Indo-US Nuclear (No-clear) Deal – And the common man!!

One issue that has dominated the media, and is likely to be a major election issue in 2009 is the Indo-US nuclear deal. As the news channels dissect and double-dissect the issue to improve their TRP ratings, and as newspapers waste editorial space looking at various key implications of singing the deal, what everybody has failed to evaluate is the implication of the deal on the common man! Someone who does not care about Left’s ideology-based opposition to the deal; PM’s will to risk his government to make the deal happen; and BJP’s “zero-issue” (I have not read any convincing arguments from BJP around this; and they initiated the deal!!) based opposition around the deal (or that matter anything done by the Congress-led UPA).

What matters to a common man in India is a the basic need for power supply to his/her house, business unit; and to some extent the assurance that his tax money is being judiciously used (read – not being wasted on untimely elections). He does not care about the three-step nuclear program that Bhaba envisioned several decades ago (that seems to be going nowhere; going by 8-10 hour power cuts in “developed regions” of the country), the Hyde Act and how the new President (possibly Ms Clinton) may use it to arm-twist India (at least that is what the Left feels; seems to be a serious case of severe schizophrenia!!). I am by no means an expert on foreign policy, technology, politics, and economics, but here are my “two-cents” on the deal from a common mans’ perspective:

I see the 123 Agreement as having ideological, strategic, techno-economic angles and implications.

On the ideological front (read Left’s position), the deal may mean that India may end up as “friend” of an imperialistic nation (as far away from the communistic ideology as possible). Per Left, it is fine to have the “imperialist monster” invest money in West Bengal, but it is not fine to be “friends” with the imperialists. While it is fine to accept billions of “imperialistic” dollars flowing into the Indian economy, it is not fine to “shake hands” with the imperialists. It is fine to claim that US is the biggest trading partner, but it is not okay to have a technical agreement with them. The common man however cares two hoots about this. Americans have helped create jobs in the country (read BPOs); they have also helped provide careers to 20 year olds. How robust these careers are and how much exploitation happens in these call centers, and the havoc these play with the social-fabric of the country is a different story (and I am not a big fan of back-office shops), but none-the-less the imperialistic friend has helped grow the economy, creat jobs, and is one of the biggest trade partner, etc.

The strategic risk of the deal as highlighted by BJP and Left is that since the deal will at least theoretically deter India to conduct any nuclear tests, it may risk the sovereignty of the country. Though I cannot comment on the legal technicalities, the experts have denied this and claimed that the 123 Agreement will be subservient to the national sovereignty. But do the BJP and Left realize that if India conducts another nuclear test, how much that may impact the economic growth of the country (due to possibly trade sanctions, etc.). A nuclear test at this point will be a disaster anyways, so why stop the deal because of that. Also, if we don’t buy the technology from the US (there is no compulsion to) and we maintain good relations with the 45 countries on the NSG, there is an outside chance that we may be totally insulated of the US reactions in an “extreme” scenario of conducting a nuclear test. Unless offcourse our diplomacy goes to sleep after the deal is finalized!! Also on the contrary, I think the deal legitimizes India nuclear status. If we miss this opportunity the next US government (possibly the Democrats) may want India to sign CTBT, NPT, etc. thereby sealing any possibility of this deal moving forward. Will India be seen a part of the US-UK tag team post the deal, and will it be forced to tweak its foreign policies to please the US. I don’t think so. India is big and influential enough (and smart enough) to have bi-lateral relationships with the key nations, and have an independent foreign policy.

There are two angles to the techno-economic side of the deal – the nuclear energy techno-economic feasibility, and India’s independent nuclear energy program. On the former, there are all kinds of reports that the nuclear capability will cap at 50,000 MW over the next 20 odd years; India’s entry in the nuclear energy era will push up uranium prices; nuclear power will be 6-7 cents per unit (as against coal/gas based power at 2-4 cents), the technology is not stable, etc. India is doing well to run its nuclear energy program under the current NSG sanctions. But the existing nuclear power stations are running at a low PLF due to inadequate and low-grade uranium, and the fast-breeder Thorium based power generation is still a few decades away (the three step nuclear program proposed by Bhaba envisions – stage 1: heavy water-based plans run on uranium; stage 2: fat breeder based reactors based on plutonium/uranium; stage 3: Thorium-based fast breeder reactors). And, the deal does not stop us from working on our three-phase program on the side.

India (read a common man) needs electricity flowing into his house and business, so any incremental electricity even if it will cap at 50,000 MW is welcome. The per-unit cost of electricity is high, but is it higher than no-electricity? If India has to grow at 10% over the next few years, the electricity demand will have to keep pace (at elasticity of 0.8). There is no other way out

Where I feel the PM and current UPA government has messed up is not marketing the scheme to the people of India. But then you cannot expect an academician like Mr. Singh to take up petty political marketing. Nuclear technology is too mundane (and complex) a topic for the common man to appreciate. The UPA government should sell it as its effort to “provide bilji” to a common man rather than “as a partnership with the US to develop the nuclear energy capability.” The UPA should have seen this “beamer” coming from the Left and BJP and should have been savvier in getting public support on the issue. Besides, Ms Gandhi and Mr Singh should have controlled their emotions in the initial stages of the political fracas around the deal.

I feel (since this is my blog, I think I can express my opinion freely), the deal should go through after a legitimate parliamentary debate in November. I hope the government pushes this deal at an opportune time (post maybe Gujarat elections) to give the Bush administration enough time to get it approved from the NSG and the US Congress in time before the US elections take all the focus away from the deal.

The common man can only benefit from the deal. The downside I guess is in the minds of Left (still living in the 70s bi-polar worlds) and the BJP (which will oppose anything from anyone other than itself).