Some Economics with Stefen.

Well this is one of the happiest day. There were many questions in my mind about the economics and I got the answers today. There still remains something to be studied but the stefen's argument has given me a way to look.

I:

Stephen, I found your claims very interesting and it has added a lot in me. I have some doubts here:

1. social cause - in any economy there are some basic requirements, the basic infrastructure like roads, education, health, etc. Do you mean to privatise everything possible? Privatisation may bring efficiency in the organisations but what about the affordability? Do you think no sector of the economy is left out? If a sector is left out and is out of the economy and if he doesnt get any government assistance, will he not turn out to be a social criminal?

2. When the economy is rising like in the developing countries, i think govt needs to invest heavily in infrastructure as per the economic needs while the private investors will invest only in the segments where there is high profitability. By this some of the segments are leftout and this will be the cause of the economic backlash in the future. What do u think on this?

3. Americans are heavy spenders and so it is also the largest market of the world. Many economists say that most of the Asian economies are running only by US consumptions. US has given more power to the private then any other country. It has deregulated the labor market but what about the fiscal deficit? Do you think the way US economy is going is safe enough for others to follow - less govt spending and more private ownerships? How do u see the US economy when many of its pillars are dying .... enron is out, GM and Ford are loosing? How do u analyse this situation?

4. Comparing India and China, China has built its infrastructure more and the govt spending is very high w.r.t the indians and so is the economy. China is growing faster than India, and the only reason is infrastructure as the govt in india is democratic and anyone want to come to India then to China provided they provide equal oppertunity. But the flow is seen the otherwise. The govt spending is strengthening the rural markets of China. comments on this plz.

5. Nepal govt had privatised most of its economy and it is the most capitalist country in the whole of South Asia but this resulted in social unrest, while the semi-socialist govts are slowing rising. dont u think a proper planning is necessary by the govt? One thing most of the countries while developing has been controlling their economy. the better the planning by the govt and more the govt spending the faster a country develop. Japan was most controlled market before opening its economy to the world. They had made huge investments with one of the highest tax rate in the world. Is this claim false??

I have seen by your comments that you follow that " the least governing govt is the best". But is this suatainable?

When a baby is born, if it is exposed to so much competition it will never get food and so will never grow. It needs protection till a certain stage of life when he can compete. So I think a optimal protection necessary for the new entrants in the market. Whats your view?

Stefen:

There are so many issues you raise. Let me try to keep the answer as simple as possible, mostly by referring you to other posts in this forum, e.g. the one on privatization.

The issue is not if investment is private or government, but if competition is legal. I wouldn't mind government as an agency, if it was just one actor among many and of course if government didn't finance its projects with tax revenue, which dissociates the payment from the actual demand and real cost.

Any infrastructure must be financed by the users. If users can't finance it, then who should? If there are "indirect benefits", the active users will charger their own costs (e.g. of road use for transportation of goods) to their customers through prices.
Every single infrastructure, including roads, railways, schools etc, were built privately in Europe and the US before the invention of the modern State, which is a very recent invention.

Things started getting worse, not better, when governments got involved. I highly recommend the book "The Myth of the Robber Barons", Burton W. Folsom, which documents wonderfully how an entirely privately operated railroad outperformed subsidized and then state run companies, to the point where government eliminated the annoying competitor through trumped-up anti-Trust charges.

Imagine that: government was running 80% or more of all the railroad services, but the tiny proportion that was run privately was supposed to "control" the market for railroad services and cause "unfair competition".

As a rule of thumb, any service operated by government costs 2 to 3x more than it would, if the exact same service was run through competitive enterprise. So the question becomes: can any society, especially a poor society, afford to waste so many resources? The answer is obviously NO.

The next question is: would private companies provide those services? The answer is YES. Why would government have to make laws to exclude competition, if no one wanted to compete? If government does not exclude private operators either directly or through excessive legal or financial requirements, then naturally, private companies will try to offer those services, as they expect them to be profitable.

The largest infrastructure project ever, the tunnel between England and France, was built with private resources. That is a very interesting example, as it turned out that there wasn’t really that much demand for it. The ferry services were quite good, though overpriced. What happened right away was that the new competition lowered the price of ferry tickets. Investors lost a lot of money, but the project was simply taken over by new investors, who were now operating at a lower cost. The initial investors had lost most of their capital, but that was their risk.
No one ever said that every infrastructure project is really useful and will be profitable. It is the risk of entrepreneurs to find profitable investments. Non-profitable ones represent a waste of resources and should be discontinued, if their cost cannot be lowered. Governments will finance such loosing projects at excessive cost way longer than any private business would.

