sneezymelon
NetZombie
Holy God!How can one type such long posts??
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about that 123 agreement...
- Thread starter blr_p
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gregory house
philosopher-in-chief
Date: 19 Aug 2007
That was a good article.
Yes. The US is still the biggest market in the world. And the biggest market for China. And will remain so for another decade or two. But China and India will catch up in the market size game in due course.
Currency does not recognise markets. It is a reflection of value.
Consider Zimbabwe under Mugabe. All Zimbabweans want bread. That does not automatically give the Zimbabwean currency value. The bread will be sold at the price that recovers its cost and makes the seller a profit. These proceeds will be invested by him in doing the same thing again. If the currency cannot be exchanged for flour, the seller will not accept that currency. The same thing happens lower down the chain. The flour dealer will not accept the currency if he cannot use it to pay for wheat and so on.
In the case of the US, they are consuming more that they are producing. If it were an isolated economy, that would be different. Supply = Consumption and currency is a convenient way of exchanging value. But since they are not isolated and are drowning themselves in imports, they have to pay for it somehow. Their exports take care of some of the bill. What about the rest? Say they have to pay the world USD 500 billion. Lets say the world accepts the amount in dollars. Now what is the world to do with these dollars? This money cannot be exchanged for anything American as whatever America could export, it has already done so. The only alternatives left are - invest in US Govt. securities, US markets and use the balance to trade amongst themselves.
This is what the world has been doing for the past 15 years. Bankrolling USA. The world and importantly China, has huge amounts invested in US treasuries and markets. Their only incentive is that if they pull out the money, the US economy would crumble and that can lead to unforeseen consequences. So they are playing the "facing the known than the unknown evil" game. But they are running out of patience. The US has to tighten its belt. Otherwise it will explode because of overeating (sic). As the article says, the US is in no position to boss around with China. China can do what it wants. At the most, it will attempt to give the US economy a soft landing because too many of its customers in other countries would be impacted by a US meltdown.
As is made out, one does not need advanced degrees in management and economics to analyse and comment on economic issues. Economics, like much of science, works on logic. If you think logically, you can come to good conclusions. But countries, that would not dream of thinking that they could legislate gravity out of existence, don't seem to have the same regard for the power of economics. Demand vs. Supply might just be the most powerful force in the universe.
Economics does not take kindly to orders, fiats and assumptions. Many so called gurus and investment analysts who have bitten dust bear testament to this. I used to hate the subject in college with idiotic teachers and professors trying to teach Ricardian Theory of Rent without showing or creating any interest in the subject. Now, it is interesting, to say the least.
Regarding Indian politicians, we all know exactly how they operate. The Left is Anti-American. The BJP actually initiated the process of getting cozy with US and would have done the same thing the UPA is doing, had they been in power right now. As to the rest, I am curious to know if they are sure of the difference between their head and their ****.
@sneezymelon
We read the other posts, ponder over it and search for articles to support our wild claims. Its takes about 30-60 minutes to write each post. And its is enjoyable and educational at the same time.
Date: 20 Aug 2007
Ambassador to US: 'We will have zero credibility'
Date: 21 Aug 2007
Left playing Chinese Checkers
Rajiv Desai suggests, in today's TOI (edits page), that the Left is actively sabotaging the deal under instructions from Beijing. There is a very thin line which separates pigheadedness from malice.
The otherwise-moral Left goes deep red when confronted with its activities during the 1962 war when they provided tacit support to Beijing. The government should hurl this issue back at them and ask them where a difference of opinion ends and anti-national activity begins.
Note for moderator: Automerging doubleposts is making this post look like a blog. I have to insert dates to separate the various posts.
That was a good article.
Yes. The US is still the biggest market in the world. And the biggest market for China. And will remain so for another decade or two. But China and India will catch up in the market size game in due course.
Currency does not recognise markets. It is a reflection of value.
Consider Zimbabwe under Mugabe. All Zimbabweans want bread. That does not automatically give the Zimbabwean currency value. The bread will be sold at the price that recovers its cost and makes the seller a profit. These proceeds will be invested by him in doing the same thing again. If the currency cannot be exchanged for flour, the seller will not accept that currency. The same thing happens lower down the chain. The flour dealer will not accept the currency if he cannot use it to pay for wheat and so on.
