India dilutes anti-proliferation rules.

The SCOMET list , notified under the amended Foreign Trade Development and Regulation Act of 1992 reflects India’s commitment to global anti-proliferation efforts. Together with other supportive legislations i.e Weapons of mass destruction Act 2005, the list regulates import and export of dual use technologies. Dual use goods and services are classifies as those tradable that are needed for making common consumer and capital goods but also weapons and munitions including atomic and biological ones.
Notification 93 of 6th January 2012 http://164.100.9.245/Exim/2000/NOT/NOT11/not9310.pdf issued by the Director general of Foreign Trade dilutes these rules in favor of companies operative in India’s special economic zones(SEZ). SEZs are meant to be future power houses of it export economy. Earlier, exporters needed export licenses to supply into SEZ based factories. This requirement has been now dispensed with after the notification 93 came in force. Though the requirement of export licensing for shipments from SEZs remains, the catch lies in liberal border controls that Indian customs administers in case of SEZ exporters. Goods stuffed out of SEZ factories do not require as rigorous customs examination at their port of exports as those arriving from domestic tariff zones. This is likely to increase the incentive for mis-declaration of dual use goods that can be shipped out without export licenses.
The strengthening of export controls that happened during negotiations leading to Indo-US nuclear deal in 2006 had started hurting the free flow of high-technology exports. To ease that pressure , government has now given them a breather through notification 93. Any measure violations ,if noticed in future, of anti-proliferation measures is likely to put the Government under international pressure particularly when its nuclear program is now under greater global scrutiny due to expanding civilian nuclear energy sector.

Nuclear renaissance at cross hurdle of judicial activism

Writ in Supreme court against nuclear energy
Prospects of nuclear energy renaissance post Indo-US nuclear deal now faced with unexpected hurdle of judicial activism in the form of public interest litigation(PIL). Common Cause , the delhi based NGO, an old hand at PILs through its lawyer Prashant Bhushan filed a writ petition no. 464/2011 in the supreme court that came up for hearing on 14th November 2011.
The petitioners are mostly former bureaucrats led by former cabinet secretary TSR Subramanian. An assortment of retired IAS officers having occupied sensitive top positions in government and at one or other time might have been party to decision processes leading to Indo-US nuclear deal. Also included are some former Magsasay ward winners like retired Admiral L Ramdas. The Magsasy award sponsored by Ford Foundation has recently been in news in anti-corruption movement of Anna Hazare when one of demand in the controversial Jan Lokpal bill wanted the Magsasy awardees in the penal to select Lokpal. The lawyer of the petitioners is none other than the irrepressible Prashant Bhushan of Team Anna.
That apart, the writ among other challenges the constitutional validity of nuclear liability act passed by the parliament last year, seeks a safety assessment of all nuclear plants in India, and a comprehensive long term cost- benefit analysis of nuclear power. It aggressively seeks to put an end to construction and proposal of any more nuclear power plants pending safety review. It alleges that governments solitary motive in pushing for nuclear power is at the behest of multi-billion dollar global nuclear industry. The proposed French company Areva supplied nuclear plants in Jaitapur have come for special crititcism for its poor, unsafe and outdated technology from the anti-nuclear energy activists in the petition. Building heavily on public fears post Fukuyama, the petition also calls for establishing an independent regulatory authority to oversee nuclear power sector. , The current regulator, Atomic Energy Regulatory Board( AERB) they argue, is loaded with former atomic energy scientists hence can’t be relied to exercise their authority impartially.
The writ petition came up for hearing on 14th November in the court of Hon’ble Chief Justice of India. The court bluntly informed the lawyer of the petitioners that the issues raised on safety were more based on hearsay, stray newspaper reports rather than hard and unbiased factual analysis. Besides, the court was not an expert on nuclear safety matters. It rightly advised them to approach the concerned of the government i.e deptt of atomic energy. Court was hardly persuaded by Prashant Bhushan’s repeated pleas to intervene on regulatory issue when he learnt that court would not entertain any points concerning safety issues with complex technical implications. It further opined that if issue involved safety of any particular reactor or general safety norms, they could issue notice to the atomic energy department and seek information to alley their apprehension. In case government was not found to be sensitive to the safety aspects, courts were at liberty to intervene in public interest at any time.
The petitioners often referred to proposed Areva reactors in Jaitapur to drive home the point that French firm’s technology was old and unsafe and India was a dumping ground from what had now become prohibitively costly and outdated technology. Besides they were at pains to point out that india was expanding its civilian nuclear program much against prevailing global trend of phasing out nuclear power. Examples of Austria, Germany were pointed out. Dr Gopal Krishnan, a former retired DAE chairman’s articles and statements in media were made rallying points against the Indian nuclear program by Prahsant Bhushan. The learned judges didn’t fail to notice petitioners reference to a particular foreign supplier and hinted at the anomaly in lawyer activists views despite his lack of any competence of nuclear safety issues and comparative economic cost-benefit analysis of nuclear power. The argument clearly had shades of market access battle between operators.
In the prevailing mood of resistance largely led by anti-nuclear activists, it is likely that nuclear program will face renewed resistance at local level. Even though these trends are somewhat global and not localized strictly, nuclear industry is much to blame for the current state of affairs. The safety technologies have leapfrogged since Chernobyl and Three Mile Island accidents happened. Fukushima was hardly about robustness and reliability of safety technologies but more about a freak natural calamity that had lowest odds of disabling a reactor. Yet it happened because there is nothing like hundred percent safe technology anywhere. Nuclear industry due to sensitive proliferation concerns has failed to educate the public about safety standards in latest generation reactors. It needs to build a balanced and careful approach to improve transparency in safety operations without endangering security issues inherent in operation of nuclear power plants.
The blog will follow the development in this court battle when it is resumed and will inform readers as debate progresses.

