The Peninsula Foundation

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  • Women In Indian Armed Forces

    Women In Indian Armed Forces

    Center for Women’s Studies & Department of History
    Women’s Christian College, Chennai
    & The Peninsula Foundation, Chennai

    cordially invite you to the Inauguration of the

    National Seminar

    Women in Indian Armed Forces:
    Changing Contexts and Transformations

    On 8th March 2018 at 9.00 a.m.

    at the Auditorium (Centenary Building)

    Inaugural Address

    Dr. C. Joshua Thomas

    Coordinator, ASEAN Studies Centre &, Deputy Director,

    ICSSR North Eastern Regional Centre, NEHU Campus, Meghalaya

    Keynote Address

    Air Marshal (Retd.) Dr. M. Matheswaran

    Former Deputy Chief, Integrated Defence Staff (Air),

    South Block, Govt of India, New Delhi

    Chairman The Peninsula Foundation, Chennai

    Special Address

    Lt. Gen. (Retd.) Vinod G. Khandare

    Former Director General Defence Intelligence Agency, New Delhi

    Sponsored by

    Indian Council for Social Science Research,

    New Delhi & Southern Regional Centre, Hyderabad

    Events Snaps

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  • The Military Industrial Component of the U.S.-India Partnership – Panel Discussion at Stimson Centre

    The Military Industrial Component of the U.S.-India Partnership – Panel Discussion at Stimson Centre

    Past Events July 24, 2018 The Military-Industrial Component of the U.S.-India Partnership
    JULY 24, 2018 | 12:15 PM
    Please join the Stimson South Asia program for a conversation with Air Marshal M. Matheswaran, the former Deputy Chief of the Integrated Defence Staff in the Indian Ministry of Defence, who will talk about the military-industrial component of the U.S.-India partnership. Joanna Spear, Associate Professor of International Affairs at the Elliott School, and Benjamin Schwartz, Head of the Aerospace and Defense Program at the U.S.-India Business Council, will serve as discussants. Sameer Lalwani of the Stimson Center will moderate.
    WHAT: An on-the-record discussion with Air Marshal M. Matheswaran on the military-industrial component of the U.S.-India partnership.
    WHERE: The Stimson Center, 1211 Connecticut Avenue, NW, 8th Floor, Washington DC, 20036
    WHEN: Tuesday, July 24 from 12.15 to 2 pm. Lunch will be served at 12.15 and the discussion will begin at 12.30.
    RSVP: Click here to RSVP for the event.
    FOLLOW: @StimsonCenter on Twitter for event news and use #StimsonNow to join the conversation
    Featuring:
    Sameer Lalwani, Senior Associate and Co-Director, South Asia Program, Stimson Center (moderator)
    Sameer Lalwani is a Senior Associate and Co-Director of the South Asia Program at the Stimson Center where he researches nuclear deterrence, inter-state rivalry, and counter/insurgency. He is also an Adjunct Professor at the George Washington University’s Elliott School and a Contributing Editor to War on the Rocks.
    Air Marshal M. Matheswaran, former Deputy Chief of the Integrated Defence Staff, Indian Ministry of Defence
    Air Marshal M. Matheswaran retired from the Indian Air Force in 2014 after nearly 39 years of military service. In his last appointment, he was the Deputy Chief of the Integrated Defence Staff for 23 months at the tri-service headquarters in the Ministry of Defence, India. Since then, he has held defense and aerospace consulting positions at Hindustan Aeronautics Limited and Reliance Defence. He is the Founder, Chairman, and President of the Peninsula Foundation, a think-tank for security policy research.
    Benjamin Schwartz, Head, Aerospace & Defense, U.S.-India Business Council
    Benjamin Schwartz leads the U.S.-India Business Council’s Defense and Aerospace program where he advocates for pro-trade policies before officials in the Indian and American governments. He previously served in a range of positions within the U.S. national security community, including at the Department of State, the Department of Energy, and the Department of Defense, where he was Director for India in the Office of the Secretary of Defense.
    Joanna Spear, Associate Professor of International Affairs, George Washington University.
    Joanna Spear is Associate Professor of International Affairs and Director of the FAO Regional Sustainment Initiative at the Elliott School of International Affairs at George Washington University. Her areas of focus include U.S. and UK arms sales policies, U.S. counter-proliferation policies, and transatlantic relations. In 2012, she was a Senior Visiting Fellow at Institute of Defence Studies and Analyses New Delhi, working on India’s arms import policies and offset strategies.
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  • Defence Corridors

    Defence Corridors

    M Matheswaran August 19, 2018
    As a follow-up on the ‘Make in India’ strategy in the defence sector, the Government of India has announced its intensions to set up two defence corridors, one in Tamilnadu and another in Uttar Pradesh.The idea of defence corridors is a very sensible one. However, the challenges to it should not be underestimated. The economic viability and success of the defence corridor plan lies in its careful implementation through well thought out cluster strategy.

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  • The Challenges of AI-enabled Underwater Platforms

    The Challenges of AI-enabled Underwater Platforms

    Vijay Sakhuja  Aug 03, 2018

    The Chinese People’s Liberation Army Navy (PLAN) is likely to acquire a new type of submarine by the early 2020s. According to the South China Morning Post, the Shenyang Institute of Automation under the Chinese Academy of Sciences (CAS) is engaged in developing a series of extra-large unmanned underwater vehicle (XLUUV) that will feature Artificial Intelligence (AI). The vessels will be capable of performing a number of tasks without “human intervention,” “handle their assignments and return to base on their own,” and carry out reconnaissance, surveillance, combat operations against enemy targets, and undertake activities such as whale tracking. It will be possible to integrate these vessels with other manned and unmanned platforms and systems at sea, in air as also on land to carry out coordinated missions.

