Sunday, December 30, 2007

Henry Sokolski misses the point!

One of my readers pointed me to an article by Henry Sokolski.

Henry is on his usual anti-nuclear deal kick, and is keen to use the possibility of proliferation at the Pakistani end as a result of the deal. Frankly given the reception to the deal in India, I cannot at this point say that India wants the deal anymore than Henry Sokolski does. Needless to say I speak only for myself and not for anyone else I may or may not know.

What I have an issue with however is that I feel, Henry's lack of understanding of Pakistan is glaring and I think this needs to be fixed right now.

Henry is under the impression that he is smarter than the American State Department, and for all I know that is true. I am not well placed to tell you how smart the State Department is or how smart Henry is.

However I do know the following things are true:
  1. Pakistani Armymen believe that America is forcing them to kill their Pakistani Islamic Jihadi brothers and
  2. America is using "democracy" as a way to curtail the Pakistan Army's influence on politics in Pakistan.

Taken together, these ideas hold the natural implication that America is trying to drive the Pakistan Army from power in Islambad. I speculate that this "natural implication" is gaining currency inside the Pakistan Army.

When you interfere like this in a nuclear armed military dictatorship, you create use-or-lose type pressures on the regime.

A fractious leadership within the regime makes an accurate analysis of the effects of such pressures difficult and consequently, it becomes exceedingly easy to invite a failure of deterrence.

So while Henry Sokolski is busy worrying about the possibility of a larger nuclear arsenal in Pakistan some five years down the road, I am worried that the Pakistani leadership has an increasingly itchy finger on the big red button!

Henry's view of Pakistan relations is in sync with the history of US-Pak ties, but it appears to me to be out of touch with the reality in Pakistan right now!

US-Pakistan ties despite their rich history - are in a very different and difficult place today - and I feel - Henry and his friends completely miss that point.

If America as a whole shares Henry's lack of understanding, then the consequences of that - i.e. a mishandling of the "transition to democracy" in Pakistan will in my opinion produce disasterous consequences for the World.

A world where deterrence has demonstratably broken down is beyond the ability of American spinmeisters to fix. Such a world will find America's claims of global leadership lacking in credibility. That may be the "New World Order" that a scared and disoriented regime in Pakistan pushes us towards.

Saturday, December 29, 2007

The Tragic Death of Benazir Bhutto

After reviewing the information available from various sources, I have concluded that Benazir's death in the bomb attack on December 27 2008, was most likely an unintentional and exceedingly tragic coincidence.

I have difficulty imagining that a long suicide bomber with explosives strapped to his/her body could be expected to succeed against an armoured vehicle like the one Bhutto was travelling in. I cannot imagine that a capable officer like Rehman Malik would allow her to travel without a BPJ - so I think bullets in her chest cannot be the cause of her death.

At the end of the day, incredible as it may seem, the Pakistani government's bloody handle theory seems plausible.

Was Musharraf responsible for her security? or was Rehman Malik and Zardari Clan?. Are the Islamists responsible for bombing her convoy in the first place? or should she not have stuck her head out the vehicle? etc... etc... these things can be argued endlessly.

Conspiracies like - Was she killed because America wanted her to be the Eid ki Bakri? was she killed because she said something that offended Musharraf? Was she killed because she alienated the Islamists in her public utterances? etc... that will swirl in the minds of observers endlessly as well..

I care little for such speculations, for me, some things are beyond argument, such as -
  • Participating in Pakistani elections or politics is not a joke - death is .. well.. an occupational hazard. If you get careless or try stupid stunts, you will die. People play rough out there, if you aren't serious about this, now is a good time to quit (Hint Hint Imran).
  • The PPP has no second rung leadership capable of holding the party together at this time. It will need time to organise itself into an effective electoral formation. They need to have time - time which they will have to beg President Musharraf to give them. Yes, there is a need to vent the anger welling among its cadre, but if in the process the PPP alienates itself from Musharraf and the Army, that is not going to help their electoral chances. The PPP knows this, and in a week or two, the "Oh My God - BB is dead" feeling will go away - the crowds will tire of burning buses and chairs and refridgerators. Even the Shia and Sunnis will tire of killing each other. Boredom can and will move mountains.
  • It is true that "ultimately" Musharraf bears responsibilty for all things that happen in Pakistan. It has become very fashionable among the glitterati that float in and out of TV screens to spew venom on Musharraf. But honestly, do these people have an alternative to Musharraf? Can they tell the rest of us what that is? because for the last seven years these same people have been telling us - "there is no alternative to Musharraf". And today in all their talk I still see no such thing as an alternative.
  • Without a pretty face like Benazir at the helm, the Pakistan Army will be unable to retain the support of the image conscious American political crowd. This will make releasing monies from US congressional sources difficult and that side of things - coupled with President Bush's own unpopularity in the halls of Congress, will act as a powerful motivator for the PA to seek out a window dressing that suits America's eyes. Please understand the moment the window dressing goes up, the same voices that are railing against instability in Pakistan will rush to tell us how America must give Pakistan trillions of dollars to "stabilize" a fledgeling democracy. This is the extent of the "Pakistani Spring".
  • The Pakistan Army and President Musharraf will have to seek new engagement points in D.C. especially now that the Bush presidency is reaching its end.

