governance, political economy, institutional development and economic regulation

Posts tagged ‘Tibet’

Socializing the Dragon

dragon

(photo credit; http://www.mrwallpaper.com)

China has “bested” its way onto the big boys table through three critical initiatives which bore fruit since President Xi took over as China’s numero uno in 2013.

The first was the founding of the BRICS New Development Bank (NDB), headquartered at Shanghai. Symbols speak louder than words. The logo of the NDB is eerily reminiscent of Chinese communist logos of yester-years encased in two encircling stalks of wheat or maybe olive branches, as in the UN logo. At its center is a round blob with geometric shapes embedded- a suitably vague and nondescript statement of intent, possibly illustrating that the Bank can go any which way and has endless opportunities.

Whilst the first President of the Bank is an Indian corporate guru -K. V. Kamath, no one is under any doubt that it is China which will call the shots, exactly as the US does in the World Bank or Japan in the Asian Development Bank. This is fair since she who pays the bills gets to call the tune.

The second success was to get thirty eight regional and twenty non-regional countries, including members of the G8 except the US, Japan and Canada who kept away, to sign up as Prospective Founding Members of the Asian Infrastructure and Investment Bank which is to be based in Beijing. The candidature of North Korea and Taiwan was refused by China. The former because it is a renegade and the latter because China does not recognize Taiwan as a sovereign country.

The third success completes the trilogy of China’s financial hegemony. China has offered to fund the European Infrastructure Fund at a time when Europe’s powerhouse- Germany and the European Union are engrossed in managing the financial bog of a potential “Greek exit” from the Euro and the likely ensuing turmoil. Massive investments in infrastructure are viewed as one way to kick starting growth in Europe, which has lagged recovery post the 2008 crisis. With Europe agonizing over how much more pain it can take, China’s generous offer of financial support is well timed.

China gets it fiscal muscle from its foreign exchange reserves of over US$ 3.7 trillion. These are down from their peak last year of nearly US$4 billion but remain the largest reserve ever. The annual trade surplus is a healthy US$300 billion plus. Its budget deficit, albeit increasing is still low, though off-balance sheet borrowing by state owned enterprises and the iffy quality of bank assets could cloak an incipient problem.

Its diplomatic and economic muscle is evident from its success in cowing down the meek protests by the Philippines and Japan against its assertive claims over small islands in the South and East China Sea. Far-off South Africa, the continents most developed economy, has repeatedly refused to give a visa to the Dalai Lama since 2009, reportedly out of deference to Chinese sentiments. The Dalai Lama, who is resident in the gorgeous Indian mountain paradise of DharamshaIa, is not recognized by China as the titular head of the Tibetans. China promotes an alternative in the Panchen Lama who is resident in Tibet.

Only the feisty Mrs. Merkel, Chancellor of Germany has had the gumption to ignore China’s ire and met formally with the Dalai Lama. Now with China bailing out Germany-till now the primary “money bag” for the reconstruction of Europe – the jury is out whether Mrs. Merkel would be inclined to repeat this diplomatic equivalent of thumbing her nose at China.

There are two jewels China still seeks. First is to implement President Xi’s vision of reviving the ancient silk route from Western China to Europe. The second is to develop a maritime silk route in the Indo-Pacific region from Myanmar via Bangladesh to India and Sri Lanka. Possibilities exist of extending this further West to Pakistan (where China is already developing the Gwadar port) and Iran where India is tentatively engaged in a similar venture at Charbahar.

These Chinese financed beltways will straddle Asia physically. If China pulls it off they are sure benefit the economies of the continent by reducing transit cost and linking local markets better. But the key issue spoiling the party is sovereign doubts about China’s true intentions in proposing these extravagant infrastructure plans.

Action speaks louder than words. Chinese overseas investment, particularly in Africa, is perceived to be driven too narrowly by self-interest. Its muscular approach to safeguarding what it considers its justified claims in the South and East China Sea give rise to fears of territorial expansionism.  Despite the fact that the India-China border has been peaceful for the last forty years the fear of conflict is ever present.

China needs to demonstrate that it has crossed the hump of middle-income prickly aggression into the beneficent altruism of a self-confident, high income country. It needs to take on an international commitment which demonstrates its resolve to make the world a better place.

