Tuesday, February 28, 2006

VIDEO: Charlie Rose Interviews PM Manmohan Singh

56 mts 55 secs

Please click the Play button above.

PBS's Charlie Rose talks to PM Manmohan Singh at the PM's official residence before President Bush's visit.

Pronunciation gaffes (when you hear giant, he actually means joint), which make the PM sometimes hard to understand even to Indians, notwithstanding, this is a very interesting interview, and Manmohan Singh comes across as a person in control. He comes across as one who knows exactly what's going on, knows what he wants to do and when, and is aware of his limitations.

The PM handles most questions very defly; the question about Iran's nuclear ambitions and questions about relationship with China are prime examples. He also gives the impression of honesty and modesty which strengthens the positive stereotype. A few answers do appear to get repetitive, and he seems to be beating the issue of "a democratic India within an open economic framework" to death.

Anyways, without further ado, here's the interview (yeah, I do know it rhymes):


CHARLIE ROSE, HOST: Welcome to the broadcast. This week, the president of the United States goes to India. I just returned today from India with two of my colleagues, where we spent an extraordinary week talking to political, business and cultural leaders. They provide us with an insight into this extraordinary moment in India's economic development and the possibilities of a new relationship with the United States. The centerpiece of this new relationship is about India's nuclear facilities and its rise to a global power.

A visit to India and the interviews this week are the beginning of a series of visits our broadcast will take to various countries around the globe, where we will examine powerful ideas shaping the 21st century.

We begin this evening with an exclusive conversation with the prime minister of India, Manmohan Singh.


MANMOHAN SINGH, PRIME MINISTER, INDIA: I've mentioned to the president last time I met, Mr. President, the people of India, particularly the thinking part of our population, our scientists, our technologists, have rightly or wrongly nursed this grievance against the United States, that the United States has joined with other countries to erect a system of controls which denies our country access to dual-use technologies, to prevent us from leapfrogging in the race for social and economic development.

And I said, I appeal to you, I think to look at India-U.S. nuclear cooperation in that grand setting. I look upon it as an act of historic reconciliation. The future growth of China -- China's influence is bound to rise. And we all believe that we must remain engaged with China. We have differences with China with regard to the border issue. We are making a sincere effort to resolve those differences, and the president told me that's precisely what you should do, I think. He says the United States also wants to remain engaged with China, but I also believe that without looking at each other as rivals or as competitors, in a democratic India, operating in the framework of an open economy, an open society has, I think, some significance for developing countries, not only in Asia but outside Asia.


CHARLIE ROSE: The prime minister of India for the hour. Next.


CHARLIE ROSE: Mr. Prime Minister, thank you very much for letting us visit you here, at the official residence.

MANMOHAN SINGH: It is a great pleasure and great privilege to have you with me at my residence.

CHARLIE ROSE: Thank you very much. Anybody who comes here from America always comes back and says it's really a remarkable experience. I mean, the last time I was interviewing you, you quoted Victor Hugo, saying, as you had said to the parliament, "Nothing can stop an idea ...

MANMOHAN SINGH: "...whose time has come."

CHARLIE ROSE: "... whose time has come." In terms of the United States and India, you think that applies today, an idea whose time has come?

MANMOHAN SINGH: I sincerely believe that, and that's what I said in my address to the U.S. Congress. I said there are partnerships based on principle. There are partnerships based on pragmatism. And fortunately, when it comes to Indo-American relations, both concentrations find a new robust phase of relationship, a multi-fasted relationship which I believe exists in the interests of both our countries.

CHARLIE ROSE: Can it be transformational?

MANMOHAN SINGH: It could be transformational. It's...I hope
it will be transformational.

CHARLIE ROSE: So, signaling a new what?

MANMOHAN SINGH: A new India which realizes its destiny in the framework of an open society, in the framework of an open economy, respecting all fundamental human freedoms, great respect for pluralistic, inclusive value system. I think that's what unites India and the United States. And I do hope that working together, our two countries can write a new chapter in the history of our relationship.

India has, of course, aspirations of getting out of its poverty, ignorance and disease, which still afflict millions of people. But I do believe that we have something to offer to the rest of the world, including the United States. Nowhere else you will find a country of India's diversity, of India's complexity, one billion people trying to seek their social and economic salvation in the framework of a democracy, in the framework of an open economy.

I sincerely believe what happens in India has, I think, lessons, morals for the future evolution of humankind in the 21st century.

