Blunder of the millennium for India : Third part

UNSC Seat: Did Nehru Really Fumble?

Was Nehru’s action 55 years ago an unpardonable bungling or a clever diplomatic move to save India from ignominy and enmity of powerful nations?

Since long India has been fighting for a place as a permanent member of the United Nations Security Council (UNSC). However, this struggle for a permanent UNSC seat is turning out to be a losing battle and would seemingly continue to be so for a variety of reasons for possibly many more decades to come. Before going into the pros and cons of the intriguing international situation, so vitally associated with the entry of a new permanent member to the UNSC, over a billion people in India reserve the right to question as to why the first Prime Minister of the country, Jawaharlal Nehru, refused the offer of a permanent UNSC seat made by the United States in 1955. Was it an unpardonable bungling by Nehru or a clever diplomatic move to save India from ignominy and enmity of powerful nations?

Very few people know that in 1955 the then US President Dwight David Eisenhower was caught in an unenviable situation of choosing between the People’s Republic of China under the Communist regime led by Mao Tse Tung and the then Formosa or the present Republic of China for a permanent seat at the UNSC. While Communist revolution was new and was beginning to find a firm footing in the Chinese mainland or the present People’s Republic of China, Washington’s blue-eyed boy Seng Kai Sek was compelled to find shelter in the island of Formosa after fleeing from the Chinese mainland. While the US was dead against Communist China becoming a permanent member of the UNSC, Eisenhower could clearly visualize that any offer made in favour of Formosa, then ruled by a fleeing dictator, would be vehemently opposed by other permanent members of the UNSC, more particularly by the then Communist USSR.

With the Cold War between the NATO and the Warsaw Pact countries being the order of the day in 1955 and India maintaining equidistance from both the blocks, perhaps President Eisenhower thought it prudent that India could fit into the permanent Asian seat in the UNSC, and accordingly the offer was made.


On the other hand, reports indicate that the then Communist USSR, a permanent member in the UNSC, mounted pressure on New Delhi to vouch for Communist China for the permanent Asian seat in the UNSC, promising that an elusive sixth UNSC permanent member seat to be offered to India in the coming years.

Today, 55 years later, as New Delhi runs from pillar to post for a permanent member seat in the UNSC, a review of Nehru’s decision to go by Moscow’s persuasion and plea in favour of China for a permanent UNSC seat could be of great significance. Perhaps a leader with lesser understanding of the then international scenario would have jumped to the conclusion of saying ‘‘Yes’’ to the US offer and possibly would have landed up biting dust. The crux of the matter at that point of time was the Cold War. The US, UK and France openly belonged to one block while of the Warsaw Pact countries USSR was the sole member in the UNSC. Moscow’s gameplan was obviously to have another Communist power as a permanent member in the UNSC to face the challenge of the NATO even within the security council. And hence the pressure on New Delhi to surrender the US offer in favour of China.


Any observer with adequate knowledge of the raging Cold War and the international scenario in 1955 would agree that Washington’s offer of a permanent UNSC seat could never ensure India a cake walk into the Security Council. With every permanent member enjoying veto power it was clear as daylight that any proposal for the fifth member’s name made by a member of one block would be vetoed by the member(s) of the other block. Accordingly, in the face of a standing US offer, possibly Nehru could see through the Soviet gameplan of vetoing any member’s name till China made the entry into the Security Council as the permanent member from Asia. Perhaps realizing a near impossible task of making way to the Security Council with the two Cold War blocks calling the shots in tune with their confrontation, Nehru possibly could clearly visualize the ineffectiveness of the US offer and hence turned down the offer.

Another reason why Nehru possibly rejected the US offer could possibly be to maintain friendly relations with all countries, regardless of blocks, or at least not to incur the wrath of any country, more particularly powerful nations. Perhaps Nehru was highly convinced that the American gameplan would come a cropper, leaving India to bite dust while relations with the Soviet Union and China would deteriorate to an all-time low. With the situation ensuring an almost certain fall and ignominy, it was only natural for New Delhi to reject the US offer. After all, any fool can aim for the moon, but the wise and the intelligent would always consider if a greater risk of crash-landing or still worse nose-landing could be on the cards. And certainly Nehru did not want to see India crestfallen after fighting a losing battle.

