Neo-liberal policies will go: CPI(M)

Neo-liberal policies will go: CPI(M)

POLL AGENDA: CPI(M) general secretary Prakash Karat, along with Polit Bureau members, releases the manifesto for the general elections, in New Delhi on Monday. From left are Brinda Karat, Sitaram Yechury, M.K. Pandhe and Mohd. Amin.

NEW DELHI (March 16, 2009): The Communist Party of India (Marxist) on Monday said it was committed to forming a non-Congress, non-Bharatiya Janata Party government at the Centre that would strengthen democracy and ensure equitable economic development and social justice.

“Five years of the Congress-led government had been a major disappointment for the people and a let-down of the mandate of the 2004 Lok Sabha elections,” says the party in its manifesto for the general elections.

Four components

Releasing the document, general secretary Prakash Karat said the alternative policies would have at least four components: reversing the neo-liberal policies and bringing in pro-poor policies; standing firm on secularism and defending it; giving a new deal to all oppressed sections and ensuring social justice; and having an independent foreign policy.

On economic policies, the manifesto promises to increase the annual plan expenditure to 10 per cent of the country’s current GDP, stop further tax concessions to corporates, launch a drive to unearth black money, especially that stashed away in Swiss banks and other offshore tax havens, and strong regulation of the financial sector.

Other economic proposals include a total halt to disinvestment and privatisation of profit-making public sector undertakings, protecting the domestic industry from indiscriminate lowering of import duties and takeover of the existing Indian companies, prohibiting FDI in retail trade and reversing FDI guidelines to prevent backdoor entry.

Mr. Karat said the Left parties were successful in preventing the entry of WalMart into retail trade. He pointed out that the move would have displaced lakhs of shopkeepers and retail traders. Had Prime Minister Manmohan Singh and the then Finance Minister P. Chidambaram had their way, the entire banking industry would have collapsed.

The manifesto notes that the CPI(M) and the Left acted as “sentinels of people’s interest” and the major legislation — the National Rural Employment Guarantee Act and the Tribal Forest Rights Act — would not have come about in their present form without the party’s intervention.

It proposes strengthening democracy and federalism by amending Articles 355 (Protecting States against external aggression and internal disturbance) and 356 (imposition of President’s Rule) to prevent their misuse, devolving 50 per cent of the total collection of central taxes to States, a political solution to the Kashmir problem based on maximum autonomy on the full scope of Article 370 (special status to J&K.)

Terrorism

On terrorism, the manifesto says the policy will be to revamp the intelligence machinery, enhance coordination between the security and intelligence agencies, modernise police forces and strengthen coastal security.

Charging the Manmohan Singh government with following a foreign policy that “is tied to the coat-tail of the United States,” it promises to pursue an independent and non-aligned foreign policy that will defend India from imperialist pressures.

It proposes amendment to the Constitution to make legislative sanction mandatory for any international treaty and building of closer ties with West Asian countries.

Mr. Karat said the Defence Frame Agreement with the U.S. would be scrapped and the 123 Agreement on civilian nuclear cooperation reviewed and reworked.

As for Sri Lanka, he said there should be diplomatic and political efforts to protect the lives of Tamils in the war zone.

The party favoured an immediate political settlement based on autonomy for the Tamil-speaking areas within the framework of a united Sri Lanka.

“We are not happy as the Sri Lankan government has not expedited political settlement,” he said.

Third alternative gathers momentum, says Karat

Third alternative gathers momentum, says Karat

NEW DELHI (March 16, 2009): Communist Party of India (Marxist) general secretary Prakash Karat said on Monday the party envisaged more realignment of political forces and its effort to forge a third alternative had gathered momentum.

Taking a dig at the Congress and the BJP leaders for attacking the Third Front, he said: “we have not used the word Third Front; they are popularising it.”

Addressing a press conference after releasing the party manifesto, he pointed out BJP leader L.K. Advani said the Third Front was “impractical and unworkable,” while Congress leader Pranab Mukherjee observed that he did not understand the front.

“By the end of the elections, he [Mr. Mukherjee] will also understand,” Mr. Karat said. Nine parties were together on Sunday because there was need for a non-Congress, non-BJP alternative.

Mr. Karat said the four Left parties have seat-sharing arrangements with different political parties in different States. On Sunday, all came together to discuss alternative policies. In the past, fronts were formed after elections, he pointed out.

Since last year, the CPI(M) was clear that the BSP would go it alone. Just as the nine political parties that came together with the objective of having a non-Congress, non-BJP alternative, the BSP too wanted the Congress and the BJP defeated. “We hope the Third Front will emerge after the elections,” he said.

Asked whether the CPI(M) would join the government, he said if such a situation arose, the Central Committee would discuss and decide.

On the AIADMK, he said the CPI(M) was in constant touch with its chief Jayalalithaa. Even the joint statement of Sunday was sent for her approval before its release.

The Jharkhand Vikas Morcha of Babulal Marandi had sent a letter expressing solidarity with the parties striving for a third alternative.