Sabarmati to Ralegan Sidhi; A Travellers Short Tale

On the day Anna wound up his fast at Ram lila maidan, our ground zero of anti-corrruption crusade, it was flattering to witness history in making. The euphoric air of truimph blew harder with Kejriwal's 'mission accomplished' speech. Many I talked to said they no more felt the abscence of 'living presence' of Gandhi whom they were content to know through school text books or see in rupee bills. (Yes. The rupee bill whose mysterious catwalk is at the heart of the dispute.) They had now a 'real one' standing on the dias before them. A very redemptive moment for a long suffering people.
An enduring mystery of our culture , so providential, that it produces at every hinge point a great man who matches the moment. Or is it merely wish fulfillemnt of a civilization steeped in mythology of Mahabharata where Lord Krishna counsels Arjun to not despair as he is ever re-incarnate in any epoch that sees a decline of 'Dharma'. (Yeda, yeda hi dharmashya glanirbhavati bharat..)? Whatever that was. Anna gave wings to myths and whole nation looked up into the sky with thanksgiving gaze.
This is just the beginning. If Gandhi shifted his earthly office from Sabarmati to Ralegan sidhi, then he will have appoint his new Nehru's, Patels et al, to complete the mission. A 'Team' is ready to fill that vacuous imagination of our history while antagonists are ready to introduce their Jinnahs and juveniles .
If artistic defficiencies of this narrative has trumped your thoughts and you haven't seen the unfolding face of future, then read on...

