News



DATE=5/15/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-232271
TITLE=INDIA / SANCTIONS (L)
BYLINE=DOUGLAS BAKSHIAN
DATELINE=NEW DELHI
CONTENT=
VOICED AT: 

INTRO:  INDIA IS BEING SUBJECTED TO INTERNATIONAL SANCTIONS 
BECAUSE OF ITS DECISION THIS WEEK TO CARRY OUT NUCLEAR TESTS.  
V-O-A NEW DELHI CORRESPONDENT DOUGLAS BAKSHIAN REPORTS THERE ARE 
DIFFERING ESTIMATES ON WHAT KIND OF IMPACT THE SANCTIONS WILL 
HAVE.

TEXT:  A CLEAR PICTURE OF THE IMPACT OF ECONOMIC SANCTIONS HAS  
NOT  YET EMERGED.  ACCORDING TO ONE WIDELY QUOTED ESTIMATE, U-S 
SANCTIONS COULD COST INDIA ABOUT 20 BILLION DOLLARS. 

HALF THE AMOUNT IS IN INSURANCE AND FINANCING FOR AMERICAN FIRMS 
FROM THE U-S OVERSEAS PRIVATE INVESTMENT CORPORATION.   ANOTHER 
FOUR BILLION DOLLARS IS IN PENDING PROJECTS BY THE U-S 
EXPORT-IMPORT BANK, AND THE STATE DEPARTMENT SAYS SEVERAL BILLION
DOLLARS IN FUTURE LOANS BY INTERNATIONAL INSTITUTIONS COULD BE 
AFFECTED.

BUT INDIA'S RESPECTED BUSINESS STANDARD NEWSPAPER GIVES ANOTHER 
VIEW.  THE PUBLICATION QUOTES UN-NAMED SENIOR INDIAN GOVERNMENT 
OFFICIALS AS SAYING THE ACTUAL IMPACT OF SANCTIONS WILL BE ABOUT 
ONLY ONE BILLION DOLLARS.  FINANCE MINISTRY OFFICIALS WOULD  NOT 
CONFIRM OR DENY THE FIGURE FOR V-O-A.  HOWEVER, INDIA'S FINANCE 
MINISTER, YASHWANT SINHA, THIS WEEK PUBLICLY PLAYED DOWN THE COST
OF SANCTIONS. 

ON ANOTHER FRONT, INDIA RECEIVES SEVERAL BILLION DOLLARS A YEAR 
IN AID FROM INDIVIDUAL COUNTRIES AND MULTI-COUNTRY AGENCIES. 
JAPAN, INDIA'S BIGGEST AID DONOR, HAS FROZEN ONE-BILLION DOLLARS 
IN LOANS.

OTHER MAJOR DONORS INCLUDE THE UNITED KINGDOM, THE NETHERLANDS, 
SWEDEN, GERMANY AND DENMARK. GERMANY HAS EFFECTIVELY FROZEN 
160-MILLION DOLLARS IN NEW DEVELOPMENT ASSISTANCE, SWEDEN SAYS IT
WILL CANCEL A 119-MILLION DOLLAR AID DEAL, AND DENMARK FROZE AID 
WORTH 28 MILLION DOLLARS.  

ON THE MILITARY SIDE, EXPERTS SAY NEW DELHI SEEMS TO BE MORE 
SECURE.  INDIA RECEIVES THE VAST MAJORITY OF ITS WEAPONS FROM 
RUSSIA AND ANALYSTS SAY THESE SUPPLIES REMAIN INTACT. THERE HAVE,
HOWEVER, BEEN ACTIONS BY SMALLER PARTIES -- AUSTRALIA HAS 
SUSPENDED ALL DEFENSE CONTRACTS WITH INDIA AND CANADA HAS BANNED 
ITS MILITARY EXPORTS. 

WHILE AID AND LOANS MAKE UP ONLY A SMALL PERCENTAGE OF THE INDIAN
ECONOMY, ANALYSTS SAY THE IMPACT OF SUCH MONEY MAY BE GREATER 
THAN THE NUMBERS REVEAL.  THEY SAY THAT IN A VERY POOR COUNTRY 
LIKE INDIA, THE LOSS OF EVEN A FEW MILLION DOLLARS CAN AFFECT 
MANY PEOPLE. INDIAN LEADERS SAY THEIR ECONOMY IS SELF-RELIANT AND
CAN SURVIVE WITHOUT FOREIGN AID. (SIGNED)

NEB/DB/JO

15-May-98 8:00 AM EDT (1200 UTC)
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Source: Voice of America
.