G A T E W A Y H O U S E I n d i a n C o u n c i Bi-annual Review l o n G l o b BRICS: a l R e l a t i o n s The new Syndicate Q u a r t e r l y R e v i e w | O c t o b e r - D e c e m b e r 2 0 1

Gateway House 1 Quarterly Review Bi-annual Review January – June 2012 Letter from the Executive Director

Manjeet Kripalani Executive Director Gateway House: Indian Council on Global Relations

his quarter was dominated by the BRICS alliance. The first BRICS meeting to be held in India was hosted Tin New Delhi on 29 March 2012. The big announcement was the possible establishment of a BRICS Bank – an alternative and supplement to the World Bank and IMF that currently dominate international development financing today.

The rest of the world is skeptical about what they see as diverse developing nations trying their hand at institu- tional financial independence. But given the stresses that are threatening the most ambitious financial integration project – the Euro – a new international financial alliance that can keep in mind the lessons from the Euro’s strains, may be a worthwhile experiment for the developing economies. A key concern: Keeping the Renminbi as a partner currency, and making sure it does not dominate (page 7).

Meantime, the BRICS are experiencing troubles of their own: India and China are slowing down economically, and as Gateway House points out, while China is by design, while India’s is involuntary. Putin’s re-election has evoked public protest, but there is also a new xenophobic dimension of nationalism in the country which is noteworthy (page 26). Brazil’s currency is too strong and growth has slowed significantly for the grouping to benefit from each others’ strengths, they must learn from each other – and India and Brazil provide some examples (page 31).

The troubles of the Arab uprisings never far from our shores, is intensifying. The Assad regime is being cornered now, and Western support of various ‘rebels’ in West Asia has caused a full-scale Shia-Sunni split to erupt across the region (page 44). The consequences will be catastrophic.

In March, Gateway House launched its first Global Stability Map, authored by our research head Akshay Mathur and interns. The map, which all our members received, is the first attempt to look at the world’s political, social and economic elements from the viewpoint of a developing country – in our case, from the shores of Mumbai. The map will be an annual feature for Gateway House members.

Enjoy the summer and the mangoes that come with it.

Manjeet Kripalani Executive Director

Gateway House 3 Quarterly Review Table of contents

Greeks do not want to leave the Eurozone 6

Beware of cheap lending from China 8

IMF interview: How the European crisis will affect India 10

What the Dimon debacle means for the world 11

EU austerity: Room to wiggle 12

The case for BRICS swaps 14

China: What Nixon wrought 17

China’s global proxy game 19

Pragmatic Populism: Learning from the new Latin America 20

India-U.S.-Iran: A tightrope walk 22

Petit, not grand geste on India-Pakistan 24

Iran: An opportunity for BRICS 25

The Bahrain formula 28

U.S.-Afghanistan agreement: A welcome start 29

Sanctions on Myanmar: Have they worked? 31

Qatar: Geopolitical Cosmopolitanism 34

Deconstructing the Muslim Brotherhood manifesto 36

Can Pakistan sustain its democracy? 40

What Iran's election means for India 41

Competitive intolerance: Reflections on Gandhi’s death anniversary 43

A significant election in Kuwait 44

Maldives: Nasheed outpaced his people 46

Rethinking human rights 48

Russia’s growing nationalism 50

India and Russia: A new Central Asian engagement 52

India-Brazil: Pioneers of a new development agenda 54

BRICS: Moving in the right direction? 56

BRICS: Their case against the U.S. 58

Gateway House 4 Quarterly Review Myanmar in the ASEAN Matrix: An opportunity for India? 59

India-Tonga: Old friends, new engagements 60

India-U.S.: More equal partners 62

BRICS: An alternate financial framework 63

West and Wahabi vs. Shia 65

UN: A return to 'mandated colonialism' 67

Hillary Clinton’s ‘Pivotal’ Moment 70

Rio + 20: Accommodating new global donors 72

Taliban in Qatar: An Afghan view 74

MMRCA: Building empires, not security 75

India: A unified defence command? 77

AFSPA: National necessity or human rights violation 79

Should India emulate China in space? 81

Piracy: A dangerous eco-system 83

Gateway House Meetings: January to July 85

Gateway House 5 Quarterly Review Geoeconomics Greeks do not want to leave the Eurozone