Meanwhile, much water has flowed down the Mississipi, the Volga, the Ganga and the Yangtze Kiang in the last 55 years. Looking back now, nothing perhaps is as easy as criticizing Nehru for giving up the Security Council permanent member seat even by one without any knowledge of the Cold War that raged for decades together till the Soviet Union collapsed in the eighties.


However, it is most unfortunate and ironic that today China is apparently turning out to be a mighty roadblock in India’s quest for a permanent seat in the UNSC. Likewise, the United States also has a different gameplan. Washington would not like to offend Pakistan, one of its frontline buyers of arms and other goods, by supporting India in the matter of a permanent seat in the UNSC. Ironically, today India can almost be certain of Moscow’s support among the powers enjoying veto in the Security Council. However, with raging turbulence than ever before on all fronts in the international arena, one can never be sure as to how many more decades India may have to wait for an opportune moment to enter the Security Council as a permanent member or if a UNSC permanent seat would remain an elusive dream for this nation for all times to come.

Blunder of the millennium for India : Second part

Nehru rejected the UNSC offer by the then US President Dwight David Eisenhower in 1955.



Very few people know that in 1955 the then US President Dwight David Eisenhower was caught in an unenviable situation of choosing between the People’s Republic of China under the Communist regime led by Mao Tse Tung and the then Formosa or the present Republic of China for a permanent seat at the UNSC. While Communist revolution was new and was beginning to find a firm footing in the Chinese mainland or the present People’s Republic of China, Washington’s blue-eyed boy Seng Kai Sek was compelled to find shelter in the island of Formosa after fleeing from the Chinese mainland. While the US was dead against Communist China becoming a permanent member of the UNSC, Eisenhower could clearly visualize that any offer made in favour of Formosa, then ruled by a fleeing dictator, would be vehemently opposed by other permanent members of the UNSC, more particularly by the then Communist USSR.


With the Cold War between the NATO and the Warsaw Pact countries being the order of the day in 1955 and India maintaining equidistance from both the blocks, perhaps President Eisenhower thought it prudent that India could fit into the permanent Asian seat in the UNSC, and accordingly the offer was made.





Ironically, around 1955, Prime Minister Jawaharlal Nehru was offered the disputed Chinese Permanent Security Council seat by the US to keep out the People’s Republic of China, and he also was sounded out by the USSR Prime Minister, Nikolai Bulganin, to allow China to take this seat while giving India a sixth permanent seat in the Security Council. Nehru rejected this offer in deference to China. History may have been different if this offer had been subjected to serious negotiations. Now, 54 years later, we are struggling for this seat.

the statements made by the two people at that time

NEHRU:Perhaps Bulganin(USSR president at that time) knows that some people in USA have suggested that India should replace China in the Security Council. This is to create trouble between us and China. We are, of course, wholly opposed to it. Further, we are opposed to pushing ourselves forward to occupy certain positions because that may itself create difficulties and India might itself become a subject to controversy. If India is to be admitted to the Security Council, it raises the question of the revision of the Charter of the U.N. We feel that this should not be done till the question of China’s admission and possibly of others is first solved. I feel that we should first concentrate on getting China admitted. What is Bulganin’s opinion about the revision of the Charter? In our opinion this does not seem to be an appropriate time for it.

Bulganin: We proposed the question of India’s membership of the Security Council to get your views, but agree that this is not the time for it and it will have to wait for the right moment later on. We also agree that things should be taken one by one.

Blunder of the millennium for India

It is an irony that India first rejected the UNSC(United Nations Security Council) seat and is now begging for it.
When the USA, UK and Soviet Union were willing to give UN Security Council's permanent membership to India in 1955, Nehru rejected the offer and suggested it should go to China.

"He (Jawaharlal Nehru) rejected the Soviet offer to propose India as the sixth permanent member of the Security Council and insisted that priority be given to China's admission to the United Nations"
S. Gopal: Jawaharlal Nehru;
Volume II; page 248.