“I have always favoured a non-NDA, non-UPA government at the Centre and assure you that after the Lok Sabha elections, my party will cooperate with all of you,” Mr. Marandi said in the letter to TDP chief N. Chandrababu Naidu, who invited him for the Sunday meeting.

The Haryana Jan Hit party too wanted to associate with the new arrangement, he said.

BSP to go it alone

BSP to go it alone

An appeal: Uttar Pradesh Chief Minister and BSP president Mayawati addresses a press conference in New Delhi on Sunday, 15 March, 2009.

NEW DELHI (March 15,2009): Bahujan Samaj Party (BSP) president Mayawati on Sunday announced that her party would go it alone in the Lok Sabha elections and made it clear that the issue of the prime ministerial candidate of the Third Front would be decided after the polls.

At a press conference here, she said the BSP had not entered into any alliance or understanding with any party for the elections. It would make all-out efforts to keep the Congress, the Bharatiya Janata Party and their coalitions out of power at the Centre. “The Left parties and some other parties are determined and working unitedly for this purpose, and our belief is that we will achieve our objective this time,” she said.

Referring to the dinner meeting with the Third Front leaders on Sunday, Ms. Mayawati said it was not scheduled to discuss the issue of prime ministership. “It has nothing to do with the issue of prime ministership. The issue will be decided only after the results of the 15th Lok Sabha polls are out.”

“All our allies are contesting the elections separately and after the polls, we will unitedly prevent the UPA and the NDA from coming to power.”

The Uttar Pradesh Chief Minister claimed that the Third Front’s growing influence had “rattled” the UPA and NDA leaders and made them panicky. In desperation, they were attacking it through public statements. It was the “heartfelt desire” of BSP founder Kanshi Ram that the party captured power at the Centre and in all States.

The BSP supremo released her party’s “appeal” for the elections in which she identified unemployment, rising prices, terrorism and lopsided economic policies of the Congress and the BJP as key problems facing the country.

The “appeal” attacked both the UPA and the NDA and alleged that their governments failed to come out with “proper” economic policies that had hit the common man hard. The BSP was the only viable alternative to the policies of the Congress and the BJP, it said and appealed to people to give an opportunity to the party to form a government at the Centre.

Mayawati, Third Front leaders join hands

Mayawati, Third Front leaders join hands

STRATEGY SESSION: Third Front leaders (from left) Sitaram Yechury (CPI-M), A.B. Bardhan (CPI), D. Raja (CPI), H.D. Deve Gowda (JD-S), Prakash Karat (CPI-M), Mayawati (BSP), Chandrababu Naidu (TDP), T.J. Chandrachoodan (RSP) and K. Chandrasekhara Rao (TRS) at a dinner meeting in New Delhi on Sunday, 15 March,2009

NEW DELHI (March 15, 2009): Bahujan Samaj Party supremo Mayawati and leaders of the Third Front, barring the AIADMK, joined hands at a dinner hosted by the Uttar Pradesh Chief Minister wherein they resolved to work for forming a non-Congress, non-BJP government at the Centre in the coming elections keeping the interests of the country and people in mind.

The coming together of the leaders is significant as it happened nearly eight months after they jointly decided to vote against the Manmohan Singh government in July last year during a debate on the nuclear deal in the Lok Sabha.

Ms. Mayawati, who gave a brief statement to the media in the presence of the leaders of the Third Front, said the meeting coincided with the birth anniversary of BSP founder Kanshi Ram and shifting of her residence in Delhi. They discussed the strategies to be adopted during the elections to provide a better alternative government minus the Congress, the BJP at the Centre.

Among others Prakash Karat, Sitaram Yechury (CPI-M), A.B. Bardhan, D. Raja (CPI), H.D. Deve Gowda (JD-S), N. Chandrababu Naidu (TDP), K. Chandrasekhara Rao (TRS), Jay Panda (BJD), Debabrata Biswas (AIFB) and T.J. Chandrachoodan and Abani Roy (RSP) attended.

Asked why he did not attend the dinner hosted by Ms. Mayawati, AIADMK Parliamentary Party leader V. Maitreyan said his party general secretary Jayalalithaa had asked him to attend only the meeting of Third Front held at the CPI(M) headquarters. Asked whether his party got an invitation from Ms. Mayawati, he said: “I don’t know.”

Mr. Yechury said Mr. Maitreyan was not able to attend the dinner as he was busy with the collection of funds for Sri Lankan Tamils and a meeting in this regard with Indian Red Cross officials.

Third Front leaders resolve to work for defeat of BJP, Congress

Third Front leaders resolve to work for defeat of BJP, Congress.

NEW DELHI (March 15, 2009): Leaders of nine political parties, which are working for a third national alternative, on Sunday resolved to work together to defeat the Congress and the BJP in the Lok Sabha polls.

“We shall work together to form an alternative government for the progress and welfare of people. We appeal to all secular and democratic forces and all sections of people to support this endeavour,” a joint statement issued by the leaders of four Left parties, the AIADMK, the BJD, the JD(S), the TDP and the TRS said.

