The Nuclear Deal: The Larger Picture

As the U.S. readies for the battles of the 21st century, India must not ignore the resurgence of Russia, the rise of China and the relevance of Iran. It must manage its relations with all these powers.

The India-United States nuclear deal that was supposed to be a path breaking agreement has run into stiff opposition in both countries where critics say that each has given too much for too little. For India, the deal was supposed to provide nuclear energy to make good the shortfall, access to hi-technology, be an economic bonanza for the future and grant legitimacy as a major power. For the U.S., it was part of a larger game plan. The deal was a means to cap India’ s strategic programme, provide access to India’s growing defence market, and become a strategic partner in U.S. foreign policy initiatives globally. One of the abiding primary bipartisan U.S. objectives has been to restrict, roll back and cap the Indian strategic deterrent. Bill Clinton tried it earlier when he wanted India to sign the Comprehensive Test Ban Treaty and announce a moratorium on fissile production. But critics in the U.S. fear that the deal has weakened the Non-Proliferation Treaty regime.

There have been different interpretations of the deal in the two capitals. New Delhi asserts that the agreement assures continued supply of fuel and that if there is any disruption, the U.S. would help find an alternative source. American officials do not agree and will help only in the case of technical or logistical difficulties. This means that there would be no assistance in case India violates some aspects of the agreement or tests a nuclear device or reprocesses U.S. origin fuel.

The 123 Agreement has been extensively commented upon by strategic analysts, experienced commentators and scientists. One of the arguments being that the Hyde Act suggests that India should work bilaterally with the U.S. for an early conclusion of the Fissile Material Cut-off Treaty instead of what India has wanted — a universal, non-discriminatory and verifiable arrangement. The Americans would want to rely on national technical means which would make the deal bilaterally intrusive. The deal does not give India access to reprocessing, enrichment or heavy water technologies or dual use components. In addition, the right of return of nuclear material, restrictions on reprocessing or building fuel reserves, verification and end-use monitoring, have been built into the agreement. This could restrict our strategic capabilities and options in the years ahead.

The deal was supposed to give India several benefits but the pressure to sign the deal by a specific deadline mostly came from the Americans, almost as if India was being hustled into this. The old principle of never ever signing anything in a hurry was abandoned. The Japanese, for instance, spent seven years discussing the deal before signing it. The China-U.S. 123 agreement of 1985 specifically states that both sides would observe the principle of international law under which neither party could invoke a domestic law to justify failure to perform a treaty. The India-U.S. 123 agreement does not have this safeguard.

It would be unreasonable to expect that the U.S. would give us a carte blanche on the business of testing and fissile material. But it was also unnecessary for us to have allowed what was a voluntary moratorium on testing become binding in a bilateral arrangement. It was also not necessary to agree to a U.S.-led fissile material cut off instead of a multilateral arrangement in Geneva. This is what we had agreed on July 18, 2005 and since then it has been a steady process downhill. In March 2006, we agreed to place 14 of our 22 reactors under safeguards and eventually shut down the Cirus reactor permanently. By voting in the manner in which we did at the IAEA on the Iran issue, we have set a precedent that may be difficult to live down. From now onwards, whenever we vote along with the U.S. or do any deal with it, opponents to this action will accuse the government of having become subservient to the U.S.

Unfortunately, the official response to the various criticisms or doubts has been dismissive and disappointingly inadequate. No one has bothered to sit down and explain that the various doubts and fears expressed were either incorrect or exaggerated. Instead, the response has been to depict criticism as a reflection of tunnel vision of cold war mindsets or nitpicking by ignoramuses. In the midst of this emotional debate, it was forgotten that dissent is also a form of patriotism. Protagonists of the deal have claimed that the 123 Agreement overrides the Hyde Act. This is incorrect because the 1954 Atomic Energy Act is the mother of all such Acts; the Hyde Act is a stringent enabling India-specific legislation for the 123 Agreement to be signed within the parameters of the Hyde Act. It has been suggested that in case the deal did not go through, Pakistan and China would collaborate for a similar deal. Surely this would have been factored in when the deal was being negotiated. It does not require any special clairvoyance to predict that whatever the outcome of the India-U.S. deal, Pakistan would want to seek a similar arrangement either with the U.S. and failing which, with China. In a high pitch drive, it has even been suggested that this deal would now open the doors for all sorts of hi-tech technologies. Conversely, should India be seen to be in violation of this deal, these technologies would be withdrawn from us followed by sanctions.

The Nick Burns statement in Washington on July 27 is a clear enunciation of what the U.S. expects from the deal. He said that the 123 Agreement “brings India … back into the nonproliferation mainstream in a way it was not before. And that is a tangible gain for India, as well as the U.S. and the rest of the world.” From then flow the rest of the arguments about the strategic consonance on Iran, reducing India’s dependency on countries like Iran for energy supplies. He also spoke of the advantages that American companies will have in selling the “finest nuclear technology” to India. Yet he did not mention that no American company has built a single reactor in the U.S. since 1979. Mr. Burns also hoped for greater defence co-operation between India and the U.S. leading to more exercises, training and defence sales. Both countries were already working together in South Asia on Bangladesh, Sri Lanka, Nepal and “in trying to form a better functioning relationship between India and Pakistan.” He hoped that the two countries would form a global partnership and work together in East Asia and Africa. The India-U.S. nuclear deal is part of an overall plan which includes the Defence Framework Agreement, the Agriculture Deal and the Disaster Management Agreement. The idea is to engage India at all levels.

The U.S. has been pursuing a military basing policy extending globally as it prepares to take on a resurgent Russia and a powerful China. There are about 1000 bases of various descriptions and purpose strewn all over the globe and Chalmers Johnson points out in his book Nemesis, India has agreed to have a ‘lily pod’ base along with Thailand, Australia and the Philippines. (Pakistan already has four such bases with much larger facilities). These ‘lily pods’ e nable pre-positioning of weapons and munitions to which U.S. access has already been negotiated. This does not mean permanent U.S. presence but only in times of emergency. No wonder Washington is very keen that the two countries sign an Access and Cross Servicing Agreement which would allow logistic support to the U.S. from locations in India. A natural corollary to this would be the SOFA (Status of Forces Agreement) which would give U.S. troops immunity from violations of laws of the host country. U.S. joint exercises in and around India also make perfect U.S. military sense. There is a clear agenda and a pattern.

The Washington-based American Enterprise Institute is considered to be the unofficial headquarters of the neo-cons. Writing in the July 2003 issue of the AEI National Security Outlook, just a few months after U.S. troops had landed in Iraq, Thomas Donnelly and Vance Serchuk spoke of U.S. military missions being transformed into a ‘global cavalry’ that would need a radical overhaul of America’s overseas force structure and creation of a worldwide network of frontier forts as well as a system of frontier stockades “necessary to win a long-term struggle against an amorphous enemy across the arc of instability.” This arc of instability extends from Morocco to the Philippines inclusive of Eurasia which is predominantly Muslim in the peripheries of Russia and China with India and Israel stuck in the middle.

As the U.S. readies for the battles of the 21st century, India must not ignore the resurgence of Russia, the rise of China and the relevance of Iran. It must manage its relations with all these powers. It needs to therefore pause and think about ways of smoothening the wrinkles in the nuclear deal. If the sense of the House is that there are reservations about the deal then the party in power must address them adequately, in keeping with the convention that India’s foreign policy is pursued through consensus. It should not be construed to be the handiwork of a tyranny of a minority in a minority.

Source : Hindu, 5th Sepetmber 2007

The Great Game : 21st Century Version

The rules of the game

The current century began in an intensely violent manner and there are no signs of a let up. Two and a half deadly wars are being fought in our neighbourhood and threaten to spread further and may even affect India in the years ahead.

These are the results of great power politics, ambitions and economic needs. It is therefore interesting to go through some of the statements by Western strategists and political analysts from time to time. There is a common thread running through them – that seeks total dominance over the rest of the world.


Quotes

‘Old Europe will have to lean on our shoulders, and to hobble along by our side, under the monkish trammels of priests and kings, as she can. What a colossus shall we be.’
Thomas Jefferson 1816

NEARLY ONE HUNDRED AND FIFTY YEARS LATER
‘We have 50% of the world’s wealth but only 6.3% of its population. In this situation, our real job in the coming period … is to maintain this position of disparity. To do so, we have to dispense with all sentimentality … we should cease thinking about human rights, the raising of living standards and democratisation.’
George Kennan, US strategic planner, 1948
ANOTHER FIFTY -FIVE YEARS LATER
‘We’re an empire now, and when we act, we create our own reality. And while you are studying this reality… we’ll act again, creating new realities….’
Unnamed Bush adviser talking to Ron Suskind, 2004

This is the global US view but before this we had the British giving their view of how things would be played out.

‘Turkestan, Afghanistan, Transcaspia, Persia—to many these names breath only a sense of utter remoteness … but to me, I confess they are pieces on a chessboard upon which is played out a game for the dominion of the world.’
Lord Curzon, 1898

TWENTY THREE YEARS LATER
‘Who rules East Europe commands the Heartland:
Who rules the heartland commands the World-Island:
Who rules the World-Island commands the World.’
Halford Mackinder, 1921

Reverting to American interests, expressed a hundred years after Curzon’s prediction:
‘I cannot think of a time when we had a region emerge as suddenly to become strategically more significant as the Caspian Sea.’
Dick Cheney, CEO Halliburton 1998


THE PLAYING FIELD

In today’s terminology, he who controls the energy belt in West Asia and the Caspian region controls the world. The Persian Gulf and the Caspian Sea region -- Eurasia – remains the most vital region today for powers seeking dominance or economic growth or both.

It is necessary to recapitulate a few facts to capture the importance of the region. The US imports about 30% of its requirements from the region, 40% of the world’s energy requirements pass through the Persian Gulf, and in the years to come India will need to import 90% of its requirements.

