Indian Politics in the context of the Iranian Crisis

Pratyush Chandra

The postponement of the decision to refer Iran to the UN Security Council has given the Indian rulers temporary relief. A few days back, India’s Foreign Secretary denied giving away any inkling about India’s stand if voting on Iran issue took place on November 24. (1) But did he or his superiors themselves have any hint of what they were going to do?

1 India and the Iranian crisis

Ever since India joined the Western powers led by the US in backing an IAEA resolution calling on the agency to consider reporting Iran to the UN Security Council if it does not meet its nuclear obligations, the Indian government has been going out of its way to explain its vote being in accordance with not only national but also Iranian interests. Its leftist allies are doing everything to make it apologetic for what it did on September 24, and to ensure that they do not repeat it again whether on November 24 or after. When the rightist opposition was in government it did not miss any opportunity to run behind the US wagging its tail. In fact, the consistency that we see today in the Indo-US relationship and its general acceptability are their gift to Manmohan Singh. However, the parliamentary logic forces even this spineless opposition to talk about non-alignment and anti-“imperialism” in its efforts to mobilise the alienated forces under its fold, and regain its spirit after last year’s electoral shock.

The government had always expected some international political development to take place that would help it avoid the voting. Increasing its pain was the Iranian endeavour to mix up the issue with the pipeline deal, which is still halfway. During the project’s Joint Working Group’s meeting in Tehran, Iran’s Deputy Petroleum Minister for International Affairs M H Nejad Hosseinian told the Indian delegation on October 24 “Iran expects that the esteemed government of India would compensate the past default by supporting Iran in the next meeting of the IAEA board of governors in November.” (2) Petroleum Secretary “had then replied that Iran’s demand was political in nature and it was difficult for him to comment on a political issue.” (3) Since then the desperate Indian government has been trying hard to convince Iran of its neoliberal lessons on the depoliticisation of economy learnt under the guidance of an Economist who happens to be the present Prime Minister, too, “to keep nuclear politics out of the Iran-Pakistan-India gas pipeline project and consider the latter as a purely commercial deal.” (4)

Finally, the US agreed to the Russian proposal allowing Iran to refine uranium at a key nuclear facility as long as more advanced work on the material was completed in Russia. Iran too promised to consider it. It is a face saving exercise for every party in the discussion. The Bush administration recognises “that its Iran policy, both tactically and strategically, was failing to resolve” the crisis and that it has been unable to persuade other Western powers, not even its otherwise faithful allies to refer the case to the Security Council. (5) Any unilateralism in these circumstances will be dangerous for the US. Militarily irresolute EU powers too wanted a resolution that did not force them to take a stand. However, the only negative aspect of such resolution for the US and other Western interests seems to be the strategic boost to Russia and China that this resolution entails – their ability to negotiate.

A similar face saving exercise was on in India – the possible resolution of the nuclear crisis or even delay in any decision in the IAEA in sight was a great respite. The international political exercise apparently seemed to second the government’s main argument in its efforts to convince its partners and others that what it did on September 24 was in national interest and in the interest of Iran too – giving time to Iran and others for negotiations. On the other hand, the official Left which has been trying hard to balance between saving its own independent political image and its desperate need to keep rightists out of power by supporting the government too will be able to continue balancing them consistently for some more time. When everything seemed safe, the government informed the Left what everybody already knew by then:

“At the eighth meeting of the United Progressive Alliance and the Left parties here, two days ahead of the crucial IAEA meeting in Vienna, the Government apprised the Left leaders of the progress made. The indication is that there is a possibility that there will be no voting and till now there has been no draft resolution suggesting that the matter be taken to the United Nations Security Council.”

As expected the government sought to convince its critiques that the postponement was the success of the diplomatic efforts to which it became a party by voting affirmatively on September 24. Finance Minister told the media, “The Government informed the Left parties of the progress made through diplomatic efforts. It was noted that the Government’s intention was to ensure that the matter remains within the jurisdiction of the IAEA”. (6)

2 Neo-liberal consensus and the foreign ministry

Ambiguity and opportunism have always constituted the bedrock of Indian foreign policy. Even during the Cold War, India’s choice for “non-alignment” was opportunistic rather than a matter of principle. Non-alignment allowed it a space to manoeuvre and bargain in the bipolar atmosphere. On the one hand, the already established strong capitalist interests in the country motivated the Indian state to establish channels that could facilitate their integration in the world market dominated by the West under the US. But, on the other hand, the lateness of capitalism in India kept it devoid of a systematic infrastructure for domestic capitalist expansion on the basis of which its capitalist interests could integrate and compete in the world market. The required support for this could come only from the Soviet camp, which envisaged a similar model for “national capitalist development” in third world countries. This dualism on the part of the Indian State made it opportunistic par excellence.

