The India Model

The beneficial rise of an economic power

by Maxwell School, Syracuse University,NY, January 25, 2011

"The India Model: The Beneficial Rise of an Economic Power." The market dynamics and thriving democratic institutions in India have generated an economic model of a global power that other developing countries, such as Bangladesh and Pakistan, can emulate. While the South and Central Asia region lacks integration, the large markets and complementary resources have the potential to grow rapidly. Mr. Blake was appointed Assistant Secretary for South and Central Asian Affairs in May 2009. As Assistant Secretary, he oversees U.S. foreign policy with India, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan, Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, and Tajikistan. He previously served as Ambassador to Sri Lanka and Maldives from 2006 to mid-2009 and Deputy Chief of Mission at the U.S. Mission in New Delhi, India from 2003 – 2006. Since entering the Foreign Service in 1985, he has served at American Embassies in Africa as well as in a number of positions at the Department of State in Washington D.C. Mr. Blake earned a B.A. from Harvard in 1980 and an M.A. in International Relations from Johns Hopkins School of Advanced International Studies (SAIS) in 1984.

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Campbell Conversations

by WRVO Radio, Syracuse, NY, January 28, 2011

Interview with
Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs WRVO Radio

QUESTION: Welcome to the Campbell Conversations. My guest today is Bob Blake. Since 2009 he’s been Assistant Secretary of State for South and Central Asian Affairs. Prior to that he was the U.S. Ambassador to Sri Lanka and the Maldives.

Bob, welcome to the program.

ASSISTANT SECRETARY BLAKE: Thank you, Grant. It’s a pleasure to be here.

QUESTION: On a recent piece in the New York Times Jim Yardley called the region that you deal with, quote, “perhaps the most politically complicated region on earth.” Would you agree with that?

ASSISTANT SECRETARY BLAKE: Yes, it does have its complications, but it’s also an enormously rewarding region, one I think where we have a lot of opportunities to really advance our interests.

QUESTION: What makes it so complicated? Maybe that’s a dumb question, but what are some of the things that --

ASSISTANT SECRETARY BLAKE: First of all, we have about a quarter of the world’s population. We have a lot of countries that are still relatively young countries, that are still emerging democracies, so they don’t have necessarily the most developed institutions. They’re very young countries, most of them. About half of the population of South and Central Asia is under the age of 25. Of course in many cases the governments are run by people who are 70 or above and sometimes out of touch with the views and the needs of the younger people. So there are a lot of those kind of natural tensions that arise as a result of things like that.

We have in many of our countries problems with governance, with corruption, human rights problems, and yet it’s an extremely important region for our national interests and one that I think President Obama and Secretary Clinton and the rest of the team devote an enormous amount of time and attention to.

QUESTION: I wanted to get into some of the importance of the relationships with those, but let me follow up quickly on this. Is one of the other problems or complications in this area, has a lot of countries with many different groups that are not only fractured, but a lot of tension there and history of tension. Is that something that marks that area or is that just all around the world?

ASSISTANT SECRETARY BLAKE: It’s hard to make generalizations about South and Central Asia, because the Central Asian part of it is so different from the South Asian part. But one of the interesting trends in South Asia is that for the first time in the history of South Asia now we have popularly, democratically elected governments in all of South Asia, which is really quite a remarkable achievement when you think about it. The last two to join the democratic club were the smallest. The Maldives, the Republic of the Maldives which in 2008 had a democratically elected president for the first time after 30 years of rule by another ruler. And then Bhutan which has been ruled by a king since its inception. The king himself very wisely decided that it was time to have a parliamentary democracy, so he himself stepped down and essentially convinced the population of Bhutan that it was better to have a parliamentary democracy. So they now have a functioning opposition. That’s quite an interesting transition that’s taking place there.

So again, I think there are some positive trends that are also quite evident in the region. Countries like Sri Lanka or Nepal have come through long-term civil strife.

QUESTION: I wanted to get back into that with you.

ASSISTANT SECRETARY BLAKE: -- now emerging to sort of new opportunities with varying degrees of success. But still, I think the longer term trends largely are positive in South Asia.