CHARLIE ROSE: What are those lessons?

MANMOHAN SINGH: I do believe that the future of civilization belongs to those who would lay emphasis on working together instead of talking about clash of civilizations. What we need is a dialogue amongst civilizations. And we need multiculturalism, respect for diversity, tolerance, respect for diverse faiths. And that's what we are doing in our country. And if we succeed, and if we succeed in doing all this in the framework of a democratic policy, I believe a large part of humanity will draw appropriate lessons from what is the wave of the future in the 21st century.

CHARLIE ROSE: And you're prepared in this new strategic partnership with the United States to use that to help in terms of bridging and creating dialogue with the rest of the world where it might be necessary to have that kind of background?

MANMOHAN SINGH: We have -- yes. I think what we're trying to do is, I believe, has lessons for what happens to the rest of the developing world. But not only developing world. With the revolution in information technology, with the revolution in transport technologies, I think just geography has lost its all significance. I believe whether it is the United States or Europe, they will all end up as multicultural societies. So India is this great experiment of a billion people of such great diverse persuasions working together, seeking their salvation in the framework of a democracy. I believe it will have some lessons for all the multicultural societies, and I believe all societies, all thriving societies of the future are going to be multicultural societies.

CHARLIE ROSE: So on Wednesday, March 1st, the president of the United States, representing the world's oldest democracy, comes to see you, representing the world's largest democracy. How did that happen? Because it is said that the president saw you at the United Nations, one story, and pulled you aside or asked for a moment and said, I understand your country's demand for oil. I understand China's demand for oil. I understand our demand for oil. I want to help you with the nuclear issue, and let us work on that, and let us try to get past what has been an obstacle.

MANMOHAN SINGH: Well, I don't recall his telling me at the United Nations, but I do recall his telling me at the very first meeting that I had with him. And we were together also at Gleneagles, at the G-8 summit. We had extensive dialogue. We were sitting side by side. And this is exactly how he described the global energy scene, India's requirements. And he said to me, if the oil prices go up to $100, that hurts India, but it also hurts the United States. So we must work together to help India to get its nuclear security by increased emphasis on the availability of nuclear power.

CHARLIE ROSE: So that puts this nuclear deal at the centerpiece of this new relationship?

MANMOHAN SINGH: In a way, yes. But ours is a multidimensional relationship. But at the present stage, energy has emerged as a major constraint on our development. A the present, 70 percent of India's imports of oil and oil products are imported from abroad. There is uncertainty about supply. There is uncertainty about prices. And that hurts India's development.

We have large reserves of coals, but extensive use of coal, unless we use clean coal technologies I think has environmental hazards, global warming and all that. But in all this, if we have access to nuclear energy, that adds to our maneuverability in ensuring energy security as our country marches on, on the path to accelerated development.

CHARLIE ROSE: It will also mark, too, a new access to technology and to fuel, you know, and future reactors in the civilian sphere. It also seems to give acceptance within the global community to the responsible -- your sense of responsibility in handling nuclear weaponry.

MANMOHAN SINGH: Well, we have an impeccable record. We have never been the source of unauthorized proliferation of these sensitive technologies, even when the provocations were there. We have a very tight system of export control. In fact, before going to the United States, I got parliament to pass latest legislation, which puts our export controls on the same footing as most of the developed countries when it comes to export of sensitive technologies.

So I do believe -- we are a nuclear weapons state, but we are unique in the sense that we still believe that the salvation of the world ultimately lies in moving towards universal nuclear disarmament, but that's a long distance away. And Indians, we would like to be a part of the nuclear world order, accepting all the responsibilities that go with being a responsible nuclear power, and at the same time enlarging our options with regard to energy security of our country.

CHARLIE ROSE: The president arrives on Wednesday. Will you have an agreement before he arrives, do you think?

MANMOHAN SINGH: Well, I sincerely hope. That's my hope. That's my prayer.

CHARLIE ROSE: Right now, there seems to be a separation in terms of what reactors will be in the civilian field and what will be considered military in this separation. Is that the dividing issue, what goes where?

MANMOHAN SINGH: Well, I wouldn't call it a dividing issue. It is an important issue. I think the United States -- I recognize that the United States has to sell this deal to the Congress, but we have also a congress. And I've always told our parliament, as I mentioned to the president, this deal is not about India's strategic program. That is not under discussion. What is under discussion is our civilian nuclear program.