28 March 2012 Akshay Mathur Head of Research, Gateway House

Greece holds on /Storem-Flickr

he Greek debt debacle seems separation from the Eurozone may opinions but a majority, both in the Tto be over – at least for now. have enabled faster recovery. political spectrum and in society, do The crisis is fading and the dreaded want to be in the Eurozone. restructuring of Greece’s obliga- Dr. Kostas Botopoulos: I’ve never tions – sharply reduced in value for supported the idea of Greece leaving AM: This is a Eurozone crisis investors – went smoothly. Despite the Euro. I’m not an economist, but it affects the global economy. riots and strikes, Greece moreover but many research reports have Shouldn’t you engage the emerging seems willing to pay whatever price shown that it would be devastating countries? It is time to think out of necessary to stay in the Eurozone, for both the Greek and European the box. an outcome few outside experts economy if the Euro were to begin foresaw. Recently in Paris, Head unraveling. So I think this is out KB: We are thinking out of the box. of Research for Gateway House: of the question. A large majority, The world has changed dramati- Indian Council on Global Relations, around 80%, of Greeks also do not cally. The ‘G’ now has 20 countries Akshay Mathur, spoke with want to leave the Eurozone. (G20) and the emerging powers are Kostas Botopoulos, Chairman, more and more important. We are Greek Financial Services Authority, Of course, there are some parts trying to have financial partnerships on the pain and commitment of the of the Parliament that now say we with every country that is willing Greek decision. should renegotiate but they are not to work with us. We have built a in power, and if they ever came to strong partnership with China for Akshay Mathur: Why didn’t power they would change their example. It would be a very good Greece choose to default? The opinion. There are extreme right idea to have the same relationship devaluation of the currency and wing and the extreme left-wing with India.

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AM: But I have not seen any in sectors such as infrastructure. movement toward India. They were pumping money into the Greek economy without a clear KB: No, not yet. But it is important. idea of the results they wanted to I know that our stock exchange has achieve. That’s a problem. A lot of been going all over the world and money has been given but not as seeking opportunities for funds a present. It has been lent, albeit to come from foreign countries. at a very good rate, but it has been So this is an invitation for Indian lent. So this is something to keep in investors to come to Greece, see mind. What has been lacking up to first-hand what is happening, and now is a strategy to ensure that the invest here. Our tourism industry So this is an money is being put where it counts; is one obvious starting point. that is, in the real economy, and in Infrastructure, maritime and energy invitation the banks; then making sure that the sectors are also very lucrative. for Indian banks lend it to the real economy and not keep it for themselves. AM: The rest of the world is investors surprised by the slow decision- to come to AM: What are the reforms making process. Why couldn’t the demanded by the stakeholders? stakeholders agree on a deal sooner? Greece, see first-hand KB: This is a global political KB: This process has been going on program that has been imposed on for more than two-and-a-half years. what is Greece after very little negotiations, The outside world must understand happening to be frank, on a sovereign state. that it is not an easy process for us. In this program, one good thing, The procedures in the European but not popularly discussed, was Union (EU) are by essence very the series of important structural slow because you have to build KB: One hundred and seven billion reforms such as abolishing privi- a consensus with 27 different Euros have been erased from our leges for legal and pharmaceuticals countries that have different books. There is a €30 billion aid sectors that were over and above interests.We also have numerous package for the banks and another normal European standards. institutions – the European Union €30 billion on top of that will is guided by the European Council be given to combat recession in The second example of reform and the European Commission, Greece. demanded is that of the tax system. which is approved by the European This is a big problem because Parliament. In addition, the respec- The goal is to reduce debt from the we have high tax evasion. Every tive national parliaments have to private sector and restart the Greek government wants us to fix it but ratify the main political decisions. So economy. It seems voluntary but it it is very difficult to put into force. you need agreement from all stake- really is a global arrangement. We Another example is reform of the holders for a final arrangement. It didn’t know the exact numbers up social security system. takes time, it’s very difficult and the to the last minute. The 85% is high. negotiations are very lengthy, with This is the first time ever that a These reforms have been put into the end result is always culminating PSI of such scale is going on in any place, even if they are imperfect, to in a compromise. country in the world. Argentina’s avoid default and keep our place in debt restructuring totaled $60 the Eurozone. AM: Private bondholders of Greek billion whereas we finished at debt have agreed to a 75% haircut. roughly double the amount. AM: What are the signals you are Are you happy with the number? getting from the market? AM: It seems that Greece was KB: Actually, if you count the initially reluctant to accept default KB: I hope everybody will under- Collective Action Clauses (CACs) and was not using the bail-out stand now that there is no danger of participation in the Private Sector money productively. Greece’s defaulting and going out Involvement (PSI), it will be close of the Eurozone. This should calm to 95%. Voluntary acceptance was KB: Greeks are the first to blame the foreign investors because they 85% and the CAC forced most of because the political system and the account for 55% of our exchange. the remaining 15% to participate. society have lived very carelessly for Foreign participation is very many years. But there have also been important and we are opening up AM: What are the other elements delays by the EU. Some European to new markets. We hope this will of the deal? packages with considerable funds provide a healthy shock in order for

