WITHOUT COMMENT

 Know Your Client Or Your Partner

Below we give extracts of the speech made by David Mulford, US ambassador to India in a seminar at the American Enterprise Institute in Washington on April 24, 2006

SOME of you know that I am an international investment banker turned diplomat. This can be a risky transition. The hard, competitive realities of international investment banking do not naturally lend themselves to the language of diplomacy. But one principle of investment banking applies importantly in international relations, and that is the principle of “know your client” or your partner.  This means, master his current situation, know his past and above all, understand his future. Follow this principle, and you will both maximise prospects for success and reduce risk.

India began its transition in the early 1990s following the cold war and was a near-financial calamity at that time. That was when economic reforms were first introduced as it happens by the man who is presently prime minister of India, Manmohan Singh. And it was also at that time and thereafter in the 1990s that India began to move away from its traditional, non-alignment stance in foreign affairs.

ON DABHOL REVIVAL, AIRPORT PRIVATISATION, PATENT LAWS ETC

In the past year, we have taken steps that are opening many new opportunities for both of us. We have resolved the long-standing and festering Dabhol project and sorted out several troubled independent power projects in Tamil Nadu. These both remove lingering concerns many US companies have had about foreign direct investment in India. We negotiated a few short months ago, and then in a relatively brief period of time a comprehensive open skies agreement – I am told that it is the most liberal and open agreement in the world – that has jump-started the aviation sector. Since then Boeing has sold, as I said, before, almost 15 billion in new Boeing aircraft to India, two US airlines have open direct route service to India. Airport privatisation is underway, and the air transport market in India has grown by close to 40 per cent in the last 12 months. India amended its Patent Act to recognise product patents and to bring in an IPR regime that would be in conformity with TRIPS, and we are working to build new IPR programmes and to ensure enforcement of standard.

ON INDIA–IRAN GAS PIPE LINE

The pipeline is a much longer range and in my opinion as a banker, a very difficult project wherever you try to do it to really bring to ground, get it financed, overcome the risks of transmission and so on, that would be involved in this, in the cost of financing and so on. So, I think beyond just letting them know that we have this concern, we have simply been watching the situation, and there is not really anything more that we need to do. The Indians have made a change recently in their Ministry of Petroleum, which is read in India at least as a move of the person who was very much keen on that project out of that department and a new person is there who has a much more broader and balanced view of their energy problems so on. So I think, I do not see what that really should be a problem in this scenario.