Britain And India: A Convenient Scapegoat In A Time Of Economic Crisis

By Colin Todhunter



07 November, 2012

Countercurrents.org



India is likely to be told this week that Britain plans to slash its 280 million pounds a year aid to it following growing domestic pressure on Prime Minister David Cameron to stop funding emerging economic powers such as India at a time when Britain is in serious economic crisis.



International Development Secretary Justine Greening during her visit to New Delhi is expected to discuss a timetable for winding down British aid commitment to India. She is expected to make it clear that the UK’s commitment to India will change radically at the end of the current eight-year 1.6 billion pound programme which lasts until 2015.



The idea to cut aid has been building for some years and has received added impetus from recent events. In 2011, Cameron led one of the largest-ever business delegations to India, comprising six cabinet ministers and around 60 business leaders. He lobbied heavily in favour of supplying India with the British built Eurofighter. But in 2012 as Britain seemed destined to lose the contract for 126 fighter jets, the knives came out in Britain – both for Cameron and for India too.



Instead of the British media attacking the sordid nature of the heavily taxpayer-subsidised arms industry and the way its massive profits are made by stoking tensions and war, it saw better mileage from cashing in on fear mongering by telling the public that the apparent loss of the contract to the French company Dassault, which makes the Rafale fighter, could jeopardise thousands of British jobs. It would have been much more constructive for the media to have regarded the loss any jobs in the arms sector as an opportunity to reinvest arms industry subsidies in more socially useful ventures, such as renewable energy.



As a backlash over India’s decision, however, sections of the public and various self-appointed opinion leaders took it on themselves to also apportion blame to India by linking the loss of the contract to the issue of aid. They were quick to point out that the British Government’s aid package is around 15 times larger than what France sent to India in 2009.



They asked, “Where is the trade dividend?” – especially in light of former International Development Secretary Andrew Mitchell saying that the aid relationship with India is very important and its focus included seeking to sell Typhoon jets. He made it clear that aid was linked to trade. In order to get the government off the hook, this stance (and claims that aid was being used as a bribe) was soon being strenuously denied by various members of the government in light of the French seemingly bagging the prize.



Public pressure has subsequently grown over sending aid to India, especially at a time when massive public sector job losses and slashes to services are being made in Britain. The issue has certainly struck a chord with sections of the British public.



Egged on by politicians and the media, sections of the public began to ask why should the overburdened British taxpayer give aid to a country with 300 billion dollars worth of foreign reserves and year on year growth that has been over 8.5 per cent? It did also not go unnoticed that India has funds not just for its own aid and space programmes, but for nuclear weapons too, while Britain itself has no space programme and has been debating scaling down its own nuclear weapons systems.



Many in Britain also questioned why aid should be given to India, which has an economy on course to overtake Britain’s in the next ten years, and that, according to financial advisers Merrill Lynch, has 153,000 dollar-millionaires – a number that grew by 20 per cent in just one year, compared with Britain’s own increase of less than one per cent.



The argument proceeded along the lines that India might do better to scrap its space programme, aircraft carriers, nuclear weapons and its huge aircraft buying programme worth billions and redirect all those funds to invest in improving the plight of the poor.



And then there was the matter of giving money to India being a waste anyhow, seeing that rich Indians and politicians have salted away billions in Swiss bank accounts since independence. The accusation is that much aid money to India is thus chewed up by corruption and fraud. The lavish spending of India’s rich has been targeted too, with much focus on multi-storey Mumbai penthouses, Formula 1 and the like.



Cut through the tabloid-type hysteria and the media’s agenda, and there is indeed a certain logic behind many such criticisms. But what has often been ignored during this tirade against India is that, as a strategy for poverty alleviation and within the broader context, the impact of aid is minimal at the very best.



There is no denying that, despite India’s rising power on the world stage, poverty remains rife and the country is home to a third of the world’s malnourished children. India’s annual average income per person is around 2.5 per cent of Britain’s.



However, much of the hardships are today fuelled by rising inequality brought about by neoliberal economic policies. Inequality in India has increased significantly since it opened up its economy in the early 1990s (1). India’s rich elites have benefited enormously, and this has often been at the expense of the poor. Look no further than the real estate speculators and the land grabs from the poor, the rising obesity levels and the persistent malnourishment, the corporate rich and the theft of natural resources in the tribal areas and the high GDP and the low poverty alleviation statistics. Aid is like using a plaster to stem a burst dam.



Regardless of whether India even wants this relatively small sum of aid in the first place from it’s former colonial oppressor, which so many Indian politicians have openly stated it patently does not, it’s a pity that sections of the British media and certain politicians do not highlight the fact that the sum given by Britain to India is anyhow only less than one per cent of Britain’s debts – hardly a drain on the British economy as it is too often made out to be. It’s also a pity that they don’t focus more on the real drain placed on the British economy via the hundreds of billions that are being picked from the pockets of ordinary Brits via bank bail outs, corporate subsidies and fraud and tax avoidance and evasion by the rich.



According to economics professor John Foster (2), the aggregate wealth of Britain’s richest 1,000 people was in 2010 some 333 billion pounds. In 2010, Britain’s aggregate national debt was half that amount. In 2009, the top 1,000 increased their wealth by a third, meaning that the amount they actually increased their wealth by in just one year was half of the national debt!



