Indian Express on the Sino-American grand-strategy term sheet

Piece by K. Subrahmanyan, a name you might recognize from his frequent publications.

From his Wikipedia entry:

K. Subrahmanyam (Tamil:கிருஷ்ணசுவாமி சுப்பிரமணியம், born 1929) is a prominent international strategic affairs analyst, journalist and former Indian civil servant. Considered a proponent of Realpolitik, Subrahmanyam has long been an influential voice in Indian security affairs. He is most often referred to as the doyen of India's strategic affairs community, and, more contentiously, as the premier ideological champion of India's nuclear deterrent.

Somewhat unsurprisingly, Subrahmanyam takes the "G2" approach, assuming the zero-sum outcome for India and the rest of the world.  Nothing could be further from the truth, but one must expect this sort of response.

The Sino-American relationship is central to globalization's success or failure--hard to deny that.  That relationship is not in good shape right now, for a lot of reasons.  Trying to address that cluster of macro-imbalances is a worthy goal, but such effort does not--on the face of it--automatically insinuate the creation of G2, and when that charge is so reflexively slung, you have to say that it tells us more about the provider of the feedback (as in, this is how this proposal makes me feel!) than the effort itself.

It is certainly in some people's best interests to keep the U.S. and China at odds, but I honestly don't believe that to be the case for India, when the facts and trends are viewed objectively.

From his piece ("The return of G-2"), I limit the exerpts more to his commentary than his recitation of the proposal, which--of course--is a work in progress and is already significantly altered as we receive significant feedback here in Beijing.  Suffice it to say, nobody here in Beijing is interested in "G2," even as they are highly interested in a more productive relationship with the U.S. 

Even as President Obama and Prime Minister Manmohan Singh talked of a 21st century world order based on their shared values as leaders of the world’s two largest democracies, a newspaper run by the Chinese Communist Party published a plan for an alternative world order, based on a mutuality of interests between China and the US. It asserted, though, that the article, in the November 22 edition of People’s Daily Online, represented only the views of the authors — who include John Milligan-Whyte and Dai Min, authors of China and America’s Leadership in Peaceful Coexistence, and Thomas P.M. Barnett, the author of The Pentagon’s New Map, and leading Chinese policy experts.

The article describes the benefits of the grand strategy they propose: “[it] will promote US economic recovery, increase US exports to China, create 12 million US jobs, balance China-US trade as well as reduce US government deficits and debt. Furthermore, it will stabilise the US dollar, global currency and bond markets. It will also enable reform of international institutions, cooperative climate change remediation, international trade, global security breakthroughs . . . 

There is no doubt that while this is not a formal proposal from Chinese official circles; this is kite-flying, to test public reaction in the US. It is possible that the idea is to suggest that the US and China can accommodate each other to mutual benefit — and China shares the US view that a war between two such powers in the 21st century would not make sense. It also holds out certain assurances that China will accommodate the US’s concerns on Southeast Asia as well as on North Korean and Iranian proliferation, provided the US reciprocates on Taiwan, Tibet, Xinjiang, and human rights. The US must also forget down its desire for regime change in North Korea and Iran. And, in return for the US lifting its high-technology trade ban, China will invest $1 trillion in the US, presumably in new technologies, as well as help in balancing trade and enabling the US to manage debt reduction.

But the glaring gap in the proposals is that there is no mention of Pakistani proliferation and Pakistani sponsorship of terrorism. While all the other issues listed by China are important to the US, casualties are being incurred by the US on the Pakistan front, and the US homeland is under threat from Pakistani terrorist organisations that are fielded by the Pakistan army behind the nuclear-missile deterrence shield that China provides to Islamabad. This may have one of two implications: either Pakistan, unlike North Korea and Iran, is not under Chinese influence; or Pakistan, in Chinese strategic interests, is a non-negotiable factor.

There is also no mention of US interests in India — even after the development of the Indo-US strategic partnership. Does this mean that China hopes to wean the US away from its strategic partnership with India, as part of the price for the deal? Or do they hope to frighten India into a non-aligned submission to China’s hegemony over the mainland of Asia (less Asean)?

China’s, and the authors’, value systems are evident from their advocacy that such a Sino-US deal should be outside the purview of the US Congress purview: they say it should be “agreed upon by the presidents of both nations through an ‘executive agreement’ not subject to US Senate ratification.” Surely, now that these ideas have been publicised, the present US president — with two years to go before seeking re-election — will find it difficult to move in this direction, as there will be accusations of his selling out to China.

It is also clear that there are sections in China who are of the view that, just as the US helped China’s rise to second position in the world so that its resources and cheap labour could benefit US multinationals and US consumers — both by way of cheap consumer goods and credit expansion in the US — now the US will help China by releasing high technology, and thereby help themselves, benefiting through job creation and debt reduction. And once China has access to US high-tech, its demographic advantage over the US will ensure it will become the superior knowledge power this century.

A significant number of people in this country imagine that there is an adversarial equation and a conflict of interest between China and the US, and thus, it will benefit India to be non-aligned. This article — published, significantly, on the eve of Prime Minister Wen Jiabao’s visit to India and Pakistan — holds out the possibility that China thinks it is possible to use the US to attain hegemonic power. Let us wake up to reality!

What to say?

First, the non-inclusion of the Pakistan-India dyad hardly amounts to signaling any desire to leverage this relationship to their collective or singular advantage or disadvantage.  It simply reflects the reality that when people on both sides of the Sino-American dialogue speak to its ups and downs, those issues aren't considered central. Important? Sure.  But not central.  No one is saying that Pakistan and/or India constitute the core of what's wrong or going wrong with the Sino-American relationship right now.  Reflective of it, perhaps, but not among its primary causes.

Noting the suggestion that the proposal be done as an executive agreement (longstanding practice of U.S. presidents for such matters) hardly suggests something extra-constitutional or politically devious.  Just the opposite!  It says we see no purpose in suggesting something on the level of a treaty requiring Senate ratification.  None of this is intended as "law of the land"-caliber stuff:  we simply come to certain understandings that allow an economic rebalancing to proceed.  That is classic, within-the-president's-foreign-policy-purview stuff.  Suggesting otherwise is sheer ignorance of how our political system works and has worked for decades. The economic rebalancing itself would need some political direction from above, but it would be overwhelmingly a private-sector-driven affair.  If you're a U.S. business and don't want any investment from Chinese companies, then don't ask for any and none could ever be forced upon you. From the Chinese side, they simply will not enter into alliances or treaties implying any such commitment, so no sense in supposing such grandiose mechanisms are useful here.  