Those who attended the meeting at AKG Bhavan, headquarters of the Communist Party of India (Marxist), were Prakash Karat and Sitaram Yechury (CPI-M), A.B. Bardhan and D. Raja (CPI), Debabrata Biswas and Devarajan (AIFB), T.J. Chandrachoodan and Abani Roy (RSP), H.D. Deve Gowda and Danish Ali (JD-S), N. Chandrababu Naidu, K. Rama Mohana Rao and M.V. Mysura Reddy (TDP), K. Chandrasekhar Rao and B. Vinod Kumar (TRS), V. Maitreyan (AIADMK) and B.J Panda (BJD).

Third Front launched

New ‘secular democratic alternative’ vows to form government

Third Front Leaders

Dobbespet (Karnataka) March 12, 2009: The Third Front was officially launched at an impressive rally here on Thursday, with a coalition of Left and major regional parties vowing to defeat the Congress-led UPA and the Bharatiya Janata Party-led NDA in the Lok Sabha elections to form the next government at the Centre.

The mammoth rally saw the Communist Party of India (Marxist), the Communist Party of India, the Janata Dal (Secular), the Telugu Desam Party, the Bahujan Samaj Party, the All-India Anna Dravida Munnetra Kazhagam, the Telangana Rashtra Samithi, the Revolutionary Socialist Party, the Forward Bloc, and the Janhit Congress Party of the former Haryana Chief Minister, Bhajan Lal, closing ranks against the Congress and the BJP.

The former Prime Minister and JD (S) supremo, H.D. Deve Gowda, who presided, said a national policy document would be prepared soon and placed before the people.

CPI(M) general secretary Prakash Karat set the tone for the rally, stating that the “historic” convention was organised to address the “country’s need for a new alternative.” The coming electoral battle would give the people a chance to choose a new secular democratic alternative that would meet the aspirations of the masses.

CPI general secretary A.B. Bardhan said the aim of the Third Front was to come to power. “It is an alternative to the policies and programmes [pursued by the UPA and the NDA],” he said.

Mr. Bardhan claimed that the Front could expand in the run-up to the elections and cited the possibility of the Biju Janata Dal (BJD) joining forces with it. “They have snapped ties with the BJP. They will not go to either the Congress or the BJP,” he said.

BSP MP Satish Chandra Misra, who was deputed by Uttar Pradesh Chief Minister Mayawati to attend the rally, said the Front was the “only alternative” at the Centre.

AIADMK representative V. Maithreyan accused the UPA of being “soft” on terrorism, while TRS president Chandrashekara Rao’s son and party leader Taraka Rama Rao accused the Congress of “betraying” the party by doing a U-turn on the issue of statehood for Telangana.

Neoliberalism is in retreat and Election 2009 presents an opportunity to bury it and go for an alternative development strategy.

Prabhat Patnaik

THE triumph of neoliberalism in India was never complete. The nationalised banks continued to remain state-owned; key public sector companies were not privatised; pension funds were not handed over to speculative finance capital; the currency was not made fully convertible; and the financial sector’s holding of foreign assets, other than the foreign exchange reserves of the Reserve Bank of India (RBI), continued to remain minuscule. In short, the two interlinked and mutually reinforcing processes underlying neoliberalism, namely, the dismantling of the public sector and integration with global finance, remained arrested.

This happened not for want of trying by the proponents of neoliberalism. Every means, fair and foul, was adopted, including crash measures, for insurance privatisation for instance, by a government in its last days that had even been reduced to a minority. But they floundered in the face of stiff opposition by the trade unions, especially those in the financial sector, by the political Left, and by the progressive intelligentsia. The glee with which the neoliberal establishment greeted the break between the Left and the United Progressive Alliance (UPA) and the alacrity with which it demanded that the neoliberal agenda should be rushed through after this break only underscore the significance of the Left’s resistance to neoliberalism. But even that resistance was not enough. Even the half-triumph of neoliberalism was enough to widen the hiatus in Indian society and shake modern Indian society to its very foundations.

The formation of a modern Indian nation out of an extraordinarily disparate population riven by millennia of caste, class, gender and other forms of oppression is one of the marvels of our times. It was made possible through the prolonged anti-colonial struggle that was founded upon an implicit “social contract”. This implicit “social contract”, which had been occasionally articulated earlier, notably in the Karachi Congress Resolution of 1931, was sought to be given expression to in the Constitution of the Republic. And central to it were: electoral democracy based on universal adult franchise, secularism, civil liberties, the end of caste and gender oppression, and the building of an egalitarian society. An economic regime that produces some of the world’s top billionaires at one end and thousands of peasant suicides on the other is a violation of that “social contract”; it endangers the foundation of the modern Indian nation. And neoliberalism constituted such a violation, above all by withdrawing state support from peasant and petty production.

Peasant and petty production can survive the onslaught of capitalism only through the active intervention of the state, and such survival must be ensured in a society like ours. The reason is not that the travails of the people in the process of transition from a declining petty production economy to an emerging capitalist one become unbearable when they are “between jobs”, and that the decline therefore needs to be fine-tuned. It does, but that is not the reason. The reason is that in the present conditions such a transition is simply not possible. The capacity of such capitalist development to generate employment is so low that not protecting peasant and petty production against displacement by such capitalist development can only produce a growing army of unemployed and underemployed paupers, that is, absolute immiserisation at one pole together with the growth of wealth at another.

