The Great Debate UK

from Breakingviews:

Trade should leave China and India both winners

Decades of mistrust haven't stopped China and India's trade from tripling in the past five years. Now China wants to restart free trade talks when Premier Wen Jiabao visits New Delhi later this week. India has long resisted such an agreement. Yet more open trade should leave both sides winners.

Since the two countries warred over a border dispute in 1962, China and India have had a fractious relationship. But on some issues they agree. India helped China stop an agreement over climate change in Copenhagen that both felt was too soft on rich countries. Chinese and Indian state-owned firms have bid together for oil and gas assets.

While both have benefited from foreign trade, closer union may sound like an unequal bargain. India's trade deficit with China rose to $16 billion in 2007-2008 from $1 billion in 2001-2002, and freer trade might push it wider. China's cheap currency gives it an edge, despite Indian tariffs on many goods. But in the longer term, India could be a big beneficiary too. Despite the widening deficit, India's exports to China have been growing. Indian exports to China surged by 75 percent in the first quarter of 2010, year on year, led by textiles and precious metals. China's cheaply produced goods pose little threat to India's thriving services sector, while in categories like pharmaceuticals, India remains significantly ahead.

Moreover, India looks due to take over some of China's manufacturing lead. Wages in China have been rising rapidly. India's workforce could step into the gap: the country's GDP per capita is a quarter of China's, its median age ten years younger, and its unemployment rate double that of its trade partner. Cheap Chinese power equipment and infrastructure should help India build modern factories, at relatively low cost. Undoing deep mistrust will take time. Indians may worry that China will attempt to keep both low and high end manufacturing, particularly given its reluctance to let the currency appreciate. India may not be prepared to sell more of what China really wants, like iron ore. Free trade between the emerging superpowers is a distant goal, but still one worth pushing for.

from Pakistan: Now or Never?:

On WikiLeaks, India, Pakistan and a partisan media

SOUTHASIA SIACHENReading through some of the WikiLeaks cables, I have been struck by how easy it might be to take the fragmentary and often outdated information contained in them and make a case to support either side of the India-Pakistan divide.  Now it turns out someone did, but without even the support of the underlying cables, according to this version of Pakistani media reports by the Pakistan blog Cafe Pyala of alleged Indian skulduggery, including in Baluchistan. 

As Cafe Pyala notes, Pakistan's The News and various other papers cited the alleged cables as proof of alleged Indian involvement in creating trouble in Baluchistan and Waziristan. These allegations were included amongst others that anyone who follows the subject closely hears being bandied about between India and Pakistan. (Reporting on those allegations is much harder, for reasons I will discuss below.)

from Pakistan: Now or Never?:

Wikileaks on Pakistan

iran pakistanIn the State Department cables released by Wikileaks and so far reported, the most eye-catching as far as Pakistan is concerned is a row with Washington over nuclear fuel.

According to the New York Times, the cables show:

"A dangerous standoff with Pakistan over nuclear fuel: Since 2007, the United States has mounted a highly secret effort, so far unsuccessful, to remove from a Pakistani research reactor highly enriched uranium that American officials fear could be diverted for use in an illicit nuclear device. In May 2009, Ambassador Anne W. Patterson reported that Pakistan was refusing to schedule a visit by American technical experts because, as a Pakistani official said, “if the local media got word of the fuel removal, ‘they certainly would portray it as the United States taking Pakistan’s nuclear weapons,’ he argued.”

from MacroScope:

Building BRICs in Africa

Some eye-catching numbers from Standard Bank out today on the influence of BRICs countries -- Brazil, Russia, India and China -- on Africa.

First off, the bank says the global recession and its recovery have been nourishing these so-called South-South ties. But it is all now ready to take off. The bank estimates:

from Pakistan: Now or Never?:

“Orientalism” in Afghanistan and Pakistan

dust storm twoIn his must-read essay on the debate about the state of the U.S.-Pakistan relationship, Amil Khan has one of the best opening lines I've seen for a while: "Much is said about Pakistan, but I'm constantly saddened that so many innocent pixels are lost without good cause."

Much the same can be said about the recent flurry of stories on the war in Afghanistan, from upbeat assessments of the U.S.-led military offensive in Kandahar to renewed interest in the prospects for a peace deal with Afghan insurgents.

from India Insight:

Going global in India’s chaotic way

Labourers walk on a flyover in front of the Jawaharlal Nehru Stadium in New Delhi September 25, 2010. REUTERS/Krishnendu Halder

India is globalising, but not the way much of the world wants.

That rather contradictory thought nagged at me one morning during the chaotic Commonwealth Games here in New Delhi.

On the road to the media venue's gate, I trudged past a squatter's family living in a tarpaulin. The mother was helping her son pee on my left. Rubbish, the smelly, sickly kind, lay to my right. My shoes sunk in mud from an unfinished pavement.

from Chrystia Freeland:

Rise of the rest

Get ready for the next wave of globalization. The emergence of the emerging markets is old news, of course: after all, Tom Friedman discovered that the world was flat back in 2005. But even as much of the developed world is struggling with weak consumer demand and stubbornly high levels of unemployment, the emerging market countries are writing a new chapter in the story of the global economy.

We are accustomed to thinking of our economic relationship with the countries Fareed Zakaria describes as “the rest” as a two-way exchange between west and east or north and south: western companies setting up call centers in India or manufacturing their goods in China, for instance; and, more recently, savings-rich emerging market economies, especially China, investing in US treasuries, or Russian oligarchs buying London mansions.

from Pakistan: Now or Never?:

Pakistan, India and the value of democracy

gilani kayaniOf the many comments I heard in Pakistan, one question particularly flummoxed me. Was democracy really the right system for South Asia?  It came, unsurprisingly, from someone sympathetic to the military, and was couched in a comparison between Pakistan and India.

What had India achieved, he asked, with its long years of near-uninterrupted democracy, to reduce the gap between rich and poor?  What of the Maoist rebellion eating away at its heartland? Its desperate poverty? The human rights abuses from Kashmir to Manipur, when Indian forces were called in to quell separatist revolts? Maybe, he said, democracy was just not suited to countries like India and Pakistan.

from Breakingviews:

Vedanta’s Indian oil interest is hard to fathom

Vedanta Resources' Indian oil interest is hard to fathom. No doubt Cairn Energy will have plenty of ideas for any cash it may raise by selling a stake in the UK oil explorer's Indian subsidiary. But it's harder to see what Anil Agarwal's mining group has to gain from dipping its toe into the oil business.

Vedanta's interest is in Cairn India, which pumps oil in the Rajasthan desert and has had a separate listing since January 2007. A full takeover would be a stretch. Cairn Energy's 62 percent stake is worth $8.5 billion at current market prices. Add in a control premium, and a possible offer to minority shareholders, and a deal could easily cost twice that amount.

What is Cameron offering India?

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- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’.  The opinions expressed are his own. -

Prime Minister David Cameron has loaded a 747 full of British business leaders and government ministers, all on a charm offensive aimed at securing deeper trade ties between the two nations. But what is he offering the Indians?

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