From the Selected Works of Jawaharlal Nehru , Series II, Volume 29, Minutes of meeting with Soviet Leaders, Moscow ,22 June 1955, page 231, here are the minutes of the conversation between Jawaharlal Nehru and Soviet Premier Marshal Bulganin, as quoted in Claude Arpi's Born in Sin: The Panchsheel Agreement (Mittal Publications, Delhi, 2004, ISBN 81-7099-974-X):
'Bulganin: While we are discussing the general international situation and reducing tension, we propose suggesting at a later stage India's inclusion as the sixth member of the Security Council.
Nehru: Perhaps Bulganin knows that some people in the USA have suggested that India should replace China in the Security Council. This is to create trouble between us and China. We are, of course, wholly opposed to it. Further, we are opposed to pushing ourselves forward to occupy certain positions because that may itself create difficulties and India might itself become a subject of controversy. If India is to be admitted to the Security Council it raises the question of the revision of the Charter of the UN. We feel that this should not be done till the question of China's admission and possibly of others is first solved. I feel that we should first concentrate on getting China admitted.'
Those were the halcyon days of Hindi-Chini-bhai-bhai. To paraphrase Jyoti Basu, in hindsight, this was a 'historic blunder'. India has wasted incredible amounts of energy trying to rectify this blunder and get itself into the Security Council. But it's quite apparent that if India ever gets a seat it will be a worthless seat. It reminds me of Woody Allen's] observation that he'd never want to be a member of any club that would actually admit him.
Again, going back to the NPT as well as the Comprehensive Test Ban Treaty, it hasn't particularly hurt India that it has stayed outside these discriminatory treaties, despite much wagging of fingers by others. Similarly, certain neutral States have remained outside the UN: if I am not mistaken, Switzerland famously doesn't join anything, and is not a UN member. Just as Norway has refused to join the European Union.
India has been over-eager to join various motley crews, for instance the banana-republic kaffeeklatsch of the Non-Aligned Movement. Championing various causes for the 'Third World' may have given an ego-boost to certain Indians, but it won India no brownie points. For instance, a resolution condemning India for intervening in the genocide in the then-East Pakistan in 1971 won by a resounding 104 votes to 11. So much for NAM gratitude to India, a pious fiction believed only by South Block. Similarly ungrateful is the UN.
On top of all this is the enormous waste of the UN bureaucracy. By latching on to the generous mammaries of the UN welfare state, many consultants have become wealthy. Graham Hancock's damning 1989 expose, Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business, estimated that most of the $60 billion plus that comprised governmental, UN, and World Bank or IMF-type 'aid' was siphoned off. Mostly by elites in poor nations with their Swiss accounts, special interests (like agribusiness in donor countries, which dump their subsidised excess produce), but also, startlingly, the aid agencies' own personnel budgets, which waste as much as 80 per cent of the funds for lavish (first-class) travel, salaries, and perquisites. Similarly with the UN's extremely generous salaries and benefits.
Is there any good reason to keep on paying through the nose for a body that doesn't do India any good or give India any respect?
It's time for India to say, 'We're out of here!' if the UN continues to treat it shabbily. The return on investment to India of being in this failing body is not high; it is falling apart anyway under the weight of its own internal contradictions. Therefore, India should give the UN an ultimatum, and walk out if it is not satisfied.

How can India unleash its innovation and entrepreneurship potential?

The world has started accepting India as a major player in global economics. Analyst and

Industry veterans prophesize India to be a major power of the future. This is still a distant

dream because India has a humungous youth population of 300 million with just 100

million jobs in her pocket. The million dollar question is that which industry has got the

nerves to absorb a workforce of this scale. The only rational answer to this problem is

entrepreneurship which in itself comes with a new set of challenges.

DO WE HAVE INNOVATION AND ENTREPRENEURSHIP IN OUR BLOOD?

Globally India is conceived as a country with aversion to innovation and

entrepreneurship. The condition aggravates with the fact that we traditionally have had a

miniscule amount of investments in our R&D facilities. In the year 2007-08, we had only

0.93% of GNP being spent on R&D with the lion’s share going into strategic (military)

development. This can be further substantiated by the fact that on one hand the R&D

expenditure of all Indian industries taken together is less than that of a Single Japanese

company - Sony while on the other hand, 12% of the world’s total R&D expenditure in

2005 was done by China.

A comforting fact is that Indians have a tendency of self-employment which was revealed

in the 62nd round of NSSO’s report on employment showing a national average of 254

per 1000.

A quick glance at history enforces the thought that even Indians are adept entrepreneurs.

Karsanbhai’s Nirma, Munjal’s hero, Iyengar’s TVS group, Dhirubhai’s reliance, Kiran

Shaw’s Biocon, Bharti’s Airtel are few examples out of the inexhaustible list of Indians

who have carved a niche in the golden temple of fame.