To the people of Pakistan, members of the family of Benazir Bhutto, and the members of her political party, I offer the following comments.

Many of us in India liked Benazir, and we are all very very very sad about what has happened. Benazir was a familiar face to us, a fixture at every major treaty we signed with Pakistan since the Shimla Agreement of 1972. Yes, we will miss her and many will only have positive memories of her.

Please ignore the utterances of fools and young people in India who tend to speak before they think. They say senseless and hurtful things. We in India do not hold grudges against the dead. Our political issues with her ended with her passing, and we are all left poorer by her death.

Most people I know in India will sympathize with the people of Pakistan during this tragedy and time of trial. Please do not interpret this as a desire on our part to intervene in Pakistani internal affairs, we merely want to tell you that we understand and feel some fraction of your pain.

Sunday, December 23, 2007

On the possibility of "Clerical Error" in the India Pakistan Context

An article by Jawed Naqwi on the ABM related developments in India came to me by way of email.

I think the article is quite perceptive and in the spirit of things found abundant in environs of Neemrana Fort, I wish to add a few comments.

When faced with a situation where the political authority in an adversary state is unstable, the path to reinforcing deterrence becomes complicated. The traditional idea of finding some object critical to the adversary leadership and posing a credible threat of guarenteed retaliation to that specific object becomes tricky to implement. As the leadership in the adversary nation is unstable, the idea of what is dear to them is unstable also, so a simple point and shoot philosophy becomes somewhat moribund and the possibility of escalations rises.

When two political groups tussle for control over nuclear weapons in a failed state, the only thing that both groups can agree upon is that the ability to project a nuclear threat is the key to gaining political prominence. This makes the entire deterrence regime extremely escalation prone as every little internal political shift acquires a nuclear deterrence related implication. By posing a credible threat to the ability to deliver nuclear weapons on to your soil, you diminsh the escalation potential inherent in such a situation.

In the more traditional context ( US-USSR or P5), this idea appears counter-intuitive. There the possibility of preventing the enemy's missile creates an escalation. The adversary simply increases the number of missiles in the arsenal or fields their own ABM system. This all pushes things towards a new equilibrium where neither party can field another ABM systems or ballistic missile. For this reason, perhaps, in the traditional context, political instability is never allowed to become so extreme that it shakes the very foundations of deterrence. However the India-Pakistan scenario significantly departs from the traditional mould in many ways, and I feel one cannot become too attached to ideas that have worked elsewhere.

As long as a deterrent exists to using weapons, no political leadership in a failed state, however desperate or short term in its thinking, will seek out nuclear adventurism. In my opinion the biggest deterrent to nuclear weapons use is the possibility of failure. No one wants to go down in history as someone who used a weapon of this magnitude and failed to deliver it to the target. Such a person or persons would be consigned to the dustbin of political history very quickly.

Much is made of the possibility of a religious zealot getting his finger on the button. To some extent the negative publicity accorded to this possibility comes from the incumbents who wear suits and pants but fear being displaced by those that wear pyjamas ans shawls. This is at some level, a form of elitism or perhaps it is simply a show being put on.

The "zealots" of Pakistan are not an unknown quantity. In the last seven years alone, they have been intensively studied in the West. In places like India, the exposure to these men is quite high. In India derogatory terms like "zealot" are rejected in favour of a direct recognition of the scholarship and erudition in social and political science that these men possess. The suits and pants have appeared in the last 60 years, by contrast, the others we have known them for centuries now, can one really expect us to be afraid of them? Especially when the men in suits have refrained from talking sense for the better part of the last 60 years but we recall the men in pyjamas and shawls speaking sense throughout the centuries?