It's as simple as that.  

Yes, you will get some of this, "the Chinese will own America" fear-factor, but if majority ownership is out of the question (and we don't suggest that--just the opposite), then the question becomes, Should Chinese money flowing into America be used to facilitate even more public debt and welfare payments or should it be put to use putting Americans to work?

I honestly believe that it's much easier to argue that China does a great job of destroying America's competitiveness by enabling our addiction to federal debt right now than it does by being stubborn on the renminbi's value. History (especially past history with Japan) tells us that revaluing the RMB will not solve our trade deficit with China.  We also screw ourselves by restricting high-tech exports to China due to military concerns, because they simply turn around and buy the same from the EU (like most such sanction efforts, we only hurt ourselves in this globalized economy, achieving nothing on the security side).  But somehow we've let ourselves be convinced that China's potential military threat outweighs all such considerations--as if Mutual Assured Destruction somehow gets invalidated in the process!  To me, that's just nuts, or--put more prosaically--bad leadership in Washington.

Again, the proposal is driven by a simple logic:  There is a profound imbalance of easily-accessible investment capital in the world system right now.  China's got a ton and America (and Europe) are somewhat starved by comparison and wracking up unsustainable public-sector debt that is already causing default crises in the EU, soon to be followed by some variant at lower levels of US government (cities, states).  You can judge that dynamic from a lot of angles, but just to say, "Ahah!  Now China has the West in its grips!" is rather silly. China presses its temporary advantage too much in the short term and all those trillions can end up being worth nothing.  Business is about parties and counterparties--as in, you need two to tango.  

Judged objectively, China has let in a lot of foreign direct investment over the past two decades, to the point where majority portions of its exports in certain sectors are actually controlled by foreign firms!  Imagine the U.S. putting up with that?

On the other hand, it's clear that the U.S. has shouldered the bulk of the global policing role over the past two decades.

So in both instances, we need something more balanced, more reasonable, and more sustainable.

This proposal simply begs the question:  if such rebalancing is necessary, what would the nature of such transactions look like if they weren't simply conducted according to America's preferred outcomes but actually reflected a compromise between the U.S. way and world vision and the Chinese way and world vision?

I know, I know. This is kowtowing to those communist Chinese! But more seriously, didn't we just try a long stretch of my-way-or-the-highway BS with Bush-Cheney?  And how well did that work?

How anybody can feel threatened by such dialogue is beyond me, given the seriousness of the current imbalances in the world system and how their solution is in everybody's best interest. Again, let's get our inner FDR on and have some faith in who we are and stop being such wimps on dealmaking.  Our inability to motivate ourselves beyond sopho-moronic internal arguments is our greatest weakness right now.  Oooh wee! The GOP just nailed Obama on tax cuts!  So now we get to extend unemployment benefits while refusing to pay for it.  What a fab signal to send the world!

Honestly, the immaturity factor in Washington right now is almost unbearable to witness.  It's just so embarrassing to endure when you travel abroad--especially in China.  How can we be taken seriously when we act this way?  We are just kidding ourselves if we think no one takes note.

India cannot want a U.S. and P.R.C. turning on each other and destroying globalization in coming years, because India cannot possibly prosper in that environment.  You can say, such a bad thing would never happen, but to me, this is a head-in-the-sand sort of optimism.

The Global Financial Crisis does not disappear simply because of the somewhat successful (less in West, more in East) public-sector stimulus push in the initial phase.  Much of the crisis's underlying causes are simply transmuted into the current/looming sovereign debt crises that worry so many leaders and--quite frankly--a decent chunk of the American middle class as captured in the Tea Party anger (which you can ridicule at your own risk, because history says that, when the U.S. middle class ain't happy, ain't nobody gets to be happy in our political system).

You can also say, China is right to lecture America now on its bad economic behavior.  But such lecturing gets both sides--and the world--nowhere.  For China to expect all the adjustment to happen now solely on America's side is unreasonable, just as unreasonable as the U.S. expecting somehow that all the adjustments should be on China's side.

But the dialogue, as it current stands, consists of both sides talking past each other and hoping that--somehow--this all balances out on its own over time.  I think such a mindset it truly naive.  Both sides have plenty of incentives and reasons not to budge, leaving both with increasingly unpleasant tools/weapons for seeking redress.  I think that pathway is a bad one, and so I got together with the Center for America-China Partnership to change the conversation.

Such an attempt can be criticized from numerous angles, and the Indian Express piece offers one such angle. But we've got to get over the fear of exploring real solutions with real compromises and real adjustments on both sides--simply because it will make others around the world nervous.  That would be the opposite of global leadership, which both countries owe the world right now.

Personally, I will always be warned not to get involved in this sort of manner, because it will cost me my credibility as a strategic thinker.  My response to that logic is, What is the use of being a credible strategic thinker if all you do is sit on the sidelines at such moments?  I hope to leave behind six kids who'll need a strong America and stable world to live and work and prosper within.  I see no reason to amass a reputation (such as it is!) that can suffer no risks.  Geez, anybody who knows me knows how much I like being an unreasonable troublemaker!

I have no fear of altering my positions and vision to fit reality as it unfolds.  I marry myself to as few core interest propositions as possible, because the more you accumulate, the more dead your thinking becomes.  I want America at all times to succeed to the best of its ability in prospering and continuing to shape this world for the better.  I think we do that better than anybody, but I also think our approaches have to change when success/failure stare us in the face (usually at the same time, as we now face the great success of our globalization process AND the addiction to cheap money created by the dollar's standing as reserve currency).  I cannot, for example, logically argue for regime-change in NorKo right now like I did in 2004-05.  The system wouldn't handle it well right now, the Sino-American relationship couldn't handle it right now, and there's just bigger fish to fry.  

You see such vaunted and highly-respected figures like Krugman, Tom Friedman, Niall Ferguson and Zakaria expressing extreme alarm on all these same issues, so this is exactly the sort of nexus where strategic thinking that posits win-win scenarios has to be employed.  Just this week on Zakaria's GPS, Ferguson raised the issue of the EU possibly needing a huge flow of Chinese capital down the road.  So this proposal is in the right zip code even as we hammer out its weaknesses with a steady stream of sit-downs with Chinese experts this week in Beijing.

