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.

Defining "National Interests" in Indian Foreign Policy

Pratyush Chandra

There has been a tremendous growth in politico-intellectual interest in interpreting Indian foreign policy. On the one hand, journals and newspapers are overflowing with analyses of India’s international activism, and on the other, we find a rise in institutions or ‘think-tanks’ specializing in it, both within India and abroad. However, it can be effectively contended that there is rarely any novelty in the approaches taken by these intellectuals, institutions and politicians on the issue. Most of them are restricted to producing permutation and combination of preconceived and ill-defined notions of “national interests”, “security interests”, “terrorism”, “pre-emptive measures” etc. Even progressive and ‘counter-hegemonic’ discourses are unable to go beyond conceiving the Indian policies as those of a ‘comprador’ third world ruling class, submitting to external pressures. This leads to analyses limiting themselves to mere tautological descriptions of the policies, different only in tone and of course in humanist tenor, but rarely disputing on the basic foundations of policy-making, that inform even the rightist jingoism and centrist pragmatism.

1. Indian “National Interests” – the Left-Right-Center Combined

The domestic opposition to Indian rulers’ intervention in international politics today is broadly confined on the following lines:
(1) They are compromising on the “national interests”,
(2) They are coming under the “American pressure”,
(3) As the consequence of (1) and (2), they are betraying their erstwhile “Non-Aligned Movement” (NAM) comrades.

Such tenor of opposition itself provides the Indian state a viable framework to rationalize its position. It can restrict itself to demonstrating how “national interests” are being served and sovereignty is not compromised, that it is taking its own decision and is being treated as an equal partner in the international strategic forums; further, that it is “leading” its erstwhile NAM comrades by actively representing them and supporting their political and economic sovereignty. This is effortless defense since there exists no need to defend the basic premises of the Indian foreign policy. There is unanimity across-the-board over the sanctity of “national interests”, sovereignty, the principle of “not coming under any external pressure” and India as a leader of the “third world” or “NAM” countries. The opposition counts on the evidences on which these sanctified principles are being violated, while the government in power provides counter-evidence on the same lines.

Recent debates “on the Next Steps in Strategic Partnership (NSSP), the July 18 Agreement with the United States, the September vote in the IAEA and the recent deliberations of the Nuclear Suppliers Group (NSG)” are typically confined to this mode of discourse – whether led by the leftists, rightists or centrists.

Seemingly, there is no disagreement on India’s right to be a “Nuclear Weapon State” while remaining “committed to the goal of complete elimination of nuclear weapons”. Not long ago, when with the rightist Vajpayee government’s nuclear tests in 1998, political forces of all hues and colors not only refrained from criticizing the act, but on the contrary they fought to take the credit for promoting researches which led to India’s nuclear capability. Nobody apparently denies the ideal “that the best and most effective nuclear non-proliferation measure would be a credible and time-bound commitment to eliminate nuclear weapons from existing arsenals, including India’s own nuclear weapons” and that we should “have no desire to perpetuate the division between nuclear-haves and have-nots”. However still, the left, right and center all are guilty of aspiring to see India as “a permanent member of the Security Council”. They all want India to demonstrate “a growing capability to shoulder regional and global responsibilities”, and “focus … increasingly on trans-national issues that today constitute the priority challenges – whether it is terrorism or proliferation, pandemics or disaster relief”. Further, “we cannot sit out the debates on the big issues of our times. Our interests demand a vigorous and articulate diplomatic effort that explains our positions and advances our interests.”

The quotes above are taken from a single lecture by the Indian Foreign Secretary Shyam Saran on “Nuclear Non-Proliferation and International Security” (1), wherein, despite its usual diplomatic nature, he eloquently presents the unanimous aspirations of the Indian political elites. Everybody (left, right and center) will agree with him that India’s approach to nuclear non-proliferation [or on everything] should be “a consistent one, a principled one and one grounded as much in our national security interests as in our commitment to a rule-based international system.”

While defending the recent decisions by the Indian government and its agreements with the US, he says,

“There is a continuity and consistency in our approach that may sometimes be masked by the particularities of a specific decision…. What appears to some observers as inordinate external influence over our decision-making in sensitive areas is, in fact, rooted in our own well-considered and independent judgment of where our best interests lie. This is in keeping with our tradition of non-alignment… We must adjust to change, change inherent in our emergence as a Nuclear Weapon State, change inherent in the sustained dynamism and technological sophistication of the Indian economy, and, as a consequence, change in global expectations of India as an increasingly influential actor on the international stage.”(2)

As a bureaucrat who is supposed to be “above politics”, Shyam Saran is not wary of making it a point to stress on the continuity and consistency in the policies of the Indian state, always reminding of the consonance of the present left-supported ‘centrist’ government’s policies with those of the erstwhile rightist Vajpayee government. In his defense of the Indian vote on the IAEA resolution on Iran, he stressed in his press briefings:

“I do not think that you should interpret India’s position as being aligned on the Left or on the Right or aligned with this group of countries or that group of countries. I think India has all along taken decisions on issues of concern to itself on the basis of its own assessment, and on the basis of its own national interest. So, the question of this representing a shift in India’s policy does not arise.”(3)

And he is obviously not wrong. All depends on how you define the “national interests”. And on their definition there is hardly any difference between various parties involved in the debate. One side says the government serves them, other side denies it; but nobody seeks to describe what those interests are and which sections of the society determine them.

2. “Uses of Domestic Dissent”

This fact of unanimity makes all mainstream approaches on the Indian foreign policy merely repetitive. They rarely question the basic foundation of the policy decisions. One says “compromises”, other notes “cooperation”; one notes “subjugation”, other says “equal partnership” etc. But this discursive exercise has a definite ideological role. Howsoever, this exercise seems futile, it significantly emasculates any decisive domestic opposition to the Indian state as they combine in unity on making it evermore “stronger” in the name of challenging ‘external pressure’, giving ‘international leadership’, and serving ‘national interests’ etc. It is this unanimous ‘nationalist’ tone in the Indian politics that has left the Indian hegemonic [militarist] exercises complementing and supporting the expansion of ‘national capitalist’ interests internationally unchecked.

The Indian interventions in the politics and economy of its neighboring countries and elsewhere are universally termed self-conceited and ‘big-brotherly’, but not imperialist. Hence what is seen as required is simply correcting this ‘aberration’, making the Indian policy towards these small and weak neighboring countries more ‘responsible’. The preconceived notion of a ‘third-world’ country imposed on the late capitalist countries does not allow the analysts to perceive their leadership as serving ‘national’ political economic interests by maneuvering internationally.

Further, any gesture of confrontation with the First World is termed ‘anti-imperialist’. This ‘anti-imperialism’ stresses the importance of the reconstruction of a ‘non-aligned movement’ and ‘south-south’ cooperation. But it does not take into account the material basis of a state-to-state cooperation between the “third world” countries. It does not consider the contradiction inherent in the ‘nationalist anti-imperialism’ in countries like India. At the juncture when India owns 35 percent of the FDI in Nepal, when it is the biggest investor in Sri Lanka since 2002 and has Bhutan and Maldives as perfect clienteles, do we expect India to lead another NAM? And if it does, what will be its role? Will it not be similar to that of Germany’s in EU, howsoever subservient to the US or any other global hegemonic power? Backwardness or lopsidedness of the Indian capitalism and society does not stop it from becoming expansionist and imperialist.

The indigenous corporate capitalist interests (immaterial of the adjectives we might choose to characterize them) today frame the agenda for the Indian state in the international scenario, whether pro-US or otherwise. These interests are formidably conscious and mature, as can be seen from the way the Indian state and capital combines their various strategies – a militarist combination with the US-Israel nexus, supposedly “progressive” alliance with various “third world” powers in WTO, independent oil dealings with varied forces, investments in oil fields, offer of lines of credit to developing countries in Africa and Tsunami affected countries, pipeline diplomacy and readiness to militarily-politically support all these. We cannot simply isolate one aspect of the Indian capitalist interests and generalize it to grasp their hydra-like nature. Competition and collaboration are inherent in the capitalist political economy. Will it not be just and appropriate to use this same principle to assess the “Indian designs”? Or else, we will only support them asking the Indian state to be “stronger” and will convert the opposing voices to mere instrument in its international bargaining. (4)


(1) Lecture on “Nuclear Non-Proliferation and International Security” by Foreign Secretary Shri Shyam Saran at India Habitat Centre, New Delhi, October 24, 2005, Ministry of External Affairs, Government of India.
(2) Ibid.
(3) “Press Briefing by the Foreign Secretary on the events in UN and IAEA”, September 26, 2005, Ministry of External Affairs, Government of India.
(4) In fact in a recent article by Harish Khare such use of dissent has been proudly advocated. See Harish Khare, “Uses of Domestic Dissent in Foreign Policy”, The Hindu, October 26, 2005.

For a different interpretation of Shyam Saran’s lecture, see Siddhartha Varadarajan’s India submits to the Bush doctrine?

