Water war could result in Assam's economic downswing

India's Congress-led UPA may soon experience major political turmoil. Recent reports from China say that  3,30,000 people in China’s Hubei and Henan provinces have been employed for the water diversion project. The resettlement work is to be completed by 2011- an effort to supply water to the parched areas of Beijing, Tianjin, Henan and Hebei regions.
The two Asian giants have been at loggerheads since the Indian media reported of China's incursions on Arunachal Pradesh. India is now threatened by the dam, which will be a threat to Assam's economy, a northeastern state in India. The state's economic conditions are set to take a big hit with the water diversion to China.

Along with Assam, Arunanchal Pradesh, too, is heavily dependent on the river for its economic development. A major blow would be to Assam's recent gas cracker project - Brahmaputra Cracker and Polymer Ltd, a Rs 5460-crore project. This project is the prospective employer for thousands of people across the country. The dam's purpose to divert the flow of the river toward arid areas of China for Zangmu hydropower project has been protested by the Assam government, headed by Chief Minister Tarun Gogoi.

The 2,906-km long Brahmaputra is one of Asia’s largest rivers that flows the first stretch of 1,625 km in Tibet region, the next 918 km in India and the remaining 363 km through Bangladesh before converging into the Bay of Bengal.

For long the state of Assam has felt neglected by the center. The state’s economic development has been a slow process. When India’s GDP grew 6 percent in the period of 1981 to 2000, Assam’s growth rate grew only by a half.

Another point to note is that 80 percent of the 28 million people living in the two states make a living off farming. The agricultural sector, as a whole, contributes 28 percent to the country's GDP. Besides that,The farming business is certainly a major concern for the country. India has had a controversial history of farmers committing suicide. The reasons range from debts to droughts. Some analysts say that nearly 17,500 farmers commited suicide between 2002 to 2006, mainly in the states of Maharashtra, Andhra Pradesh, Karnataka, Kerela and Punjab. 

Does U.S. await yet another expensive war?

When Mr. George Bush decided to dispatch more American troops to Iraq to wage the war, he did not foresee the economic challenges that lay ahead, and the criticisms followed. Today, many eyes are set on President Barrack Obama, as he mulls over the future of the Afghanistan war. In this beleaguered economy, will US be able to manage another expensive war?

Very recently, Obama’s top commander in Afghanistan, Gen. Stanley McChrystal requested for 40000 more troops as the existing 68000 troops in addition to NATO’s 38000 troops, were not enough to fight the Taliban. While Mr. Obama has been busy with meeting his advisors and seems in no hurry to call the shots on this one, the situation in the war zone is not a pleasant one. According to several reports in the American media, the military operations in the third world country are not going too well. With the war starting to quiver, McChrystal aims at redefining the strategy from hunting down Taliban to protecting the civilians, which he believes will put the American military in a better position.

Another factor to think about is that the money involved is huge. Amy Belasco, a US Defense Policy and Budget specialist, said in her total report - The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11- that a total of $849 billion has been spent on the military operations post 9/11 terror attacks.

From the total budget, $189 billion were appropriated for the Afghanistan war. However, the latest estimate in a newspaper report said that $288 billion have been spent on the operation to date, according to a newspaper report. The numbers involved here are big, a startling especially because of tough the economic situation that U.S. is in right now – with little to no signs of improvement.

The major concern for America at this point should be the economic input and the political outcome. Once the defense budget is exhausted, more funds will be directed from the Federal Reserve to the operation. And if they do not survive this war the economic loss would be in billions – the amount that can possibly employ billions of Americans. In a nutshell, the scenario would be similar to that of the Iraq war – the one that left a bad impact on everybody's mind. The extravagant expenditure on the war in the Bush years also led to an incredible increase in the US government’s debt - the money that was borrowed from Saudi Arabia, Japan and China.

An important step for Obama in this precarious scenario would be to think economically as well as politically, unlike Bush who thought politically and that reflected in most of his decisions, the war in Iraq being the most prominent example.