QUESTION: And you’re here to give a speech titled “The India Model -- The Beneficial Rise of an Economic Power.” So what briefly is the Indian model and why is it important?

ASSISTANT SECRETARY BLAKE: First of all, our relations with India have undergone an enormous transition over the last ten years or so and I really date that to the post-9/11 world where both of our countries realized that we had a lot of common interests and many common values. So we began to work much more closely, not just on counter-terrorism and military cooperation, but in a huge wide range of areas. It was helped along by the fact that we have three million Indian-Americans here in this country who also have done so much to help build a bipartisan support in the U.S. Congress and in the wider community for improving relations with India. And India has the same. All those Indians [that] went back to India and I think have an enormous impact in terms of supporting the rise of a partnership with the United States.

What you see now is cooperation between our two countries and governments in virtually every field of human endeavor, which is an enormous change and transformation in just ten years.

President Obama had a landmark visit there in November, his longest foreign trip during his presidency and announced a lot of new areas of cooperation where for the very first time we’re not just cooperating bilaterally, but we’re cooperating at the global strategic level to, for example, encourage agricultural production in Africa, to work on women’s empowerment in Afghanistan, to work on open government around the world. These are areas that, again, ten years ago it would have been almost unthinkable for our two countries to be working together in third countries and trying to promote global peace and security and prosperity. Yet now here we are. It’s really been a remarkable change.

The India model that I’m going to be talking about is really one based largely on local consumption and innovation and enterprise because of the changes and the reforms that have taken place in the Indian economy over the last ten years and twenty years, that were started by the current prime minister when he was finance minister in 1990. India had a terrible balance of payments crisis that they faced, so they had to change and they had to move away from their own import substituting socialist model towards a much more open system. He really led the way and now he’s the prime minister of India.

That in itself is a great story, and it’s in very sharp contrast to the more export-oriented model of China which is much more devoted to, and their prosperity is based on the continued success of their exports. Whereas India is much more internally driven and therefore quite an important model.

QUESTION: What do you think is the most important thing about present-day India that most Americans don’t know?

ASSISTANT SECRETARY BLAKE: Probably most Americans are not aware of, again, the striking changes that have taken place in India. India now has a middle class of 300 million people, all of whom are very well educated, who are very global in their orientation and outlook. That middle class is going to grow to 600 million people over the next 20 years. That’s roughly the size of the current European Union, which by the way isn’t going to change very much over that same time period. So they’re going to be a huge and important influence around the world.

And they’re a country, again, that wants to work very closely with the United States which is again a very important partner for us, where we need countries like India that are democracies, that are market oriented economies, and are countries that are willing to step out and work with us to take responsibility for managing the global system. India is one such partner.

QUESTION: I’m Grant Reeher and I’m speaking with State Department official Bob Blake.

Just a minute ago you were talking about the President’s trip to India following the mid-term elections and I remember this being billed as kind of a drumming up business, deal-making trip. The emphasis was on jobs I think particularly in the aftermath of the mid-terms. But you talked about all different kinds of things that are important in this relationship. I want to come back to a couple. But one is obviously this business part, the deal-making. I wanted to get your sense of how does the value of that stack up against this concern we always hear about our out-sourcing jobs to India. How should we weigh these two things?

ASSISTANT SECRETARY BLAKE: You mentioned earlier what are some of the things that perhaps Americans don’t know very much about India. One of the other things that Americans don’t know much about is the fact that India, because of the growth of its private sector, has increasingly become an important investor in the United States and is creating jobs by virtue of that investment. So increasingly the relationship, the trade and investment relationship is very balanced and it’s really no longer possible to talk about a huge outflow of jobs from the United States. As you say, during the President’s trip he and Prime Minister Singh announced new trade deals worth roughly $15 billion with $10 billion in U.S. export content creating roughly 50,000 new jobs for us here in the United States.

The other side of that is that Indians are now investing roughly $4.5 billion a year in the United States and also creating a lot of jobs. So increasingly it’s a two-way street and I think you’re going to see more and more of that as the Indian economy develops.

So it really isn’t appropriate to talk any more about a significant out-flow. It is a much more balanced picture and I think that helps us, but it also helps India because it’s going to make it more sustainable.

QUESTION: So that’s an old stereotype, I guess.