India’s “Persian Puzzle” – A Possible Solution

Pratyush Chandra

[The recent Indian vote on the IAEA resolution is being generally interpreted as a sign of the Indian state’s subservience to the US. However, the reality belies this simplistic analysis. At the risk of being labelled economic determinist, this article brings out some facts that indicate towards the growing expansionist interest of the Indian capital. It is this expansionism that drives the Indian state to defy its ‘non-alignment’ past and design its own game-plan, which at least for now coheres with the US global strategies.]

India has finally voted in favor of the International Atomic Energy Agency (IAEA) resolution on Iran. Everybody was speculating that at last an issue has come up that will break the pace and uniformity of the growing Indo-US relations. But India has made its choice clear in the world market of strategies and alignments. There are various lines of explanation that dominate the discussion on the rationale of India’s choice on the issue. The most prevalent one is of course based on the belief that the “third world” states are congenitally incapable of taking such decisions except under the pressure from the West. This view generally presumes these states to be ‘soft’ and their ‘national’ hegemonic interests to be weak, which can easily be swayed by the external pressures. Further, any gesture of confrontation between these states and the Western states especially the US is generally taken as potentially anti-imperialist. However, this view cannot explain the Indian case as it does not capture the basic political economic processes that are increasingly integrating the Indian hegemonic interests within the global strategic alignments and realignments.

The Official Justification

Even before voting for the resolution, the Indian government had been categorically stressing that there was “no difference in objectives between India and the United States vis-à-vis Iran even if the two sides differ on tactics”.(1) Further, even when India stressed on “diplomatic consultations to evolve an international consensus on how to deal with Teheran’s decision to continue its uranium enrichment programme”, it never wanted “another nuclear weapon state in its neighbourhood”.(2) Under these circumstances India’s vote must not be taken as a surprise.

The Indian foreign ministry is not wrong when it says that India’s vote on the resolution was actually in line with whatever had already been happening. This continuity is what constitutes the “evolutionary” foreign policy of India, as envisaged by its present Foreign Minister. The Indian leadership has consistently expressed all its international dealings in terms of “national interests”, “security interests”, etc. Once again, with regard to its vote on the IAEA resolution, the justification given by the Indian state is based on an ideological depoliticization of the so-called “national interests”. In the words of the Indian Foreign Secretary Shyam Saran:

“I do not think that you should interpret India’s position as being aligned on the Left or on the Right or aligned with this group of countries or that group of countries. I think India has all along taken decisions on issues of concern to itself on the basis of its own assessment, and on the basis of its own national interest. So, the question of this representing a shift in India’s policy does not arise.” (3)

However, it all depends on the way you define the “national interest” which under neoliberalism (the professed ideology of the Indian state at least since 1991) means nothing but what provides leverage to the Indian businessmen and their businesses.

The Context

While analyzing India’s strategic maneuverings internationally, the analysts very rarely note their economic dimensions. It is scarcely admitted that India’s relationship with other developing countries after 1991 has been increasingly based on the export of capital and the Indian investment abroad. And in most of the cases, such economic relationship has been simultaneously equipped with militaristic aid to those states. India has been offering credit lines to many Afro-Asian countries that they can utilize for infrastructure building and other business purposes with a condition that they will employ Indian companies. India’s ‘non-aligned’ past has allowed it to have a major share in the capitalist subordination of the backward economies in Africa and Asia. In fact, the rhetoric of non-alignment (“South-South cooperation”) plays an efficient ideological role in rationalizing the expansionist drive of the Indian capital. Recently after India refused the foreign aid for its own Tsunami victims, the Indian External Affairs Minister, Natwar Singh, while offering Indonesians “concessional credit for reconstructing roads, buildings, harbours, ten units of fully equipped hospitals”, rattled proudly that “they were lumping us with the others but now we are seen separate offering our help and assistance”. (4)

Definitely, since 1991 India has been consistently endeavoring to be recognized as a faithful ally of the US. Its nuclear graduation and global politico-economic interests have shown the US leadership that it is a force to be reckoned with, and its subordination provides one of the most reliable allies to oversee the Indian Ocean and meet up with China. In recent years the growing energy needs of the Indian capital has forced the Indian State to invest in the oilfields abroad – India has operating assets in Sudan, Vietnam, Iraq, Iran, Myanmar, Libya, Syria, Sakhalin Islands, etc. It has been acquiring competitive amounts of shares in foreign oil companies. All these make India a player in the global oil politics too both as an investor and a consumer.

The Indo-US relationship is thriving in this context, and has a clear-cut ‘material’ semantics. India requires not having a confrontation with the “global police” state when its capital is struggling to stabilize its share in the global pool of surplus value, of which a major portion comes from the American market and the Indian investment in the US. Further, by providing dual citizenship to the Non-Resident Indians (NRIs) recently, the Indian state has further increased its own responsibility of protecting NRI capital in exchange of ‘rent’ and the assurance of repatriation of profit.

In this scenario, apparently one may interpret the Indian vote on the IAEA resolution as an appeasement of the US-led ‘coalition’. But here too there is a vital interest of the Indian capital that is playing an important role. The recent pipline diplomacy between Iran, India and Pakistan is quite well known. It is impossible to interpret the Indian vote, which is unequivocally affirmative (not even abstention!) on a resolution that is meant to isolate Iran, without connecting it to the facts of the Indian ‘oil politics’ in general and its pipeline diplomacy with Iran in particular.

The Nature of India’s Oil Interests and the Global Coalition

Recently, while rationalizing the Indian nuclearization, the Indian Defense Minister noted:

“India is a heavily energy deficient country. Of all the variables that could hinder India’s economic progress, energy scarcity and dependence are probably the most serious. Seventy percent of our crude oil is imported. Per capita energy consumption presently is only 1/5th of the world average. Considering a high growth rate of around 8 percent of GDP per year in the coming years, growth of oil demand is projected to be 6 percent per annum. If so, dependence on oil imports could rise from 70 percent to 80 (percent), to 85 percent over the next two decades. It is therefore imperative for us to look for cost-effective and long-term alternatives to meet our energy requirements. Indian oil companies are currently actively involved in a search for energy in the form of oil and gas fields, pipelines, LNG, and other new and non-conventional sources. But most hydrocarbon resources underline our dependence on limited reserves and others for this critical requirement. They also carry scope for avoidable strategic energy rivalries.” (5)

The clue to India’s alignment with the US hegemony in the Middle East lies here. Its energy deficiency, yet the desire and ability to proactively make up for it, makes the Indian rulers a player in the Middle East conflicts. Major, yet low productive oil producing industrialized countries, including the United States (6) and oil deficient industrialized economies can influence the global oil price only by appeasing or isolating OPEC countries. Since a major determinant of the oil price today is the differential oil rent appropriated by the highly productive oil economies like those of the Middle East, “cost effective” energy appropriation requires reducing this rent. The bully tactics (“either with us or against us”) of the US and other Western powers in the Middle East has been mainly geared towards this purpose.

The increasing Indian investment in the oilfields abroad was definitely triggered by the need to satisfy the domestic energy requirements, but ultimately as it happens with all capitalist ventures, these investments eventually develop their own logic of earning profit. With increasing divestment in the state owned oil companies of India and intrusion of private capital, this becomes furthermore true. Hence, the need to minimize the differential oil rent, which the oil companies have to pay to the oil producing countries, becomes an important aspect of India’s international political intervention, too. So this unity of ‘economic’ interest serves as the background for the increasing Indian intervention in the Gulf politics and that too in consonance with the US hegemony and other non-OPEC powers. India’s readiness to refuel the American warships during the First Gulf War and later during the Afghan War all point out that there exists an Indian consciousness of possible material gains from its subservience to the US led coalition. However, because of a formidable domestic anti-imperialist opposition, until now the capitalist preference in India could not come out as openly as it has in the vote on the IAEA resolution.

It is worthwhile to note that that a major hitch in the Indo-Iranian negotiations on the proposed pipeline was also related to pricing. “India has taken the position that any price above the US$3 per million British thermal units (BTUs) currently being paid by its power and fertilizer sectors for gas on the international market is unacceptable. Iran, in contrast, appears to be seeking more than US$4 per million BTUs, a rate that will only go higher if Pakistani transit fees are added.” (7) This might have been one of the major reasons in persuading the Indian state to go with the scheme of the West, since the isolation of the Iranian regime and its consequent desperation to earn revenues in the midst of enveloping sanctions can make the Iranians more compliant to the Indian demands and increase the weight on the side of the Indians in the negotiations for the pipeline.


