After the NSG Debacle, Here Comes the Spin
By
Satyabrata Pal on
04/07/2016 •
5 Comments
The claims made by apologists for the government about why India needs to rush its membership of the NSG simply don’t add up
See how I spin. Credit: Reuters
The Nuclear Suppliers Group plenary in Seoul was a debacle for India. Countries of our standing in the world rarely suffer such public humiliation, because they have skilled diplomatic services, as India does, which assess the importance of an international objective to national interests, gauge very carefully the likelihood of success, prepare the ground without fanfare, and commit national prestige to a public pursuit only when nothing has been left to chance. Exceptions are made only when what is at stake is of such supreme importance or urgency that a gamble is worth the risk. These precepts, which all mature nations follow in their foreign policy, were abandoned in the government’s strange and sudden infatuation with the NSG. We were, as Shakespeare said of lust, mad in pursuit; it ended, as he said it does, with the expense of spirit in a waste of shame.
This was a scandal, but though the prime minister gave his
first television interview in office soon after to a programme that is usually the last refuge of scandals, he was not even asked the obvious and crucial questions. Why was membership of the NSG so important? If it was, why did we rush into it, expecting a decision to be taken within weeks of asking for it? What were we doing over the six years since the United States gave India its benison for the NSG, as well as the MTCR, the Australia Group and the Wassenaar Arrangement? And why, when China refused to budge, in the company of others, did we
single it out for public criticism in official statements, not once
but repeatedly, turning this now into a tussle between them and us, a win for one down the line an inevitable loss of face for the other. This is the nightmare scenario that diplomats try to avoid. The more powerful the country that loses, the more certain that it will exact a price, then or later. Does joining the NSG justify getting into a showdown with China over it?
Tall claims on ENR
In articles of
absolutely mesmerising spin, apologists for the government now argue that the 2011 amendment to the NSG guidelines – which excluded countries outside the NPT from trade in enrichment and reprocessing (ENR), and therefore qualified what had been an unconditional waiver for India – was a “wake-up call”; unless India was in, other changes could be made to the waiver in the future which it could not block. Secondly, that membership became urgent because the principal suppliers wanted it, and it was essential to move forward on contracts after India committed, as part of its Intended Nationally Determined Commitments (INDC) in the context of the Paris summit on climate change in 2015, to generate 63 GWe from nuclear power by 2032.
On the first argument, the insinuation is that those on the watch in 2011 were sleeping on the job, and snored through the wake-up call, forcing their more alert successors into the unedifying running of the Brahma bull into the china shop that we have seen now. This would have been plausible if this government had not taken office in 2014: two years is a long time for wise virgins, not least because Obama the bridegroom twice tried to shake India out of its slumber. The joint statements issued in
September 2014 and
January 2015 reiterated his support for India’s “early application and eventual membership” in the NSG, as well as the other three groups. This was not enough to break our torpor. The “early application” came a year and a half later.
Secondly, the 2011 amendments to the NSG guidelines were
sui generis. As was reported extensively when negotiations in the NSG on the waiver came down to the wire, a group of NPT purists – Austria, Ireland, The Netherlands, New Zealand, Norway and Switzerland – held out for three conditions: there would be a periodic review of India’s compliance with its non-proliferation pledges, the waiver would not cover trade in enrichment and reprocessing, and it would lapse if India resumed nuclear tests. India accepted a review, since it had nothing to hide, the purists accepted our voluntary moratorium on testing, and were coerced into backing off on ENR, since we insisted that the waiver should be unconditional or “clean”.
ENR therefore was the only reservation these countries still harboured, and they took the first opportunity they had to amend the guidelines, so that what India got from the waiver was taken away by the revision. They could not have done this without the consent of all the others in the NSG, even those who later said that they would honour the original terms of the waiver, ignoring the change. That remains to be seen. We have incorporated the other changes made between 2011 and 2013 to the NSG guidelines in our own laws, so clearly we have no difficulties with them.
The crucial difference now is that over the last five years, we have signed agreements for the supply of fuel with Australia, Canada and Kazakhstan, three out of the ten largest producers in the world, and either have awarded contracts for reactors, or are negotiating them, with Russian, US and French companies. A minimum of five major members of the NSG now have enormous stakes in ensuring that the terms of the waiver are not changed in any way that could jeopardise their interests. A chance of any further revision that is India-specific is now remote, apart from the fact that there is no area of trade with India, other than ENR, on which any member of the NSG has reservations.