Given that government operating costs are so much higher, they will even loose money on potentially profitable infrastructure, which is one of the many defects of loosing information via government interventionism and tax financing.

I don’t know enough about the situation in Nepal, except that government is very strong and cronyism is widespread. Hence I imagine that “privatization” really meant tax farming privileges handed over to people who are in favor with government. Tax farming is what brought on the French revolution. It has nothing to do with competitive enterprise.

As for China, what really drives their economic growth is the fact that they finally allowed people to keep most of the benefits of their private activity. It has nothing to do with government infrastructure, which would be built one way or another. As I understand, there is even a lot of excess infrastructure and useless, glamorous projects, instead of things that people would really need.

Extremely rapid growth is possible for countries that start low. They just need to copy what is already well known from elsewhere. When they approach the state of the art, growth will naturally slow down. The amazing thing is not that some countries grow rapidly, but that many others grow very slowly or not at all, which just demonstrates how many obstacles they must impose on all economic activities. They must use FORCE to stop people from acting in their own interest to remain so poor.

The most amazing thing is that people from more wealthy countries are lining up to invest in such poor countries, something that was entirely unavailable for people in Europe or the USA in the 19th century, because there were no foreign countries with great wealth and technology. They had no choice but to do it all by themselves. So what gives? The fact that there is very little protection for private property in poor countries, that political whims may change rapidly, that corruption is universal and finally, absurd nationalistic opposition.

Nationalism is particularly stupid. Think of Argentina: while some British companies were operating the Argentinean railroads, they ran perfectly well. But then, some idiot decided that they should be “nationalized” (he stole private property for his own benefit, garnering public support for the theft through emotional appeal). As a result, within a few years, those railroads stopped working. WHO owns a company is entirely unimportant to the consumer. The only thing that counts is that he can purchase some useful service at a low price.

India still has many roadblocks for foreign investment and so does China. The successes of China are currently so visible that the shortcomings are not given much thought, but they are quite real. If China grows faster than India, it simply means that India still has more bureaucratic hurdles, more corruption and less protection for private property.

The same is true for western countries: their comparative wealth is so great that they are assumed to have done everything right, when in fact they are far below the possible level of wealth they could have if they had not given in to Keynes and Socialism. Their wealth only seems great as compared to countries that really, really screwed up their economies.

The US are an incredible mix of a very free society with a very large and heavy government. The spirit in America is one of free enterprise and individual achievement, which is what creates all the very real wealth, while the government is often totally out of control. Fortunately, the total share of government in the US GDP is only about 29%, which goes a long way to explain their prosperity. More than the nature of any interventionism, it is the absolute share of GDP that is really important. In France, it is 65%, which explains why they have so many problems.

US spending is not the cause of US growth and their contribution to the world economy. Far more important is their very real productivity. Why should anyone want to sell to the US if they don’t expect to get anything in return? You don’t produce just for the benefit of US consumers, right?

Americans have a special trump: they benefited largely from the fact that a lot of foreigners are happy to hold US currency. Given the instability of most national currencies, the USD is still far more convenient. So Americans are able to buy tons of real goods in exchange for some pieces of paper, because these pieces of paper are of real value to their customers. Currency DOES have a value, if it is stable. The dollar is not, but it is still far more stable than most other currencies. The US supply a service to other people in the form of a universal currency system and they get a lot of consumer goods in exchange. Fair trade.

When some stupid Marxists propose to burn US dollar notes, I always wonder just how stupid they are: that is the greatest service they can render to Americans. If currency is burned, they will never have to deliver any good in exchange for it.

Even if foreigners did demand goods in exchange for their dollars, there wouldn’t be any shortage: the total wealth in the US in the form of land, buildings, companies and available services is immense, so people who sell to Americans do act rationally. The “trade deficit” is not a problem at all. We all run trade deficits. I for one buy a lot more from supermarkets than they buy from me, but that doesn’t bother either of us, because I earn income from other sources with which I am able to pay the supermarket.

“When a baby is born, if it is exposed to so much competition it will never get food and so will never grow.”