As for personal risks, you've got to get over that stuff (and yourself, quite frankly).  I don't get 50 lives to test out various pathways for useful application of my ideas.  I get this one, and this one has this big issue staring it right in the face right now, and so I participate with likeminded people in China--none of them perfect and all with their biases, but likewise all with their hearts in the right place. I'm still unduly Catholic:  I prefer to sin first and seek forgiveness later.  

I believe in having your own foreign policy and have said so many times on this blog.  This is the point of being in the field in the first place. If I were good at following the command chain, I wouldn't have gotten fired from the Naval War College and I'd probably being living some quiet existence as a CIA analyst (the organization correctly turned me down in 1990 for having the "wrong personality type"!).  

Frankly, this sort of bold scenario work is exactly why I linked up with Wikistrat.  I want nothing better than to undermine conventional thinking at this point in history, because I believe it to be America's worst enemy in these tumultuous, system-shaping times (the second biggest danger being the lack of competent strategic-thinking counterparties around the world because we've so long been the only country blessed with the strategic means to encourage such strategic thought--a situation changing rapidly before our eyes).  

Personally, I think this is the best time to be in this business--the best time since WWII.

Obama zigged in India when he should have zagged

Good FT op-ed by Mansoor Ijaz, who "jointly authored the blueprint for a ceasefire of hostilities between Indian security forces and Islamist militants in Kashmir in July and August 2000," so he knows from where he speaks.

In line with my bit about making India happy before Pakistan, he says you need to make India happy enough to chill Pakistan if you want any sort of real answer on Afghanistan, which I would thereupon say needs some Indian effort/presence to boot (piling on, perhaps, but if you're going to make such effort, why not get maximum response?).

Starts with story about how in 2004 the Indian intell discovered a jihadist plot to kill Musharraf and immediately decided to tell the Pakistanis about it, averting in their minds that disaster.  The logic?  The terrorists were now everyone's problem, says Ijaz, "for Pakistan is a country that can no longer manage the monsters it has created."

Ijaz's primary sale here is an "open security architecture" for the region, by which he means one helluva lot more transparency than currently exists.  

Frankly, the same should be done on the South China Sea with China, to include the subsets of NorKo and Taiwan.  There simply should be no joint exercises that don't include damn near everybody.  Why?  We are fooling around with very important countries in a fairly fragile global economy--simply put, bigger fish to fry.

Ijaz argues that if we got the Pakistani and Indian militaries/security forces cooperating openly, then:

Such co-operation would reduce stress not only along the Indo-Pakistani border, enabling those resources to be spent elsewhere in stabilising Pakistan, but also in Afghanistan, where Islamabad perceives an Indian effort to squeeze it out of a traditional power base. Defusing mistrust here is critical. As a confidence-building measure, India could for example ask Pakistan’s military to join its own in training the new Afghan army.

Same trade answer useful here as in the Korean peninsula, where the US should ratify its free trade agreement with South Korea immediately:  get an Indian-Pakistani free trade accord.

And so on and so forth.

My point:  Obama comes and makes this empty gesture of supporting India's bid for a permanent UN Security Council seat. "Empty" because it's not his to give and very unlikely anytime soon, so he offers it at zero cost/risk.

Instead, as all the media coverage notes, he references common terror threats and totally sidesteps the Kashmir issue--again an empty gesture as far as the Indians are concerned, because their terror fears start there, as do Pakistan's need to keep those networks and militias available for employment against India. Unless we eliminate that requirement, Pakistan will continue double-dealing with us, and the Afghanistan solution will not come.

Good piece, good logic.

So far Obama's done an unimaginative rerun in Afghanistan of Bush logic in Iraq:  surge + no real regional diplomatic dealmaking. We get away with it in Iraq because the dominant group was allowed to win, and its tentativeness ever since has been due to our letting the dominant group win.  We face no such neat opportunity in Afghanistan. To settle that place, we need to settle the Pashtun, and to settle the Pashtun, we need to settle Pakistan, and to settle Pakistan we need to get India in the right space with Pakistan.

The bold move would have been to get that rolling on Obama's big-time trip to India, but, unless I'm missing something here, that did not happen. The coverage I've read said Kashmir was strictly avoided.

And that, to me, sounds like a president--notwithstanding the Nobel--overmatched by the dealmaking required to make some genuine peace happen.  Obama either lacks the imagination or the will, because that was a wasted trip.

Again, cool all right, just empty in outcomes.

WPR's The New Rules: Nation-Building, not Naval Threats, Key to South Asian Security

It is hard for most Americans to fathom why the U.S. military should be involved in either Afghanistan or northwest Pakistan for anything other than the targeting of terrorist networks. And since drones can do most of that dirty work, few feel it is vital to engage in the long and difficult task of nation-building in that part of the world. These are distant, backward places whose sheer disconnectedness relegates them to the dustbin of globalization, and nothing more.

If only that were true. 

Read the rest of the column at World Politics Review.

The book reviewed in the piece is Monsoon:  The Indian Ocean and the Future of American Power.

This week in globalization

Clearing out my files for the week:

• Martin Wolf on why the US is going to win the global currency battle:  "To put it crudely, the US wants to inflate the rest of the world, while the latter is trying to deflate the US."  We win because we have infinite ammo.  But better that we come, per my Monday column, to some agreement at the G-20. 

• Sebastian Mallaby, also in FT, says that, despite the current currency struggles, the "genie of global finance is out of the bottle" and not to be stuffed back in.  Wolf had noted $800B capital inflows to emerging markets 2010-2011, which is gargantuan, thus the crazy struggle of some places to keep their currencies low.  As for America stopping China from buying US bonds in retaliation for our not being able to buy Chinese assets?  China holds only about one-third of the US T-bonds abroad ($3T total), so it can buy all its wants from others in the system.  There is no turning back, he says.

• Meanwhile, the Pentagon makes plans to turn back the clock on the globalization of defense manufacturing.  A new spending bill provision--inserted at DoD's request--includes the power to exclude foreign parts suppliers (read China). Just about every US-based defense firm uses offshore suppliers, so this is going to get very expensive very fast.  It'll be a lot harder to find that $100B in savings over five years. This is almost a fifth generation warfare version of shooting yourself in the foot--first, before the other guy can.  China does nothing here, that frankly we shouldn't be able to handle, but we move down a path that instantly adds a significant tax to everything we buy in the growing-by-leaps-and-bounds IT realm.  One hopes there's a half-billion for that American rare earths mining co. that's looking for a new investor.  Interesting how China's becoming vulnerable to, and dependent on, so many unstable parts of the world for resources, and we're going to cut off the tip of our IT nose to spite our face.  I can imagine a cheaper way, but that would be so naive in comparison to spending all this extra money.

