Bhutan: Between Two Giants
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BHUTAN Bhutan: Between Two Giants SHERPEM SHERPA NEPAL BHUTAN MYANMAR HIMPHU—A short walk past the shops lining Norzin Lam, the main street in Bhutan’s capital Thimphu, re- Tveals most of the merchandise on display is “Made in China”—shoes, silk, toys, heaters, and kitchen utensils. While diplomatic relations between Bhutan and China have yet to be established, the market in the capital city is already flooded with Chinese-made goods. Bhutanese are fast adopting Chi- nese products and cuisine. Like many countries in the region and beyond, it might not be long before Thimphu has its own little “Chinatown.” Thimphu already has a rather cramped sec- tion of town popularly known as “Hong Kong market,” de- fined by its narrow alleys, tall buildings, and the proliferation of Hong Kong goods sold there. It was once also a hotspot for street fights, alcohol, and gambling. History has shown that the northern routes through 20,000-foot passes of the high Himalayas, though tough, have long served as critical connections for merchants from Bhutan, India, and Tibet. As early as 1773, Bhutan was al- ready a gateway for trade with Tibet, and the British East India Company sent many missions to extend and explore WINTER 2013 / 201441 Downloaded from wpj.sagepub.com at COLUMBIA UNIV on December 16, 2014 CASE STUDY the frontiers and trade routes to Central Bhutan considers India its closest friend. Asia during the British Raj in India. The two countries have cooperated for more “In olden days, salt used to be brought than 50 years. As Bhutan’s Prime Minister to Bhutan from the township of Phari,” Tshering Tobgay observed recently, “the re- recalls Dawa Namdu, a 69-year-old busi- lations between Bhutan and India have re- nessman and resident of Thimphu. Phari, ally stood the test of time; we’ve worked to- some 14,000 feet above sea level, border- gether. Our good relationship was founded ing Bhutan in the east, was and given shape by our kings an important frontier town and former kings and leaders in Yadong County in the Ti- regional of India.” betan Autonomous Region. integration Bhutan’s Third Monarch, It served as the main busi- King Jigme Dorji Wang- ness hub for merchants from with its chuck and India’s Prime both Tibet and Bhutan. But neighbors Minister Jawaharlal Nehru as border disputes increased has become launched this special relation- after the annexation of Ti- ship between the two coun- bet by China, trading along imperative for tries in August 1949. Deeply this and other towns in the bhutan. rooted in religious, cultural, northern route diminished. historical, and economic Now, most basic staples, from salt and veg- ties, Bhutan and India signed the Treaty of etables to oil and fuel, come from India. Friendship, calling for “peace and friend- ship” and “free trade and commerce,” and SANDWICHED ultimately allowing Bhutan duty-free transit Bhutan—a landlocked Himalayan across India. Bhutan is, after all, a landlocked kingdom sandwiched between the two nation, and it is vital for its economic devel- political and economic powers, India opment to have access to a seaport. and China—has long faced challenges to Bhutanese-Indian relations strength- its frontiers from incursions and border ened further after China annexed Tibet in disputes. In 1865, the country lost the 1950. Tibet’s fate was a warning to Bhutan Duars region to British India. More that an isolationist policy could place its recently, in 2007, Bhutan lost its northern independence in jeopardy. In the wake of snow-capped mountains to China. The cross-border incursions by Chinese soldiers Bhutan map, over the years, has changed and China’s publication of a map show- significantly in its shape and size. Bhutan, ing altered traditional Sino-Bhutanese with 14,820 square miles of land area, now borders in their favor, Bhutan restricted looks like a miniature upside-down version cross-border trade in the north and quietly of the map of Mongolia, the latter being extended its relations with India. Indeed, more than 40 times larger than Bhutan Bhutan’s process of modernization began and sandwiched between two other major with the acceptance of India’s assistance in powers—Russia and China. its development programs. Sherpem Sherpa, a former reporter and writer for Bhutan National Radio and Television (BBS) and Deutsche Welle, works for UNICEF in Bhutan. 