Or do the men in suits now want to suggest that Shaykh Sirhindi and Shah Waliallah were not making sense at all?

Saturday, December 22, 2007

"Clinical Discussions" and "Guarentees"

I see BC has come up with a "clinical discussion" of the MEA's statements.

The US was not a signatory to the Non Proliferation Treaty in 1954, and the NPT is not specifically mentioned in the Atomic Energy Act - AEA (1954) . The NPT's impact on US laws was covered via a separate act - Nuclear Non Prol. Act, -- NNPA of 1978.

The AEA of 1954 was amended in 1978 to suit the conditions imposed in the NNPA of 1978.

Since the US concieved the "NPT" to keep other nations in check, the letters "NPT" find utterance in every US bureaucrat's statements about the nuclear affairs of India and other states.

In terms of US law, the provisions of the law in the letter are in completely consonance with the requirements of the NPT via the NNPA. For example, the US AEA (1954) frequently uses the words "non-nuclear-weapon state", a term only defined in the NPT and accepted by the US via the NNPA to address all issues related to transfers of nuclear technology.

The application of US law has also been in agreement with the NPT, until that is, President Bush went and signed a 123 agreement with us.

I can understand if the DCH are sufficiently clueless to grasp this, but one wonders if this subtlety really has to be explained to BC and if it does, what does that say about BC?

There are no guarentees with regards to the US not changing its laws - just as there are no guarentees to Russia changing its laws or France or UK or anyone else - lets face it folks - this is the real world - there are no guarentees!

Prafool Bidwai is celebrating the obstacles he thinks we have encountered at the IAEA. BC is celebrating how much smarter he thinks he is than the MEA mantri.

I am wondering how much longer will we continue to have career troublemakers provoke problems in parliament.

How much longer will be before sensible people realise what comes from allowing people like this to dictate your ideas of right and wrong?

Will the DCH and their pied pipers have to learn from the school of hard knocks?

Monday, December 17, 2007

Our perceptions of General Musharraf have changed over the years

In the aftermath of Kargil, we did not think well of Gen. Musharraf. The manner in which Gen. Musharraf conducted the Kargil operations while Mian Nawaz Sharif, the Pakistani Prime Minister, was initialing a peace treaty with Sri. Atal Bihari Vajpayee left everyone in India angry. We felt betrayed... and Gen. Musharraf's actions were an open challenge to the Prime Minister of India. There was only one language in which it could be answered.

Perhaps this act of insolence on part of the General was the reason why the 1999 coup was greeted with distaste in India. Strictly speaking Indians do not have strong feelings about Pakistani internal affairs, but when General Musharraf removed Prime Minister Nawaz Sharif from power, Indians as a whole felt very unhappy - after all a known and friendly face had been replaced by an unknown one.

Now as the years have passed, India's eyes have grown accustomed to General Musharraf and his flamboyant style. Indian observers have learnt what to ignore and what to pay attention to. It was this growing confidence that allowed the escalations of 2001-2002 to proceed with minimum friction and despite overt animosity a great deal of progress was achieved where it mattered - in the business of restoring trust.

As trust was slowly rebuilt, one step at a time, the Vajpayee government's policy vis-a-vis Musharraf's Pakistan was smoothly handed over to the Manmohan Singh government, an extremely understated foreign policy success. The last six years have seen a steady march towards normalisation of relations, expanded people to people contact and the restoration of key lines of communication.

It is no surprise the pace of positive motion has accelerated in the post 9/11 era and ofcourse things have proceeded with visible speed only under the stewardship of General Musharraf and his Army. One can now almost believe what Stephen Cohen foretold about this venture. It is not to say that India disbelieved Stephen Cohen, for if it had, it would have never taken the path he pointed out - but India's sense of skepticism about this had its roots in the stark reality of the Kashmir. And frankly none of us could have believed the damage that one earthquake would cause. Perhaps Stephen Cohen foresaw the earthquake too - who knows. He is after all - as my Chinese friends would say - even more mysterious than mysterious itself.