• China continues to buy low, as a ruthless capitalist should. Giving us a taste of what it could be like if we don't get too protectionist, it's buying up Greece's "toxic government bonds."--and plenty more in Europe. All of the EU is getting a taste, says Newsweek, as Chinese investors are snapping up bankrupt enterprises and--apparently--putting people back to work.  China also, like a ruthless capitalist, seeks to make bilats reduce the chance of EU-wide restrictions on its trade. Old American trick.

• Another sign of globalization on the march:  emerging economies buying up food and beverage companies in the West that would otherwise naturally be targeting them for future expansion. Bankers expect the trend to continue.  Gotta feed and water that global middle class that keeps emerging at 70-75m a year.  Emerging economies are buying up the companies from equity firms that had previously bought them during down times.

• Great FT story on how Turkey has the Iranian middle class in its sights.  Long history of smuggling inTurkey dips a toe in, would like to drink entire tub eastern Turkey.  Sanctions hold up what could be a major trade, so the black-marketing local Turks mostly smuggle gasoline--and a certain amount of heroin.  But the official goal is clear enough:  be ready to take advantage whenever Iran opens up.  A local Turkish chamber of commerce official floats the notion of a free trade zone at the border. Those 70m underserved Iranian consumers beckon.

• Bloomberg Businessweek stories on how China's working aggressively to get western technology and cooperation to allow it to work its significant coal-bed and shale gas reserves.  Russia's exporting nuclear reactors like nobody's business, and Mongolia's beginning a long boom as "one of the last places on earth with huge, untapped metal ore resources" (guess who's showing up in numbers--with cash).

• India's airline industry can't keep up with demand generated by itsGet me planes and pilots--now! booming middle class. Boeing says Indian airlines will buy over 1,000 jets in the next two decades. Already they're forced to have one-in-five pilots be foreigners.

• Fascinating WSJ story on how China's car economy is going wild, with ordinary Chinese exploring the freedom of the road.  Drive-in service is taking off, weekend jaunts mean hotel business, etc. In past visits I saw a lot of this coming down the pike.  Just like when America's car culture went crazy after WWII, this is a serious social revolution.

Don't forget your meal of eternal happiness!

• "Brazil and China banks join list of world's top credit card issuers."  And so it begins.

• Funny thing about all this South China Sea hubbub: "Corporate ties linking China and Japan have never been stronger," says the WSJ.  Serious driver?  Japan is exporting its mania for golf to China--the fastest growing market for the sport.  It's what middle-class guys do.

Coming soon: the "golf wars"

• WSJ story on Vietnam creating its own Facebook to keep a closer eye on its netizens.  Defeat the anti-capitalist insurgents!What caught my attention: "The team has added online English tests and several state-approved video games, including a violent multi-player contest featuring a band of militants bent on stopping the spread of global capitalism."  I would say we finally won the Vietnam War.

Chart of the day: More likely to be India's century than China's?

A compelling analysis from The Economist on how India's freer style of doing business, when combined with a huge and still unfolding demographic divided, could well trump China's current star turn in the global economy.

As I have noted for a while, China's demographic "golden hour" ends right now, as from here on out they add old people to their non-working-age population--despite the continued cut-off pressure applied through the single-child policy (Deng's gift to the world, for which we must be eternally grateful).  

Point being:  China's labor gets more expensive from here on out, but the good news should be, that means China's domestic consumption (higher wages) should become a huge driver in globalization.  It's just that China will no longer have a no-brainer--pun intended--advantage.  From here on out, the extensive growth must yield to intensive growth--as in, brain-fed.  For somebody who believe his work has a lot to do with capacity-building (i.e., raising a generation of strategic thinkers), China looks like a huge market to me already:  they're having outsized impact throughout the world but aren't assuming commensurate responsibility, which I believe the Chinese shudder from out of fear that it'll be draining (yes) and complex (yes) and demand all manner of innovative thought on their part (absolutely).  But the Chinese have no choice; the world simply will demand it all from them.  So developing China's human capacity is magnificently important for the future of the world--as in, we depend on it.  So whenever I hear about China cranking all manner of this or that skill set, I say, bring it on, and--by doing so--elevate your game and ours. Our education is stuck in industrial era mode and must be radically reformed, but we won't do it without the push of serious competition.  

Conversely, China's own internal reforms, I believe, will be increasingly driven by a sense of India coming up on its heels--all good stuff with all the same attendant dangers.  The question always to be asked when great powers compete intensely on the economic landscape is, "What is the state of the military-to-military relationship?"

When I look at China-US, I spot a moribund relationship.  When I spot India-US, it looks promising but still too embryonic.  And when I spot India-China, I spot another extremely weak bond.  

These are the three dominant economies that will have both the will and wallet, over the long haul, to shape the global security landscape.  Europe is taking a pass, primarily for demographic reasons.  Russia is similarly cursed.  China has a solid window, with India's even bigger.  America, a demographic freak of nature, retains it own.

So, from a security standpoint, the most important hearts-and-minds to win are all found within that trio of powers.  Keep the relations open and cooperative, and the economic competition will never spill over into anything truly bad, but keep them weak, and all sorts of bad choices linger out there.

I stick with my tighter logic that says:  go for China and you get India in the bargain, while going for India as a China hedge, if done too vigorously, gets you neither, for China will withdraw from the logic of security cooperation and India, as we all know, hates being played as pawn more than anything.

So the goal must be:  do whatever it takes to work the security cooperation with China, encouraging India to join at every possible junction.  The tiny bit of naval cooperation on Somali pirates is a start, but so much more can be done.  In a world of frontier integration, America needs two friends with million-man armies (with Turkey the next logical spoke in that wheel).  No one but America will retain the warfighting power-projection capacity, but it's clear there are strong limits to what we can do with that and that alone.  My concept of the SysAdmin was always about reorienting our major alliance relationships, and demographics was always the underlying driver.  Why?  The rise of the middle class triggers the resource relationships, and those relationships must be protected.  Same thing that happened with the US in the late 1800s; same thing happening with China, India, Turkey, Brazil, etc. now.  We are in the midst of a huge swapping out of allies, from North/West to East/South, and America is the connection that binds the two eras, because America's system of states-uniting, economies-integrating, networks-expanding, collective security and so on is the underlying template of this era's hugely successful globalization.