And there are concerns. And we had agreed that we will have a credible separation between our strategic program and the civilian program. That we are committed to. Whatever we have committed in July 18 statement in letter and spirit, we will fulfill our obligations.

CHARLIE ROSE: It's more than 90 percent likely they will have an agreement?

MANMOHAN SINGH: I certainly hope that.

CHARLIE ROSE: You think it will happen before the president arrives or once the president arrives?

MANMOHAN SINGH: Well, I think there is only a few days. Our officials have been at work. They were at work until I think early morning yesterday. I think the burden has gone back. I sincerely hope that we can clinch this issue, and that would be a great contribution of President Bush to ending India's isolation from the world nuclear order.

I mentioned to the president last time I met, Mr. President, the people of India, particularly the thinking part of our population, our scientists, our technologists, have rightly or wrongly nursed this grievance against the United States, that the United States has joined with other countries to erect a system of controls which denies our country access to dual-use technologies to prevent us from leapfrogging in the race for social and economic development. And I said, I appeal to you, I think to look at India-U.S. nuclear cooperation in that grand setting. I look upon it as an act of historic reconciliation.

CHARLIE ROSE: Well, I think it's an interesting thing, because the president has Congress to deal with.

MANMOHAN SINGH: Well, we have also our parliament, and our parliament is also very sensitive about these issues. I have promised our parliament that I will do nothing which will hurt India's strategic program.

And our program is a modest program. Also although we are not NPT signatories, we abide by most of the guidelines that operate with regard to export of sensitive technologies, and therefore I do believe that India is a unique case, and you need, I think, exceptional skills, I think, to incorporate India into the world nuclear order.

CHARLIE ROSE: Some say to the United States, if you go ahead with this, as you plan to do, the United States, it's hypocritical because of your objection to Iran having a nuclear weapon.

MANMOHAN SINGH: No. Our relations with Iran we relish a great deal. We have civilizational links. We are in the same region as Iran, and our concern with regard to Iran is that Iran is a signatory to the NPT. Iran must therefore have all the rights which go with it being a member of the NPT, but it also has certain obligations, which it has voluntarily taken, and, therefore, it is appropriate that Iran also fulfills those obligations.

Now, there have been doubts about Iran's program. The International Atomic Energy Agency has gone into this. The Iranians themselves have admitted that certain elements of their program they have not reported to the International Atomic Energy Agency. Our hope is that it is not too late in the day to the resolve these differences through dialogue, through diplomacy. And I hope that the world community will have the sagacity to give diplomacy, dialogue the full scope to reconcile these so-called irreconcilable...

CHARLIE ROSE: Why do you think the president, or do you believe he views this relationship with you and your country, between the United States and India, as a major foreign policy initiative? Some have even said, as you know, that for this president, it's equivalent to President Nixon going to China.

MANMOHAN SINGH: Well, I've met the president now three or four times, and I have been deeply impressed by his commitment to the cause of democracy. He sincerely believes that democracy is good for everybody, that democracy is good for world peace, democracies don't go to war. And the fact that India is a functioning democracy - despite its extreme poverty, India has stayed the course. It has remained a full, functioning democracy. I suspect that weighs with the president a great deal.

CHARLIE ROSE: The idea of democracy and being able to have a strategic relationship with the world's largest democracy is important to him?

MANMOHAN SINGH: That's what I feel. I think he's always told me, and in his address to the Asia Society a few days ago...

CHARLIE ROSE: A few days ago, yes.

MANMOHAN SINGH: ... he made again I think great emphasis on that. What sort of relationship? It's based on values as well as interest, as the president put it. The values are the values of democracy, the values of pluralism, the value of tolerance of differences. And the interests are to have two countries work together, this is a win-win game. India's growth rate will be accelerated, but in the process, America would also benefit. Outsourcing, information technology revolution, the access to India's human resources, India's pool of scientists. It will also help American companies to become leaner, meaner, more efficient, and they become more competitive, both in the United States and in dealing with the rest of the world.

CHARLIE ROSE: I want to talk about all those economic issues. Let me stay with the strategic issue for a second. There are those who say the president would like to have a counter-balance to China. That India serves, because of all these interests -- the economic, as well as cultural, and as well as sharing democracy -- as the best way for the United States to have a countervailing relationship for China?

MANMOHAN SINGH: Well, we are not in competition with China. I had a very good discussion with the president on this subject, and I think there was a complete unanimity of news. Both of our countries believe China is very important. The future growth of China, China's influence is bound to rise. And we all believe that we must remain engaged with China.