Equally, however, given the negotiating history, we would be unable to get a consensus in the group to turn the guidelines on ENR back to accommodate us. Membership, therefore, gives us nothing. It means that India would be the only member of the group not allowed to trade as of right with all others in all aspects of the nuclear cycle. That is a second-class membership.
Faulty maths on climate change
The second argument, that membership was essential because of India’s commitments in the Paris agreement on climate change, was first put out as a veiled threat in the
official statement issued after the NSG plenary ended. It made the astonishing claim that India’s application for membership had “acquired an immediacy” after we set a target of “40% non-fossil power generation capacity by 2030” in our INDC, and an “early positive decision by the NSG would have allowed us to move forward on the Paris Agreement”. In other words, without being members of the NSG, we might have to renege on our commitments.
This petulance did not become a country like India. And the special pleading since then has been
very frugal with the truth. The fact is that in our INDC, presented by this government, it had said that its plans for nuclear power would go forward “if supply of fuel is ensured.” That is not now a constraint. None of the major suppliers with which India now has agreements has made membership of the NSG a condition for continuing contracts. So supply of fuel is ensured, and that was the principal proviso the government placed on meeting the target it announced.
The other problem, stated elliptically elsewhere in the INDC, is of course finance, and that would be massive. Price negotiations for the six Westinghouse AP1000 reactors we have agreed to buy have not yet begun, but there were huge overruns on the two now being built in the US. They were contracted for in 2008 for $8 billion, rose to $14 billion, and current estimates are that they will
end up costing $21 billion. Given escalation of costs by the time our contract is finalised, and the padding that will be inevitable to cater for the provisions of our Nuclear Liability Act, even in the most giddily optimistic scenario, the six reactors will cost India a minimum of $63 billion to produce 6000 MW. However, the US think-tank Institute for Energy Economics and Financial Analysis
did a study in March this year in which it estimated that the six units would cost India between $95 and $170 billion, the first unit would start to produce power by 2029 at the earliest, and the tariffs would be insupportable for the consumer.
If the government plans to contract with foreign suppliers for new reactors to generate 30 GWe, as its apologists claim, and the estimates of the think-tank are realistic, the outlay will be between $475 and $850 billion. Not more than one or two would be ready by the target date of 2032, and the financial burden, for the government and the consumer, would be back-breaking. These, therefore, are the real problems that the government must confront and place before the people: is nuclear power, generated on this scale from imported plants, fiscally responsible or even sustainable? Even if the government finds the money, the imposition in tariffs on the consumer would be huge and unfair. And since the target of 63 GWe cannot possibly be met by 2032, how does it plan to honour its INDC? None of these problems will be solved by membership of the NSG. It simply is not germane.
Satyabrata Pal is a former Indian high commissioner to Pakistan
http://thewire.in/48006/after-the-nsg-debacle-here-comes-the-spin/
Why this fuss about NSG membership?
TS Gopi Rethinaraj
Bright future: For India's nuclear programme
India needs technological help to build light water reactors, for which the Nuclear Suppliers’ Group is irrelevant
The decision of the Nuclear Suppliers’ Group (NSG) to deny India membership to its club is hardly surprising despite the government employing its diplomatic muscle in the run up to the group’s plenary meeting in Seoul this month.
Prime Minister Narendra Modi’s personal pleas to leaders of important countries, including China, certainly helped build broad support among NSG members for India. However, China’s resolute opposition (which is quite independent of Pakistan’s obstinacy) has ensured keeping India outside the NSG tent for now.
While the Prime Minister cannot be faulted for embarking on ambitious foreign policy goals, it is puzzling why he risked his personal reputation by hitching India’s diplomatic horse to a wrong cart. NSG membership, while desirable, is an issue of marginal importance to India’s nuclear energy development.
NSG’s exaggerated relevance
After the grand bargain following the nuclear détente with the US in 2005, India has gained substantially from the NSG waiver and partial safeguards agreement with the International Atomic Energy Agency (IAEA) in 2008 without having to sign the Nuclear Nonproliferation Treaty (NPT) and compromise its nuclear weapons programme.