In the case of the US, they are consuming more that they are producing. If it were an isolated economy, that would be different. Supply = Consumption and currency is a convenient way of exchanging value. But since they are not isolated and are drowning themselves in imports, they have to pay for it somehow. Their exports take care of some of the bill. What about the rest? Say they have to pay the world USD 500 billion. Lets say the world accepts the amount in dollars. Now what is the world to do with these dollars? This money cannot be exchanged for anything American as whatever America could export, it has already done so. The only alternatives left are - invest in US Govt. securities, US markets and use the balance to trade amongst themselves.
This is what the world has been doing for the past 15 years. Bankrolling USA. The world and importantly China, has huge amounts invested in US treasuries and markets. Their only incentive is that if they pull out the money, the US economy would crumble and that can lead to unforeseen consequences. So they are playing the "facing the known than the unknown evil" game. But they are running out of patience. The US has to tighten its belt. Otherwise it will explode because of overeating (sic). As the article says, the US is in no position to boss around with China. China can do what it wants. At the most, it will attempt to give the US economy a soft landing because too many of its customers in other countries would be impacted by a US meltdown.
As is made out, one does not need advanced degrees in management and economics to analyse and comment on economic issues. Economics, like much of science, works on logic. If you think logically, you can come to good conclusions. But countries, that would not dream of thinking that they could legislate gravity out of existence, don't seem to have the same regard for the power of economics. Demand vs. Supply might just be the most powerful force in the universe.
Economics does not take kindly to orders, fiats and assumptions. Many so called gurus and investment analysts who have bitten dust bear testament to this. I used to hate the subject in college with idiotic teachers and professors trying to teach Ricardian Theory of Rent without showing or creating any interest in the subject. Now, it is interesting, to say the least.
Regarding Indian politicians, we all know exactly how they operate. The Left is Anti-American. The BJP actually initiated the process of getting cozy with US and would have done the same thing the UPA is doing, had they been in power right now. As to the rest, I am curious to know if they are sure of the difference between their head and their ****.
@sneezymelon
We read the other posts, ponder over it and search for articles to support our wild claims. Its takes about 30-60 minutes to write each post. And its is enjoyable and educational at the same time.
Date: 20 Aug 2007
Ambassador to US: 'We will have zero credibility'
Date: 21 Aug 2007
Left playing Chinese Checkers
Rajiv Desai suggests, in today's TOI (edits page), that the Left is actively sabotaging the deal under instructions from Beijing. There is a very thin line which separates pigheadedness from malice.
The otherwise-moral Left goes deep red when confronted with its activities during the 1962 war when they provided tacit support to Beijing. The government should hurl this issue back at them and ask them where a difference of opinion ends and anti-national activity begins.
Note for moderator: Automerging doubleposts is making this post look like a blog. I have to insert dates to separate the various posts.
gregory house
philosopher-in-chief
Brahma Chellaney has his points. A stronger India has a better chance of getting a better deal. But so much has happened since 2005 that this deal not passing will be a royal snub to the US (TOI edit summarised. Also my own view). From now on, no other US president will even consider another deal with us and put his all into it because we always cry wolf. We would be repeating a Nehruvian 'himalayan' blunder. Anyway, if the relations are strong in the future, I am sure existing arrangements can be modified or enhanced.
The part on India being an importer of weapons is of our own making. If the DRDO were a bit more focused in approach and stop being so secretive about the duds and white elephants it is producing after having spent 15-20 thousand crores on the same, we might have a better chance. Now that the Tatas, Mahindras and L&T are entering defense production, I hope to see great results within the next decade.
Consider all the non-starters - Arjun Battle Tank (2 decades), LCA (2 decades), Trishul and Akash (Indian missiles far from being operational despite repeated tests) and many many more. I am sure the generals are very patriotic and are ready to die for the country. But even they would want working foreign weapons than non-working (or more seriously, malfunctioning) Indian ones when they are fighting. Misplaced nationalism, again. Analysts always put Pakistan down comparing our indigenous efforts to their Chinese ones. I couldn't care less. Den Xiaoping once said (I always thought it was Mao) - It doesn’t matter if a cat is black or yellow, so long as it catches mice. It fits here. Till Indian systems come up to international standards, I would prefer imported ones. Absolutely nothing wrong in that.