ASSISTANT SECRETARY BLAKE: Yes.

QUESTION: You also mentioned the contrast between the India model as you described it and the China model. So one of the things I was wondering about and thinking about this relationship with India and the importance of it for us is has it become more important as China’s economy has grown and our relationship with China has become arguably more problematic or more complicated? Is India perhaps a counterweight to China in some way for us?

ASSISTANT SECRETARY BLAKE: We don’t look at it that way. Obviously we have very important partnerships with both of these countries, and both of them are going to be extremely important countries that we have to deal within the 21st Century, and hopefully we can enlist their help to again, help manage the international system. So we face different challenges in each country. I’m not really an expert on China so I can’t really talk as much about that, but just to say that India also sees it that way. They have their own very important relations with China. They see them on their own merits. They don’t see any kind of collusion with the United States against China. Their fastest-growing economic partnership is with China in terms both of trade and investment. So --

QUESTION: I think we sometimes think of them as rivals though, don’t we?

ASSISTANT SECRETARY BLAKE: In some cases they can be rivals, but I think the Indians, again, are looking as much as possible to try to engage the Chinese and they do have border disputes and things like that, but I think because of that growing economic partnership there is an incentive on both sides to manage those and try to resolve them.

QUESTION: You also mentioned earlier 9/11 and I was curious as to whether the relationship with India also has something to do with our complicated relationship with Pakistan. That we could somehow get some more leverage with Pakistan based on what we do with India. How does that fit into the calculations here?

ASSISTANT SECRETARY BLAKE: For a long time we used to say that U.S. relations with India and Pakistan were hyphenated. That is that we tried to make progress with each of them kind of along similar lines. Increasingly I think we’ve de-hyphenated our relations with India from our relations with Pakistan because it is such an important relationship and has so many different aspects to it.

But Pakistan, of course, is equally important and arguably our most important foreign policy priority right now, perhaps with the exception of Afghanistan. It’s our largest aid recipient, it’s a country that has a great many challenges but has also done a lot particularly on the counter-terrorism front.

I think the President, Secretary Clinton and everybody else are devoting an enormous amount of attention to developing our strategic dialogue with the Pakistanis, and have made a lot of progress. But again, there are many many challenges there.

My piece of this is to help on the India-Pakistan side where we have a great interest in promoting better ties between our two friends. We’ve always said that it’s important for them to determine the pace and the scope and the character of how they will improve their relations, but again, we can always offer ideas.

It’s particularly important now in the kind of post-9/11 world. As many of your listeners know, there was a terrible attack in Mumbai, what they call their 26/11, November 26, 2008, when approximately 175 people were killed by an attack caused by Lashkar-e-Taiba which is a group that is based in Pakistan. That was a searing moment for the Indians because it played out on national television for three days and people were able to see for the first time the faces of suicide attackers who came in with the express purpose of killing not only Indian civilians, but some Americans. Six Americans were killed during those attacks. And the Indians showed a lot of restraint in not retaliating at that time, but at the same time I think were there to be another attack and were there to be similar numbers of civilian casualties, and were there to be any kind of allegations of Pakistani involvement, there would be a lot of domestic pressure for some sort of retaliatory act. That would be very damaging to our interests.

The Pakistanis have been very good about redeploying approximately 140,000 troops from their Indian border to the Afghan border where these sanctuaries are, where a lot of the groups that are attacking our troops in Afghanistan are based. So it’s very important that they maintain that focus and that they, if anything, increase the number of troops going into that area. Were there to be another attack like that, of course they’d have to redeploy many troops back to the Indian border, and that would certainly not be in our interest.

So we have done a lot to improve our counter-terrorism cooperation and our intelligence cooperation to prevent such an attack from occurring. And it’s part of, again, the widening scope of relations between our two countries.

QUESTION: I’m Grant Reeher and you’re listening to the Campbell Conversations. I’m talking with Bob Blake, Assistant Secretary of State for South and Central Asian Affairs. We’ve been talking about India’s importance in the world and the importance of the United States’ relationship with that country.