It has already taken the first step by voluntarily capping carbon emission by 2030 including by increasing the share of clean energy to 20%. The voluntarism is praise worthy. But a bird in hand is always more credible than two in the bush by 2030.

Stabilizing Afghanistan presents an existential challenge which China can use to establish its credentials as an international force of substance. This single initiative can start a virtuous cycle of development in the “roundabout of Asia”- as president Ghani of Afghanistan, terms his country- with spill over benefits across the region.

China is well placed to substitute the US in leading this effort. It has a close relationship with the Pakistani army and civil leadership which are crucial to contain the Taliban. It has the resources. The US is reported to have spent around US$ 800 billion in Afghanistan, over the thirteen year from 2001 to 2014. This is not a scary number for China, especially since there are spin off benefits- bringing to the international market the huge copper and iron ore deposits in Afghanistan; honing the experience for the Chinese army and equipment in the field and creating a stable buffer in Afghanistan which can sever the existing arc of terror and violence that extends today through Syria, Iraq, Iran, Afghanistan to Pakistan.

The real question is will President Xi bite this bait to flex muscle productively or shall transactional engagements remain the order of the day for China.

1061 words

Naga rebels are also Indian

Rijiju

(photo credit: northeastnews.in)

Bloodletting always makes good copy. No wonder then that the killing, by Naga rebels, of 18 unarmed Army jawans going on leave in Manipur on June 5 and the airborne counter-strike on June 9 by Indian troops on rebel camps in Myanmar, stirred public sentiment. The depth, the speed and the effectiveness of the Army response was breathtakingly efficient, and reflects the capabilities of our Army when it is effectively led.

But the “cheer-leader” type response of the young minister of state for information and broadcasting — Colonel Rajyavardhan Singh Rathore, himself an ex-Armyman, using Twitter handles to extend dire warnings that Indians will root out terrorists who attack India or Indians anywhere, was reminiscent of President George W. Bush’s forceful “Marlboro Man” resolve to “hunt down” the Al Qaeda perpetrators of 9/11.

Col. Rathore forgets that President Bush was targeting enemy aliens who had wreaked havoc on American soil. Naga rebels are as Indian as the minister — historically disgruntled though they may be. Surely the optics of managing our own rebels has to be different from the manner in which foreign enemies are dealt with.

Col. Rathore will rue his remarks should he, one day, become minister in-charge of the Northeast — as his more illustrious colleague Gen. V.K. Singh (retd) is today. Negotiating with “rebels” you wanted to once hunt down becomes unnecessarily more awkward and difficult.

Alternatively, Col. Rathore could, in future, become minister in the external affairs ministry where he will rue a hawkish image whilst dealing with our immediate neighbours. The friendly government of Myanmar ostensibly only came to know about India’s targeted penetration into their territory, after the airborne Indian Force had returned — a mirror image of the US strike to hunt down Osama bin Laden in Pakistan.

No government likes its sovereignty to be taken lightly, least of all our immediate neighbours in South Asia, who already bristle at our “big bully but empty pockets” image. China is also a big bully, but at least they shut the protesting mouth with cash.

The point Col. Rathore should consider is that he is not mandated to speak on matters outside his portfolio. He may have personal opinions. As an ex-Armyman it would be natural to glow with professional pride at the faultless manner in which the operation was executed.

But the code on tweeting personal opinions by ministers was established in 2009. Shashi Tharoor, a junior minister in the previous government, got a rap from his party for tweeting jocularly that he was willing to travel “cattle class” or economy on government work in solidarity with all our “Holy Cows” — a particularly evocative term for the “secular”, very politically correct optics code of the Congress.

India’s very professional armed forces, like all professional soldiers worldwide, are the first to acknowledge that violence, even when it is justified and used by the state legally, is at best a necessary evil to deal with those who do not respect the rules of law. The Army is a highly honed, surgical knife, effective only when used for the shortest period to maximum effect. Violating this key axiom for their deployment results in rapid degradation of their effectiveness. This is what happens when the Army is used for extended periods to ensure internal security as in Northeast.