Blast from my past: "The Rise of the Global Middle Class" (2009)

The Rise of the Global Middle Class

by

Thomas P.M. Barnett

Good magazine (Jan/Feb 2009), pp. 90-91.

America has had the biggest demand in the global economy for so long that we can’t remember what it was like when that wasn’t the case. But that’s all about to change.

I’ll let you in on a little secret about globalization: It is demand that determines power, not supply. Consumption is king; everybody else serves at will. So it ain’t about who’s got the biggest military complex but who’s got the biggest middle class. Everybody’s got the dream. What matters is who can pay for it.

For as long as we can remember, that’s been America—the consumer around which the entire global economy revolved. What’s it like to be the global demand center? The world revolves around your needs, your desires, and your ambitions. Your favorite stories become the world’s most popular entertainment. Your fears become the dominant political issues. You are the E. F. Hutton of consumption: When you talk, everybody listens. That was the role the Boomers played for decades in America and—by extension—around the world through their unprecedented purchasing power. But that dominance is nearing an end.

In coming decades, it won’t belong to Americans, but to Asians. So say hello to your new master, corporate America: Mr. and Mrs. M. C. Chindia.

The rise of the Asian middle class, a binary system centered in China and India, alters the very gravity of the global economy. The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw. Achieving middle-class status means shifting from needs to wants, so Asia’s rise means that Asia’s wants will determine our planet’s future—perhaps its very survival. And as any environmentalist with a calculator knows, it isn’t possible for China and India to replicate the West’s consumption model, so however this plays out, the world must learn to live with their translation of the American dream.

As for the new middle class’s relative size, think bread truck, not breadbasket: Over the next couple of decades, the percent of the world’s population that can be considered middle class, judging by purchasing power, will almost double, from just over a quarter of the population to more like half. The bulk of this increase will occur in China and India, where the percentage shifts will be similar. So if we round off China and India today as having 2.5 billion people, then their middle class will jump in numerical size from being roughly equivalent to the population of North America or the European Union to being their combined total.

The vast sucking sound you hear is not American jobs going overseas, but damn near every natural resource being drawn into Asia’s yawning maw.

No, it won’t be your father’s middle class—not at first. Much of that Asian wave now crests at a household income level that most Americans would associate with the working poor, but it will grow into solid middle-class status over the coming years through urbanization and job migration from manufacturing to services. And for global companies that thrive on selling to the middle class, this is already where all the sales growth is occurring, and it’s only going to get bigger. As far as global business is concerned, there is no sweeter spot than an emerging demand center, because we’re talking about an entire generation in need of branding—more than 500 million teenagers looking to forge consumer identities.

There are also essentially two unknowable wild cards associated with the rise of China’s and India’s middle classes: First, how can they achieve an acceptable standard of living without replicating the West’s resource-wasteful version? And second, what would happen if that middle-class lifestyle was suddenly threatened or even reversed? The planet must have an answer to the first question, even as it hopes to avoid ever addressing the second. Here’s where those two fears may converge: As their income rises, their diets change. Not just taking in more food, but far more resource-intensive food, like dairy and meat. Right now, China imports vast amounts of food and India is just barely self-sufficient in the all-important grains category. Both are likely to suffer losses in agricultural production in coming years and decades, thanks to global warming, just as internal demand balloons with that middle class. Meanwhile, roughly one-third of world’s advanced-lifestyle afflictions—like diabetes or cancer—will be found in China and India by 2030. Toss in the fact that much of the population lives along the low-lying coasts, and our notional middle-class couple could eventually cast the deciding global votes on the issue of whether or not global warming is worth addressing aggressively.

Whoever captures the middle-class flag in coming years will have to possess the soft power necessary to shape globalization’s soul in this century, because humanity’s very survival depends on our generation’s ability to channel today’s rising social anger into a lengthy period of social reform. This era’s global capitalism must first be shamed (populism) and then tamed (progressivism), just as America’s rapacious version was more than a century ago. Today’s global financial crisis simply marks the opening bell in a worldwide fight that is destined to go many rounds.

Report: NATO members foil Mumbai-style wave of attacks on Europe

From Michael Smith, the gist of the Sky News report:

Intelligence agencies have intercepted a terror plot to launch Mumbai-style attacks on Britain and other European countries, according to Sky News sources.

... militants based in Pakistan were planning simultaneous strikes on London and major cities in France and Germany . . . the plan was in the advanced but not imminent stage and the plotters had been tracked by spy agencies "for some time".

Intelligence sources told Sky the planned attacks would have been similar to the commando-style raids carried out in Mumbai . . . the European plot had been "severely disrupted" following intelligence sharing between Britain, France, Germany and the US.

It is not known whether the attackers are already in Europe.

News of the planned strikes came as the Eiffel Tower in Paris was evacuated because of a bomb scare for the second time in two weeks . . .

When the terror plan came to light, the US military began helping its European allies by trying to kill the leaders behind the plot in Pakistan's Waziristan region.

There have been a record 20 missile attacks using drone aircraft there in the past 30 days.

Why it's important to pay attention:

• It's long been my contention that extremists operating in NW Pakistan, most likely in some collusion with al Qaeda (not a big leap), will keep trying to make some big splashy strike in the West.  Many experts saw the Times Square bombing attempt as a practice run using an expendable. Figuring how hard that is to pull off--in a relative sense, and with AQ and its net falling from our collective memory thanks to the economy, the default alternative for such groups to regrab the headlines is to do something easy and cheap like Mumbai II and to do it in Europe.  So yeah, I find this whole logic believable.

• I think Obama is right when he says, we can absorb another attack without freaking out.  I don't think we would, having gone through Afghanistan and Iraq since and understanding that such unilateralism just leaves us holding the bag.  So the next strikes, I believe, can lead to more interesting and better cooperative opportunities with Russia, China, India, Turkey, et. al, if done well.  Is Obama the guy to do it?  While I don't think Americans would freak, I fear another attack would simply give the man another chance to come off as far-too-Vulcan for the average American voter.  While I think we're still in philosopher-king political mode and will be for a while, I think his off-putting style will mean we'll stop reaching for the smartest-guy-in-the-room option, because that guy should be the brilliant adviser (which Obama lacks because his smartest-guy-in-the-room mindset attracts other big egos and sycophants and apparently not much in between) and not POTUS himself, who should be all about leading and not aspire to such a title.  Therefore, I do not see a rally-round-the-prez dynamic unfolding when it eventually happens.  That bad feeling will simply be piled upon the existing glut of bad feeling about the economy.