    Lin Yang, the project director and a marine technology specialist, has noted that Chinese interest in these platforms is prompted by US plans to acquire XLUUVs capable of carrying “a variety of payloads, from sensors to weapons.” Two prototype units have been contracted, one to Lockheed Martin and the other to Boeing, and they have been granted US$ 43.2 million and US$ 42.3 million, respectively for research, design, and testing in 2020. The winner will receive orders for production of up to five platforms. Unlike China and the US, Russia is developing the Status-6 autonomous torpedo capable of delivering 100-megaton warhead capable of “wiping out all living things” within a 1,500 km radius.

    These developments are clear signs of the role of AI-enabled underwater platforms and weapons in the future, and add a new dimension to underwater operations. There are at least four issues concerning them that merit attention.

    First is naval warfare. Navies have traditionally employed conventional submarines for intelligence gathering, laying mines, attacking enemy submarines and ships, and more recently, conducting strikes against shore targets by using land attack cruise missiles. The usual tactic for conventional submarine has been the ‘lie-in-wait’ position at the entrance to harbours or close to choke points and attack the enemy. Like their conventional counterparts, AI-enabled platforms can serve as scouts, and smaller platforms can masquerade as decoys to attract the enemy, forcing it to expose its position. If necessary, the AI-tool kit should be able to detect, track, generate high speed, and attack the enemy like a torpedo.

    It is useful to mention that the US’ XLUUVs will “operate autonomously for weeks or even months, periodically phoning home to check for new orders,” giving the US Navy a significant advantage in tactical operations. Similarly, the Status-6 autonomous torpedo can be used by the Russian defence ministry’s special division for deep-sea research and deliver “deep-sea equipment or installing surveillance devices.”

    Second, the XLUUVs may entail new legal challenges. There is an ongoing debate raging over regulating lethal autonomous weapon systems (LAWS), including a call to ban fully autonomous weapon systems centered on the Principle of Non-Delegation of the Authority to Kill by non-human mechanisms. A global campaign – Coalition to Stop Killer Robots – has called for an international ban on ‘killer robots’, and “a treaty for emerging weapons.” There is a belief that morality and generally accepted ethics need to be injected into the use of AI-enabled weapon systems given that “inanimate machines cannot understand or respect the value of life.” If the XLUUVs are put to combat operations, it would result in the weaponisation of AI, and this empowers humans to absolve themselves of any moral consequences of killing or using these for self-defence.

    It is important to mention that engineers and scientists from the technology industry signed a pledge in Stockholm at the 2018 International Joint Conference on Artificial Intelligence (IJCAI) and called upon “governments and government leaders to create a future with strong international norms, regulations and laws against lethal autonomous weapons.” They have since been joined by corporates such as Google DeepMind, the XPRIZE Foundation, University College London, ClearPath Robotics/OTTO Motors, the European Association for AI, and the Swedish AI Society.

    Third, the XLUUVs rely primarily on AI to conduct operations. These platforms would transit long distances passing through a variety of undersea topography, ie ridges, mounts, trenches, rocks, slopes and basins, and would be vulnerable to collisions, detection by civilian research and survey vessels, enemy submarines and warship, and underwater military detection systems including those used for seismic warnings. Further, underwater activity such as laying of oil and gas pipelines and fiber optic cables can impact their safety. Besides, natural occurrences such as currents and tides can result in drift and cause considerable difficulty to being positioned in the designated destination.

    Fourth regards the impact of AI-enabled underwater platforms on the marine environment, particularly marine life such as whales, sharks, dolphins and other migratory species. Sonar transmissions by XLUUVs can cause potential damage to mammals’ sensory organs resulting in disorientation or death. Whales may even misunderstand sonar waves as that of an attacker, and panic can drive them towards the platform.

    The development of XLUUVs presents clear dangers and could have potentially destabilising consequences for all countries. Further, their impact on marine life and the associated ecosystem – which is already witnessing stress due to pollution and plastic – does not appear to have been taken into consideration. Finally, an international treaty for emerging AI-enabled underwater platforms needs to be prepared, debated, and signed.

    This article was originally published in IPCS.

    http://ipcs.org/comm_select.php?articleNo=5497

  • Governance

    Governance

    My dog Charlie is long gone. But Charlie, who was a brown “Great indian Mongrel”, was wise in the ways of the world. He taught me a lesson in public policy I will never forget.

    Corruption is India’s favorite conversation topic. We love discussing it and bemoaning its all pervasiveness. We are experts at it and have all experienced it at in some form or the other and at all levels. Yet with so much collective experience it is a difficult topic to write about. Like our gods it takes so many myriad forms. It defies a simple definition. But we all know what it is. What Justice Potter Stewart of the US| Supreme Court said in the context of obscenity – “I know it when I see it”- is equally applicable to corruption. It is the most obscene of obscenities but is a fairly common one.

    Economists prefer to bandy about a different term when referring to corruption. They call it “economic rent”. According to the IMF “it is the extra amount paid (over what would have been paid for the best alternative use) to somebody or for something useful whose supply is limited either by nature or through human ingenuity.” Quite clearly this definition excludes the moral dimension. But then our problems get even more compounded when we realize that the moral dimension is very elastic and varies.

    Take for instance the case of former Prime Minister Manmohan Singh. As far as the Rajya Sabha is concerned, he is a tenant of Mrs Hiteshwar Saikia and is a resident of Guwahati in Assam. But we know that is not true and that he has been ordinarily resident in New Delhi from ever since we came to know him. LK Advani, has been just as peripatetic. At one time he declared he was a resident of Ujjain in MP for the sake of a Rajya Sabha seat. Now he is a resident of Ahmedabad. Arun Jaitley has similarly been vagrant. He is a Delhiwala, but went to Amritsar where he announced he was buying a house to reloacte in 2014. The Amritsaris didnt want teh likes of him, so now he is a resident of Ahmedabad. But if you and I were as cavalier as this in declaring our place of residence, say for the purpose of a passport, we could end up in prison.