India has made enormous strides on the diplomatic front by establishing a functional relationship with the government in Myanmar. No trivial task given the political contradictions within Myanmar. The nascent democratic architecture; our ambivalent competition with China — intent on using Myanmar as an overland route to the Indian Ocean area; India and Nobel Laureate Aung San Suu Kyi’s subdued take on the human rights of the marginalised Rohingya Muslim community — all add to the complexity of Indo-Myanmar relations.

But it is on the domestic front in Nagaland and Manipur that the deficiencies are more extreme. As in Kashmir and in the Maoist-affected eastern districts, the incentive for local citizens, including rebels to end the conflict is less than self-evident.

It does not help when local administrations are elitist, historically weak, inefficient and often corrupt as in Nagaland and Manipur.

The jury is out on whether democracy helps or hinders this process of stabilisation in conflict situations. It is entirely possible that a strong authoritarian government, with deep pockets can “crush” rebellion temporarily. This is the expectation in China. But it is yet to happen in Tibet or in Xinjiang.

Unless the root causes of marginalisation are addressed and the incentive to conform to the rule of law becomes greater than the incentive to rebel, sustained stabilisation is unlikely. In any case, India is committed to working within the democratic framework. Both Nagaland and Manipur have elected governments, as in Kashmir and they have to be supported to take control. Emerging from conflict into peace is a complex societal process.

The good news is ordinary people in war-torn areas are usually unequivocal about their desire for peace. Padma Rao Sundarji’s Sri Lanka: The New Country presents this alternative view that local Tamil Sri Lankans, in sharp contradiction to the jingoistic sentiments of overseas Tamils, are happy that the domestic war in Sri Lanka has ended. All “armies”, including ones own, are extractive in character and feed off the local population, which suffers the economic cost, the indignities and the atrocities of conflict.

Rebels living comfortably abroad sheltered and assisted by “friendly” foreign governments and their agents never truly represent the ordinary citizen in the conflict zone. The recent incidents in Manipur are surely not the last round in the battle of attrition, ongoing since 1952, between the Indian state and the Naga rebels.

The real question is whether we are doing enough to innovate a domestic political solution? Can Team Modi build the process of reconciliation on the aspirations of educated, young Nagas? Are there more Kiren Rijiju’s (junior minister for home who is from Arunachal Pradesh) out there?

Adapted from the Asian Age June 12, 2015: http://www.asianage.com/columnists/innovate-move-conflict-peace-902

Indo-German Defence Pact- New beginnings for subaltern states.

Leyen

(photo credit:www.junglekey.fr)

Ursula Von Der Leyen, the scarily efficient and glamorous German Defence Minister, who is also incredibly mother to seven children, ticked all the required boxes for soaring rhetoric on a bilateral strategic partnership with India. Democracy, freedom, an open society, diversity and religious plurality being the ground for shared values.

Of course, she was careful to not mention the closest strategic arrangement yet between India and Germany, forged by Netaji Subhash Chandra Bose whose “Indian National Army” joined the “Axis” forces in World War II.  This fact is inconvenient on two counts.

First, Germany is still defensive about its authoritarian past under Hitler. Second, Netaji, whilst acceptable to the current BJP government, remains a big no- no to the Congress. He was Pandit Nehru’s rival within the Congress and had to quit. Displaying characteristic German caution, Ms. Leyen preferred to give the past a brush-over and concentrated on the future.

Today, the most visible link is the fascination of the Indian nouveau riche for high-end German cars- the Audi and its cheaper cousin the Volkswagen and the BMW stable- thereby uncharacteristically forsaking the “value for money” Japanese options.  The second common link is a taste for beer though German brands remain unrepresented in the Indian beer sweep stakes which is dominated by Dutch, American, UK, Australian and home grown Indian brands.

Human Rights and Democracy go together

To a direct question from a media representative whether a dodgy human rights record for India could sour any proposed strategic partnership with Germany, Ms. Leyen was quick to brightly aver that since the two countries were democracies,  safeguarding human rights was, by definition, of equal value for both. She could not have done better.

The response was in sharp contrast to the US Ambassador’s apprehension, recently voiced publicly, that freezing the activities of Ford Foundation and Greenpeace in India could chill Indo-American relations. But Ms. Leyen’s response also came as recognition of India’s long standing support for the rights of the exiled Tibetan community, resident in India. Chancellor Merkel has been an international exception in publicly snubbing China by maintaining warm relations with the Dalai Lama. PM Modi in turn has been quick to project the Indian origins of Buddhism.

