WALL STREET JOURNAL
Tuesday, April 19, 2005

The Courtship of Mother India
GEORGE MELLOAN

Chinese Premier Wen Jiabao, well-tailored, charming and eager to please, paid what some are calling a historic visit to India last week. The two demographic titans had been scowling at each other across a 2,200-mile disputed border for at least a half century, and fought a small border war in 1962. But last week's meeting was pure sweetness and light, with Mr. Wen and Indian Premier Manmohan Singh agreeing to a "strategic partnership for peace and prosperity."

It's wonderful what a few good economic policies can accomplish. Now that both countries are getting richer, their common slogan is, "make money, not war." China is sucking in over $50 billion in foreign direct investment a year, fueling an annual economic growth rate in excess of 9%. India, although far less attractive to foreign investors, is nonetheless managing over 6% growth and has lately become the new international darling, admired not only for its economic potential but also for its role as an increasingly important player in Asia's geopolitics.

George W. Bush understood this early on and has intensified the courtship of India this year. Secretary of State Condoleezza Rice, on her recent 17,000-mile journey to visit Asian capitals, focused her considerable charms especially on the Indians. The U.S. she said, wants a strategic relationship with India. Last Thursday in the Oval Office, Mr. Bush told the Indian external affairs minister, Natwar Singh, that he wants to take relations to "a much higher level" during his second term and is excited about his planned trip to India late this year or in early 2006.

That means that the U.S. is offering India some of its most sophisticated military technology. Included are F-16 and possibly F-18 fighter planes, high-tech command-and-control systems, and possibly technology transfers to enable the Indians to produce more of their own materiel. The Patriot missile defense system is being offered.

All this ties in nicely with the plans of the Indian military to modernize, getting rid of the obsolete MiG-21 and MiG-23 fighter planes, for example, and ancient tanks. The U.S. is also proposing joint military exercises, even at brigade level where some 4,000 troops from both sides would take the field. An expansion of joint air force and naval maneuvers is being planned along with greater opportunities for Indian officers to learn their trade in U.S. military colleges.

U.S. Ambassador David Mulford said that the U.S. wanted to help India with its ambitions to become a "global power" this century. Since India already has a large military, modernization would make it a formidable presence in Asia. The sanctions imposed by the U.S. in 1998 when India tested its first nuclear bomb are now a policy relic.

This torrid affair between the two democracies is obviously what attracted the attention of Beijing. China is jealous of America's influence in Asia and fearful that the U.S. seeks to weaken China's relations with its Asian neighbors. That's no doubt why Mr. Wen followed up Ms. Rice's goodwill tour a week later to say that China has some things to offer India as well, including greater trade and a possible border settlement.

Getting the border problem sorted out still has a long way to go, but at least it was a friendly gesture. China specifically acknowledged, for what it's worth, that Sikkim state on the border belongs to India. Mr. Wen offered support for India's bid to win a permanent seat on the United Nations Security Council.

Well, there seems little reason to complain about all this bonhomie. Even India and Pakistan are on better terms, despite some carping on either side about the evenhanded U.S. offer of F-16s to both countries. The two sides have established a bus link between their respective sectors of Kashmir and Pakistan's President Pervez Musharraf and Premier Singh are willing to sit down together. If Mr. Bush's proactive diplomacy has created a virtuous circle of goodwill in Asia, what's to complain about?

Russia was pleased with the Delhi-Beijing reconciliation, but not for the most positive of reasons. Moscow's government mouthpiece, Novosti news agency, commented on the Wen-Singh pact that "India-China rapprochement is a major goal of Russia's foreign policy, and the three countries have many things to do together." Russia no doubt thinks that the meeting furthered its long-standing ambition of forming a tripartite coalition of giants, a kind of Russia-India-China axis that could jointly swing more weight in world affairs than any one could alone. The frictions between China and India have been an obstacle to that plan.

The Russians are dreaming. It's not clear that either China or India wants to cast its lot in anything other than a superficial sense with a Russia that seems to be growing more and more estranged from the Western democracies. Even if that were not the case, both India and China are fiercely independent states, with ancient cultures that distinguish them from Russia and each other.

But back to the point of what economic reform can accomplish. India slumbered for 40 years in the swamps of Soviet-inspired central planning, hiding its inefficiency and poverty behind barriers to imports and investments. But in the late 1980s it began to wake up to modern realities. The Soviet experiment was collapsing. China, which had initially followed the Soviet path as well, had made a sudden course change a decade earlier. Deng Xiaoping in 1978 had opened the country up to trade and foreign investment. And what do you know? It was getting richer.

So in 1991, during a severe economic crisis, India under the leadership of Premier Narasimha Rao launched its own reforms. It began to abandon Nehruvian "industrial policy," with which the government attempted to manage investment, and began to open the economy up, á la China. It hasn't moved as rapidly as China, but at least it finally is on the right track.

That's why Washington now sees it as an attractive partner in the U.S. effort to spread freedom and prosperity around the world. As Humphrey Bogart said in "Casablanca," this could be the beginning of a beautiful friendship.