It is not really the baby that is competing, it’s his parents. And competition is exactly what allows the parents to buy food, health care and everything else cheaply. It is the lack of competition that produces poverty. Countries where children die of hunger know almost no competition at all. They do not participate in global trade. If they did, they wouldn’t be so poor. The more “protected” a country’s economy is, the poorer it is. Switzerland has almost no protectionism, except for agriculture. The only sector of the Swiss economy that is a complete failure is agriculture.

It’s amazing to see that when the market for cheese was finally deprived of protection and subsidies, it soared and started exporting like crazy. The producers simply didn’t have any alternative and so they started marketing their product, specialized in products where they had an edge and oh, surprise, they became profitable.

“ It needs protection till a certain stage of life when he can compete.”

A very bad analogy: companies are not children. A company is run by adult people who need to make rational decisions. Size is never a problem: small companies can be far more profitable than large ones.

“So I think a optimal protection necessary for the new entrants in the market”

The current justice minister of Switzerland, Christoph Blocher, is an entrepreneur. He got into politics as an act of self-defense against the increasing pressure on private business. He started his activity by taking over a tiny chemical company that was on the verge of bankruptcy. At great personal risk, he bought it and built it into one of the largest Swiss companies, with factories all over the EU and China. He went from zero wealth to 2 billion CHF.

His opinion on “protecting” small firms? “Any company that is not able to survive on its own should fail! There never should be any form of government protection or subsidies.” It is hard to survive when you run a small company, but its independent success is the only way to know if it is viable.


....................Thanks a lot Stefen. (Stefen is a Independent software from Switzerland, educating people on Economics is his hobby).

Formation of South Asian Union

Praveen:
South Asian/SAARC Union 6/7/2005 10:04 AM
We all know, not so long ago the entire South Asian region was the Indian sub-continent or what some call United India! History has changed all that and we have borders separating each of the countries in the region. Yet, nothing can change the fact that the countries in the region have many similarities and share a common ancient civilization.

Now, I know some of you might call me a dreamer for raising this topic since we have differences like territorial disputes, terrorism, insurgency, naxalism etc.

But, why not? If Europe with a much larger area and more countries with differences and facing many setbacks(like the recent referendum) can still keep its focus on the ultimate goal of a united europe, why not this region?

Why can't we have soft borders, free trade area, relaxed visa regime, open societies, common financial system and currency, shared goals at international forums like UN? All this should co-exist with an individual's national pride vis-a-vis his/her country in the region.

It's only then we will be able to foster communal harmony and be economically prosperous. It's only then the world will respect us. The potential for this region is tremendous because the talent and manpower in the region is unmatched compared to the rest of the world. The world won't see the real South Asia/SAARC until we get our house in order.

Let us all help the South Asian/SAARC region in returning to its glorious past of becoming a world leader again in all walks of life!

I:
yeh praveen u have rightly pointed out 6/7/2005 9:34 PM
i agree with praveen in all his points. SAARC has to come forward with the economic and defence integration if it wants to get a respectable position in the world economy or politics. india, the largest member may not also enjoy much power going unilaterally. the present growth has made india very optimistic but it should not be forgotten that Germany, France, Britain, Japan etc are not anything if seen singally .... their power is in collaboration and unity among their group menbers.
Free trade among the SAARC contries is a most now and for that india must take lead giving many benefits for other smaller nations as it is going to be the largest benefitter in the long run. Other countries must see what they are gaining nad must not cry for th larger benefit that india is getting. Lets build a prosperious and developed SAUTH ASIAN UNION.

Vishal:
Hi praveen and friends

This is really a valid point that has been brought up. Our governments needs to work in this regard.

But I have a serious reservation. While it is necessary that India should help other SAARC counties, India should not be taken for granted. Things like terrorism, infiltration and the recent attacks on BSF soldiers by BDR should not be allowed to go unchecked. It is necessary that other nations see India as a friend and not as a dumb person who will take whatever is thrown at it. We need to promote our interests first and then that of the subcontinent. We can only think of a united sub-continent if countries like Pakistan and Bangladesh give up their hatred and age-old grudges. You need two hands to clap. SAARC can become G-8 only if all the member countries are untied and share a common interest. We want more than words.