But that is a taboo issue. It’s not up for public debate or scrutiny. It’s not to be questioned. The dirty machinations of capitalism are to be hidden away – preferably in an offshore bank account.



Much easier to point the finger at India in order to divert attention from the predatory capitalism that continues to fuel Britain’s economic woes and exacerbate poverty in India. Much easier to use aid to India as a convenient whipping boy.



But can we expect much better? Not really. The British press, politicians and establishment mouthpieces have been using welfare provision within Britain itself as a convenient scapegoat for capitalism’s failings for decades!

The UK's Protection racket in the Middle East

The Gulf protection racket is corrupt and dangerous folly

Sooner or later the Arab despots David Cameron is selling arms to will fall, and the states that backed them will pay the price

• 
• • Seumas Milne
  • The Guardian, Tuesday 6 November 2012 22.20 GMT

Illustration by Helen Wakefield

On the nauseating political doublespeak scale, David Cameron's claim to "support the Arab spring" on a trip to sell weapons to Gulf dictators this week hit a new low. No stern demands for free elections from the autocrats of Arabia – or calls for respect for human rights routinely dished out even to major powers like Russia and China.

As the kings and emirs crack down on democratic protest, the prime minister assured them of his "respect and friendship". Different countries, he explained soothingly in Abu Dhabi, needed "different paths, different timetables" on the road to reform: countries that were western allies, spent billions on British arms and sat on some of the world's largest oil reserves in particular, he might have added by way of explanation.

Cameron went to the Gulf as a salesman for BAE Systems – the private arms corporation that makes Typhoon jets – drumming up business from the United Arab Emirates, Saudi Arabia and Oman, as well as smoothing ruffled feathers over British and European parliamentary criticism of their human rights records on behalf of BP and other companies.

No wonder the prime minister restricted media coverage of the jaunt. But, following hard on the heels of a similar trip by the French president, the western message to the monarchies was clear enough: Arab revolution or not, it's business as usual with Gulf despots.

The spread of protest across the Arab world has given these visits added urgency. A year ago, in the wake of the uprisings in Tunisia and Egypt, it seemed the Gulf regimes and their western backers had headed off revolt by crushing it in Bahrain, buying it off in Saudi Arabia, and attempting to hijack it in Libya and then Syria – while successfully playing the anti-Shia sectarian card.

But popular unrest has now reached the shores of the Gulf. In Kuwait, tens of thousands of demonstrators, including Islamists, liberals and nationalists, have faced barrages of teargas and stun grenades as they protest against a rigged election law, while all gatherings of more than 20 have been banned.

After 18 months of violent suppression of the opposition in Bahrain, armed by Britain and America, the regime has outlawed all anti-government demonstrations. In western-embraced Saudi Arabia, protests have been brutally repressed, as thousands are held without charge or proper trial.

Meanwhile, scores have been jailed in the UAE for campaigning for democratic reform, and in Britain's favourite Arab police state of Jordan, protests have mushroomed against a Kuwaiti-style electoral stitchup. London, Paris and Washington all express concern – but arm and back the autocrats.

Cameron insists they need weapons to defend themselves. When it comes to the small arms and equipment Britain and the US supply to Saudi Arabia, Bahrain and other Gulf states, he must mean from their own people. But if he's talking about fighter jets, they're not really about defence at all.

This is effectively a mafia-style protection racket, in which Gulf regimes use oil wealth their families have commandeered to buy equipment from western firms they will never use. The companies pay huge kickbacks to the relevant princelings, while a revolving door of political corruption provides lucrative employment for former defence ministers, officials and generals with the arms corporations they secured contracts for in office.

Naturally, western leaders and Arab autocrats claim the Gulf states are threatened by Iran. In reality, that would only be a risk if the US or Israel attacked Iran – and in that case, it would be the US and its allies, not the regimes' forces, that would be defending them. Hypocrisy doesn't begin to describe this relationship, which has long embedded corruption in a web of political, commercial and intelligence links at the heart of British public life.

But support for the Gulf dictatorships – colonial-era feudal confections built on heavily exploited foreign workforces – is central to western control of the Middle East and its energy resources. That's why the US has major military bases in Kuwait, Qatar, the UAE, Oman and Bahrain.

The danger now is of escalating military buildup against Iran and intervention in the popular upheavals that have been unleashed across the region. Both the US and Britain have sent troops to Jordan in recent months to bolster the tottering regime and increase leverage in the Syrian civil war. Cameron held talks with emirates leaders this week about setting up a permanent British military airbase in the UAE.

The prime minister defended arms sales to dictators on the basis of 300,000 jobs in Britain's "defence industries". Those numbers are inflated and in any case heavily reliant on government subsidy. But there's also no doubt that British manufacturing is over-dependent on the arms industry and some of that support could usefully be diverted to, say, renewable technologies.

But even if morality and corruption are dismissed as side issues, the likelihood is that, sooner or later, these autocrats will fall – as did the Shah's regime in Iran, on which so many British and US arms contracts depended at the time. Without western support, they would have certainly been toppled already. As Rached Ghannouchi, the Tunisian leader whose democratic Islamist movement was swept to power in elections last year, predicted: "Next year it will be the turn of monarchies." When that happens, the western world risks a new backlash from its leaders' corrupt folly.