Regarding what US may do after signing the agreement and 1974, surely this is not 1974. Indira Gandhi was hostile to the US. The US was wary of India till it knew (in the 1990s) that we were not going to go the Soviet way. She did the first Pokhran test so that China would realise we were no pushovers. I appreciate her doing so. I am sure of one thing. This deal was not created to sucker-punch India, as Chellaney fears. We know who are enemies are. And they are not going to change soon. The US would be stupid to do anything to cause India and Indian security serious harm. Because that would leave the whole of Asia under the "Chinese Sphere of Influence".
The credible-deterrent thing is a non-issue. Does our not signing the deal mean we can start testing again? 10 tests this year, 10 the next and so on till we get a deterrent.. And the world will just keep mum (because we have signed no deal that restricts us from testing). Get real. We will have to use what we have.
Analysts in India are afraid of US naval bases in the Indian ocean. They are not for use against India. China owns the South China sea, has access to both the Bay of Bengal (Burma/ Bangladesh) and Arabian sea (Pakistan). US wants to make sure that things don't change too much in China's favour.
Finally, the deal is not only about India-US. We can always go for French technology (they have much-much better nuclear reactors). This deal will just enable that, I hope.
The part on India being an importer of weapons is of our own making. If the DRDO were a bit more focused in approach and stop being so secretive about the duds and white elephants it is producing after having spent 15-20 thousand crores on the same, we might have a better chance. Now that the Tatas, Mahindras and L&T are entering defense production, I hope to see great results within the next decade.
Consider all the non-starters - Arjun Battle Tank (2 decades), LCA (2 decades), Trishul and Akash (Indian missiles far from being operational despite repeated tests) and many many more. I am sure the generals are very patriotic and are ready to die for the country. But even they would want working foreign weapons than non-working (or more seriously, malfunctioning) Indian ones when they are fighting. Misplaced nationalism, again. Analysts always put Pakistan down comparing our indigenous efforts to their Chinese ones. I couldn't care less. Den Xiaoping once said (I always thought it was Mao) - It doesn’t matter if a cat is black or yellow, so long as it catches mice. It fits here. Till Indian systems come up to international standards, I would prefer imported ones. Absolutely nothing wrong in that.
Regarding what US may do after signing the agreement and 1974, surely this is not 1974. Indira Gandhi was hostile to the US. The US was wary of India till it knew (in the 1990s) that we were not going to go the Soviet way. She did the first Pokhran test so that China would realise we were no pushovers. I appreciate her doing so. I am sure of one thing. This deal was not created to sucker-punch India, as Chellaney fears. We know who are enemies are. And they are not going to change soon. The US would be stupid to do anything to cause India and Indian security serious harm. Because that would leave the whole of Asia under the "Chinese Sphere of Influence".
The credible-deterrent thing is a non-issue. Does our not signing the deal mean we can start testing again? 10 tests this year, 10 the next and so on till we get a deterrent.. And the world will just keep mum (because we have signed no deal that restricts us from testing). Get real. We will have to use what we have.
Analysts in India are afraid of US naval bases in the Indian ocean. They are not for use against India. China owns the South China sea, has access to both the Bay of Bengal (Burma/ Bangladesh) and Arabian sea (Pakistan). US wants to make sure that things don't change too much in China's favour.
Finally, the deal is not only about India-US. We can always go for French technology (they have much-much better nuclear reactors). This deal will just enable that, I hope.
gregory house
philosopher-in-chief
Sometime last week, the Times of India carried a quote by Groucho Marx in its Contrapunto (counterpoint) section. Here it is:
Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.
Certainly fits in this case.
Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.
Certainly fits in this case.
gregory house
philosopher-in-chief
Since the BJP does not seem ready to change its crass and opportunistic behaviour and since the Left is batting for China, it is time that Manmohan Singh called their bluff and recommended dissolution of parliament. Let the people of India decide on whether they want the deal to go through or not. If 10,000 crores have to be spent, so be it.
