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Natural And Engaged Democracies

Text of the Deputy Prime Minister's address titled, 'Indo-US Relations In A Strategic Perspective' at the World Affairs Council, Los Angeles, June 11, 2003

I am delighted to be amongst you today at the World Affairs Council, Los Angeles, and to have this opportunity to share a few thoughts with such a distinguished gathering.

I am especially pleased that I have been able to come to the West Coast during my current visit to your great country. The West Coast of the United States is a testimony both to the immense diversity of your country and to the distinctive strengths of its diverse regions. Thanks to Hollywood, we in India, like the rest of Asia and the world, are familiar with this part of the United States. But from a geo-political point of view also, the West Coast has a special relation to Asia. It is a reminder that the United States is not only an Atlantic nation linked to Europe, but also a Pacific nation linked to Asia. I am mentioning this because it has an important bearing on the theme of my address today.

Understanding what is "Strategic"

I have been asked to speak on Indo-US relations in a strategic perspective. Generally, when we use the term ‘strategic’, we intend to convey a combination of meanings. It refers to long-term goals as against immediate or short-term objectives. It refers to important missions as against relatively less weighty efforts. It calls for a forward-looking orientation, as against a weakness that often bogs nations down in problems and difficulties of the present. It demands sustained and focused attention as against episodic or sporadic consideration. Since attainment of success carries a far greater importance in a strategic undertaking as against a non-strategic one, it demands a clear roadmap and a carefully devised system of implementation.

So, is there a basis for a strategic perspective in the relations between India and the United States? Do our two countries share a common view and a common set of values that require us to pursue certain long-term and important goals in the 21st century and beyond? Do these goals have any significance for the needs and concerns of the rest of the world? Do we have a clear and broadly congruent understanding of these goals? Can we create a roadmap for our undertaking? And do our two countries feel strongly enough about achieving success in this undertaking?
As far as India is concerned, my answer to all these questions is in the affirmative.

Two Natural Democracies

We are two large and populous countries in the world. Naturally, all big countries with significant populations are required to cooperate for the good of the world community. We are not only large and populous, but we also share other attributes that are important for the good of the world community. We are both democracies, a fact that has, historically, not sufficiently contributed to the depth and content of our bilateral relations. If the 20th century is going to be remembered for any one great achievement, apart from the spectacular advances in science and technology, it is the spread of freedom and democracy around the world. Totalitarian systems collapsed. Many a dictatorship got demolished.
India, unlike many other developing nations, did not have to wage a struggle for democracy. It became democratic as a natural corollary of attaining freedom British rule. At independence, India established a democratic polity with a Constitution that enshrined the rights and liberties of people, blending them with age-old human values and a vision of social equality and justice. This early vision has blossomed into a firmly rooted, secular, federal, multi-party political system. People talk of India’s democracy with a sense of wonder. The forging and consolidation of our political, economic and emotional national unity in a vast and diverse land with a population of over one billion people, has been an achievement that we can be truly proud of. I believe it is also of some significance for the world.

We are proud of the fact that elections are held at regular intervals in India. Not even once in the past 55 years has a change of government taken place through any kind of violent or undemocratic means. As in the United States, the will of the people has always prevailed.

Both India and the United States are open societies, with constitutionally mandated and non-discriminatory civil liberties for citizens. We both have a free and vigorous press, which we consider a pillar of our democratic system. Both cherish, and zealously guard, freedom of thought, speech and association. I should add here, with special emphasis, that we both also value freedom of faith. Persecution on the basis of faith is alien to our cultures.

There is yet another important attribute we share. We both are assimilative and integrative societies. We do not believe in exclusivism and exclusion. We not only tolerate diversity, but also celebrate it as a distinctive and enriching feature of respective national identities. Yet, in spite of all the diversity, there is a strong unity that defines both India and the United States. At a time when the world is shrinking to a Global Village, when all countries are becoming increasingly inter-dependent on one another, it has become all the more necessary to recognize "Unity in Diversity" as a universal ideal.

One might wonder why these commonalities are important for a strategic relationship between our two countries. My answer is that, it is precisely these shared attributes that the world of the 21st century is going to need in greater and ever greater measure. Preserving and promoting these values is an important mission for any nation that possesses them, and for any two such nations to do so collaboratively. This, I wish to submit, is a strong basis for a strategic relationship between India and the United States.