    Economic rent takes other forms, which tax the common good much more. High import duties, for instance, meant to restrain imports actually serve to increase prices and profits for domestic manufacturers. The Hindustan Ambassador, that immortal symbol of a mindless and rapacious bureaucracy, actually gave its manufacturer and employees as much joy as it gave sorrow to those who owned or drove these cars. Did you notice how all car tyres or batteries cost about the same? Or how all similar sized air-conditioners and refrigerators cost about the same? Or till recently how all air-tickets cost the same and an arm and a leg at the same time? Adam Smith explained it best by noting that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.”

    These conspiracies cannot succeed without the active connivance of the politicians and bureaucrats. We know what they mostly do, but thanks to the exertions of Aniruddha Bahal, purporting to represent an industry association, we have proof for the first time of this. Our MP’s have much to thank Dr. Manmohan Singh for conjuring up MPLADs (MP’s local area development scheme), but the then Finance Minister probably never contemplated the likes of the venerable Sakshi Maharaj who turned the scheme into one of personal development. But though both the two stings involve MP’s scams evidenced are of different natures. The money for questions business is a common place as a traffic cop collecting money from errant drivers. The payment itself is a punishment for the truancy and it does not seem to matter very much where the money paid ends up, We learn our lessons from it. But when the cops collect for registering an FIR or for no rhyme of reason then it belongs to a different class and we are truly outraged.

    Those of us in Delhi who built houses or made alterations without the sanction of the authorities paid for the deviations knowing it was contrary to the law. But it was commonplace and that seemed to make it okay. But when the High Court has ordered them demolished we were outraged. What if the same High Court ordered that MP’s making false statements about their place of residence must quit? Would we be outraged? We may be happy but not outraged. This is clearly a subject that requires far greater deliberation and discussion and there is much Parliament can do by way of introspection. There are many who are quite expert on the subject. Chandan Mitra, a former  BJP MP, whose concern for probity is as well known as his Chattarpur farmhouse, has even written a book on the subject of corruption.

    Opinion polls show that there are some professions we believe to be almost entirely corrupt. Politicians and policemen top this list with 99% of those polled believing them to be crooks. Much of the corruption we witness in everyday life is a result of their unnecessary exertions. In the past few months I have had opportunity every morning to contemplate a vacant plot of land in the neighborhood I live in. The plot is bounded by roads on all four sides and naturally people walking take a short cut across it. Some well meaning soul has taken upon himself to put an end to this practice. First a sign came up demanding that people not do the most rational thing, that is take a short cut. The sign was ignored and my dog Charlie has been using the signpost to leave his signature. Then a small length of barbed wire pegged between two poles appeared astride the path at both ends. The people who use the path still find it convenient to go around the poles and take the not so short shortcut. Good old Charlie just slips under the wire and seems quite happy that he has two more poles to leave his daily markers.

    The nature of most of our lawmaking is just like this. They are irrational and people will respond rationally to them, by circumventing them if not ignoring them. Just as Dr.Manmohan Singh has done to the requirement that MP’s to the upper house be ordinarily resident in the state. Now the only way that plot can be prevented from being used as a short cut is to either build on it. If the empty plot is just walled up, the walls will encourage another use, which will be odious to boot. Which brings me to another aspect. We have laws that prohibit pissing in public and on walls, private and public. Pissing is meant to be a private business. But where are people to pee when you just don’t have enough urinals? So a law against pissing in public makes sense only when you have enough public urinals.

    Thoughtless laws corrode a state thoroughly. This is why states built around tight regulation and appeals to a higher human idealism fail. The crime wave that engulfed the former USSR was really due to the old nomenklatura doing the only thing they were adept at. It is not that other social and political systems do not germinate corruption. Corruption is all-pervasive and a world wide phenomenon. It comes built in with nature. Animals steal food from each other just as humans extort from others. But human beings live in organised societies and societies are nothing but systems based on laws. For laws to work it must be clear that if caught, trial will be swift and if found guilty retribution will be commensurate.

    That’s where we have serious problems. Who makes the law? Politicians. Who enforces the laws? The police. Both are believed to be overwhelmingly corrupt.

  • The San Juan Incident

    The San Juan Incident

    K N Sushil   December 08, 2017

    The ARA San Juan disappeared a few hundred kilometers off Argentina’s coast on November 15, and despite an extensive air and sea search no sign of the sub has been found. Eight days after the sub vanished, the Vienna-based Comprehensive Nuclear Test-Ban Treaty Organisation said that it had detected hydro-acoustic anomaly” about 30 nautical miles (60km) north of the sub’s last-known position at 10:31 (13:31 GMT) few hours after the sub’s last contact. The analysis of the acoustic incident was reported as follows.