In 2008 the Bush administration broke new ground for India’s relationship with other nuclear powers by forging an agreement that permits civilian nuclear trade with the United States. At that time that move was criticized by many as rewarding bad behavior. India didn’t sign the nuclear non-proliferation treaty and had tested bombs in ’74 and in 1998, so I wanted to ask you at this point what’s been the effect of this agreement so far?

ASSISTANT SECRETARY BLAKE: First of all let me say that while there was some criticism, it passed with overwhelming support in the United States Congress. Again, showing the bipartisan support for improving relations between our two countries.

We see enormous opportunities in this civil nuclear deal. First of all, it’s important for us to help India to meet its energy demands. Like China, they have very fast-rising energy needs. We’d like to make sure that they don’t source too much out of Iran, for obvious reasons. So we’d like to help them to diversify their sources of energy. We think civil nuclear is a very good possibility. We also have a number of efforts underway to help with renewable energy development. The President announced some of those during his recent trip.

During the President’s visit in November we completed all of the government-to-government aspects of the civil nuclear deal. The Indians agreed to ratify the main international convention that governs this kind of thing-- the liability part of this called the Convention on Supplementary Compensation, and to ratify it within a year. So that was a very important undertaking. And a number of other smaller steps were taken as well. So all the government piece of this is done now, and now it’s up really, first of all, for the Indians to ratify the CSC, but also more importantly, for the companies to begin actual negotiations.

The Indians have set aside two reactor sites that most likely will be in Andhra Pradesh and Gujarat, two very important states in India. So there are going to be very very significant export opportunities for American civil nuclear firms. We’re doing everything we can to, again, lay the basis for those exports so that they can proceed as quickly as possible.

QUESTION: Some people worried at the time that this would send the wrong message to countries like Iran and North Korea, that it would lead them to accelerate their own development of their nuclear capabilities. You don’t think that’s happened?

ASSISTANT SECRETARY BLAKE: I don’t think it has. First of all because India has always had a very good non-proliferation record. The heart of the civil nuclear deal and the reason that other countries may not be eligible for it is that while they haven’t signed the NPT, they have a very strong non-proliferation record. And our judgment was that it was better to bring them into the non-proliferation system and have them be part of enforcing and strengthening the non-proliferation system, and that’s exactly what they’ve been doing.

QUESTION: In case you’ve just joined us, you’re listening to the Campbell Conversations, and my guest today is Bob Blake, Assistant Secretary of State.

I’ve got to ask you a couple of questions about your previous experience in Sri Lanka. Before you took on your current position at the State Department you were Ambassador to Sri Lanka and the Maldives. While you were in that position the country was going through a civil war that had some really gruesome levels of violence and cruelty.

The first question, just a base one, what was that experience like for you in that time period?

ASSISTANT SECRETARY BLAKE: It was a very searing time for the country and I think a searing time for me personally, because the government of Sri Lanka went from being involved in a peace process with the LTTE which is the terrorist organization at that time, to making a decision after suffering many attacks from the LTTE that they were going to try to defeat them militarily. Most of us believed it couldn’t be done, but they disproved a lot of the skeptics. But they did so at a very high cost. Many many civilians were killed during that and particularly at the end of that conflict. It points now to the need for very serious reconciliation and accountability efforts to take place so that the country can be unified and it can again I think realize the promise that Sri Lanka has always had.

QUESTION: You just mentioned this and I wanted to follow up on it. There’s a recent piece in the New Yorker, I’m sure you’ve read it, about the conflict by John Lee Anderson. In that piece he writes about exactly what you just mentioned, the fact that despite, one of the points I wanted to ask you about here, despite the brutality with which the Tamil insurgency was extinguished, the government’s response is held up by some strategists as a model for effectively putting down a terrorist insurgency. And the model, to quote Anderson, is “deny access to the media, the United Nations, and human rights groups; isolate your opponents and kill them as quickly as possible; and segregate and terrify the survivors, or ideally, leave no witnesses at all.” Do you think that accurately captures what was done?

ASSISTANT SECRETARY BLAKE: I’m not sure I’d call that a model for how I’d want to see --

QUESTION: Exactly.