There is another basis. Other factors apart, one of the tests of whether two countries can have a strategic relationship is whether their best minds resonate with each other, and also whether their ordinary citizens have a good feeling about each other. On this yardstick, the answer to the question "Can India and USA have a strategic relationship?" is self-evident. Even though geo-political factors sometimes affected our bilateral relations negatively, they have never succeeded in impacting people-to-people perceptions about one another. Similarly, we know that the best representatives of India and the United States have always admired the intrinsic strengths of our two societies. The names of Swami Vivekananda, Mahatma Gandhi and Rabindranath Tagore on the Indian side, and of Walt Whitman, Ralph Waldo Emerson and Martin Luther King on your side readily come to mind.

Friends, today the relations between India and the United States are characterized by an unprecedented dynamism and willingness on both sides to impart breadth and depth to them. Several factors have contributed to this positive development. I wish to mention a few of them.

Yesterday – Estranged Democracies; Today – Engaged Democracies

First of all, the end of the Cold War meant the lifting of a distorting influence on our bilateral relations. Wrong perceptions about India and her foreign policy had got accumulated in policy planning establishments in this country. These have substantially disappeared in the past decade and more. Our two countries used to be called "Estranged Democracies". Today we are two "Engaged Democracies". High-level contacts have become frequent and substantive. They have deepened the India-US partnership and led to the emergence of a closer, qualitatively new and more purposeful relationship. Regular consultations have been instituted in diverse fields and a framework established for exchange of views and cooperation. The visit of President Clinton to India in 2000, the first by an American President in 22 years, was a landmark event in our bilateral relations. The warmth with which our people received him spoke for itself. While in Washington a few days ago, on behalf of our Prime Minister Shri Atal Bihari Vajpayee, I extended an invitation to President Bush to visit India. We hope to welcome him in India soon.

The second factor that has contributed to the upswing in our bilateral relations is the growing profile of Indian-Americans in your country. Not only has their number gone up rapidly over the past two decades, but also their achievement curve has become remarkably steep in recent years. Reflecting the diversity of India, the community enjoys the distinction of being one of the highest earning and best educated in America. They are loyal Americans, but they retain strong socio-cultural links with India. They have contributed enormously to improvement of Indo-American relations, by networking with governments and political establishments in both countries. Today I wish to pay special compliments to them for their invaluable contribution.

India’s Success: Economic Reforms without Social Unrest

There is a third factor, and it deserves to be dealt with at some length because it points to the immense opportunities that now exist for strengthening economic ties between India and USA. Today there is a growing recognition around the world that India is a steadily emerging economic power in Asia with enormous strengths and opportunities in diverse areas. The rising strength of India’s economy is an outcome of the policy of economic reforms. These reforms, we can claim with legitimate pride, are being implemented without social turmoil or political upheaval. Today there is complete political stability in the country. Under the leadership of Prime Minister Shri Atal Bihari Vajpayee, the government of the National Democratic Alliance has completed five years in office.

Liberalization and opening up of the economy have unleashed the energies of our talented people and have taken the country to a higher trajectory of growth and prosperity. To take only two examples, the revolution in production of food grains has made the country self-sufficient in food, with a growing export surplus. The average life expectancy of an Indian has more than doubled since Independence. In terms of Purchasing Power parity, India presently has the fourth largest economy in the world. The Indian economy is robust and healthy and has registered an average annual growth of 5-6% since 1992. Simply put, India is already double the size of the economy it was ten years ago. Inflation has been restricted to low single digits; food grain reserves stand at a comfortable 46 million tones; foreign exchange reserves crossed US $79 billion; merchandise exports are growing at a fast pace.

India has a well developed banking system, a vibrant capital market, skilled manpower and professional management available at competitive rates, a strong, mature and dominant private sector, large manufacturing capabilities, a well-developed R&D infrastructure, competent technical and marketing services, and an independent judicial system for enforcement of contractual rights and obligations.

India’s development has not been merely more-of-the-same variety. There have been fundamental shifts, which affect the quality of life of our people. India has achieved rapid strides in science and technology. Remarkable successes have been made in our harnessing of nuclear science and space technology. India has in position a system of satellite-based communication linking remote regions of the country. It has made a giant leap forward, particularly in software development, and is acknowledged as an emerging IT superpower.

The Indian economy is also being propelled by the service sector, in particular by knowledge-based industries. Starting from scratch a few years ago, Indian software exports have reached US $ 10 billion per annum. By 2008, India’s software industry is expected to cross US $ 87 billion, with US $ 50 billion coming from exports. Information Technology is gradually
becoming India’s signature tune as it seeks to consolidate its position as an IT superpower, even as it explores new areas of strength in fields like biotechnology and bio-informatics.

