should india sign the ctbt

8/8/2019 Should India sign the CTBT

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Should India sign the CTBT?

AFTER the successful completion of a series of five nuclear testsat Pokhran, the Prime Minister, Mr. Atal Behari Vajpayee, claimedthat "India is a nuclear weapon state." In a formal statementissued at the press conference on May 17, Dr. A.P.J. Abdul Kalam,

Scientific Adviser to the Defence Minister and Dr. R.Chidambaram, AEC Chairman, said that India possessed both nuclearweapons and their delivery system.

These tests are the logical conclusion of the process which beganat Pokhran 24 years ago when Indira Gandhi had the first nuclearexplosion done in 1974. The scientific and technologicalcompetence of the Indian scientists and engineers reflect thevision of Jawaharlal Nehru, who laid the foundation for thesedevelopment. This was carefully nursed and developed by the

successive Congress Prime Ministers.

Reacting to the nuclear explosions, the U. S., Japan and a coupleof other countries have declared economic sanctions againstIndia. They have also demanded that India must not proceed withmanufacturing nuclear weapons and that it should signunconditionally the Non-Proliferation Treaty (N-PT) and theComprehensive Test Ban Treaty (CTBT) without delay. The G-8nations in a joint communique adopted at the Birmingham summit onMay 17, asked India and Pakistan not to deploy nuclear weapons.The British Prime Minister, Mr. Tony Blair, conveyed what hetermed the G-8's " strong exception" to India's nuclear tests andclaimed that he had obtained an assurance from Mr. Vajpayeeduring a telephonic conversation that New Delhi would start

negotiations on the CTBT and that the G-8 countries were nowawaiting "delivery on commitments made by Vajpayee to me."

The question is whether India should sign the CTBT and the NPT.India's refusal to sign the treaties was based on its principledstand articulated over the years. India's aversion to nuclearweapons was first expressed by Mahatma Gandhi when atom bombswere dropped over Hiroshima and Nagasaki in Japan, causingunprecedented devastation. He said it was the most diabolical useof science. We were, therefore, appalled that instead of steppingback from the road to nuclear ruin, the nuclear weapon statessped faster and faster down it. As they accelerated, India tried

unsuccessfully to apply the brakes.

In 1954, Nehru called for a "standstill" agreement to haltnuclear tests, to be followed by discontinuance of production andstockpiling of nuclear weapons. In 1965, India proposedprinciples for an NPT. In 1982, it called for a convention toban the use of nuclear weapons and for an end to the productionof fissile material for nuclear weapons. In 1988, Rajiv Gandhi


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proposed to the U.N. a comprehensive action plan for a world freeof nuclear weapons. However, the nuclear weapon power states didnot heed the advice. Before the signing of the CTBT, the fivenuclear weapon states had conducted 2,047 tests since 1945, theU.S. accounting for more than half (1,032) followed by Russia(715), France (210) and the U.K. and China (45 each). China and

France carried out nuclear tests even at the end of thepenultimate stage of negotiations on the CTBT and after the

indefinite extension of the NPT.

In January 1994, the Conference on Disarmament adopted anunambiguous mandate to conclude the " CTBT which would contributeeffectively to the prevention of proliferation in all itsaspects, to the process of nuclear disarmament and, therefore, tothe enhancing of international peace and security." It reflecteda balance among the different objectives that the delegatessought to achieve. India's constructive approach in thenegotiations had been to try and ensure this balance so that the

treaty did not become a flawed instrument aimed only at curbing ahorizontal proliferation. For India had visualised the CTBT aspart of a step-by-step process of global nuclear disarmament,leading to the complete elimination of nuclear weapon with a time-bound framework. In fact, at the special sessions of the U.N. in1988, the then Prime Minister, Rajiv Gandhi, placed a concreteaction plan for a universally negotiated treaty based on equalitywith the objective of not only preventing proliferation but alsocompletely eliminating nuclear weapons over a definitive time-

frame.