We have differences with China with regard to the border issue. We are making a sincere effort to resolve those differences, and the president told me that's precisely what you should do, I think. He said the United States also wants to remain engaged with China. But I also believe that without looking at each other as rivals or as competitors, in a democratic India, operating in the framework of an open economy, an open society, has, I think, some significance for developing countries, not only in Asia, but outside Asia.

CHARLIE ROSE: The president said he didn't want to -- I think his words were, I don't want to contain China -- but he doesn't think that one country should dominate in the region. Do you share that idea?

MANMOHAN SINGH: I think looking at history, I think that would be an appropriate moral, I think.

CHARLIE ROSE: Does India want to help contain China if that's America's policy?

MANMOHAN SINGH: As I said, we are not in competition with China. We are not part -- we are not going to be a part of any alliance against China. And I do believe that the present Chinese leadership wants to make a success of its modernization. I don't believe the present leadership of China threatens India, or for that matter other countries.

We would like to have, I think, warm, friendly relations with China. We would like to resolve our border dispute. Our economic relations are growing. And both of our countries need peace and cooperation I think to make a success of our ambitious plans to get rid of our -- get rid of poverty that afflicts millions of people in both countries.

CHARLIE ROSE: What do you think China's ambitions are?

MANMOHAN SINGH: Well, as of now certainly, I think the modernization of Chinese economy and Chinese society is a prime concern. But also I think the Chinese do have visions of being a great power, and I think it's legitimate, and I don't see that's a danger to us.

CHARLIE ROSE: India wants to be a great power?

MANMOHAN SINGH: Yes. I just said -- when you quoted me, when I quoted Victor Hugo, I said precisely, I said the emergence of India as a major global power is an idea whose time has come. This is a legitimate ambition for China, this is a legitimate ambition for India. And the challenge for humanity is to evolve a system in which the legitimate ambitions of both our countries can find constructive expression without threatening anybody else.

CHARLIE ROSE: Secretary Rice has said that the United States' goal is to assist in any way it can India becoming a global power in the 21st century.

MANMOHAN SINGH: That's when she came here last year and she for the first time made that formulation. And I rang her up a few days ago, and I said to her, Madam, you are the one who planted this idea that the United States would like to help India to become a major power. Well, this nuclear deal (INAUDIBLE) be a concrete expression of U.S. interest. So I hope we will have her blessings to conclude this deal before the president comes.

CHARLIE ROSE: As India becomes a global power, with its economy, with its population, with its democracy, with its trade, how can the United States in a strategic sense help India?

MANMOHAN SINGH: Well, there are diverse ways in which - right now, terror and all that goes with it is a prime concern. It's a concern of the United States. It's a concern of India. Joint strategies, cooperation, joint sharing of intelligence, in controlling terrorism, in making the world free from terror. I think that's the fundamental, I think, consideration if our development aspirations are to be fulfilled. And I think our two countries can cooperate.

CHARLIE ROSE: In the battle against terrorism?

MANMOHAN SINGH: Yes. Well, in our neighborhood, we have the nascent democracy of Afghanistan. We have been engaged in helping Afghanistan to the best of our ability. We have a development assistance program for Afghanistan of nearly $650 million. Our program covers all the basic human needs and requirements of Afghanistan. So working together in helping nascent democracies in the task of reconstruction, in the task of development is another area where our two countries can work together.

And the president himself mentioned our cooperation in making the world secure against epidemics like HIV/AIDS, malaria, tuberculosis. These are our major problems. The United States and India can work together. We can pool our research capabilities to find vaccines which will provide effective answers to the problems posed by these epidemics.

CHARLIE ROSE: It's already happening in the private sector with Bill Gates coming here and being involved.

MANMOHAN SINGH: Yes, Bill Gates is very, I think, intimately involved in these programs. And we welcome his involvement.

CHARLIE ROSE: When you think about agriculture, there is this idea that is being promoted, which is a second green revolution.

MANMOHAN SINGH: Yes. I did mention myself in my address to the joint session of the Congress, the first green revolution in our country, which came in the early 1960s, owes a great deal to the cooperation between Indian authorities, Indian scientists and the (INAUDIBLE) colleges of the United States, the Rockefeller Foundation, the Ford Foundation. I think that is a glowing chapter in the history of cooperation between our two countries.