Under the previous order of world affairs, private multinational oil companies controlled a large percentage of the resources of energy and their development.

The current trend is towards ownership of assets by national oil companies.

Oil is no longer just traded on the spot market in New York or London, but countries like China and India with their rapidly growing economies are now buying assets in the country of origin in long term bilateral or trilateral arrangements.

Iran is now selling 70% of its oil and gas in euros; it has also sold oil to China in yuan. It has constructed a brand new oil bourse on the Kish island in the Persian Gulf and is expected to trade in Euros. Europeans are buying Iranian gas and there are possibilities of a three-way agreement between the Iranians, Gazprom of Russia and the Austrians.

This is also done to replace the old system of production sharing arrangements where the investing company had the upper hand in acquiring the profits.


MAIN PLAYERS AND THEIR ASSETS

Today there are five major oil giants

• Exxonmobil (US)
• Royal Dutch (Anglo Dutch)
• BP (British)
• Total (French)

Chevron (US)

Even though they control only 9% of the fields, companies like Exxonmobil had a turnover of 450 billion dollars in 2006.

Many have a size that is more than the GDP of 180 of the 195 members of the UN

OPEC

Of the 12 OPEC countries 10 have leading State oil companies. Nine are Muslim majority countries i.e. Algeria, Indonesia, Iran, Iraq, Saudi Arabia, Kuwait, Libya, Qatar, and UAE.

OTHER NOCs

China National Petroleum Corporation, ONGC Petrobras and Statoil Norway control 16% of the reserves. Fastest growing are the Chinese companies like Sinopec and CNOOC operated in six countries in 1999 and today in 40.

Since the beginning of oil age, the world has consumed 950 bbl of oil, 30 % of this in the last ten years.

Petroleum consumption was 10 mbd in 1950, 50 in 1970, 76 in 2000, and will be 120 in 2025.


THE MAIN NARRATIVE

Oil and gas in the vast Eurasian region are mostly to be found in areas inhabited by Muslims and ruled either by monarchical or dictatorial regimes, sometimes obscurantist as well. In addition, they are politically unstable and even violent, which could easily mean interrupted and uncertain supplies. In most of these countries, including the new countries after the break up of the Soviet Union, there is American troop presence, in varying degrees. In addition us forces are in Afghanistan and Pakistan, especially in areas facing Iran. The only hold out so far is Iran but the noose is tightening and the campaign is getting more vociferous.

But there have been challenges to US control and supremacy in the region. These have emanated from a resurgent Russia and a rising China, principally. It is a reaction also to what the Americans have tried to do in the Russia’s and China’s neighbourhood.

Iraq was never about WMDs, Al Qaeda or democracy. It was about oil, the best of its kind in the world, and because Saddam had tried to kill Papa Bush. Iran had spoiled the US game of containing the Soviet Union by going radically Islamic, held Americans hostage for 444 days and both Iran and Iraq had toyed with the idea of keeping their reserves in Euros. The switch to the Euro would have been devastating for the US economy and many experts compare this to a nuclear attack. There are indications that Iran has gone ahead and shifted a part of its petro-holdings into Euros. Afghanistan was a cold war outcome fought by the superpowers with their proxies and surrogates in the 80s.

Wars in Afghanistan and Iraq were not prompted by terrorist attacks in New York and Washington, nor waged to spread democracy in West Asia or enhance security at home. Instead, they were conceived and planned in secret long before September 11, 2001 and were undertaken to control petroleum reserves. US State Department official Christina Rocca told the Taliban in August 2001, during the infructuous pipeline negotiations, to “accept our offer of a carpet of gold or we bury you under a carpet of bombs.” And so it came to pass.

Planning for Iraq began in 2001. While the world may look at the mayhem and the tragedies in Iraq, in reality this has been a victory for the major oil companies. The new Iraqi law that has been introduced gives the major MNCs ‘unprecedented sweet heart deals’ that allow them to have production sharing agreements. These deals will permit some semblance of Iraqi ownership of assets but the oil companies will rake in at least 75 per cent of the profits indefinitely or until such time as they feel that they have made good their infrastructure costs and investment.

Successive American Presidents have enunciated doctrines for guaranteed supplies of abundant and cheap oil from the gulf. President carter declared in 1980 that access to Persian Gulf oil was a vital national interest and that the US would be prepared to use military force to protect its interests. Carter’s rapid deployment joint task force grew to become the powerful Centcom, with an area of responsibility that coincided with the energy-rich West and Central Asian and Caspian Sea regions.

The Republican Right began planning for the future in the post-Cold War phase. In 1992, the neo con policy paper, Defence Planning Guidance, talked of permanent military superiority and world dominance. It also talked of the need to prevent emergence of a new rival. It was important to remain the predominant outside power in West Asia and Southwest Asia to preserve US and Western access to the region’s oil.

In September 2000, the project for the New American Century, the Washington based think tank, recommended massive power projection capability globally. Translated, this meant stepped-up pressure on ‘rogue’ states like Iraq and Iran, and taking “actions regarding the capture of new and existing oil and gas fields”.

In May 2001, President George W. Bush’s New Energy Policy recommended that ties with oil-rich countries should be bolstered and US presence expanded. The 2001 Quadrennial Defence Review spoke of the need for the US to retain ability to send forces to critical points around the globe. It identified overseas oil-producing regions as critical points. Preemptive intervention became the Bush Doctrine—clear indication that private oil interests and US strategic interests now coincided.

Even as conflict and instability in the oil-producing regions remain a real problem for the foreseeable future, two other crises loom. There is the phenomenon of peak oil. Experts differ about when the supplies will dwindle but all agree that this decline is inevitable and it will become increasingly difficult to extract more oil. The bigger countries—the US, Russia and China—have responded to scarcity by securitising the energy supply dimension and strengthening military alliances in the Gulf.

The other worry for the US was the rise of the Euro. The EU bought over half of the total crude oil produced in West Asia in 2004, which could legitimately insist on paying in Euros. The dollar’s supremacy and its status as the world’s reserve currency were under threat. Oil was denominated in dollars and the strength of the US dollar had propelled the US economy to new heights and military supremacy. In effect, the US, with its more than $ 6 trillion debt in a $ 9 trillion economy, was not really paying for any oil.

Iran had also transferred a majority of its reserves into Euros in 2002 and contemplated a Euro-based oil bourse by March 2006. Some European analysts describe the effect of this changeover as worse than a nuclear attack on the US. Iran had qualified to be a member of the axis of evil. Despite all the calls to battle, the US has limited choices. A full-scale invasion seems to be out; aerial attacks would be the other option. Clandestine covert operations through the Baloch areas of Pakistan and partly through Afghanistan are now a reality. Somehow, Iran has to be disciplined—and soon.

Political interests apart from economic interests are an important factor for the US. Supplies from the Caspian region must not go through either Russia to Europe or through Iran to the Persian Gulf, which is the cheapest and the fastest route. The Americans want the oil to flow from Kazakhstan and Azerbaijan through the turbulent Caucasus and end up at Ceyhan on the Mediterranean coast of Turkey, both expensive and long. The gas from Turkmenistan should flow through Afghanistan to Pakistan, similarly expensive and long and charted through politically volatile territories of Afghanistan and Balochistan.

The new US foreign policy of “transformational diplomacy” is not just about just reporting the world as it is but about replicating nation-states into US clones. Post conflict multinational reconstruction and stability teams consisting of lawyers, engineers, economists will be deployed. It is more about access diplomacy. Arab analysts point out that US embassy officials began to tour the corridors of government buildings in the countries to which they were posted on grounds to monitor the progress of irrigation, healthcare and other development projects sponsored and funded by US aid agencies. Soon there were whispers that American directives to local government agencies on purely sovereign concerns were being received.

America’s neo-cons have consistently professed that America had a global mission that military power was the indispensable foundation of American foreign policy, and stressed the importance of the use of military superiority to help introduce democracy. The debate in the last two decades of the 20th century provided the real foundation of the Bush Doctrine of pre-emptive action which means an America driven forward by unrivalled military power aided by religion and the growing profits of the world’s largest multinational corporations. Iraq may have been an unmitigated disaster according to most but for US oil corporations it has been a glorious war. Exxon, Chevron and Conocophilips earned US $ 64 billion between them in 2005.

The US may today have a bureau of deconstruction in the Department of Defence that would deconstruct 26 regimes and a Bureau of Reconstruction in the State Department that would reconstruct these countries into democratic American clones. Others like Seymour Hersh have talked of ten countries that are up for facelifts while Ralph Peters has redesigned maps of the region. The global war on terror is not about defeating terrorism, but is a handy means for re-ordering the world and retaining US pre-eminence.

It is, however, becoming increasingly costly and difficult to retain this position. It is axiomatic that without access to assured cheap and abundant energy supplies, the US cannot maintain its way of life and its full spectrum global dominance. A Russia that was supposed to have been finally defeated after the Afghan jehad and the fall of the Berlin Wall is resurgent under President Putin. The rise of China, as a global power, is another phenomenon that Washington must deal with. There is competition for resources and markets; Putin has used energy as a weapon of influence. Neither threatens the US militarily but its economic interests and those of its allies as well as political influence are being challenged. Equally, without access to similar energy resources China will not be able sustain its scorching rate of growth required to keep its economy growing and prevent an internal political upheaval.

As a vital supplier of gas and oil to Europe and Japan, Russia exhibited its newfound strength in early 2006. When it shut off gas supplied to Ukraine as part of a bargain for a higher price. Possibly, the Russian president had learnt these tactics of using energy reserves for geo-strategic advantage at the St Petersburg mining institute where he did a dissertation on “toward a Russian transnational energy company” soon after making a career change post-KGB. Russia-China relations have been on the upswing with mutually beneficial military and technology deals. They are also working some deals with Saudi Arabia. Russia may have lost the cold war but is not going to lose the energy war.