I:
India must lead 6/11/2005 2:48 AM
you are very true vishal that india has lots of challenges from pakistan and bangaladesh which these need to check to make good union but it must not be forgotten that even in nepal, bhutan and sri lanka there is sufficient anti-indian sentiment in the public. this is because of the short-sighted policy of the indian government and over-involvement policy it is adopting.

for any country to evolve it must take "pig policy" ... and this is the only way to become a superpower. china never involves in the internal matter of any sovereign countries for which it gets good public support. the situation is recently fely in nepal. the kings move is condemned by india and is taken as internal matter by china. by condemning india might have made good impression in the eyes of the global democrats and the nepalese politicians but the public and the intellectual circle of nepal dont welcome the indian step.
THESE MATTERS DONT MATTER MUCH IF THE POLITICAL WILL OF THE SEVEN MEMBERS COME TOGETHER. IF FRANCE AND GERMANY, PORTUGAL AND BRITAIN, CAN COME TOGETHER THEN WHY NOT INDIA AND PAKISTAN.
with other countries other than pakistan there was never any problem. the only problem is the growing muslim extrimism in bangaladesh and hindu extremism in india. most of the problems here are not solved because the top order never wanted it to be solved.
The political will must come and india must lead.

Praveen:
I knew one of my Indian friends would mention these issues... anyway, other nations in the region must take into account India's concerns my friend pointed out here.

Please take back your comment vis-a-vis China after what they did in Tibet, the threats they give to Taiwan regularly, occupying north eastern areas of Kashmir from India and lastly, their hidden but long-term goal of de-stabilizing the north-eastern areas of India.

As for extremism, it should be condemned. Islamic extremism has affected just about every part of the region and the world and has been justified on the grounds that it is in the name of religion, which is totally baseless. Nothing can justify killing innocent civilians.

Hindu extremism in whatever form it exists in India is mainly against the so-called Jehadis and the Evangelist forces. They have been grossly misunderstood by the public and have been demonised by the pseudo-secular forces saying they are anti-minority, which I think is going a bit too far. However, they also need to reform in certain areas. Anyway, I don't think they will create a problem because organisations like RSS believe in Akhand Bharat... which is stretching a bit as unifying entire South Asia as one country is no longer possible, but a South Asian Union which is very close to this is possible, if people shed away old mindsets and address the problems and concerns of each country in the region.

I:
yes praveen u are right. u have rightly pointed out about the matters of extremism. in reality i also think that what u said is correct but one thing, is RSS really good for india and its cause is justified. i dont agree, we are hindus so we think from our side and it looks pretty good but any group that is not fair to all and is lead by some religious belief is not good for the country, they are the causes of social violence; RSS may be doing good by balancing the muslim extremism and the christian invasion but that maynot be justified fully.

there is a interesting experience i had while in college. one of my friend from Maharastra and i were going through the news once. there was a news that BBC is banned in nepal followed by the students protests regarding a panel discussion topic in BBC ....... should india and nepal be unified in the basis of cultural similarity.
he said to me, "if u look at the base of everything dont u think that nepal must be a part of india. more than the gorkha population in nepal, there are gorkhas in india and we share many things in common which makes sense of making a unified territory."
i said, " ok, then lets annex india to nepal. india will be a part of nepal and u will be then nepali."
he didnt like this statement and said, " ha ha what rubbish are u talking, india to come inside nepal??" ...

praveen if u look at joining the territories the result is same ... whether nepal annex with india or india annex with nepal, but our national sentiments dont allow that. country is made up of peoples and not of territories, and our goal must be development of societies not territories but this is hardly felt.

while there can be no loosing of sovereignity so building Akhand Bharat will not be digestable to anyone other than the indians. practical thoughts must come form everyone.

Praveen:
My friend, I don't support each and every thing RSS does. In my earlier post I had mentioned that there are some areas where they need to reform as well. I still maintain the view that they have been unfairly demonised by pseudo-secular parties, politicians and the media ever since Independence.

People forget the fact that they have done lots of social work especially in rural areas, they have done so much during natural disasters. For example, after the recent tsunami, they went and provided relief to everyone in Tamil Nadu, Kerala etc without even looking at whether a person is hindu, muslim, christian etc. But the evangelist forces were busy asking people to be converted to christianity in order to be provided relief. Where were the so-called Islamic extremists then? Parties like Congress allow the Muslim league to get away with burning of Indian flag in public when it is a punishable act by Indian Constitution.