This opportunism has acquired new dimension in the post-Cold War liberalisation phase. The uneasiness that India feels today when it has to take a clear stand on international issues derives from the multi-layered, often contradictory, nature of its integration in international political economy. Its apparent opportunism is starkly reflected throughout its international dealings. Ever since it did nuclear tests in 1998, India seems to be caught in a schizophrenic existence, unceasingly oscillating between over-confidence and desperation. Events in the year 2005 evidence this eccentricity at least twice, earlier on the issue of Nepal and now on Iran.

Political analysts generally take this political behaviour at their face value. They fail to grasp the underlying stress and strain. Since Rajiv Gandhi’s open avowal to ‘neo-liberalise” the Indian economy with his New Economic Policy, there have been opportunities to test the words and deeds of almost all the major political fronts in the country. Since Rajiv Gandhi’s defeat in 1989, we have seen 8 Prime Ministers taking over (if we include the 13 days rule by Vajpayee in 1996). All these leaders despite their diverse political and ideological allegiances have been consistently wed to the basics of neo-liberalism. Finance Ministry has been remarkably consistent in its attitude throughout the two decades since 1985. Ideologies and ‘politics” have served to divert their social fallouts rather than to guide the overall policy designs.

The interior or home ministry along with the external affairs or foreign ministry takes on the tasks of making the ground fertile for the practice of neoliberalism. The Home Ministry has always been important for smoothening the track for capital accumulation by securing property relations and bringing material and “cultural” commons into the fold of these relations. However, less recognised is the fact that since the neo-liberalist economic policy is fundamentally designed to facilitate the entry and exit of capital and to administer the process of international capitalist integration, the External Affairs or Foreign Ministry eventually becomes the most active in this phase. Synchronising the global market dynamics and political reality is the major task undertaken through this ministerial coordination. The motivational glue is provided by keywords like pragmatism and the trans-political (de-politicised) notion of national interest. This pragmatism is nothing but a sanctified discourse to justify the “realpolitick” of making best of opportunities, or opportunism.

3. The crisis of mainstream left nationalism in India

The so-called experts on international relations and security issues have divided India’s international activism in two phases – the idealist phase and pragmatist phase, Rajiv Gandhi’s reign being generally considered the turning point. Despite being superficial and meaningless, this division sufficiently indicates at its purpose, which is simply to disparage the principle of non-alignment as utopian and to justify the pro-US tilt. Similarly these self-acclaimed ‘security intellectuals’ have redefined the all-accommodative notion of “national interest” in “Social Darwinian” terms. They have succeeded sufficiently in derailing the task of a serious inspection of the real context in which the Indian foreign policy is taking shape, of understanding it in terms of the continuity and change in Indian capitalist development.

Even the Left in India has been mesmerised by this ‘realpolitick’ definition of national interests, not trying to reinterpret them in terms of class and class interests. Eventually they too become prisoners of the supra-class nationalist ideology. This has been starkly evident in the ongoing debate on India’s “interest” in the Iranian nuclear crisis. The Leftists tried to assess India’s “national interest” in terms of ‘national’ material gains, the same basis on which the ruling elites are grounding their defence. Asking for an independent foreign policy in general, on this particular issue Prakash Karat, the general secretary of the Communist Party of India (Marxist), said, “If the Centre decides to vote against Iran, it should be viewed seriously as the focus should be on Indian interests, without succumbing to outside pressures”. And, hence, “India, which imports 70 percent of its oil, should maintain good relations with Iran and be alert of the designs of the ‘imperialists’”.(7) So the “focuses” are national sovereignty, “national interests” and pragmatism. Does any mainstream political formation differ on the primacy of these “focuses”? Does the Indian state deny them? In fact, by retelling all the known facts leading to India’s September 24 vote, the Indian government has been repeatedly showing that whatever it did was its own sovereign decision. Further, on the question of national material interests too, Indian policies pro-US tilt can be explained on the basis of India’s dependence on the Western (especially the US’) market and investment.