Kurt Godel and Anna Hazare: Logic of checks and balances

The connection looks so distant and incomprehensible that I begin by fixing some background to it.
Godel was the one of greatest logician who made immense impact upon scientific and philosophical thinking in 20th century. His incompleteness theorems in mathematics helped us understand the foundations of mathematics (logic in particular) and paved way in early twentieth century for development of computing machines that have nearly a century later taken over every aspect of human life. The finer nuances of Godels work are best left to mathematicians but its wider implications can be subject of great interest to us today. The implications for politics are topical considering the developments we see today led by Anna Hazare against corruption.
Constitutional democracies are product of deep political understanding evolving from logic of power and legitimacy in ordering of societies. Their architecture draws sustenance and stability from concept of ‘checks and balances’ necessary for exercise of modern statecraft. Power corrupts and absolute power corrupt absolutely. If so is the wisdom of man concerning the political power then answer lies in distributing it among agents of state in a way that their functions act as a checks on each other’s behavior and the resultant outcome is a balance of power that seeks to further larger public good. Though such arrangements seems to function and democratic societies always swear by their faith in them. However their logical foundations have been rarely questioned. Implicitly constitutional democracies abhor the idea of empowering individuals and build institutions that honour the maxim of ‘checks and balances’. Therefore restoring balance of institutional power becomes a logical remedy against malfunctions.
Then what explains the crisis in our polity today raised by Anna Hazare? And how is Godel, a mathematician with little association and interest in politics relevant to the crisis at hand? The answer lies at understanding of the logical structure of our political institutions that are comprehensible to common citizen merely as a dogma rather that an instrument designed with intelligence to serve his needs. The dogma which Godel demolished in realm of logic and forever altered man’s intellectual and philosophical landscape. What did Godel say? Godel said for mathematical systems that rules of a system can not be understood with the available resources in that system alone. One must transit to higher set to understand the lower set of rules. Though hard and difficult to map this for a political process, a rough effort should interpret its consequences this way: the logic of ‘checks and balances’ in designing systems of governance will appear as dogma to elements in that system whose credibility has been consistently eroded . Hence the desire to over through it even swearing by the same rules will appear as face of resistance to it. That’s the most covert and seditious enemy of rule based systems.
Anna’s movement is a consequence of this political dogma that preached ‘checks and balances’ as the necessary cornerstone of a constitutional democracy. Partly because the beneficiaries of that system perpetuated that dogma and prevented efforts to probe its infirm logical foundation. Which translated else way would mean they never demonstrated the logical honesty in playing by those rules. The result was a vast segment of that society, that we see lined up behind Anna today, lost all faith in even limited efficacy of logic and hence this putsch. An anti-constitutional putsch that seeks to bring revolution through legislation and ,paradoxically, swears by those very axioms of ‘checks and balances’.
We now know that Jan Lok pal bill doesn’t supplement Indian constitution but seeks to supplant it. And Ann’a people are least to blame for it. It stands against an entirely compromised political establishment. That also explains the uncertainty of outcome associated with any dialogue. The positions are deeply fundamental and profoundly ideological, now arbitrated by lack of reason on both sides. UPAs fall now seems to be the easiest way out of this illogical impasse unless it manages an inspirational jump to summon a higher level of political imagination to restore sanity in polity.
In detailed biography of Kurt Gödel, it is mentioned that he had found a loophole in the American Constitution which could allow a Fascist type government to legally take power in some special set of circumstances. During his U.S. citizenship examination, sponsored by Einstein as a witness, the judge inquired about his German passport (given to him after Austria was taken over by Nazi Germany), and said that by coming to the U.S. he would be safe from the likes of Hitler. Gödel replied that such was not entirely the case, and that he could explain how a fascist dictator could come to power in the U.S.
Has anyone an idea of what Gödel had found in the U.S. constitution that would make him think in this manner ? Before proceeding for his citizenship oath, he is said to have discussed this possibility with Einstein who dissuaded him from discussing that with the judge if ever discussions came to that. Einstien feared that judge may reject Kurt Godel’s citizenship application.
Logical systems like constitutional democracies will continue to face assault from elements of those systems that continually test her limits. That’s what gives it an organic and evolutionary character. Those moments also test the leadership and imagination of the actors in that theatre. Anna’s movement can be regarded one such moment, bizarre , unsuspecting and spontaneous it may look today, it will test the deeper strands of our faith in constitutional democracy. Where it will end is today anybody’s guess. But by politicizing the vast middle class of India which has till date willingly or otherwise remained a dormant and withdrawn actor in Indian polity, it may have restored the sapping spirit of constitutionalism and thereby , paradoxically once again, saved it from its shaking logical foundations.

