Indian Economy

[srini]

Foreign policy should be pragmatic.

I completely agree with this statement.

We need to try to figure out how we can have some influence with whoever is in power to the extent we can without giving up our interests, without giving up our morality, and without mortgaging too much of our future interests, thinking strategically and long-term.

But then you go on to say things that may contradict in their purpose. Foreign policy can't be serving our own interests and at the same time be on moral high grounds. If at all foreign policy wants to be seen as taking moral high ground that will also be to serve some ulterior self interests (like US, UK and Canada always do). I think we are in the situation that we are in (having to accept Hasina as permanent guest) due to this balancing act we have been doing all along between self interests and morality. When we try to do that we end up hosting the same guest for a longer period. (just to remind, Hasina was in India for 6 years last time when military coup killed her whole family including her father who was also the founding father of the nation). I guess its in Indian psyche somewhere to think morals even when doing things meant solely serving self interest. We never exported defense equipment before(we started now quite earnestly now) because we thought that was blood money that we shouldn't lay our hands on. If only world were like us, it would have been free of war (ukraine-russia) or clash of religions being witnessed now in middle east.

[prasen9]

Foreign policy can't be serving our own interests and at the same time be on moral high grounds.

Yes, it can be. Just like we serve our own interests by trying to work hard etc. but not steal from our neighbors.

I think we are in the situation that we are in (having to accept Hasina as permanent guest) due to this balancing act we have been doing all along between self interests and morality.

The problem we are in is because we acted immorally by supporting a dictator because it was our friend.

I guess its in Indian psyche somewhere to think morals even when doing things meant solely serving self interest.

Your guess is wrong. It is immoral to support dictators who are killing political opponents in their country.

We never exported defense equipment before(we started now quite earnestly now) because we thought that was blood money that we shouldn't lay our hands on.

Again, factually wrong. In the 1950s, we supplied arms to Ghana and in the 1960s to Bhutan, at least. See: Arms Exports Database, which I think is not complete. Nice spin though. We did not sell arms because we had no buyers and no good industry to build surplus to export. The British had ransacked the country and it took time to build our manufacturing capacity. And, we had to fight wars in the last 40s, early 60s, etc. and we could hardly produce enough quality arms to arm our army. When our industry became better in producing better arms, people wanted to buy from us and we sold. Before that we did not because we had no good arms to sell at competitive price/quality. Why would people buy from us when they can get things from others that are better quality? We were perhaps a bit cheaper. But, anyway, we did not have that much surplus production then.

If only world were like us, it would have been free of war (ukraine-russia) or clash of religions being witnessed now in middle east.

This is mostly true expecially if you look 1000s of years. Exception is Kashmir. Ukraine-Russia is not different from India-Pakistan over Kashmir. A fight over land. It is about the same in the Middle East. A clash of religions like India-Pakistan is a clash of religions. A clash over land like India-China is a clash over lands. I am not saying that we should have fought but I am opposing the holier than though attitude. We fought for land and Russia is fighting for land. There are umpteen differences and we can all split hairs and come up with reasons why things are different but at the core it is about greed, power, money, resources. All war boils down to that.

[Atithee]

There are umpteen differences and we can all split hairs and come up with reasons why things are different but at the core it is about greed, power, money, resources. All war boils down to that.

You forgot women. I think all wars were/are either about money or women

[prasen9]

Well, can't find one after the 16th century that happened over women. Yep, guilty of recency bias. And, it is sad that women were thought of as property, etc.

[Atithee]

Well, can't find one after the 16th century that happened over women. Yep, guilty of recency bias. And, it is sad that women were thought of as property, etc.

Not property but suitor for the most desirable. From times eternal until now.

[prasen9]

Well, can't find one after the 16th century that happened over women. Yep, guilty of recency bias. And, it is sad that women were thought of as property, etc.

Not property but suitor for the most desirable. From times eternal until now.

I do not know of any wars in the last 100 years or so because two suitors wanted a woman, etc. Maybe among some tribes in the Amazon, etc.

[srini]

@ Prasen I agree with you that an individual can serve self interest by working hard, but there are not many external factors that apply to individuals as they do for foreign policy.

I don’t think India acted immorally, by supporting Hasina as we only did the balancing act of supporting a person who took care of Hindu minority while also being beneficial to Bangla economy. After all India’s choices were limited between Hasina or Khalida and it supported the better administrator Hasina. Bangla democracy hasn’t matured enough to spring up any other leaders. Forget about Bangla , democracies all over the world are struggling to spring up good leaders.

Which political opponents did Hasina kill to be called a dictator? Khalida was originally sentenced to Jail by a court in a corruption case. Talking about immorality, i just can’t understand the mentality of these protesters who after ransacking her house were waving undergarments of a woman their grandmother’s age.