Indeed the higher the rate of growth of the capitalist sector, the greater will be the scale of such absolute immiserisation, insofar as the higher growth impinges even more strongly on the petty production sector. The view that the solution to the persistence and even accentuation of poverty lies in the achievement of even higher rates of economic growth is thus erroneous; the higher growth itself can be, and has been, the cause of the accentuation of poverty.

The amelioration of poverty requires a state that prevents the decimation of petty production by capitalist development, that undertakes significant expenditure to provide welfare benefits to the entire working population and augment the social wage in both capitalist and non-capitalist sectors. The neoliberal state, by its very nature, cannot do this; indeed it does the opposite.

The term “neoliberal state” may cause surprise. After all, Nehruvian dirigisme and neoliberalism are often seen as two alternative possible policy sets that are available to the same state, that is, the same state is seen to be capable of pursuing either the one or the other. But this is a mistake. The transition from one policy to the other entails a change in the class configuration underlying the state, a change in the nature and composition of the dominant classes themselves, and hence also a change in the nature of the state. During the 1930s, for instance, when import-substituting industrialisation was undertaken in Latin America, replacing the earlier export-oriented strategy, this shift was accompanied by major political upheavals. It was not just a switch from one policy to another; this switch was part of a shift from one kind of state to another. The shift from Nehruvian dirigisme to neoliberalism in India was part of a worldwide shift from dirigiste to neoliberal regimes; in the advanced countries this shift was marked by the end of Keynesian demand management. This worldwide shift was the result of a process of “globalisation of finance”

Nation-states pursuing dirigiste policies had to bend to the caprices of international finance capital in order to prevent the flight of finance (unless they showed the political resolve to delink themselves altogether from the realm of globalised finance, which bourgeois states typically did not). Neoliberal policies, of “sound finance” (involving at best a small specified fiscal deficit); of trade and financial liberalisation; of rolling back the state from its interventionist role (except in the interests of finance capital); of privatising public sector units; and such like represented the interests and outlook of international finance capital.

Their pursuit accordingly entailed a shift in the character of the state, from one standing above classes and mediating between them (even while being a bourgeois state) to one that acted predominantly in the interests of the upper echelons of the bourgeoisie that was integrated with international finance capital. Expecting such a state to defend and protect petty production, to undertake welfare expenditure and to raise social wages, that is, to ameliorate poverty, is a chimera.

True, in India the transformation in the nature of the state was never complete. The framework of democracy constrained the march of neoliberalism, since within this framework the neoliberal agenda could never muster sufficient support for its total triumph; and yet this framework itself could not be jettisoned either. Notwithstanding all exhortations to “keep development above politics”, a euphemism for getting a consensus around the neoliberal agenda, such a consensus proved elusive. And yet even this half-triumph of neoliberalism, this semi-transformation of the state, was quite enough to do considerable damage, above all through its withdrawal of support to peasants and petty producers.

The cut in subsidies increased the input costs for the peasantry; the withdrawal from the goal of social banking reduced institutional credit to agriculture, throwing the peasantry back to the mercy of moneylenders for loans at exorbitantly high interest rates; the virtual winding up of extension services increased the peasantry’s direct exposure to, and dependence upon, multinational companies; trade liberalisation made the peasantry vulnerable to the vagaries of world market prices; the progressive dismantling of the domestic procurement mechanism removed even such protection as the growers of crops covered by the Commission for Agricultural Costs and Prices (CACP) could have got; and above all public expenditure deflation in the countryside reduced rural purchasing power drastically.

The upshot was not just agricultural stagnation and a decline in per capita foodgrain output in the period after the beginning of the 1990s; it was also a decline in per capita foodgrain absorption, which was even steeper than the output decline. The squeeze on purchasing power in rural India was so drastic that notwithstanding the declining per capita output, foodgrain stocks got built up whenever procurement operations were in force. And what was true of the peasants was equally true of other sections of petty producers as well. Squeezed between cheap imports on the one hand and rising input costs on the other, they experienced significant absolute impoverishment, to a point where their return per labour day fell below even the lowest minimum wage.

The tragedy, however, lies in the fact that the very same people who had been immiserised during the boom will get further immiserised during the crisis that is now upon us, the crisis that has been precipitated worldwide by the triumph of neoliberalism itself. The same neoliberal dispensation that had squeezed vast masses of the population during the boom has now precipitated a crisis in the course of which this squeeze will intensify.

But the crisis also spells the end of neoliberalism. It is obvious that the only way out of the global crisis is through fiscal stimuli in the form of increased government expenditures, which, to be effective, have to be coordinated across countries, and which, to be politically acceptable, have to be directed towards the welfare of the people. Such a coordinated stimulus, which would violate the tenets of “sound finance” and re-establish the proactiveness of the state, is obviously anathema for international finance capital and is being resisted by it. This resistance, however, only prolongs the crisis and strengthens the rejection of its ideology, neoliberalism, which is the cause both of the crisis and of its persistence. Neoliberalism clearly has reached the end of its tether.