Surprisingly, the otherwise crazy and xenophobic Shiv Sena has shown mild support for the deal. Long live Bal Thakrey!
On the lighter side, in context of their opposition to the deal, the acronyms of parties opposed to it can stand for something entirely different. Like the following:
BJP
Bharatiya Janata (ko joote maaro) Party
Bharatiya Janata (ko Bewakoof banaao) Party
CPI
Cheen Pehle India (Baadmein)
CPI(M)
Cheen Pehle India (Bhaad) Mein
Surprisingly, the otherwise crazy and xenophobic Shiv Sena has shown mild support for the deal. Long live Bal Thakrey!
On the lighter side, in context of their opposition to the deal, the acronyms of parties opposed to it can stand for something entirely different. Like the following:
BJP
Bharatiya Janata (ko joote maaro) Party
Bharatiya Janata (ko Bewakoof banaao) Party
CPI
Cheen Pehle India (Baadmein)
CPI(M)
Cheen Pehle India (Bhaad) Mein
Source
Deal will end our isolation
Aug 23 2007
G Parthasarathy
Never in independent India's history has a foreign policy issue been so hotly and comprehensively debated as the July 2005 India-US civil nuclear Agreement that seeks to end, not just American, but global nuclear sanctions against India. The acrimonious exchanges between supporters and detractors of the July 2005 Agreement has precipitated a political crisis, with the Left parties voicing concern over the Hyde Act passed by the US Congress that seeks to end existing sanctions against India and about what the Left refers to as a "strategic alliance" with the US. Why is it important to sign an agreement with the US on nuclear cooperation given the manner in which the US unilaterally abrogated a solemn agreement with us to supply nuclear fuel for the Tarapur Power Plant?
Ever since the Pokhran nuclear test of 1974, successive US Administrations have endeavoured to coerce us to "cap, roll back and eliminate" our nuclear weapons programme. This effort included establishing a cartel of 45 countries, the Nuclear Suppliers' Group (NSG), to join the US to deny us access to nuclear technology for power generation. Despite this, we have built our own nuclear reactors fuelled by natural uranium and are on the way to building indigenous fast breeder reactors, using indigenous resources of thorium ore. This process will be facilitated and made self-sustaining if we have large resources of plutonium from power reactors.
Unfortunately, our own capabilities to develop nuclear energy are seriously constrained by the shortage of indigenous resources of uranium ore, making import of uranium ore imperative for significant nuclear power development. Moreover, is it desirable for a country like India to face the international odium of being subject to sanctions by 45 countries, when global solutions are required for developing non-polluting energy resources?
What India is attempting is not merely an end to American, but global sanctions. It has been evident that international sanctions against us will not end unless, in the first instance, the US ends them. This has been conveyed to us by good friends like Russia and France. Hence, when President George W Bush took the decision to move to end US sanctions, it was only natural for us to seize the opportunity.
Opposition to the July 18, 2005, Agreement is as strong in the US as it is in India. But, even if there are shortcomings in the 123 Agreement that has been agreed upon, this is the only available key to ending nuclear sanctions against India now imposed by 45 countries. India has held extensive consultations with the members of the NSG. China has strongly lobbied NSG members against ending nuclear sanctions on India, duly assisted by its 'all-weather friend' and partner in nuclear and missile proliferation, Pakistan.
There are three issues that need to be considered in any agreement we sign on nuclear energy cooperation. Does the agreement contain guarantees for uninterrupted supply of fuel for the lifetime of imported reactors? Can we reprocess the spent fuel for use in future fast breeder reactors? Does the agreement constrain our strategic nuclear weapons programme, including our right and freedom to test nuclear weapons, should the need arise? The State Department spokesman categorically asserted: "The proposed agreement has provisions in it that in the event of a nuclear test by India, all cooperation is terminated." Prime Minister Manmohan Singh asserted: "The agreement does not in any way affect India's right to undertake future nuclear tests if necessary."
