India is among “big brothers” of WTO: Pascal Lamy

The WTO Chief seems to know perfectly well what phrases would attract his audience in India today. This way they feel themselves to be in the company of global abusers.

    “Among the big brothers (in WTO) are the big developing countries. China, India and Brazil (are the) three big brothers,” Lamy told reporters.

    He said the three countries, along with key players like Australia, EU and the US constitute the world of today.

Krugman’s “great illusion”

Economist Paul Krugman in his latest column in NY Times (Aug 15, 2008) entitled “The Great Illusion” expresses his concern at the possibility that “the second great age of globalization may share the fate of the first”. And it is the recent Russia-Georgia conflict that makes him say so. To be more explicit he goes on to explain that “our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.”

Krugman’s above statement clearly shows his lack of any historical sense. When was that “world of large-scale international trade and investment” free of (militarist) nationalism – a mechanism to protect that “large-scaleness”? And much of the “nationalism” which destroyed that world was in fact a revolt against that “large-scale” militarism. Yes, it destroyed the Pax Britannica – it was a war against the war monopoly.

On the one hand, Krugman seems to tell that national self-sufficiency at least with regard to “the current food crisis” is at last clearly shown to be not “an outmoded concept”. But he is in fact accusing nationalism of “many governments” for “leaving food-importing countries in dire straits”. He further finds that there is a rise of “militarism and imperialism” as “it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization”. Obviously, for him, “Russian energy” and Chinese big economy are the real threats as they have the capacity to manipulate world polities and economies to submission.

Then what is the Pax Americana? Is it not militarism, imperialism and manipulation, that we witnessed throughout the 1990s and afterwards? When did war-mongering and militarist build-up end during the “Pax Americana”? Increasing manipulative capacities of other countries and their political economy at the most demonstrate a globalization of “militarism and imperialism”.

Krugman rightly questions those analysts who “tell us not to worry: global economic integration itself protects us against war, they argue, because successful trading economies won’t risk their prosperity by engaging in military adventurism”. He thinks “the foundations of the second global economy” are solid than those of the first only “in some ways”, “[f]or example, war among the nations of Western Europe really does seem inconceivable now, not so much because of economic ties as because of shared democratic values”. So euro-centric Krugman, like Stiglitz, ultimately thinks the West not to be adventurist because of its democracy, but ah! “much of the world, however, including nations that play a key role in the global economy, doesn’t share those values”. So does he think the Pax Americana to which the West has submitted is about peace and democracy, which is now being threatened by the despotic Orient?

Krugman rightly concludes that “the belief that economic rationality always prevents war is an equally great illusion”. But like any other ordinary bourgeois he thinks economic rationality can prevent war when coupled with “democratic” values of the West. Obviously he can’t see the fact that economic rationality is about competition, representative democracy is about competition, and a war is competition par excellence. They are all ultimately the same – diverse moments in the life of “social capital”(1). Krugman refuses to recognize that capital whether protected by democratic regimes or not is at constant war against labour – which needs to be divided and controlled if it is to be exploited – and Western xenophobic megalomaniac nationalisms have always been nurtured for this reason. Where is the country in the West free from state-sponsored Ku-klux-klanesque policies and activism against migrants and “the other”? The neo-capitalist regimes have learned their lessons properly – obviously at the cost of threatening the established monopolies. It is not an end of globalization, as Krugman prognosticates, but a new stage – and a more barbaric stage – of capitalist globalization.


(1) “Here social capital is not just the total capital of society: it is not the simple sum of individual capitals. It is the whole process of socialization of capitalist production: it is capital itself that becomes uncovered, at a certain level of its development, as social power”. (Mario Tronti (1971), Social Capital)

Has “the ghost of an incipient Indian imperialism” grown up?