In India, however, a novel effort is being made to rescue it. The government agrees that a fiscal stimulus has to be provided to get the economy out of the crisis, since all efforts at using monetary policy to revive demand have come a cropper. But in discussing the nature of this fiscal stimulus it emphasises larger “viability gap funding” for public-private-partnership (PPP) projects in the infrastructure sector. Larger government expenditure, in other words, should take the form of handing over larger amounts of funds to private capitalists in the name of developing infrastructure. Since PPP with viability gap funding was very much a part of the neoliberal agenda, this amounts to promoting neoliberalism even while apparently retreating from it, in a Keynesian direction, through having a larger fiscal deficit.

This strategy is not just futile in the present context, when the inducement to invest is so low that even larger government munificence is unlikely to help in inducing larger private investment, but also undemocratic, in a double sense. First, “infrastructure” being a portmanteau concept, promoting “infrastructure” development can mean anything from building a road in a village to building a five-star hotel; typically, the projects that are promoted in the name of “infrastructure” development prioritise the latter rather than the former, thereby ignoring people’s priorities. Secondly, the expenditure of public money is better done directly through a government accountable to the public than through transfers to private capitalists, the need for which is never established and the use of which is never monitored.

An appropriate fiscal stimulus, in the form of larger government expenditure on health, education, sanitation, drinking water, rural infrastructure, agricultural development, food security, and price support for the peasants and petty producers, will necessarily require controls over cross-border financial flows to prevent capital flight. It will also require an appropriate regime of protection which defends peasants and other primary commodity producers against the crash in world prices, which defends petty producers against cheap imports, and in general against the “beggar-my-neighbour” policies of other countries, and which ensures that the “leakages” of the impact of the fiscal stimulus are minimised.

All these entail a retreat from neoliberalism. But this retreat cannot be seen only as a temporary one. Overcoming the crisis has to be linked to an alternative development trajectory, a trajectory of peasant agriculture-led growth, which requires an economic regime altogether different from neoliberalism. The neoliberal regime, in other words, has to be buried for ever, which in turn is possible only if we shake off the hegemony of international finance capital. The struggle against neoliberalism, which had restricted its triumph to only a half-triumph, now needs to get intensified to roll it back altogether.

An Open Letter to Members of Parliament

AN OPEN LETTER TO MEMBERS OF PARLIAMENT
September 8, 2007

Dear Member of Parliament,

The Indo-U.S. bilateral agreement on nuclear cooperation has raised a number of issues which are of vital importance to the nation. Through this open letter we wish to place before you the considered views of the Communist Party of India (Marxist).

Ever since the Joint Statement issued in July 2005 during the Prime Minister’s visit to Washington in which the civilian nuclear cooperation agreement was announced, there has been a debate in the country about the merits of such an agreement. Political parties, nuclear scientists, the media and concerned citizens have been expressing their views. Parliament has also discussed the agreement at various stages. However, the current debate is crucial as the bilateral text has been finalised and the Government is planning to take the next steps to operationalise the agreement.

It is our contention that the nuclear cooperation agreement should not be seen in isolation from the overall context of India-US strategic relations, its impact on our foreign policy and our strategic autonomy. Further, the nuclear cooperation agreement must be seen in the context of our energy security, access to technology and the development of the three stage nuclear programme.

The bilateral “123″ agreement has also to be seen also in the light of the assurances given by the Prime Minister in his statement to Parliament on 17 August 2007.

The Left parties have asked the Government not to proceed with the next steps to be taken to operationalise the agreement.

Implications of the Hyde Act

Members of Parliament will recall that in August 2006, there was a debate on the draft law being discussed by the US Senate and the House of Representatives to amend the US Atomic Energy Act of 1954 to give exemption for the proposed nuclear cooperation agreement with India. The two draft legislations before the House of Representatives and the Senate contain many provisions which were detrimental to India’s interests.

The Prime Minister had given certain categorical assurances on the points raised regarding this draft legislation. The nine points which the Left parties had raised were covered by the Prime Minister’s statement. However, subsequent to that, the Hyde Act (Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act” was adopted by the US Congress in December 2006.

Many of the provisions of the Hyde Act go contrary to the assurances given by the Prime Minister in August 2006. What are these?

• Under the terms set out by the Hyde Act, it is clear that the Indo-US nuclear cooperation would not cover the entire nuclear fuel cycle. It denies cooperation or access in any form whatsoever to fuel enrichment, reprocessing and heavy water production technologies.

• The denial extends to transfer of dual use technology and covers items which could be used in fuel enrichment, reprocessing or heavy water production facilities. Thus, dual use restrictions remain on technology transfers to India. Hyde Act section 102 (13) states, “The US should not seek to facilitate or encourage the continuation of nuclear exports to India by any other party if such exports are terminated under US law”.

• Section 103 (a)(6) of the Hyde Act says US policy shall be “Seek to prevent the transfer to a country (India, in this case) nuclear equipment, materials or technology from other participating governments in the NSG or from any other source if nuclear transfers to that country (India, in this case) are suspended or terminated pursuant to this title (Hyde Act), the Atomic Energy Act of 1954 or any other US law”.