Can Germany subvert NATO discipline?

For all the talk about a strategic partnership, it was not clear what the substance of this partnership could be. Germany and Japan (the defeated Axis powers of WW II) have both reaped the economic advantages of aligning with the victors and outsourcing their external protection to the US Nuclear umbrella for the last seven decades. Japan and Germany are the third and fourth largest economies, respectively, but on defense spend they rank a lowly eighth and ninth, behind the UK, France and even India (SIPRI 2015).

Is Germany seriously considering abandoning the US crutch and shouldering more of the defense burden versus Russia’s currently expansive ambitions in Europe? Would the additional fiscal burden be feasible given that the dodgy economies of Southern Europe are fast becoming Ms. Merkel’s subsidy problem?

This would be uncharacteristic for the cautious and pragmatic Ms. Merkel. Germany is increasingly dependent on natural gas imports, subsequent to it closing the nuclear power option. Russia is right next door with the largest reserves of gas and the pipeline infrastructure to supply it. It makes perfect sense for Ms. Merkel to continue to depend on the US for “protecting” Europe and avoid a direct face-off with Russia.

One lesson to learn from Germany is how aligning with a stronger partner for strategic purposes can free up public resources for development and growth. But it is unlikely that the context will ever fit the tough neighbourhood India is situated in and the compulsion of living with a “muscular” China.

Indo-German strategic partnership?

Indeed the question uppermost in Ms. Leyen’s mind was whether there was any future for an “alliance” with India, given our long standing adherence to the doctrine of non-alignment. It is unlikely that she will get a straight answer.

First, strictly defined “for-ever” alliances are now old hat. Germany, together with the UK, Netherlands, Denmark, the Nordics, Australia and New Zealand have ignored US chagrin at their participation in establishing the Asian Infrastructure Investment Bank- China’s counter to the Japan dominated Asian Development Bank.

Second, the past shows that alliances do not suit India. We are too large and too poor, to hang our hat exclusively on any one peg though it is not for want of trying. India has all the characteristics to be a natural ally for the rich, democratic world.  But the accident of history, or the perversity of diplomacy, has been that none of the rich, democratic countries (US, UK, EU) actually showed much interest in having an alliance with democratic India and its messy politics.

The rich, democratic world (G8) found it more convenient, during the extended “cold war years”, to team up with developing country dictators in Asia, Africa and South America in a global pact against Communism. Unfortunately, this also meant teaming up with elites and against the poor citizens of their allies in the developing world. This is what drove India into a strategic alliance with Russia in 1971 which has since lost its salience.

Make for India

Germany is today Europe’s powerhouse. India has shrugged off its mantle of lethargy. Demography is waiting to be exploited in India whilst ageing Germany needs skilled, temporary immigrants to drive their economy. This presents a huge opportunity for India’s unemployed but tech savvy youth.

Language will be a problem for Indian immigrants and this is one good reason why India should free up the language curriculum in schools and make it market oriented. Ms. Leyen is multi-lingual as must Indian kids become.

Around 12% of the German population has roots outside Germany but mostly in other European countries and Turkey. Ms. Leyen’s proposal for temporary migration, at scale, from India must be pursued.

A partnership with Germany will likely cater more to optics than substance. But the proposal to integrate the technical workforce in the two countries is a substantive addition via Indians making, for India and the world, in Germany.

A packed house turned out in the burning, mid-day heat of New Delhi to listen to Ms. Leyen and to get a glimpse of the endearing German ambassador and India buff- Michael Steiner.

Part of the curiosity was to see what the Germans had to offer in this new area of defense international co-operation. What was on offer publicly was underwhelming. Seeing and hearing the first woman Defence Minister of Germany was itself a novelty. But mostly, it was an opportunity to be with a possible future successor to Ms. Merkel once she decides Germany no longer needs her.

If this happens in 2017, PM Modi may be dealing with a powerful transatlantic woman-power tie up: Hilary Clinton in the US and Ms. Leyen in Germany – both of whom are likely to provide him stiff sartorial competition.

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