Writing in 1949 N.V. Sovani in his ECONOMIC RELATIONS OF INDIA WITH SOUTH-EAST ASIA AND THE FAR EAST (OUP and Indian Council of World Affairs) talked about the “ghost of an incipient Indian imperialism”:

Indian migration to Ceylon, Burma and Malaya, as explained above, was largely under the aegis of the British. It could take the form it did only under the circumstances that British imperialism created. The withdrawal of British imperialism from these areas – though only half way through in Malaya – has changed the entire background. Indians abroad are likely to encounter increasing opposition. The Indian trading and commercial interests in these countries have evoked stronger and more bitter resentment, and it is likely that more and more restrictions will be placed on their activities. This is not an isolated phenomenon. Foreign elements all over South-East Asia are experiencing a similar fate. The reaction against the Chinese in Siam and lately in the Philippines are cases in point. Such a development is but natural during the transition from a colonial to a national economy. Realizing the new set-up of things the problem of Indians will have to be continuously handled in such a manner as to lay the ghost of an incipient Indian imperialism./page 68/

Now sixty years after, the Indian neoliberalisers and their western promoters are unabashedly boasting about “reverse imperialism”.

Gainers gain, losers lose

Today (Aug 06) Mint carried an article written by one of its columnists which shows how neoliberalism in India has made the rich richer and the poor poorer at the geo-structural level.

The article concludes on the basis of recently released data on “outstanding loans sanctioned in a particular state/region and utilized in that place” – much has changed since India officially took steps towards liberalisation (according to the author, the economy has overall gained), however, “there are winners and losers…, there are some regions that have gained more than others”. What is most significant in the data (which the author does not explicitly recognise) is that it remarkably demonstrates that the geographical hierarchy that prevailed prior to the 1991 counter-revolution persists with hardly any reshuffling, while the vertical gap has tremendously increased. The data is significant since neoliberalism is mainly about financialisation and capital investment through the instruments of usury, debt and the credit system, which seemingly are, what the data perhaps substantiates, “radical means of accumulation by dispossession”, as David Harvey would put.


1. “Comparing the data for end-March 1991 with the recently released numbers for end-March 2007, the northern and western regions have been the biggest gainers in terms of credit growth. In March 1991, the northern region accounted for 18.3% of the total credit outstanding—that percentage rose to 21.9% in March 2007. The western region, which accounted for 27.5% of total credit outstanding in the country in 1991, saw its share rising to 31.5%. The southern region’s share increased modestly from 28.1% to 28.5%. The losers were: the east, with the region’s share down from 12.3% to 8.9%, the central region (which includes Uttar Pradesh), whose share fell from 12% in 1991 to 8.1% in 2007, and the North-East, for which it declined from 1.7% to 1%”.

2. However, the gain in the northern region is virtually sham as “it’s Delhi that gained the most, with its share of credit going up from 7.1% in 1991 to 12% in 2007. The shares of Haryana, Punjab, Himachal Pradesh and Jammu and Kashmir all declined over the period, while that of Rajasthan was flat”.

3. “In the east, West Bengal’s share fell from 7.7% in 1991 to 5.3% in 2007, Bihar’s share (including Jharkhand) decreased from 3% to 2% while Orissa’s share remained flat at 1.6%. In the central region, the share of Uttar Pradesh, or UP (including Uttarakhand) fell from 7.9% to 5.2%, while that of Madhya Pradesh, or MP (including Chhattisgarh) declined from 4.2% to 2.9%”.

4. “In the south, the big beneficiary has been Karnataka—its share went up from 6.4% to 8.8%. Kerala’s share went down from 3.7% to 3.1%, Andhra Pradesh’s from 7.2% to 6.6% and Tamil Nadu’s from 10.6% to 9.9%.

5. “The data also corresponds to the increasing metropolitan focus of credit delivery. The numbers show that 66.1% of credit was utilized in the metropolitan centres in 2007, compared with 46% in 1991. Naturally, this will mean more credit growth in places such as Delhi and Mumbai. That’s probably the result both of the decay of rural India as well as the more rapid growth of these centres”.

6. Comparing the recent data with the distribution of national credit pie during 1981-91, Delhi’s share actually fell “from 10.2% in December 1981 to 7.2% in March 1991. Growth in that period was more uniform, with all the southern states except Kerala gaining modestly during the decade, as did MP, UP, Orissa and Assam”.

7. As for the political conclusion of the above economic phenomenon, the author shivers at the prospect of increasing “demands for redistribution” along with migration. “These will create immense political strains between Indian states and the potential for serious differences.”


