Happy Leap Year Day!

Its been three weeks since I've written anything here, and a very long three weeks they seem. Of course, in three weeks, the entire current affairs of the world changes, but many things do manage to remain the same as well.

Yesterday was the last day of polling in Uttar Pradesh, and now we will see who comes up on top in the most backward, but politically most important state of the country. Lots and lots of analysis and predictions are doing the round, but perhaps one thing is certain that the CON mafia isn't going to win it, and this assumes significance because the Gandhi family had been campaigning there as if their lives depended on it. Maybe they do, but most likely they don't.

Anyways, so the murmurs of a neck to neck race between the cycle and the elephant, and the dirty hand of the CON mafia will probably come third, and in the rear will be the other national party, the BJP. The CON mafia's trump card has got to be the talk of Muslim reservation within the 27.5% OBC reservation quota, which actually isn't that big a polarizing factor for many Muslims apparently. the Samajwadi Party is another party that has promised no stone unturned to give the Muslims of the state a new deal. CON mafia came up with the quota promise, and SP, through Akhilesh Yadav, says that they will support the party, but they should raise the quota promised to 18%. Of course, India's most eligible middle-aged bachelor, Rahul Gandhi, says that SP should stop these shenanigans and stop trying to steal their thunder.

Ha ha, we've all heard this before, and I did get a feeling that the Muslims of UP also echoed similar sentiments this time. First, why does the entire Muslim community need to vote en bloc, why do politicians believe that is the case when it has been shown that it isn't, and have the issues of development, education and health become bigger matters of concern for the Muslims than religion and minority politics? Actually, why just the Muslims? When will these issues actually start mattering more to the people of this country?

Coming out of these big games that politicians play, lots of other things have been going on in my personal front as well. I am happy to announce that I am out of the finance industry for now! I was thinking yesterday that I have tried so hard to move ahead in the finance domain because that's where the money is, or so is everybody made to believe in the IIMs, but I am beginning to realize that maybe I just won't be able to be good in it because its just not in me. When people discuss models and valuations and all that jazz, i just quieten up! So now I am in an area that is very new in the country, and has a lot of potential, and the best part is that it is mainly to do with the environment, which is something I am glad I finally made a greater part of my life professionally. So my new work is busy, but good busy, and feels nice to finally be in a situation where I don't have my boss breathing down my neck all the time.

So happy March everybody. This is the year when I turn 30, so its a big month! I'm getting old, I think I need to now get into second gear on most of the plans I have for my life.

aid for the sake of aid

January 31, 2012 was a big day for people watching the MMRCA competition of the Government of India, for that day, the Government of India announced to the world that Dassault Aviation had emerged as the lowest bidder among six, and between two after the down-selection. The Rafale, a highly capable plane, had beat the Eurofighter on a number of technical specifications and was, which was apparently the deal maker, the cheaper of the two.

That is all over and done with and hopefully the deal will be officially signed on paper and India and France can get on with whatever wonderful technological things they have planned over the next many years.

The reaction to the news that Eurofighter has not won the bid has really not gone down well with the British public and political class, and its actually very surprising to see the intensity of reaction from their press. While most of the reaction of linking the over GBP 200 million in aid to India to the MMRCA deal is that of "ingratitude" by India, there are at least a few media outlets that ask the question - is it fair to connect this aid to expectations of winning a major defense contract?

The truth is that aid for trade is nothing new, and history is replete with examples where the rich seller goes to a third world nation with an agenda in mind. In Africa, examples of China building schools and infrastructure in return for the former's natural resources are a good example of this "quid pro quo" set-up that many sellers, backed by their powerful governments, favour.

For the developed economy giving the aid, the aid industry is a huge multi-billion dollar enterprise that has many, many vested interests who benefit directly from it. I have already written a few times about it. In Britain's case, as some news items point out, its also about 'feeling good about themselves.'

Aid For Trade is an official policy of the World Trade Organization, and perhaps can be a very effective way of transferring the expertise and good business practices of developed nations to the third world by channeling the aid provided to build institutions that will allow that nation to be more financially independent. Of course, as pointed out by many, that is never the case. There is a precedent set that aid for trade is illegal. It was in Britain, in fact, in 1994, when the British aid to fund the Pergau dam in Malaysia by the then British secretary was found to be linked directly to the arms sales to that country.

When it comes to giving aid to India, I think all the nations in the world who still keep the practice going should stop immediately. It is for all to see that India has turned into a highly unequal and socially and economically divided nation with an unprecedented level of governmental incompetence and an alarming inability to implement policies and procedures. If India can't take care of itself, then nobody can take care of it. As Rahul Bedi writing in The Mail points out - it only enriches a corrupt elite.

