India, China, Pakistan Healthy Developments

An IDC Analysis


New Delhi, 02 December 2004

These are good times for foreign and Indian investors, professionals and most self employed persons as business results are good to excellent in most sectors of India's economy and tax collections too were healthy. Job hopping is common. The national deficit is something we need not worry about provided we continue to have pragmatic and business oriented policies. India's PSUs if sold and privatised could wipe out any deficit that we foresee. 

Even the Reliance tussle between brothers is not affecting the SENSEX. Dhirubhai Ambani of Reliance did not worry about his borrowings from his shareholders (deficit) but he was pragmatic (looking after politicians and he had an intelligence set up) and see where Reliance is today. But Anil Ambani joined politics and wants to hobnob with Mulayam, Amar, Subrata and Amitabh and though he is friendly with Pranab Mukherjee (as per India Today), we wonder if the UP Electricty Board will be able to pay for the electricity that Anil hopes to generate in Ghaziabad and can the Mulayam team be trusted? The Congress too is keeping its distance from Mulayam of SU 30 fame. Some money has already been advanced to UP and surely Anil's election to the Rajya Sabha had some strings attached. So Mukesh is angry and then there are stories in the media of other affairs, which we will avoid. Lets hope they resolve everything amicably.

More good news. Employment is up and tourism is booming and reviving even in Kashmir. We have always maintained that stabiltiy is good for any nation's economy and China believed in it and see where its economy is today. USA has another theory which works for the big daddies and that is 'war is good for the economy'. So since the ceasefire with Pakistan there has been a relative calm in India and the Indian leaders have had a respite to attend to other issues and not be visiting Army War Rooms and meeting all the time with the Army and Intelligence, and worry. MEA mandarins have less work and are beginning to realise that build up of Economy is an extension of Foreign Ministry duties in today's world and they must hark Putin's policies. 

The Armed Forces and Intelligence which are proliferating without cohesion or a CDS, are happy doing their own thing, issuing Doctrines, promoting events, seminars and people, with plenty of money in their pockets and travelling, with little checks and balances as that is a drop in the ocean in the Rs 77,000 crores ($16 billion) Defence budget and a supplementary is due to be put up in Parliament. They are happy too and we recommend that serving senior officers too join delegations to Pakistan. 

Prez Musharraf wants Sonia Gandhi to look into the resolution of the Kashmir problem and Zardari, Benazir's husband has been freed that gives IDC the confidence to anlayse the situation with Pakistan and China, as of today. It is looking good and lets hope it lasts. The stability has helped, and on 2nd December a team of retired Pakistani military officers and their families will come across the Wagah border and will be received by Admiral L Ramdas (Retd) as part of IPSI India i.e. INDIA PAKISTAN SOLDIERS INITIATIVE FOR PEACE. They will visit the Golden Temple, Agra, Jaipur and are being hosted by many as hospitality even in military messes is open for them and they will meet many serving and retired officers and the Home Minister and Ram Jethmalani. Lets hope they can assist to make the LoC the IBL that India has already fenced in.

We just heard another GOI statement that China has been told that we must settle the International Border along ground realities and if that is true then our reading is correct as we have always maintained. We will be obliged to settle 'as is where is' and Tawang will remain with us with minor adjustments in the central sector and nil in the Eastern or Western sectors. If our reading is correct then where is the problem and the MacMahon line will be a thing of the past and the Tibet issue gets resolved as China's own. As the MOD report says we must watch the build up in Tibet and be on guard. Then Establishment 22, SSF, SSB and many other military and paramilitary agencies will have no role left to play but we fear that in India Parkinson's Law is more powerful than in any other country and so this may just be a pipe dream.

Acting Pakistani President Soomro of Pakistan signed a bill allowing President Musharraf to keep his dual positions as head of the Army and President. The move enables Musharraf to ignore his earlier pledge that he would be out of uniform by the end of 2004. Musharraf has justified his control over the military and the government as essential to achieving peace with India and maintaining vigilance in the War on Terror. We have been saying that India must look kindly at Musharraf not because he can be fully trusted but because he is also looking for a respite to build up his economy and now Gwadar is being opened for tourism, residential investment and Iran is being encouraged to invest. India's need is also a few years of peace and tranquility so that our economy is more robust, and we can look at the issue of a federation in Kashmir with Pakistan where ID cards can be issued to Kashmiris on both sides. 
Pakistan tested the Ghaznavi Hatf 3 missile the equivalent of India's Prithvi 250 km missile and both countries claim these are Nuclear capable. We have some doubts as they will need safe miniaturized warheads and they should have been operated in dummy form by the Armies, the users. The missiles may be ready at BARC and with the Pakistani Strategic Forces Command but they need to be operationally demonstrated to ensure deterrence. Also the safety aspects of the nuclear warheads need to be looked into and publicised. The IAF and PAF have loaded dummy bombs on Mirage 2000 and F16s. 

In India DRDO continued its series of two consecutive missile tests on 30 Nov, as this short-range, surface-to-air missile was launched at Balasore against the Lakshya target with a warhead. This is great news if it hit the tow of the Lakshya. Then the radar or heat lock on is proved and DRDO needs to uncork the bubbly and call us too! The Akash missile, which has a range of 25 kms, was earlier fired on 26 Nov. Both tests were successful according to reports. Indian officials claim that the missile test has been planned for some time and was not in response to Pakistan's test so this is good news and Pakistan informed India of its missile test so CBMs are moving and we recommend that India take a relook at Pakistan's offer of a no war pact as the time is ripe. 

The Putin visit will mean a lot even if matters are kept in camera as pragmatism is seeping into the Defence establishment. India and Russia will hold a joint paratrooper exercise next year, according to a statement by Russian Defence Minister Ivanov. No specifics of the exercise have been detailed, but both sides have indicated a willingness to develop inter-services relations and move away from the Cold War system of Russian training operations that marked military relations. Both sides are currently meeting in India, and this comes on the heels of the two day excellent seminar organised by Lt Gen Vijay Oberoi of the CLAWS, on INDIAN SPECIAL FORCES: THEIR GROWTH PASSAGE, ORGANIZATIONAL CHANGES, CURRENT STRUCTURE, CONCEPT AND DOCTRINE FOR EMPLOYMENT. Foreign Attaches and media were invited and that is a good sign too.

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