    “They have exemplified the saying: To him that hath, more shall be given; and from him that hath not the little that he hath shall be taken away — The rich have become richer, and the poor have become poorer; and the vessel of the state is driven between the Scylla and Charybdis of anarchy and despotism. Such are the effects which must ever flow from an unmitigated exercise of the calculating faculty”. (Shelley, ‘The Defence of Poetry’)

Untouchability and Indian capitalism

Below is an interesting story published by The Observer. It shows how stratification specific to a society is reproduced and even intensified under capitalism, with competition being generalised. Caste, race and all other hierarchical identities of yesteryears are transformed into competitive identities, as well as inducing market segmentation – the upper caste/race seeks to maintain its supremacy utilising every brutal means, while the lower caste/race tries to assert itself. A schematic radical would call this situation semi-feudal, as it seems to him/her an aberration to “pure” idealised capitalism. Is there anything like that? But who can argue with the convinced ones – ever afraid of dropping the coloured glasses that their fathers lent them? This forces him/her to go in all kinds of ‘bourgeois democratic’ alliances – in order to sweep away the “vestiges” of “pre-capitalism”, before removing capitalism and the capitalists. So much for his/her utopianism and idea-lism.

India’s untouchable millionaire

Entrepreneur who escaped the rigid caste system warns that it is becoming more divisive as India grows richer

Amelia Gentleman in Agra
Sunday May 6, 2007
The Observer

As a child, Hari Pippal slept alongside his six sisters and eight brothers on a stretch of pavement. As a teenager, he pedalled a bicycle rickshaw to help feed the family. Now the owner of a large, profitable private hospital, a shoe factory, a motorbike dealership and a successful restaurant, Hari Pippal has become a symbol of the enormous possibilities available in new India to anyone with entrepreneurial flair.

The fact that this self-made millionaire has risen to the top despite being a Dalit (an untouchable) has prompted some to promote his achievements as proof that, as India races towards economic transformation, a more egalitarian society is emerging. Magazines feature him as a Dalit success story. Pippal, however, is uneasy with his status as poster boy for a casteless modern India. He believes his triumphs have come in spite of his caste and warns that, as India becomes richer, caste divisions are becoming ever more pronounced. At the headquarters of his business empire, he said: ‘As a rule India’s economic boom is only enjoyed by high-caste people. This is a great tragedy for India, because so much talent is being excluded. I feel real despair.’

The Hindu concept of untouchability was abolished in 1950, but the challenge of eradicating prejudices dating back thousands of years has defeated successive governments. Last week in Delhi the issue of caste-related inequalities divided politicians as they argued over the merits of extending affirmative action programmes in universities for backward castes. Prime Minister Manmohan Singh has compared the caste system to apartheid South Africa. ‘Untouchability is not just social discrimination; it is a blot on humanity,’ he said.

Pippal believes that the government needs to force the blossoming corporate sector to introduce positive discrimination schemes of the kind which have existed in the public sector for decades.

‘The government believes the scheduled caste [the official term for Dalits] is coming up, that the caste system is disappearing. That is wrong. The gap between the scheduled castes and the higher castes is increasing,’ Pippal said. ‘Lower castes are still very poor. Without money it’s hard to take advantage of the new opportunities, so they stay poor and everyone else gets richer.’

Pippal became conscious of his status on the first day at school. His teachers would mutter in his direction: ‘You people are ill-educated, badly dressed and don’t know how to behave’. Consigned to do the jobs no one else wants – latrine-cleaners and roadsweepers – Dalits have traditionally been forbidden from touching the food or water of upper castes. Pippal, 56, remembers how teachers would never ask him to bring them water or invite him to eat with them, as they did other higher-caste pupils.

‘I responded by deciding I had to be better than the others – cleverer, better dressed, better behaved, more successful,’ he said. But the snubs and subtle insults have lasted a lifetime. His surname identifies him as a Dalit, so when he opened his first company he called it ‘People’s Export’ – which sounded about the same, but did not have the same negative connotations.