After the confrontation at Lal Masjid, it became clear that the bridges had been burned and there was no turning back. It is at this point that Indian minds began to see the full extent of this confrontation and what it was shaping up into. Having seen the complexities of this drama, the "grudging respect" that Sri. Narayanan speaks of, developed in India's minds for General Musharraf. Before our very eyes, Gen. Musharraf, the perpetual guerilla, the perennial commando, now fights a battle on an open plain like an ordinary infantryman. Gone is the Janus face and in its place is a sombre, determined and yet melancholy stare that occasionally glistens with freshly shed tears.

Perhaps herein lie the roots of India's change of heart? Who can say with certainity, but one thing is certain, ultimately, every post 1971 soldier in Pakistan had seen the images of defeat and the crushing consequences of the loss of national respect. As it stands today - General Musharraf - howsoever grudgingly has earned that respect from India.

While we still do not understand why our Pakistani brothers persist in seeking more than heavenly power permits - Pakistan today is a great deal more transparent to us than it was in the late 1990s. Its Arabistani flirtation is over, and Pakistanis are no longer strangers to us.

Should transparency be maintained, the path of sanity will only grow wider.

Thursday, December 13, 2007

India-US Nuclear Deal: Clearing up Myths

A lot of new myths have cropped up to take the place of old ones. Although I know this will have no effect on the blowhards, I list them below in the hope of putting this *information* (as opposed to the bullshit) out there.

1) Coal is India's lifesaver

No, not quite. India has a lot of poor quality coal. Transporting poor quality coal requires a tremendous amount of electricity or diesel. The economics of this does depend on the price of diesel or electricity, but ultimately the profitability of transporting coal to a TPP requires that the amount of ash content in the coal be small - we have up to 40% ash in our accessible coal deposits. The ability of Coal to secure India's energy future is in doubt unless a cheap source of electricity or diesel is found.

2) Coal can be burnt with advanced pollution control technology to avoid Greenhouse Gas Emissions

There are no currently available economically viable pollution control technologies to sequester Carbon Dioxide from burning coal. In a carbon audited world, the price of coal utilisation will be quite high. Lets face it - Carbon Dioxide sequestration is not cheap.

3) Hydel Power can be tapped more aggressively in India

If you weren't injecting opiates during the entire Narmada Bachao Andolan saga, you will realise that is complete bullshit. The high population density of India makes large land acquisitions very difficult. Hydel projects can be justified in lieu of TPPs if carbon emissions are taxed, but land acquisitions are going to become progressively more and more expensive.

4) Wind, Solar can save the day in India

Wind and Solar have very low volume generation. This may be suitable for Indian villages where consumption control measures might be able to restrict the loads to something that Wind and Solar generation may be able to meet. That is something the people inside GoI might be giving quite a bit of serious thought but unless it can generate 100 MWe - it is useless from the perspective of industrial generation. You have an SEZ and you want to supply it power, Wind and Solar cannot give you that - you need Coal, NG or Nuclear.

5) Coal Bed Methane, Unconventional NG, etc... can give us power

This technology is in the exploratory stage, if we pursue it for another 20 years, we *may* be able to develop a domestic production wedge against NG imports. It all depends on where the consumption patterns take the country. If the country as a whole shifts away from firewood to hydrocarbon fuels, our import dependence is going to remain a serious issue.

6) Biomass will save us from poverty

Do the numbers for this. Biomass cannot currently yeild anything that remotely resembles heavy oil. The conversions demonstrated have very poor efficiency and cannot be properly costed. Without an alternative source of heavily oil, we can't free ourselves from a 70% import bill.

7) Natural gas exploration and liquification is a priority

Yes, sure and to make this happen in any time frame that is useful - most of technology for this has to be imported. We do not have the capacity to make anything of size indigenously. Don't take my word for it, ask your friends at Jamnagar.

8) We don't need to import nuclear reactors or fuel

Sure... if you are willing to put up with expanding blackouts you don't need anything. If you don't want to breathe, then you don't need air either.

But if you want electricity in the *next few years* you are going to have to import fuel - you import fuel - the P5 will want you to buy reactors also. If that surprises you then think it through it will become obvious. The entire nuclear deal is hung up right now because the leader of the pack America is offering us a good rate on the fuel and reactor package. But whoever sells the fuel+reactor package to you will demand all sorts of ancilliary rubbish to ensure some kind of IPR protection. The Americans simply have the annoying habit of dressing up their IPR protection as some kind of "save the World from the nuclear proliferation" rubbish - the rest of them have more subtle ways of doing the same thing.