Sheriff Doubling As Salesman

Obama’s New Export Promotion Policy
Obama’s 2010 state of union address has set the tone for America’s new found thrust on exports. By setting a goal of doubling exports in next five years as a major job boosting strategy, US signals to play hard at global trade forums. Exports will be expected largely to carry the burden of recovery. Some trade friction looks inevitable with unfinished and contentious Doha round still on table. It is estimated that US economy will add 2 million jobs by doubling its exports in next five years. Though historical trends militate against such ambitious rise, yet a weak dollar and faster growing rest of the world could see significant export growth in coming years. The president also announced a National Export Initiative, first ever of its kind, targeting US small businesses and farmers to be major engines of it’s export strategy. By promising to aggressively pursue market access , US has given enough hint of its likely stance at stalled Doha round. However what is most important of all is the President also promised to review US stringent export control rules in a way that they remain consistent with the objectives of national security. Reforming US export controls may not result in revival of national Export control Act but the promise carries potential of far reaching changes in the way US views it's companies declining competitiveness in global market. A long pending demand of America’s high-technology industries, who mostly constitute small and medium enterprises, easing export control regulation will see export growth while at the same time may unleash trade war in strategic commerce arena.
On March 11th, administration rolled out a slew of initiatives. The most significant being replacement of current system of export controls by one time notification. The review time taken in scrutinizing an application drops to 30 minutes from two and half months for 85 percent of the 3300 affected products. End-use and end-user requirements on exported goods have been further simplified. The Exim bank authorized financing limits have been raised with special focus on small and medium enterprises. Some symbolic steps such as naming an ‘Export Promotion Cabinet’ with representation from Commerce, Treasury, State, Agriculture as well as from other concerned government bodies and revival of long defunct President’s Advisory Council chaired by chief of Boeing and Xerox reinforce a sense of urgency on export front.
Though SMEs and farmers may need promotional stimulus to export but big firms would need market access more than any home grown help. The disappointing trajectory of Doha round has set widespread disenchantment with Geneva based WTO and set member countries getting busy striking regional trade deals. Free trade deals with Panama and Korea may be low hanging fruits. In any case concluding them would be easier than dealing with Brazil and India under Doha gridlock.
However , the real prospects of quick export surge lie in influencing China against holding on to fixed yuan. The growing and also shrill criticism of China’s fixed exchange rate policy has the potential to trigger a trade war leaving everyone worse off. But a bleeding US job market may find an easy scapegoat in lowly pegged yuan that keeps Chinese exports cheap and discourages investment in American manufacturing.
This New Export Initiative, however as pointed by leading strategic journal ‘Stratfor’ could have unintended and unprecedented consequences. First, America has not been historically a market capturing empire unlike those in the pre-World war II era. To build a stable global security architecture after 1945, US allowed allies to penetrate its markets without demanding access to theirs. This only in return to grant US the control on security matters. These arrangements proved successful beyond imagination as Japan, Germany reconstructed their war ruined economies giving them powerful incentives to be part of US alliance structure. The replication of that model proved equally good in Western Europe, Taiwan, Korea and also to some degree in Indonesia. This arrangement seems to be facing a subtle challenge now.
Doubling exports in five years would mean finding additional 1.5 trillion US dollars market. That’s unlikely to happen without trade frictions even in a vastly expanded global market. It is bound to have widespread disruptive effects. Few then are likely to trust the idea of free and fair trade when the global policeman also starts doubling as an active salesman.

