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What Is Expected From PM During His US Visit

Sunday 17 July 2005, by KARAT*Prakash

THE prime minister, Dr Manmohan Singh, will be making his first official visit to the United States of America from the 17th of July. This is an important visit. The United States is the most powerful country in the world today. It is also India’s largest trading partner. The policies of the Bush administration have a direct bearing on India’s economy, security and national interests. India, for its part, is one of the leading developing countries whose economic and political potential is widely recognised. The outcome of the visit therefore will be closely watched not only in India but in the international arena and in particular the third world countries.


In recent years, due to the one-sided pro-American policies of the Vajpayee government, the impression had gained ground that India is moving into the orbit of the United States as a strategic ally. The coming into office of the UPA government and the adoption of the Common Minimum Programme, wherein the stress is on an independent foreign policy, raised hopes that India would correct the earlier distortions and play its due role as a leading representative of the developing countries and as one of the founders of the Non-Aligned Movement (NAM).

In the-run up to the prime minister’s visit, a number of issues have come up which require careful consideration. A coherent set of policies which put Indo-American relations on a balanced and equitable plane need to be formulated.

Being the most powerful capitalist country with a global hegemonic outlook, the United States is interested in exploiting India’s large market. It is particularly keen to see that India is fully open to the flow of international finance capital and provides privileged access to the giant American multinational corporations.

The UPA government headed by Dr. Manmohan Singh is eager to utilise this interest of the US to push forward with the policies on liberalisation. In doing so, the Left expects the government to keep in mind the framework of the Common Minimum Programme. The Left has stated that FDI flows into the country should augment our productive forces, help acquire new technology and generate employment. The CMP has also accorded priority to employment generation, recognising that the low rate of growth of employment was a marked feature of the BJP-led regime.

The United States is keen that India open up its retail trade to foreign investment. It is well known that the giant US company WalMart is interested in coming to India. Retail trade employs nearly 8 per cent of the total workforce of our country and contributes around 13 per cent to the GDP. In the absence of the expansion of the manufacturing sector, retail trade is one area that has absorbed the surplus labour from the countryside. The UPA government should resist the temptation to make any announcement about opening up the retail trade to FDI during the prime minister’s visit.


As far as the financial sector’s liberalisation is concerned, already a major concession was made during the prime minister’s visit to New York for the United Nations General Assembly session last year. He announced that the UPA government would implement the policy announced by the BJP-led government of allowing 74 per cent FDI in the private banking sector in India. The United States wants further liberalisation of the financial sector, including the insurance sector. The Left has consistently maintained that deregulation and opening up of the financial sector can lead to loss of economic sovereignty. Further, India has to play an independent role by developing its economy and strengthening the united forums of the developing countries for ending the iniquitous international economic order. National control over the financial sector is a key task.

The United States loudly proclaims that it encourages the free flow of trade and commerce while it repeatedly takes protectionist steps and prevents the free flow of personnel and goods even in bilateral relations. Moreover, the United States does not hesitate to interfere in India’s economic relations with other countries. One would expect the prime minister to convey in clear terms India’s determination to pursue the Iran-Pakistan-India gas pipeline project. The US should be told that it cannot hamper India’s quest for energy security.

An important part of the energy requirements of India is the civilian nuclear programme. The United States has engaged India in discussions on civilian nuclear cooperation. It will be prudent on the part of the UPA government to view this matter cautiously. The US has a highly restrictive policy of supply of high technology to India. The supply of “dual-use” technology is blocked. Any decision regarding civilian nuclear cooperation must be taken keeping in mind the evolution of India’s nuclear energy sector in an independent and self-reliant manner.

The prime minister is visiting the United States when President Bush is into his second (and last) term in office. The Bush presidency has been marked by an arrogant unilateralism, bypassing of the United Nations, and brazen aggression, the worst example being Iraq. For the first time a majority in opinion polls are expressing their lack of confidence in Bush’s policy in Iraq. Increasingly, his foreign and domestic policies are being challenged.


The UPA government is keen to enlist American support for India’s candidature as a permanent member of the Security Council. The United States has so far only declared support for Japan’s membership in the council. It has recently indicated that it may support one or two more countries. This is a clear attempt to inveigle India into granting more concessions and be amenable to becoming a junior partner of the United States in Asia. Unfortunately, the signal that India is willing to go along with US strategy has already been conveyed with the signing of the framework of Indo-US defence relations for a ten-year period. The CPI(M) has already criticised the various provisions of this agreement. Giving in to the US on such vital issues will be counterproductive and will actually detract from India’s credibility as an independent power which necessitates its representation in the Security Council.

The question of India’s representation in the Security Council should not be delinked from the wider question of the democratisation of the UN structure. The powers of the General Assembly should be strengthened. The deleterious impact of US unilateralism on the UN must be checked.

It will be instructive for the prime minister to find out during his visit the fate of the social security reforms that Bush wanted to push through. In the US every person makes a contribution out of his pay check to the social security fund. This fund is administered by a trust. Every US citizen reaching the age of 65 is entitled to the social security payment, irrespective of whether they were employed or not. Bush has proposed that the social security fund should be privatised and put in the stock market, just as other pension funds. The proposal has met with widespread opposition and the president has been forced to backtrack. In our country, government employees’ pension funds are proposed to be privatised and put in the stock market. The Pension Fund Development and Regulatory Authority bill to facilitate this is now before parliament. The people of India, who consider pension a social security benefit, oppose what the American people oppose --- the privatisation of the social security fund.

In Dr Manmohan Singh, India has a prime minister whose integrity and sincerity is unquestioned. In the recent period, we have seen how India’s prestige and stature in the developing countries and third world is once again being recognised. This was evident during the 50th anniversary of the Bandung conference held at Jakarta. It is expected that the prime minister, during his visit, will keep in mind this overall role and position of India when steps are taken to strengthen bilateral relations with the US.

See online : People’s Democracy


(Weekly Organ of the Communist Party of India (Marxist) Vol. XXIX

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