CABLE TO PMO FROM INDIAN EMBASSY WASHINGTON DC
TOP SECRET. NO DISCLOSURE TO FOREIGNERS, ALLIANCE PARTNERS IN UPA, OPPOSITION, BURKHA DUTT AND VIR SINGHVI.
Scene setter for forthcoming visit of POTUS to India.
In a pre visit meeting at the Oval Office with Post (attended by SecState Clinton and our RAW representative masquerading as translator from Indian English to American English) POTUS expressed keen desire to sign new deals that can create jobs.
POTUS is under significant pressure in local media to create jobs. US Economy shrank by at least 10.0 million jobs ($ 2.60 trillion GDP) in the last two years. POTUS has been able to persuade Americans that this is mostly due to the outsourcing of 0.3 million jobs ($ 0.06 trillion) to India. However, more and more of the unemployed are now beginning to feel this is due to a shrinking economy and pressure is building on POTUS to step up initiatives to create jobs.
POTUS could have launched massive government expenditure on infrastructure to do this. His Budget Director says POTUS is unable to do so because his predecessors have already stepped up government expenditure "way above decency". An unfriendly Congress (not ours, theirs) does not help either. (In a private conversation Post encouraged House Majority leader John Boehner to support this; but reactions were negative).
POTUS could have reduced interest rates. However, it is already near zero. It would be weird to reduce even further and ask lenders to pay interest to borrowers.
Therefore POTUS has chosen the Weimar Republic solution of printing and releasing more cash into the economy.(They call it QE2 – the British Ambassador was not at all pleased with such an innuendo). POTUS thinks that you did a similar thing just before election (writing off farm loans). Post clarified that you forgave loans that would have never come back even otherwise; but the cash was always going around. You did not increase it. POTUS fails to appreciate the point and hopes more money will make people happy. Post urges FinMin and RBI to evaluate converting our dollar reserves to a wider basket of currencies.
In meetings with you, POTUS may seek new business deals (he is bringing several CEOs). It is important that we sign a few deals while POTUS is in India to help him send the right signals back home. It would be better if deal sizes are defined by number of jobs created and not dollars sent to US. Their current need is jobs; not more dollars.
POTUS' main worry is his re-election in 2012. In our opinion, short of opening the gates to friendly immigrants, this appears unlikely. POTUS is impressed with your successful re-election campaign. He might be interested in knowing more about the huge write off of farm loans. It might be worth suggesting write off of all sub prime loans. (In a different chat, Karl Rowe told our political analyst that this may not work in POTUS' favor since all those borrowers, after becoming debt free owners of their houses with picket fences, may turn Republican).
POTUS is not exactly India friendly. (He spent a few months in Pakistan in his younger days). However, he is our best bet. The alternative is Sarah Palin who is likely to have an even greater affinity to Pakistan because she can see Pakistan first before she sees India from her home in Alaska if she looks eastward. There is no point in telling her to look westward and discover us first. She is not exactly friendly with directions and maps.
We should not expect POTUS to make any statements against Pakistan while in India. POTUS needs Pakistan’s help to maintain the supply line to his army waging a "war against rebels hiding in Pakistan who are protecting the terrorists living in Pakistan". He has too much in stake there. He has paid $ 2.30 trillion to American suppliers and soldiers and $ 0.01 trillion in aid to Pakistan so far to conduct this war.
POTUS may not want to be seen in US media visiting Bangalore or shaking hands with CEOs of IT businesses while in India. PMO should be sensitive to this. However, the CEOs accompanying him have sought Post for private introductions. They are happy to have off site meetings to explore opportunities.
SecState accompanying POTUS is currently under pressure due to Wikileaks. She is not worried about the cables becoming public knowledge. The issues discussed and positions taken, after all, were public knowledge for a while. The cables are mostly harmless and may even achieve peace in the Middle East. Isreal is happy with Saudi King's desire (as SecDef said) to "fight the Iranians to the last American". She is upset only about inability to pretend a posture that is different from policy any more.
SecState may ask you how we deal with leaks. Urge PMO to use this opportunity to put in a good word for Indian IT companies to administer IT infrastructure and security.
SecState may want to discuss Kashmir with you. Americans think if Kashmir is given to Pakistan, Pakistan will be free to fight in the western border. Americans should be impressed that if Kashmir goes to Pakistan, Bin Laden will move to Kashmir; build good neighborly relations with China and get Chinese funding and support for Jihad. That should scare tem a bit. My assistant thinks this is a tad far fetched and not likely to be believed. Suggest leak it to the AmDip in Delhi. If he puts this in his cable, it might acquire more credibility.
There is one cable from AmDip in Delhi suggesting that you have been too timid and compromising in your principles thanks to pressure from Sonia Gandhi and Karunanidhi. However, the cable clearly adds that you yourself may not have benefited from the biggest scam in India’s long history of scams. Journalists accompanying POTUS may raise questions on this.
POTUS' wife tends to wear sleeveless dresses (PakAmb had the best joke on this in diplomatic circles: she bares arms while he bears arms). It would be better if Shri Ram Sena’s Pramod Mutalik is given an all paid trip to Bangkok for the duration of the visit to avoid a diplomatic incident.
Post met General Petreaus in a private meeting. He is comfortable supporting POTUS strategy in Afghanistan. His distrust of Bush/Cheney is more than his dislike of Obama. He thinks the war is a “practical exam” part of his doctoral theses in Princeton on counterinsurgency. If he succeeds, he may get more votes than Karzai in the next Afghan election. If he fails, he is afraid it would be a C- in Princeton.
We hope POTUS creates a “mother of all controversies” while in India so that you can have a brief period of rest instead of having to deal with all this unnecessary media attention on CWG, 2G, Bihar elections, etc.
Good luck Pratan Mantriji.
03 December 2010
CABLE TO PMO FROM INDIAN EMBASSY WASHINGTON DC