    The acoustic signal associated with the loss of the Argentina Submarine ARA SANJUAN confirms the following:

    That acoustic signal originated near 46-10S, 59-42W at 1358Z (GMT) on 15 November 2017. It was produced by the collapse (implosion) of the ARA SAN JUAN pressure-hull at a depth of 1275-feet. Sea pressure at the collapse depth was 570 PSI. The frequency of the collapse event signal (bubble-pulse) was about 4.4Hz. The energy released by the collapse was equal to the explosion of 12,500 pounds of TNT at the depth of 1275-feet. That energy was produced by the nearly instantaneous conversion of potential energy (sea-pressure) to kinetic energy, the motion of the intruding water-ram which entered the SAN JUAN pressure-hull at a speed of about 1800 mph.
    The entire pressure-hull was completely destroyed (fragmented/compacted) in about 40 milliseconds (0.040s or 1/25th of a second), the duration of the compression phase of the collapse event which is half the minimum time required for cognitive recognition of an event. Although the crew may have known collapse was imminent, they never knew it was occurring. They did not drown or experience pain. Death was instantaneous.
    The SAN JUAN wreckage sank vertically at an estimated speed between 10 and 13 knots. Bottom impact would not have produced an acoustic event detectable at long range

    The ARA San Juan was an IKL(German) designed type 1700 submarine built by TKMS in their Essen yard in 1985 at about the same time the Indian type 1500 was being built at HDW(Kiel). Both the submarines have great deal of similarities. Therefore, having commanded two type 1500s I will venture to hazard a guess on what could have afflicted the submarine.

    Facts as gleaned from various reports.

    15 Nov 0030Hrs. Submarine surfaced to report Water ingress through snort system causing a short circuit in the forward battery group. The forward battery group was isolated. The submarine charged her batteries on surface

    At 0600 The message is transmitted through normal communication channels.

    At 0730 the Captain informs base that he intend to continue his passage dived (Presumably because the sea was rough) At 1031, according to the CTBT report the submarine imploded at a depth of 1275 ft.

    From the above it would appear that the submarine was snorting before she surfaced at 0030hrs. If there was water ingress through the snort mast that caused a short in the forward battery group then the submarine was unable to maintain snorting depth, because the sea may have been too rough and the “head valve” (that prevents water from coming into the mast, when the mast dips even momentarily) was not functioning. As part of the SOP the snort induction drain, which drains into the bilges is kept open for the duration of the snort.  In any case during the snorting, the diesel engines are used to create the suction that draws all the foul air from all over the submarine. The fresh air coming from the snort mast merely spreads to fill the vacuum. Therefore flooding through the snort system would normally have no effect on the battery groups.

    The submarine remained on surface for seven hours post an incident of fire and smoke, which was attributed to short circuiting of the forward battery group. The crew, it seems, did not see any fire but managed to clear the smoke after isolating the forward battery group.

    A fire in a battery group is one of the most dreaded emergencies on board any submarine. Therefore the damage control actions and subsequent analysis would have been painstakingly thorough. If there was a fire in the battery pits the firefighting system would have been activated (manually or automatically). Once the system is activated the battery pits are to be kept in a sealed condition for at least one hour. Thereafter the pit is ventilated for at least an hour before inspecting it. In these types of submarines one has to lie down on a trolley and manoeuvre manually over the batteries. If the sea is rough it becomes extremely difficult and dangerous.  It may therefore be possible that they may have dispensed with the inspection whilst on surface.

    In the seven hours on surface the crew must have thoroughly examined the power distribution network and come to the conclusion that the problem was contained, and the submarine was reasonably safe to continue dived with a single battery group. They may even have considered that it would be safer and easier to inspect the battery pit while the submarine is underwater.

    The submarine dived at 0730 hrs. After 3 hours it appears to have imploded at a depth of 388 Meters. 388 Meters is of course below the normal operating depth but well above the crushing depth. If the submarine did indeed implode at that depth the inescapable inference is that there were severe structural problems that had weakened the pressure hull. The Argentinean Navy must have known if any structural limitations were reported or imposed.

    If the structural problems were not severe enough then some event that occurred in the 3 hours she was submerged must have been responsible. That event was so catastrophic that the submarine was unable to prevent an uncontrolled descent. Given the background situation the captain would have ordered the submarine to dive to 50 Meters. As soon as he settled down to that depth, he would have ordered the inspection of the battery pit. Unless there are clear tell tale signs, it is possible to miss some things which may have the potential to cause damage. Anyhow the inference and action post this inspection is not known. Did they reconnect the forward group? We will never know. The inspection would have taken about 45 minutes to an hour. The fact that they did not surface immediately after the inspection indicates that they did not notice anything alarming.

    In the three hours that the submarine was under water, if there had been a gradual flooding, the crew would have taken action to mitigate the effects, and would have ample reaction time to surface. Therefore loss of control must have been triggered by a sudden event. A pressure hull breech and flooding that must have cause to rapidly lose depth. The most immediate response is to use speed to create dynamic vectors to aid depth control. Since the submarine had only one battery group connected the speed of the submarine would be restricted to about 8 Knots ahead and about 4 Knots astern.  This would not be sufficient to delay the descent so that de-ballasting and pumping out capacities can effectively annul or reduce the rate of flooding. The rate of flooding keeps on increasing with depth.

    Now we have a situation where the submarine with the forward (or all) ballast tank probably blown going down. At depths greater than 180 meters the effect of blowing ballast with High Pressure air (250Bar)is painstakingly slow. The next stage is when the submarine crosses 15 meters more than the operational depth the Hydrazine emergency de-ballasting system will be triggered. This system is designed to clear the forward and aft main ballast tanks in 12 seconds at any depth. The problem would be if the Ballast tanks already contain air the Hydrazine will cause an explosion in the ballast tanks. If that happens there is nothing left to create positive buoyancy.

    The Next question is why did the submarine implode at 388 meters? As brought out earlier it clearly points to structural weakness in the pressure. If such a situation did not pre-exist then it may be possible that the battery pit event may have cause massive spillage of acid into the pit causing the pit to corrode in the almost 10 hours this corrosion may have weakened the hull sufficiently to cause a substantial breech in the pressure hull. The flooding of the pits could an explosion as the water level reaches to short the terminal connectors.  This is only a conjecture.