• The other side's ability to sked our counter-reactions is a real problem, because, in our habits, we feel the need to "keep all balls in the air," so terror competes with WMD in NorKo and Iran competes with our growing fears of Chinese military build-up competes with global warming competes with . . .. What was nice about the post-9/11 period was the willingness of great powers to clear the decks on most everything else, keeping them in some big-picture perspective mode, and exploiting the common threat opportunity embodied by AQ to contemplate a serious recasting of the great power relationships for the better.  But then Bush-Cheney went wild on the unilateralism/primacy and that moment was largely wasted.  Can it happen the next time a crystalizing attack occurs?  Sadly, I don't see the leadership anywhere in the world to take advantage, so we go on with the current situation, where everybody is juggling balls and no serious progress is being made on anything. Meanwhile, mutual suspicions pile up, and increasingly we've all got enough gripes with every other great power to make cooperation an almost tortured affair. I'm not secretly wishing for something bad to happen; that is a dangerous intellectual route to go for someone who thinks seriously about the future. The point is, I don't have to. Globalization's penetrating speed has not abated one whit with the great recession--anything but. We're only dimly aware of that here in the States because we think that drawing down in Iraq and hoping to do the same in Afghanistan is a big deal for the system, when, in truth, it barely notices it right now and continues down its aggressive integrating path.  In short, we assume it's Old-Core-does-Gap-or-nobody-does-Gap, when in truth, it's New-Core-does-Gap-systematically and compared to that, the West's efforts are marginal and concentrated in bits and pieces.  I'm not looking to go back to the frantic push the US made after 9/11.  I'm looking for a better marrying up of those two efforts, because the mismatches in resources are vast and the big opportunities for new collaborations are slipping away.  AQ or others will accommodate that need whether we want it or not.  That's the dynamic we're in right now with globalization pushing into previously disconnected places with such force that serious blowback will be the norm for the foreseeable future.  Yes, we can dream it'll all come down to some naval battle in the South China Sea, but that's just habit talking.  And that's what I find so sad right now:  that whole "juggling the balls and keeping all of them in the air" mentality of Clinton and Obama is just a placeholder for real leadership, which events will eventually demand.  Why?  Because they will keep trying and eventually they'll get our attention.  As always, what we'll do in that moment will be far more important than the vertical shock laid on us.  Nation-states still run horizontal scenarios to ground, meaning the question of the day is, "When the next vertical shock comes, where will go with it?"

• Then tack on Obama's statement to Woodward that "We need to make clear to people that the cancer is in Pakistan."  I guarantee you, the next scheduled-by-our-enemies response (when the drones aren't enough) will induce a serious calibration effort/opportunity with both China and India.

And that's why I pay attention to stories such as this.

Iran's oil exports not choked, but redirected eastward

Our sanctions are described as "choking" Iran's exports.  But what I see is an export level dropping in concert with production, where the sanctions may be having significant impact, but probably not as much as claimed. 

Clearly, what the sanctions etc. has done is redirect Iranian oil exports from Europe & Japan to "rising" Asia. Eventually, the investment profile will change to reflect that, meaning the energy investments Iran attracts will likewise be shifted from West to East.  It just takes longer.  

Naturally, the Obama administration wants to shut down that possibility as well, but I suspect it'll be far less successful simply because rising Asia needs oil and gas from EVERYBODY, and can't afford our WMD qualms.

And frankly, why should they when we shield our best-boy in the region on the same subject?

Scary, I know, but eventually Iran's nukes gets Israel the strategic security it needs.  Frightening journey, yes, but I've yet to see an alternative pathway of any serious plausibility.

What India is getting wrong on the Kashmir

Guardian column says India's policies in the Kashmir account for the recent unrest, despite New Dehli's claims to the contrary:

In an echo of Iran's lost "green revolution", the youthful protesters organised using text messaging and social media such as Facebook and YouTube. Their wrath focused in particular on the so-called "black laws", otherwise known as the Armed Forces Special Powers Act, that authorises Indian security forces to stop, search, arrest and shoot suspects with impunity. As the beatings, detentions and curfews made matters worse, chief minister, Omar Abdullah, elected in 2008 as Kashmir's bright new hope, fell back on an old expedient – requesting army reinforcements from Delhi.

Despite plenty of evidence that the unrest was both spontaneous and rooted in decades of neglect, discrimination and repression of Jammu and Kashmir's Muslim majority, the Indian government has also stuck to an old story: blaming Pakistan. Delhi has repeatedly accused Islamabad of covertly backing efforts by militant Islamist groups such as Lashkar-e-Taiba, held responsible for the 2008 Mumbai attacks, to destabilise Kashmir. Now it says that Pakistan, switching tack, is at it again.

The longer-term indictment is that India works the political disconnect too much and the economic reconnect too little:

But Delhi's blinkered Kashmir policy since partition in 1947 – ignoring UN demands for a self-determination plebiscite, rigging elections, manipulating or overthrowing elected governments, and neglecting economic development – lies at the heart of the problem, according to Barbara Crossette, writing in the Nation.

The violence "is a reminder that many Kashmiris still do not consider themselves part of India and profess that they never will," she said. "India maintains a force of several hundred thousand troops and paramilitaries in Kashmir, turning the summer capital, Srinagar, into an armed camp frequently under curfew and always under the gun. The media is labouring under severe restrictions. Torture and human rights violations have been well documented." Comparisons with Israel's treatment of Palestinians were not inappropriate.

India's failure to win "hearts and minds" was highlighted by a recent study by Robert Bradnock of Chatham House. It found that 43% of the total adult population of Kashmir, on both sides of the line of control (the unrecognised boundary between Indian and Pakistan-administered Azad Kashmir), supported independence for Kashmir while only 21%, nearly all of whom live on the Indian side, wanted to be part of India. Hardly anyone in Jammu and Kashmir wanted to join Pakistan.

The problem with this path, of course, is that proud India is strong enough to prevent any such splitting.  Fine and dandy, as the economic viability of any such breakaway state is likely very low.  But that reality doesn't obviate making the locals happy, and India has failed at this for reasons unrelated to Pakistan's meddling.

Chart of the day: India needs spectacular growth no less than China

WSJ front-pager.