9) Our Uranium is good enough and can be mined to meet our needs

If you actually read the DAE's numbers instead of just mouthing off about them you will see that our *proven* and *accessible* Uranium reserves are poor quality and we have not found a single vein of high quality ore in India. By contrast other nations have proven reserves of quality ore. We can keep looking but it does not look good for the price of mining Uranium domestically. Imports are the key to shoring up the local Uranium market until fresh sources (i.e. Thorium based extraction) becomes viable.

10) Soverignity is the most important thing!

And just you absolutely understand what I am saying - you are okay with importing natural gas and petroleum related infrastructure from the same Americans but then you don't want to import nuclear reactors? - Were you all asleep when the US and its friends refused to supply the Iranian refinery at Abadan last year? Did you just miss this crippling petrol and diesel shortage that the Iranians endured in the July this year? Or are you magically hoping that somehow Jamnagar will not be harmed by this kind of "negotiation"?

Let me sum this up those people in India who have a short *comprehension* span.

If you want your electricty to be uninterrupted and secure the domestic Indian diesel market against shocks from "sudden and unanticipated events", you *HAVE* to have fuel imports to existing reactors. This can only happen when the NSG obstacles are cleared and since America has created most of this NSG bullshit you have to deal with the Americans and their bizarre ideas of the world.

So instead of spending your time spewing venon on India's elected representatives, put your American passports, you American visa applications and your American supplied paychecks down and look carefully at what America really wants out of this deal.

Don't ask India's representatives stupid questions like "Why would America give India such a nice deal".

Find out for yourselves.

The DCH (and their pied pipers) must go beyond the Cold War psyops about America and go deeper into its national desires. Try to get a sense of why America does what it does and then open your mouth.

Because of your irresponsible behaviour the nation's political parties have to stage an unprofitable drama in parliament. This has already massively eroded the credibilty of the office of the Prime Minister and cost *India* hundreds of crores. This drama needs to be toned down before it actually costs us thousands of crores of rupees. The sooner you DCH (and the pied pipers) sort out your ignorance issues, the sooner this drama ends.

Monday, December 10, 2007

On this Malaysia Thing.


Yes, I am aware of the problems faced there, and frankly I am extremely reluctant to get mixed up in this. If you start in Malaysia you will have to eventually follow that stream to KSA itself because conditions there for Indians even Muslims are pretty bad - far worse than Malaysia. I have absolutely no intention of going down that path.

In very very brutal plain speak - there are many marginalised Indians in India I would rather spend money on.

As Sri Raman has already indicated, we can't get mixed up in this without damaging our relationship with the Malaysian leadership, and absolutely honestly, no one I know wants to do that. The Malays and us go back a long way, and I am not going to push that aside. Heck, when the Taliban were in power and that whole drama happened in Kandahar, I was against doing anything that damaged our ties with them and that affected India way way more directly.

I accept Ashok Malik's contention that the Malaysian leadership is trying to send the Indian government a message with its statements in this matter. However I would await a more nuanced reading of the message before rushing to make suggestions about what to do here.

There has been immense friction between Malaysia and the US in recent times. The footage provided by western media services to these events tells me an entirely different story. Do I really believe that these services suddenly give a crap about the marginalised Indian origin people in Malaysia? No I don't.

The HINDRAF's high profile media campaign brings forth memories of a colour revolution.

My instinct is to give this a wide berth.

And the DCH and their pied pipers need to give this a rest.

Thursday, December 06, 2007

Understanding the role of diesel in India.

I had said earlier that diesel was India's lifeline.

Let me put some numbers on it.

India imports 70% of the oil it uses. This is about 100 Million Metric Tonnes (MMT), with crude trading at about $100 per barrel, we get a bill of about $70 Billion.

India consumes about 50 MMT of Diesel.

The Indian Railways and the road transport sector consumes about 80% of that.

Coal accounts for about 30% of the total transport activity.

So basically to move the coal around to our (Thermal Power Plants) TPPs we consume approximately 10 MMT of diesel a year.

That is almost exactly how much the DOD burned during the year 2006 for the operations in Iraq and Afghanistan. The only way to logistically hedge against supply disruptions from KSA/Iraq, is for the US to turn to India for this specifically Jamnagar for things like Diesel and ATF.