    San Juan went down without a trace. The crew did not even have the time or opportunity to release the systems and tell tale indicators that were meant tell the outside world that the submarine is in distress.

    It is said what goes up must come down. Submariners know that what goes down need not necessarily come up. San Juan RIP.

    In the language of the submarine community San Juan is on eternal patrol.

    Vice Admiral K N Sushil (retd) is a Indian Navy Veteran, and the former Flag Officer commanding-in-Chief of Southern Naval Command.[/vc_column_text][/vc_column][/vc_row]

  • China: A Colossus in Asia?

    China: A Colossus in Asia?

    Vidya Nadkarni December 10, 2017
    China today is moving out of the shadows.  After decades of following Deng Xiaoping’s advice to “hide our capacities” and “bide our time,” Xi Jinping in his long address to the CCP’s 19th Party Congress in October announced that his country “has stood up, grown rich, and is becoming strong” and would move “closer to center stage.”  Xi celebrated the “steady progress” in China’s construction on the islands and reefs in the South China Sea—a self-back-patting that has disregarded the concerns of Southeast Asian claimants to the Paracel and Spratly island chains and troubled the United States. China, in Xi’s words is a “great nation,” and he implied a prominent global role for the country when he noted that history looked “kindly on those with resolve, with drive and ambition, and with plenty of guts.”  He could not have offered a clearer message to the world that China was claiming its proper due on the global stage.

    China’s assertiveness is coming at a time when American allies and partners are increasingly questioning U.S. resolve and interest in global leadership.  President Trump’s “America First” strategy appears to many as a clarion call for a foreign policy strategy of retrenchment.  While the rhetoric of Trump administration officials continues to support US global engagement, the President’s position has been far less clear.  For instance, early in his administration Trump unceremoniously withdrew from the Trans-Pacific Partnership and the Paris Climate accord.  He decertified the Iran nuclear deal but stopped short of suspending the multilaterally negotiated agreement. Predicting the depth and steadfastness of US commitment to a global presence is therefore difficult.

    Specifically with respect to the Asian theater, while Secretary of State Rex Tillerson and Admiral Harry B. Harris of the US Navy’s Pacific Command (PACOM) have underscored US interest in a strong presence in the Indo-Pacific region, President Trump, in a speech at a November 2017 gathering of Asia-Pacific CEOs in Danang, Vietnam that White House officials had billed as highlighting the US commitment to a “free and open Indo-Pacific region,” inveighed instead against the unfair trade practices of other countries and insisted that he would put America first and not let the United States be taken advantage of anymore.  Trump’s fiery defense of nationalism and sovereignty was followed immediately by President Xi’s vigorous defense of open trade and globalization.  Upon his return to Washington, however, President Trump in debriefing remarks on his trip to Asia touted his accomplishment of three goals: uniting the world against the North Korean menace; strengthening America’s alliances and economic partnerships in a free and open Indo-Pacific; and insisting on fair and reciprocal trade deals. His interlocutors in Asia, however, heard him emphasize the third objective.

    Trump’s November trip to five Asian countries—Japan, South Korea, China, Vietnam, and the Philippines—thus did little to reassure US allies who are caught between the Scylla of economic reliance on China and the Charybdis of an uncertain protection from the US security umbrella. China dominates the economic scene in Asia.  To get a picture of what this means, consider the degree of dependence on China in Australasia.  China has superseded the United States as the largest trading partner of Australia, Japan, India, and the ASEAN countries.  International Monetary Fund (IMF) trade statistics for 2016 show that Australia and the countries of ASEAN collectively ran trade surpluses with China, making access to the large Chinese market enormously important, particularly to Australia and the smaller countries in Southeast Asia.  India and Japan ran trade deficits, although Japan’s deficit is small.  India is the exception here with a trade imbalance ratio of 1:5 in China’s favor fueling fear of Chinese goods flooding the Indian market.  Beijing is investing in much-needed infrastructure projects in countries from Asia and Europe to Africa.  Xi Jinping’s signature Belt/Road Initiative (BRI), which was unveiled to much pomp in May’s Belt and Road Forum in Beijing, has behind it the promise of $124 billion in funding.  China’s economic aid is attractive despite market rate loans because Beijing is unhampered by transparency issues as well as environmental and human rights concerns that are part and parcel of projects funded by the World Bank or the Asian Development Bank. In the long term, however, many of these investments saddle politically volatile countries with massive debt burdens making them vulnerable to strategic manipulation.

    Recognizing that BRI is as much a geostrategic as an economic initiative, Australia, Japan, and India have been cautious about participation.  Australia has nominally agreed to set up a working group to discuss possible cooperation, but Prime Minister Malcolm Turnbull has so far refused to link BRI with the Northern Australian Infrastructure scheme.  Perhaps reacting to Trump’s protectionist instincts, Japanese Prime Minister Shinzo Abe in a June speech offered a paean to free trade and spoke favorably about BRI in the context of the economic virtues of linking the Pacific to Eurasia.  But, in an indirect message to the Chinese leadership, Abe noted the international community’s expectations that it was critical for any infrastructure projects to be “open to use by all” and “be developed through procurement that is fair and transparent.”  India’s concerns arise from the BRI’s lack of transparency and from New Delhi’s objection to the China Pakistan Economic Corridor (CPEC) project, which links the Chinese province of Xinjiang with Pakistan through contested territory in Kashmir.  Recognizing the importance of having India on board, the Chinese leadership has sought to placate New Delhi.