Point to remember:  India needs to score in that magic 8 percent ranger to continue cranking enough new jobs--just like China.

In the West, I think we just don't appreciation what a grind that it for them, since we haven't been in that phase of growth for decades now (having matured).  But this is a huge deal for the planet:  between China and India we're talking about a billion and a half poor people that the West doesn't need to worry about--by and large.  They may be poor, but things are improving and there's no great unrest.  Absent the government efforts to make that fabulous growth happen, we could easily end up owning that aggregate problem on some level (aid or worse).

Something to remember as we contemplate our duty in helping run this world:  a huge chunk of responsibility has been taken off our plate by India's and China's rise, and all we have to do is shape their trajectory for the betterment of the world.

And these are good problems/challenges to have--as in, they beat the hell out of the alternative, especially since India and China joining the global economy gave it its critical mass over the pass couple of decades.

So I say, always err on the side of letting them have their way while they're pursuing this unbelievable collective good for the planet.  Push where we can, but always keep in mind what a win their twin rise represents for our international liberal trade order-cum-globalization.

The Indian-Chinese rivalry on outsourcing: India's upper hand for now

FT story on how India fears China will become a major competitor in outsourcing of services, with the concluding judgment being:  1) China's share remains but a fraction of India's for now; and 2) even if it grows a great deal, this global economy IS big enough for the both of them.

Right now, China's service outsourcing sector is growing faster, but it's where India was years ago, so that steep trajectory is unremarkable.  The Indians are just scared because they know what it means to roll up markets and worry about the Chinese doing the same to them.

Beijing's declared goal:  ten internationally competitive outsourcing hubs with 1k vending Chinese companies pulling in 100 multinational companies as client.  Naturally, China is making some headway in the US and Europe--traditional strongholds of the Indians.  

Why China won't catch up here?  India's language advantage (and frankly, trust advantage) and China's big domestic market.  Plus China is small fry compared to India ($10b to India's $50b).  China's domestic IT services market is already bigger than India's, so China's service outsourcing industry can expect a lot of growth there in addition to whatever it wins abroad.  India's industry would love to capture some of that China pie as state-owned banks and telecoms open up more in that way, but I would expect Beijing to make sure most of that business stays home.

An India-Iran-Russia package on Afghanistan stability: sounds smarter to me than relying on NATO's staying power

WSJ op-ed via WPR's Media Roundup.  Shanthie Mariet D'Souza is an Indian academic.

The gist of the tripartite vision, as seen from India:

At the moment it's tough to discern what the details of this tripartite cooperation might look like. The overarching goal is to prevent the return of the Taliban to any position of influence in Afghanistan. India would of course welcome any initiative to inhibit the political legitimization of the Taliban and, by extension, Pakistan's influence in Afghanistan. One example is the Indian government's construction of the Zaranj Delaram road, which connects landlocked Afghanistan to Central Asia and Iran, reducing the country's dependence on Pakistan for trade.

India's vision shouldn't be surprising. The country has historically been allied with Iran and Russia, so in some respects Delhi is simply reverting to form. But since the Clinton administration, India has drawn closer to the U.S., both economically and militarily, as a response to the rise of China. Given the Obama administration's strained relationship with Russia and Iran, Delhi will have to proceed cautiously to avoid a rift with its U.S. partner.

This isn't an impossible mission. Even Washington must agree that in the long run, Afghanistan will be better off if all of its neighbors have a stake in the country's stability. When President Obama visits Delhi in November, India should present its roadmap for how it can contribute to this vision, either as a direct participant or as a bridge between the U.S., Russia and Iran.

For years, India pursued a "soft power" approach to Afghanistan that focused on economic aid and development. Its reinvigorated regional diplomacy shows how its role in the region is changing. Unlike in the past, India is a key power that needs to be involved, consulted and heard in discussions on Afghanistan. Washington should take note.

I couldn't agree more.  The lack of this sort of wider regional involvement to date in Obama Administration efforts is very frustrating.

I know, I know.  Admin officials will say, "We've broached this subject with the X's!"  But I would like a bit more than the usual box checking.  Didn't we get enough of that empty gesture from Condi "talking-points" Rice?

More natural counter-China balancing in Asia: India-South Korea

Great WPR piece that speaks to the "Finlandization" fallacy peddled by Krepinevich:

Indian Defense Minister A.K. Anthony visited South Korea last week at the invitation of his South Korean counterpart to boost defense cooperation between the two states. His visit came just two months after the Indian external affairs minister visited Seoul and at a time of great turbulence in the strategic environment of the Asia-Pacific region. After having long ignored each other, India and South Korea are now beginning to recognize the importance of tighter ties. The resulting courtship was highlighted by South Korean President Lee Myung-Bak's state visit to New Delhi in January, when he was the chief guest at the Republic Day celebrations. During his stay, New Delhi and Seoul decided to elevate their bilateral relationship to a "strategic partnership."

Ah, but what is this compared to the Assassin's Mace!

[cut to the Pink Panther squaring off against his man-servant]

South Korea and India entered into a free trade agreement last year too.

The clash of the titans, according to The Economist

Economist editorial and briefing on the Indian-Chinese economic rivalry.

Unlike the rising tandem of Japan and Germany a century ago, India and China are akin to entire civilizations and not mere nation-states.  They are also overwhelming poor, despite the booming economies.

And yet, how these two handle their twin rise will likely determine, says The Economist, whether or not great-power warfare returns to the scene.

Neither seems comfortable in their skin, says the editorial.

China, for example, gets resentment whenever it's told it needs to do more for the world.  And yet, how not to involve the world's most populous state, biggest exporter, biggest car market, biggest carbon emitter and biggest consumer of energy?

India's paranoia tends to run toward the Chinese directly:  they see China, at every possible point, trying to undermine its rise by locking in resources the world over, keeping it from a permanent UN Security Council seat, challenging its desired naval supremacy in the Indian Ocean, and the like.  Then, of course, the last time they fought, in the early 1960s high up in the Himalayans, India fared badly. 

From the outside, the Indians seem the better Western partner: its interests do not threaten the West and its long-term prospects seem brighter than China's (would you rather lose 100m workers by 2050 or add 300m?).

For now, only the hyper-nationalists on both sides dream of war between these two rising giants.  Trade, meanwhile, has increased 230-fold since 1990 to a rough $60B this year (although decidedly favoring the Chinese, who, like in so many bilateral relationships, import raw materials from India while sending back finished goods).  The leadership on both sides seems keenly aware that any fight between the two would likely derail both nation's rise.  Still, both are nuclear powers and, between them, have 4m men in uniform, and share a disputed 4,000km border that includes the restive Tibet.  But no confirmed shots in anger since 1967.