There are still many who argue that India does need aid still, and point to the shamefully high number of extremely poor in our population. Indian apologists write that India needs aid because we're not a poor country but poor people but nobody really questions our own incapability, or should I say, unwillingness, to actually invest in improving the lives of the poor.

A good article in the British tabloid, The Sun, asks why is all this aid going to a country that has more billionaires than India, that huge money making venture called IPL, and a multi-billion dollar space program? Good questions for them to ask themselves, and good questions to once again look at India and wonder why are we such a rich country with such poor people?

So when everybody knows that the money rarely reaches the intended beneficiary, why keep it up? That is where the many vested interests start showing their head. Keeping third world dictators well fed and happy has been a state policy of the US for many decades. Similarly, keeping people in governments in these poor nations have allowed many corporations to do business there smoothly and exclusively.

So if you think about it, aid fits well into the kleptocracies that many third world nations have transformed themselves into. Now they are simply not poor, now they are poor and thoroughly incapable of getting out it. I wonder why rich nations simply shut their eyes and give aid, when they should be raising their voices most vehemently and forcing the third world nations to manage their resources better and cut graft and increase efficiency of welfare schemes. But doing that is much more difficult that doing business, and since the mantra of globalization and capitalism is that trade is the real antidote to poverty, it is thus the most effective way to reduce poverty. For chunks of the third world which have nothing to produce or sell, then the only way remains is lots of aid and arms sales.

Meet the IAF's latest bird

I had written about India's MMRCA deal many moons ago on this blog, and about the six beautiful aircraft that were vying to be a part of the Indian Air Force's inventory in the coming decades. Considering the defense deal of the decade by many, this deal was touted as a completely fair and transparent deal in which the winner would be decided solely on the IAF's checklist of what it was looking for in the winning aircraft. Of course, the argument goes that to make it a completely technical decision was a completely political decision.

Given that there was so much global attention paid to this deal, in which India was looking to get 126 fighter aircraft and a possible 80 added on for a price that could stretch beyond USD 15 billion, or INR 75,000 Crore, I think India's policy makers thought it best to not screw it up completely. Thus, in a land beset by defense scandals, this was supposed to be a rare case of a defense deal in which proper procedure was followed and the Armed Forces' best interest kept in mind. Of course, it is not to say that politicians haven't made money off it - I'm sure they have, but as was the supposed case in Bofors, despite the Gandhi family and the Government making money off it, the gun was actually very good and well liked by the Army. The same, many online observers and commentators are saying, may be true here.

The deal did take over a decade to materialize, and was not fraught without its moments of uncertainty and possible scandal. This link by the Asian Age gives a good idea of the time line of this deal.

• 2000: Indian Air Force (IAF) conveys to defence ministry its interest in acquiring medium multi-role combat aircraft (MMRCA) to replace its ageing fleet of Soviet-era MiG-21s and because of delays in developing the indigenous light combat aircraft (LCA).
• 2001: IAF issues request for information (RFI) for 126 combat jets.
• 2003: IAF seeks defence ministry's permission to buy 50 more French Mirage-2000s to shore up the only MMRCAs in its fleet as a stop-gap arrangement. The aircraft had been acquired in the mid-1980s.
• 2004: Defence ministry asks IAF to instead issue a larger MMRCA tender.
• 2005: Defence ministry issues initial MMRCA tender but withdraws it quickly even as it starts receiving responses from vendors. 
• 2006: The then IAF chief, Air Chief Marshal S.P. Tyagi, flags the dwindling squadron strength of the force. From a sanctioned strength of 39.5 combat squadrons, the IAF is down to 33 squadrons.
• August 2007: India issues the tender for 126 MMRCAs at an estimated cost of $10.4 billion.
• February 2008: US majors Boeing and Lockheed Martin, Russia's United Aircraft Corporation, France's Dassault, European consortium EADS and Sweden's SAAB submit their bids.
• April 2009: Reports that Dassault and SAAB are out of the race.
• May 2009: Defence ministry says Dassault and SAAB still in contention.
• April 2010: IAF completes its flight and weapons evaluation of the six contenders on the basis of 643 parameters.
• December 2010: Offset proposals of contenders goes missing; later found on the roadside in south Delhi. The incident threatens to derail the tendering process.
• April 2011: India down-selects EADS and Dassault for the final leg of the contest, rejecting the other four contenders.
• November 2011: The commercial offers from European consortium Eurofighter and France's Dassault Aviation opened.
• January 31, 2012: Dassault informed that it has emerged as the lowest bidder.