(1) The Times of India, September 16, 2005
(2) The Hindu, September 21, 2005
(3) “Press Briefing by the Foreign Secretary on the events in UN and IAEA”, September 26, 2005
(4) Indian Express, January 8, 2005
(5) Defense Minister Pranab Mukherjee’s Talk on “India’s Strategic Perspective”, Carnegie Endowment for International Peace, Washington DC, June 27, 2005
(6) Cyrus Bina, “The Economics of the Oil Crisis: Theories of Oil Crisis, Oil Rent & Internationalization of Capital in the Oil Industry”, Merlin Press, London, 1985.
(7) A.J. Tellis, “India As a New Global Power: An Action Agenda for the United States”, Carnegie Endowment for International Peace, Washington DC, 2005

Pre-1990 ‘Democratic’ Experiments in Nepal


Pratyush Chandra


“Democracy refers to a system of governance in which the elite elements based in the business community control the state by virtue of their dominance of the private society, while the population observes quietly. So understood, democracy is a system of elite decision and public ratification. Correspondingly, popular involvement in the formation of public policy is considered a serious threat. It is not a step towards democracy; rather, it constitutes a ‘crisis of democracy’ that must be overcome.”(1)

Recently, political developments in Nepal have started getting considerable attention throughout the globe. The past negligence has been partly due to reading of the Nepalese situation as inherent in the so-called global process of democratisation triggered by the collapse of the Soviet Union. Even the stark instability of the Nepalese democracy did not attract attention as it was thought to be a general characteristic of what was happening in all the newly ‘democratised’ nations, and was considered to be a birth pang. But it is commonly forgotten that this birth pang of democracy in Nepal is tremendously long drawn. In this short survey of pre-1990 ‘democratic’ experiments in Nepal, I wish to indicate a recurring pattern of ‘royal regression’ (2) accompanying these experiments, which seeks to de-legitimise the democratic aspirations of the people of Nepal, and all in the name of democracy. It shows that what followed after 1990 was scarcely different. Every time there is an increased people’s assertion from below, emergency measures are taken to overcome the ‘crisis of democracy’. Unlike advanced bourgeois democracies, which have created numerous self-sustaining mechanisms of dealing with such crises by reducing militant opposition to debates and lobby groups, the democratic farce in Nepal is quite evident at the wake of continuous refusal of the downtrodden classes to be reduced in that manner. Hence, Nepal faces a perpetual ‘crisis of democracy’.

Episode 1: 1951 Democratic Revolution

Nepal’s flirtation with democracy has been continuous since the fall of Ranas in 1951. The Democracy Day that is commemorated every year on Feb 18 was in fact the day in the year 1951 when King Tribhuvan was reinstated with the help of India. It was the day that marked the transfer of absolute power from the dynasty of Prime Ministers to that of the Kings. It so happened that after the withdrawal of the British from the Indian soil, the Ranas of Nepal, the unique dynasty of Prime Ministers found themselves without any support in the subcontinent and faced an energised force of insurgents, whose leadership was trained in the Indian Freedom Struggle. Sensing the insecurity of the Ranas, King Tribhuvan found it opportune to gather India’s support to buy off the lost glory of the Shahs, the dynasty of the Kings. The Indian rulers (still struggling to outmanoeuvre the Communist revolt against Nizam, the democratic revolt against Hindu royalty and landlordism in Kashmir) were too ready for such a deal, as they were alarmed by growing radicalism among insurgency with the birth of the Nepalese Communist Party (in the year of the great Chinese Revolution) and evolving socialistic tenor of a section within the Congress. Hence, this “Delhi Compromise established the palace as paramount over a basically unchanged state machinery and class regime and subordinated the Ranas to the palace within a cabinet consisting of a combination of the old rulers and the compliant leadership from among the insurgents (the insurgent leadership was nearly all from landholding families of the old regime as well).”(3)

Nothing changed except the promise for a constituent assembly, which remains unfulfilled to this day. And of course, neighbouring the theatre of a continuous revolution, China, Nepal could be sold off as a strategic location to check the spread of socialism in the subcontinent. The American aid came showering in – “this began the creation of a whole class of commission agents and contractors who took their tithe of the foreign aid… [Further] Indian advisors arrived to expand India’s corrupt and unwieldy colonial bureaucracy to Nepal, which set about in turn to extending its control over local communities to undermine their autonomy, dispossess them of their natural and biological resources, and generally destroy their social and ecological viability and productive base.”(4)

Episode 2: The First Congress Government and the Coup

Nepalese people waited 6 years to see a constitution drafted by the royalty in 1957 and in 1959 they experienced the miasmic electoralist democracy, but to be vanished soon. Shrewd as he was, King Trubhuvan’s son Mahendra knew the meaning of a democratic government in Nepal – howsoever weak – a rise in democratic aspirations. The Congress Government under B.P. Koirala swept the first elections in Nepal on the platform that included abolishing Birta land tenure system (under which individuals were granted land on an inheritable and tax-exempt basis by the king), on the motto that “As long as land was not in the hands of the tiller…industrial development was infeasible”. It was not important whether the state machinery was equipped and consistent enough to undertake such a step, since the rise in democratic aspirations in an agrarian society is enough to disturb the patrimonial state apparatuses and superstructure that sustain the agrarian relations nurturing the absolutist state. Mahendra found his natural allies among shivering landlords. He had every means to undermine the first democratic experiment. As Nepali kings always know that power flows from the barrel of a gun, they never relinquish their control over armed forces and other coercive state apparatuses. But Mahendra needed an appropriate moment to draw the curtain on this first democratic drama. This moment came right away – India was beginning to engage itself in border conflicts with China and could not afford to see troubles right on its nose despite its democratic rhetoric, and the US aid was always ready to maintain the status quo for its own interest in the Cold War. For internal legitimacy, violent riots against the Koirala government were staged especially “in Bajhang, a feudal rajya in the midwestern Hill region with some degree of local autonomy, and in Gorkha, the ancestral home of the Shah dynasty (Mahendra’s forefathers)”.(5) In a night time palace coup d’etat in December 1960 the parliament was dissolved, its members were arrested, and subsequently all parties were outlawed for introducing divisions in the country.

Subsequently, the Constitution of December 1962 installed a system, which formalised the ‘cut and commission’ hierarchy in the society perpetuated through foreign aid along with stabilising the landlordist interests and absolute monarchy. “In the Royal Proclamation promulgating the new Constitution, King Mahendra inferred that the parliamentary system, being a foreign creation, was not as much in “step with the history and traditions of the country” as the panchayat system.”(6) Land reforms too were introduced imposing land ceilings. However, they allowed parcellization of “family plots in the names of brothers, sons, household servants, retainers, and even dogs to make it seem that no one individual owned all the land”(7).

Episode 3: Referendum

In 1970s with increasing commercialisation of the economy and society in Nepal, new ‘modern’ interests and economic relations arose. On the one hand, the statisation of the commons – forest and pasture lands – led to a privileged access to these lands allowing land monopolisation in the hands of the people close to power and bureaucracy. Rural poverty increased. This led to the ‘illegality’ and incrimination of land ‘encroachment’ by the rural poor resulting into rural tensions, which were frequently channelled into regional conflicts and some times into open class struggles. On the other hand, growing commercialisation led to an increased urbanisation and diversification of economic activities in urban centres. There was a tremendous growth in informal non-production sector especially with tourism and road linkages between different locations within Nepal and with India. There was an unprecedented increase in urban unemployment and especially educated unemployment, which led to the radicalisation of campuses and radical organising. Jhapali Khand of the Nepalese Communist Party along with other radical groups (in the All Nepal Communist Coordination Committee) reorganised under CPN(ML) systematically developed its organisations among rural and urban working classes. It was at this juncture, when ML had launched its student movement in 1979, that the ruling class under King Birendra agreed with the Congress leadership to hold another democratic drama – a referendum on the panchayat system. “Military and bureaucratic control of the ballot boxes along with violent intimidation of the voters under the then Prime Minister Suraya Bahadur Thapa allowed the pro-panchayat forces to swing the election by adding far more ballots than there were registered voters to quash the referendum”.(8)


The next episode of the ‘democracy’ drama in Nepal began in 1990. However, one might say that things after 1990 are different, but are they so? The backbone of the royal regression and aggression has always been the control over coercive state apparatuses, and of course, the non-implementation of land reforms, capable of destroying the rentier control over the rural economy. Further, why do the ruling classes of Nepal remain wary of forming a democratic constituent assembly? Seeing the levels of polarisation in the Nepalese society and political consciousness of the rural and urban poor, the Congress and the parliamentary left, which has been able to get accommodation within the evolving power structure, too have muted their opinions on the constituent assembly. The only purpose that all these democratic experiments in Nepal have fulfilled is time-to-time refurbishing of power structure by accommodating newer elements in the ruling class, while consistently marginalizing the working classes. Further, the royal ‘regression’ or takeover, on the one hand, asserts the hegemony of the rent-oriented classes and big corporates and on the other hand, demonstrates the weakness of the petty bourgeois political formations which have consistently been utilised for the competitive and corporatist interests of various sections of the ruling class, which includes the articulated interests of the multinational capital, irrespective of its origin.


(1) Noam Chomsky, “On Power and Ideology”, 1987

(2) Baburam Bhattarai, ‘Royal Regression and the Question of a Democratic Republic in Nepal’, Economic & Political Weekly (EPW), April 9 2005

(3) Stephen Lawrence Mikesell (1999), “Class, State and Struggle in Nepal: Writings 1989-1995”, Manohar, Delhi, pp 94

(4) Ibid.