China's hubris of recent years has been expressed in its quiet but aggressive development of infrastructure along the disputed line, to include the permanent stationing of a lot more troops.  India pledges to match that effort.

And yet, this is the system America created:  an international liberal trade order that's easy to join and hard to dominate or overthrow, so if India and China continue to rise peacefully, despite all the trappings of power that would suggest the high probability of conflict, then our system is much to be credited, because we're doing what the British colonial order was never able to accomplish--peacefully integrate rising great powers.

My take remains the same: if you get Chinese partnership, it's hard for India to remain outside the larger, resulting process, but if you try the same with India, you get a far more stubborn China. And yet, a certain amount of hedging is called for until China becomes something far more pluralistic in its politics. Simply put, we don't fear rising democracies, only rising authoritarian states.

The non-reciprocity of trade with China frustrates India's outsourcing biz

FT story on the consistent issue with China:  it wants into your markets but ultimately shuts you of its own.  

So China pushes India to let telecom equipment giant Huawei into its big market and yet Indian outsourcers are largely shut out of what should be the lucrative Chinese market.  The frustration leads the Indian industry to speak more of Latin America as the future booming market rather than China, which, like Japan, remains difficult to penetrate.  

With Japan, Indian outsourcers detect a "lack of urgency to innovate," whereas in China, the biggest hurdle is the language barrier for an industry that thrives largely on using English--along with the usual complaints about dealing with state-influenced enterprises.

So India's commerce ministry is pushing China to open up more in this industry.  

Western companies that have done well in China's service sector say you have to indigenize the workforce to succeed, something Indian outsourcing companies are apparently less willing to do.

What I see here: The world's two biggest rising economies are so amazingly different in structure and temperament, and yet everybody, including top players on both sides, are determined to foster more linkages out of the fear that zero-sum competition between them would ruin both.

I know a lot of experts spot a ton of friction in this relationship; I'm just amazed at how much effort is being made on both sides to smooth things over wherever possible.  I mean, compared to part periods where rising rivals endured such dynamics, this thing has gone amazingly smoothly to date.

Pakistan finally wakes up on its own insurgency

WSJ story on how Pakistan now admits its own internal militant insurgencies problem is a bigger threat than India.

Hmmm.  About ten years and $10B in military aid too late.

No impact yet seen on troop positioning.  Pakistan has about 150k soldiers in the Taliban fight, with 100k in reserve.  350k keep a close eye on India to the south.

Experts say that the ISI (intell service) may be leaning this way, but the military still likes to use the militants as a tool against hated India.

America gives upwards of $2B a year in military aid to Pakistan.  No ultimatums issued by Team Obama--unlike in the case of Turkey.

The Pakistan Taliban kill about 1,000 Pakistanis every year since 2003.

The middle class loves movies--3D or not!

image here

Trio of FT stories.

First one laments future of 3D in Hollywood after recent string of flops that prove only that bad films, when presented in 3D, still suck!  Avatar?  Alice?  Great flicks.  But the rest of the recent crop?  Complete crap--unsave-able by 3D, big surprise.

With roughly 2/3rds of Hollywood's take now from foreign markets, you wonder about the need to push 3D so extensively, especially given the theater costs involved and the higher ticket prices. Neither go well with an emerging global middle class, which is easier to please than that and doesn't necessarily want to shell out more money for fewer viewings.

Second story cites rising impact of India's middle class on theater-going there, as luxury cinemas (basically, a version of the modern US cinema but a big improvement over standard national fare) are going up all over India's big cities.  And even with Bollywood's immense draw there, the article says that the full force of the market is far from being felt to date.  Some chains are reporting 80% growth in attendance over the last year, as more people with more disposable income are flocking to films both native and foreign (Inception, for example, is doing very well in India).

Still, the numbers can only go up.  A blockbuster in the US will get 70m viewers out of a total population of 300m.  In India, a blockbuster gets maybe 50m out of 1.2B.  And we're talking an Indian demo that's half under 25 (or 600m in youth alone!).

Already, according to the third cite, we see Universal planning a big movie-theme park in Mumbai, one that would blend the best of Bolly and Holly.

A trend to watch.

The Gap is Asia's to shrink economically

image here

Bloomberg Businessweek with goofy title (Really?  The new silk road doesn't lead to the U.S.?  Wow!  I would have expected otherwise, given our geographic position on the planet.)

All this piece confirms is that the economic integration and development of the Gap will be done primarily by the New Core--not the Old.  That's something I've argued for many years now.  It just makes sense:  the last in, the next integration begin.  Think of it as a staircase:  the higher up you are in the production chain, the less sense it makes for you to be the primary agent of slotting in those who come immediately behind you.

So Europe slotted in North America way back when, then we did the same to Asia and the ABCs of Latin America, and now they do the same to the Gap.

As one expert is quoted in the piece, "We saw the same phenomenon with American and European companies 100 years ago."

Yes, this all means more competition for markets and resources for companies across the Core, but the best of the Old Core's companies will clean up nicely--like a Caterpillar.

A good byproduct:  as the New Core-Gap trade explodes, more of it will be done in currencies other than dollars and euros, and that's a good disciplining pressure on the Old Core--especially the US.

Chart of the day: Who adds labor and who doesn't

From WSJ column by David Wessel--always good.

This is the most interesting demo slide I've seen in a long while. Already put it into the brief.

What I note:

1. the decline of Europe and Japan (almost off the chart--pun intended)
2. how closely China's trajectory mirrors Old Core Europe
3. America as Old Core outlier without peer
4. India's fantastically long "golden hour" of declining ratio of dependents to workers--much longer than China's was.

But it's the numbers that jump out at you. Between now and 2050 we add 35m workers, China loses 100m and India gains 300m.

Desilu = 20th century, Desi Hits! = 21st

Anjula Acharia-Bath, CEO of Desi Hits!

WSJ story on new record label focused on promoting Indian music.

Jai Ho!

Actually, my favorite recent Indian piece was that long soaring one that fronted Spike Lee’s “Inside Man.”

Legendary Jimmy Iovine supports Desi Hits!, which started in 2007 and is now coming under the larger umbrella of Universal.

The label is expected to blend Indian music with hip hop—naturally.