CHARLIE ROSE: And it can be reignited?

MANMOHAN SINGH: It can be reignited. And that's what the president and I have some very good ideas. We have discussed that, the knowledge initiatives to give a big boost to the second green revolution in our country.

CHARLIE ROSE: There is also military cooperation. Some representatives of your military went to see Secretary Rumsfeld. There is an agreement there.

MANMOHAN SINGH: Yes, there is a framework agreement.

CHARLIE ROSE: What are the implications of that?

MANMOHAN SINGH: Well, I think we would like to diversify sources of our purchases of weapons. Also, we would like to have a cooperative arrangements where some of these things, joint research, joint production, and also I think the cooperation between the military of two countries. We have already, I think, in place arrangements where the air forces of the two countries have joint exercises, the naval forces. So I would like I think to expand the relationship with the United States in all these diverse fields.

CHARLIE ROSE: Is in any way it difficult to be a friend of the United States in 2006?

MANMOHAN SINGH: Well, let me say that even since Iraq, even in Iran, I think do create some anxieties, particularly among the Muslim population of our country. And I sincerely hope that the difficulties that are there in Iraq and Iran can be resolved, that Iraq will see a new era of hope in which its people will enjoy a full sovereignty, and also the problem of terrorism with Iran can be resolved through dialogue, through giving diplomacy a chance. Otherwise I don't see, I think, any problems between India and the United States.

CHARLIE ROSE: No significant foreign policy differences, other than Iraq and you're prepared to help there, and in terms of...

MANMOHAN SINGH: In terms of reconstruction, we had offered, for example, to train their police, to train their civil service, train their election officials. Just as what we are doing in Afghanistan.

CHARLIE ROSE: The U.N. membership -- permanent membership on the U.N. Security Council. France was here and said we're in favor of you.

MANMOHAN SINGH: I would very much like the United States to -- I think that when the president comes here, I think that he would announce that the United States is also of the same view.

But I recognize the United States is a superpower. It has various interests. It has to balance various things. But I do believe that India's case for permanent membership of the Security Council is pretty strong.

CHARLIE ROSE: But you'll remind the president when he comes?

MANMOHAN SINGH: Well, this issue was raised with Secretary Rice when she came here. And if I get a chance, I will raise that again with the president.

CHARLIE ROSE: This nuclear agreement can be reached. Your national security adviser says that the relationship will go into the stratosphere, is the way he described it. I just want to make sure I understand your vision of the stratosphere in terms of how the United States and India can cooperate, certainly in terms of using India in the Middle East, as you suggested, as a sense of a voice for where there is a secular society of diverse religious and ethnic backgrounds. How else will this be manifested, this strategic relationship that's possible with the United States?

MANMOHAN SINGH: We are enlarging areas of cooperation, joint working, joint thinking, whether in cooperation in multilateral forums, regional forums, bilateral forums. I think there are enormous possibilities. And today there are no I think barriers to increased cooperation with India and the United States. But as I said, what goes on in Iraq, what goes on in Iran, it does worry a significant proportion of our population. And I hope that these issues can be resolved.

CHARLIE ROSE: Did they believe that somehow moving away from India's position of a nonaligned nation, or have you long ago moved away from that idea?

MANMOHAN SINGH: I have always regard nonalignment as a statement that India's policies, foreign policy will be guided by what I describe as enlightened national interest. That we will make judgments on an independent basis, with the sole concern being what is enlightened India's national interest. In that sense, nonalignment remains as relevant today as it was in the early 1950s.

CHARLIE ROSE: Who opposes, in your political community, this coming of the United States and India closer together?

MANMOHAN SINGH: Well, my own feeling is that it has a widespread support. In fact, the majority of our population wants closer involvement between India and the United States. There was a research I think team, which conducted a survey about what Indians think of Americans, and 71 percent I believe said, well, I think all the nice things about our working together with the United States. But there are people I think that are old mind-sets, who still I think remain mired in the Cold War ideology. There are I think the left parties in our coalition. They still regard the United States as a hegemonic power. But I think the new Indians of tomorrow, our young people, our businessmen, our scientists, our technologists, I think they are not, I think, held back by these old-time thinking.

CHARLIE ROSE: I've been visiting with your business leaders this week in India, and they all tell me that with respect to China, there is increasing economic relationship -- with respect to China. And that that is good, that China sees India as a market, that China has a manufacturing base, India has a service base. They all have all kinds of trade developing between India and China.