lacked incentives to boost growth the system to restart. GH

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Beware of cheap lending from China

9 March 2012 Samir N. Kapadia Geoeconomics Researcher As the banker to the emerging world, China has the ability to use cheap loans as leverage Gateway House

veryone’s taking Beijing’s of foreign currency convertible The loan opened the door for China Emoney, but at what cost? bonds worth $1.18 billion dollars by to enter one India’s largest markets, a consortium of Chinese banks for which is key since the Indian With over $3.2 trillion in foreign the prominent Indian industrialist. government had been working currency reserves, China has a lot It was the largest refinancing of its to keep Chinese companies out. to invest. In addition to investing kind for an Indian company. The While India’s mega-companies are across asset classes, offering attrac- seven-year loan was offered at a 5% only experiencing the beginning tive loans has been a growing part interest rate. In 2011, Ambani also of Beijing’s accommodating bank of China’s geo-economic strategy. needed cash – $1.9 billion – to help policy, Brazil and Russia seem to China’s fellow BRIC partners, finance his 3G telecommunica- have grown accustomed to taking Russia, Brazil, and India have tions infrastructure for Reliance Chinese money with conditions. benefited from this largesse. As Communications. Recorded as the emerging market economies, all largest financing in the history of In 2009, Russian oil and pipeline three countries desperately require India’s telecom sector, the loan giants, Rosneft and Transeft, took a the cash to break ground on massive was underwritten by the China combined loan of $25 billion from infrastructure projects. BRIC Development Bank. Reliance had the China Development Bank. nations, along with South Africa, said that the average projected The loan was needed to finance a are currently gearing up to sign a interest cost savings on the loan are massive project that would supply memorandum of understanding to valued at $100 million a year. China 15 million tons of oil a year, receive renminbi loans from the or 300,000 barrels a day, over 20 China Development Bank. Before As part of the $1.9 billion loan years. With $10 billion, Transneft they meet in New Delhi on March agreement, Reliance would import was able to finish constructing 29 at the 2012 BRICS summit, it’s a part of its telecommunications Russia’s first pipeline to Asia, now important to remember that China’s equipment from Chinese vendors, linking the Federation to China and loans come with strings attached. namely Huawei Technologies. the Pacific. With the remaining $15 Huawei, a quasi-government billion, Rosneft launched its Vankor India has much to consider. Recently, company partially owned by the field in eastern Siberia, the largest China made news by lending People’s Liberation Army, has find brought into production in money to Anil Ambani’s Reliance since invested $200 million in Russia in the last 25 years. Communications, for the second another Indian telecommunications time. The Reserve Bank of India company, Unitech Wireless, a major Today, Rosneft is paying about 4% last month approved a refinancing competitor of Ambani’s Reliance. in interest, based on a margin of