The Civil Liability and Nuclear Damages Bill 2010

No Clear Liability
Government has today introduced Civil Liability for Nuclear Damages Bill 2010 in the parliament. A logical consequence of much controversial and widely debated nuclear deal with the US, the Bill intended to facilitate entry of foreign firms in nuclear power generation seems destined to be no less controversial. The likely opposition against the bill is to be both political and economic in nature. The political one carries the echoes of controversy surrounding Indo-US nuclear deal while the economic factors may point to role of state in risk subsidization of intrinsically hazardous nature of nuclear commerce.
Liability arising from accidents is an important issue in nuclear civil nuclear power generation. Two multilateral regimes exist today to handle liability issues arising from nuclear accidents. The IAEAs Vienna Convention for Nuclear Damages and OECD led Paris Convention. This is apart from the national liability laws like Price-Anderson Act in the US. There is no provision for liability in India’s Atomic Energy Act of 1962. Most of the imported civil nuclear reactors in India today are a result of agreement between governments that the government of India ( read Indian taxpayer) through its state actor, Nuclear Power corporation of India Ltd, NPCIL ,alone liable against any nuclear accidents.
The bill pegs the liability of plant operator at Rs 500 cr with a further Rs 2087 Cr to be born by the government in case of an accident. Clearly ,it seems, the major burden of safety is to be borne by the taxpayer not the plant-maker foreign firms. Besides the provision against raising any lawsuit by victims in an Indian court or home country of the reactor builder ostensibly seems to be for purpose of easing the entry of private firms, mostly US based, in nuclear power generation. Though it can easily be labeled by critics as appeasement of US, the government may in fact be bending to US pressure to help its nuclear firms, most notably, General electric and Westinghouse. Besides the low upper liability limit can be treated as attempt to subsidize foreign reactor builders through taxpayer paid funds. India is not a signatory to Vienna or Paris convention, which doesn’t prescribe any upper limit on damages. Incidentally the upper limit under proposed Indian bill is the minimum prescribed under the Vienna convention. Governments anxiety to control cost of nuclear power generation appears to have got better of its commitment to protect health and safety of its people. It is likely to set a precedent on government bearing the burden of private-sector failure.
The Price-Anderson Act of the US does not providing for the channeling of legal liabilities and was one main reason for US not joining any of the two international nuclear damages liability regimes. Though it does allow economic liability enforcement through lawsuits and criminal proceedings against the reactor makers. International regimes were crafted by the suppliers nations under competitive claims of superior safety standards as a platform to outbid each other in this highly regulated business. Hence the terms of conditions in Vienna and Paris Convention put a high bar on safety in reactor business. Surprisingly the Indian bill seems to be designed keeping in mind India as a supplier of nuclear power technology rather than a receiver as it is today and also may be as a prelude to joining some international safety convention in future. As a receiver it is likely to become a ginny pig to test low end and low cost safety technologies. As a supplier the benefits may be in distant future when it will get a piggy ride on global giants like, Areva, Toshiba, GE to get a slice of lucrative emerging global nuclear business .
By making it easier for foreign firms to do nuclear power business in India than in their home countries, the bill gives an unmistakable signal on lowering safety standards for lure of cheap power. The message may be: if you find it tough to test your hazardous innovations at home under a vibrant consumer-protected environment, as has been the case in home turfs of leading nuclear suppliers, do it here with little or no fear for consequences. As our lives are not as precious as yours. Coming from a country that has seen history’s worst industrial disaster, the Bhopal gas catastrophe, the bill clearly conveys our inability to learn from past mistakes.
The more appropriate and balanced approach would be to peg the bar not at the minimum of international standards but fairly higher up to be in a position to influence nuclear safety issues at a global scale in future. There is no denying that safety technologies today are far advanced than in 60s when the current global standards were laid, yet the very nature of nuclear power calls for near perfect safety standards and can’t be compared with conventional power generating methods in an actuarial mode. Any lack of indication to suppliers to the potentially serious costs of laxity and pursuing profits at the cost of safety will seriously endanger the growth of nuclear power.
The common features of amended Vienna and Paris protocols which served as the template for the bill have been adopted in their minimalist forms. It continues to securely hide the suppliers behind the operators who will invariably be domestic companies i.e the public sector NPCIL in India’s case , and thrust on him the absolute liability. So are the other contentious issues related to time limitation of 10 years and court jurisdiction.
The necessity of raising legal infrastructure for high-technology industry like civil nuclear power is hardly denied. Yet government conveys an impression of being in hurry and pilots a bill with little thought on long-term consequences. Thus by inevitably inviting charges of pandering to Washington, it helps little his own case as was also seen in a similar legislation Foreign Trade Act up for amendment before the parliament.

