What's good for Britain may not be good for India

The signing of a Rs 5,110 crore Hawk jet contract was heralded as a great success by the UK media. Apparently, it is good for ‘the country’ because privately owned BAE will receive around Rs 3,600 crore and privately owned Rolls Royce up to Rs 1,500 crore.

The deal came just a week after it was revealed that India has more poor people than sub-Saharan Africa. So, just how will the headline-grabbing Hawk deal benefit the ordinary people of India, the majority of whom require food security, drinking water and basic health care, rather than hugely expensive weapons? And how will it benefit ordinary people in the UK?

The simple answer to these questions is it is ‘not a great deal’. Arms sales in the UK are always portrayed by the government and the media as good for business, good for Britain and good for jobs. This line is used to help mask or legitimise the not-so-nice practice of selling products for killing. But is it really so good for Britain?

The arms sector’s contribution to the British economy is minimal, but the industry constitutes a very powerful and effective lobby in the UK. BAE receives considerable support from the UK taxpayer. It is in effect a subsidised industry. In 2006, using a report from BASIC, the Oxford Research Group and Saferworld, and updated government figures, it was calculated that the arms trade received about 852 million UK pounds a year subsidy. Much of this money goes to BAE, a company with a track record of bribery, espionage and arms deals with oppressive regimes, among other dodgy deeds.

Instead of subsidising the arms industry, perhaps the UK government could have intervened elsewhere in the economy, for instance by investing in jobs to create long term benefits in the renewable energy market. Although every country needs to subsidise industry or upgrade its military hardware, just which sector money goes to and how much becomes a question of priorities.

As for India, it has increased its arms spending steadily over the past decade and has been identified as a ‘priority market’ by the UK government’s arms sales unit. India is also classified as one of BAE Systems’ seven ‘home markets’.

However, according to the Campaign Against the Arms Trade (CAAT), the new Hawk deal is controversial because India is part of the so-called ‘arc of conflict’ ranging from Iran through Afghanistan and Pakistan to the borders of India. India is also involved in several internal conflicts, and any arms procured could be used on its own people. CAAT believes such deals merely crank up regional tensions and the potential for internal oppression, while individuals in the arms trade bag huge profits.

At the moment, India has the tenth largest defence budget in the world. That is 40 per cent of what China spends annually. However, according to the Stockholm Peace Research Institute, India is the world’s largest importer of arms, and its imports have grown by around 240 per cent since 2000. Over the past year, its defence spending increased by 34 per cent.

In return for contracts, Britain offers support to India’s attempt to propel itself towards superpower status, given its political aspirations on the world stage. Meanwhile, despite the wheeling and dealing of high commerce and the needs and wants of the rich, powerful Indian elites, some 800 million Indians live on less than two dollars a day, and undernutrition is twice as high as that in sub-Saharan Africa.

In the UK, politicians and media alike never tire of highlighting India’s rapid economic growth, its potential superpower standing and the country’s huge middle class.

Predictably, the British government has stated that it is considering cutting aid to the country’s poverty stricken millions, despite eight Indian states having more poor people than the 26 poorest African countries.

People are continually fed the message that eye-catching business deals, whether armaments or otherwise, are good for ‘the country’, implying that trickle down economic policy works. It’s part of the neo-liberal agenda. Indeed, around 70 per cent in India might argue otherwise, as would many in the UK and US given that during the years of economic growth real wages actually fell in those countries.

‘The country’ is the ordinary man in the street. Business deal that are sold to the public as being good for ‘the country’ aren’t necessarily good for the country. While some regard the future in terms of space programmes, prestigious sports events or lucrative transactions that benefit India’s developing military-industrial complex, it’s the quality of life for the masses that really counts, not headline hogging deals and projects that benefit the relative few.