42 WORLD POLICY JOURNAL Downloaded from wpj.sagepub.com at COLUMBIA UNIV on December 16, 2014 BHUTAN India has repeatedly reiterated its sup- coincidence” as the country had not signed port for Bhutan’s independence. Bhutan, a new agreement with India in the absence for its part, proved its ability to safeguard of a newly elected government. The subsidy its sovereignty when, led by His Majesty cut was bad timing as it left many of Bhu- the Fourth King, the country’s armed forc- tan’s middle class facing difficult times. For es conducted operations against the Unit- months during that period, Dawa says, he ed Liberation Front of Assam insurgents saw the depot where the cooking gas cylin- who were using Bhutan’s land to carry out ders were distributed—thronged by people attacks on Indian soil. hoping to get their hands on a single cyl- inder. It also dramatized Bhutan’s critical NATIONAL SECURITY dependence on India. What followed was a new Friendship Treaty, signed in 2007, replacing the OPENING TO BEIJING provision that required Bhutan accept Some commentators have suggested that India’s guidance on foreign policy. Under the timing of the subsidy cuts had to do the new agreement, Bhutan and India with the meeting of Chinese Premier Wen are required to “cooperate closely with Jiabao and then Prime Minister Jigmi Y. each other on issues relating to their Thinley in Rio De Janeiro on the sidelines national interests. Neither Government of the Rio+20 Summit. Xinhua, China’s shall allow the use of its territory for official news agency, reported both leaders activities harmful to the national security “expressed willingness to establish formal and interest of the other.” This was seen diplomatic ties” between their countries, to provide greater freedom for Bhutan adding, “China is willing to complete to manage its sovereignty and external border demarcation with Bhutan at an relations. In 2008, welcoming Bhutan’s early date and strengthen exchanges in move towards democracy, India also various fields so as to push bilateral ties to allowed 16 entry and exit points for a higher level.” Bhutanese trade with other countries A statement from the Bhutanese (excluding China). Prime Minister’s office said the meeting But many critics see recent events as carried “great historic significance as it part of India’s continued efforts to expand marks the first meeting between the heads its influence over Bhutan’s foreign policy, of the two governments.” While many in trade, and security. Many people—hoteliers, the country welcomed the news, calling it shopkeepers, civil servants, journalists—ar- a “good move,” it was received with some gue that India’s warm embrace of Bhutan considerable skepticism in neighboring is turning increasingly into a stranglehold. India. The meeting—amid a backdrop This perception came into focus during of growing border tensions between In- Bhutan’s 2013 national elections. India dia and China—raised the prospects of cut its subsidy on cooking gas and kero- thawing border disputes between Bhutan sene—commodities for which Bhutan is and China. For India, the Bhutan-China highly dependent on India—leaving many border talks are intimately related to its Bhutanese spending days to stockpile gas own border conflicts with China. India is cylinders before prices skyrocketed. Some particularly concerned with the territory diplomats called this “bad timing” and “a in Doklam near the contentious Chumbi WINTER 2013 / 2014 43 Downloaded from wpj.sagepub.com at COLUMBIA UNIV on December 16, 2014 CASE STUDY valley—strategically located at the cor- GROWTH ON BOTH SIDES ner where Bhutan, India, and China in- Reflecting back, Dawa thinks that tersect. If Bhutan agrees to China’s offer perhaps “the historic and economic ties of territory in the disputed Jakarlung and that Bhutan and India established early Pasamlung areas in the north, it could on led to relations between the two mean that India’s Siliguri corridor, the countries growing over the years, while 12 mile wide and 120 mile long corridor the uninhabitable northern belt and surrounded by Nepal, Burma, Bangla- the inconclusive border talks between desh, and Bhutan, would be threatened. Bhutan and China deterred Bhutan from That’s why soon after the 2013 elec- formalizing its relations with China.” tions, India’s National Security Advisor, Bhutan shares a 260-mile border with Shivshankar Menon arrived in Thimphu China, which has yet to be demarcated. to congratulate the new prime minister, India, with more than 370 miles of border, Tshering Tobgay. India also just prom- continues to be Bhutan’s largest trading ised 50 billion rupees ($810 million) to partner, and accounts for over 90 per cent assist in the implementation of Bhutan’s of its imports. 11th Five Year Plan. During that visit, Regional integration with its neigh- Shivshankar Menon was accompanied bors has become imperative for Bhutan by the Indian Foreign Secretary Sujatha in overcoming the hurdles posed by its Singh—the main purpose of the visit small domestic market and lack of capital clearly to “advise” Bhutan on handling available to take advantage of trade and border talks with China, with the next commercial opportunities in hydropower, round of negotiations following several tourism, textiles, and traditional Hima- weeks later. layan herbs. Therefore, Bhutan will con- Before the next round of boundary tinue to explore any regional cooperation talks, however, came reports that Bhu- that is to its advantage.