War clouds on horizon

May you live in interesting times, says a famous Chinese curse. By all measures ,these appear to be interesting times and we seem to be cursed to live through them. So it’s time to do some crystal ball gazing. The fanning flames of Af-Pak war in heights of Hindukush mountains present most unpredictable scenario for future with massive global and regional ramifications. As Pakistan engages itself into the existential battle with the Frankensteins it created, it is faced with another moment of truth in its turbulent history. It now sees some flicker of light at the dark end of Afgan tunnel. The recently held London conference on Af-Pak has veered to the Pak view of grading and sorting Talibans and dealing with the ‘good’ one while vanquishing the ‘bad’ ones with added caveat that any such grading and sorting will be at Pakistan’s bidding alone. If that path is pursued, Afganistan could see a brief era of stability through Taliban co-option and Pakistan realize that elusive dream of strategic depth while India left confused and confounded in backroom of geopolitics. Yet ,like Iraq, it will be long before some sane semblance of peace returns to Afganistan even when the last boot of international coalition forces have left Afganistan. Let us first look at the implications it has for India.
What is the political poker Pakistan will play now on? It will not cease to press hard international community, US in particular, to arm twist India for a favorable settlement on Kashmir. So dialogue will be resumed , notwithstanding all political subterfuge on prosecuting culprits of 26/11 Mumbai carnage. Home Minister P.Chidambaram may be asked to test dialogue- waters through SAARC sidelines. Choice of India’s home minister to re-ignite the Indo-Pak stalled talks will be a politically pregnant move . No harm in talking to Pakistan, goes the chorus of liberal opinion. But talks that Pak sees as not producing outcome favorable to its policy goals may inspire ISI-Military combine to step on the terror pedal with a re-run of 26/11 catastrophe for India.
If one goes by the clues emerging from Indian side, it is this pessimistic scenario that Indian establishment seems to be preparing for. In the background of political consensus to respond to any 26/11 re-run on India, a somber analysis of some desperate events is called for. The first being the news of Chinese cyber attacks on Indian security establishments. A flash war on Indo Pak border will inevitably draw China to save its most trusted ally. This is the likely import of out-going General Deepak Kapoor’s call to Indian armed forces to be ready for a two-front war. No less than the outgoing NSA, M.K.Narayanan ,abandoning all diplomatic niceties, accused China of poking into it’s most sensitive computer networks . India’s message to China may be same that Pakistan has consistently delivered to India as a irredentist state in its short history. When push comes to shove, India is willing to give up its status-quoist pretensions vis-à-vis China.
The stray reports of tunnels on Indo-Pak border may be part of same strategy to out -wit Pak Generals. India’s cold-start military doctrine should see a gentle covert push, through the international border into Pakistan with Indian special forces raiding Laskar’s Lahore hide-outs in a blitzkrieg. And if action-response cycle in heating military cauldron spirals out of control with Pak unsheathing its nuclear sword, India may be prepared.
Look at the feverish activities of National Disaster Management Authority. Through expensive page-long advertisements in the national newspapers, NDMA has been releasing guidelines on public awareness about preparedness in the event of an array of disasters. Most notably those concerned with Chemical(Terrorism) attack, biological attacks and nuclear and radiological emergencies. A radiological emergency management service geared to handle the fall out of a limited nuclear exchange should be seen as a minimum necessary preparation before calling off the bluff of a free falling jehadi state in India’s neighborhood.
India may have finally overcome the strategic paralysis caused by Pakistan’s war of thousand cuts under a nuclear umbrella. Though the chickens of that mis-begotten state policy have now returned home to roost, Pakistan may still chose to go down the nihilistic path as a final homage to its unattainable dream of becoming the fortress of Islam. For India the uncertainty of perishing in wholesale may finally be preferable to certainty of death in retail. Hence it may try to shed its long winding cow web of existential doubts by making a cold start in an October night.