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3.25% over a six month averaged at the last minute. Reliance tied up LIBOR rate. With LIBOR at refinancing on its bonds just six historic lows, the terms of the loan weeks before the redemption date. agreement remain attractive for With distressed Kingfisher Air Russian companies. looking for money, one can only hope China doesn’t become the The pipeline was completed on reserve bailout bank for strapped January 1, 2011, but the cost per If there’s a Indian corporates. barrel has been under dispute lesson here, between the two countries. Last All countries practice sharp month, Rosneft approved changes it may be not bargaining. As the banker to in the existing agreement that to expect the the emerging world, China has permitted a $1.50/barrel discount the ability to use cheap loans as on crude shipments offered to Chinese to make leverage. But what China concedes China National Petroleum Corp, concessions on on financing, it can recover on the beneficiary of the supply the supply agreement. This quid contract. The Russians will absorb the deals that pro quo then becomes more of an a discount of $3 billion in aggregate they make with implicit guarantee for favorable revenue over the course of 20 BRICS partners supply terms and access to markets. years, or $450,000 a day. The initial Because of these tacit obligations, capital investment thus served as a India needs to look behind the veil. bargaining chip for the Chinese in vessels, each with a 400,000-ton Brazil, burned by its experience, is the boardroom. carrying capacity for iron ore. now stacking up the bricks against Vale had the ships manufactured China with policies in an effort to Brazil is headed down the same in China to create some goodwill, forestall further influence. Brazil’s path. In 2009, Brazilian oil giant, thinking the Chinese would then rude awakening has made it more Petrobras accepted a $10 billion allow the Brazilian company to protectionist. To curb damage dollar loan from the Chinese ship large quantities of iron ore to to domestic manufacturers, the Development Bank over 10 years. Chinese ports in its own vessels. But government raised taxes by 30% The financing also tacked on the plan backfired. On her maiden on all cars with a high proportion an export agreement calling for voyage in June last year, Vale’s first of foreign-made parts. Brazil has 150,000 barrels of oil supply a Chinamax vessel was barred from also put restrictions on foreign day for the first year, followed by anchoring at Dalian port. Facing a land ownership and in the case of 200,000 barrels of oil supply a day backlash from domestic shipping Petrobras, made it the sole operator for the remaining nine. The terms companies, the Chinese govern- of oil fields where licenses haven’t of the loan were also attractive for ment banned Vale’s ships from yet been auctioned. Petrobras’ the Brazilians. any port of entry in China. After Refining Director Paulo Roberto months of dispute, particularly Costa said the regulation “repre- Petrobras’ then CEO, Jose Segrio from China’s state-owned shipping sents a strong position of the Gabrielli, stated that the loan’s company COSCO, Beijing allowed state to keep this wealth,” making interest rate, at less than 6.5%, the ships to unload ore. Brazil – not anyone else – the prime offered better terms than anything custodian of its energy resources. the company had seen before. If there’s a lesson here, it may be Brazilian steps are all seen as ways By offering the oil as collateral not to expect the Chinese to make for the nation to protect itself from as opposed to being a part of a concessions on the deals that they Chinese influence in industries securitization structure, Petrobras make with BRICS partners. When such as manufacturing, agriculture, makes the loan payments primarily China finances a pipeline, it may and oil. from its oil sales. One question is demand a lower price on the oil whether Petrobras will be asked to delivered. If you use Chinese yards In a two-year window of 2009- discount the oil price as Russia did to build your ships, it may ban 2010, China has expended some for China. By priming the pump your ships. China’s use of power $50 billion in Brazil through loans with financing, China has demon- through state-owned companies and investments, up from $83 strated how it can lock up supply like COSCO is exactly what India million the year earlier. While in a straight procurement contact, has to watch out for. India has to the rate of Chinese investment avoiding the commitment of an be especially careful with loan has been significantly higher in equity stake that it used in other repayment plans that rely on Brazil, the Brazilian government’s Brazilian energy deals. In 2010, the assumed business with China. That new ‘BRICS-laying’ policy may Brazilian iron ore giant Vale signed interdependency can put companies be what Russia and India should a $1.23 billion loan agreement to and their shareholders at risk. India be considering as they tap China’s construct 12 ‘Chinamax’ shipping has to also beware of seeking loans ever-flowing river of money. GH

Gateway House 9 Quarterly Review Geoeconomics IMF interview: How the European crisis will affect India