Now the question is, what is the size of the US fuel hedge? they are going to come and ask us for 5-10 MMT of heavy oils, then can we really spare that much? at a time when we need to move more coal for our TPPs?

If we don't move more coal to our TPPs, how are we going to make up the short fall due reduced capacity factors on our Nuclear Power Plants?

Ofcourse you all remember that our Nuclear Power Plants are running at lower capacity factors due to anticipated fuel shortages?

Mind you I have left out the impact this could have on other things like pump sets, agriculture related transport etc...

But does even such a simple calculation enter the DCH consciousness?

Tuesday, December 04, 2007

India US Nuclear Deal: An irretrievable state of debate

The debate on the India US nuclear deal is in an irretrievable state. No matter what one says or does, one cannot force a conclusion.

A number of hyper-active and extremely vocal groups have filled the air with inaccurate rubbish. These groups fall on the right and left extremes of the political spectrum and are driven exclusively by a desire to dominate the national debate in the media than any real national interest. If the nation burned to the ground, these groups would be happy, because then they would have more to whine about. They have set up a fantasical notion of India which can never be achieved in a measurable amount of time, and we are all to aspire - nay pine for it and in its absence, per their vision of things, we are to heap abuse on India and its leaders, and thus reject what little happiness we can have in India.

The sheer volume of material emerging from these polarising influences is so high that the entire political system is forced to respond to it and pretend it is somehow accomodating these people and their views. This paralysing resources within the political system.

A creative use of government propaganda resources could in theory be applied to subdue these groups, however this does not seem to be worth the effort at this time. A bare minimal exertion required to contain such views is obviously necessary but I really don't see any point in going to great lengths to shut these views down for the sake of the nuclear deal.

There was a limited window in which the deal could have been profitably operationalised from India's point of view. In this period, the dollar was about to drop and that gave India tremendous bargaining power. Now the dollar has dropped and India's bargaining power is considerably less. The deal can now only be operationalised in a way that benifits India less and perhaps benifits US corporate energy interests more. That should tell you a lot about who paid for all this media nautanki on this issue.

As alluded to in pieces by Sri. Vikram Sood and Mme. Arundhati Ghose, in its current state, the debate is a political struggle that is disconnected from the harsh economic realities confronting us. At this point as Sri. Sood carefully implies, even if the India-US deal were to go through, no pricing stability could be guarenteed on the electricity produced. Mme. Ghose goes one step further to indicate that the concerns of soverignity raised by hyper reactive types are completely hollow and that the technical and economic reality of the deal is lost on most who debate it.

The statements by Sri. Yashwant Sinha, represent the best anyone in India can do at this time : issue a carefully worded assurance to the US that India will renegotiate the deal at another time. Though the US will publicly say that it has no interest in a renegotiation, its actions will say otherwise. Needless to say this kind of talk will drive India into a confrontation with the US. However there appears to be no alternative to a confrontation at this point.

Without a nuclear deal of some kind energy shortages will occur in India and our dependence on heavy oil will become an extremely sensitive matter. As I said in an earlier post here, Coal may be India's great energy reserve, however heavy oil (i.e. diesel and kerosene) is our lifeline. In the short term, we are going to see a reduction in nuclear power production. If the diesel prices fluctuate excessively, these costs will propagate into costs of electricity from the grids. It is also likely that the grids may not be able to bear the additional load, and we will have to introduce fresh energy economisation measures to keep our industries functioning. This will mean more blackouts in the residential areas and a deeper reliance in the small scale sector on heavy oil based generation.

Dear readers, one will do well at this point to forget about the nuclear deal and carefully start watching the nation's fuel gauge. As the needle on the gauge strains towards empty, the problems will multiply. A pissed off and angry energy lobby in the US will making handling these issues very difficult.

Added later:

I suppose it is natural to ask if this kind of shift on our part constitutes a breach of trust. I do not think so but other may not agree with me.

I feel trust is important when you have an absence of information regarding intentions. In our case, we had to trust the Americans. The Americans use extremely advanced encryption and security on their internal government communications. This is beyond the ability of our intelligence agencies to penetrate. Thus, we had to rely on President Bush's word that the US possessed no ulterior motives with regards to the nuclear deal. This is where "trust" came in as far as we were concerned.