    China’s rise is unlikely to be smooth unless Beijing can neutralize the worries of India, long-standing US allies in Australasia, and smaller countries in Southeast Asia.  Many of these countries are hedging their bets by engaging with China economically but also by investing in military hardware to shore up their security.  Australia, India, Japan, and South Korea regularly hold military exercises with their favored security partner—the United States.  India and Japan have cemented a strong partnership.  Australia has expressed interest in joining the annual Malabar naval exercises that bring together the United States, India, and Japan.  The first time that a quadrilateral naval exercise among these four democracies occurred was in 2007.  While New Delhi has not responded favorably to Australia’s recent request, either to avoid upsetting China or due to doubts over the extent of China’s influence in Australia, an overweening China is likely to propel security countermeasures in all these countries.

    Beijing’s challenge is how best to balance its economic lure with what are seen by many of its Asian neighbors as provocative military moves in the East and South China Seas and the Indian Ocean Region. If China looms large in Asia militarily, the formation of an anti-China alliance may quickly follow.  The problem for great powers is that economic influence is seldom sufficient to override measures that countries are likely to take in the face of security threats.

    Dr Vidya Nadkarni is a Professor and Head of Political Science at the University of San Diego, California. She is a Trustee of TPF.

  • GDP Growth by increasing the Cost of Government!

    GDP Growth by increasing the Cost of Government!

    Mohan Guruswamy  11 July 2018

    The truth is now staring us in the face. The latest breakdown of sectoral contribution to growth is out. Get ready for this. Public Administration, which somewhat perversely is classified as part of services, has now grown by 7% over the previous quarter making it the biggest driver of growth in India. Very simply this means as you keep paying government employees more the GDP will keep growing ever faster till one day you run out of breath and cash. In the Q3 of 2018, Public Administration added contributed 17.3% towards growth. In Q4 of 2018 it has grown to 22.4% making is a fraction smaller than the contribution of manufacturing at 22.7%.

    But hold your breath. Not satisfied with the 7th Pay Commission’s across the board hike of 23%, government employees are hopeful that the Prime Minister on August 15 will make an announcement fulfilling the promise made by the Finance Minister to give central government employees a pay hike beyond the recommendations of the pay commission. They are also hopeful that the retirement age will be raised to 62 years, allowing them to serve this poor and hapless country longer.

    There had been a spate of commentaries about how beneficial the 7th Pay Commission mandated pay hikes, and now approved by the Union Government with retrospective effect will benefit the economy. Despite this munificence, some government employees have called the 23.5% across the board hike peanuts! Others have made comments like “you pay peanuts you get monkeys!” as if you will now have earnest and honest public servants because the same fellows get more pay? The metaphor is unfortunate as well as illogical as the “monkeys” are already in place, only now the diet has become much more richer. Fat monkeys are what you will get.

    The high cost of wages has also slowed down intake into government and most departments are hugely understaffed. For instance the Revenue collecting departments are under strength by as much as 45.45%, Health by 27.59%, Railways by 15.15% and that the MHA is under strength by only 7.2% speaks volumes about how much has gone wrong in our system. We have a saying that the main business of government is to collect taxes so that they may be spent for the benefit of all the people. Thus we see the main business of government is now its least concern.

    The sheer absurdity of the logic that higher government salaries are beneficial to the economy speaks volumes of the kind of stupidity that permeates our policy thinking at high places. By this logic if the pay hike was higher GDP growth would be even higher. But think of this in terms of money denied for critically needed infrastructure and social development such as rods, power plants, schools and hospitals. As if these don’t generate GDP growth? Higher salaries mostly benefit those who get them. Period.

    The last pay hike hike benefitted 23 million government employees in the central and state governments and their PSU’s. No doubt this will make the CII and FICCI members will hear the music louder and dance all the way to the bank.  No wonder the top industry and banking analysts have given a big thumbs up to the Union Cabinet decision stating the move will “boost consumption in the economy” and lead to higher GDP growth. Its their fond hope that the pay hike combined with continued public push to the capital expenditure will help steer the economy to higher growth levels of 8% and above.

    “The pay hike of nearly Rs. 1 lakh crores for government employees will give a strong boost to the consumer demand and help uplift the growth of the economy,” said Didar Singh. the then secretary general, FICCI.  He will approve being a former IAS officer rehired by the industry trade union. But has FICCI noticed the IIM, Ahmedabad study that has found the “pay in the government sector is distinctly greater than that in the private sector?” The 23.5% average hike in central government employees’ salaries pushed up the government’s wage bill, including arrears, by an estimated R. 1.14 lakh crores.

    While you worry about the high cost of government, I will give you another reason to worry? If you wonder why our public administration is so ineffective, consider this. An analysis by a leading media organization suggests that roughly 14% officers get transferred within one year of service and another 54% within 18 months. In other words, 68%, or over two-thirds of India’s top bureaucrats, last on an average less than 18 months at a posting. Only 8% of the officers analyzed had average tenures of more than two years and there are only 14 officers who have managed to complete an average stay of more than three years between transfers. So what is the government you are getting for all the money we spend?

    This when 648 million Indians are living below the UNDP stipulated poverty line. The question we all must ask is growth at whose cost? Arun Jaitley crowing about it is akin to the head of a family who prefers to increase his spending on smoking and drinking by cutting down on the milk for the growing children.

    The three levels of government together employ about 185 lakh persons. The central government employs 34 lakhs, all the state governments together employ another 72.18 lakhs, quasi-government agencies account for a further 58.14 lakhs, and at the local government level, a tier with the most interface with the common citizens, we have only 20.53 lakhs employees. In other words it simply means we have five persons telling us to do this or do that, for every one supposedly serving us. And whom even these one out of six persons are answerable to is still a big question?

    Do we then have a big government bearing down on us? Not really.

