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Speech by Shri Pranab Mukherjee, Minister of External Affairs, at the Emirates Centre for Strategic Studies and Research(ECSSR), Abu Dhabi on the “India’s Foreign Policy and India-Gulf Relations: Meeting the Challenges of the 21st Century”

May 12, 2008

It is an honour for me to address this august gathering at the Emirates Centre for Strategic Studies and Research. This institution has acquired a well-deserved reputation as a centre for foreign affairs research and as a podium for the expression of important ideas relevant to contemporary times. I am grateful to Dr. Jamal Al-Suwaidi, Director General, for providing me with this opportunity to share some of my perceptions pertaining to our contemporary environment. These perceptions guide India as it shapes its foreign policy and its ties with this important region – the Gulf.

India’s ties with the Gulf go back many centuries: every area of the Arabian Peninsula continues to yield evidence of this intimate relationship. Every year, archeologists and scholars unearth new findings from the soil and from ancient manuscripts. This relationship was so comprehensive that it encompassed every aspect of human life - commercial, intellectual, religious, social and cultural. Indeed, our cultures were enriched by these interactions over the centuries. Today, if we feel a natural affinity for each other, it is because these ties were given shape and content by our ancestors over several centuries.

At the same time, relations between India and the Gulf have remained substantial and vibrant because they were constantly reviewed, and, where necessary, re-invented, so that they always remained relevant to their times. In ancient times, Indian goods traversed across the Indian Ocean and then across land routes of the Arabian Peninsula to markets in Greece and Rome. Peninsular India had very substantial links with the Arabian Peninsula from pre-Islamic times. Hence, after the advent of Islam, interaction between these two regions continued seamlessly. The impact of the new religion which had taken birth in Hijaz came to be felt in Malabar soon after the divine message was revealed to the Holy Prophet, and a number of Indians became adherents of Islam on the basis of the influence and piety of Arab traders and teachers.

Indian pilgrims, over the last 1400 years, bravely crossed the seas in obedience to the call of the Almighty and performed Haj every year in their thousands. In due course, India came to meet most of the needs of this region – food and clothing, as also items of comfort and luxury such as silks, muslin and gold jewellery. It is interesting to note that the principal items exported from India to this region have not changed over the last several centuries: basmati rice, textiles and jewellery continue to constitute an important part of our exports to the Gulf!

The advent of the "oil boom” from the early 1970s qualitatively transformed our relationship. Now, as the countries of the Gulf embarked on massive programmes for the development of their infrastructure, including their hydrocarbon industries, India was in a position to meet their need for human resources.

It would not be an exaggeration to say that for the last 35 years, India has been a reliable source that has been drawn upon by the Gulf countries to meet their requirements of professionals, technicians and labour. It is a matter of pride for us that Indians are associated with most projects undertaken in the Gulf, as contractors, sub-contractors and as contributors of human resources.

Again, in recent years, the profile of the Indian community has changed in accordance with the changing needs of the Gulf. As the Gulf economies move slowly towards the development of the services sector, more and more Indian professionals have begun to come to the Gulf: 20 years ago, the Indian community was blue collar to the extent of 85-90 per cent, with a negligible percentage of professionals; today, it is only 65% blue collar, with 15-20% being professionals.

Before we identify the contours of the new ties between us that would be relevant for this century, let me briefly touch on the principal challenges before us. As I see it, the world today is characterized by two robust but contradictory trends. The first is the trend towards globalization where national boundaries are becoming less relevant in the wake of the movement of technology, finance, information and personnel. However, this scenario of a world without borders, at times referred to as a "global village”, is challenged by the other trend, which is the tendency to reject globalization and to assert respective identities and interests.

This is not surprising. Today, the fruits of globalization tend to be enjoyed by those with the appropriate technological and educational tools and training. In this scenario, millions of those who are not similarly endowed and are thus excluded from the fruits of globalization tend to respond by mobilizing support from other similarly excluded groups. The result is resistance to the new global order, at times peacefully, at other times violently. When such a dichotomy occurs within the boundaries of one nation, it cannot but be a matter of concern for policy makers and government leaders.

How are we to cope with these challenges of inequity, both within our national borders and in the world order itself? There are no simple answers to this question, no facile remedies. But I would like to share with you some thoughts I have on this complex subject.

The obvious need, as far as developing countries are concerned, is to pursue the path of high growth rates, with active programmes to address the needs of those at the bottom of the economic ladder. After several years of modest annual growth, India has now entered the era of high growth rates, over 8 per cent per annum across the board, and between 9-12 per cent per annum in certain sectors, particularly the services sector. The impact of these growth rates is quite visible: today, we have a substantial middle class that, in terms of achievement - technological, managerial and financial - is able to hold its own with the best in developed societies. We have also been able to address the problem of poverty substantially. Many more people than before are today able to experience a palpable improvement in terms of food consumed and other aspects of daily life that enhance human dignity.

