National security, the last refuge of the protectionist

Mercantilism behind the protectionism

It is good old protectionism, one is tempted to think, that lies behind one think-tank’s opposition to the sale of Tyco Global Network (TGN), a distressed submarine-cable telecommunications network to India’s Tata group. It is only when one runs of out sound arguments that privately-owned assets come to be painted as ‘strategic national assets’, and one of the mundane submarine-cables criss-crossing the oceans becomes a ‘true national treasure’. And how can the United States put such an important asset in the hands of those unreliable Indians, who are not only attempting to buy gas from Iran, but also attack PepsiCo’s plants?

Frank Gaffney argues that TGN is not simply any telecommunication network, but is a military ‘force-multiplier’, and failure of two conditions disqualify an Indian company from owning it: that India may prevent US forces from using the network; and communications is susceptible to eavesdropping by Indian intelligence agencies.

The first argument is based on the precedent that several years ago, VSNL objected to the extension of a previous submarine-cable to Diego Garcia, an American base in the Indian Ocean. What Gaffney does not reveal is that this was for commercial, rather than, political reasons. Traditional submarine cables were built by multi-national consortia, comprising of telecom operators from scores of countries. Landing points were, and continue to be, decided on costs and traffic projections. Connecting to Diego Garcia would not have been feasible on commercial grounds simply because there would have been very little traffic volume to justify it. Also, it would be incorrect to pin the decision on VSNL alone, as the decision on landing points is made by the consortia which, among others, included European and American parties too.

Indeed, given the global glut in undersea capacity today, it is unlikely that Tata-VSNL would pass up a chance to sell its services to the Pentagon.

The concern about eavesdropping of electronic communications is similarly misleading. It either assumes that military communications are unencrypted, or that Indian intelligence agencies have sufficiently advanced capabilities that will allow them to break American military codes. In the real world though, military communications are sufficiently encrypted, and the United States has a tremendous lead in terms of encryption technologies. There is one argument Gaffney did not make — even if those sinister Indians cannot read our email, they probably can disrupt the line. This argument too takes a simplistic view of military communications, where redundancy, resiliency and restoration are basic ingredients.

In its post on this article, Secular-Right rightly questions the motives that prompted an otherwise sensible Gaffney to object to the sale. Here’s a guess: the price. Apart from pushing the interests of other interested buyers, using the words ‘fire-sale’ and the mention of the $130m price tag could well point to an attempt to drive up the price using national security as a bogey.

That is good old mercantilism. If, however, the US government succumbs to this ploy, it would only be giving in to paranoid protectionism.

Related Link: Om Malik’s analysis of the deal

2 thoughts on “National security, the last refuge of the protectionist”

  1. I disagree that Gaffney is merely mentioning national security as a guise for protectionism. I think Gaffney is genuinely interested in stopping the deal for so-called “National Security” reasons. AFAIK, Gaffney does not normally involve himself in commercial policy per se, only in security policy.

    Gaffney is a prominent neocon, and was a member of PNAC. Some neocons are genuine idealists, believing in genuine democracy. I think Wolfowitz is one of those. Gaffney seems to be different: he is interested only in preserving American power. PNAC, for instance, published documents suggesting that the US should embargo India for the nucleat tests, should restrict India. Such people could care less that India is a democracy, they just see it as a rival to US commercial and military power: not now, but in a few decades.

  2. Pingback: The Acorn »

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