The mainstream presentation of ‘national interest” allows the hegemonic political economic interests to homogenise the ‘nation’ behind their designs. In a class divided and stratified society any such homogenisation ultimately harnesses the ‘people’ for the royal ride of the state and the ruling classes in pursuit of a “national” political economic expansion. Instead of recognising and sharpening the class conflict underlying the neo-liberal polity, while fighting its ideological transcendence in the discourse of nation and “national interests”, the Indian Left in its eagerness to become part of the ‘national mainstream’ is helping in conserving the national pomposity that characterises the Indian foreign policy, which politically sustains the Indian capital’s global pursuit. It seeks a nationalist compromise that can synchronise its “interests” with the State’s “national interests”. In the event of this uncritical acceptance of the political philosophy that underlies the Indian state policies, even anti-Americanism in the Indian leftist discourse is well utilised in supplying versatility and strength to the Indian state’s manoeuvrings and bargaining.


(1) Stand at Vienna will be in national interest, says Saran, The Hindu, November 17, 2005

(2) Iran’s armtwisting begins: fix Vienna mistake or else, The Indian Express, November 13, 2005

(3) Delhi will tell Iran: Keep N-politics out of pipeline, The Indian Express, November 16, 2005

(4) Ibid

(5) US backs Russian Plan to resolve Iran Crisis, The Washington Post, November 19, 2005

(6) Left apprised of stand on Iran issue, The Hindu, November 22, 2005

(7) PTI, India must have independent foreign policy: Karat, posted on November 20, 2005

Volcker’s Report Reread: Business, not Corruption

Pratyush Chandra

The Report on Programme Manipulation (Volcker Report) brought out by the Independent Inquiry Committee (IIC) into the United Nations’ Oil-for-Food Programme provides a graphic account of how Saddam Hussein’s regime struggled to “launder” a meager sum of 1.8 billion dollars in the span of more than two years. The Report seeks to demonstrate how Iraq had to manipulate the sanction regime and play on various companies and agencies involved in the OFFP to obtain that amount.

I Saddam meant business!

The timing of the Volcker Report makes it an efficient tool for providing legitimacy to the American occupation and delegitimizing the UN’s ability to act as a multilateral world power opposed to the unilateralist US. Despite this, one may commend Volcker and his associates for describing Saddam Hussein’s scheme in such minute details. It seems that they used every real, half-real fact to complete this picture, putting many politicians and businessmen, who shook hands with Saddam Hussein when he was Iraq’s head-of-state, in the range of ‘suspicion’. However, a brief scrutiny shows that the whole exercise is an exposition of what every petty businessman does to survive in the world of competition, monopolies and surveillance. Of course, the Iraqi ruling elite and its “national” oil bourgeoisie had to be smarter as, on the one hand, the eyes of the competitors in the fellow oil economies and Western corporate oil companies were constantly watching the effect of Iraq’s primitive “in kind” oil sale on their own “in cash” transactions; while, on the other hand, any slack would have only hastened the execution of “what was already written” – the pending invasion by the US.

Iraq tried to make good use of its only privilege under the OFFP, choosing its oil buyers. The Volcker Report complains:

“Yet the decision to allow Iraq to choose its buyers empowered Iraq with economic and political leverage to advance its broader interest in overturning the sanctions regime. Iraq selected oil recipients in order to influence foreign policy and international public opinion in its favor. Several years into the Programme, Iraq realized that it could generate illicit income outside of the United Nations’ oversight by requiring its oil buyers to pay “surcharges” of generally between ten to thirty cents per barrel of oil.”

Only this privilege provided Iraq a degree of economic sovereignty, which other countries enjoyed more amply. And what it did with this privilege was nothing different from other countries. Every country requires a friendly international atmosphere to survive and grow, and it utilizes every means under its command to build it, and Iraq had only one way to mobilize “international public opinion in its favor” – by selecting oil recipients. Others, too, do have this privilege, but they have more than simply this.