Based on India's position on the CTBT, concrete Indian textual

proposals or amendments were tabled on June 26, 1996. Theproposals served to link the CTBT to the objective of eliminationof nuclear weapons within an agreed time-frame. As the proposalswere not taken on board, India made a definitive statement thatit could not subscribe to the CTBT in its present form as it wasnot conceived of as a measure towards universal disarmament. Itwas also not in India's national security interest. India pointedout the deficiencies of the CTBT in the form it was presented:

It was not aimed at nuclear disarmament. it was not an effectiveinstrument to create a nuclear weapon-free world; it was notreally comprehensive as it did not arrest the qualitative

development of nuclear weapons. it does not enhance the globalsecurity for which the mandate was received at the Conference onDisarmament in January 1994; both the NPT and the CTBT wereunequal and flawed and both the treaties were discriminatory andrecognised the concept of "deterrence" in favour of the five

nuclear weapon states.


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To enhance global security, a decisive nuclear disarmament in atime-bound framework was needed. Therefore, India informed theCD on June 26, 1996 that as the treaty had not lived up to itsmandate, the country would no longer be able to maintain itsoffer of CTBT monitoring facilities as part of the internationalverification system and requested that references to monitor

facilities located in India be deleted from the draft treaty. OnJune 28, in the draft text presented the reference to themonitoring stations in India was deleted but a new article xivwas inserted which made the entry-into-force conditional uponratification of the treaty by 44 countries including India. Thiswas unacceptable to India. It opposed the adoption to the drafttreaty by the ad hoc committee and its submission to the CD

plenary.

Subsequently, India also opposed the transmission of the specialreport by the CD to the 50th U.N. General Assembly as there wasno consensus on the draft treaty text. However, on the basis of a

resolution moved by Australia, the non-consensus draft treatytext was adopted in the resumed session of the 50th U.N. GeneralAssembly on Sept. 10, 1996. India, along with Bhutan and Lybia,voted against the resolution while Cuba, Tanzania, Lebanon, Syriaand Mauritius abstained. A total of 158 countries voted in favourof the resolution and the CTBT came into existence and 144countries have so far signed, including the five nuclear weaponstates.

Against this background, it is to be considered whether Indiashould sign the CTBT. If India is not recognised as a nuclearweapon state and does not enjoy an equal status with the five

nuclear weapon power states, then it will have to bear theobligations and will not have any benefit. The tests carried outwill not lead us further as the upgrading of technology would beprevented by the international monitoring system. Not only on thenuclear sector, inquisitive inspections would hamper the normal

industrial and technological developments.

Nowadays most of the sophisticated technologies have a dual use.Restrictions on export of these dual-use technologies imposed bythe industrialised countries are already standing in the way oftechnological upgradation of the developing countries.Strengthened by the monitoring and inspection under the CTBT, the

curbs on use of imported technologies would increase. Therefore,if India agrees to sign the CTBT unconditionally withoutobtaining adequate safeguards for its future plan, it would notbe able to consolidate its gains obtained through the tests.This is a crucial issue on which a national debate should takeplace. As the Government will have to respond to the adverseimpact of economic sanctions, it should initiate a dialogue with


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all the major political parties and others on the strategies to

be adopted as they resume negotiations on the CTBT and the NPT.

The Real Reasons Behind Indias Reluctance to Liberalize Petroleum Prices

In just four years the Indian government has had three high-level committees recommend how petroleumproduct prices should be determined. All three have shared the same general conclusions: the governmentshould reform fuel-price subsidies and use other, more effective policies to improve the welfare of thepoor. But the reality behind India's reluctance to liberalize prices is not a lack of good policy advice. It isthat dealers and wholesalers can make large amounts of money out of the subsidies, and, one way oranother, some of this ultimately ends up supporting politicians.The first committee was commissioned in 2006, as international crude oil prices were climbing, and oilcompanies were losing money because of the price controls. The government asked the chair, Dr.Chakravarthi Rangarajan, former Chairman of the Economic Advisory Council to the Prime Minister, tolook at the pricing and taxation of petroleum product prices, with a view to rationalizing them. The

committee concluded in no uncertain terms that the government should allow oil companies to set pricesbased on trade parity in other words, at international prices and there should be no further interferencewith the market. The committee also warned that if the government failed to liberalize prices, oil-marketing companies would become non-viable, unable to recover costs and with mounting losses. Thisis of course something that has now taken place.In India, the government subsidizes petroleum products by requiring the companies who sell them referred to as oil-marketing companies' to do so at a fixed price. If the companies are private, theyreceive no compensation and must absorb any losses. If they are government-owned, they are givengovernment bonds in return: financial instruments that guarantee a fixed payment at a future time period,and can be immediately traded for their future value on financial markets. Giving out government bondsis essentially the same as printing new money. Government-owned oil-marketing companies are alsocompensated with some of the profits earned by government-owned upstream oil companies. Even state