ASSISTANT SECRETARY BLAKE: But I think it’s important to be balanced in this. The first thing to recognize is the LTTE bore a large part of the responsibility for this. If you read the public statements that I and the EU and the Norwegians put out during the course of this conflict, we were always careful to urge both sides to protect civilians. The LTTE --

QUESTION: Just to clarify, that’s the Tamil group, Tamil Tigers.

ASSISTANT SECRETARY BLAKE: The LTTE, the so-called Tamil Tigers, have been on our terrorist list since 1997. One of the most brutal, lethal terrorist organizations in the world.

As the Sri Lankan army was pushing north into the Tamil areas, the predominantly Tamil areas that were controlled by the LTTE for more than two decades, they displaced, the Sri Lankan army displaced a large number of Tamil civilians and they all began to move northwards. The LTTE systematically refused international efforts to allow those internally displaced persons to move south. To move away from the conflict areas where they could have been given food and shelter and so forth. So they systematically basically refused all efforts and in fact violated international law by not allowing freedom of movement to those civilians. So had the LTTE actually allowed people to move south, none of this would have happened in the first place, so it’s important to make that point. I think that often gets lost in the debate on this.

Secondly, the LTTE often deliberately put its heavy artillery in the midst of civilian encampments, precisely to draw fire so that people would get killed in the hopes that there would then be international outrage and there would be essentially demands on the Sri Lankan government to stop the fighting and [agree to] some sort of negotiated settlement.

The Sri Lankans, not without reason, argued that the LTTE was really never interested in peace and that they had always used ceasefires as a way to regroup and rearm themselves, so they essentially refused any efforts to resume the peace process.

So we faced this very very difficult situation. On the one hand we wanted to see the defeat of a terrible terrorist organization that had been responsible for hundreds if not thousands of civilian casualties. On the other hand we wanted to ensure that there were not going to be civilian casualties as a result of this. I have to say, both sides were guilty of massive human rights violations that caused the deaths of many many civilians. I think, just to say what I said earlier, which is for this country now to recover from this experience I think there needs to be a reconciliation process, there needs to be new elections that are held in the north so that a new indigenous leadership can emerge, and I think there also needs to be some sort of accountability mechanism so that the Sri Lankan nation can put this episode behind them and that they can be confident that those who were responsible for the deaths that took place will be held accountable.

QUESTION: You had anticipated my final question which is what needs to happen next. Thank you.

The very last thing, this show always ends with three short questions that are asked of everyone who appears on it, so here they are.

The first is, what is the title of the chapter of life you’re currently living?

ASSISTANT SECRETARY BLAKE: The chapter of the life I’m currently living is “New Challenges”. Maybe that’s true for all Foreign Service officers, always. I’ve been in my job now for 25 years working in the State Department. We always look for new challenges, and that’s one of the reasons it’s such fun to be a Foreign Service officer. But it’s particularly true now that I’m responsible for this very sensitive region.

QUESTION: Secondly, what is your worst trait?

ASSISTANT SECRETARY BLAKE: My wife and my secretary would say that my worst trait is my congenital inability to say no. Anybody who asks me to do anything, I will almost always say yes. That means that oftentimes my hours are quite long and I end up doing things that probably I shouldn’t be doing, but it’s because of, again, my enthusiasm for the job that I’m doing and the love of my work.

QUESTION: I’ll try to remember to ask for a State Department grant before you’re out of there. [Laughter].

Finally, what professional or creative achievement in your life so far has surprised you so much?

ASSISTANT SECRETARY BLAKE: If you’d told me 25 years ago when I was entering the Foreign Service that I would be an American Ambassador and that I would become an Assistant Secretary of State I probably would have said you’re completely out of your mind. But I feel enormously privileged to be in this job and to have again, the opportunity to make a difference. That’s what the Foreign Service is all about. Every single day of our lives, no matter what you’re doing in the State Department, you have an opportunity to make a difference in people’s lives and I think that’s why I’ve been in for 25 years. That’s why it’s fun to come here and talk to a lot of the young students in a place like Syracuse and tell them about what I do and hopefully encourage them to join as well.

QUESTION: That was Bob Blake, Assistant Secretary of State for South and Central Asian Affairs. Bob, thank you so much for talking with me.

ASSISTANT SECRETARY BLAKE: Thank you, Grant, it’s a pleasure.