Regarding our arms exports, i agree we didn’t export much because other countries were able to supply better quality arms at a lesser price. But that happened because we thought private enterprise shouldn’t get into arms industry because that’s blood money after all and shouldn’t be “for profit”. If US or France are able to supply better quality arms that’s because the private enterprise in those countries does the manufacturing for profit. And western governments have a playbook to ensure wars happen from time to time and there is consistent demand for the arms their private enterprise exports.

[prasen9]

@ Prasen I agree with you that an individual can serve self interest by working hard, but there are not many external factors that apply to individuals as they do for foreign policy.

Huh? That is completely not true. However much you work hard, if you are born in an Amazonian tribe say, you will most possibly not be the next Fields Medal winner. We are a function of a whole bunch of external factors including simply not getting hit by a car everyday as much as a nation is based on external factors. It takes a village to bring up a successful person and the environment matters a whole lot. It is American B.S. that you can pull yourself up by your bootstraps. Working hard puts you on the right path. In fact, a country especially if it is large has less vagaries than individuals. An individual may die tomorrow - the probability of a country dissolving is very low. Aggregates are harder to eliminate or move than individuals. So, it should be easier to be a moral entity if you are a country than if you are an individual. There are countries who manage to not take sides etc. to a large extent and do just fine. Maybe they are not growing or accumulating wealth as much as they would ... akin to an individual not getting as rich as they can by killing all their neighbors and grabbing their money. I do not know which has more factors. But, you do not have to optimize the last penny and behave like responsible human beings do all over the world instead of say these artificial entities such as corporations, a whole lot of which are built to optimize the last ounce of profit and the sole objective is to optimize returns for the shareholders.

[prasen9]

Regarding our arms exports, i agree we didn’t export much because other countries were able to supply better quality arms at a lesser price. But that happened because we thought private enterprise shouldn’t get into arms industry because that’s blood money after all and shouldn’t be “for profit”. If US or France are able to supply better quality arms that’s because the private enterprise in those countries does the manufacturing for profit. And western governments have a playbook to ensure wars happen from time to time and there is consistent demand for the arms their private enterprise exports.

Where did we say that private enterprise should not build arms in the 1950s and 60s? Can you point me to what you are talking about? We just did not have the infrastructure and the capability to build quality weapons at a pace that we would have surplus to export. Private companies did make weapons in India. I am not talking about 1997 or the Indira Gandhi era of nationalization etc. I am talking early on for a large part of the 50s, 60s and early 70s. That is early India post-British. It was not a moral choice but we just did not have anything to export that people would buy. Maybe the 70s were better ... I will have to check. I have never read of any government policy that establishes the fact that we did not export arms because we did not want blood money. Maybe some idiot tried to pass off our lack of infrastructure as that but that was not a policy I am aware of. But, then I do not claim to know all such policies and things that happened in the past. Please provide evidence of what you are claiming.

[prasen9]

Hasina ordered the killing of the protestors. 440 people died. The police should not be militarized to attack protestors. She wanted to call the army to kill more. Over 700 cases were documented of political opponents disappearing in her rule. One party grabbing full power is dictatorship and is completely against the ethos of democracy.

There is a choice. The choice is to neither support Khaleda nor Hasina after she turned a dictator. That would have been the moral choice. Foreign policy for most countries is not guided by moral choices. The average human being is more moral than the average country - although I accept it is comparing apples and oranges.

[srini]

Regarding our arms exports, i agree we didn’t export much because other countries were able to supply better quality arms at a lesser price. But that happened because we thought private enterprise shouldn’t get into arms industry because that’s blood money after all and shouldn’t be “for profit”. If US or France are able to supply better quality arms that’s because the private enterprise in those countries does the manufacturing for profit. And western governments have a playbook to ensure wars happen from time to time and there is consistent demand for the arms their private enterprise exports.

Where did we say that private enterprise should not build arms in the 1950s and 60s? Can you point me to what you are talking about? We just did not have the infrastructure and the capability to build quality weapons at a pace that we would have surplus to export. Private companies did make weapons in India. I am not talking about 1997 or the Indira Gandhi era of nationalization etc. I am talking early on for a large part of the 50s, 60s and early 70s. That is early India post-British. It was not a moral choice but we just did not have anything to export that people would buy. Maybe the 70s were better ... I will have to check. I have never read of any government policy that establishes the fact that we did not export arms because we did not want blood money. Maybe some idiot tried to pass off our lack of infrastructure as that but that was not a policy I am aware of. But, then I do not claim to know all such policies and things that happened in the past. Please provide evidence of what you are claiming.