Elsewhere, the Shanghai Co-operation Organisation comprising China, Russia, Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan, has enrolled Iran as a member. These could be early signs of moving towards a Central Asian version of OPEC or NATO. The prospects of a triangular relationship that has Russia, China and Iran as the three sides with the energy rich Central Asia boxed in, is fast becoming America’s geo-strategic nightmare especially after its colossal failures in West Asia. Iran has 11% of the world’ oil and 16% the world’s gas. Although Saudi Arabia has more oil and Russia has more gas, no other country has more of both of these resources combined. Iran is geo-strategically located as the only country that has borders with the vital Persian Gulf and the Caspian Sea. This, rather than the nuclear issue, is the real reason for US anxiety about the way Iran will turn. Iran is the only country that has gained from the failed US campaign in Iraq. No wonder, less than spontaneous anti-Tehran demonstrations seem to be taking place in Iran’s Azerbaijan province and in Khuzestan bordering Iraq while there have been intrusions from Balochistan into Iran by the Sunni outfit Al Qaeda associated group Jundullah.

In the last seven years, Putin has brought Russia back into international reckoning. Today, the Russians feel sufficiently confident to be able to cancel their production sharing agreement with Royal Dutch Shell in Sakhalin-2 and, Gazprom, the Russian energy giant has taken over. There is steely determination in approach, bordering on ruthlessness at times. Chechnya and the Dubrovka Theatre hostage episode are indications of the latter; the manner in which the vast energy resources have been used as a strategic and tactical weapon is a sign of a single-minded desire — to protect Russia’s national interests.

Forty-five per cent of Russian arms sales have been to China, at the rate of $ 2 billion annually. The first-ever joint military exercise of the Collective Security Treaty Organisation (Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan and Tajikistan) and the SCO will be held this year in Russia’s Volga-Urals area. There has been a coming together of Russia and China in other ways as well and the recent visit of President Hu to Russia where the two leaders referred to India as the third side of a possible triangle was interesting. Hu followed this up with a visit to Japan. Quite apparently, the Chinese are preparing themselves for stronger competition with the US, if not confrontation in the years ahead. Left to themselves they would not want to provoke the US into any pre-emptive action against them but the attempt is to assure uninterrupted supplies of energy and a base rate of growth of about 10% annually.

Meanwhile, the Chinese too have been active in Kazakhstan having purchased a second oil field since 2005. The Russian state-owned company, Rosneft, plans to enter the Chinese market for retail in petrol and petroleum products. Pipelines into China would be built by Russians and not by Western companies. The Russians have become more active in Turkmenistan and seem to be beating off competition from the US, the EU, China and Iran as the new regime seeks to strengthen its ties with Gazprom.

A smaller but equally important game is being played in our neighbourhood. Pakistan has now begun to claim that Gilgit and Baltistan are not part of the state of J&K. All along it has tried to depict these as Northern Areas of Pakistan. China too would be interested that Pakistan has total control over Gilgit and Baltistan. Otherwise the 298-million dollar investment in the development of Gwadar is a financial or strategic waste. Xinjiang is only 2500 kms away from the Arabian seaport of Gwadar. On the other hand, it is 4500 kms away from the Chinese east coast. A fully developed port at Gwadar would help in the economic development of Xinjiang. Gas and oil pipelines from Gwadar to Xinjiang and Tibet would enable China to overcome the uncertainty of sea-lanes from the Persian Gulf through the Malacca Straits patrolled by the US.

The Chinese will be building the Gwadar Dalbandin rail network into Xinjiang as an extension of the development of Gwadar port which will have an exclusive SEZ for the Chinese. China has set aside US $ 150 million to upgrade the Karakorum Highway and widen it from 10 metres to 30 metres for heavy vehicles in all weather conditions. A rail link is also planned in the region with technical advice from an Austrian firm to connect Pakistan and China. This link will be connected further south into the main Pakistani rail grid. Fibre optic cables are being laid. An Islamabad-Kashgar bus service will start from August 1.

Both China and Pakistan are getting ready for an economic boom that will include transit trade to Central Asia. The Pakistan Army’s National Logistics Cell, which has a near monopoly, will handle this freight traffic all the way up to Kazakhstan and Xinjiang. There is money to be made. Thus development of both Gwadar and control of Gilgit and Baltistan are interlinked and the Pak Army will gain financially from both. In fact, it is going to be a financial bonanza for the already huge corporate interests of the Pak Army.

The Chinese are also going to construct 12 new highways into Russia, Kazakhstan, Tajikistan, Uzbekistan and Pakistan as part of their plans to extend eastwards along the old Silk Route into Europe and access to warm waters. The longest one will stretch 1,680 kilometers from Urumqi, capital of the autonomous region, to Tashkent, capital of Uzbekistan, Iran’s Mashhad, Turkey’s Istanbul and finally reach Europe. The road will be completed before 2010.

There is a problem though that is more intrinsic to the Central Asian republics are constructed than to any external factors. It is the problem of abundance in the three oil and gas producing countries—Turkmenistan, Uzbekistan and Kazakhstan accompanied by distorted and uneven growth as well as unstable undiversified economies leading to corruption and wasteful/fanciful schemes that are counterproductive. Political instability is inbuilt in autocratic systems. Despite these problems the Europeans and the Chinese have been looking at Central Asia for their energy requirements. Oil flows to China are still dependent on Russia and there is not enough gas potentially available in Central Asia that would change European dependence on Russia.

The fear in the West also is that long-term bilateral arrangements would knock out the spot market mechanism at the New York and London stock exchanges, while also undermining the production sharing arrangements that had benefited western oil conglomerates. The Russians are back in business and US advances have been halted. Putin gets no popularity points in Washington for this but he does in Moscow, which is important.

The new version of the Great Game includes trying to ratchet the fear of a rising Shia Iran among Sunni Arabs to create a Shia-Sunni schism. The danger is that this will merely succeed in generating anger in West Asia that will give birth to more Al Qaeda and its variants. Vali Nasr, a professor at the US Naval Postgraduate School in Monterey California, says that violent anti-Shiism was the domain of radical pro Al-Qaeda clerics, websites and armed groups in the Arab world and Pakistan. Sectarianism — especially among Sunnis — was a driver for radical jehadi ideology.

Former American National Security Advisor Zbigniew Brzezinski has warned that if the US remains bogged down in Iraq it would inevitably lead to a conflict with Iran and the rest of the Islamic world. Unless the Americans and the Iranians engage in dialogue, there is a very real danger that we are marching towards an unimaginable disaster fought with tactical nuclear weapons. There is already speculation about the likely date of attack but when US Air Force tankers move to remote air bases to refuel B-2 bombers then it will be time for the world to take cover.

Although the US is still the primary global economic, military and technological power, American actions have given room for others to walk into the space being yielded. Obviously, us ability, or perhaps willingness to reconstruct as it did immediately after world war ii, no longer matches its ability to deconstruct. The second is the rise of Russia — Vladimir Putin’s speech at the last Munich security conference was like a punch in the Western solar plexus where he spoke of “one single centre of power, one single centre of force and one single master” and the dangers of this situation. This was evidence of an angered Russia on the rebound. Not for nothing does Putin have a 70-80 per cent approval rating in his own country. His speech was not in isolation but comes after the Russian economy with its vast energy resources has shown signs of revival.

Putin followed this with a visit to Saudi Arabia that has the potential to be as epochal as Nixon’s visit to China in 1972. Not many years ago, the Saudis had been enthusiastic members of an alliance that sponsored and financed a jehad against the god-less Soviets. During his recent visit to Saudi Arabia, Jordan and Qatar, Putin spoke of a ‘GAS OPEC’, offered military assistance to Saudi Arabia as well as nuclear technology to Saudi Arabia and Jordan. A GAS OPEC may still be some years away and is only a concept but the very thought of such a cartel has sent shivers down the Western spine as this would leave the producers of gas as the controllers of prices and production and not the consumers.

The third is the continued strong showing of China as an economic and military power on the rise. Russia and China have been moving closer to each other in the last two years as relations between the US and Russia began to sour. The border issue between China and Russia having been settled; there have been military exercises and increased Russian arms and energy sale commitments. China has made important gains in Africa, where it is likely to be in contention with the US just as it may be partly in cooperation and partly in competition with Russia in the energy rich Eurasian and West Asian regions. Meanwhile, China seeks to strengthen its position in Asia seeking but not admitting to eventually wanting to replace the US as the primary power in the continent.

Ironically, the American decline began, unnoticed, soon after the end of the cold war. It seems that the American military-industrial complex, dependent on the profits of war and insecurity, was horrified that peace seemed to have broken out. Most of the American establishment went hunting for new enemies and they thought it best to go for the Russian jugular. Thus, instead of helping the Russians to recover from years of communism, the opposite happened. This only proved the prediction that Washington and Moscow would always have competed for global dominance regardless of ideology.

After the Warsaw Pact was beguiled into disbanding, NATO quickly moved into Poland and the three Baltic republics. Ukraine and Georgia were sought to be brought under US influence through sponsored multi-coloured democracy revolutions. When the US wanted temporary bases in Central Asia to fight the war on terror in Afghanistan, Putin agreed only to find that these were becoming permanent US facilities in Russia’s own backyard. Anti-missile defence systems are now located in Poland and the Czech republic and new US air bases in Bulgaria and Romania. The Western oil conglomerates encouraged Russian oil and gas to break free of Russian government control. But under Putin this has been largely reversed and the Russians are using energy as a strategic weapon to reposition themselves much in the same way that the west has used largesse, sanctions and technology alternatively to extract concessions or force a favourable decision. Today we see a resurgent Russia challenging the US.

