Friday, April 17, 2015

"La reconnaissance est la memoire du coeur"

“Gratitude is memory of heart”. Mr Modi in his recent visit to France has created many memories that shall remain in the hearts of French! Overwhelmed by warmth given by France, he tried to pay back the gratitude by striking the Rafale deal! This deal will surely create more memories for India in future for which the country may not be that grateful to Mr. Prime Minister!

The overwhelming gesture which was part of State courtesy, Mr. Modi took it as a personal victory.  The last Obama visit has definitely not paid him well, despite all his  PR. The happy heart of Mr Prime Minister eagerly announced the Rafale deal, reciprocating the warmth through crossing the cheque of state exchequer.

It was indeed a win-win situation for France. The visit to France, whose GDP  per capita is $42000 could get a market in a poor country like India whose GDP per capita is $6000. Is it a not a great news! This deal means new jobs, new market and new customer. (Rafale’s only sale in recent times has been to Egyptian military dictator Abdel Fattah al-Sisi).

A look in Rafale’s past suggests that to date, the Rafale has lost export opportunities  with many countries including  Algeria (SU-30MKA – Rafale a long shot), Brazil (JAS-39E/F Gripen NG – Rafale the initial favorite), Greece (Eurofighter, then F-16), Morocco (F-16C/D – Rafale the favorite), The Netherlands (F-35A), Norway (F-5A), Oman (Eurofighter – Rafale a long shot), Saudi Arabia (Eurofighter),Singapore (F-15SG), South Korea (F-5K, Rafale won but politics reversed the pick), Switzerland(JAS-39E Gripen NG), and the UAE (F-16E/F, but could win next competition).  The main concern that hit the Rafale hard until 2011 was its questionable precision ground attack capabilities for Rafale F1-F2s, coupled with limited integration beyond French weapons. Ground attack capabilities have been fixed, but the Rafale’s EUR 100+ million price tag leaves it still questionable at other fronts.

Success of Rafale deal is not due to economic or efficiency  considerations but a lot to do with politics India has aided Dassault, which despite it’s all positive projection in the global fighter market, lacked foreign orders. The loss of business would have choked expected investments.
Now, keeping its production line and supply chain throbbing at an economically-profiatble rate are sufficiently valuable achievements to push immediate profits into the sidelines. if India buys an optional second batch of the combat aircrafts, it will generate gigantic profits.

Is Rafale Deal really a mistake?  The deal, done through direct purchase by the government, side lining procedure, (which same government made a lot of noise about when was in opposition), may create more scope for political and personal consideration. Many argue that such direct procurement gives the government, a free hand to procure best with least interference. Only time can prove this right.

India is aiming at becoming a world power and such deals will only propel it in right direction. However, India’s purchase of fighter jets may be a means to achieve greater hard power, but in the process, as domestic social conditions of misery and injustice continue to fester, it is losing soft power."Forbes on India's Rafale Deal.  Forbes notes that "A country that has 44% of its children under five suffering from malnutrition, with one-third of the total population of hungry children can perhaps become a world power but certainly not a world role model.

Choice of Rafale seems to be an expensive choice. It may be seen not as an imminent need for India, especially when social stakes are high.  Concern with Rafale is not just its préciosité but also the efficiency. Many rich countries have also not gone for Rafale.

In recent times, inequality has only increased in India.   India needs more social laws like Food security Act an MNREGA. These laws should not be seen as a social burden but a nation’s compulsion for it has to guarantee its citizen basic needs. Government spending on defense should be within the allocated budget and government needs to ensure that it is utilized well within the budget. Also, when there is general consensus on bringing more transparency, procedure should not be compromised. Rather, government should find ways to get through the deal keeping in mind the procedural requirements.   When the contracting party is India, it is not personal choice but national interest that should matters.

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