When he opened his hospital in 2004, it was difficult to recruit high-caste doctors, many of whom would not contemplate working under him. Because the hospital, a few kilometres from the Taj Mahal, swiftly gained a reputation, attitudes changed and he now employs 25 upper-caste doctors. Even now, several of the Dalit doctors avoid revealing their surname, relying on initials so that they don’t alarm higher-caste patients.

When the oldest of his five sons said that he was engaged to a girl from a higher caste, Pippal was happy that his son had found someone he loved. Her parents, too, made no objection to the match, but a few days later about 100 people from her community arrived at Pippal’s flat, threatening to kill the girl’s parents if the marriage went ahead. ‘I told my son that he would destroy their whole family if he persisted in the marriage, and he understood,’ Pippal said. The son recently married a Dalit doctor from his father’s hospital. ‘Now I believe my children should marry within their caste. It’s better that way.’

India has a number of Dalit role models who have battled their way to the top. This year KG Balakrishnan was sworn in as chief justice of India, the first Dalit to hold the post. Narendra Jadhav, the chief economist of India’s central bank, is a Dalit. Yet the social mobility which usually accompanies rapid economic growth has barely touched this 150 million-strong community, the bulk of whom remain deprived and oppressed. Dalits die sooner and are more likely to be malnourished, unemployed and murdered than others.

Pippal knows how exceptional his life has been when he meets his contemporaries from primary school. ‘All of my school friends of my caste are still sitting on a pavement making shoes,’ he said. ‘They are angry with the system, but what can they do?’

Eroding India’s “competitive advantage”?

Business Standard on May 03 had an interesting article (posted below) about the erosion of India’s comparative advantage in IT – cheap labour seems not so cheap now. Even if labour is still cheaper than the ‘advanced’ countries’, but then productivity is far lower. Solutions are suggested – off to KPO. Also, “Some feel there is nothing to worry as India is rapidly creating huge economies of scale in IT offshoring, which offset the inflationary pressures of salary increases”. This bubbly boom and bust of BPO – how much does it affect the country’s overall economy – the P(roductive) F(orces)/P(roduction) R(elations)?

BPO`s diminishing competitiveness
Shyamal Majumdar / Mumbai May 03, 2007

The cost-arbitrage benefit may erode if the meagre productivity of IT staff is factored in.

In a survey released yesterday, CLSA Asia Pacific says 40 per cent of India’s information technology employees expect their salaries to rise by 20 per cent annually over the next 10 years. Two-thirds expect at least a 15 per cent growth. While this indicates continued all-round prosperity for IT employees — for example, the IT professionals spend $1 billion annually just on eating out and almost half in the 28-35 age group had an international vacation last year — how does the zooming salary bill impact the competitiveness of India’s outsourcing industry?

The jury is still out on this. Some feel there is nothing to worry as India is rapidly creating huge economies of scale in IT offshoring, which offset the inflationary pressures of salary increases. Many outsourcing companies are implementing large team sizes and long-term projects to help maintain utilisation levels at above 75 per cent.

But there are quite a few other analyst firms which feel by 2010, India may become too costly to provide low-end services at competitive costs. For example, Evalueserve, a leading provider of knowledge process outsourcing services, says Indian salaries have increased at an average of 14 per cent a year. If this trend continues, the cost-arbitrage benefit would get reduced from the present 40 per cent to 25 per cent by 2010.

Or, listen to The Conference Board. The world’s pre-eminent business membership and research organisation has been a longtime supporter of outsourcing and offshoring American jobs to cheap overseas labour markets. It said in a report in 2005 that potentially massive savings in wage and benefit costs will continue to drive the global offshoring movement.

But the same organisation is now questioning the economic benefits of outsourcing. In a study in October last year, the Conference Board said the competitive advantage of low-wage countries is often exaggerated once the meagre productivity of their workers is factored in. The study said the comparative cost advantages of taking your business to low-wage countries such as China or India are often not the bargain they seem when wages are adjusted for low productivity. The manufacturing sector in India and China only pays between 2 per cent and 3 per cent of the US compensation level on average.