About Akhand Bharat, I already mentioned in the first and previous post that it's stretching a bit as most countries in the region have now become separate nations for some time and so, re-unification into one indian nation is impossible... but, south asian union is possible and needed in the long run.

I:
i admit it.

now lets dicuss on what we can do to have a good unified economic block.

Praveen:
Yes, it's about time... we were shifting a bit from the topic of discussion.

Most important thing in a unified economic block is political will and stability in the region. The previously elected NDA govt in India first suggested this and I think the current govt and all future govts in India will have this agenda whenever annual SAARC conferences are held. So, in terms of the political will, ball is in all other nations' court.

I agree some of the least developed nations in the region will be fearing an onslaught of Indian products in the market... it's the same fear Pakistan has too. For all this, I ask all of 'em to follow the India-Sri Lanka example. Sri Lanka and India had strained relations not so long ago, but look at the situation now... bilateral trade is booming, many Indian companies are present there and employment scenario has improved. With mutual economic linkages, all the issues and concerns will be addressed with pragmatism by nations in the region because there will be something to lose for the nations involved.

Pakistan should stop the attitude of Kashmir first, trade later. They don't know it's hurting 'em in the long run. They can get cheaper goods from India... instead, they chose to pay the extra buck by getting it from western nations for keeping their so-called pride of not buying anything from an enemy as some of their officials point out.

I suggest all the nations in the region to take bolder steps and develop a vision for a more prosperous and stable South Asia. India has already agreed to take into account concerns of some of the least developed nations by giving them more time and a level playing field when entering into the free trade agreement. They also have to take into account India's concerns as pointed out earlier.

As for Nepal, now the King should stay to get rid of the Maoist insurgency. But, in the long run... democracy(open society) has to be there not only in Nepal but in all other countries in the region.

I:
Nepal has a problem 6/13/2005 5:37 AM
Along with having free trade with the SAARC countries Nepal must have free trade with China too else it wont have an advantage in increasing its foreign investments. being in the centre india will get most of it. for Nepal without free trade with China the economy will be only one sided and this wont be good in the long run.

India has made its economic movement multilateral by doing bilateral FTA's with Singapore, Thailand and talks are going to have with Australlia. india also has preferential agreements with many other countries including Iran, Afganistan, japan and others. In this context SAFTA will give a good advantage for the indian companies to grow and compete with MNCs and also india will attract more FDIs from foreign firms looking the whole SAARC markets.

India has been seen openly against bilateral FTA between nepal and china fearing the invasion of chinese goods in india. I think india has to allow the smaller neighbors to grow and not only support development in words and just interfare in their internal matters.

Praveen:
/14/2005 8:26 PM
You have a valid point there regarding multilateralism. India's cultural linkages with Nepal are much more than any other nation in the SAARC. I agree that it still doesn't justify the interference into internal matters. The present Indian foreign minister despite all his experience is making a lot of mistakes, with Nepal being the biggest of 'em all.

I think Chinese investment must be promoted by India and I think it will, as relations between India and China continue to improve. About bilateral trade like FTA and all, it is a different thing altogether. After the USA-China trade deficit, the entire world wants to see the end of the artificial pegging of yuan in order to stop the unfair upsurge of Chinese exports.

I suggest Nepal only does a PTA with China for the time being like India or else the situation will be worse than USA-China. India doing a PTA with China has benefitted and has a decent trade surplus with China thanks especially to the huge Chinese steel imports from India. So, I am all for Chinese investment in Nepal, but be a bit cautious while dealing with a bilateral trade agreement.

Ultimately though, if investment, whether Indian or Chinese, has to come into Nepal, the insurgency has to reduce and a stable government has to be present at the centre.

I:
i salute u pravin ... i was waiting for ur reply for long.

SAARC doesnot have just the Kashmir problem and the trade problems.

Regarding Bhutanese refugee problem also there are some misunderstandings. almost all the bhutanese refugees and the nepalese believe that the whole crises of ethnic cleansening in bhutan has been done with the indian help. most of the nepalese speaking people driven away from bhutan have gone to nepal via the indian soil as there is no direct land link between bhutan and nepal. I have also heard that the trucks were provided by the Assam and the Bengal govt for carrying the people. but when it comes to the solution india has always commented this issue as the bilateral issue inspite of its involvement time and again in making it complex. Everybody has clear view that india has to play the last ball to solve the problem but in order to please the bhutanese monarchy india has always been away. the largest democracy of the world has been helping Srilanka and Bhutan for ethnic cleasing. This is a black mark india is having and the issue cannot be neglected but it has to be rectified.