In the context of dwindling fossil fuel supplies and rising demands, he who controls not just the production but also the supply and has discovered substitutes, will rule the world. India, whose buoyant economy has a 70 per cent dependency on imported fossil fuels and weaponry for its security, is disadvantaged as it has neither the deep pockets of the Chinese and the Americans, the military power of the Russians and the Americans and nor the single-mindedness of the Chinese or the Russians. The jostling for vantage positions to control energy resources in the years ahead is going to be ruthless and urgent. This will largely determine each country’s future in this century.

As the Great Game intensifies, there is need to reposition and reorient our strategies. There has to be an Indian version of the CNN-BBC-AL JAZEERA kind of voice in India’s extended neighbourhood.

There is need to find alternative sources of energy, to utilize renewable resources and to conserve what we have. There is enough wind and solar resource available in India that would allow for fuller, determined and systematic use of this natural and replaceable resource. None of this will reduce our dependence on imports from a volatile and unstable region.
There is need, also, to capitalise on the soft power of our IT industry, the talent of our young population and the ability of our engineers to handle infrastructure and petro-chemical projects. India must seek to have a higher profile in the West Asia-Eurasia region.

Nevertheless, no country can have pretensions to being a major power if it is so completely dependent on external sources for energy to run its industry and turn its wheels, or imported weaponry and armament to defend itself.

Self reliance is not only required it is the difference between survival at low levels and success at high levels.

Source : Indian Defence review , Jul-Sep 2007, Vol 22(3)

Bear?s back in business

It was Brezhnev’s blunder in Afghanistan that led to the first multi-billion dollar international jehad sponsored by the ‘free world’ out to settle old scores, which had its ultimate ugly trickle-down effects in India. Yet, India had been a treaty ally of the Soviet Union. The treaty had a Cold War relevance to both countries as Nixon’s America and Mao’s China warmed up to each other. But when the Soviet Union fell, India suddenly felt adrift in a Clinton-led world that lacked the vision to be the magnanimous victor and capitalise on this great opportunity. Instead of doing what they had done to Japan and Germany after World War II, the Americans continued to try and grind the Russians down to nothingness. Unfortunately, narcissism on a national scale can make nations forget that a people who resisted Hitler’s German army for nearly 900 days in Leningrad or defeated them in the bloodiest battle in history in Stalingrad were bound to rise again. All they needed was a leader. And Vladimir Putin is that leader.
In the last seven years, he has brought Russia back into international reckoning. Today, the Russians feel sufficiently confident to be able to cancel their production sharing agreement with Royal Dutch Shell in Sakhalin-2 and, Gazprom, the Russian energy giant has taken over. There is steely determination in approach, bordering on ruthlessness at times. Chechnya and the Dubrovka theatre hostage episode are indications of the latter; the manner in which the vast energy resources have been used as a strategic and tactical weapon is a sign of a single-minded desire — to protect Russia’s national interests.
The various tulip and orange revolutions in Russia’s neighbourhood to bring democracy to these countries, quite apparently encouraged by Washington, invited retaliatory action by Moscow. Ukraine flirted with the US and had to pay a price when its gas spigots were switched off last winter. Much of Europe too shivered, more in fright than in the cold. Uzbekistan, the most populous Central Asian State, has joined the Russian-led Eurasian Economic Community that is a customs union comprising Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. Belarus was once a faithful Soviet satellite and then Russia’s loyal friend but it dared to step out of line and Putin came down hard to cut off its gas supplies.
Alarmed at the eastward expansion of Nato and US interests in acquiring energy and strategic reserves in Central Asia, the Russians got together with the Chinese to counter US advances. The Russian-Chinese relationship is marked by competition for resources and influence and cooperation against western inroads. The border issue is now settled and there have been military exercises and increased Russian arms sales and energy commitments to China. Forty-five per cent of Russian arms sales have been to China, at the rate of $ 2 billion annually. The first-ever joint military exercise of the Collective Security Treaty Organisation (Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan and Tajikistan) and the Shanghai Cooperation Organisation (SCO) will be held in 2007 in Russia’s Volga-Urals area. Heads of State of participating countries are expected to witness the exercise. SCO observer countries — Iran, Pakistan and India — could also be invited.
There was a time during Boris Yeltsin’s presidency when the impoverished Russians sold their giant companies to eager carpet-baggers in a desperate bid to stay afloat. It was Putin who decided to consolidate Russia’s vital assets of energy and strategic minerals. Gazprom, which today is estimated to control a third of the world’s natural gas reserves, plans to become the world’s largest energy company, once it diversifies into oil production.
The argument is very simple — Western companies will not get access to Russian energy resources unless Russian industry gets similar

Source : Hindustan Times 23rd feb 2007

Friends in Need

There are storm clouds gathering over the horizon in the Persian Gulf and the drums of war beat louder each passing day.
A wounded American presidency, torn between the need to salvage lost pride and the desire to control the world, glowers at a defiant Iran in the hope that the Iranians will blink.
The rest of us must wait with bated breath for the debris from another costly and destructive war to fall upon us. And no one has the magic formula to stop this inexorable march of folly towards the next episode of 'shock and awe'.
Yet, there are other analysts in the West who do not see this as a war against terror at all, or a war against WMDs, or for democracy and liberty. They see it as a battle for control of oil and, therefore, see it as a victory for Big Oil.
Meanwhile, the Persian Gulf is overcrowded with the US armada of two carrier fleets bristling with state-of-the-art killing machines, making this the largest concentration of US naval forces in history.
A wounded US presidency, torn between the need to salvage lost pride and the desire to control the world, glowers at a defiant Iran Patriot missiles have been deployed to defend friendly and 'moderate' Sunni regimes like the UAE and Saudi Arabia against Iranian attacks.
After spending half a trillion dollars, resulting in the deaths of countless Iraqis and more than 3,000 American soldiers, the US ended up making Iran the primary power in the Gulf.
It must now find ways to overturn this unintended consequence of a wrong war. Therefore, a casus belli is required. Iran is now being accused of meddling in Iraq, supporting Shia insurgents with arms and funds. The Iranian leadership is demonised and being provoked to react.
Preparations for an eventual assault on Iran required other arrangements. It is commonly believed that Defence Secretary Donald Rumsfeld left because he was too hard on Iraq.
Actually, he had to go because he wanted a rethink of policy. Chief of Intelligence John Negroponte would not, or could not, produce intelligence to confirm Iran was enriching weapons-grade uranium. That was blasphemy and he had to go.
Centcom Generals who objected to escalation in Iraq were sidelined and Admiral William Fallon from the Pacific Command has been brought in to take on what is going to be primarily a naval and aerial battle against Iran, for the protection of sea lanes.
The fact that Iraq had become a quagmire could not be admitted, and the Iraq Study Group established last year was to find a way out to make a defeat seem a victory. But when the report suggested a phased withdrawal, it was discarded.
Instead, there had to be a 'surge' of American forces in Iraq. It is strange that 20,000 additional troops will help in controlling a majority Shia insurgency when 150,000 troops could not control a minority Sunni insurgency.
It is more likely that these troops are only meant to protect American interests in Baghdad’s Green Zone against a possible Iranian retaliation.
Understandably, there has been considerable obfuscation about the US’s intentions, varying from 'all options are on the table' to 'we will not attack Iran'.
This does not mean that the US will not attack in defence of its interests in the region, the definition of which can be fairly flexible.

Source : Hindustan Times 14th feb 2007

Fission for Compliments

It’s US self-interest, not American largesse, that is pushing the India-US nuclear deal