But labour productivity in these countries is also far below the US level at 12 per cent to 13 per cent.Though the productivity levels at present exceed compensation levels by a considerable margin — unit labour costs in China and India are on average 20 per cent lower than that in the US — The Conference Board warns that the one critical lesson for businesses that benefit from one-time labour cost benefits when investing in low wage countries is that productivity gains from new technology and innovation have to keep pace with often fast rising wages of skilled and semi-skilled workers. Or the cost advantage begins to erode.

The worry is real. For example, according to Deloitte research, the top 10 per cent of the IT workforce in India has been receiving an average salary rise of more than 40 per cent. In contrast, most IT employees in the US received a salary rise of five per cent or less. Though salaries in the US are still, on an average, nearly 10 times higher than those in India, the gap is sure to diminish over time. One reason for the fast-rising wages is the limited “employable” pool.

The Indian education system is not churning out enough computer science and electronics graduates. For instance, though India’s 272 universities and nearly 14,000 colleges churn out over 25 million graduates, only about 300,000 enter the workforce as engineers. And, out of that, maybe just 30 per cent are suitable for the software and IT services industry.

One way out of the diminishing competitiveness could be to go up the value chain — from voice-based services to knowledge process outsourcing. According to an Evalueserve study, the global KPO market is expected to grow at a cumulative annual growth rate (CAGR) of 46 per cent. Compare this with the prediction for the low-end outsourcing services market. This is expected to have a CAGR of 26 per cent.The high-end KPO opportunities are immense for Indian firms.

For instance, look at some of the figures pertaining to intellectual property research. Drafting and filing of patent applications in the US is quite expensive. A typical application costs about $10,000 to $15,000 to draft and file with the United States Patent and Trademark Office. Cost savings from offshoring even a portion of the patent drafting process can easily save up to 50 per cent of the cost for the end client, according to Evalueserve.

One Millionaire and Millions Poor

The Communist Party of India’s MP and veteran trade union leader Gurudas Dasgupta was at his best in the Lok Sabha on April 26, 2007, where he lambasted his party-supported government on its track record over labour issues. He in fact, asked his comrades to review their support to this “blind-to-facts” government. However, it seems he still views the anti-labour attitude as a problem of the government’s eyes being “blind to facts” or being “closed”, not a systemic symptom related to the ‘class capacity’ of the State and the government.

Following is an excerpt from his speech published in Business Standard:

Madam, we have a unique coinage — facilitator. Government is the facilitator of economic growth. Since it is the facilitator of economic growth, its eyes are blind to facts. In order to open the door for foreign capital, eyes are closed. This is the economic background of your ministry. Madam, it is being understood deliberately — I do not say by the Ministry of Labour but the Ministry of Finance — that the trade union movement is a roadblock and all the labour laws are obstacles.

Madam, what is the situation? Honourable Labour Minister must be confronted with facts. The economic figures are like this. Productivity has increased in the country. Output per unit has increased in the country. Untaxed dividend has increased in the country. You understand untaxed dividends. You never touch the dividend. Mr. Chidambaram had no political will to touch the dividend because he is friendly to investors, I do not say he is friendly to the corporates. Therefore, dividend is untaxed. There has been growth of not only millionaires but billionaires in the country.

Madam, please do not laugh at me if I say that it is easy to become a millionaire in India, but it is difficult to reduce poverty in India.

The Congress party came to power, defeating the BJP on the promise that it will do something better. Are they doing better? May I call Shri Chidambaram, Mr Failure?

Therefore, the point is that the leaders of the government are speaking of production and productivity. On how many occasions did our respected ministers including the prime minister attend the meetings of the CII and speak of production and productivity? Do they speak of violation of labour (laws)? Have we ever heard the prime minister speaking in this House about violation of labour law? Violation of labour law is not the agenda. The agenda is to clear the deck for more investment.

When the price rise is taking place, workers are not being given Dearness Allowance. Is it social justice? I would give two examples how DA is being flouted. There was a strike in West Bengal by 2.5 lakh jute workers. After prolonged two months strike they had been able to get DA up to 200 points when the DA was due to 320 points, and this was despite the attempt of the West Bengal government. The private sector just did not give the DA. What is the remedy?