    Consider this: India has 1,622.8 government servants for every 100,000 citizens. In stark contrast, the U.S. has 7,681. The central government, with 3.1 million employees, thus has 257 serving every 100,000 population, against the U.S. federal government’s 840. Now look at the next tier at the state level. Bihar has just 457.60 per 100,000, Madhya Pradesh 826.47, Uttar Pradesh has 801.67, Orissa 1,191.97 and Chhattisgarh 1,174.62.

    This is not to suggest there is a causal link between poverty and low levels of public servants: Gujarat has just 826.47 per 100,000 and Punjab 1,263.34. The troubled states or really speaking the troublesome states actually fare far better on this score. Thus, Mizoram has 3,950.27 public servants per the 100,000 populations, Nagaland 3,920.62 and Jammu and Kashmir 3,585.96. Bar Sikkim, with 6,394.89 public servants per 100,000, no state comes close to international levels.

    Very clearly for the most part, India’s relatively backward states have low numbers of public servants. This means staff is not available for the provision of education, health and social services needed to address poverty. It would seem that instead of getting better government and more public servants, we are getting more expensive government.

    We are now riding the tiger of a high wage enclave of government employees, who also drive consumption and hence GDP growth. It may now be difficult to get off this tiger

    Shri Mohan Guruswamy is a former Rajya Sabha MP and a political commentator. He is a Trustee of TPF.
    This article was earlier published in National Herald.

  • PLA Navy and Robotics

    PLA Navy and Robotics

    Vijay Sakhuja December 03, 2017

    Early this year, the UK Royal United Services Institute announced that by 2020 China’s naval order of battle would be 500 ships comprising aircraft carriers, nuclear and conventional submarines, frigates and destroyers, amphibious ships and logistic vessels. Further, the Chinese defence spending would increase from US $ 123 billion in 2012 to US $ 233 billion by 2020. Surely, China is on its way to build a large and powerful navy and in the last eight years Chinese naval shipyards built 83 ships. The speed of production has been characterized as ‘making dumplings’.

    One of the significant features of this naval build-up is investments in science and innovation led by digital technologies. Among these, the ‘robotic revolution’ merits attention. Till about 2013, China was the top importer accounting for 20 per cent of industrial robots produced globally (36,560 units as compared to Japan’s 26,015 units, and US in third place with 23,679 units). Since then Chinese demand for robots has increased, and in 2016, it installed 90,000 imported units nearly a third of the global total, which is expected to increase to 160,000 units by 2019.

    While import substitution has proved useful, the Chinese government has invested in the development of indigenous robots to support the country’s US $11 billion robot market. The plans aim to ensure that China-branded robots constitute over 50 per cent of total sales by 2020 from 31 per cent in 2016. The country plans to produce 100,000 robots annually by 2020, compared with 33,000 in 2015. This is in line with the country’s “Made in China 2025” strategy led by industrialization and informatization focused on innovation, smart technology, the mobile Internet, cloud computing,  big data and the Internet of Things.

    No doubt the robot led industrialization has boosted China’s production and export competitiveness in a number of sectors such as car manufacturing, electronics, appliances, logistics, and food industry, but its use in the military has not lagged behind. In June 2017, the state-owned China Electronic Technology Group demonstrated 119 tiny propeller aircraft (X-6 Skywalker, a commercial model) loaded with software and sensors capable of communicating with the other drones in the swarm.

    There are nearly 1,300 drones currently in operation with the PLA and the PLA Air Force, but use of robots in the naval domain is more recent. Perhaps it was the discovery in 2015 of a torpedo-like spy device off Hainan province provided the requisite impetus to invest in unmanned platforms. The spy device of US origin was confirmed as an intelligence gathering system to obtain information on the Chinese naval operations in the South China Sea.

    China’s advancements in underwater platform technology has been demonstrated by the indigenously built Haiyi-7000 (Chinese for “sea wings”) unmanned platform which dived to a depth of 5,751 meters in the Mariana Trench, western Pacific. Apparently, the technology for the platform was obtained from the US.

    The PLA Navy’s has been quite enthusiastic about using unmanned platforms. In 2016, a naval exhibit showcased Chinese plans to build an Underwater Great Wall comprising of sensors moored to the ocean bed 3,000 meters deep, to work in tandem with autonomous unmanned underwater vehicles (AUV’s) launched from torpedo tubes, surface ships, missiles and aircraft, to monitor underwater vessel movements including tracking enemy submarines particularly those of the US and Japan. Although China is yet to develop a mature technology for underwater drones, Chinese scientists are working to build swarms of 3D-printed and cheap autonomous underwater robots connected through underwater communication and datalink technologies, as well as precise navigation systems and multiple sensor payloads.

    Another noteworthy Chinese demonstration of its interest in robot ships is validated by the development of a stealthy robotic trimaran warship D3000. According to China Aerospace and Science Technology Corporation, a Chinese defense contractor, this vessel is designed to operate autonomously for months, or as part of a larger task force with manned ships. The D3000 can serve as a mothership for other unmanned systems and pass the data of targets or unfriendly objects to ships and aircraft to work out firing solutions.

    China is offering to foreign customers new unmanned systems that are still undergoing testing or have just entered service in the Chinese military. For instance, China showcased a 42-foot trimaran High Speed Intercept Boat in 2016 in Malaysia. The vessel can be armed, achieve speeds of 80 knots, and can ‘potentially operate in unmanned swarms.

    The concept of operations for the USVs involve undertaking various missions and tasks “including escort, interdiction of civilian freighters, patrolling offshore assets and working in a system of systems with other unmanned systems, including drones and submersibles”.