The Act concerns itself with areas outside nuclear cooperation and contains objectionable clauses to get India to accept the strategic goals of the United States. These issues are:

• Annual certification and reporting to the US Congress by the President on a variety of foreign policy issues such as India’s foreign policy being “congruent to that of the United States” and specifically India joining US efforts to isolate and put sanctions against Iran [Section 104g(2) E(i)]

• Indian participation and formal declaration of support for the US’ highly controversial Proliferation Security Initiative including the illegal policy of interdiction of vessels in international waters [Section 104g(2) K]

• India conforming to various bilateral/multilateral agreements to which India is not currently a signatory such as the US’ Missile Technology Control Regime (MTCR), the Australia Group etc [Section 104c E,F,G]

It is on the basis of the Hyde Act that the United States has negotiated the bilateral “123” agreement with India. Some of the harmful provisions of the Hyde Act are reflected in the bilateral agreement.

• The bilateral agreement, while superficially using the original wording of the joint statement of 2005, “full civilian nuclear cooperation” actually denies cooperation or access in any form whatsoever to fuel enrichment, reprocessing and heavy water production technologies. The statement of intent in the agreement that a suitable amendment to enable this access may be considered in the future has little or no operative value.

• Further, this denial (made explicit in Art 5.2 of the agreement) also extends to transfers of dual-use items that could be used in enrichment, reprocessing or heavy water production facilities, again a stipulation of the Hyde Act. Under these terms, a wide range of sanctions on a host of technologies would continue, falling well short of “full civilian nuclear co-operation”.

• It is also important to recognise that the fast breeder reactors under this agreement would be treated as a part of the fuel cycle and any technology required for this would also come under the dual use technology sanctions. This would be true even if future fast breeder reactors were put in the civilian sector and under safeguards. Thus, India’s attempt to build a three-phase, self-reliant nuclear power program powered ultimately by thorium would have to be developed under conditions of isolation and existing technology sanctions.

• Another key assurance that had been given by the Prime Minister was that India would accept safeguards in perpetuity only in exchange for the guarantee of uninterrupted fuel supply. While the acceptance on India’s part of safeguards in perpetuity has been spelt out, the linkage of such safeguards with fuel supply in perpetuity remains unclear.

The assurance that the United States would enable India to build a strategic fuel reserve to guard against disruption of supplies for a duration covering the lifetime of the nuclear reactors in operation appears to have been accepted in the agreement. However, whether the fuel supply will continue even after cessation or termination of the agreement depends solely on the US Congress. The Hyde Act explicitly states that the US will work with other Nuclear Suppliers Group (NSG) countries to stop all fuel and other supplies to India if the agreement is terminated under US laws. Since this agreement explicitly incorporates domestic laws, it appears that fuel supply from the US will not only cease in case the US decides to terminate the Agreement but they are also required under the Hyde Act to work with NSG to bar all future supplies. The clause 5.6 on disruption of supplies therefore seems to be limited to “market failures” and not to cover a disruption that takes place under the clauses of the Hyde Act. In such an eventuality, the US will have to pay compensation to India but all future fuel supplies would stop. Therefore, the 123 agreement represents the acceptance of IAEA safeguards in perpetuity for uncertain fuel supplies and continuing nuclear isolation with respect to a substantial amount of technological know-how.

The Hyde Act and Supremacy of National Law

The government has asserted that the Hyde Act is not binding on India. The relevant issue is that it is binding on the United States and this has been repeatedly stressed by US spokespersons.

Article 2 (1) of the 123 Agreement states, “The parties shall cooperate in the use of nuclear energy for peaceful purposes in accordance with the provisions of this agreement. Each party shall implement this agreement in accordance with its respective applicable treaties, national laws, regulations, and license requirements concerning the use of nuclear energy for peaceful purposes”.

If the argument is that the reference to national laws is simply the case of binding towards the law, that will have a bearing on the conduct of different transactions under the 123 agreement, then what do we make of the reference to national laws in other places in the 123 agreement?

Thus, for instance, Article 5 (6) (a) in part states that “As part of its implementation of the July 18, 2005, joint statement the United States is committed to seeking agreement from the US Congress to amend its domestic laws…to create the necessary conditions for India to obtain full access to the international fuel market…..”. Article 5(6) (b) (i) states that “The United States is willing to incorporate assurances regarding fuel supply in the bilateral US-India agreement on peaceful uses of nuclear energy under Section 123 of the US Atomic Energy Act, which would be submitted to the US Congress”. These clauses show that the need for conformity with “national laws” is not superfluous. If there is no direct reference to the Hyde Act in the 123 agreement, it is simply because and this is worth reiterating that the Hyde Act is the `Act to exempt from certain requirements of the Atomic Energy Act of 1954 a proposed nuclear agreement for cooperation with India.