READING US Senate proceedings may not be as entertaining as Stella Rimington’s “At Risk” - , “a cracking good thriller”, as the Observer put it. But those interested in the US-India nuclear deal should take the trouble of going through the 50-odd pages of Congressional record. It is only this that clearly shows that the debate was about protecting and strengthening US security interests. Largesse to India is meant to be only incidental and granted under strict ground rules. Disagreement during the debate was accepted and not construed as being anti-American. Incidentally, many of the prominent Democrats voted for the ‘killer amendments’.
Senator Lugar, introducing the Bill, commented that under the administration’s original plan, the agreement would have come into force within 90 days unless both the Houses of Congress voted against it with such a majority that a presidential veto would not have been possible.
Senator Biden, opening the discussion, said that the US administration had suggested to Congress that the July 18, 2005, Indo-US agreement could be treated as having met the requirements of Section 123 of the Atomic Energy Act. A horrified Congress disagreed not just in an assertion of ‘turf ’ but because Congressional oversight “protects the balance of power, the separation of power, which is essential in the formulation of a policy”. Obviously, the White House had miscalculated the mood of the Congress, which was smarting for having been misled into supporting the catastrophic war on Iraq, which cost American lives, for non-existent WMDs.
Senators Kennedy and Clinton made it more apparent that the debate was about nuclear non-proliferation, curbing India’s ability to make weapons and diverting uranium — and not about civil nuclear energy. Kennedy was not willing to believe that the agreement would enable India to cease production of fissile material. He said he would support the agreement if it could be shown that India would take steps to become a full-fledged member of the non-proliferation community and agree to cut off production of fissile material. Kennedy was particularly upset with the “White House’s decision to withhold until after the vote on the Iraq war, North Korea’s admission about its nuclear weapons programme” and other similar omissions.
Senator Barak Obama’s questions and the replies Lugar gave him illustrate the fears US legislators have about the agreement.
Obama: Is it the managers’ belief that Section 129 of the AEA will apply prospectively to India?
Lugar: …the full force of Section 129 would apply to any detonation of a nuclear explosive device, any termination of IAEA safeguards by India and material violation of IAEA safeguards … Obama: …in the event of a future nuclear test by the Government of India, nuclear power reactor fuel and equipment sales and nuclear cooperation would cease … and the US would have the right to demand the return of nuclear supplies?
Lugar: Yes… the United States shall have the right to request the return of the supplies as you have stipulated.
Obama: Is it your understanding that providing a fuel reserve to India is not intended to facilitate a resumption in nuclear testing?
Lugar: Yes, I hope that would be the case.
Throughout the debate those opposing and supporting the agreement refer to nuclear weapons and fissile material restrictions. Very few spoke of civilian nuclear energy for India. While supporting the agreement, Senator Voinovich said that by expanding civil nuclear cooperation with India, the US has an opportunity to bring India into an arms control regime that will guarantee greater oversight and inspection rights.
The general fear was that uranium supplied to India would enable India to divert its own uranium for nuclear weapons manufacture. At least two senators cited an article in the Times of India of December 12, 2005, suggesting that India should declare as many power reactors as civilian ones which would use imported fuel as this would enable conservation of “our native uranium for weapons grade plutonium production”. This article was written by K. Subrahmanyam, clearly an example of overstating one’s case.
Section 108, for instance, lists out innumerable steps to be taken for the implementation and compliance of the agreement. The US President has to keep Congress fully and currently informed of any material violation by India on non-compliance under the July 18, 2005 agreement, the separation plan presented by India on March 7 and May 11, 2006, the safeguards agreement between India and the IAEA and so on. The lengthy list mentions uranium production figures, including the amount assigned for weapon production, US efforts to promote national or regional progress by India in disclosing, securing, capping, and reducing its fissile material stockpiles. Either this will be a formality where the US administration will fudge figures to keep Congress happy or there will be a serious effort that would need a concerted intelligence effort in India requiring Indian participation.
It is with this intention that Section 115 was quietly introduced and passed without debate. This section empowers the US Secretary of Energy, acting through the National Nuclear Security Administration (NNSA), to establish a cooperative threat reduction programme jointly pursued by scientists from India and the US to strengthen non-proliferation goals. It can be argued that this is a necessary scientific venture and non-proliferation is something India believes in without signing the NPT. Therefore, one need not see any dev ils in this.
One might first want to have a look at what the NNSA is capable of doing. Established in 2000 as a semiautonomous agency within the Department of Energy, the NNSA’s aims are to maintain the US nuclear deterrent, protect and revitalise the weapons complex, respond to nuclear emergencies world-wide, support the nuclear navy, develop space and land-based detection systems, secure and eliminate nuclear materials and strengthen the nonproliferation regime. It has a multibillion dollar budget with an intelligence and counter-intelligence component.
Among its many global achievements, the NNSA has had a robust programme with Russia and claims to have secured over 80 per cent of Russian nuclear weapons storage sites, improved security at all 39 Russian navy and 14 Russian strategic rocket forces sites. The NNSA is simultaneously responsible for enhancing and achieving an 18month underground nuclear test readiness within the next decade for the US while reducing the threat from other sources to the US. The NNSA will be the means for intrusive verifications in India to enable the US President to give his certifications. Indian counterparts would surely be from our DAE and given our experience with the joint task force of cyber security, it would be a very wary India that would step into such an arrangement.
It can doubtless be argued that all this is so far only proposed US law and there has to be reconciliation, enactment and then a treaty to be signed. Much of it could get diluted to bring it on par with the July 18 accord. Maybe that will happen but the underlying message from the US Congress is that the July 18 agreement is not so much about civil nuclear energy as it is about getting India into the NPT regime through the back door.
Given a weakened President desperately looking for a foreign policy success, given the distrust Congress has for the administration, given that the US is unable to hold its sway even in its own backyard, it is doubtful if Congress will allow a final Bill that will be very much different. It would be wise to carefully assess all our options next year.

Source : The Hindustan Times, December 7, 2006

Empire's new clothes

Believe it or not, US policy is driven by a voracious need for global supremacy

It was a single deft move in the 18th century that secured the British Empire in India so many advantages over the advancing Russians. By sending five English dray horses along with a blue velvet upholstered coach to Maharaja Ranjit Singh in Lahore upstream from Kutch, the British discovered that the Indus was navigable all the way up and were given access to Afghanistan through his territories by a grateful Maharaja. The irony is that the British were only returning a gift Ranjit Singh had sent King William IV! Not a single shot was fired but the Empire had gained.

The opening gambits for empire building at that time were to flatter, cajole, persuade and if this did not work, then coerce and control and finally, occupy. One hundred and seventy years later these tactics and aims – access to markets and resources -- have not changed although the new Empire has shown a greater propensity to violence as a first option. The wooing started a few years ago when opinions began to filter through about a new power rising in the east – democratic India. National Intelligence Estimates predicted a bright future for India. Others predicted that India would challenge China; that maybe India ought to be a member of the UNSC and of so many other exclusive power centres of the world; that India could be trusted with American weaponry and even given American civilian nuclear technology to help it meet its fast growing energy needs. We took the bait.

Nuclear experts and scientists like Matin Zuberi, Dr. A Gopalakrishnan and Bharat Karnad, strategic analysts like Brahma Chellaney and Siddharth Varadarajan have written extensively about their misgivings on the Indo-US agreement of July 18, 2005. Criticism is about what we have signed, how the agreement will be fulfilled and what India has gained. These experts have argued that India has derived no benefits from this deal, and at the same time there are those in the US, like Robert Einhorn, who do not want the deal to go through because this would dilute the NPT regime that is so close to US Foreign Policy beliefs. Having flattered and cajoled India to sign on the dotted line, US coercion was evident at the time of the Iran vote. Control of events is sought through the various steps that are now being spelt out that India must carry out before Americans try to deliver anything they have promised.

India has agreed to identify and separate civilian and military nuclear facilities and programmes in a phased manner; to place all its civilian nuclear sites under IAEA inspections; adhere to the rules of NSG and Missile Control technology regimes without being a member of these groups; adhere to IAEA’s Additional Protocol which will subject India’s entire civil nuclear fuel cycle to international monitoring something which the 5 nuclear weapon states do not allow for themselves. Finally, and this is very crucial also, to promise to continue the self-imposed moratorium on nuclear tests.

As for the process for all this, we say “you first” but Brothers Burns and Joseph, America’s pointsmen have repeatedly made it quite clear that we must jump through the hoop first. The US had to be able to see what was happening, understand what was going on, and, agree with what was going on. So said Nicholas Burns in his testimony to the US Congress. Translated, it means total control. Joseph clarified that the kind of arrangements the Nuclear Five had with IAEA would not be granted to India.

It is only when India, enticed by assistance for commercial nuclear power, has carried out a complete emasculation of its nuclear establishment and given proof of this, will the US Government be able to move the US Congress to amend its 1978 Nuclear Non-Proliferation Act. Convincing other members of control groups like the NSG is another problem because members like China and South Africa have expressed their opposition to allowing India access to the 200-odd hi-tech items.

The two main items on offer in this deal are access to US defence industry and the “permission” as it were to spend US $ 5 billion for this. The other is the offer to sell civilian nuclear technology for India’s energy requirements. GE, which built Tarapur, also a prototype, has not built another reactor in the last 30 years. They tried to sell reactors to China in 2004 but the Chinese baulked at the idea as they were looking for full technology and engineering.

The American writer on development issues, Patrick Doherty, recently made an interesting observation, when he said that as part of America’s new energy policy, nuclear energy was an important component and “the Bush administration has worked out an agreement with the Indian government to share civilian nuclear technology. That agreement, in effect, allows India to be America’s lab rat on which we will test the unproven next generation of nuclear technology.” Thus, it is quite a choice -- either outmoded technology that does not suit Indian conditions or new untested technology.

The argument in favour of closer ties with the US is based on the assumption that only the US can help us become what we want to be. We forget that years of democracy have not saved us from sanctions while dictatorships have been rewarded and strengthened by purveyors of democracy. Some of us are dreamy eyed with illusions of grandeur but without understanding the character of the US Empire.

The US has spent huge sums of money and effort to maintain global primacy. One has to be incredibly naïve to assume that the US will let any alternative pillar of power emerge. Indians must understand what US policies are not what we want them to be or dream they will be. Similarly, why should our policies suit other power interests. What we need to know and understand is that why America, that is so fixated on global dominance, known to be a hard bargainer and has made nuclear non-proliferation an article of faith, is today willing to dilute this 30-year stance. What is the US getting and what is it that we have promised? Surely the people are entitled to know.

As it is, the US worries about the rise of China and another power centre in Asia would create complications. If it were looking for India to challenge China then it would clearly do some of the following things. It would have supported India’s efforts to UNSC membership and India’s desire to join the Generation IV International Forum (to design the next generation commercial nuclear power reactors) or the nuclear-fusion consortium that is to build and run the International Thermonuclear Experimental Reactor (ITER) in France. Instead, it offers India outmoded weaponry and untested civilian nuclear technology in return for circumscribing, forever, India’s nuclear weapons programme through imposed restrictions, safeguards and restrictions of fuel supplies that do not apply to NWS.

There is, however, a problem and a hope. America has moved from the days of “bipartisan age of narcissism and hubris” as Walter Russell Mead describes the decade of euphoria after the Berlin Wall came down. Today, that hubris is leading to nemesis. The Colossus that strode the globe is now more like an angry Samson, maybe on his way to becoming a Goliath. The Presidency is beleaguered. In this situation, the US Congress, belligerent about various issues, may not give the US President what he wants. Therein lies our hope.

Surce : The Hindustan Times, December 7, 2005

The new great game : 21st century version

The British, French and Russians, played their Great Game in the 19th century in the playing fields of the Middle East and Central Asia. Britain’s Indian possessions were the coveted prize. Today the three players are the Americans, Russians and Chinese; the main playing fields are the energy rich but trouble-prone West Asian and Caspian lands. India, whose USP is its growing market, is peripheral.

Post Second World War, it was clear that the American way of life, based on cheap and abundant availability of oil, had to be preserved. As domestic supplies declined, dependency on imports from conflict zones increased. From being domestically self-sufficient, the US has moved to becoming the world’s biggest importer of oil and by 2025 it would need to import 70% of its requirements.

