its nuclear weapon, but by the country’s economic security. Any politician who realizes this truism has all the makings of a good finance minister. It is to be expected that Singh will now take to the economic plain the battles he fought with the US in the last four years to secure de facto acceptance of India’s nuclear weapons power status in Washington.

The trouble with the new finance minister, though, is one of perception. Conspicuously absent from his persona in North Block is the activism which characterized his presence in South Block. Maybe, that activism was triggered by the fact that there was so much that called for a spin on the foreign and security fronts as a result of the nuclear tests, the prime minister’s Lahore visit, the Kargil invasion and so on.

That is not the case in North Block. But one also suspects that Singh is mandated to silence in his new role by the example of his leading counterparts across the world. After all, Jack Straw’s is a familiar face on television screens. But unlike the British foreign secretary, one seldom sees or hears Gordon Brown, the chancellor of the exchequer — or, for that matter, the French finance minister, Francis Mer, unlike the foreign minister, Domini- que de Villepin.

This may well change once the tidying up, which Singh is now carrying out in the finance ministry, is well under way. But at the end of his visit to Washington, there is a definite expectation that after hitting a plateau, Indo-US economic relations are on the upswing. And if things are happening with America, can the rest of the world be far behind'

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