UNLEASHING THE LATENT POTENTIAL

Opportunities Galore

Advantage India: The Demographic Dividend Way

This colossal population of over 1.15 billion not only poses huge challenges for the

country but at the same time opens the golden door of opportunity. A third of India's

population was below 15 years of age in 2000 and close to 20 per cent was in the 15-24

age group. It is expected that in 2020, the average Indian will be only 29 years old,

compared with 37 in China and the US and 48 in Japan. This ensures that India in no way

can fall short of manpower in the next few decades and this can sustain India’s growth

story in the long run.

Unsaturated Indian Markets

World over companies are eyeing Indian markets because of high domestic demand and a

robust growth supplementing it. This gives an opportunity to entrepreneurs for exploring

the latent needs of the Indian customers. Launch of Kinetic scooters at the time when no

Indian would have ever imagined a non-steel, self-start, gearless scooter, companies such

as Hi Design rubbing shoulders with global majors like Gucci and Prada are few

examples to learn from.

World Is Equally Flat For “Everyone”

Over and over again the issue of dumping by foreign companies comes up, but crying

wolf is not the solution. With umpteen bilateral and multilateral agreements in place,

along with the opening up of economies, it is a shot in the arm for entrepreneurs’ world

over.

Indian “Baniya” Is Alive And Kicking

According to a McKinsey report, Indian families are already saving too much to support

small businesses directly. Comparing India with South Korea in 2005, both had an almost

identical national-savings-to-GDP ratio of about 33 percent. Yet, in Korea's case,

households accounted for just a fifth of the overall rate, compared with 69 percent in

India. Gross domestic savings in the year ending March 31, 2008 were almost 35 percent

of GDP. That is almost 10 percentage points higher than in 2003. Add a small amount of

capital absorbed through a current-account deficit, estimated to be less than 2 percent of

GDP, and India has enough fuel for an economic growth of 8-9 percent. With more

productive use of capital, even 10 percent is feasible. These savings under expert

guidance and mentorship can work wonders for aspiring and budding entrepreneurs.

Global Downturn: Not For India – Time To Explore New Avenues

India is making headlines due to its partial immunity from the global meltdown. It is true

that although there is slowdown in a few sectors, majority of the industries have shown a

promising profit which is remarkable. Layoffs and cost cutting is a global phenomenon

but India is largely unaffected. A report by Hewitt states that over 60% of the companies

are still hiring and 9 out of 10 companies are still promoting.

There is a silver lining to every cloud, is as true as ever. Globally Indians are being sent

back due to lack of employment opportunities but the catch is that these Indians are

flushed with funds and have valuable experience. This is a perfect mix to start new

ventures. There is an abundance of skilled and experienced employees in the market

which can be a great asset for any new company. “Recession can lead to Indian

progression”, is the verdict.

Challenges Await the Entrepreneurship Bandwagon: Blueprint for Achieving Excellence

The Indian Curse Of “Babudom”

The world “Doing business report 2009” published by World Bank and International

Finance Corporation ranks India at 122nd out of 181 countries whereas even countries

like Pakistan stand at 77th. The sorry story of bureaucracy and red-tapism still haunt the

Indian businessmen.

“Single Window Clearance” can act as a booster for novice entrepreneurs. Implementing

such process in itself is a herculean task for the government as this practice has been

nurtured by the bureaucrats for decades. However, this is the only way out if we want to

progress.

Credit Crunch Coming Home: Promoting Alternate Sources Of Finance

The global downturn has led to drying up of funds through stock market and International

sources. The situation is further aggravated by the dollar outflow and vigorous efforts by

the Reserve Bank of India to defend the rupee by buying out dollars (Forex reserves fell

by approximately $5.8 billion in just two weeks of early September).

We have few organizations that have come to the rescue such as Indian Venture capital

association (partnering with Thompson, Tie, Indian Angel network etc.), NEXUS India,

Sequoia India etc. Government has to participate actively in the initiative by promoting

cooperatives and banks for providing credits.

Vicious Organizational Inefficiencies: What About Corporate Mentoring?

Indian firms are well known for their inefficient processes. Upgrading to advanced

technology to compete in the global arena is imperative. An eye opener can be the Indian

cement industry which is outmoded and highly inefficient as India’s per capita production

of 115 kilograms per year lags the world average of over 250 kilograms and China’s

production of more than 450 kilograms per person.

A viable but unconventional way could be mentoring by successful corporate and MNC’s

who have already proved their mettle in the global arena. They are people who have

proved their business acumen and they would definitely look for their benefit in this also.

Giving redeemable Corporate Credits by the Indian government can be the way out.