Yet, so much remains to be done. The provision of safe drinking water, basic health facilities, universal literacy, electricity and other basis necessities of life, are among the formidable challenges facing India.

Our Resolve: Infrastructure Improvement

Other sectors where fresh investment is needed are hardly a secret – any visitor to India is immediately exposed to them. For example, infrastructure (roads, ports, airports, railways, bridges) and energy (power, coal, oil and gas). In most of these areas private sector involvement on a commercial basis is a relatively recent phenomenon. We must move forward in these sectors as we raise our present annual economic growth rates a couple of notches higher. Our government is determined to do so. I believe we enjoy the broad political consensus to make it possible.

In that context, it is deeply satisfying that India’s four largest metropolitan cities will soon be linked through a high-speed ‘Golden Quadrilateral’ and India’s northern and southern ends and western and eastern extremities will be connected through new highway corridors. In scope, it is comparable to FDR’s great leap of faith in connecting America after the Second World War. Similar quantum leaps are being made in other areas as well. In the last few years, telephone connections and cellular phone subscribers have increased exponentially.

The insurance sector too has been opened up. Government of India now permits 100% Foreign Direct Investment in many new sectors, ranging from airports and urban infrastructure to drugs and pharmaceuticals, from hotels and tourism to mass rapid transit systems. Even defence production, earlier the sole preserve of the Government, has now been opened to the private sector and 26% FDI is allowed as equity in Indian defence production units.

There are many significant new avenues in which US companies and businesses can cooperate with their Indian counterparts or invest in India. We do not expect this as largesse. I am told by many US corporations, that their investments in India, in diverse fields, are among their most successful and most profitable international operations. This is truly a partnership for mutual benefit.

Potential for Indo-US economic cooperation

Liberalisation of the Indian economy has also contributed to a steady improvement in India-US trade relations. The post 1991 India-US trade pattern reveals several significant trends. First, there has been a very notable increase in trade, which has more than doubled in the past five years. Second, there has also been a shift in the pattern of trade, with a number of new items coming to the market. Third, a more harmonious dialogue on trade and economic issues has emerged involving cooperation and consultation rather than confrontation and threats. Being strong advocates of frontier technologies, we are often on the same side during international deliberations in new and dynamic areas like IT, bio-technology and entertainment industries.

Merchandise exports from India to USA grew by 21.4% in 2002 compared to 2001. This strong performance reflected the highest annual percentage growth in Indian exports to USA over the past decade and occurred against a backdrop of stagnant worldwide exports to USA in 2002. Moreover, it took place despite concerns over trading with India due to heightened tension in the subcontinent and travel advisories against visiting India that were in place during mid 2002. This trend has been largely maintained during the first quarter of 2003, when Indian merchandise exports to USA have grown by nearly 20% while US merchandise exports to India have grown by a further 26%, on top of the 9% growth registered in 2002. At the current pace, India ’s merchandise exports to USA in calendar year 2003 should easily cross $4 billion, from $11.7 billion in 2002, while two-way India-US merchandise trade should exceed $19 billion, compared to $15.9 billion in 2002, if trade in services is added on, then the total two-way trade is set to reach $30 billion in 2003.

Growth has not been restricted to trade and a number of US companies operating in very diverse fields have quietly expanded their business and prospered in India. Virtually every major American IT firm has a presence in India. Over 250 of the Fortune 500 companies outsource their software requirements from Indian software houses.

Another noteworthy development in recent years has been that FDI is no longer unidirectional. Investment by Indian companies in the USA has also been growing significantly in recently years. As Indian corporations mature and become global players, we expect these trends to continue and grow.
Partners in the Fight Against Jehadi Terrorism

Beyond the economic challenges facing India, there are certain hurdles in the security sphere that have to be overcome. The biggest external threat to the country has been the wave of terrorism directed against it for over two decades. Well over sixty thousand innocent lives Indian have been lost in this madness. Our people, Parliament, temples, aircraft, trains and buses have all been attacked. The elderly, women and children – no one has been spared. The sponsors and instigators of this terrorism hail from the same common pool that also provides the terrorists that have been active against the USA. The epicenter of international terrorism lies in India’s immediate neighbourhood. It gives me no joy in pointing fingers, but the involvement of Pakistan can no longer be ignored. India and the United States have to work in active partnership to defeat the menace of terrorism fueled by religious extremism. I would say that this is an important component in the strategic relationship between our two countries, because jihadi terrorism is a threat not only to the security of our two countries, but to peace and tranquility around the world.

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