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KLMNO THE WORLD


Corruption scandals in India fuel fears of crony capitalism


TAPED CALLS CAUSE OUTCRY


Lobbyist, ex-minister under investigation BY RAMA LAKSHMI


new delhi —A new corruption scandal erupts almost every month in India. But even here, the secretly taped phone conver- sations of a powerful lobbyist have shocked most people. The lobbyistwasrecorded talk-


ADNAN ABIDI/REUTERS


Police detain Tibetan exiles at a protest outside the venue where Chinese PremierWen Jiabao was speaking Thursday inNewDelhi. With long-term oil supplies at stake for the two nations that make up 40 percent of the world’s population,Wen offered support for India’s bid for a greater role in theUnitedNations and agreed to an ambitious target of $100 billion in trade between theAsian powers by 2015.


Chinese premier turns on the charm


In India, Wen strives to ease strain between rising Asian giants


BY EMILYWAX


new delhi — During Chinese Premier Wen Jiabao’s visit to the Indian capital this week, he won over high school students with a declaration rendered in his per- fect Chinese calligraphy: “India and China are friends.” That seems to be the theme of


his three-day trip here, which many Indians see as a charm offensive by China to promote what Wen called “cooperation, not competition,” between Asia’s two fast-rising giants. The Chinese leader’s visit fol-


lows similar forays to India in recent months by President Obama, British Prime Minister DavidCameronandFrenchPresi- dent Nicolas Sarkozy, all ofwhom were trying to gain unfettered access to the country’s booming markets to help pull their econo- mies out of a global slowdown. Yet despite this week’s feel-


good slogans and ambitious agreements to boost bilateral trade, the wary friendship be- tween India and China is under growing strain as the two energy- starved nations compete for oil markets in Africa, SoutheastAsia, Russia and Latin America. Although their own infrastruc- ture remains relatively inade-


quate, both are rushing to build roads, schools and community centers throughout countries such as Sudan and Nigeria, hop- ing to sweeten deals for guaran- teed oil supplies. China has built a massive “friendship center” in Sudan’s desert capital, Khartoum, one of the city’s largest and most mod- ern facilities. InNigeria, India has agreed to spend as much as $6 billion on roads, railway lines and power plants in exchange for oil deals. Competition between India


and China as they seek bigger shares of the world’s dwindling supply of oil is likely to accelerate the rise in oil prices, economists say. It also has the potential to ignite lingering tension between the two countries going back to China’s 1962 invasion of India and exacerbated by hundreds of border incursions since then. A disputed stretch of border


between India and China is just one point of tension. India is increasingly irked by China’s mil- itary and economic relationship with Pakistan, India’s archenemy, which Wen is expected to visit Friday. There is also tension over water supplies near their shared border and over China’s seeming- ly pro-Pakistan position on the disputed region of Kashmir, which is claimed by both India and Pakistan. Few issues, however, are more potentially long-lasting and divi- sive than oil, experts said. “There’s going to be huge ener-


gy consumption in India and Chi- na and only so much oil on Earth as these massive economies grow. Competitionbetweenthemfor oil will become more of an irritant in their relationship,” said Zorawar Daulet Singh, co-author of“Chas- ing the Dragon: Will India Catch Up With China?” Together, China and India


make up more than 40 percent of the world’s population. In both countries,hundredsof millions of people are being lifted out of povertyandinto the middle class- es, where they require more and more energy to power their com- puters and air conditioners and fuel their cars. India imports 75 percent of its


oil while China imports a little more than half its requirements, according to a U.S. Energy De- partment report. By 2025,China’s oil demand will double to about 14.2 million barrels a day, the department estimates. By con- trast, India imports only about 1.4 million barrels a day, but imports are expected to rise to 5 million barrels a day in the next decade.


Around the globe, India and


China are both trying to hammer out deals in war-scarred oil fields in Iraq, southern Sudan, Nigeria andAngola.They are also seeking oil contracts closer to home, in Burma and Russia. With its huge reserves of cash,


China appears to hold a bargain- ing advantage, experts say. “China has much deeper pock- ets when competing for the same


resources. India tends to lose out,” said Vikram Sood, a China expert and former head of the Research Analysis Wing, India’s foreign intelligence agency. “This will, long-term, be a real source of tension.” In Angola, for instance, China


beat out India’s oil corporation last year in bidding for a patch of land for oil exploration being sold by Shell. Both New Delhi and Beijing


negotiated with Moscow in late December last year, but China ended up lending the Russian government $6 billion in return for a guaranteed supply of oil. One of the fewareas of cooper-


ation between India and China is coal, which is plentiful and cheap in both countries. It accounts for nearly 40 percent of India’s total energy consumption. Days before Wen’s visit here,