The US spokesperson soon had to backtrack, as his assertion was not entirely correct. Under Article 14, the US could seek termination of the agreement and return of nuclear fuel in the event of a nuclear test by India. But the entire process would involve detailed consultations, with the US giving due consideration to India's security imperatives. Thus, if India were to carry out a nuclear test in response to tests by a nuclear-armed neighbour, the US would find it difficult to justify or implement sanctions.
India will, however, not be able to internationally justify any nuclear test, or avoid worldwide condemnation and sanctions with or without the 123 Agreement, if it unilaterally and suddenly conducts a nuclear test, when the rest of the world is eschewing nuclear testing.
Nuclear sanctions will end only after India concludes a safeguards agreement with the IAEA, the NSG ends global sanctions on India and the US Congress approves the 123 Agreement. It is at that stage that Parliament has to exercise maximum vigilance on how future imports for nuclear energy are undertaken. Section 5.6 of the 123 Agreement provides for India to maintain stockpiles of nuclear fuel that can meet its lifetime requirements of imported reactors in the event of termination of US Supplies. An action plan for the maintenance of reserve stockpiles needs to be drawn up.
Any agreement for the import of reactors from the US should contain specific provisions that we can import fuel for these reactors from countries other than the US. As a further safeguard, the Atomic Energy Act could be amended to provide for foreign equity participation in any imported nuclear power plant. Further, no reactors should be imported from the US till procedures for reprocessing spent fuel are approved by the US Congress. Contrary to claims by Government functionaries, we do not have an unfettered 'right' to reprocessing under the 123 Agreement.
The end of sanctions should not be construed as an open license for excessive imports. Parliament will have to ensure that a substantial proportion of our reactors are indigenous, even though they may be run on imported iron ore. Indigenous reactors are more cost efficient than imported ones. The effort should be to promote energy security by expeditious and effective development of our three stage, thorium-based fast breeder reactor programme. But, at the same time, we have to realise that any future American Administration will not be as forthcoming as that of Mr Bush in ending nuclear sanctions.
International sanctions will end only after we negotiate an India specific safeguards agreement with the IAEA and the NSG decides to end sanctions, overcoming China's opposition. Parliament should finally accept or reject the terms set by the US and the NSG only after the entire process of ending sanctions is completed. It makes little sense to halt or delay the process at this stage.
Deal will end our isolation
Aug 23 2007
G Parthasarathy
Never in independent India's history has a foreign policy issue been so hotly and comprehensively debated as the July 2005 India-US civil nuclear Agreement that seeks to end, not just American, but global nuclear sanctions against India. The acrimonious exchanges between supporters and detractors of the July 2005 Agreement has precipitated a political crisis, with the Left parties voicing concern over the Hyde Act passed by the US Congress that seeks to end existing sanctions against India and about what the Left refers to as a "strategic alliance" with the US. Why is it important to sign an agreement with the US on nuclear cooperation given the manner in which the US unilaterally abrogated a solemn agreement with us to supply nuclear fuel for the Tarapur Power Plant?
Ever since the Pokhran nuclear test of 1974, successive US Administrations have endeavoured to coerce us to "cap, roll back and eliminate" our nuclear weapons programme. This effort included establishing a cartel of 45 countries, the Nuclear Suppliers' Group (NSG), to join the US to deny us access to nuclear technology for power generation. Despite this, we have built our own nuclear reactors fuelled by natural uranium and are on the way to building indigenous fast breeder reactors, using indigenous resources of thorium ore. This process will be facilitated and made self-sustaining if we have large resources of plutonium from power reactors.
Unfortunately, our own capabilities to develop nuclear energy are seriously constrained by the shortage of indigenous resources of uranium ore, making import of uranium ore imperative for significant nuclear power development. Moreover, is it desirable for a country like India to face the international odium of being subject to sanctions by 45 countries, when global solutions are required for developing non-polluting energy resources?
What India is attempting is not merely an end to American, but global sanctions. It has been evident that international sanctions against us will not end unless, in the first instance, the US ends them. This has been conveyed to us by good friends like Russia and France. Hence, when President George W Bush took the decision to move to end US sanctions, it was only natural for us to seize the opportunity.
