
The day the United States government decided to launch a military campaign against Al-Qaeda and the Taliban in Afghanistan, an American investor called his fund manager in London and told him, 8216;8216;get my money out of India8217;8217;. The surprised fund manager advised his client not to panic. 8216;8216;Your money is safe in one of India8217;s brightest blue chip companies located in Bangalore several thousand kilometres south of Afghanistan. You don8217;t have to worry.8217;8217;
The client was not convinced, 8216;8216;Look, I don8217;t care about geography. I know something about making money. Right? Now, either you get my money out of the region or I8217;ll send you an atlas!8217;8217; One more investor had flown out of a 8216;risky emerging market8217;. This is a true story, from October 2001. 8216;8216;Sentiment is all in the markets,8217;8217; lamented this fund manager, worrying at the time that 8216;8216;India may be going out of fashion8217;8217;.
|
India is a continental country. Asking Americans to get out of border states, given the prospect of a war, is one thing. Asking them to leave India is an exaggerated response |
His pessimism was not entirely justified. As statistics put out by the Union government8217;s ministry of industry show encouragingly, foreign investment into India increased by over 60 per cent since September 11. Only last week, Japan8217;s Osamu Suzuki flew down to New Delhi with a cheque for a thousand crore to boost his stake in the automobile company, Maruti Udyog Limited. But then, these are uncertain times and the persistence of tension in the region has once again turned market sentiment negative.
Last fortnight, the stock market felt the impact of this uncertainty for days as the sensex slipped with every statement about India seeking a decisive end to Pakistan8217;s proxy war. This week the market may well react excessively to the news over the weekend that the US government has advised its citizens not to travel to India and has advised those already in India to get out. Is the government ready with its response to this psywar?
It is not clear to what extent the US government travel advisory is motivated by genuine fear of a widespread conflagration in South Asia, including possible terrorist attacks directed against US targets, and to what extent it is aimed at exerting psychological pressure on policymakers in the region to reduce tensions. While the travel advisory is cautiously worded and suggests that American citizens 8216;8216;defer travel to India 8230; particularly to all border areas between India and Pakistan including the Indian states of Gujarat, Rajasthan and Punjab, and the state of Jammu and Kashmir8217;8217;, it urges 8216;8216;American citizens currently in India to depart the country8217;8217;.
India is a continental country. Asking Americans to get out of border states, given the prospect of a war with Pakistan, is one thing. Asking them to leave India is an exaggerated response. It would be interesting to check out if the US government urged all Americans to leave the European Union when its forces joined the hostilities in the Balkans! If not, the current travel advisory, and reports suggesting that there could be an airlift of all Americans out of India, may be viewed as psychological tactics aimed at influencing policy options in the region. The market must then discount the advisory for what it is intended to be.
The travel advisory was not the first instrument of a possible psywar campaign. The scenario building on a nuclear conflagration in the region appears equally orchestrated. All manner of commentators and analysts have been creeping out of the Washington DC think tank woodwork to paint grim scenarios of armageddon in South Asia. If Pakistan was unable to resort to nuclear blackmail during Kargil, why does the U.S. take Pakistan8217;s nuclear threat more seriously now, that too when U.S. troops are present on Pakistan soil?
More to the point, the mobilisation of Indian armed forces to exert pressure against cross-border terrorism in the region is being projected as an Indian offensive against Pakistan when in fact it is nothing more than an aspect of the campaign against terrorism, in pursuit of which the United States has also deployed troops in the region. If the Bush administration treats India and Pakistan even-handedly in this confrontation, viewing the problem as a bilateral dispute over Kashmir, it would be missing the wood for the trees.
The attempts at raising the spectre of a nuclear conflict, the travel advisory that is undoubtedly going to hurt market and investor sentiment, which in turn will hurt India rather than help, are counter-productive at a time when both the US and India have the same objective of weakening the forces of jehadi terrorism in the region. Indeed, even General Pervez Musharraf says he is committed to this cause.
If this is so, then any attempt at turning Jammu and Kashmir into a Talibanised Afghanistan, a haven for jehadi terrorists and mercenaries from across the world, serves neither the interests of India nor of Pakistan, nor indeed any of the other major powers in the region, namely the US, Russia and China. India8217;s current military posture aimed at exerting pressure on the present regime in Pakistan to give up the path of globalised jehadism and its immediate manifestation in Jammu and Kashmir should be strengthened by all nations battling terrorism.
To pressure India at this stage with misplaced anxiety about a nuclear conflagration, and excessive nervousness about the safety of American citizens and property in the rest of this subcontinental nation cannot help strengthen the campaign against terrorism. Rather, it would appear as if the US has become a victim of Pakistani nuclear blackmail, retreating under that pressure from the campaign against terrorism. If India and the US were to begin quarrelling today, who in the region will be laughing all the way to the next target of terrorist attack?
The US should immediately put an end to its psywar against India and widen the campaign against terrorism. The issue at heart is not the future of Kashmir, it is the future of the world.