As a caveat, the deal is not a done deal yet. In fact, what has happened is that now Dassault will enter into exclusive negotiations with the Air Force and the Ministry of Defense to hammer out the nitty gritty of the deal, such as the final price per aircraft, the weaponry, the modifications, the transfer of technology, and other aspects. According to the media, a firm agreement will only be signed not before 9 months from now, at least.

I will come back to the whining and hand wringing that is going on around the world currently with many people unhappy that their product was not chosen, but right now, I want to write more about the beautiful and deadly aircraft that the Indian Government has selected to negotiate exclusively with and possibly induct into the Armed Forces, provided there are no major scandals and allegations and obstacles thrown in the way by interested parties.

Both Eurofighter and the Rafale are excellent 4.5 generation fighter jets, but India has had a great experience with French fighters, most recently with the Mirage 2000 during the Kargil War. Both planes look beautiful, are twin engined, have canards, and offer the AESA radar, a new age radar that allows a plane to track and engage multiple aggressors at once.

Photo Copyright held by online source

Photo Copyright held by online source

Photo Copyright held by online source

India has been good for France and Sarkozy in particular, who goes to polls in three months and this can be seen as a major victory for him and a lifeline to the French industry. Of course, that is not to say that despite French military hardware to Pakistan, France has not been a good military partner to India, albeit expensive, but much more reliable than even the Russians in many cases, and definitely more than the Americans. As India announced that the Rafale had been selected as the lowest bidder, beating the Eurofighter by about USD 5-6 million per aircraft, the stock price of Dassault on the Paris Stock Exchange rose 22%!

The French already work with India on a number of big ticket projects, the most important being the construction of the 6 Scorpene submarines, 4 of which are under construction/to be built in India. Then India is working closely with SNECMA, a French engine manufacturer, on our own Kaveri engine. In addition, India is looking for major support from France on nuclear know-how, and this is where France has often gone against the rest of the nuclear suppliers group in their attempt to block transfer of critical technology and knowhow to India.

It has been very amusing to read the reaction of the UK and the USA on finding out that Dassault's the L1. Particularly laughable has been the British insistence that the ungrateful Indians should have gone for the Eurofighter given the billions provided by the UK to India as aid. Another laughable article in the Guardian was that the reason Eurofighter, and in effect UK, failed to get the contract was because of the current Government's poor relations with the Gandhi Dynasty!

Of course, the fact that it is France is not lost on the British, and perhaps even the Americans. The colonial hang-up has refused to leave many of the politicians there, and Sarkozy and David Cameron in the past have openly made fun of each other's industrial economy. I think many Brits can't over the fact that the UK has provided India over a Billion GBP in aid and yet the Indians did this to them. France, as it turns out, gave less than a tenth of that aid amount in the same period! So the article above from the Daily Mail goes to great lengths to again resort to the kind of condescension that one can expect from a white colonialist. Yes, we're corrupt, yes we're poor, and yes our entire system is a kleptocracy. There's no doubt about any of these and sure the Brits are angry, but linking relations with Gandhi's (who are they anyway?), giving of aid, to a defense deal shows the hypocrisy that is prevalent in the west when it comes to doing business with the third world.

The angst is on all shores of the Atlantic, not just the Eastern shores. The US has not been to bullying or forceful since the Super Hornet and Fighting Falcon were not downselected from the original six contenders. An article in the American site, The Agonist, says that the US lost out to India because of its unwillingness to share technology with India at the level that France is proposing to do. Also, as some online commentators pointed out, did President Obama really think India would go for an American product even though they know its a watered down version of their best, with some critical technologies withheld, only because of this new India-US partnership and camaraderie?

Of course, it would have been the best situation if India had been manufacturing such cutting edge fighter jets on its own, but we're far from that state, though not as far now as say 20 years ago, but till then, India needs to maintain a minimum deterrence because it is becoming increasingly clear that the Chinese are becoming cockier by the day. The whole of South East Asia hates them, and since financial bullying can't win you land, i suppose it will have to be the good old military bullying. Of course, the bottom line is that China is in a hurry to be a super power, and since it has none of the institutions that constitute a modern society, it can only influence others by money and by force. Defense Aerospace magazine has a very good article on the political analysis of the deal. The article cites a mix of geo-political compulsions, a lot of historical precedents, and what is the best deal from the Indians' point of view.

I love the Armed Forces, still have that little boy's adoration for their cool weaponry, and am eager to see them expand and become better. Of course, these go against my visions of peace and stability at the highest level of human society, but I have always been a utopian, and have always been shown that it simply does not, and cannot exist. So let us hope to welcome the sexy beast to the fold, our poverty, illiteracy, health care and homelessness notwithstanding! :-)