There is already enough leeway for India to deal with nuclear vendor countries bilaterally for importing uranium, reactors, and fuel cycle technologies. Hence seeking formal membership to NSG even before fully exploiting the benefits of the 2008 grand bargain appears to be an unnecessary distraction from pursuing more important strategic objectives.
The failed attempt in Seoul, however, presents India an opportunity for a hardnosed evaluation of priorities in the nuclear sector and to undertake steps to recover lost ground. In any case, a NSG membership is not going to make countries rush to India with nuclear reactor orders.
Only a few countries with deep pockets have sustained their interest in building nuclear power plants after the Fukushima disaster. The most popular choice for new builds is light water reactors (LWRs) for which India itself will have to depend on countries such as Russia, France, US and Japan.
The heavy water reactor (HWRs) technology that India could potentially export with or without NSG membership is fading into the sunset because of its declining share in the global reactor fleet.
HWRs may be of interest to countries that aspire to build nuclear weapons under a civilian cover, but it is unlikely that India will show any enthusiasm to export reactors to countries with dubious reputations. Obstacles for import of specific technologies could be overcome through strategic bilateral engagement with relevant nuclear vendor countries.
Hence India is better off limiting its civilian nuclear engagement with Russia, France, the US, and Japan while also preserving the indigenous expertise in HWRs and associated fuel cycle technologies. While the domestic nuclear programme is testimony to India’s sustained efforts to preserve its technological independence during the sanctions era, there is nothing sacrosanct about it.
Changing technological realities
Re-examination of nuclear technology options and policy correction in order to adjust to new realities is not a sign of weakness. India will have to use the present window of opportunity (for which NSG membership is immaterial) to obtain critical technology transfers from friendly countries to manage future uncertainties.
This is what the French and Japanese did earlier during 1960s and 1970s and what the Chinese seem to be doing skilfully now. Letting the bitterness of past experience come in the way of present choices and self-delusion about the capability of the indigenous nuclear programme to meet short and medium term energy demand will end up costing dearly in the long run.
Peter Senge in his classic
Fifth Discipline argued that the hallmark of successful organisations is constant learning and willingness to change when faced with new realities and uncertainties. There is nothing wrong in re-examining the vision and roadmap that was laid out for India’s nuclear energy development during a bygone era.
If Homi Bhabha were alive today he would have had no hesitation in effecting a course correction if it served the interests of national energy security and India’s broader geopolitical goals.
This is not to suggest giving up on the hard-won indigenous nuclear capability. India is now a world leader in HWR development after the Canadians turned their back on the technology.
India is also one of the few countries that have acquired a formidable research and industrial experience in breeder reactor technology, even though its economic case has never been persuasive, especially when identified global uranium resources appear adequate for fuelling projected demand through the end of this century.
The reluctance of the nuclear bureaucracy to admit this reality and its continuing obfuscation about the economic benefits of certain aspects of the indigenous programme has made it an easy target for criticism.
The space research example
Denial of NSG membership amidst fresh opportunities provided by the grand bargain of 2008 should encourage India’s nuclear mandarins to take a fresh look at their development priorities.
With focused and sustained efforts it is within the realm of possibility that the NSG will find a way to accommodate India in a matter of time, provided India plays its cards well. In this context, the Department of Atomic Energy (DAE) would do well to look at the recent successes of the Indian Space Research Organisation (ISRO) and its enhanced global stature.
India’s space programme was also subject to sanctions like the nuclear programme, but ISRO’s focused and modular development strategy seemed to have paid off well. ISRO recently launched 20 satellites in one go including two student satellites from Indian universities and 17 of four foreign countries, and has become a world leader in a niche market.
Although the DAE is a technically superior and resourceful organisation compared to ISRO it seems to have muddled in the process of juggling with several reactor development fronts.
Perhaps, what is needed in the wake of denial of NSG membership is a hardnosed realism regarding priorities for nuclear energy development and a strategy to navigate the tangled thicket of international nuclear trade and commerce through bilateral engagements.
The writer is academic head at the National Institute of Advanced Studies, Bengaluru. The views are personal
(This article was published on July 8, 2016
http://www.thehindubusinessline.com/opinion/why-this-fuss-about-nsg-membership/article8824716.ece