Successive post-war American Presidents enunciated doctrines for guaranteed supplies of oil from the Gulf. President Carter declared in 1980 that access to Persian Gulf oil was a vital national interest and that the US would be prepared to use military force to protect its interests. Carter’s Rapid Deployment Joint Task Force eventually blossomed into CENTCOM with an area of responsibility coinciding with the energy rich West and Central Asian and Caspian Sea regions.

Strategists of the Republican Right began planning for the future in the post Cold War phase. In 1992, the neo-con policy paper, Defence Planning Guidance, talked of permanent military superiority and world dominance and of the need to prevent emergence of a new rival. There was need to remain the predominant outside power in the Middle East and South West Asia to preserve US and Western access to the region’s oil.

In September 2000, the Project for the New American Century spoke of America’s grand strategy to preserve and extend its advantages in the absence of any rival power and recommended massive power projection capability globally. Translated it meant stepped up pressure on ‘rogue’ states like Iraq and Iran, and “take actions regarding the capture of new and existing oil and gas fields.”

President George W. Bush’s new energy policy enunciated by the National Energy Policy Development Group in May 2001 recommended that ties with oil rich countries should be bolstered and US presence in these countries expanded. The 2001 Quadrennial Defence Review spoke of the need for the US to retain the ability to send forces to critical points around the globe and explicitly identified overseas oil producing regions as critical points. Preemptive intervention became the Bush doctrine of 2002. This was a clear indication that private oil interests and US strategic interests now coincided.

Even as conflict and instability in the oil producing regions remain a real problem for the foreseeable future, two other crises loom. There is this phenomenon of peak oil. Experts differ about when the supplies will dwindle but all agree that this decline is inevitable and it will become increasingly difficult to extract more oil. The bigger countries – the US, Russia and China -- have responded to scarcity by securitising the energy supply dimension and strengthening military alliances in the Gulf.

The other worry for the US was the rise of the Euro. Over half of the total crude oil produced in the Middle East was bought by the EU in 2004 who could legitimately insist on paying in Euros. The dollar’s supremacy and its status as the world’s reserve currency were under threat. Oil was denominated in dollars and the strength of the US dollar had propelled the US economy to new heights and military supremacy. In effect, the US with its more than 6 trillion dollar debt in a 9 trillion dollar economy was not really paying for any oil.

Saddam Hussein’s effrontery was not that he was making WMDs and harbouring Al Qaeda. It was that Saddam had dumped the dollar and switched his UN ‘oil for food’ fund of US $ 10 billion to the euro in October 2000. The fear was that if OPEC also made a sudden switch to the euro, the US economy would collapse. Other countries could follow OPEC and some of them had begun to keep a part of their holdings in euros. Saddam had committed blasphemy and had to be punished.

Iran had also transferred a majority of its reserves into Euros in 2002 and contemplated a Euro-based oil bourse by March 2006. Some European analysts describe the effect of this changeover as worse than a nuclear attack on the US. Iran had qualified to be a member of the Axis of Evil. But post-Iraq, with credibility low, even the UK balking at any talk of attacking Iran, the USA has limited choices. A full-scale invasion seems to be out; attacks from the air would be the other option. Clandestine covert operations through the Baloch areas of Pakistan and partly through Afghanistan could be a possibility. Somehow Iran has to be disciplined -- and soon.

Ideally the US would like to access Iran’s hydrocarbon reserves for US companies, restructure OPEC and keep out competition. Unfortunately, the US Executive Order of 1995, renewed by President Bush in 2004, prohibits American companies from working in Iran. This order will not be revoked so long as Iran does not have a regime change and refuses to give up the nuclear option.

Russia may no longer be a Super Power, militarily or economically but it is still the world’s second largest oil exporter and the largest outside OPEC. It remains a major player in the energy market outside total US control and has continued interests in Iran and the Gulf. Russia and China have been investing in military sales to the Middle East.

Russia remains an important player in Central Asia while the EU and NATO along with China are the other big players. After initial flirtation with the US, the Uzbeks once again talk of the reliability of Russians. The US Senate vote to delay payment to Uzbekistan for the use of an air base undoubtedly angered the Uzbeks. The EU decision to impose sanctions would be another factor. Russia is to build a military airbase in Tajikistan, apart from retaining the one it has in Kyrghystan where the Americans also have a base at Manas. The Tajiks have so far resisted having an American airbase but might change their minds depending perhaps on what is on offer. Condoleezza Rice was on a visit to Kyrgystan, Kazakhstan and Tajikistan in October trying to shore up US position in these former Soviet Republics after the loss of influence in Uzbekistan that could have some bearing on US which could have a partial bearing on its operations in Afghanistan and the rest of Central Asia.

China has been concentrating on oil and gas rich Kazakhstan. This makes economic and strategic sense for it could provide the much needed energy, close political ties would help keep the East Turkestan movement active in Chinese Xinjiang province at bay and hopefully keep the Americans at arm’s length. The Chinese have remained extremely busy planning gas pipelines from Kazakhstan to Xinjiang. The Chinese have a 962-kilometre oil pipeline deal with the Kazakhs to be completed by 2015 and want the Russians to build a pipeline from Siberia to China. The Russians are similarly interested in the oil fields in Kazakhstan. Earlier this month, the Chinese announced plans to spend about 180 billion dollars in the next 15 years to increase use of renewable energy to 15% up from the present 7% and to replace ten million tons of petroleum with renewable energy as well as increase use of solar energy to replace 40 million tons of standard coal each year.

While NATO has offered Kazakhstan military assistance, the Chinese and the Russians have been having joint exercises in the Pacific and Russia has sold state of the art military equipment to China. While the US has used the war against terror to move into the energy rich areas with bases and forces to guard the pipelines and installations, the other two have been militarising their friendships and alliances in the region as well. US presence in the region naturally heightens Chinese fears of encirclement and Russian fears about their near abroad. It is not difficult to see a triangular struggle in the future.

Nearly 200 years ago, William Moorcroft of the British East India Company made desperate attempts to attract his employers’ attention to events in Central Asia and of the advance of the Russian Empire but they would not pay any attention to him. Today, when we want to pay attention to this area we are hemmed in by disadvantaged relations in our neighbourhood, even though to us Russia is far from an Evil Empire. Maybe we can breakthrough this geopolitical logjam. We should make use of the invitation to the SCO and maybe we should think like Moorcroft did, of accessing the Central Asia through Yarkand and Kashgar.

The game remains what it was -a game for the dominion of the world. This would be a test of our diplomacy and long-term strategic thinking, of thinking out of the box.

Source : Tge Hindustan Times, November 23, 2005

Oil's not right with the World

The British, French and Russians, played their Great Game in the 19th century in the playing fields of the Middle East and Central Asia. Britain’s Indian possessions were the coveted prize. Today the three players are the Americans, Russians and Chinese; the main playing fields are the energy rich but trouble-prone West Asian and Caspian lands. India, whose USP is its growing market, is peripheral.

Post Second World War, it was clear that the American way of life, based on cheap and abundant availability of oil, had to be preserved. As domestic supplies declined, dependency on imports from conflict zones increased. From being domestically self-sufficient, the US has moved to becoming the world’s biggest importer of oil and by 2025 it would need to import 70% of its requirements

Successive post-war American Presidents enunciated doctrines for guaranteed supplies of oil from the Gulf. President Carter declared in 1980 that access to Persian Gulf oil was a vital national interest and that the US would be prepared to use military forceto protect its interests. Carter’s Rapid Deployment Joint Task Force eventually blossomed into CENTCOM with an area of responsibility coinciding with the energy rich West and Central Asian and Caspian Sea regions.

Strategists of the Republican Right began planning for the future in the post Cold War phase. In 1992, the neo-con policy paper, Defence Planning Guidance, talked of permanent military superiority and world dominance and of the need to prevent emergence of a new rival. There was need to remain the predominant outside power in the Middle East and South West Asia to preserve US and Western access to the region’s oil.

In September 2000, the Project for the New American Century spoke of America’s grand strategy to preserve and extend its advantages in the absence of any rival power and recommended massive power projection capability globally. Translated it meant stepped up pressure on ‘rogue’ states like Iraq and Iran, and “take actions regarding the capture of new and existing oil and gas fields.”

President George W. Bush’s new energy policy enunciated by the National Energy Policy Development Group in May 2001 recommended that ties with oil rich countries should be bolstered and US presence in these countries expanded. The 2001 Quadrennial Defence Review spoke of the need for the US to retain the ability to send forces to critical points around the globe and explicitly identified overseas oil producing regions as critical points. Preemptive intervention became the Bush doctrine of 2002. This was a clear indication that private oil interests and US strategic interests now coincided.

Even as conflict and instability in the oil producing regions remain a real problem for the foreseeable future, two other crises loom. There is this phenomenon of peak oil. Experts differ about when the supplies will dwindle but all agree that this decline is inevitable and it will become increasingly difficult to extract more oil. The bigger countries – the US, Russia and China -- have responded to scarcity by securitising the energy supply dimension and strengthening military alliances in the Gulf.

The other worry for the US was the rise of the Euro. Over half of the total crude oil produced in the Middle East was bought by the EU in 2004 who could legitimately insist on paying in Euros. The dollar’s supremacy and its status as the world’s reserve currency were under threat. Oil was denominated in dollars and the strength of the US dollar had propelled the US economy to new heights and military supremacy. In effect, the US with its more than 6 trillion dollar debt in a 9 trillion dollar economy was not really paying for any oil.

Saddam Hussein’s effrontery was not that he was making WMDs and harbouring Al Qaeda. It was that Saddam had dumped the dollar and switched his UN ‘oil for food’ fund of US $ 10 billion to the euro in October 2000. The fear was that if OPEC also made a sudden switch to the euro, the US economy would collapse. Other countries could follow OPEC and some of them had begun to keep a part of their holdings in euros. Saddam had committed blasphemy and had to be punished.

