India Political Blog

The conversations about the United States economy always carries a feeling of impending doom. This despite an economy which today generates US 50,000 per capita GDP. United States is an unbelievably rich country with net worth of about US 60 trillion and annual GDP of US 14 trillion +.

Yet the conversation is always about lack of savings, deficits and on and on…but to view something completely different here is an excerpted section from the BEA: on the United States business with the rest of the world (ROW) including payments on US Bonds.

($ billions) Income from ROW             Payments to ROW              Net

2001                   322.4                                 278.8                            43.6
2002                   305.7                                 275.0                            30.7
2003                   336.8                                 280.0                            56.8
2004                   437.5                                 361.4                            76.1
2005                   573.5                                 480.5                            93.0
2006                   725.4                                 647.1                            78.3
2007                   861.7                                 759.3                          102.4

USA has a Net international investment position of -$2.4 trillion…made up of $20 trillion of foreign investment in the US and $17.6 trillion of US investments in the Rest of the World.

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In a landmark deal that broke many facets of the international nuclear embargo on NPT (Nuclear Non-Proliferation Treaty) non-signatory nations, the US has finally signed a nuclear deal with India. This has been among the most heated and debated agreements in recent times. Part of a mission to make US-India ties closer, and to relax some of the restrictions on India in the nuclear area, the deal took a lot of diplomatic effort to get through, and the final legal step of the deal was signed in by President Bush. This last step was not necessary for India to go ahead with nuclear deals with other nations, but in light of the recent efforts by the US administration to push the deal, the Indian side decided to wait for the US Congress approval.

US President George W Bush has signed into law a nuclear deal with India, which ends a three-decade ban on US nuclear trade with Delhi. The landmark agreement was approved by the US Congress nearly a week ago. The deal will give India access to US civilian nuclear technology and fuel in return for inspections of its civilian, but not military, nuclear facilities.

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For the last several years, there has been an ongoing political discussion about whether the United States is following the correct policies with regard to getting rid of terrorism emanating from the region of Pakistan and Afghanistan, rated by many as the most likely place to generate the next big terrorist attack in the Western World. Part of that discussion is whether the United States has relied too much on Pakistan, and not pushed it hard enough to get rid of the entire support structure for terrorism in the tribal border regions. Implicit in this discussion is that Pakistan is not really doing all it can to get rid of terrorism in the region, to take on the vast support for the Taleban and terrorist elements in the wild ungoverned regions. Now, Pakistan has always claimed that this was a difficult task, that these regions have historically had a reputation for resisting any attempts to enforce a central governance; and that periodic pushes by the Army and border guards have only met fierce resistance and let to further embittering of the population in these regions, thus leading to a further support for the so-called resistance fighters.
At some point it is difficult to blame only Pakistan for this. The US has had a huge amount of analysis that claims that there is a lack of governance, civil reconstruction, and enough boots on the ground in Afghanistan. What was required that there be a push to strengthen the regional paramilitary forces, combined with an active and huge construction program in these regions of Afghanistan and Pakistan. It is when the affected population see only a military push, and the same old bad conditions with no scope for improvement that they tend to move further towards the extremist position. And in Pakistan, the Bush Administration seems to have had a blinkered vision with taking the actions of President Musharraf at face value, not applying the pressure that might have made things much better. For example, there has never been much pressure to improve the condition and training of the regional paramilitary force that might be able to help turn the tide.

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