(5) Nanda R. Shrestha (2001), “The Political Economy of Land, Landlessness and Migration in Nepal”, Nirala, Delhi, pp 156

(6) Frederick H. Gaige (1975), “Regionalism and National Unity in Nepal”, University of California Press, Berkeley, pp 137

(7) See (3), pp 97

(8) See (3), pp 100

State, Economy & Class Struggle in Nepal

Pratyush Chandra


1. Monarchy & Democracy in Nepal – Myth & Reality

The foremost reason that is cited in support of monarchy in Nepal is to ensure politico-economic stability. Inherent in this thesis is a criticism of the Nepali society that democracy by itself cannot sustain stability there. Parliamentary democracy that enlivens various local interest groups has to be tempered and controlled by an overseeing authority that can police them. Both the monarchists and ‘legal’ democrats in the country uphold this bias against the Nepali ‘demos’. The latter perhaps will counter this assessment by saying that they support constitutional monarchy, as in Britain, where monarchy is simply allegoric. But, this is not what was established in Nepal with their agreement in the 1990s – the arrangement to which they agreed keeps monarchy as the final authority. Given the internal class dynamics in Nepal and international scenario, is their any reason to hope for a successful reformist road to Nepali democracy, even in the pattern of constitutional monarchies in some European countries?

The comparison of Britain and Nepal is not only hilarious but mischievous too. A sense of being equal to the royal whites placates many hearts in Nepal. After all, many times in the 19th and 20th Centuries the Nepali royalty struggled to be treated equally. In the world of big powers, where Nepal is evidently powerless and on the receiving end, it gives some Nepalis an easy sense of national pride, history and identity. Understandably, it gives them a heart in this heartless world of competition and race. A handful of Nepali middle class immigrants and children of Nepali high and low nobility in Europe and the US may get a source of emotional and even material sustenance through the exotic image of a Hindu Nepal.

Britain in the 16th-19th centuries as the pioneer of world capitalism was going through tremendous internal transformations as a result of fierce struggle for hegemony between the rentier interests and profiteers – between landlords, merchants and industrialists. It was this struggle that determined the fate of monarchy in Britain. The situation in Nepal is obviously nowhere near Britain. Definitely like in Britain, in Nepal too the rentier interests are the most consistent support bases for monarchy. But the comparison has to stop here. These rentier interests are not complemented and countered by the forces rising from trade and industry within the country as in Britain. The formidable presence of foreign economic interests in the case of Nepal destroys any scope of such internal ‘class’ struggles among the exploiting classes for hegemony. These foreign forces find Nepali rentiers, at least till now, better equipped to regulate the superstructure to sustain their interests on the Nepali soil.

The class base sustaining monarchy in Nepal is that of the financial ‘capital’/moneylenders/landlords, ‘corporate’ interests in many joint ventures with Indian and other foreign capitalists, the mercantile establishments and the upper crust of civil servants and armed forces. The mass base for monarchy is constituted by sections of rich and middle peasantry, petty bourgeoisie and urban intellectuals who waver according to the strength of the working class struggles and their own class-conscious elements. Most of the ‘legal democratic’ forces at grassroots’ level represent this mass base. However, the post-1990s political economic development has developed a ‘democratic’ elite who has consistently interacted with the new institutions and has formidable interest in sustaining them. It is this section that today constitutes the leadership of all the mainstream ‘democratic’ forces in the country. The post-February development this year characteristically attests this fact. Even when the younger generation of democrats occasionally displayed republican sentiment, the leadership almost consistently refrained from attacking the institution of monarchy in their criticism of the monarch. In fact, many of them called for the preservation of the ‘heritage’ of monarchy.

2. Nepali Economy – Problems & Prospects

In order to understand the Nepali situation we must look at its economic contours. In 2003, Nepal’s population was around 24.7 millions, of which around 86% resided in the rural areas, suggesting their dependence on agriculture. The per capita income (PCA) is US $240, which is far below the average PCA in low-income countries ($430) and in South Asia ($460). The share of agriculture in the total Gross Domestic Product has come down from 60.3% in 1983 to 40.6% in 2003. On the other hand, the services sector has increased its share from 26.9% in 1983 to 37.8% in 2003, while the industrial sector too has increased its share in GDP from 12.8% to 21.6%. Even though the increasing share of services and industrial sectors in GDP in comparison to the agriculture sector is a universal trend, it is a peculiar South Asian phenomenon that this is not accompanied with a proportionate shift of the working force from the agriculture sector to the other two sectors. As mentioned above, 86% of the population is directly dependent on agriculture and allied activities, while 80.2% of the labour force is employed in this sector. The services absorb 17% of the labour force, while the industrial sector employs just 2.8%. This situation is aggravated by a tremendous sluggishness in average annual growth (AAG) in the overall productive sectors (agriculture and industrial) and stagnation in services sector. The AAG in agriculture decreased from 3.4 in 1983-93 to 3.3 in 1993-2003 (2.2/2.5 in 2002/03) and in the industrial sector for the same periods it decreased from 9.2 to 4.9 (-2.8/2.3 in 2002/03). In the manufacturing sector, specifically, the AAG declined from 10.1 in 1983-93 to 4.3 in 1993-2003, while it was –10.0 in 2002. On the other hand, in the services sector it remained constant during both decades at 4.9 (-1.7/3.2 in 2002/03).

These facts have several grave implications for the Nepali society. We can enumerate some of them here. Firstly, there is a tremendous rural/urban divide, which provides the topological glimpse of poverty in Nepal – an immense sea of rural poor encircling a few islands of urban affluence. Officially, people living below poverty line amount to 42%. The lowest 20% of population gets 11.5 % of national income whereas the highest 20% gets 44.8%. Taking into consideration the extent of rural inequality and the persistence of semi-feudal forms of exploitation in an increasingly monetised rural setting one can only imagine the state of the poor peasantry, the semi-proletarians and the landless. In 1994, 43.1% of rural household were marginal farmers (less than 0.5 hectares) occupying just 11.3% of the total land, 45.9% were small farmers (0.5-2.0 hectares) owning 46.8% of the total land, and 11% were large farmers (more than 2.0 hectares) owning 41.9% of the total land. Even the World Bank admits that the poverty cannot be reduced in Nepal since “growth has been concentrated primarily in the urban areas and particularly in Kathmandu valley, largely excluding 86 percent of the population who live in rural areas, where per capita agricultural production has grown minimally and the overall level of economic activity has been sluggish”.

Secondly, the disproportion between the share of industrial sector in the GDP and the amount of employment generated there demonstrates that whatever growth we find in this sector is in capital-intensive industries controlled by foreign capital collaborating with a handful of Nepali mercantilist corporates. (A major section of this Nepali big capital is in fact from the Indian business community of Marwaris who migrated a hundred years ago. Since Marwaris are largely endogamous, they have strong familial ties with their Indian counterparts.) In the post-liberalisation phase in the Indian subcontinent, where the Indian big capital overwhelmingly dominates, the employment-generation potentiality of the profit-driven industrial growth is very limited. Whatever employment is generated in the peripheral small scale industries fall in the informal sector, with rampant casualisation, no job security and very low wage. The extent of informalisation in the overall Nepali economy can be gathered from the fact that, even if the “market agricultural workforce” employed in commercialised farming activities is excluded, the informal sector employment, officially, comes to 90.7% of the total labour force. Further, in Nepal unemployment is at 4.89%, which by the head count methodology goes up to 15%, and underemployment is 45% of the total man-days.

Thirdly, the stress on the services sector, especially on tourism, has led to critical consequences. On the one hand, it too has been unable to absorb workforce proportional to its share in GDP, and the labour market in this sector is rampantly informal. Further, the Shangri-la image of Nepal that is sold in this sector, especially in tourism, has degenerating fallouts with a tremendous increase in drug abusage and prostitution. There are people in command who seek to sustain Nepal’s image as South Asia’s Las Vegas or even Bangkok.

Fourthly, the impoverishment in rural and urban areas has resulted in sluggishness in domestic demand for industrial goods, which has further eroded the possibility of an increased industrial growth in Nepal. This fact coupled with the backlash of liberalisation (export-oriented production) has made the industries in Nepal increasingly dependent on external markets – depleting internal resources to feed external demand. This further perpetuates the need for capital-intensity and an import of technologies to compete globally. The World Bank, in 2002, itself provided the glimpse of Nepali dependence while prognosticating slower growth in non-agricultural sectors and a contraction in manufacturing. It speculated that this sluggishness would be due to “(i) drop in domestic demand due to falling agriculture growth that especially affects small industries and services; (ii) decline in export demand as growth in both OECD countries and India has decelerated; (iii) cancellation of export orders caused by trade disruptions and higher insurance costs after the events of September 11th; and (iv) rising costs and uncertainty due to power disruptions, bandhs (general strikes) and direct terrorist attacks by Maoists and other groups on carpet and garment factories and on the liquor business” (these industries are most exploitative, and are heavily dependent on casualised workforce). Hence, there is not much in store for the Nepali industrial sector due to service sector-based (rent-oriented) development strategy and turbulent external market. Moreover, the Indian Multinationals in Nepal have added another dimension to the Nepali economy, they prefer employing Indian labour instead of Nepalis to avoid any investment in human resource development and, of course, class-conscious native proletarians.