I am giving a second example. Today, a strike is on at Hindustan Motors of the Birlas. What is their demand? For six years Birlas have not given any DA to the workers. The government of West Bengal is trying to help them. Last night, the meeting broke up and the management bluntly said that it would not give the DA. What is the remedy?

Trade union movement is considered to be a criminal offence. Let me give you a example. Maharashtra is under Congress rule. There was a strike in a transport company. Only a few days back, 30,000 people were retrenched in a single day. Is it a respect for democracy? Is it a respect for trade unionism? Is it a respect for human rights?

(Excerpts from CPI leader Gurudas Dasgupta’s speech in the Lok Sabha on April 26 over the Demands for Grants relating to the Ministry of Labour and Employment. Sumitra Mahajan was in the Chair)

Corporate Philanthropy?

Why are corporate lords big philanthropists? Just now I read an article on “corporate responsibility in India”, where the author says:

The notion of corporate responsibility in India has traditionally been tied up with philanthropy and community development…“Philanthropy has been important in India since the middle of the 19th century, largely due to a strong heritage of community influence and paternalism among traders-turned-entrepreneurs,” say authors Atul Sood and Bimal Arora in “Political Economy of Corporate Responsibility in India”, a 2006 paper for the UN Research Institute for Social Development.

Philanthropy has now taken the form of foundations within companies that follow the Gandhian ideology of “giving back to society”. Such giving is the sole manifestation of corporate responsibility for many firms.

Why this desperation to “giving back to society”? Definitely, “Philanthropy” is a pre-capitalist element that capitalism has inherited – it transforms class division based on exploitation into an ideologico-ethical hierarchy. However, it additionally helps in suppressing the starkness of the fallacy that characterises capitalist ethics, which Duncan Foley calls Adam’s Fallacy –

The specific fallacy is Smith’s claim that the pursuit of self-interest, which has to be balanced against regard for others in other human interactions, can be trusted to lead to good outcomes both for oneself and others in the context of competitive market interactions.

Of course, the political economy of Aid is also there which is literally buying off the oppressed (meaning their ‘representative’) to normalise/naturalise capitalism and its exploitative nature – politically, economically, culturally, morally… Normalising Corporate Misanthropy is the Responsibility of Philanthropy. Distrust is inbuilt in philanthropic action – “give back” something or they will “take away” everything.

How true was Blake:

Pity would be no more,
If we did not make somebody poor;
And Mercy no more could be,
If all were as happy as we.

On the logic of imperialism – US & India

To say that the US invasion of Iraq “was not all about oil” is nothing novel. The triviality of “all about oil” argument is perhaps most clearly shown in the works of Marxists like Cyrus Bina. When neoliberal economic journalists like Swaminathan S Anklesaria Aiyar criticise this argument, they ultimately circularly reiterate the same argument – not all about oil, but still all about oil. So he in one of his recent gems published on 10 March 2007 starts with saying:

“Many Indians, including respected foreign policy analysts, believe that the US invaded Iraq and ousted Saddam Hussein in 2003 simply to grab his oilfields. “Its all about oil,” they said. Well, it’s now four years since the invasion. Yet, we see no sign of the US grabbing Iraq’s oilfields”.

And ends by:

“The US still has a strong interest… in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers. So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

That’s just “one reason”, but in Aiyar’s write-up it is the only “one reason”.

Definitely, we cannot ask him to comprehend the dialectics of abstract and concrete, essence and appearance etc – the complex relationship between economy and polity, where we cannot reduce any to the other. Also, we cannot expect him to avoid the circularity of bourgeois economics.

However the interesting aspect of his article is the details which he offers to prove his “not all about oil” argument – when he draws parallel between Indian and the US oil interests:

“Those familiar with India’s oil policy will find the Iraqi controversy over production sharing [contracts to foreign companies] mystifying, even comic. India has long signed production-sharing deals with private and foreign oil companies, and nobody regards this as a sellout.

The latest bidding round this year drew 32 domestic and 36 foreign bidders. In production-sharing deals, the foreign or private sector partner bears all exploration costs, but shares with the government any oil or gas that is found. The terms of production-sharing have varied in different rounds of bidding in India.