Defense production is a capital intensive industry and immensely time consuming. The R&D process for some of the high valued armaments like fighter jets, anti missile systems can take decades from conception to delivery. So to sustain such capital intensive industry, private firms should be ready to invest tonnes of money and wait for decades to get any meaningful returns. No domestic investor in a low per capita economy like India would do that and FDI was needed, but was opened up only in 2001 to 26% and after review in 2014 increased to 49% and again in 2020 to an automatic 75% and up to 100% on case-to-case review basis. I am not saying we didn't have private industry at all, we did have private companies manufacturing but only low valued items like guns and tanks which can't increase India's arms export share in world market. So for such capital intensive sector when India was getting ready to open up as late as 2001 when reforms were started in 1991 itself, questions were raised why India was so late in opening up FDI and some ministers of those times tried to answer the questions and what i said regd "defense export being blood money" etc are based on my impressions of what i read in those days. One of those minister in those days went on to say, India has always preached non-violence and can't become merchants of death by exporting strife by means of exporting weapons to irresponsible countries and that if foreign companies have majority stake they can't be stopped from deciding whom they want to export to.i couldn't find references what was said in those years, but only have my recollections.

I never mean to say "India is holier than thou", i was only implying just that Indian leadership and most of Indians have always been hypocrites and confused about what were our main interests by throwing excuses like non violence as reason for putting cap on FDI in defense sector.

Anyways coming to our main discussion of what India should be doing in case of Bangla, it should be neither supporting Hasina nor Khalida but bring the world's attention back to the core of the problem which is Bangla continues to be in a state of anarchy and the interim government and its chief advisor should be made accountable for not speaking up on why Hindus are continued to be attacked and forced to resign from industry and educational institutions.

[PKBasu]

How about India getting friendly with Yunus though? He may be better than whoever is going to replace him!

Yunus' first statement upon returning to Bangladesh (from watching the Paris Olympics) was to declare that this was Bangladesh's "second independence". Independence from whom and what?? No Bangladeshi was left in any doubt about what he meant. He was hinting that Hasina is an Indian puppet -- a completely ludicrous charge. (Even her father was very far from an Indian puppet; in 1965, he gave calls for Bengali Muslims to mobilize to defend Pakistan, and in 1946 he was HS Suhrawardy's right hand man during the Great Calcutta Killing organised by the Muslim League on 16th August). Mohammed Yunus is merely a front man for BNP-Jamaat. He has already unbanned Jamaat-e-Islami, the party that strongly supported Pakistan in 1971 and has indulged in wanton killings of Hindus at every opportunity. Thousands of Hindus have been forced out of jobs in government, schools, colleges, hospitals, etc., since Yunus took over -- apart from many hundreds being killed and raped purely because they are Hindus. Yunus has done almost nothing to intervene.

[arjun2761]

Where did we say that private enterprise should not build arms in the 1950s and 60s? Can you point me to what you are talking about? We just did not have the infrastructure and the capability to build quality weapons at a pace that we would have surplus to export. Private companies did make weapons in India.

The Indian private industry was heavily regulated in 1950-80s. Even if one wasn't explicitly prohibited from building things in the private sector, lots of government permits and permissions were required (together with navigating very strict import restrictions) which were difficult to get and many sectors were reserved for the public sector (which is generally a model of inefficiency). Until Sanjay Gandhi broke through with his Maruti-Suzuki in the 80s, the only cars that were being built in India were 50s model British cars which were branded as Ambassador and Standard Herald together with a similarly old version of Fiat.

[PKBasu]

Sanjay Gandhi DID NOT "break through with his Maruti-Suzuki"!! Sanjay Gandhi tried to build a car called the Maruti in the 1970s, for which he received free land allocations, and lots of support from the Haryana government and equity infusions from a large number of corporates (who were trying to please his mother, PM Indira). The Maruti factory built by Sanjay never turned out more than 6-10 cars that viably ran on India's roads (out of a total of 21 produced by March 1976). In other words, it was a gigantic failure.

After Sanjay died in 1980 (plane crash at Safdarjang Airport), his mother turned to Suzuki to take over the Maruti car factory (and buy the land from Sanjay's estate, thus taking his failed company out of bankruptcy). Maruti Udyog Ltd. emerged as a collaborative venture with Suzuki in 1981, and began producing cars in 1982 (very successfully, but initially as public sector enterprise, with Suzuki owning 26% of the shares). It was privatized by Arun Shourie (Disinvestment Minister in Vajpayee's government) in 2003 (with Suzuki becoming majority shareholder, and listing the stock on the BSE and NSE), and Suzuki bought out the government's remaining minority stake by 2007.

[arjun2761]

By "breaking through," I meant breaking through the bureaucratic and corruption maze which would choke most productive private enterprise and prevented any modern cars from being built or introduced into the Indian market to replace the 50's era junk that ran on our roads. The only reason Indira Gandhi allowed Suzuki in was because her son had started down that path with Maruti -- otherwise Suzuki's (or any one else's) efforts who have been choked by our infamously corrupt bureaucracy.