3. Finance, Foreign Aid & Politics in Nepal

Interestingly, the fastest growing sub-sectors among services are financial/real estate and community/social services. Moreover, these are the areas that concern the rentier interests (in and out of the State apparatuses) the most. They have been trying everything to make these sub-sectors stable and rewarding. It is the financial sector that is the force behind the neoliberal revolution throughout the world, which motivates the commercialisation of economies and breaks every boundary even if it is meant to attain a degree of self-reliance to be able to compete in the market. While, on the one hand, it helps in the capitalist control over local resources by funding economic activities, on the other hand, it rewards the peripheral agencies who facilitate such acquisitions.

The financial sector in these efforts is complemented by foreign aid driven ‘social sector’, the other sub-sector that has never slackened in Nepal since the initial American efforts under the Truman Doctrine to buy off the Nepali rulers to counter the ‘second world’ influence in South Asia. A foremost radical political economist from Nepal, Nanda R. Shrestha rightly concludes in his “The Political Economy of Land, Landlessness and Migration in Nepal” (Delhi, 2001), “This is what so-called development or foreign aid had achieved: mesmerization of the restless Nepali intellectuals into submission to the reality of consumerism and family sustenance.” It has created a slavish middle class fully trained in protecting and serving the imperialist interests on the Nepali soil. It has created a vast population of “development victims”, too. While enticing the rural producers into commercial ventures without providing them training and peripheral infrastructure, and motivating them to a reckless utilisation of fertilisers, chemicals and genetically transformed seeds for immediate profits regardless of their ecological repercussions, they have made their survival dependent on the ups and downs of the market and on creditors, thus enforcing a form of archaic primitive accumulation and mercantilist exploitation. Once again quoting Shrestha from “In the Name of Development: A Reflection on Nepal” (University Press of America, 1997):

“Development funds have proved to be not only a fantastic boon for the elites, but also a powerful tool of control in their class (power) relations with the poor, an instrument that helps to keep the poor in check while issuing themselves fat checks…To wit, some of the development money has certainly trickled down to a few poor, mainly in the urban-commercial contexts. Consequently, one can find a few poor who have become rich, thus providing good anecdotes of development (capitalist) success. And development advocates are quick to hail such anecdotal rags-to-riches stories to stress their message that the development works. For instance, a poor butcher in Kathmandu has become the owner of a relatively large supermarket-like grocery store which is quite popular among Kathmandu’s elites and Westerners. But what they fail to announce openly is that, for the poor, development is a lottery game and that buried under every success story are scores of tragic stories of development victims. Simply put, poverty remains the stepchild of development, with foreign aid now acting as its sponsor.”

4. Political Changes in Nepal

We provided an overview of the Nepali economy above, and briefly touched upon the various processes in its formation. But underneath these processes one must recognise the semi-conscious designs of hegemonic forces to stabilise their hegemony – their struggle to sustain the roots that gave birth to them. Hence, the people who talk about stability and peace at this juncture must clarify whose stability and peace they want. If they say the forces that came to power in the 1990s must be stabilised to be able to deliver goods, then one must identify who came to power during that time. Did they do anything to curb the continuity and ‘stability’ of the above-mentioned economic processes, which have sustained the rule of the people thriving on foreign aid and squeezing the indigenous productive sectors? The liberal inflow of imperialist capital has been further smoothened. The overstress on attracting aid has become another government enterprise. A finance minister in 1993 while enumerating the Nepali Congress government’s successes added – “there has been a noteworthy increase in the volume of foreign assistance after the formation of the elected government”, even when most of this assistance were in the form of loans, increasing Nepal’s indebtedness. Further, data presented above clearly shows the deepening of dependency of the Nepali economy during 1990s after the ‘democratic takover’, rather than any move to counter it. The contribution of the 1990 ‘revolution’ was simply that it served to bring the neo-rich rural and urban gentry close to the state power, which was earlier monopolised by the royalty and armed forces directly representing the Nepali rentier-corporate class and negotiating with the global capital. In fact, the 1990 ‘revolution’ was a culmination of the Panchayat system and commercialisation of the economy undertaken during that time, which created numerous local facilitating agencies and elites. In their urge to find a sustainable political accommodation, they utilised the general unrest and eventually compromised its revolutionary potential by agreeing to the arrangement that kept the monarch at the helm. It was this intermediate ‘class’ representing neo-rich and petty bourgeois interests in the society that entered the parliament. So, effectively the Panchayat System was repainted as parliamentary democracy, leaving the institution of monarchy to play the same gimmicks of diminishing the vitality of the forces of change by accommodation and repression.

However, this 1990 incident can be called a revolution only in this respect that it was only after it that for the first time in the history of Nepal that the labouring classes – proletarians, landless and poor peasantry – could nationally and independently organise themselves, independent of the wavering petty-bourgeois leadership. The successes of Maoist revolutionaries, despite the news about their recent errors and ‘sectist’ infightings, show that the exploited masses of Nepal can be organised above localism and beyond reformist concessionary movements. What the spontaneous Sukumbasi (landless) movement of 1979 in Tarai lacked, and thus was suppressed brutally and quickly, the Maoists have provided – an organisation with a clear political vision.

When we talk of the working class’ struggle against exploitation in societies like Nepal, which is predominantly an agrarian society with a few enclaves of industrialisation, we need to avoid the schematic ‘pigeon hole’ framework of class analysis. In fact, class boundaries in sociological sense are always fuzzy and their solidification (in a sense, of ‘class solidarity’) depends on the level of class struggle. The level of class struggle in turn depends not only on local production relations, but also on the locus of these production relations in the overall national, regional and global political economy. An agrarian society in South Asia, where agriculture is heavily dependent on seasonal variations, where low technological development and population pressure characterise the whole economy, there is always an organic linkage between the proletarian and rural poor (poor peasants and the landless). This linkage if, on the one hand, depreciates the overall wage-levels and perpetuates casualisation of workforce, on the other hand, it allows a self-organisation of the labouring masses across the rural-urban divide. If on the one hand, villages act as depositories of cheap labour, to be pulled out and pushed forth, whenever capital needs it, on the other hand, these same villages act as the zones of political and economic solidarity among labouring masses. The experience of the Chinese Revolution, the glorious history of Latin American workers and peasant movements and the ongoing struggles in Nepal attest the presence of such potentiality in agrarian societies.

(Note: The data utilised here are taken from various World Bank reports on Nepal and from the studies published by a Nepalese trade union, GEFONT, available on its website,

For an analysis of the February “Coup”: The Royal Coup in Nepal

Ways of Waste Management

Economic Times, Sunday, August 7, 2005

Even the most rabid globalist would admit that globalisation, too, has its “discontents”, although most likely he would reason them to be due to insufficient effort towards globalisation on the part of governments, or ignorance on the part of the general public or its inclination towards immediate results.

In fact, there has been an increasing trend in social researches, coming out of premier First World institutions, of moralising social conflicts. They see them as “greed disguised”. But at least this much everybody will admit that the dream of a peaceful, post-Cold War global village has not materialised.

This leads to a general apathy towards legal political processes as they do not allow the “multitude” even the illusion of influencing the institutions that affect their economic well-being. The recent nos against the new EU constitution are symptomatic of the general mood against such depoliticisation.

That apart, the general unrest in Latin America against free-trade agreements originates from similar political consciousness. And though one should not draw up any definitive blueprints and conclusions for the future, history does force us to imagine limited possibilities.

Full Text:

Advani’s Jinnah Drama

Advani’s Jinnah Drama – An exercise in Goebbelsian parliamentarism

Advani’s recent visit to Pakistan was quite meaningful. Perhaps the most apparent reason was to assuage his aggressive communalist image, which is seen as a hindrance in posing him as a ‘national’ leader of a ‘secular’ India. Vajpayee’s image of a moderate rightist made him more acceptable, despite Advani’s unique popularity among the ranks and files of all the rightist forces in the country, due to the latter’s leadership in the movement that led to the demolition of the Babri Mosque and communal riots across the country (although he denies his own participation in the actual demolition). If we understand this purpose, the total game plan behind the just finished Jinnah ‘controversy’ seems deliberate and well designed. It shows the strength of the fascist forces in India and their ability to manipulate opinions and coordinate their own organs skilfully. How does it matter, at least, to BJP, VHP and RSS whether Jinnah was secular or not? Taking into consideration their perception regarding the state and the role of religion in defining it, it is highly suspicious that they are reacting against Jinnah being called secular. They could have made it an occasion to tell people that Pakistan is the result of what they call ‘pseudo-secularism’, as they are always ready to reinterpret their leaders’ meaningless utterances. But they did not choose to do that, or rather they wanted to take time in doing so. It was only after the drama that BJP started convincing its bewildered cadres that Advani was actually suggesting that despite Jinnah’s secular speech at the time of independence, he created a theocratic state. However, the collaboration between the different organs of the ten-headed (dashanan) RSS was perfect as always, and it corroborates the Italian anti-fascist leader Togliatti’s characterisation of fascism as a chameleon –
1. Advani calls Jinnah secular,
2. VHP’s Togadia croaks immediately in his regular spirit of mindless denunciations,
3. RSS too does some chastising,
4. Advani is defiant; he resigns and calls for an open debate,
5. BJP is in temporary crisis,
6. “Secular” toadies in NDA, like Nitish Kumar, come in support of Advani, and threatens to pull out of the coalition,
7. Vajpayee and the BJP leadership soothe Advani and,
8. Advani withdraws his resignation.