Iran had also transferred a majority of its reserves into Euros in 2002 and contemplated a Euro-based oil bourse by March 2006. Some European analysts describe the effect of this changeover as worse than a nuclear attack on the US. Iran had qualified to be a member of the Axis of Evil. But post-Iraq, with credibility low, even the UK balking at any talk of attacking Iran, the USA has limited choices. A full-scale invasion seems to be out; attacks from the air would be the other option. Clandestine covert operations through the Baloch areas of Pakistan and partly through Afghanistan could be a possibility. Somehow Iran has to be disciplined -- and soon

Ideally the US would like to access Iran’s hydrocarbon reserves for US companies, restructure OPEC and keep out competition. Unfortunately, the US Executive Order of 1995, renewed by President Bush in 2004, prohibits American companies from working in Iran. This order will not be revoked so long as Iran does not have a regime change and refuses to give up the nuclear option.

Russia may no longer be a Super Power, militarily or economically but it is still the world’s second largest oil exporter and the largest outside OPEC. It remains a major player in the energy market outside total US control and has continued interests in Iran and the Gulf. Russia and China have been investing in military sales to the Middle East.

Russia remains an important player in Central Asia while the EU and NATO along with China are the other big players. After initial flirtation with the US, the Uzbeks once again talk of the reliability of Russians. The US Senate vote to delay payment to Uzbekistan for the use of an air base undoubtedly angered the Uzbeks. The EU decision to impose sanctions would be another factor. Russia is to build a military airbase in Tajikistan, apart from retaining the one it has in Kyrghystan where the Americans also have a base at Manas. The Tajiks have so far resisted having an American airbase but might change their minds depending perhaps on what is on offer. Condoleezza Rice was on a visit to Kyrgystan, Kazakhstan and Tajikistan in October trying to shore up US position in these former Soviet Republics after the loss of influence in Uzbekistan that could have some bearing on US which could have a partial bearing on its operations in Afghanistan and the rest of Central Asia.

China has been concentrating on oil and gas rich Kazakhstan. This makes economic and strategic sense for it could provide the much needed energy, close political ties would help keep the East Turkestan movement active in Chinese Xinjiang province at bay and hopefully keep the Americans at arm’s length. The Chinese have remained extremely busy planning gas pipelines from Kazakhstan to Xinjiang. The Chinese have a 962-kilometre oil pipeline deal with the Kazakhs to be completed by 2015 and want the Russians to build a pipeline from Siberia to China. The Russians are similarly interested in the oil fields in Kazakhstan. Earlier this month, the Chinese announced plans to spend about 180 billion dollars in the next 15 years to increase use of renewable energy to 15% up from the present 7% and to replace ten million tons of petroleum with renewable energy as well as increase use of solar energy to replace 40 million tons of standard coal each year.

While NATO has offered Kazakhstan military assistance, the Chinese and the Russians have been having joint exercises in the Pacific and Russia has sold state of the art military equipment to China. While the US has used the war against terror to move into the energy rich areas with bases and forces to guard the pipelines and installations, the other two have been militarising their friendships and alliances in the region as well. US presence in the region naturally heightens Chinese fears of encirclement and Russian fears about their near abroad. It is not difficult to see a triangular struggle in the future.

Nearly 200 years ago, William Moorcroft of the British East India Company made desperate attempts to attract his employers’ attention to events in Central Asia and of the advance of the Russian Empire but they would not pay any attention to him. Today, when we want to pay attention to this area we are hemmed in by disadvantaged relations in our neighbourhood, even though to us Russia is far from an Evil Empire. Maybe we can breakthrough this geopolitical logjam. We should make use of the invitation to the SCO and maybe we should think like Moorcroft did, of accessing the Central Asia through Yarkand and Kashgar.

The game remains what it was -a game for the dominion of the world. This would be a test of our diplomacy and long-term strategic thinking, of thinking out of the box. The British Imperial policy was to keep the two – Russia and China – away from India. Maybe today we need to move closer to these two massive landmasses. Maybe this is only a dream but then unless you dream how do you seek fulfillment.

Source : Hindustan Times 5th oct 2005

Slipping and Sliding

Iran is paying for US fears of instability arising from depleted energy resources

There is a great churning that is going on in the energy-rich West Asian region. US attempts to control the destinies of these regions through massive force have recoiled. Iraq, which was to give more and cheap oil, has been a failure. Actually the reverse has happened; oil production has declined, costs have increased and profits from these projects never materialised. Further, the Iraqi Shias and the Iranians seem to be getting closer. Saudi Arabia, is internally unstable and highly Islamised and despite having the largest known reserves, cannot sustain a further surge in output. There are new and aggressive competitors, primarily China and India, whose economies are the fastest growing in the world today and an existing consumer, Japan, with strong interests in the region. Like the US, both India and China wish to build a Strategic Reserve. Russia backs Iran. Besides, there is the prediction that oil production is about to peak. This means that it will be increasingly difficult to pump more oil and eventually production will start to decline.

Iran, the local bad boy of the region in US eyes, seems to be the next target and the stated reason again is weapons of mass destruction. The London-based International Institute for Strategic Studies, in a press launch (Sep 6) of its study of Iran’s Strategic Weapons’ Programme, assessed that Iran’s nuclear option was not imminent and was several years away from producing enough fissile material for a nuclear weapon. Even the Americans do not have an accurate picture of Iran’s nuclear weapons’ status with the additional factor of low credibility post-Iraq. Yet the drums of war from Washington sound louder and louder like they did before they went into Iraq. The world has seen an exhibition of arrogance of power in Afghanistan and Iraq diminish into an impotence of power but the lesson that beyond a point there is a futility of power, has apparently not yet been learnt adequately. This time around it would be much worse.

No one, either in the US government or outside, will mention that the real reason is oil and gas. The present US administration, more than the any other in recent years, is driven by oil and gas interests. Those in power today have had successful careers in this business and would soon be reverting to this after the present term runs out. Iran’s total hydrocarbon (oil and gas) reserves amount to an equivalent of 280 billion barrels of oil, slightly less than those of Saudi Arabia. Ideally what the US would like to achieve is access to Iran’s hydrocarbon reserves for US companies, restructure OPEC and keep out competition. Unfortunately, the US Executive Order of 1995, renewed by President Bush in 2004, prohibits American companies from working in Iran. This order will not be revoked so long as Iran does not have a regime change and refuses to give up the nuclear option.

The Iranians did make overtures to the Americans when they signed the NPT and agreed to abide though not ratify, the Additional Protocol. They were also helpful in the early months of the war against terror in Afghanistan and never harboured Al Qaeda despite American accusations. The Iranians wanted to come “clean” hoping that the US would lift the unilateral sanctions but instead the US anointed Iran as a member of the Axis of Evil along with North Korea and Iraq and invaded the latter. No wonder today Iran feels threatened and surrounded by American bases in Central Asia, Iraq, Afghanistan, Pakistan and Saudi Arabia along with the massive US naval presence in the Gulf. There have been reports of US reconnaissance missions into Iran. Add to this, the Pentagon now talks of pre-emptive nuclear strikes against potential non-nuclear adversaries. Given this fear, it is understandable, in a way, why Iran asserted its right to enrich uranium. The Americans fear that the Iranians could block the Persian Gulf through which 40% of the world’s energy is shipped or pumped out. Iran could also threaten oil fields in Saudi Arabia, Kuwait, Iraq and the UAE that together possess half of the world’s known reserves.

It is the Iranian plan for a Euro-denominated oil bourse to be commissioned by March 2006 that has sent shock waves in Washington. If this happens, then London’s International Petroleum Exchange and New York’s Mercantile Exchange – both owned by American companies could feel threatened. This would make Iran the regional hub, attract European buyers paying in Euros as well as oil starved Chinese and Indians. Both India and China could offer lucrative trade in exchange to an Iran whose industry has been hurt by sanctions. The global demand for billions of dollars for buying the oil would go down along with the requirement that the US may have to buy a part of its needs in Euros. Further, if other commodities move away from the dollar, this would be the end of dollar supremacy. Some European analysts like Toni Straka describe the effect of this changeover as worse than a nuclear attack on the US. This is the urgency for the US and Iran must pay for this.

The worst is yet to come. Buffeted by hurricanes Katrina and Rita, caught up in the quagmire of Iraq and Afghanistan, the floundering war against terror, damaged refineries at home and rising oil prices are beginning to haunt the US Presidency. Goldman Sachs predict that the price may touch US $ 100 and also that should this happen or the price of petrol cross US $ 5 a gallon in the US, recession will set in. Unless cheap and plentiful oil can be guaranteed, gasoline prices will increase globally but oil companies are warning that the era of easy oil is over. Professor Michael Klare, the author of “Blood and Oil”, calls this the twilight era of petroleum and is worried that excessive US dependency on imported petroleum is becoming a cause for instability.

We need the oil and the gas desperately or our economy and reforms will grind to a halt. We need Iran as a counterpoise to Pakistan, we need the energy resources for our economic development and we need access to Afghanistan, Central Asia and Russia for markets and resources. There must have been very good reasons, other than recent pique, that prompted India’s acceptance of the IAEA resolution which exceeds the formal requirements of the Safeguards Agreement and Protocol. The hope is that the US is pleased enough to reward India. The Iran affair will now go to the UNSC but this is unlikely to satisfy the US, as this does not bring about a regime change in Tehran nor give it access to Iran’s hydrocarbon reserves.

At the same time, the Iran-Pakistan-India gas pipedream could easily become our nightmare not because of Iran but because of Pakistan. It defies logic to deal through a country where the trust deficit is huge, who will use every opportunity to undercut our interests and interdict the pipeline should it want to at any stage. It will leave India at the mercy of Pakistani intentions even if one has a tie up with the Indus Waters Treaty. India will have no control on this.

