The Other School of Economics

BRICS:2 USA:0 After challenging the dollar, India now rejects the US fighter jet

In an op-ed on the highbrow Project Syndicate, Shashi Tharoor – former Indian Minister of State for External Affairs and UN Under-Secretary General – came back on the reasons why India decided not to short list any US fighter jet for its “largest single military tender in the country’s history”. In doing so he spiced-up his lines to give a taste of India’s new ambitions. Quite a contrast with the mild diplomatic language he would have used in his previous UN job. If anyone were still thinking that India’s contribution to the world stage was limited to introducing Curry to the English food and call centers to the rest of us, they might be in for a surprise. Here is a quick review…

The decision which is leading India to consider purchasing 126 of one of two European planes, either the Eurofighter ‘Typhoon’ or the French ‘Rafale’, has sparked significant debate among defence circles.

The obvious reason is that signing a military contract is not exactly like buying a new printer for the Vice-President’s office. The sums engaged are huge. To illustrate the Pentagon’s Defence Security Cooperation Agency recently reported that U.S. arms sales could hit $50 billion in 2011 and has $300 billion worth of requests still open. To give an idea, $50 billion is equivalent to the Credit Card balances in Australia (1)

But the real reason this rebuke from India has got commentators truly excited is because of the signal it sends about the US strategy in Asia; and what it says about the BRICS countries’ new found motivation to take their international destiny in both hands. They are clearly trying to break their dependence on the American dominion.

ambitious BRICS

The BRICS challenge to the US hegemony started on the economic front when they decided to contest the special role of the US dollar as the only world reserve currency (see our recent post). They are now also putting defense considerations in the balance and are sending the signal that they do not want to be taken for granted on geo-strategic matters either.

India’s move has all the features of Realpolitik

In Asia, more than ever before the US strategy relies on India. According to the New Delhi based strategic think thank CLAWS, the brand new United States National Military Strategy 2011 (NMS 2011) released on 8 February, gives a central role to the sub-continent to counter-balance the rise of China and to keep Pakistan in check. The strategy relies on “expanded military cooperation with India on non-proliferation, safeguarding the global commons and countering terrorism”

However love clearly does not pay back in Foreign Affairs and America now finds itself at odds with India which is seeking a greater influence in the world governance (meaning independence).

So despite the tensions with Pakistan and therefore the intuitive need it would have to side with the mighty US lobbies, India is actually daring to call its own shots. A clear sign of confidence, and the real insight in this new development.

And what a better move than to bring ‘old Europe’ to the party in order to rebalance the partnership with the US! The Indian Defence reports that “Dassault and Eurofighter have been asked by the Ministry of Defence to extend the offer validity thus making them part of the shortlist”.

Another sign of confidence is the reason invoked for not signing the contract with the US. India wants to procure on the merits of the items, not to cajole the relationship with the merchant. To this effect Tharoor’s brief clearly contains a few unequivocal messages:

- The intrinsic  quality of the aircraft is questioned: “The two European fighters are generally seen as aerodynamically superior, having outperformed both US-made aircraft in tests” (see notes coming from a Rafale vs F-16 advanced dogfight here)

- The quality procurement arrangement is challenged: “The US has not, over the years, proved to be a reliable supplier of military hardware to India or other countries.”

- And India clearly doesn’t want to be contained to the role of US side-kick in the Sino-American clash-of-the-Titans: “India is rightly allergic to being seen as a US-supported counterweight to a rising China”… Proud to be an Indian!

However because there is nothing to be gained in totally embarrassing the US, India is applying the text book of Realpolitik, and pouring hot and cold water at the same time. This why a high profile like Shashi Tharoor has been dispatched to play down the implications of the missed contract. His message is that in the end the US should not read too much into the situation: it was a pure technical decision, not a strategic one.

“The notion that a major arms purchase should be based on broader strategic considerations – the importance of the US in India’s emerging Weltpolitik – rather than on the merits of the aircraft itself, strikes Indian officials as unfair. Some deny that the decision reflects any political bias on the part of India’s taciturn, left-leaning defense minister, A. K. Antony. The choice, they aver, is a purely professional one, made by the Indian Air Force, and only ratified by the ministry.”

But the harm has been done…

This demonstration from India to flex their muscles was all the more hurtful for the US that came just months after a promising Presidential trip to Dehli on November 6 for Obama to promote a stronger alliance on strategic, economic and military grounds. Mr Obama said ahead of his meeting with Mr Singh: “The partnership between the United States and India will be one of the defining partnerships of the 21st century.”

Needless to say that this is not quite working yet, and “the ‘deeply disappointed’ US ambassador to India, Tim Roemer, promptly announced his resignation”.

So where to from here?

The killing of Bin Laden on 2 May 2011 has put Pakistan’s duplicitous role under crude light, once again. Ron Paul, the current favourite Republican candidate in the polls echoed a growing sentiment when he wrote on May 10 in AntiWar:

“Our failed foreign policy is reflected in our bizarre relationship with Pakistan. We bomb them with drones, causing hundreds of civilian casualties, and we give them billions of dollars in foreign aid for the privilege to do so, all while they protect America’s enemy number one for a decade.”

The punch line is that America’s strategic interests in the region are more and more dependent of India who also knows that it is not going away. The US will have on their long term priorities to monitor the growth Chinese military power, to control Pakistan, to look after Japan and South Korea, as well as to build relationships in South Asia. A program which is likely to give a Nirvana of opportunities to New Delhi’s strategists.

{ NKN, Paris – leLaissezFaire, Sydney – 22 May 2011 }

We all have our moments… aka… it will still take two to tango.

References:

(1) PerthNow, News Ltd: http://www.perthnow.com.au/business/news/credit-card-balances-climb-to-50-billion-rba/story-e6frg2qu-1226056577740