Opposition to the July 18, 2005, Agreement is as strong in the US as it is in India. But, even if there are shortcomings in the 123 Agreement that has been agreed upon, this is the only available key to ending nuclear sanctions against India now imposed by 45 countries. India has held extensive consultations with the members of the NSG. China has strongly lobbied NSG members against ending nuclear sanctions on India, duly assisted by its 'all-weather friend' and partner in nuclear and missile proliferation, Pakistan.
There are three issues that need to be considered in any agreement we sign on nuclear energy cooperation. Does the agreement contain guarantees for uninterrupted supply of fuel for the lifetime of imported reactors? Can we reprocess the spent fuel for use in future fast breeder reactors? Does the agreement constrain our strategic nuclear weapons programme, including our right and freedom to test nuclear weapons, should the need arise? The State Department spokesman categorically asserted: "The proposed agreement has provisions in it that in the event of a nuclear test by India, all cooperation is terminated." Prime Minister Manmohan Singh asserted: "The agreement does not in any way affect India's right to undertake future nuclear tests if necessary."
The US spokesperson soon had to backtrack, as his assertion was not entirely correct. Under Article 14, the US could seek termination of the agreement and return of nuclear fuel in the event of a nuclear test by India. But the entire process would involve detailed consultations, with the US giving due consideration to India's security imperatives. Thus, if India were to carry out a nuclear test in response to tests by a nuclear-armed neighbour, the US would find it difficult to justify or implement sanctions.
India will, however, not be able to internationally justify any nuclear test, or avoid worldwide condemnation and sanctions with or without the 123 Agreement, if it unilaterally and suddenly conducts a nuclear test, when the rest of the world is eschewing nuclear testing.
Nuclear sanctions will end only after India concludes a safeguards agreement with the IAEA, the NSG ends global sanctions on India and the US Congress approves the 123 Agreement. It is at that stage that Parliament has to exercise maximum vigilance on how future imports for nuclear energy are undertaken. Section 5.6 of the 123 Agreement provides for India to maintain stockpiles of nuclear fuel that can meet its lifetime requirements of imported reactors in the event of termination of US Supplies. An action plan for the maintenance of reserve stockpiles needs to be drawn up.
Any agreement for the import of reactors from the US should contain specific provisions that we can import fuel for these reactors from countries other than the US. As a further safeguard, the Atomic Energy Act could be amended to provide for foreign equity participation in any imported nuclear power plant. Further, no reactors should be imported from the US till procedures for reprocessing spent fuel are approved by the US Congress. Contrary to claims by Government functionaries, we do not have an unfettered 'right' to reprocessing under the 123 Agreement.
The end of sanctions should not be construed as an open license for excessive imports. Parliament will have to ensure that a substantial proportion of our reactors are indigenous, even though they may be run on imported iron ore. Indigenous reactors are more cost efficient than imported ones. The effort should be to promote energy security by expeditious and effective development of our three stage, thorium-based fast breeder reactor programme. But, at the same time, we have to realise that any future American Administration will not be as forthcoming as that of Mr Bush in ending nuclear sanctions.
International sanctions will end only after we negotiate an India specific safeguards agreement with the IAEA and the NSG decides to end sanctions, overcoming China's opposition. Parliament should finally accept or reject the terms set by the US and the NSG only after the entire process of ending sanctions is completed. It makes little sense to halt or delay the process at this stage.
gregory house
philosopher-in-chief
The Times of India website is devoting more time and space to Salman Khan than to what is the current state of affairs in India politics. Good for them.And when will websites realise that php, asp etc. can be used without making the links appear like a minefield. If given a little thought, a static structure can be achieved which preserves the reader's sanity and provides easy-to-remember urls.
gregory house
philosopher-in-chief
Swaminathan Anklesaria Aiyar has been writing the Swaminomics column in TOI for as long as I can remember. He is, infact, a predecessor to Stephen Levitt (Freakonomics, anyone?), with his contrarian view on everything economics. Here is his take on 123:
Relax, Mr Karat: 123 is a non-starter-Swaminomics-Swaminathan A Aiyar-Columnists-Opinion-The Times of India
Relax, Mr Karat: 123 is a non-starter-Swaminomics-Swaminathan A Aiyar-Columnists-Opinion-The Times of India
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