MANMOHAN SINGH: I agree too with that. I agree with that.

CHARLIE ROSE: And where does that go? What's the benefit of that?

MANMOHAN SINGH: Well, I think our two countries, if our trade grows, I hope that out of that will come a new attitude of coexistence. We had this unfortunate incident of 1962.

CHARLIE ROSE: The border?

MANMOHAN SINGH: At the border. If we resolve that, the limits to cooperation between India and China would not be there, think. We are both countries located in Asia. The Chinese economy is growing at the rate of 9 percent; the Indian economy growing at the rate of 8 percent -- enormous I think opportunities for two-way flow of trade, technology and investment.

CHARLIE ROSE: Is the United States' relationship with Pakistan an issue for you?

MANMOHAN SINGH: No. We want Pakistan to prosper. Pakistan should be a moderate Islamic state. That it should be a prosperous country is in India's interests, and it is in the world's interests. I sincerely hope that whatever influence the United States has in Pakistan, it will convince Pakistan that using terrorism as an instrument of state policy has no place in the world that we want to build. If Pakistan honors in letter and in spirit the commitment that it gave to Mr. Vajpayee in 2004, that Pakistan territory will not be used for promoting terrorist acts against India, the sky is the limit of cooperation between our two countries. Basically, we are the same people. There are ties of religion. There are ties of language. There are ties of culture.

CHARLIE ROSE: You were, in fact, born in what is now Pakistan.

MANMOHAN SINGH: Yes. President Musharraf was born here. I was born on the other side of the border. And my vision is to work for the relationship between India and Pakistan which would be like the relation between Canada and the United States. We want Pakistan to flourish. We want Pakistan to flourish as a moderate Islamic state. That is in India's interests. That is in the interests of the world as a whole.

CHARLIE ROSE: You mentioned your economy. You mentioned China's economy. You've been growing at a rate of 7 percent. You're the former finance minister, and people give you a lot of credit for what has taken place. They also raise this question: Is it sustainable?

MANMOHAN SINGH: Well, I think the proof of the pudding is in the eating. I think...

CHARLIE ROSE: To use an old American expression.

MANMOHAN SINGH: So for the last 15 years now, when we opened up
the economy, I think the economy has sustained a growth rate of 6 percent. We have proved the prophets of gloom wrong. The last three or four years, our economy now is increasing at the rate of 7-plus percent. And I do believe that our growth rate in years to come will go up.

We have now a record savings rate of 29 percent of our GDP. It has gone up by 5 to 6 percent in the last five, six years. We have a record investment rate of 31 percent of our GDP.

In years to come, savings rates will go up, because we have a very young working population profile. In years to come, if we can find jobs for all these, I think they would lead to -- they would be a source of increased income. They will be a source of increased savings. I see India inching in the next five or six years to a growth rate of close to 10 percent.

CHARLIE ROSE: What has to take place in terms of liberalization and privatization for that to occur?

MANMOHAN SINGH: Well, I think liberalization, by and large, we are there. We are there. Our principal worry right now is the infrastructure. India's infrastructure has to be modernized, has to be expanded at a rate which will I think be consistent with the growth requirements.

We need to modernize our railway system. We need to modernize our road system, port system, airport system. We need to move towards arrangements which will ensure energy security.

And then we have to re-look at the way our government systems function. I think our government has got out of business -- many things we've got out. But still, I think there is an old (INAUDIBLE). The government considers itself as what we call the mabab (ph), the father and mother. I would like government to have greater concern as a facilitator rather than as a regulator. There, I think we have some distance to go.

We've also problems in modernizing our political system. There are several states in our union where I think the politicians are not preoccupied with the growth dynamics as I believe they should be. They're still mired in the old, the religious controversies, the cast controversies. So India's political system also would need to be modernized.

CHARLIE ROSE: Do you have the political will to make sure that happens?

MANMOHAN SINGH: Well, I think it is happening, though I think it could have happened at a much faster pace. But I sincerely believe that this is now an inescapable, inevitable part. Things are moving in that direction.

CHARLIE ROSE: For example, I mean, I've had conversations with business leaders about the retail segment. And some have said that's going to be a kind of tilting point, when there is modernization in the retail area that will be a clear evidence that ...

MANMOHAN SINGH: We have I think taken the first steps. This year, we have opened up the retail trade with regard to majority ownership of foreign companies, single brand areas have been opened up. There are in all these matters, there are concerns. There is such a thing as the fear of the unknown. And in a country where employment opportunities are not growing fast enough, the fear of change tends to be very acute.