Logical Conclusion: Within a few days of drama, Advani has become fit for leading a ‘secular’ India. Togadia’s abuses, RSS’ chastising and Nitish’s mediation all are necessary for such qualifications.

Tsunami, Aid & Imperialism

Pratyush Chandra


1. The Tragedy Engineered!

Colin Powell while heralding the American aid missions for tsunami affected areas rightly summed up the American Spirit, “I think it does give to the Muslim world and the rest of the world an opportunity to see American generosity, American values in action”.(1) As if the Christian god has created the devastation to allow the American angels to show kindness, and the third world simpletons to hail the virtuosity, lordship and “freedom” of the Americans. That their wretchedness would make them understand that it is for their good that the Americans make war, as it is for them that now the Americans give aid, and that they must not hate America’s “freedom”. But it was William Blake who once said in one of his prophetic poems:

Pity would be no more,
If we did not make somebody Poor

You make us poor to serve us! Facts do sufficiently tell us that the enormity of the devastation caused by tsunami could have been avoided. Even if it was not consciously designed, the callousness with which the warning of the impending disaster was treated and disseminated is peculiar of the imperialist mind set and work strategy. Their techniques fail and targets are misfired only when others are victims, giving the imperialists opportunity to show off all those things what they say. It happened in Bush’s first tenure on 9/11 (he found a mission!) and it happened now during Bush’s second tenure.

The bulletins issued by the Pacific Tsunami Warning Center (PWTC) show a striking irregularity exclusively with regard to the particular “megathrust” earthquake that hit Indonesia on December 26 leading to the Tsunami waves. It had predicted and reported every small and big seismic event before that particular quake in the region judging their implications. However, this biggest earthquake was casually reported. Even when the warning was issued, it was selectively disseminated – “according to the statement of the Hawaii based PTWC, advanced warning was released but on a selective basis. Indonesia was already hit, so the warning was in any event redundant and Australia was several thousand miles from the epicentre of the earthquake and was, therefore, under no immediate threat.” Of course, “the US Military and the State Department were given advanced warning. America’s Navy base on the island of Diego Garcia in the Indian Ocean was notified.” The excuse came, “We didn’t have a contact in place where you could just pick up the phone.” But several Indian Ocean countries are members of the Tsunami Warning System! One witnesses the unprecedented activism of the US military in the region after the disaster, yet they did not care to disseminate their foreknowledge of the impending calamity!(2) Although the monopoly over information and its selective dissemination are necessary to remain powerful and are strategically very important to have an edge in the imperialist (politico-economic and military) competition in the era of “imperialism without colonies”, it would be premature to assess the degree of deliberation in this particular case, without the danger of being hounded as a conspiracy theorist (poor Ward Churchill!).

2. The Game Plan

The immediate effect of the Tsunami disaster was that it shifted the whole attention away from Iraq where the American imperialism was caught compromised and naked in bloody orgy. Lately the invasion in Iraq was increasingly marred by the revelation of sex ‘scandals’ and other heinous atrocities committed by the American torturers to humble insurgencies. Insurgencies themselves were on increase along with the intensification of global protests against the illegitimate elections. Moreover, the US needed other venues of expansion for further strengthening its strategic and political economic control globally, while its lesser allies went on with cleaning the mess it has left, and its competitors still coping with the shocks in the money market due to the dollar’s instability (showing their dependence on the US economy).

On the other hand, the European impotence was starkly evident right from the beginning. Initially, the European powers accused the US for being indifferent in providing aid to the devastated region, but later they were themselves left behind as militarist activism allowed the latter to be swifter and far more visible in the whole effort. The unilateral announcement of the coalition, with only Japan, Australia and India invited, came as a jolt to the European confidence. However, after a few days only, Powell announced that “the coalition will be disbanded and folded into the broader UN-led operations” as “it served its purpose”. In fact, “the “core group” was announced by President George W. Bush at his Crawford, Texas ranch on December 29 as he tried to dispel criticism that his initial reaction to the disaster was slow and the initial US financial aid of $15 million stingy.” (3) The “stingy” US made others feel stingier. The European countries were found concentrating “support in areas where their nationals have suffered more”.(4) Jeremy Seabrook rightly concludes, “For the western media, it is clear that a tourist’s tragedy is more important than that of the ‘locals’”. This is true not only of the media but even the governments there. They seem to believe that “in death, there should be hierarchy”.(5)

Further, the US (like its competitors) found a new veil of aid to cover its shame and new accomplices, like India and Sri Lanka, with old ones once again readied for the occasion. Regarding what foreign aid is, Hattori has rightly pointed out, “What most clearly defines foreign aid is the symbolic power politics between donor and recipient. Aid practice transforms material dominance and subordination into gestures of generosity and gratitude. This symbolic transformation, in turn, euphemizes the material hierarchy underlying the donor-recipient relation. In this process, recipients become complicit in the existing order that enables donors to give in the first place.”(6) Powell’s tenor in the statement quoted in the beginning starkly attests this conceptualization of the foreign aid. The tsunami tragedy provided US imperialism an opportunity to refurbish its old bases established at the time of the Korean, Vietnamese Wars and other occasions, and to articulate actively with regional forces and “powers” once again. It allowed the regeneration of the “donor-recipient” relation in the region, which was getting loose in the post-Cold War era. The regional ‘rentier’ interests that were once precious allies in the coalition against the Soviets went dissatisfied and independent due to a divergence of the imperialist concentration, and even posed threat to global hegemonies by fuelling fundamentalist populisms (which in essence diverted genuine popular anti-systemic sentiments). In the tsunami aid drive, these interests in Indonesia, Malaysia etc can once again be harnessed and militarized. On the other hand, the US military for the first time openly traversed through South Asia, which was relatively independent due to its ‘relative’ non-alignment. Thus, one can say that the Tsunami tragedy has allowed an overhauling of the “international” power relations in the region under the US hegemony.

3. The Politics and Economics of the Indian Aid

India, which has been ever ready to respond to the slightest gesture from the US for military cooperation in the post-Cold war era, was flattered to find the open invitation to join the US led “tsunami coalition”. It did not wait to rethink its old stance to strengthen the UN, which is increasingly being used as toilet paper by the imperialist forces. However, what they call, “inter-operability” and “mil-to-mil” relations were already at place after 9/11, where they could jointly visualise, “The U.S.-India defense relationship has grown to a stage where the future is clear. It is one in which the two militaries can work in unison to combat the regional and global challenges of terrorism, administer peacekeeping and humanitarian action, keep the high seas safe for the movement of commerce and energy, take the lead in preventing the proliferation of weapons of mass destruction and be a force for stability in Asia.”(7) Joint military and naval exercises in the regions of insurgencies like Northeast India and in the Indian Ocean have already become frequent. Tsunami ‘coalition’ gives this cooperation an immediate purpose and provides an opportunity to legitimize the relationship. It creates, at the cost of the victims, an occasion to have an overview of the region and to build up the infrastructure necessary for pre-empting any future bellicosity in the region uncomfortable for the global power relations.

The snake charmers of non-alignment themselves seem to be charmed away by Bush’s infantile abracadabra of “strong partners”, “against evil”, “for virtues”. However, who knows better about the materialist function of such chants than we Indians whose ancestors would bring rain and grow plants using magical spells and incantations. The Indian ruling class has its politico-economic motive to go into the relationship with the cowboy. After India refused the foreign aid for its own victims, and the Indonesian President thanked India for its aid and assistance to Indonesia, the Indian External Affairs Minister, Natwar Singh’s rattled proudly that “they were lumping us with the others but now we are seen separate offering our help and assistance”.(8) But is this pride mere vanity? Does not the politics of foreign aid, which applies to the assessment of every other imperialist forces hold true for India too? Is India the only country devoid of any crass Shylockian motive behind “its gestures of generosity and gratitude”? Do they not euphemize the “material hierarchy”?