Nuclear Power and Energy Security

It is said that the Indo-US nuclear deal is central to our future electricity and energy requirements. At present, nuclear power generation capacity in India stands at 4,120 MW which is a little less than 3 per cent of our installed capacity of all power plants. One reason has been the nuclear isolation imposed on us resulted in the slow development of our civilian nuclear energy programme. However our scientists overcoming many hurdles did very well in indigenising the Pressurised Water Reactors, and then developing it further to 540 MW. The next stage is the fast breeder reactors, in which the Indian scientists are leading the world. The planned three stage nuclear programme would depend largely on technologies based on fast breeder reactors, and in the future, thorium as fuel. This programme requires far less uranium and lower dependence. Instead, the imported reactor route would focus much more on Light Water Reactors, which require much more uranium and are more expensive. Thus even the technology being offered will not necessarily be the best choice for India. Significantly, the mainstay of our nuclear power program – the fast breeder reactors – will still be under technology sanctions, as they would be considered a part of the fuel cycle.

The other reason is the techno-economics of nuclear power and its relatively high cost. Nuclear power plants are about 50% per cent more expensive, even when using domestic technology and equipment. If imported reactors for nuclear power are considered, the situation becomes worse: it will cost about three times as much to set up nuclear plants with imported reactors than coal based ones. It will also cost twice as much per unit – Rs. 5.10-5.50 as against Rs. 2.50 from coal fired plants.

According to the Planning Commission’s study, the most optimistic scenario of nuclear power is 15,000 MW by 2015 and 29,000 MW by 2021. These targets includes 8,000 MW of imported reactors. Even then, nuclear energy will only add up to about 7 per cent of our total installed capacity.

Going ahead with such an ambitious power programme dependant on imports will come at a high cost and will dry up investments in other sectors. Interestingly enough, nuclear power is not the energy of choice for most advanced countries. The US itself has commissioned its last reactor in 1996! Members of Parliament may recall the fiasco of Enron and its Dabhol power plants.

Implications for Foreign Policy and Strategic Autonomy

The United States does not see the nuclear cooperation agreement as a stand-alone. It is part of American design to try in India a wide ranging strategic alliance which will adversely affect the pursuit of an independent foreign policy and our strategic autonomy. The facts speak for themselves.

• Two weeks prior to the joint statement which announced the Indo-US nuclear cooperation agreement, India signed a ten-year Defence Framework Agreement with the United States in June 2005. This is being cited by the Bush administration as India’s commitment to cooperate with the United States furthering its strategic interests in Asia.

• Two months after the nuclear cooperation agreement was announced in September 2005, India voted against Iran in the International Atomic Energy Agency, contrary to its stance earlier that Iran, as an NPT signatory, has every right to develop its nuclear technology for civilian purposes.

• This was followed by a second vote against Iran in February on the eve of President Bush’s visit to India.

• Nicholas Burns, US Under Secretary of State, in his “On record briefing” after the finalisation of the 123 agreement said on July 27: “And I think now that we have consummated the civil nuclear trade between us, if we look down the road in the future, we’re going to see far greater defence cooperation between the United State and India: training; exercises; we hope, defence sales of American military technology to the Indian armed forces.” The United States is exercising tremendous pressure on India to buy a whole range of weaponry including the 126 fighter planes, radar, helicopters, artillery etc. worth multi-billion dollars.

Is the nuclear cooperation agreement going to bind India with the United States in a relationship which goes contrary to our cherished goals of national sovereignty and independent foreign policy and an economic development based on the priorities of our people?

The objections and the apprehensions raised by the Left parties and other parties, organisations and concerned scientists and citizens need to be examined before proceeding further. All we are asking the government to do is not to rush through with the next steps which are necessary to operationalise the deal.

We hope that you, as a Member of Parliament, which is the sovereign representative institution of the Indian people, will seriously consider these issues on this vital matter affecting our country’s future.

CENTRAL COMMITTEE OF THE COMMUNIST PARTY OF INDIA (MARXIST)

Readers’ Comments on N-Deal

Nuclear deal

The UPA government has said it will move forward with the Indo-U.S. nuclear deal only after seeking a vote of confidence in Parliament. Even if it wins, would it be proper to say the sense of the House favoured the deal? Small parties such as the TRS, the RLD and the JD(S) will play a key role in determining the outcome.

The TRS has openly said it will support the UPA only if it is given a firm assurance on a separate Telangana. The JD(S) has Karnataka politics in mind just as the Samajwadi Party is more concerned about U.P. Above all this, the Congress is bringing pressure on Mayawati through the CBI. Where is the nuclear deal in all this?

E.V. Tulasi Rao, Vijayawada

The merits and de-merits of nuclear deal aside, the UPA government’s know-all approach, in collusion with a few people in the scientific establishment, is shocking. The nuclear deal is a people’s issue, as it marks a turning point in our nuclear history. The government kept quiet all long, without forcing a public debate on it. Now it is rushing to close the deal, even while a majority has no understanding of the issue.

All talk of the Hyde Act being a domestic U.S. law is a sham. It is the enabling Act of the 123 agreement. It is a long noose woven around the 123 agreement and can be tightened at the U.S.’ will.

Balajee Rajaram, Chennai

It is painful to see that political parties, which raise a hue and cry over non-issues, are not raising their voice to save India from the catastrophic nuclear deal.

Almost all parties other than the Left are silent on the impending surrender of India’s sovereignty.

