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PURE GOLD
- Oil diplomacy may become an engine of change in south Asia

On her first day in office, within hours of moving from the White House to her new job as America's secretary of state, Condoleezza Rice rang up Pakistan's president, Pervez Musharraf, and discussed, in the words of the state department spokesman, Richard Boucher, 'how they can work together on many issues in the future'. On the same day, she made 14 other phone calls to her counterparts and leaders across the world. These included Russia's foreign minister Sergei Lavrov, Italian foreign minister Gianfranco Fini, Brazil's foreign minister Celso Amorim, Nato secretary-general Jaap de Hoop Scheffer, Romania's foreign minister Mihai Razvan Ungureanu'and nine more.

India's foreign minister, Natwar Singh, was not among those she called. This is a matter of record. Her spokesman was reminded at his daily briefing that day by a reporter who had a sense of the diplomatic play: 'Well, the Indians are going to say, why didn't she call them' Boucher demurred that 'she is still in the process of making phone calls, so don't anybody start getting ...feeling that she is calling somebody and not somebody else. She is just...has a number of calls she wants to make'.

Eventually, it was Singh who called Rice late on Thursday night to congratulate her and to invite her to India, South Block's spokesman has confirmed. On November 18, 2004, as well, Singh had called up Rice to congratulate her on her nomination as secretary of state. There is nothing improper or undiplomatic about Singh having taken the initiative to place these calls to Foggy Bottom, where the state department is located.

Indeed, if India considers better Indo-US relations to be a matter of national priority, he ought to take such initiatives. After all, when Tony Blair became Britain's first Labour prime minister in 18 years, I.K. Gujral, the then prime minister, timed his message to 10, Downing Street so precisely that his letter of congratulations rolled off Blair's fax machine as he walked into his office after his customary audience with the queen. But Singh and the rest of the UPA government must acknowledge that a gap exists between the hype about Indo-US relations and the reality.

One man in the UPA government who can change the order of things in India's complex relations with the United States of America, it became clear last week, is Mani Shankar Aiyar, the purposeful and intensely active minister for petroleum. When Aiyar arrived in Houston, Texas, at the beginning of last week as part of his global 'oil diplomacy', the US department of energy was still in a state of flux. His trip to Houston had little to do with the US government: he was in America's oil capital primarily to meet America's energy majors and to get US oil companies as involved in India's hydrocarbon sector as those from Europe.

Yet, the DoE made sure that Robert S. Price Jr, the department's director for European and Asian affairs, flew from Washington to Houston to meet Aiyar. Since Samuel Bodman, George W. Bush's new energy secretary, had not yet been sworn in, Price stood in for his boss and told Aiyar that Bodman wanted to visit India soon. The new energy secretary is not unfamiliar with what India can bring to the world energy table in terms of opportunities or in technological assets. During the six years when he was an associate professor of chemical engineering at the Massachusetts Institute of Technology, Bodman taught a long line of Indian students at the MIT.

America's DoE is more than a US counterpart of India's ministry of petroleum and natural gas. It is actively involved in US national security and part of its mission is the application of nuclear technology to America's defence. It is also a key US government agency in charge of scientific research and the application of science to the protection of America's security, including economic security. Without Bodman on its side, New Delhi would be unable to realize its ambitious goals of a strategic partnership with America along the long road to becoming a global power.

It is easy to see why Rice, who finds it imperative to telephone Musharraf or Lavrov within hours of taking up her new job, can put off calling her Indian counterpart ' or wait for South Block to make the call, instead. Washington has a stake in Islamabad in its fight against terrorism: it has always had a stake in Pakistan as a frontline state against whoever its enemy has been in the last 50 years.

Lavrov's Russia is still a big power, although it is no longer a superpower. Italy is a valued ally in Europe, while Japan ' another country which was on her radar ' is important because of its economic muscle. Rice telephoned Mexico's foreign minister too on her first day in office, not only because of geography, but also because Mexico and the US have big economic and demographic stakes in each other.

None of these situations applies to Indo-US relations. The core of friendship between Washington and New Delhi is based on pious praise for democracy, rule of law and a common commitment to values which acquire an amorphous quality when confronted by realpolitik in diplomacy and national security. One man who can change that on the Indian side is Aiyar.

In Houston, and later in Calgary, Canada, last week, Aiyar made CEOs of at least 100 oil and gas exploration and production companies as well as others engaged in assets and financial management in the energy sector excited with his projections of a 21st century Indian version of the California gold rush some 150 years ago. He spoke a language that men and women in George W. Bush's White House, with its heavy Texan presence, understand. What Aiyar merely hinted at, if followed up, would be enough to write off complaints in Washington of India's unfulfilled promises in its dealings with America in the last decade.

When Aiyar comes to North America and assures that only 82 per cent of India's sedimentary basin with potential for hydrocarbons has been explored so far, he is sending a crucial message in the US, which is perennially thirsty for oil and obsessed with energy security. India has never even attempted to spread a message of that kind in the past or make itself relevant to America in such a fashion. If American companies secure contracts in the fifth and current round of bidding for 20 blocks under India's new exploration licensing policy, these companies would be trailblazers in creating a stake for Washington in New Delhi, which will inevitably have a fallout in areas of their bilateral relations that go well beyond energy. Among the companies that attended Aiyar's presentation in Houston were Exxon Mobil, Chevron Texaco, Conoco Phillips, Unocal and several others, which collectively have overwhelming influence in the present White House.

The presence of one company at the petroleum minister's Houston road show has become a talking point in Washington. The China National Petroleum Corporation flew in its executives who have been engaged in Beijing's energy collaboration with Ecuador. A fortnight before the road show, India and Ecuador signed an agreement for similar bilateral energy cooperation.

That presence and Beijing's positive approach to Aiyar's idea of coordination among oil and gas importers in Asia, crystallized at an energy summit in New Delhi in January, may turn out to be catalysts in the complex process of rapprochement between India and China, which started with Rajiv Gandhi's prime ministerial meeting with Deng Xiaoping in 1988. If that happens, it will have a ripple effect, not only on gas pipeline projects through Pakistan and Bangladesh, but result in significant improvements in India's relations with both these countries. All in all, just as 'economic diplomacy' was being dismissed as a clich', 'oil diplomacy' may turn out to be an engine of unprecedented political and economic change in south Asia.

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