I have to create in our country a macroeconomic environment were the employment in aggregate can go up at a handsome rate. Once that happens, people losing jobs in one sector will not mean that they will become perpetually unemployed. From one sector, they can move on to other sectors.

I have therefore to wait until that time when the employment situation in our country is such that jobs are increasing in such numbers that we can take risks with regard to retail.

I don't think we can do it overnight. But I do recognize that ultimately, all sectors should be open to foreign direct investment.

CHARLIE ROSE: There is a dramatic difference between foreign investment into China and into India. And people say that reducing the regulations will dramatically change that.

MANMOHAN SINGH: Well, China is not I think a country which does not regulate, but there is a difference between the Chinese system and our system. The Chinese are much more I think centralized. We have three tiers of government. We have the central government. We have the state government. We have the local authorities. The central government gives approvals for certain investment, but there are certain things that the central government cannot do. If they want to get land, if they want to get water, if they want to get electricity, they have to go to the state government. If certain facilities, local facilities have to be arranged, the local authorities have to come. And that makes the Indian system slow moving, Indian administrative system slow moving.

I do believe that we have a problem here, and we must find ways and means in which I think businessmen wanting to set up enterprises here can get all the clearances in one go without too much loss of time running from one person, one sector to another, one authority to another. I think we have made substantial progress in the last 15 years, but we need to do a lot more.

CHARLIE ROSE: There is no turning back...

MANMOHAN SINGH: There is no turning back.

CHARLIE ROSE: ... from liberalization, from reform, from change?

MANMOHAN SINGH: No. Well, I think, as I said, the proof of the pudding is in the eating. When we launched this reform program in 1991, I was opposed by both the extreme left as well as the extreme right. In fact, when I in 1992 when I moved -- when I rose in parliament to present the budget of the government of India, all the opposition rose in revolt and said they want to move a breech of privilege motion against me, because what I'm doing is nothing else but carrying on the dictates of Washington and the IMF.

Now, from that day, lots of things have changed. Since then, there have been three changes of government. From 1996 to 1998, there was a united front government. The left parties were part of that. That government did not change the direction of policies that we set. Then we had a (INAUDIBLE) government from 1998. They wrote viciously against liberalization, that we were selling India to foreigners. But when they came to office, they also did not change. In fact, they expanded on what we had done.

So I think we have seen three changes of government -- right, left, center -- but the direction of economic policies has been towards progressive liberalization. There may be a difference of the pace at which India moves, but there should be no doubt whatsoever about the direction in which India is going to move in years to come. It is truly an irreversible shift in our policies.

CHARLIE ROSE: And what about, as many people say, how are you going to take care of the poor? How are you going to make sure that the agricultural population finds a way to live?

MANMOHAN SINGH: Well, let me say, I have always believed that the ultimate purpose of economic policies and development policy is to meet the basic needs of our people. And for that, we need a fast-expanding economy. Meaningful solutions to the problems of mass poverty that prevails in our country I believe can only be found in the framework of an expanding economy.

If the economy is not expanding, the redistribution of income becomes a zero-sum game. And therefore, all the class struggle - and it becomes much more vicious.

If the economy is growing fast, there is call for a distributing income from the rich to the poor to to put in place social safety nets. For example, we have done not this year -- we have said that in rural areas, there will be guaranteed employment 400 days in public works for whoever wants to come at minimum wages.

Now, this is not a very revolutionary program, but it will put a floor on income in rural areas. It is a program of the type which has probably few other counterparts in the rest of the world.

So our emphasis is, if the economy grows enough, fast enough, the tech system should be modernized so that the tax revenues rise fast enough also, and we should put more money in education. We should put more money in health. We should put more money in devising credible social safety nets for the poor.

CHARLIE ROSE: What is it about the Indian people that have enabled with these change in policies to have come to this moment?

MANMOHAN SINGH: Well, I have always believed India is a country blessed by God with enormous entrepreneurial skills. Now, this entrepreneurial spirits were kept suppressed by the command and control system that started out with well, with good intentions -- maybe it served us well in the beginning -- but after a time, it became a fetter on our progress.

I believe if we remove these fetters, the flowering of the entrepreneurial spirit of India would I think bring about a sea change in the way our economy works and functions.

