Obama searches for jobs

Nov 08, 2010 Editorial

Fresh from what he ruefully admitted was a “shellacking” his party took in the midterm congressional elections, US President Barack Obama is in India, the first stop in a four-nation tour in Asia that will also include Japan, South Korea and Indonesia.
While the trip obviously had to have been planned months ago, it nevertheless proved fortuitous to address the most popular issue in the elections: the moribund economy, in which over 10 million Americans are out of work. When voters were asked about the most pressing problems facing the country, only 3 per cent said Afghanistan; 60 per cent pointed to the economy and unemployment,
President Obama was quite candid about his focus on trade on this trip: “For America, this is a jobs strategy.” He is seeking to double U.S. exports within five years and was quite upbeat that India could provide markets for US produced goods and thus lead to job creation in his country. Unfortunately, he’s beginning with arms. He pointed to the US$10 billion trade agreement that had been signed just before he arrived.
India agreed to purchase 10 -C17 transport planes for the Indian Air Force for a cool US$5 billion. More to the point, it would save up to 30,000 US jobs.
Then there’s the order for 126 multirole aircraft for the IAF with Lockheed Martin or Boeing, or both. That would save and generate another 27,000 to 31,000 jobs. Of course, Mr Obama took care not to mention the additional military aid package of $2.037 billion he had just announced for Pakistan, playing both sides against the middle.
The new tack represents somewhat of a turnaround for Obama who has been a sharp critic of cheap-labour outsourcing of American jobs to India, calling it one of the principal causes of unemployment in the US.
To bring home the point that trade and not security is his main focus, in the forty-plane entourage (yes, forty) he is accompanied by Commerce Secretary Gary Locke and Agriculture Secretary Tom Vilsack, along with a business delegation of more than 250 CEOs — and not Secretary of State Hillary Clinton.
The US president’s trip is a far cry from the days when Indian PMs, hat in hand, had to make pilgrimages to Washington to seek aid for their desperately poor country. It is a reflection of the changed global trade realities.
Like David Cameron’s visit with the largest-ever Cabinet delegation in July, President Obama’s visit is an acknowledgement that India is becoming a lucrative source of potential domestic growth and an increasingly serious rival to China.
Obama became the third American President to land in India in the past 10 years as opposed to the three in the preceding 52 years. But Obama can scarcely ignore China, believing that it can be a counterweight to its trade imbalance with that country.
India’s GDP is only a quarter of China’s but more significantly, US-Chinese bilateral trade is a whopping US$330 billion compared to the US-Indians’ US$50 billion
Notwithstanding Indian euphoria about a common “democratic” tradition it will take some time, if ever, for India to overtake China in the trade equation. India’s outdated and decrepit infrastructure is seen as a severe drag on its economic expansion and sustained growth, and it will be significant if India signs contracts with US firms to remedy this defect.
Before Obama departed on his trip, Treasury Under-Secretary for International Affairs Lael Brainard told reporters at the White House “Many Asian economies in particular have strong potential to fuel domestic demand, either through domestic consumption in some cases, through major infrastructure investments in other cases, and through both, in other countries.”
The US economy is too large for any country, including Guyana, to be sanguine about its travails. Ironically, a free-trade agreement with South Korea signed in 2007, but languishing in Congress because of Democratic opposition, might now pass with Republicans in the majority. It might be easier to export US cars under the new regime and offer a boost to that beleaguered industry.

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