Wednesday, February 8, 2012

Does Aid = Business?

India recently finalized on the French made Rafale fighter aircraft for her Air Force on the deal to procure 126 Medium Multi Role Combat Aircraft that is worth initially around $11 billion - and with other related on-board procurement, maintenance and warranty the price tag is expected to almost double. After many contenders were dropped one by one – that includes US made F-16 and FA/18, Swedish Gripen, Russia’s MiG-35 – in the bidding process, Eurofighter Typhoon and Dassault’s Rafale were short-listed for the final selection. And in that, Rafale got the deal. Now this has clearly upset the British who form a part of the consortium of companies that make the Eurofighter Typhoon (the other nations involved in the design and manufacture of the Typhoon are – Germany, Italy and Spain). I am not going to go into what made India select the Rafale fighter aircraft as I am not an expert on that area (one can only hope that this was a decision taken with pure technical reasons and other compatibility factors in mind, without any corruption involved in it. So far, all reviews seem positive on this). But what’s been astonishing is the anger and the showcase of “feeling betrayed” expressed by some British politicians and the members of the British parliament.

As this article in one of India’s most famous newspaper notes - http://www.thehindu.com/opinion/op-ed/article2866369.ece many British politicians have made this a political issue and have directly questioned the need to provide India with aid worth nearly one billion pounds every year. This aid, as noted in their international development department, is considered an aid purely for economic development efforts to help the poor. Right or wrong, India still has the largest number of poor people in the world and international aid money keeps coming into the country for various development efforts concerning the poor, even though India itself is an aid donor to many poorer countries. While it is a genuine argument from the British public to question the aid in terms of priority when Britain itself is not doing well economically, the sad part is that some politicians in Britain have directly branded this action of India to buy French aircraft for its Air force as an insult thrown upon the British and have noted that France gives less aid than them. The article also states that last year, the British Secretary of State for International Development linked the aid program to selling Typhoon to India on this mega deal. Inferring from the article, I see that India had been unwilling to receive the aid for quite sometime due to the negative publicity that this aid program has caused among the British public. But it is the British who insist on continuing the program (I am not trying to question their intention here without any proof, but the arguments linking any kind of aid to business deals is tempting one to question their intentions on any such programs).

In fact, Britain has been one of the top arms exporters to India over the years. In recent years, India has bought advanced trainer jets, helicopters for VVIP travel and underwater surveillance systems from British firms. Reading from a news source, I also understand that as per the data from the Stockholm International Peace Research Institute, Britain has exported arms worth $15.4 billion from 1950 to 2010 and Britain stands as India’s third largest arms exporter after Russia and US. So why all this fuss in this deal? Well, one reason is this is the single largest defence deal that is in making at the current moment in the entire world. And the other reason is that this deal has pitched various defence firms against each other, directly getting them into competition that is watched all over the world. There could be other strategic reasons which I don’t want to go into. But then any business will have competition, some win and some lose. It’s part of the game.

Coming back to the aid program, I think it’s the responsibility of the British government to make clear to the public on why they would want to give aid to poorer countries. If it is for assuring business deals in the recipient countries, then No! Sorry, we don’t need your money. If it is purely for economic development efforts that would help lift thousands out of poverty, then it is up to the British government and its people to decide on the priority, when and how much to give. The recipient country cannot be blamed for decisions that are taken that do not favor the British, especially when the decision is made purely from a technical perspective.

References:

1. http://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/article2873536.ece

2. http://www.thehindu.com/todays-paper/tp-national/article2873679.ece

3. http://www.thehindu.com/opinion/op-ed/article2866369.ece

4. http://www.youtube.com/watch?v=GF-67ShsSZ0

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