oil companies, however, lose large amounts of potential revenue and the entire sector blames thearrangement for continued under-investment and financial difficulties. Between fiscal years 20042009,the subsidies resulted in under-recoveries of US$ 67 billion. It is difficult to estimate the total governmentexpenditure because the creation of bonds is not recorded as spending in the national budget.In 2008, as crude oil prices continued to increase, and the financial situation of oil companies worsened, asecond high-level committee was organized under the chairmanship of Shri B. K. Chaturvedi, a formermember of the Planning Commission, the government body that draws up India's Five Year economicplans. Unlike the Rangarajan committee's report, the Chaturvedi report did not recommend theliberalization of prices in direct and unambiguous terms, but its recommendation that product prices bebased on "export parity", as opposed to trade parity, amounted to the same thing. They suggested verystrongly that there should be no subsidies on kerosene and liquified petroleum gas (LPG), and that thepoor could be more effectively helped through a smart card or coupon system. In December 2008,

dramatically lower oil prices offered an ideal opportunity for reform, but the government did not act onthese recommendations because of populist political pressure from opposition parties and some allies. Thewindow of opportunity soon closed: prices climbed to over US$ 70 per barrel, once again affecting thebottom lines of the oil-marketing companies.In 2009, the government instituted the formation of a third committee, this time headed by Dr. Parikh,another former Planning Commission member, who in his Integrated Energy Report of 2006 had alreadyrecommended the liberalization of petroleum product prices and the distribution of subsidized kerosenethrough a smart-card system. It was not a surprise that the committee's report eventually recommendedmarket-based pricing (without specifying trade or export parity) for petrol and diesel. It also


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recommended the gradual removal of subsidies on kerosene and LPG, while suggesting an immediateincrease of US$ 0.13 per liter in the case of publically distributed kerosene and US$ 2.20 per cylinder inthe case of LPG.Most importantly, the Parikh committee report discredited the reason most commonly given for thecontrol of petroleum product prices: fear of increased inflation and price volatility that would negativelyaffect the poor. In the view of the committee, as petrol is largely an item of final consumption in India,

price increases would not be expected to have much impact on inflation, and as it is only consumed by thepoor in small amounts, liberalization would not be expected to significantly affect them. A similarconclusion was arrived at in the case of diesel fuel.While some of the leaders of the Congress party in the Indian government, especially finance andpetroleum ministers, are currently inclined to implement the Parikh committee's recommendations, theirallies in the United Progressive Alliance (UPA) the coalition of political parties heading the government have been slow to show their support. Even in the Congress party, there is unlikely to be much backing.The same old arguments are given: price liberalization can give rise to inflation, and the poor will beaffected.The real reason for their reluctance is that the rationalization of petroleum product prices will reduceopportunities to collect economic rents. I have conducted analysis into the diversion of subsidizedproducts, like the adulteration of reduced-price kerosene in petrol and diesel, or the redirection of

residential LPG to commercial and automotive sectors, as well as the misuse of subsidies intended for thepoor, which concludes that about US$ 48 billion of black money' has been generated between 20042009. Unfortunately, while all three government-appointed reports have discussed that this diversion ofproducts is taking place, none have even attempted to analyze the impact of such colossal amounts ofmoney on India's governance or energy security.Reform of India's petroleum subsidies would affect the dealers and wholesalers involved in thedistribution of these sensitive products, and it is a well known and established fact that most of thesedealers are either political leaders or among those close to them. Rationalizing prices in one stroke wouldeliminate the opportunity to earn as much as US$ 810 billion per year. Which political parties would liketo lose such an opportunity? It is this factor which has prevented any previous efforts to implement well-argued recommendations from high-level committees. The Parikh committee will see the same fate asthose that have come before. Adam Smith's invisible hand of self interest is indeed at work, but if left to

its own devices I doubt it will promote the common good!

should india sign the ctbt

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