S. Radhakrishnan, Coimbatore

The Congress and its supporting parties claim that the nuclear deal is the best thing that has happened to India in a long time. On the other hand, the Left parties say it is the worst that can happen. The actual fact is somewhere in between. The people of India deserve to know the facts from a neutral and reliable body. You will do a great service by publishing the bare facts of the deal.

B.C. Bhowmick, Asansol

The UPA government’s decision to proceed with the nuclear deal is a bold step forward. When we look back at the history of development, we find that whenever our leaders have taken bold steps that contribute to the development of our country, they have been criticised.

Shibin Joseph, Kozhikode

The Parliamentary Affairs Minister has a point when he says that the draft safeguards agreement was sent to the IAEA before seeking a vote of confidence because that was the only way to make it public. The BJP’s continued reference to the Hyde Act makes little sense; such a piece of legislation could have been enacted by the U.S. even after signing the 123 agreement.

There is little India could have done about such a political manoeuvre. The best insurance against U.S. actions that can infringe upon our sovereignty lies in our strength and growing clout. The fact that the U.S. has made an exception for India, which is not a signatory to the NPT, and has declined to do so for Pakistan is proof that India’s strength is recognised.

S.K.N. Nair, Thiruvananthapuram

Americans have proved to be smarter than us as far as the 123 agreement is concerned because they discussed it threadbare, taking sufficient time. We, in India, should have also set the ball rolling on discussions to match their move. BJP leader L.K. Advani’s idea of bringing an equivalent of the Hyde Act here to insulate ourselves from its effects will not work.

The Indian equivalent can be enacted only after the deal is operationalised by the present government. The best thing to do is to put the deal in cold storage till either the Hyde Act is withdrawn or amended, or the Indian equivalent of the Hyde Act is passed by Parliament. We must do as Americans do in this case.

A. Perumal, Chennai

Many eminent scientists have pointed out that the nuclear deal is to India’s advantage because of the energy security it will provide and because nuclear energy is clean from the environmental point of view.

As for the government’s inability to contain inflation, we should understand that almost two-thirds of the world is reeling under double digit inflation and it is not of the UPA’s making.

Partha Chakravarthy, Bangalore

Hyde Act Can be Used to Terminate 123 Pact

Hyde Act provisions can be used to terminate 123 pact, says Left

Special Correspondent

 

“There are number of issues on which the pact falls short of Manmohan’s assurance in Parliament”

 

NEW DELHI: The Left parties on Tuesday reminded the Government that they had expressed serious concern about the various conditions inserted into the Henry Hyde Act passed by U.S. Congress as a number of them pertained to the strategic goals of the United States.

 

The issues identified then and recapitulated now included annual certification and reporting to U.S. Congress by the President on a variety of foreign policy issues of India being congruent to that of the U.S.; Indian participation and formal declaration of support for the U.S.’ controversial Proliferation Security Initiative; and India conforming to various bilateral/multilateral agreements such as the Missile Technology Control Regime, the Australia Group.

 

Addressing a press conference after a Left parties’ coordination committee meeting here, CPI(M) general secretary Prakash Karat said that while all these were part of the Hyde Act, the 123 agreement referred only to the narrow question of supply of nuclear materials and cooperation on nuclear matters.

 

“Wide-ranging”

 

“The provisions of the Hyde Act are far wider than the 123 agreement and could be used to terminate the 123 agreement not only in the eventuality of a nuclear test but also for India not conforming to the U.S. foreign policy. The termination clause is wide-ranging and does not limit itself only to violation of the agreement as a basis for cessation or termination of the contract,” a joint statement by four Left leaders said.

 

They said that, therefore, the extraneous provisions of the Hyde Act could be used in the future to terminate the 123 agreement; in such an eventuality, India would be back to complete nuclear isolation, while accepting IAEA safeguards in perpetuity.

 

Sovereign right

 

The Left parties, they said, had well-known views against nuclear testing for weaponisation but that did not mean the acceptance of any U.S.-imposed curbs on India’s sovereign right to exercise that choice.

 

An important aspect of the India-U.S. nuclear cooperation was the relegation of India’s traditional commitment to universal nuclear disarmament. By getting “accommodated in a U.S.-led unequal” nuclear order, India’s leading role in advocating nuclear disarmament as a major country of the non-aligned community was being given the “go-by.”

 

They said that while the 123 agreement was being presented as a victory for India’s positions and conforming to Prime Minister Manmohan Singh’s assurances in Parliament, there were a number of issues on which it fell short of what Dr. Singh had assured the House.

 

“While the Indian commitments are binding and in perpetuity, some of the commitments that the U.S. has made are either ambiguous or are ones that can be terminated at a future date,” the statement said.

 

There were other aspects such as full civilian nuclear cooperation; while the 123 agreement refers to it superficially, it denies cooperation or access in any form whatsoever to fuel, enrichment, reprocessing and heavy water production technologies.

 

“Commercial gains”

 

“The flawed nuclear cooperation agreement cannot be justified on the debatable basis of augmenting our energy resources or achieving energy security. The motivation for the U.S. is commercial gains which will accrue for its corporates running into billions of dollars,” they said.