And that is happening. In 1991, where was the IT industry? I think Mr. Narayan (ph), Mr. Premji (ph), they were all I think insignificant entities.

CHARLIE ROSE: Now they have giant global concerns.

MANMOHAN SINGH: With one single thing. I think (INAUDIBLE). When I became finance minister in 1991, I discovered that the wealth tax rates income -- there was taxation on wealth. It was so atrocious and so high that actually nobody could accumulate money in an honest way. I removed that tax, and the result was that Indian companies for the first time acquired an incentive to grow big, to grow rich. And you see the results of that in Bangalore. You see it happening elsewhere. So I am convinced the entrepreneurial spirit of the Indian people, if allowed to express itself freely in the marketplace, India will be all right.

CHARLIE ROSE: What is the impact of your demographics? You're very different, say, from China.

MANMOHAN SINGH: Well, I think our demographics is going to help us to grow at a faster pace. Because the Chinese insistence on one child, I think the proportion of older, non-working age population is going to rise sharply in China.

Our age profile is much younger. The proportion of working population to total population will rise for another decade. And if we can find jobs for this population, that is going to be a source of wealth creation. India's saving rate will go up. India's investment rate will go up. And I believe that's a plus point.

CHARLIE ROSE: India and the United States seem to have, beyond this oldest democracy and the largest democracy, this special relationship period. You have a daughter that lives in New York. Your national security adviser has a son who lives and works in New York. Your finance minister went to Harvard Business School. There has been
this tradition -- there is a large Indian population in New York. Is that going to continue? Is that a central part of this relationship?

MANMOHAN SINGH: Well, let me say, in the evolving global economy, the transport revolution, the IT revolution...

CHARLIE ROSE: The death of distance.

MANMOHAN SINGH: The death of distance, there is hardly any middle-class family in India who doesn't have a son, a daughter, a son-in-law, a brother, a brother-in-law in the United States. That is a very powerful new bond.

And what is more is, and I should like to express our profound gratitude to the Americans of Indian origin. The way they have conducted themselves, the way they have worked hard to carve out a niche for themselves in the Silicon Valley, I think this has also given America a new idea about what India is capable of.

Our challenge is, as I often say, is to do what the Indian Americans have done in the Silicon Valley without going there.

CHARLIE ROSE: When you look at India today, its moment, tell me what you think its destiny is.

MANMOHAN SINGH: Well, India's destiny is what I described in 1991, quoting Victor Hugo. The emergence of India as a major global power is an idea whose time has come. And I would only modify it by what Javaharlal Neru said. He said, "The service of India means the service of those teeming millions steeped in poverty, ignorance and disease." To see that in my lifetime we can soften these harsh edges of extreme poverty and unleash a new economic and social revolution which will bring out the latent creativity and entrepreneurial spirit of our people, I think that's what I feel, I think.

CHARLIE ROSE: And if that's the destiny of India, what do you think your legacy is?

MANMOHAN SINGH: Well, I'm a small person put in this big chair. I have to do my duty, whatever task is allotted to me. I think for me, it's enough I think -- since 1991, I have been in part of the process of ushering in the reform movement. Of course, no single person can take credit for that. I mentioned the role of Rajeev Gandhi. But I think whatever I've done, I hope I've earned a footnote in India's long and tortuous history.

CHARLIE ROSE: You certainly have. And it will be even more likely if the president comes on Wednesday and says, we have a nuclear agreement and I'm fully supportive of India's desire to have a permanent seat on the U.N. Security Council. That would be a great gift.

MANMOHAN SINGH: Well, it would be a great gift. And I pray for that moment in which I think we can claim to the world that we are now in a different, new era of Indo-American relationship of trust, of working together, partnership strengthened both by our commitment to common values, and also the identity of interests.

CHARLIE ROSE: Mr. Prime Minister, thank you for taking this time. It's been a pleasure being in your company...

MANMOHAN SINGH: Thank you, Charlie.

CHARLIE ROSE: ... and a pleasure to see you. And I look forward to many, many visits back.

MANMOHAN SINGH: Please do. It has been a great pleasure for me talking to you.

CHARLIE ROSE: We are here with the prime minister. The beginning of a remarkable visit here, where we will meet the people of India and talk about their experiences, their hopes, their dreams, their challenges. People from a variety of communities, from cultural worlds, from political worlds, from business worlds, and people all vitally interested in the world's largest democracy and what happens as it becomes a true global power.

Thank you for joining us.

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