One pop intellectual in India, while writing an eulogy on the tsunami “coalition”, says, “The immediate motivation for the four-nation cooperation involving India and the U.S. is one simple fact that no one country can manage the consequences of the extraordinary disaster we are confronted with today.” But he himself provides the clue to the hidden motive – “India and the U.S. also want to ensure the security of energy supplies from the Gulf region. They also seek to ensure the safety of sea-lanes, which carry oil and a lot other commerce in the Indian Ocean. While these broad common objectives were recognised, there had been no real occasion for the two countries to actually work together in managing security in the Indian Ocean. The tsunami disaster has provided such an opportunity.”(9)

The Sri Lankan socialists perhaps know the meaning of aid in clearer terms. The United Socialist Party has demanded the withdrawal of all the foreign (American, British and Indian) armies that have arrived in the name of tsunami aid. They claim to have “received a very good response when they exposed the hypocrisy and true intentions of US imperialism and also of Indian imperialism. Both are allegedly deploying troops for humanitarian reasons but, in truth, are aiming for increased economic and military control in the region.”(10) For them the danger is quite evident as both the US and India have the similar reading of the ethnic conflict in Sri Lanka, where both have dubbed the LTTE to be terrorist.(11) Further, India has increasingly defined its “national security interests” in Bushist terms – perceiving every conflict in its neighbourhood and South Asia as threat to its security. It recently pulled out of the SAARC meeting explicitly citing the recent events in Bangladesh and Nepal as reasons.

In the particular case of Sri Lanka, India has sufficient political economic interests to take care of. “India has recently become an important investor as a result of the India–Sri Lanka Free Trade Agreement… Indeed, India was the largest investor in Sri Lanka in 2002.”(12) Further, with regard to the aid to Indonesia, too, the cat was almost out of the bag, when Natwar Singh met the Indonesian President. “Apart from the assistance sent so far, we could also offer them concessional credit for reconstructing roads, buildings, harbours, ten units of fully equipped hospitals”.(13) Washington Post saw India’s contribution in relief efforts as a sign of its emergence as regional power, and finds, “Although India still accepts some foreign aid, such help is declining in importance with the country’s rapid economic growth. In the last few years, India has begun to transform itself into a donor nation, offering lines of credit to developing countries in Africa and elsewhere.”(14) Hence, India is perfectly in line with the other imperialist forces in capitalizing on other people’s sufferings.

4. Conclusion

All shades of progressives, leftists and relatively conscious human beings booed when Bush talked about the American compassion and generosity. The tactic to divert attention from the brutality of Iraqi occupation was evident to everybody. Anti-imperialists consistently and timely exposed the real facts behind Bush’s rhetoric and Tsunami tragedy, while continuing to irritate the imperialists and their media hogs by not allowing them any rest and exposing their plans and blunders in the Middle East.

In the tsunami-affected regions, as in Sri Lanka, people are categorically stating that, “The tsunami aid which is a product of the sacrifices of the working people around the world should go to the needy people directly, as quickly as possible. All the reconstruction and relief distribution should be in the hands of democratically-elected committees of the affected people and the trade unions.”(15) Voices are being increasingly raised against the covert agenda of the new coalitions between the indigenous ruling interests and global hegemonies in the tsunami-affected regions. The Thai people are protesting the increased American military presence after December 26 and disapprove of the proposed build-up of the American military at Utapao air base and in the Gulf of Thailand, which were used in 1967 to station aircrafts for bombing North Vietnam.(16) Further, the Indonesian ruling elite had considered the American ‘humanitarian’ and military aid an opportunity to bring back political legitimacy and stability, similar to what the Americans visualized in it for themselves, according to one American historian, “an opportunity to try to move beyond the frustration of Iraq and pre-emption and tensions with the Islamic world… an area where the U.S., with its financial resources and its logistical capability, can work in a cause that no one can argue.”(17) But all these seem to be illusory at least till now; the corrupt polity in Indonesia seems to make things furthermore complex, while the Americans always find their dream of being welcome as liberators rebuffed – Vietnamese rebuffed it, Iraqis are continuing to do so, and even the tsunami victims, howsoever they are helpless, are not inclined to do any different.


(1) “Powell: US values in action”, CNN (5 January 2005), available at

(2) Michel Chossudovsky, “Discrepancies in the Tsunami Warning System” (14 January 2005) available at and “Foreknowledge of a Natural Disaster” (29 December 2004) available at

(3) “US disbands India, Japan, Aus tsunami group”, posted on Indian Express website (6 January 2005)

(4) “EU downplays transatlantic row over Asia aid”, posted (5 January 2005) on

(5) Jeremy Seabrook, “In Death, Imperialism lives on”, The Guardian (31 December 2004)

(6) Tomohisa Hattori, “Reconceptualizing Foreign Aid”, Review of International Political Economy 8:4 (Winter 2001)

(7) ‘People , Progress, Partnership – The Transformation of US -India Relations’, available at

(8) PTI, “Indonesia praises India for tsunami help”, Indian Express (8 January 2005), available at

(9) C. Raja Mohan, “India and the Indian Ocean: from isolation to multilateralism”, The New Nation, (7 January 2005), available at

(10) “Sri Lanka after the Tsunami”, The Socialist (22 January 2005), available at

(11) C. Raja Mohan, op cit. “India and America also now share the objective of peace and stability in South Asia. They have a joint interest in countering terrorism and extremism in the region. In Sri Lanka for example, New Delhi and Washington are both opposed to terrorism by the Tamil Tigers and seek to maintain the unity and territorial integrity of the island nation.”

(12) UNCTAD 2003 Investment Policy Review: Sri Lanka

(13) PTI, op cit.

(14) John Lancaster, “India Takes Major Role In Sri Lanka Relief Effort: Aid Is Sign of Nation’s Emergence as Regional Power”, Washington Post (20 January 2005). Available at

(15) Same as in (8)

(16) “Tsunami Relief as a Subterfuge? The Pentagon Scrambles to Reenter its Old Thai Air Base”, available at

(17) David E. Sanger, “Aid Summit Talks in Jakarta: U.S. Is Facing a Choice and an Opportunity”, The New York Times (02 January 2005), available at

Bush’s Re-Election and the ‘Indian Dream’

Pratyush Chandra


Interesting reactions over the US elections came from two sections of the Indian society – those vocalised by different associations of the Indian capitalist class, and those coming from the right reactionary forces of the country. More interesting is their open concurrence not only with regard to their assessment of the economic impact of Bush’s victory, but also with regard to their politico-militarist tenor. In my opinion this concurrence speaks a lot about the character of the so-called “national” bourgeoisie and their immediate interests.

Generally, it is assumed that the Indian ruling interests in the foreign political developments are rent-oriented, i.e., gathering favours for offering Indian markets. This judgement is too simplistic and does not match up to the complexity of capitalist international relations. Further, it fails to grasp the nature of capitalist development in India. Marxists enriched the concept of “imperialism” in the second decade of the 20th century to grasp this very complexity of relationships in capitalism. They saw in imperialism a “dense and widespread network of relationships and connections” causing “the propertied classes to go over entirely to the side of imperialism”. (Lenin: 133) They recognised the crisscross nature of international associations and treaties between “national” ruling classes. With the later development of “shareholder” capitalism and MNCs/TNCs, inter-national relationships have become more complicated, which cannot be explained by strict geographical conceptualisation of core/periphery divide. The Indian ruling interests have to be explained as embedded in the global logic of capitalist accumulation, their aim, like their competitors’, being to siphon away as much profit from the global pool of surplus value as they can, by collaborative or aggressive tactics.

This complex relationship between the Indian capitalist class, their political representatives and global politico-economic developments is evident in reactions to Bush’s victory. Strategic and militaristic concerns are predominant in them. They perceive Bush’s victory as an opportunity to ensure the implementation of “Next Steps in Strategic Partnership” (NSSP) with India, which was elaborated in his first tenure. NSSP outlined collaborations in high technology, civil and nuclear space programs and trade. Bush’s commitment to the partnership was taken to be evident in the setting up of the U.S. India High Technology Cooperation Group, U.S. India Cyber Security Forum and the Joint Working Group on Terrorism.

The Indian political and economic elites rely strictly on the “strategic calculus” that would garner Bush’s attractions for India. Since the collapse of Soviet Union, the Indian ruling class has been trying hard to sell themselves as a regional force that can act as a reliable watchdog for global imperialism. The decision to refuel the Anglo-American warplanes in 1991 during Chandrashekhar’s regime, India’s desperate graduation as a nuclear power and bargaining favours on its basis, and sycophant persuasion to get employment during the Afghan War – all amount to the same goal of selling themselves as a power to be reckoned with for any strategic building up in Asia. And they feel now the time has come to realise the “Indian Dream”.

Just after the elections the Confederation of Indian Industry (CII) hoped for President Bush’s visit to India early in his second term to provide a new thrust to U.S.-India relations. Rumsfield has already arrived to pave the way for the mission. The CII finds, “Bilateral defense relations are at record highs with the two countries organizing joint military exercises and patrols and are now looking at cooperating in newer areas such as missile defense”, and “a second term now provides an opportunity to build on these initiatives.” The CII being a prime association of the Indian corporates finds the economic gains packaged in this aggressive military relation that puts the government-to-government agreement for cooperation in place. The Indian bourgeoisie seem to agree with the pop-intellectual of American imperialism, Thomas Friedman (1999) that “the hidden hand of the market will never work without the hidden fist – McDonald’s cannot flourish without McDonnel-Douglas, the designer of the F-15”, and that the hidden fist that keeps Silicon Valleys and their technologies safe is the army, navy and air-force. I think he forgot to add private armies and “Ku Klux Klan” rioters, who do what “legal” forces can’t do. Further, with the Indian stakes in McDonalds, why will not F-15s be refuelled in India?