Meanwhile, if days of easy and cheap oil are over - for India they were never cheap or easy anyway – then we need to get ready for the future; we need to explore, buy and conserve desperately. We need to find alternatives before the oil runs out.

Source : Hindustan times 28th Spet 2005

Top Billing for Tehran

The shoes are by Bally, slacks by Balenciaga, the bag by Givenchy and the hijab by decree. Elsewhere, in places like the island resort of Kish in the Persian Gulf where the laws tend to be slack, one can see blonde-streaked hair peeping out from under a Hermes scarf worn somewhat casually. This is the modern Iranian woman who also typifies modern Iran, a mixture of the old and the traditional, the modern and the technological. This, despite 28 years of sanctions, which no Iranian lets you forget.

Tehran itself is a concrete jungle, a moving parking lot as the locals call it, where all power and privilege resides in the north and the people live in the southern part of the city. Petrol sells at the equivalent of one US cent a litre and bottled mineral water costs thrice as much — not that there are water shortages or power outages. The infrastructure is marvellous and the roads, like the one to Arak where the Iranians have built their heavy water facility for the 40 MW reactor to be constructed, are black-topped without potholes.

Iranian scientists at Arak asserted that the indigenously built IR-40 heavy water reactor would produce radioactive isotopes for various medical and industrial uses. Western scientists say that the facility at Arak could produce plutonium in another seven years. This and the other facilities across the country are a symbol of not just the Iranian struggle for modernity, but also of national pride and sovereignty that no Iranian is willing to give up at any cost. As signatories to the NPT, Iranians assert it is their right to process uranium for peaceful purposes.

If Arak and the Tehran TV tower, the fourth highest in the world and built indigenously, are symbols of modernity, Isfahan signifies the traditional and artistic Iran. Isfahanis proudly call their city Naqsh-e-Jahan (Half of the World). Close to the exquisite Imam Mosque is the Chehel Sotun Palace. On its walls hang paintings of Nadir Shah’s conquests in India and of the visit of deposed emperor Humayun to the court of the Safavid King, Tahmasb I, seeking assistance for his restoration.

Four hundred and fifty-three years later, Murli Deora visited Tehran seeking an agreement for LNG but he got neither the kind of coverage nor the promise that Humayun got. The Iranians are keener now to have the Iran-Pakistan-India gas pipeline. There is also a sense of astonishment, hurt and even anger at the way India has twice voted against Iran at the International Atomic Energy Agency. They interpret this as a sign that India has subserved its strategic independence in favour of US interests in the region.

In our search for new strategic options we seem to forget that Iran and India were neighbours for centuries till 1947. Iran was anti-India at its virulent best during the time of the Shah of Iran, America’s regional surrogate. It is true that in its initial post-revolution years, the regime routinely exhibited its Muslim closeness by siding with Pakistan on the Kashmir issue. It is equally true that it was Iran which prevented a consensus Organisation of the Islamic Conference (OIC) vote on Kashmir in 1994 that would have led the Kashmir issue to be eventually re-opened at the United Nations Security Council. Given that gratitude is not reason enough for international relations, India has to seek mutually beneficial relations with Iran purely for geo-strategic considerations.

Ten per cent of the world’s oil reserves — about 132.5 billion barrels of proven reserves — are in Iran. It has the world’s second largest reserves of gas. Given these assets, it is far too irresistible a prize, far too important, to be left alone and strong in the region. Iran is, therefore, a natural and prime target of US actions in the region in its quest for full spectrum global dominance. The German-born Baron Reuter (of Reuters news agency) acquired the Reuter Commission in 1872 that gave the British monopoly over Iran’s economic and financial sector. From then to the overthrow of the brutal Shah in 1979 was a long history of exploitation of Iran by Western interests.

Courtesy : The Hindustan Times, May 10, 2007

Syrian in real lIfe

Stephen Gaghan’s fast paced film Syriana is about several plots and sub-plots all told in two hours. It is about the struggle for control of oil, about dubious business mergers worked out by two Texan oil companies for oil rights in Kazhakhstan; about a “bad nationalist” Arab prince who gives his country’s drilling rights to the Chinese but angry Americans ensure a violent regime change; and the “good” Arab brother is rewarded for his willingness to help some American companies sell their military hardware; there is torture and one could say predictably and inevitably, the suicide terrorist who is a Pakistani. There is intrigue, treachery and ruthlessness in the pursuit of wealth and power. Clearly, a case of reel life imitating real life.

Outside the cinema hall, the real world looks pretty much simiar. The US has been there for over 60 years ever since they displaced the Brits when Roosevelt promised American protection to the Saudis in exchange for uninterrupted supply of cheap oil. Since then there has been a steady accretion of US power where the US CENTCOM’s area of responsibility coincides with the entire energy rich Gulf and Caspian region.

America’s neo-cons have consistently professed that America had a global mission, that military power was the indispensable foundation of American foreign policy, and stressed the importance of the use of military superiority to help introduce democracy. The debate in the last two decades of the 20th century provided the real foundation of the Bush doctrine of pre-emptive action which means an America driven forward by unrivalled military power and the growing profits of the world’s largest multinational corporations. Iraq may have been an unmitigated disaster according to most but for US oil corporations it has been a glorious war. Exxon, Chevron and ConocoPhilips earned US $ 64 billion between them in 2005.

The US may today have a Bureau of Deconstruction in the Department of Defence that would deconstruct 26 regimes and a Bureau of Reconstruction in the State Department that would reconstruct these countries into democratic American clones.. Others like Seymour Hersh have talked of ten countries that are up for facelifts while Ralph Peters has redesigned maps of the region. The Global War on Terror is not about defeating terrorism, but is a handy means for re-ordering the world and retaining US pre-eminence.

It is, however, becoming increasingly costly and difficult to retain this position. It is axiomatic that without access to assured cheap and abundant energy supplies, the US cannot maintain its way of life and its full spectrum global dominance. A Russia that was supposed to have been finally defeated after the Afghan jehad and the fall of the Berlin Wall is resurgent under President Putin. The rise of China, as a global power, is another phenomenon that Washington must deal with.There is competition for resources and markets; energy as a weapon of influence, has been used by Putin. Neither threatens the US militarily but its economic interests and those of its allies as well as political influence are being challenged. Equally, without access to similar energy resources China will not be able sustain its scorching rate of growth required to keep its economy growing and prevent an internal political upheaval.

Having won the Cold War, the US continued to needle the Russians, in areas the Russians have long considered their own backyard, confirming earlier prognosis that the US and Russia would always be adversaries even if there had been no Communism to defeat or defend. The US today wants all energy supplies meant for the West to bypass Russian and Iranian territory as these provide both with the leverage that the Americans do not want them to have.

As a vital supplier of gas and oil to Europe and Japan, Russia exhibited its new-found strength at the start of the year when it shut off gas supplied to Ukraine as part of a bargain for a higher price. Possibly, the Russian president had learnt these tactics of using energy reserves for geo-strategic advantage at the St Petersburg Mining Institute where he did a dissertation on “Toward a Russian Transnational Energy Company” soon after making a career change post-KGB. Russia-China relations have been on the upswing with mutually beneficial military and technology deals. They are also working some deals with Saudi Arabia. Russia may have lost the Cold War but is not going to lose the Energy War.

Elsewhere, the Shanghai Co-operation Organisation comprising China, Russia, Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan, has enrolled Iran into its membership. This could be early signs of moving towards a Central Asian version of OPEC or NATO.. The propects of a triangular relationship that has Russia, China and Iran as the three sides with the energy rich Central Asia boxed in, is fast becoming America’s geo-strategic nightmare especially after its collosal failures in West Asia. Iran has 11% of the world’oil and 16% the world’s gas. Although Saudi Arabia has more oil and Russia has more gas, no other country has more of both of these resources combined. Iran is geo-strategically located as the only country that has borders with the vital Persian Gulf and the Caspian Sea. This, rather than the nuclear issue, is the real reason for US anxiety about the way Iran will turn. Iran is the only country that has gained from the failed US campaign in Iraq. No wonder, less than spontaneous anti-Tehran demonstrations seem to be taking place in Iran’s Azerbaijan province and in Khuzestan bordering Iraq.

American attempts to snub the visiting Chinese leader, Hu Jintao, last April when they ‘mistakenly’ played the Taiwanese anthem and then had a Falun Gong member demonstrate loudly, left the Chinese leader unfazed. He took off for his Saudi Arabian visit, struck a deal ensuring access to Saudi oil in exchange for sophisticated weapons and new technologies. China has ventured into the American backyard by recently hosting Hugo Chavez, the defiant Venezuelan leader; nor has China taken American advice to cancel its US $ 100 billion deal with Iran. China has worked out several pipeline and exploration deals globally and also hopes to use the Gwadar port for overland energy routes in preference to sea lanes that are subject to American control.

Experts predict that global oil production is peaking and the era of cheap and abundant oil is gone forever. Apart from traditional guzzlers, other claimants like China and India and major Western oil companies, will now compete increasingly for this diminishing resource. But India is still on the reserve bench in this Big Boys League.

India joined this energy race not only late but with other handicaps, without Russia’s energy reserves, China’s deep pockets nor American military might and no direct access to energy areas.. Since India cannot sustain its economic growth without an assured and cheap energy supply, civilian nuclear energy is important. The hope is that the US Congress does not force America to lose a deal by converting the original energy deal into an NPT that would force India to rethink. As the US eyes Indian markets as a means to revive its economy, only a mutually satisfactory nuclear deal will hold. Further, nuclear energy will provide electricity to the industry but will not turn the wheels of the transport sector. No amount of increased supplies will help unless we collectively learn to be less extravagent than we are today and the government is prepared to spend huge sums on a cheap and efficient transport system, beginning today.

Source : Hindustan Times 18th September 2006