But typically the winning bidder whether Indian or foreign first gets enough oil to recover costs of production and exploration (called cost oil); then gets two to three times as much as profit oil; and then hands over most or all of the residual production to the government.

For instance, the government’s share in gas at Reliance’s Krishna-Godavari field starts at roughly 15% at the beginning and goes to 85% in later stages.

The most successful foreign explorer in India has been Cairn Energy, which hopes to produce 7.5 million tonnes a year from its fields in Rajasthan. British Gas has also experienced some success.

ONGC itself has entered into production-sharing contracts in no less than 15 countries, including Russia, Vietnam, Sudan, Venezuela, Canada, Brazil, Nigeria and Cuba.

Reliance Industries has also signed production-sharing deals in Yemen, Oman, East Timor and Colombia. Indeed, ONGC and Reliance have jointly signed a production-sharing deal in guess where? Northern Iraq. This is not Indian imperialism. Nor have these Indian oil companies encountered US resistance.

So, Indian foreign policy analysts who think the Iraq invasion was all about oil, need to brush up their knowledge of the oil business. They are living in the past.

There was indeed a time when the US used military power to back US oil companies. When Mossadegh in Iran nationalised oil companies, he was overthrown in a 1953 coup masterminded by Britain and the US. However, that was the last act in the history of oil imperialism.

This was shown when OPEC countries in 1974 nationalised all oilfields, converting oil multinationals from owners to just buyers of oil. Some US diplomats and politicians wanted military action to regain the fields. But the US Administration ruled that the days of oil imperialism were over, and it was time to deal with sovereign governents.

The US still has a strong interest as does India in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers.

So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

Here Aiyar has given some facts, ignored even by leftists suffering from third worldism. They are relevant for understanding the material base of India’s expansionist, even imperialist ambitions. Private (foreign and domestic) and State capitalist production sharing is nothing new. In recent years, India’s state oil companies like ONGC have been proactively involved in satisfying the energy requirements of India’s capitalist development by their overseas exploration and operation. Aiyar also tells us that now private capitalists like Reliance are increasingly being given space in this industry, where the State had been the pioneer.

However, for Aiyar, if “this is not Indian imperialism” then there is no US “oil imperialism”. But why do we presume that there is no Indian imperialism? In fact, let’s reverse the order of the argument – if all such facts have grounded US imperialist interests in the Middle East and elsewhere (even if not just for oil, but “oil matters”), then the parallel that Aiyar draws between India and the US must tempt us to probe India’s ambitions too, without precluding their possible imperialist nature. Definitely, the export of capital is not sufficient to make a state imperialist, but what makes it so is the state’s capacity and interest in defending that export through international political intervention, of which war is just a part, as Clausewitz taught us. Maybe if “Indian oil companies [in their outward expansion in the Middle East have not] encountered US resistance”, this is just another proof that India is a part of the imperialist coalition led by the US, or the US sees it as as an ally. This would give us a key to interpret the tremendous growth in the US-India-Israel relationship too.

Of course, in capitalism collaboration does not preclude competition – there will be moments when collaborating interests would clash too. But we should not presume that if collaboration between US and India is occurring, it is a patron-client relationship. Likewise, competition too is not liberation, India’s frequent amorous passes to Russia, China and others are not necessarily anti-imperialist or anti-US.

Economic Astrology

The Economic Times has a news today – IMF warns India of US economic slowdown. Something to be panicked about! However there is nothing in the report that is specifically directed to India. The IMF Deputy Director Charles Collyn has warned that

“emerging economies, including India, face the risk of protectionist pressures arising from a slowdown in the US economy. IMF deputy director Charles Collyns said capital flows to emerging markets have been strong even as corrections in these markets are getting smaller.”


“In its short-term outlook, the IMF has said notwithstanding recent volatility and the US slowdown, continued robust global growth still looks the most likely outcome. However, global policy makers and financial markets need to be ready for surprises.

This is the way astrologers cheat their clients – say things which are so general and obvious, even commonsensical idiocies and contradictory, that whatever happens, you are proven right and your business thrives. If some spices are still lacking then get mainstream newspapers to write the headings…