A representative of the Federation of Indian Chamber of Commerce and Industry (FICCI), Prasanta Biswal, voiced a similar hope and found that “the republican administration has been pro-India with people like the under secretary of Commerce, Ken Juster, and former ambassador to India Robert Blackwill. We just hope that the initiatives that have been taken will be carried forward and at the same time, they will take newer initiatives.”

A presentiment, definitely, existed that the Democrats would have faced difficulty in avoiding the nationalist pressure of the biggest labour union in the US, the AFL-CIO, which has been the most formidable support base for the Democratic Party. This could have resulted into the curtailment on outsourcing etc., which is an important source of tapping on low wage zones for global profit making which then is shared by the MNCs in the first world and their collaborators in the Third World. In India especially in the IT industry there was an uneasiness and apprehension. The Hindu (Nov 5, 2004) reported, “The re-election of George Bush as President of the U.S. has ended the brief period of uncertainty for the Indian IT industry. Mr. Bush’s rival John Kerry’s protectionist promises that included ending the outflow of call centre and software development business from the U.S. to other countries had made the Indian industry, one of the biggest beneficiaries of this relocation, apprehensive.”

However this fear was false because, on the one hand, any “mature” democracy and its parties are fully trained to dupe such support base while still maintaining it. On the other hand, both Republicans and Democrats have always been involved in propaganda competition on who fulfils the “American Dream”, hence both play on chauvinism to hoodwink the American masses, while remaining consistently married to the expansionist drive of the capitalist class. Even the “democratic” Clinton sagely commends the “conservatives” for drawing “lines that should not be crossed”. (Walsh, 2004)

In fact, the chauvinist tenor of the American Dream and American values herds together the masses behind expansionism as supposed “resolution” to their plight. It is true, the organised labour everywhere has been on defensive in the phase of globalisation, when capital flight works as the regimenting factor. In the face of non-availability of any immediate revolutionary option in the society, they revert to the ideology of desperation, of introversion, to slogans like “buy American, be American”. On the one hand, this forces them to convince the capitalists of their commitment to the industrial “peace”, to make “national” industries competitive in the global market! On the other hand, it consolidates the domestic market for the “national” bourgeoisie of the US. Hence, the “labour support” nowhere binds the hands of the US state or any capitalist state to do what it is meant to do as the governing body of the ruling class.

Particularly interesting is the response of Rashtriya Swayamsewak Sangh (RSS); though one never knows which part of its sounding zone will be claimed official – fascism is always cacophonous. A few months ago RSS Chief Sudarshan “discovered” about the US funded programme to christianise India completely by 2010 or so, and propounded the US to be India’s worst enemy. But now in the columns of RSS’ mouthpiece, Organiser (Nov 21, 2004), one finds Bush as the emancipator of the world from “oriental Talibanism and occidental anarchy” and by re-electing him the Americans have salvaged their civil society. In this column entitled “America, America … says the PM, Comrades want him to shut up” (a usual and unimpressive stuff of anti-communism), Rajendra Prabhu finds “the relationship between India and the United States has been transformed from the cold war suspicion to strategic partnership where the two have deepening mutual interests”. He praises Bush for bringing democracy and freedom to Afghanis and Iraqis. “Today our companies, our government, our experts are building roads, hospitals and schools in that country.” Afghan war was in “our national interest” (one of the Bushisms).

Prabhu, further, notes, “the Presidential election campaign in the US has thrown up the deep divide within that country over Bush’s action and strategy in Iraq.” But then “it was Iraq action that sent the shivers in Pakistan also that the American President could act if the Musharraf regime refused to tango with it in suppressing the Islamic fundamentalists”, thus the US action once again fulfilled “our national interest”.

In a sycophantic tone, peculiar to the “liberal” section of RSS, he lauds Bush’s messianic goals. “From Indonesia to Egypt, the historic Muslim Crescent did get a message in various intensities that the days of oppressive regimes are numbered. Regimes have changed no doubt through elections in Indonesia and Malaysia, and stirrings of a more liberal approach are buffeting the royal regimes and semi-autocracies. If finally an elected government takes office in Baghdad, the President would be vindicated. It looks doubtful at present given the rising level of violence. It looked impossible in Afghanistan also even six months back. But it has happened.” The cowboy spirit of Bush makes possible all Missions Impossible.

Finally, Prabhu concludes – “In this US election, besides Iraq and terrorism, the most divisive issue was the destruction of family values through such aberrations as gay marriages, legalization of lesbianism and such social viruses. For years it seemed the New England liberal establishment and California’s aberrant communities would hijack core values of the country. But suddenly the silent majority gave up its silence and spoke through the ballot to restore the social balance. American ultra liberals may be in mourning. And the Islamic fundamentalists are angry. Civil society needs to be saved both from oriental Talibanism and occidental anarchy. At least that is what the Americans accomplished in this election.”

Both the Indian capitalist class and the rightist forces find strategic and militaristic collaboration between India and the US as crucial for the Indian “national interests”. The only difference is that the latter provides the former with a voice that can draw the general masses behind these national interests with the help of the homogenising effect of aggressive chauvinism. It allows the ruling class interest to become a national interest. Sudarshan’s rabid anti-Christian rhetoric ghettoising masses on communal lines uniquely combines with the “secular” urge of profit-making that can be fulfilled only by joining forces with the US imperialism.

Sections of the Indian capitalists suffered a heavy shock a few months ago to see Vajpayee government voted out of power. It was the government that represented their interests while perfectly taming the masses with its rightist rhetoric. It is not that they were averse to the Congress, which has been their representative for the longest period of time. But the Congress could not sustain itself as such because of its inability to combine various sectional interests within the rural/urban ruling classes while simultaneously regimenting the general masses. In the neo-liberal phase of global capitalism it could not provide a stable government with an aggressive tenor required to support the domestic capital to collaborate and compete in the post-Cold War globalising market. After numerous ups and downs, Bhartiya Janata Party (BJP) graduated as that political power. But its defeat and moreover the parliamentary left’s position in a crucial role of stabilising the new government made the capitalists desperate.

Now, the new Congress government has the dual task of competing with the rightist political gymnastics and moderating the damage on the state’s legitimacy by the earlier government by its naïve open communal preferences. Further, it has to continue with the act of settling in the evolving global polity. The biggest contribution of the earlier rightist regime was its determination to fashion its international surroundings in favour of the corporatist interests in the country. Its tactics ranged from the hype of nuclear blasts to the laughable sycophant persuasion of the Anglo-American masters to get employment in the Afghan war. The Indian oil interests and other corporates had their heyday during Vajpayee government. It was the first consistently “outward”- oriented (even if not expansionist in the normal sense of the word) regime, concentrating on building a place in the global polity as a junior partner in global imperialism. As a result, Manmohan’s government has the major task of internal re-legitimisation of the Indian state with a furtherance of the basic orientation of the earlier government, i.e., its economic and foreign policies. In fact, the left support gives his government the essential political legitimacy to pursue these tasks. The parliamentary left was quite easily tamed by the manipulated stock exchange turbulences just after the general elections. It is being time and again forced to reassure the “business” community of its moderated nature. Even when it says that its support must not be taken for granted, it is extremely afraid of the immediate fallout of any hard-line on its part. This situation has become another self-justification for not waging “class struggle” leading to their further reduction as a distinct force of the working class. This tamed radical has become the biggest asset of the capitalist state, which was struggling for its legitimacy right from the initial days of liberalisation in the country.

Frankly as regards to the American policies it hardly mattered who won the election – Bush or Kerry. But for the Indian politics Bush’s victory is significant in the sense, that it allows the rightist forces to once again pose themselves as the smarter representative of the capitalist class attuned to the global needs, which is evident in their respective reactions to Bush’s victory. Further, it pressurises Manmohan to be on the “right” track even with a left support, as he has already demonstrated recently. His initial efforts to start a dialogue with nationalist and left extremists were perhaps laudable, but he has not shown any sign of doing away with Vajpayee government’s belligerent rhetoric and apparatus to wage its own regional “war against terrorism” that includes fighting the left insurgency in Nepal. Bush’s re-election is definitely a gift to the Indian capitalist class and the rightist forces in India, as it would continue to build an atmosphere of aggressive globalism. And they have aptly interpreted the result of the American elections – a victory for militarism and rightism.


Dutt, Rimin (2004) “Indian business groups welcome Bush’s re-election”, IndUS Business Journal Online Nov 15,

Friedman, Thomas (1999) “What the World Needs Now”, New York Times, March 28

Lenin, V.I. (2000) Imperialism, the Highest Stage of Capitalism, Left Word Books, New Delhi

Prabhu, Rajendra (2004) “America, America … says the PM Comrades want him to shut up”, Organiser Nov 21,

Special Correspondent (2004) “IT Sector greets Bush’s Re-elections”, The Hindu Nov 05,

Walsh, David (2004) “Opening of Bill Clinton’s library: a sordid gathering of the “fat cats””, World Socialist Web Site (WSWS) Nov 20,