Arms for the Poor

With a population of almost 1.2 billion and a middle and upper class numbering more than the entire population of the United States, India is literally different countries with differing languages and customs layered atop one another. Among the educated and commercial classes, English is the linguistic unifier; among the balance of society, here is the language skew according to the CIA World Factbook: Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%. The impoverished masses drag down the per capita GDP allocation of $3,100 per annum, and when you think how much more that upper and middle class earns, the numbers at the bottom are staggeringly low.

This is the world’s largest democracy, plying its own course, has often pushed against an American tide in years past. In 1998, when India joined the community of nations with nuclear weapons, the U.S. flexed its muscle and cut off military sales. While the ban was mostly lifted in 2001, India’s military has not forgotten. The notion of buying those fine American weapons comes with the perception of a very big string: the tap could be shut off, and precious parts and upgrades withheld should India take a position opposed by the U.S. Further, there are still few remaining restrictions on hardware and software that could be used in weapons technology. But with a growth rate of about 7.4% and the currency reserves available to implement the much needed ar ms sales from American behemoths like Northrop, Boeing and Lockheed, President Obama and his motley crew (particularly after the recent election) need to spur new high tech weapons sales to help stimulate the obviously needed job growth in the U.S., particularly since the recent austerity programs announced in Europe are going in the opposite direction.

Unlike China, where the trade imbalance is profoundly in China’s favor, trade with India is more even-handed. And while it might be more socially responsible for India to apply more money to her impoverished masses, she has her own share of threats, many of them linked directly or indirectly to her Muslim neighbor Pakistan, our purported ally in the war on Islamist terror. Yet India’s military buying needs are unclear and somewhat unclear, often viewed simply as an effort to “modernize” to mirror her economic rise. Further, many U.S. practices still irk top officials, and the U.S. has a few barriers it would like to see removed as well, all issues faced by our President on his Asian trip: “The officials will press Mr. Obama to ease those strictures. Another stic king point could be that India has balked at signing agreements to protect American secrets that are a standard part of any sales.

“India also uses the lure of big military contracts to require foreign companies to farm out work to Indian companies and create high-paying jobs there. But India’s fledgling military industries cannot handle all the work, and American officials want more flexibility in those arrangements… At the same time, American analysts say that India’s military spending process is so chaotic and unfocused that it is proving difficult to complete deals…American companies are also bidding on major contracts involving helicopters and missile systems, while some earlier deals are coming to fruition… Lockheed Martin, for example, is about to deliver the first of six C-130J cargo planes that India ordered for $1 billion in 2007. Boeing, meanwhile , is building maritime surveillance planes under a $2.1 billion contract awarded in early 2009… But American executives say they realize that success in India will depend on how well they can unite with Indian companies, a process that could help them win more political support.” New York Times, November 5^th.

With Nicolas Sarkozy of France and President Dmitri A. Medvedev of Russia following (with appropriate grovels) Obama’s visit with the same mission, it’s clearly a job-hungry, desperate Western world begging emerging nations for economic relief, a strange turn of events. If only it weren’t over military weapon systems.

I’m Peter Dekom, and it is interesting to watch this massive shift of economic power in action.