Companies would also benefit by promoting their brands through such initiatives.

Labor, Labor Everywhere, Not A Skill To Employ

There are more than 5000 Industrial Training Institutes (ITI) in India. However, the

quality of training is rather uneven. These ITIs produce 700,000 technicians each year.

Improving their skill level would be a very powerful channel of advancing India’s

technical/manufacturing capabilities. India is unable to compete against countries like

China in manufacturing world class products because of shortage of skilled technicians.

The institutes have bottlenecks like poor infrastructure, outdated curriculum, less

qualified instructors and limited interaction with the industry.

Skilled labor can be a huge advantage for entrepreneurs to be competitive. These

entrepreneurs are generally not in a position to train employees and then use them as it is

a huge cost and a deterrent for their growth.

We have world class educational institutions such as the IIM’s, IIT’s etc. The question is

that can we progress with a weak foundation? There are companies that train their own

workforce and if these companies join hands, with government’s support and guidance

from successful educational institutions, they can reach new acme of success.

Infrastructure, The Gordian Knot

India’s incessant infrastructural woes are yet another roadblock on the path to success.

Overstressed power grids, erratic power supply, shoddy roads acute water shortage etc

has severely impaired the growth of our country.

We can at least simulate if not emulate various other nations who have world class

infrastructure. We bemoan about paucity of resources but even some elementary

mathematics can answer this. According to a conservative estimate about Rs 1.23 crore a

day to run Parliament and during the Budget session, 47 hours were lost in the Lok

Sabha. Another 40 hours were lost in the Rajya Sabha which adds up to about Rs 17.61

crore down the drain. This amount is good enough to finance 4-5 small businesses and

who knows if they would have turned into another Reliance which contributes

approximately 3% to India’s GDP. The crux lies in optimization of resources.

Fear Is In The Air, Instilling Confidence Is The Key

With industrial goliaths being wiped out due to the global turmoil, an aura of fear has

crept in. People are worried due to uncertainty in the markets. It is time when the

government should give a fillip to the plans of aspiring entrepreneurs by incentivizing

their plans, giving better insurance schemes and cheaper credit.

The Cardinal Rule: Promoting New Ventures While Fostering Our SME’s

A small seed is tomorrow’s big tree. Even companies like Infosys, Reliance, Oberoi

Hotels etc had a modest start. It’s a well accepted fact that SME play a vital role in any

country’s growth. The contribution of SMEs to GDP in 2003 ranged from 60.0 percent in

China, 57.0 percent in Germany and 55.3 percent in Japan whereas, as per Assocham’s

report India is still slogging around 17% and trying to reach 25% by 2012. Continuous

support for technological upgradation, credit availability and export promotion by the

government can be a great support. IIMs and IITs have started the concept of incubation

where new companies are promoted within their premises (Silicon Valley, similarly,

promoted by Stanford University). This idea could be implemented on a larger scale

along with Industrial associations.

Developing of self-help groups (Cluster development) by NGO’s like SEWA, BASIX etc

has initiated a mass movement of self employment through microfinance. There are

organizations like Shri Mahila Grah Udyog which started off with a borrowed sum of Rs.

80 and has a turnover of Rs. 470 Crores which includes Rs. 24 Crores of Exports. This

showcases the potential of microfinance.

Glorifying The Corporate Tycoons

Indians have succumbed to the Nehruvian ideologies that profits are bad and

entrepreneurs can’t be leaders. For decades students have been taught of politicians and

freedom fighters as leaders but why can’t entrepreneurs like M S Oberoi, Ambani,

Narayanmurthy or for that matter Steve Jobs and Warren Buffett serve as ideals for

juveniles.

FINALLY, WE HAVE MILES TO GO BEFORE WE SLEEP…

It is apparent that India has a long way to go before making a mark on the world map as a

developed and prosperous nation. The dream can be realized by improving the quality of

life of its masses which can only be done by generating employment for them. The

seemingly insatiable demand for jobs can only be met by promoting entrepreneurial

activities by giving the right platform to entrepreneurs with the help of organizations such

as NEN, The Indus Entrepreneurs etc. It is pretty evident that Indians have launched new

ventures with flair in the past and they still possess the fire. Opportunities are in

abundance and the country is plush with resources.

The formidable challenge lies in optimizing resources and overcoming the hurdles to not

only join the league of successful and developed nations but rather set an example for

other developing nations.