(to be contd.)

Indian stand in Iran Nuclear Issue.(III)

US has already chooses India to make a strong line US-Isreal-India-Japan line to control the whole world. It may benefit India in many terms but the path wont be so simple that it looks. When India is below a trillion $ country US may want India to develop but getting countries closer as enemies will have a ever-lasting influence. Look Cuba for US. India now has an option of choosing US-Japan alliance or Chino-Russian alliance. Chino-Russian alliance seems to fit the indian interest much more than the US-Japan alliance as Russia is more clsoer to India then to China. China being the strongest of the three, will lead but Indo-Russian interest will always be taken care of. But the US-Japan alliance is a bit risky one. They can drop India at any point they like as the importance of India to them is minimal. The most important thing is in case of any forthcoming clash India will be the biggest loser as US is far and whatever happens most happens to India. But if the Russia-China-India forms a strong coalition then it will directly become a second pole in the world making the world multipolar. Any clash taking place will not damage India much as Pakistan and other US allies in these regions are more loyal to China, which is seen by latest actions.
The race starts from Iran. Because after Iran issue US will make India do manyn other things in its favor for the nuclear deal to pass from the congress. Then India will reach much farther and coming back may not be possible. Saddham once took the US side and end up in the mess taking whole into a battlefield. AlSo, with the second largest muslim population India going against Iran may not help India in any way, but may lead to internal problems as well.

The sugesstion not to bring Indian muslim in the debate is ruthless. Its always the interest of the peeple that a country considers while making any change in foreign policy. Like US support for Isreal. India has paid heavily in supporting Sri Lankan govt against LTTE despite having huge Tamil population. UK and Spain has paid for their support of Iraq war.

So this step must be taken carefully because the future steps must go along with it. In retrieving back neither of two sides will be gained. And going forward may be very difficult for a diversified country like India. The best way is to abstain like Rissia, China and Pakistan did if India doesnot like to upset US. Supporting the referendum is just the poor governance.

Indian stand in Iran Nuclear Issue.(II)

India must support Iran to defend its own position in the world scenerio.
1. Unlike Taliban, the present govt of Iran is a elected one. It has broad public support, and is committed to democratic rule . When Isreal talkes freely considering attack on the Iranian Nuclear sites like it did in the Iraq, then its normal for the Iran to comment on the destruction of Isreal. When Musharaf said of using all the weapons including nuclear if the kargil war goes to the full fledge war, I remember Indian defence chief talking of the destruction of Pakistan within a week of the first use of its nuclear missile.

2. India and its neighbors, Bhutan, Nepal and Bangladesh are very rich in water resources as well. This can be used as the ultimate cource of electricity, but the petro fuel necessity if always there, and its increasing. US congress has not passed the bill yet and is testing the indians.

3. I ran has never gone against the Indian candidature as well, while US has.

4. Iran has been a good indian ally both as a liable trade partner and an ally in international trade negotiations. The interest of the two countries match while the needs and the interest of US adn India do not match. The alliance may not move smoothly ahead.

5. There is deal between a lion and a goat. We should always focus on the deal and partnerchip with the equal partners where the pressure is minimum and can act on the sole aim of national interest. The US is the hyperpower of the world and miving with it is not going to be easy.

6. US is considering the possibility of using India against the China-Russia alliance. This will be dangerous for India. When the world is expecting that by 2040 the world will have different world top ten economies .... India, Brazil, Russia, China climbing and also there is possibility for Pakistan, South Africa, South Korea ..etc climbing to the spots after the top ten replacing the traditional power economies. This has to taken in mind. If Iran withstands the present pressures and escapes it will itself turn making into the big league.
delete

7. The Iran's contribution is same what the countries like Nepal, Bhutan, Bangladesh, Sri Lanka is doing for India and its consuming. Iran is a huge market for Indian companies and India is enjoying a trade surplus with Iran.