At the same time, I would not like to play down the problems we still face in India. Despite our successes in poverty reduction, far too many people still remain in dire economic straits. Hence, the principal challenge before us is to ensure that we maintain high economic growth rates every year for the coming 15-20 years, so that we can bring prosperity to the masses at large.

Two of the most important pre-requisites in this regard for us are energy security and development of infrastructure. India needs $500 billion in resources to meet specific targets in infrastructure development set out in our 11th Five Year Plan. We also need to expand electric power production six to seven times between now and 2032. Both these challenges, call for a robust national effort to obtain the resources required to meet these targets. It is here that I see the foundations of India’s new terms of engagement with the Gulf region.

As a result of high oil prices and prudent fiscal policies, the countries of the GCC have generated extraordinary investible surpluses. More importantly, they are today looking beyond their traditional partners in the West: in fact, the "Look-East” policy is important to all the GCC countries. I am happy to note that all of them see India as an important partner in this regard. Hence, I personally believe that investments will constitute a new, abiding and mutually beneficial area in our ties for the foreseeable future.

The other area of energy cooperation is more familiar to us. For several years, India has obtained the bulk of its oil requirements from the Gulf. Given the Gulf’s vast oil reserves and our geographical proximity, I am confident that India and the Gulf will remain long-term partners in the energy sector. However, the challenge before us is to transform the present buyer-seller relationship into something more substantial and enduring. I am referring here to the need for cross investments in each other’s energy sectors. Indian companies could participate in exploration and development projects in the Gulf, while Gulf companies could invest in India’s downstream and petro-chemical sectors. Both of us also recognize the need for trained personnel in the hydrocarbon sector. Thus, we can collaborate in the development of educational and training institutions, not only covering the technological aspects of the industry, but also related areas such as health, safety and environment sensitivity.

Trade in goods and services between India and the Gulf is expanding rapidly. The export of foodstuff constitutes an important part of India’s export basket. Today, we are a reliable supplier of food products to the Gulf countries and this will only expand in keeping with the expansion of Indian agriculture. I thus see India’s requirement for energy security and that of the GCC countries for food security as opportunities that can be leveraged to mutual advantage. In order to strengthen bilateral economic ties, we have now in place institutional arrangements with individual GCC countries and with the GCC as a whole to hold periodic interactions. These should now be made more focused and result oriented.

Ladies and Gentlemen,

I have sketched out some of the broad challenges that the global community faces and the areas that I believe will bind India and the Gulf in the coming years. However, even as we focus on the positive and substantial aspects of our relationship, we cannot ignore the fact that the regional environment within which we are giving shape to our relations is disorderly, insecure and extremely uncertain.

The issue of Palestine is a matter of abiding concern. Even as Israel celebrates the sixtieth anniversary of its Statehood, the rights of the Palestinian people remain to be achieved. This situation cannot be allowed to continue: not only does it cause deep harm to the people of Israel and Palestine, it also has a negative resonance across the region.

India continues to extend its full support to the Palestinian people in realizing their aspirations for a sovereign, independent, viable and united state living side by side at peace with the state of Israel. I believe that the reasonable and pragmatic "Arab Peace Plan”, which incorporates the collective wisdom of the Arab leadership, provides a valid basis to address the issue of Palestine, balancing Israel’s need for security with the just aspirations of the Palestinian people for statehood.

The other area of concern for us is Iraq, with which India has civilisational ties. We are pained by the continuous violence and instability afflicting Iraq. We wish to see the Iraqi people freely determine their political future and exercise control over their natural resources. We believe the UN has a crucial role to play in the process of political and economic reconstruction of Iraq. The international community, especially Iraq’s neighbours and the P-5 countries, should help in finding a political solution to the on-going violence and sectarian strife in Iraq. The US-Iran-Iraq talks are also important in this context and must seriously address these problems. A political process that brings together the different factions in the country and upholds the sovereignty and territorial integrity of this nation is of utmost urgency. India has conveyed its willingness to continue its assistance for the reconstruction of Iraq in all fields, both bilaterally and through multilateral efforts.