The Americans with the enormous intelligence gathering resources and numerous penetrations in India did not need to trust us. They had all the data intercepts they needed to form valid conclusions about our intentions and those intercepts should clearly show that we were sincere in our efforts but that circumstances beyond our control - specifically the unusual effectiveness of NPA inspired counter-deal propaganda has made it impossible for our side to achieve our stated aims.

That said - pulling away from the deal will negatively colour American perceptions of India. There is nothing we can do about this. While it is unlikely that the perceptions will fall as low as the did when a certain American ambassador remarked that India was good for nothing save exporting communicable diseases, it is likely that an extremely pissed off energy lobby in the US will force a degree of heavy handedness from the USG. If there is no US invasion of Iran, I suspect the hostility will remain muted and under wraps but if the US invades Iran, I think the sense of hostility will break out into the open.

Another important consequence that may be of relevance to a number of US NRIs who tend to believe ridiculous fantasies about India becoming a great power. What door may have laid open to India to attain great power status by piggybacking a US agenda - like for example - the Chinese in 60s and 70s is now closed.

India will have to find its own way.

There are a number of consequences to such an event. I leave it to my readers to work those out.

Monday, December 03, 2007

Iran: US presses the pause button.

The US appears to be attempting posture shift vis-a-vis Iran.

The public pronouncements of the US National Security Advisor appear to be aimed at discouraging both speculators and the media pack on a US invasion of Iran.

If the idea in the USG is to ensure that all talk of an invasion of Iran is scotched, then one such utterance is not enough. More such pronouncements will be required to bring the situation back from the brink. Whether the USG recognises it or not, the media has already told the Iranians that a US attack could occur at any time. This has added to whatever advantage the Iranians might have gained from watching the US "talk-to-walk" time in Iraq. If the US seeks to genuinely avoid war with Iran, it will have to do more to gain Iranian confidence on this issue.

If the idea in the USG is to ensure that no one save those designated by the Bush Admin speaks out of turn about a US invasion of Iran - then it is likely that one such utterance will be sufficient. Most of the talking heads in the media rely on some degree of consonance with the official line and by deliberately redrawing the official line - the pool of people on US TV yammering about the war with Iran will dry up. Though this will do nothing to reassure the Iranians, it will ensure that the debate in the US itself - does not overheat.

Either ways it appears for now that the invasion of Iran has been postponed.

Though this kind of thing is quite stunning, it is not clear what has prompted this change of stance in the US. It is possible that

- the profitability of the invasion of Iran declined with the dollar i.e. the net damage to the dollar via Iranian actions became a small fraction of the damage caused by a decline in international confidence in the dollar following the sub-prime crisis or

- US public opinion was against getting into another long drawn out counter-insurgency campaign in a foreign land and this raised electoral costs for the Republican party. The US also largely failed to gain support for its anti-Iran actions in Russia, China and Europe. It is likely that the absence of interational support made US expressions of unilateralism unsustainable or

- the deteriorating situation in Pakistan made an action in Iran dangerous and so it had to be postponed or

- Iran did something to deflect the blow. Though from the way the debate was being shaped by the US at every level, it seemed highly unlikely that there was anything the Iranians could have done to avoid getting thrashed by the US. From the way they were talking about it, the Americans seemed all too keen to get into a fight with Iran.

Whatever the reason, from the Indian point of view, it is unwise to accept this development as a sign that this US-Iran issue is over.

Though India has enough coal reserves, it may be recalled that heavy oil is India's real lifeline.

The Indian Railway transports coal around the country using diesel fueled locomotives. Without diesel, coal will never reach India's TPPs. Diesel is used in a majority of agricultural activities (pumps, tractors, trucks - food production, harvesting and transport). A vast number of critical vehicles (i.e. GOI/security forces) rely on diesel. Another heavy oil, kerosene is used in a majority of urban Indian households for cooking. A refined version of Kerosene (Jet A) is used as jet fuel. Heavy oil is used in electricty generation vital to India's smaller industries.

Fuel substitution projects are underway, for example Jatropha based biodiesels are being used in the Indian Railways, however this effort is in its infancy and cannot provide security of supply.

A US attack on Iran (and a host of other instabilities in the Middle East) could cause unacceptable fluctuations in the domestic price of heavy oils in India.

India will remain vigilant to that possibility.