China announced an $8.3 billion sale of coal-fired power genera- tors to India, a major milestone in Beijing’s quest to boost bilateral trade to $100 billion in the next five years. Already, China is In- dia’s largest trading partner. Indian and Chinese officials


say that with increased trade comes warming relations. Speaking at the India-China Business Cooperation Summit in New Delhi on Wednesday, Wen said, “There is enough space in the world for the development of both countries.” Experts here are asking wheth-


er there’s enough oil. waxe@washpost.com


DIGEST IRAQ


Detainee disclosed holiday plot, official says The Iraqi Interior Ministry’s counterterrorism chief said Thursday


that in a confessionmade in earlyNovember, an Iraqi detainee revealed the existence of a plot to attack U.S. and European targets over the holidays. Gen. Dhiya Hussein Sahi described the man as a member of the


Islamic State of Iraq, a front organization for al-Qaeda in Iraq,who had been captured along with more than 30 other suspected insurgents during a raid inthewesternprovince ofAnbar. TheWhite House said in a statement that it would not comment on


specific intelligence, but added, “We know [al-Qaeda] wants to attack Europe and theUnited States and is looking for itsworldwide affiliates and allies to do the same.” According to Sahi, the man said that unless the United States


withdraws fromIraq, “wewill attack themintheirhomeland, thatwe as the Islamic State of Iraq will focus on the U.S. and Europe, and specifically Britain, and the specific time will be Christmas Eve, New Year’sEve and theChristmas celebrations.” Sahi said that the named countries had been told of the man’s


statements and that the FBI had talked to him. “TheU.S. forces and the FBI are aware of this information,” he said.TheU.S.military declined to comment. If true, itwouldbe the first timeal-QaedainIraqhasbeenlinkedtoan


international terroristplot.Untilnow, thegrouphas focusedonIraq; it is thought to consistmostly of Iraqis and to be led by anIraqi. —AzizAlwanandLiz Sly


IRELAND


Abortion ban violates rights, E.U. says Ireland’s constitutional ban on


abortion violates pregnant wom- en’s right to receive proper medi- cal care in life-threatening cases, the European Court of Human Rights ruled Thursday, harshly criticizing Ireland’s long inaction onthe issue. The court, based in Strasbourg,


France, ruled that a pregnant woman with cancer should have been allowed to have an abortion in Ireland in 2005 rather than being forced to go to England for the procedure. The judgment puts Ireland un-


derpressure todraft a lawextend- ing abortion rights to women whose pregnancies represent a potentially fatal threat to their own health. But Catholic leaders and antiabortion activists said it does not legally obligate the gov- ernment to do anything. Irelandhasnotpassedany laws


supporting a 1992 judgment by the Irish Supreme Court that said it shouldprovide abortions incas- es where a woman’s life is endan- gered — including, controversial- ly, by suicide threats. The 18-year delay has created a


legal limbo, forcingmany women to travel overseas for an abortion rather than rely on Irish doctors fearful of being prosecuted. —AssociatedPress


IVORYCOAST


20 killed in clashes; intervention looms Forces loyal to the two men


claiming Ivory Coast’s presidency clashed in the streets of the com- mercial capital, Abijdan, on Thursday, killing at least 20 peo- ple and bolstering fears that the world’s top cocoa producer is on the verge of another civilwar. A rocket-propelled grenade


struck an outer perimeter wall of the U.S. Embassy, but no injuries were reported, State Department spokesmanP.J.Crowley said. Ivory Coast has been operating


with two presidents and two gov- ernments since adisputedNov. 28 runoffelection.AlassaneOuattara was declared the winner by the country’s electoral commission andwas recognized by theUnited Nations, theUnitedStates,France and the African Union as having beaten incumbent Laurent Gbag- bo. The next day, however, the country’s constitutional council overturnedtheresultsafter invali- dating a half-million votes from Ouattara strongholds. Crowley said a delegation from


the African Union and the Eco- nomic Community of West Afri- can States would be in Abidjan soon “to continue to encourage PresidentGbagbo to step aside.” —AssociatedPress


8 held in deadly Iranian blasts: Iran arrested eight people sus- pected of being behind two sui- cide bomb attacks inthe country’s southeast that killed 35 people, the interiorminister said, adding that the attackers were linked to neighboring Pakistan and that they were trained there. The Sun- ni Muslim rebel group Jundallah


ing to several people — politi- cians, bureaucrats and journal- ists—apparently trying to ensure that India’s telecommunications minister, Andimuthu Raja, was reappointed after the May 2009 election. The lobbyist,Neera Radia,who


runs a public relations firm in NewDelhi, was later taped telling the head of a prominent cell- phone company that she was trying to get Raja to change gov- ernment policies to favor the firm. The conversations, which have


