Hillary Clinton was in South and South East Asia last week looking out for business and strategic deals. The Obama administration is probing the region with the greatest economic potential in a world beset by the global economic crisis. India and America which eyed each other with deep distrust not very long ago — vestiges of which still remain — are beginning afresh.

India has recorded a 5 percent economic growth last year which though markedly less than previous years is still an enviable figure of growth. China has recorded a 9 per cent growth and this month announced its foreign currency holdings at $ 2 trillion much of which is invested in US Treasury bonds.

Even though it was reported during the Bush administration that US was attempting to build India as a bulwark against China with its unrivalled economic growth and rapid military expansion it does appear that the Obama administration is stepping gingerly in the lands of the two Asian giants.

Buffalo not Bangalore

The issue of outsourcing of contracts particularly on IT to Indians has been one of the major catalysts that spurred the Indian economic during the last decade. It resulted in India getting that stamp of recognition has a major industrial power while it also helped boost its economy. But now in the throes of its worst economic recession, America prefers to save jobs for Americans and not outsource them to foreign countries.

Barack Obama who had been not as favourable to outsourcing as his predecessor George Bush was recently threw a cat on the pigeons by claiming that he was: ‘Yes to Buffalo and no to Bangalore.’ Hillary Clinton took great pains to smoothen ruffled feathers saying that Obama wanted Americans to have jobs and was not advocating protectionism. We doubt whether Indians were convinced of this ambiguity.

Iran

Clinton had also discussed Indo-Iranian relations in depth with Indian leaders particularly on Iran’s nuclear programme but had not been able to get any firm Indian commitment although Clinton at a press conference had claimed that ‘in my opinion, India shared US concerns over Iran’s attempt to acquire nuclear power’.

To those outside nuclear power politics such as Sri Lanka, it does seem ironic that the US having blacklisted India for three decades over its nuclear power programme should have somersaulted on its nuclear non-proliferation policies even after India defied non proliferation laws and exploded its nuclear bombs.

Rapid changes in geopolitics may have necessitated change of US policy but for India and America to now sit down and discuss possible changes in Iran’s nuclear programme does seem comical to say the least. So far India has not directly condemned Iran’s nuclear programme but earlier it did go along with IAEA sanctions on Iran.

Islamic terror

India is most important to America in the war in Afghanistan. India is strategically placed in the region where America is fighting the forces of Islamic extremism. But Clinton in her visit could not utter soothing words into Indian ears about America’s readiness to fight terrorism emanating from Pakistan into Indian territory or the Kashmir issue. Pakistan right now is the most important country to the US and NATO allies in its war in Afghanistan.

The issue of carbon emissions causing global warming once again proved to be a stumbling block. The new Indian Foreign Minister S.M. Krishna stood by the Indian position that India on the scale of carbon emissions per capita stood lowest in the ranking of polluting countries while Clinton pointed out that India as a fast growing economy was increasing the levels of carbon emission dramatically.

$ 10 billion sale

Clinton didn’t do too badly as a saleswoman. She finalised an agreement for designation of two Indian sites on which US companies would have exclusive rights to sell civilian nuclear  powered reactors. The sale of these reactors is estimated at $ 10 billion. The other was to ensure that the technology of sensitive US defence systems would not be transferred to third countries.

During last week’s visit — the first by her to India as Secretary of State — it was announced that future US-Indian discussions would be held to widen the scope of issues such as : energy, security education, agriculture and counter terrorism. The talks would not only be confined to government leaders and officials but would be a ‘strategic dialogue’ that would include business leaders, scientists, social activists, academics and educationists. 

Hillary Clinton after her 5 day tour of India went on to Thailand for the ten nations ASEAN summit where signed the Treaty of Amity and Cooperation. Earlier the Bush administration had not placed much importance to ASEAN and it is speculated that the Obama administration would renew American interests.

  What President Obama’s policies on South and South East Asia are not yet clearly spelled out. There is some speculation that the White House policy makers are divided with  one faction led by Chief of Staff Rahm Emmanuel holding the opinion that the Obama Administration has been giving too much to China while Hillary Clinton holds the contrary view. Does Obama have a choice with China’s foreign currency holdings now at $ 2 trillion and much of it being invested in US Treasury Securities?