The Volcker Report notes that Iraqis started by appeasing US companies, but found no effect on the US government’s attitude towards Iraq. So they had to approach other Security Council members to influence international bodies, like Russia and France. But this did not mean that the US companies didn’t gain by these arrangements. The report itself finds, “a substantial volume of oil under contract with Russian companies was purchased and financed by companies based in the United States and other countries.” So it was really, business as usual!

As far as “surcharges” are concerned, they were ‘illicit’ because Iraq was exceptionally segregated from involving itself in the ‘licit’ price war in which its competitors were engaged. And even the Bretton Woods institutions (WB/IMF) would admit it is not illegitimate to ‘curb’ the laws if they put hurdles in the ‘natural’ dynamics of market and capital. What Iraq did was nothing exceptional for a businessman facing a legal system adverse to his business interests. It was doing what was best for it in the face of UN induced ‘market imperfections’.

The other source of illicit income obtained by Iraq was “kickbacks paid by companies that it selected to receive contracts for humanitarian goods under the Programme”. The Volcker Report notes that here too “political considerations influenced Iraq’s selection of humanitarian vendors”. Interestingly, the Report itself accepts the legitimacy of this kickback policy by stating that it “began in mid-1999 from Iraq’s effort to recoup purported costs it incurred to transport goods to inland destinations after their arrival by sea at the Persian Gulf port of Umm Qasr”. However, the Report complains that Iraq could have sought approval from the United Nations for compensation of such costs, without noting that under normal circumstances any intermediation in such bilateral arrangements are abhorred. So why will Iraq like any other country or even business entity not covet sovereignty in its contractual engagements? Why will it allow UN surveillance in whatever it does? Why cannot it have its own business secrets? Why will it not engage in profiteering in the limited ‘market’ and opportunity that it is granted?

What Saddam Hussein’s Iraq and agencies dealing with it did were the only ‘rational’ business options before them under the exceptional regime of politico-economic sanctions. Its few loopholes were the only source of opportunities available for them, from which, even the Volcker Report admits, Iraq could not gain much except a few billion dollars. Whatever else it could acquire under the Oil-for-Food Programme was just enough to survive in destitution – food, medicines etc. The Programme was not meant for the reconstruction of the economy destroyed by bombs and isolation.

II Committee’s Unintended Conclusion

Less known is another report brought out by a Working Group instituted by Volcker’s Independent Inquiry Committee, The Impact of the Oil-for-food Programme on the Iraqi People (7 September 2005), which explicitly puts the very purpose of the OFFP as its main negative aspect:

“The short-term approach of the OFFP, essentially as a relief operation, led to many missed opportunities for greater impact, and indeed to some actual harm. A more effective humanitarian approach would have aimed to restore productive capacity, repair infrastructure, generate employment, and use the extensive capabilities of the Iraqi people to support their own livelihood. The basis for the “relief” approach was presumably at first the perceived urgency of the deteriorating situation – food had to be supplied – but the opportunity to move towards support to livelihood was not taken, for reasons such as the policy of reducing the Government of Iraq’s access to hard currency.”

The so-called “corruption” in the OFFP was fundamentally linked with the struggle over the “access to hard currency”. The UN and the hegemonic forces were hell bent upon enfeebling the Iraqi economy by making it cash-stricken; while Iraq was determined to utilize whatever limited opportunities the loopholes in the OFFP granted it. It even went on offensive by attempting to cut on dollar’s seigniorage by selling its oil in euro. (The Observer, 16 February 2003) Against all these, the OFFP’s realpolitik was rendered ineffective.

Hence, the dual purpose of the Programme was to allow the Iraqi population survive, while inciting them against the ‘intransigent’ regime of Saddam Hussein by providing opposed images of this intransigence against the “humanitarian” external forces. When the lingering sanctions and hardships seemed to homogenize the society furthermore making the possibility of any internal revolt very remote, and Iraq was able to “corrupt” the realpolitik of the Programme, the Security Council’s bosses began finding it obsolete. As the Report on the OFFP’s impact clearly states, the Programme as a “relief operation” was a marvelous success on almost every humanitarian account despite administrative problems and “corruption”. But this success could never be a reason for its continuance. Hence, the invasion took place.