8. Why US always supports Isreal?? Its simply because it has huge jew population man. The isreal lobby there is strong and it may turn the political scenerio else. It not the matter of taking anyone's side, it about why hurting someone. India believes that Iran has to be within the IAEA and should work there and it must not be referred to UNSC, then why vote against Iran. Everyone knows that the power politics is playing the final role and Iran has not done any wrong. As a sovereign nation it has its right to have nuclear power, but west believes that it is aimed towwards them. This is ruthless.

9. yeh india and other NAM countries were the USSR allies. India even helped russia with food supplies at the time of Cold war. The reason was the return for the help in the survival of India. When US once was considering invasion of India it was Russia who sent one of its 3 nuclear submarine to India. This makes India and Russia the only countries sharing the nuclear weapon. India is now a potential ally of Russia and believes in Russia that Russia has gained in many years of support. Iran may have some for the Indians but its loosing that. Many weaker countries are watching India closely and if India goes against Iran it will loose the confidence of thoese countries as well.

10. Iran is one of the most responsible country in the world as is India, Brazil, South Africa, having clean history. The focus of India and Iran is both in economy and defence but the other two sole focus is on economy. Iran is much like India and India needs to support it to support its own cause. India must work hard to ensure its peaceful rise as is China doing, and develop neither like Isreal nor like Japan or Germany, but rather like US itself. A completely peaceful rise.

Indian stand in Iran Nuclear Issue.

The message is clear Manmohan Singh govt is a weak govt which could not take on the US pressure and end up voting against Iran. The countries like Pakistan and Isreal are more prone to use the Nuclear weapon than Iran and Pakistan is more active in producing and financing terrorist activities across the world, says the same western analysts. The countries like North Korea and Iran has never been aggressive against any country. Their history is as clear as that of Indians, and most importantly Iran is a Shia country where the terrorism across the world is headed by the sunni segments. The sunni segments also has the cause for their fight due to the Palestine cause, and now the attack on Iraq.

The message is clear to the world that India is getting away from its neutral foreigh policy towards the US alliance. It is same like India breaking the G20 alliance for its benefit in WTO fight. Last some years has been very active in achiving its national interest but its loosing its key friends. Like Brazil, South Africa, Malaysia and others of the NAM moment in WTO. Now it has lost Iran. The US alliance may be dangerous for India in future being second Isreal in the world map surrounded by the enemies. China, Russia, Malaysia, Cuba,Venezuela etc could resist the US pressure but India could not inspite of the history of being neutral for always. India was one of the most respected country in the NAM moment and despite its internal corrupt politics India has one of the most rebust foreign policy, but now India has lost it.

The vote against Iran and the speech related to the vote saying "India voted to get some more time for Iran. We know that Iran is committed to the IAEA and we respect its rights for the Nuclear Technology for energy." This was the saying of the India's Foreign minister after voting in favour of referendum referring Iran to the Security council. The left parties are right this time but noone listens to them. May India come back and not lose Iran for always.

1. India has forgotton the history of all those cases where US supproted the country in many ways in the begenning and after turned towards it. Iraq is an simple example.

2. Iran is a country which had once voiced that in case of Indo-Pak war it would take the Indian side.

3. Iran is dominantly a shia country and India has a huge shia population. Going against Iran may be seen as going against them.

4. India will have huge energy deficit by 2010 and Iran-Pak-India gas pipeline can solve it significantly but Iran may get off the project. Iran has other huge market at his disposal, China. This will take China upper than India.

5. US congress has a series of test before India gets full benefit of all the Nuclear deals and following all may not be possible, and unable of fulfilling one may end up India getting nothing.

6. India will need the support of many NAM countries if it wants to get into UNSC as permanent member. The Iran issue may decrease the vote for India. US till now has not supported and is the only country in the G5 not supporting India's candidature which shows how serious is the US.

7. The cost of seperating military and civilian Nuclear is huge according to some experts and before this done US will not go for full cooperation in the Nuclear Suppliers group. The full benefit from Nuclear Deal is a distant dream for India.

8. Pakistan being the China's closest ally has been named as the US Non-Nato ally, where is India near that. India has lost even the confidence of its traditional allys Russia, Brazil, South Africa and Iran.

India needs to look all these issues and can play a game. While Manmohan govt has the support of left parties it could use it as its strength to get the help withuot much damage to the national integrity and neutral international policy. But rather it has always seen left parties as the weakness and i think now the time has come for the left parties to get Manmohan down. so that the forthcoming govt can rectify the steps.