I would now like to say a few words about Iran. President Ahmedinejad visited New Delhi a few weeks ago. This visit reflected our traditionally close relations. We see Iran as a major economic partner, particularly in the area of energy security. Again, taking into account its geographical location, its heritage and its natural resources, it is a significant role-player in regional and world affairs. I believe that engagement with Iran is important. Such engagement can play an effective role in promoting peace and stability in West Asia, particularly in Iraq and Palestine as also in Syria and Lebanon, while supporting the regional and global effort in combating extremism and terrorism. In this regard, I must mention that Iran plays an important role in Afghanistan. The international effort underway there would also benefit from greater engagement with Iran.

There have been, in recent years, some concerns pertaining to Iran’s nuclear programme. Our position in this regard is clear: we fully support Iran’s attempts to develop its knowledge-base pertaining to the harnessing of nuclear energy for peaceful purposes. However, it has to, in accordance with its own international commitments and obligations, satisfy the international community that its programme is indeed peaceful. In this regard, we believe that the most effective platform to address this matter is the IAEA, and we strongly support the need for continued dialogue between IAEA and Iran, without the accompanying cacophony of recrimination and threats of violence.

I am sure many of you have a deep interest in India’s relations with Pakistan. In recent years, India has pursued a policy of positive and substantial engagement with Pakistan. We wish to address issues that have affected our ties over the last several years. We also wish to make progress in areas such as enhancement of physical connectivity and upgradation of economic ties. Through the medium of the composite dialogue, we have addressed a number of serious issues of bilateral interest and I am happy to report that we have made considerable progress in regard to most of them.

While developments in Pakistan over the last one year did slow down the process of bilateral interaction, the overall atmosphere remained positive. We welcome the revival of the democratic process in Pakistan and remain confident that we will be able to pursue the bilateral process of consultation and dialogue and continue to make progress in addressing various issues.

We do, nevertheless, remain deeply concerned about the strength of extremist elements in Pakistan who are not only a source of danger to neighbouring countries such as India and Afghanistan, but are also capable of severely wounding the body politic of Pakistan itself. With their intolerant and extremist mindset and propensity to terror, such forces, unless countered resolutely, could become a source of grave instability in our region.

Ladies and Gentlemen:

India has been a victim of extremist terror for nearly 25 years. We have seen at first hand how societies on the path of progress are torn apart by violence that divides traditionally fraternal groups and encourages hate and intolerance.

Just as we need a robust regional and global effort to pursue our positive and constructive programme of energy security and economic development, so also do we need a similar regional and global effort to combat the scourge of extremism and terrorism. India extends its hand of support and cooperation to the countries of the Gulf and calls upon them to set up vibrant partnerships with us to combat terrorism and also to take up the cause of development. We need to look collectively at the common regional challenges we face – political, economic, social and discuss these issues and find solutions together.

Before I conclude, I would like to say a few words about India’s ties with the UAE. India has watched with deep admiration the strengthening of nationhood within a federal structure, which makes the UAE a unique political entity in West Asia. This achievement is entirely due to the wisdom of the founding fathers of the nation, His Highness Shaikh Zayed bin Sultan Al Nahyan, the former President of the UAE and the Ruler of Abu Dhabi, and Sheikh Rashid bin Saeed Al Maktoum, the former Prime Minister and the Ruler of Dubai. Having forged national unity, these two outstanding leaders of our times have put their country on the path of economic, social and cultural progress.

India is proud to have participated in this extraordinary developmental effort that has placed the UAE in the vanguard of nations in terms of its economic achievement. I am delighted to see that Dubai is now positioning itself to emerge as a global services provider, while Abu Dhabi is already a major source of investment on the global scene. Indeed, the UAE’s energy resources and investible funds make it a natural partner for India, which is seeking precisely these resources to sustain her high growth rates. In turn, we see ourselves as partners in the development of the UAE’s services sector and the knowledge-based economy, which we will continue to support through our technological, financial and human resources.

Our bilateral relations have been strengthened by regular high level interaction. We were privileged last year to host His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and His Highness Shaikh Abdullah bin Zayed Al Nahyan, Foreign Minister of the UAE, who led the UAE delegation for the India-UAE Joint Commission that was revived after 13 years. We are committed to expanding our ties and cooperating in ensuring the peace and prosperity of West Asia as a whole. In this regard, I am happy with the regular consultations that we have on issues of common interest and the steady expansion of our political and economic ties. The interactions between our security and defence personnel and the visits of our naval ships have added a new dimension to our relationship.

Ladies and Gentlemen:

I hope my remarks today have helped clarify certain aspects of how India sees the future of its relationship with this region. For us, this is a relationship to which we accord the highest importance and we remain committed to expanding its frontiers. My visit here today is only one in a series of high level exchanges that have marked our ties. I am confident that, in the coming years, our relationship will continue to grow from strength to strength.

With these words, I thank you once again for this opportunity and for your patience.

Thank you.

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