    In 2014 President Xi Jinping during a speech to the Chinese Academy of Sciences called for a “robot revolution”’ to raise industrial productivity and it is fair to argue that Chinese shipyards, naval research centers and the PLA Navy  are ‘certainly not going to sit the robotic revolution out”.  The Chinese government has characterized the robotic industry as the “jewel in the crown of manufacturing”. This is best demonstrated by the importance of robotics in the 13th Five-Year Plan (2016-2020), the Made in China 2025 program, Robotics Industry Development Plan and Three-Year Guidance for Internet Plus Artificial Intelligence Plan (2016-2018). In essence, China is exhibiting a high degree of confidence in its ability to develop modern unmanned naval technologies.

    Dr Vijay Sakhuja is a co-founder and trustee of TPF.

  • Foreign Reserves beyond a point are Pointless

    Foreign Reserves beyond a point are Pointless

    Mohan Guruswamy  October 07, 2017

    Clearly the Indian economy is not at a place where it wants to be. The Modi government is finds itself in a chakravyuh that it is unable to fight its way out. The government is just unable to make or attract the investment needed to make the economy buoyant again. India enjoyed a decade of unprecedented growth from 2004-14 that seemed to have lost steam in the last year. It was largely caused by a huge decline in the proportion of capital investment expenditure. Despite the growth of the private and foreign investment, the Indian economy is still largely dependent on government investment to lead the investment and growth cycle.

    The promise of Modi was that he was expected to set right this trend and once again begin a new cycle with government led investment. He promised us a hundred new cities, a nationwide grid of high-speed rail networks, a national river-linking program and so many other major transformational projects. A hundred new cities have now become a hundred smart cities, which means little more than free wi-fi networks. The nationwide grid of fast trains has now become an exorbitant and apparently uneconomical single bullet train joining Ahmedabad and Bombay. Similarly all other feasible and exciting promises made are now mere caricatures of what were promised. It is simply that the Modi government has been unable to free the economy from its high subsidy burden and PSU black hole, where only the oil and power companies earn a profit due to administered pricing.

    Consequently the picture continues to be bleak. Output of capital goods contracted 1% in July against growth of 8.8% a year ago. Production of consumer durable goods shrank 1.3% against a nominal increase of 0.2% a year earlier.

    Then came the twin black swan events. Demonetization came as a body blow to the cash-dependent unorganized sector that makes up 40% of India’s GDP. The unorganized sector also accounts for 90% of the total employment of around 450 million. The loss of jobs due to the two events – demonetization and hasty implementation of GST- is still not empirically confirmed. Estimates vary. The construction and vegetable and fruit retail sectors seem to have taken a massive hit and the ballpark estimation of loss of jobs is at about 25-30 million. These sectors mostly employ rural landless labour with few skills and hence forced into taking up daily wage and earnings sustenance. They don’t shout much and few notice their pain. Unlike the loss of even a few thousand jobs in the IT sector.

    The implementation of GST forced companies to reduce production in the run-up to its 1 July implementation as dealers reduced inventory. The inadequate training and preparation was abundantly evident. The announcement of rates was hasty and the many mismatches between input and output rates compounded the confusion. Of the Rs.95000 crores collected in the first month, as much as Rs.65000 is due to be refunded. The problem is that the government doesn’t seem to have the cash to do so.

    In a belated effort to reverse these trends the government is planning to loosen its fiscal deficit target of 3.2% of GDP to enable it to spend up to Rs. 50,000 crore. This is piddly sum for an economy whose GDP is over Rs.150 lakh crores now. Right now we have a net outflow of foreign investment. What we need is a huge dollop of cash infusion to boost investment. Loosening fiscal deficit norms will help. But meaningfully slashing subsidies when Modi’s term is on the slope to elections is not politically feasible.

    There is that old saying that when the going gets tough, the tough get going.  Modi should now show toughness and imagination that is tempered with realism.  He needs to revive the national mood and generate optimism over the economy. He now needs a plan to drive investment. He doesn’t have to go far to find the money to fund this plan.

    The government is sitting with reserves of nearly $400 billion with about $135 billion alone sitting in US banks earning next to nothing. These reserves are equal to about 80% of our foreign debt. Even after providing a quarter of the reserves to cover short-term hot money of NRI investors each taking a pound of flesh for mostly foreign bank financed investment in their mother country, we will still have $300 billion in hand.  How much money can be freed from the other $300 billion for investment is the big question now? Kaushik Basu has said that India’s foreign reserves need not be more than the current account deficit (CAD) or about $80 billion. Others are more cautious.

    This will certainly raise many eyebrows. One is surprised over the number of people who think holding huge reserves abroad in ridiculously low yield securities is a sign of our wealth. No. It is a sign of our stupidity.

    Just holding enough reserves to cover the CAD or exports for a few months would be about enough. This nonsense of holding reserves to at least cover six months imports is just plain arbitrary and concocted by the people who made the Washington Consensus. This “consensus” assures New York banks plenty of cheap money to finance American domestic consumption and extravagances. The Chinese have now realized the stupidity of financing the US cheaply with their reserves which not long ago almost touched $4trillion. They have run it down by about $1trillion since.

    Now how much do you think the US foreign reserves amount to? Hold your seat. It is now $65 billion or about a fifth of India’s. What a travesty.

    Clearly running them down by $100-120 billion or Rs.6.5L- 8L crores can be contemplated. The government could establish an India Infrastructure Investment Fund and start shifting meaningful fractions from the foreign reserves into this fund. A board of well-regarded experts, who can allocate investments on merits to prevent the usual leakages and political misuse, could administer the fund. The fund must also mandate the minimum level of local procurement and investment to boost Make in India.

    Slow growth and no new jobs are Narendra Modi’s twin Achilles heels. He is vulnerable on both counts. He must seize the moment with both hands and start running with both legs.

    Shri Mohan Guruswamy is a former Rajya Sabha MP and a political commentator. He is a Trustee of TPF.
    This article was earlier published in ‘The Economic Times’.