dominated the media in recent weeks, led to a public outcry in a country where lobbying ismyste- rious work usually conducted far from the public eye.Unlike in the United States, lobbying is not recognized as a legitimate profes- sion, and few lobbyists would ever identify themselves as such. But the scandal also focused


attention on a broader issue: how economic policies are made and business is conducted in the world’s second-fastest-growing economy. Some analysts say the country’s opaque systems raise troubling questions about the ex- tent of crony capitalism and whether India’s success is sus- tainable. The tapes have taken on even


more significance since Raja re- signed last month after a govern- ment probe accused him of sell- ing licenses to his favorite cell- phone companies at bargain- basement prices, costing India $40 billion in lost revenue. Au- thorities have raided the homes of Radia and Raja and are investi- gating their bank accounts. Raja has said that he is inno-


cent and that he was following rules and procedures set by his predecessors. Other recent scandals have


also exposed the nexus between the state and big business. Last week, investigators bust-


ed a loan scheme in which a state-run insurer gave millions of


dollars to big real estate firms in return for bribes. In southern India, a government probe in October revealed that twopower- ful businessmen used their politi- cal connections to mine iron ore illegally. “The impressive economic


growth numbers hide an ex- tremely dysfunctional and skewed economic model,” said Rajeev Chandrasekhar, an inde- pendent member of Parliament. “On the one hand, we have gov- ernments with wide administra- tive discretion, little oversight and huge budget. On the other hand, entrepreneurs and compa- nies act as proxies of politicians. This combination, if allowed to grow unfettered, represents a clear and present danger to the whole concept of Indian democ- racy and free markets.” The concerns come at a time


when the developed world, espe- cially theUnited States, is seeking increased business ties and more access to Indian markets. Foreign investors are pouring money into Indian capital markets. Analysts say India should


quickly implement measures that boost investor confidence. “India needs to introduce


checks and balances because the world will want to know if India’s high economic growth rates are sustainable,” saidRuchir Sharma, head of emerging markets at Morgan Stanley InvestmentMan- agement inNewYork. “India can- not always depend on global in- vestors to send money into India. If they see the cracks developing in India’s economic model, then the global investors will become discerning. The direction can re- verse very quickly.” Some analysts say the tapes


reveal the vulnerability of Indian businesses to the power that poli- ticians and bureaucrats wield. “The one truth that has come


home very palpably during the last few days is how deeply the state structures capital in India,” PratapBhanuMehta, president of the Center for Policy Research, wrote in his column in the Indian Express newspaper last week. “Business is vulnerable at the hands of the state at so many levels: At every moment it is taxed, licensed, stamped, as- sessed, audited, authorized, given permission.” But others say cronyism is an


inevitable but transient phase of emerging capitalism, just as it was in early 20th-century Ameri- ca.


“Although it looks ugly right


now,” said Sharma, of Morgan Stanley, “we are hoping some cleansing will take place.” lakshmir@washpost.com


FRIDAY, DECEMBER 17, 2010


MOHAMAD TOROKMAN/REUTERS


APalestinian girl who belongs to the Roman Orthodox Church watches as candles are lighted inside a cave in theWest Bank village of Aboud that residents say is used as a sanctuary. Aboud is near Ramallah.


asserted responsibility for the blasts outside a Shiite mosque Wednesday.


S. Korea announces more live- fire drills: SouthKorea said itwill conduct artillery drills in coming days similar to ones that prompt- edNorthKorea to shell a frontline island last month — a move that risks further confrontation even as NewMexico Gov. Bill Richard- son (D) arrived in Pyongyang in a diplomatic effort to cool tensions.


13 hurt in knife attack in Japan: An unemployed Japaneseman at- tackedgrade-school studentswith a knife northeast of Tokyo on Fri- dayinarampageaboardabusthat


left 13 people injured, police said. Eleven of the injured were junior highandhighschool students, fire department spokesman Shireka Iyoka said.


Suspected U.S. missiles kill 7 in Pakistan: A U.S. missile strike killed seven militants in the Spin Drand area of Khyber, a Pakistani region close to the Afghan border that has rarely seen such attacks, Pakistani intelligence officials said.Morethan100missilestrikes have hit Pakistan’s border region this year.


Ukrainianlawmakers fight inpar- liament: Five oppositionUkraini- an lawmakers were taken to a


hospital after losing a fistfight with pro-government lawmakers in the parliament building. Law- makers from the BYuT party re- fused to leave the chamber in pro- test against the criminal prosecu- tion of their leader, Yulia Tymosh- enko.


Mugabe’s wife sues over WikiLeaks disclosure: Grace Mugabe, the wife of Zimbabwe’s president, Robert Mugabe, has filed a $15million lawsuit against a popular independent newspa- perafter itpublishedastoryciting WikiLeaks cables alleging her in- volvement in illegal diamond deals.


—Fromnews services


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