11 May 2012 Hari Seshasayee Researcher, Gateway House

report released by the advanced economies. Therefore, A International Monetary Fund you can expect capital to continue to (IMF) on the Regional Economic flow into Asia and other emerging Outlook for Asia and the Pacific markets. notes that stronger economic and policy fundamentals have helped If India intends The way forward is two-fold. One is buffer the region’s economies to direct capital inflows to the right against the global financial crisis, to return to a areas. A framework must be built to by limiting adverse financial attract capital into areas like energy, market spill-overs and improving rate of growth infrastructure and FDI, and not the impact of de-leveraging by of around 9%, into short-term speculative capital. European banks. Gateway House’s That needs to change. Hari Seshasayee interviews Anoop reforms are Singh, Director of Asia and Pacific essential as Secondly, many countries in Asia at the IMF, to discuss the way have a lot of domestic savings, but forward for Asia and the lack of recognized in the financial sector in Asia has reform in India. the 12th Plan been unable to keep those savings in the region. Countries with Q: Two weeks ago, Standard & Poor’s documents excessive savings tend to send their cited lack of reform as one of the reasons for surpluses to advanced economies; their lowering India’s investment outlook If India intends to return to a rate these surpluses come back as capital from stable to negative. What can India of growth of around 9%, these flows. If we in Asia build up our and institutions like the IMF do to ensure reforms are essential as recognized financial sectors to ensure savings that New Delhi enacts long-term reforms? in the 12th Plan documents. remain in the region, it would reduce volatility in capital flows. If the business community feels Beyond this, it is significant to note that a country is not carrying out that countries in Asia have begun to In the short run, this volatility may the reforms needed for growth, build their corporate bond markets. be a problem, but in the long-term, investment tends to fall. This is This is required for financing it need not affect growth. And the what we’ve seen in India in the last longer-term investments, because signs are already here: in the first six months—a fall in corporate bank credit is typically short-term. quarter of this year, money has investment. Investors want to be What these sectors need is longer- come back. convinced that governments can term capital. enact reforms which will yield The on-going financial crises in Europe long-term returns. There was a certain emphasis on China and the U.S. have already resulted in the IMF’s new report on Asia, but the in slowing growth in many emerging With regard to the reforms that region follows a different trajectory than economies. In this context, how sensitive is India needs, much of it is already China. There is a large need for capital in India to the crisis? laid out in the 12th Plan Approach the rest of Asia. Could measures like the Paper.These reforms are suited intra-BRICS trade in local currencies and India is clearly exposed to the for long-term growth. But they the multi-lateral letter of credit be the way crisis. Of late, the country has will take time to be put into effect forward for Asia? become more financially integrated because laws must also be changed – on trade, services, capital, and to enforce these reforms. The If you look at Asia in the next 10-15 financial markets – with Asia and challenge for government is to work years (even if you exclude China) the global economy. Although this out what must be done until these you’ll find that Asian countries – may increase the risk India faces in laws change. and also the other BRICS countries the event of a global crisis, India is – will grow much faster than the not nearly as exposed to the crisis as

Gateway House 10 Quarterly Review Geoeconomics many of its Asian counterparts. This of the financing needs of the It is too early to tell now. According is primarily because its economy corporate sector in India is met to our projection for this year, the is more driven domestically rather by foreign capital. If there were to Euro zone area will go through a than by exports. This helps create a be a renewed phase of increased recession. It will contract by roughly buffer to regional or global shocks. de-leveraging due to the crises in 0.3%. There is a strong commitment Europe, India could be affected. to address public debt in Europe, What must also be noted is that but a balance is required: along with in the past five years, the Indian And how do you see the results of the recent fiscal measures to re-structure the corporate sector has begun to rely elections in France and Greece impacting economy, these should be balanced on financing from foreign institu- India? with rebuilding competitiveness tions. As much as one-quarter and ushering in growth. GH

What the Dimon debacle means for the world

Marc Mezvinsky, Gillian Tett, FT, Chelsea Clinton, Jamie Dimon and Mary 18 May 2012 Callahan from JPMorgan at the Davos Nightcap/Financial Times – Flickr Bob Dowling Editorial Advisor Gateway House

t’s been a week since J.P Morgan will have a “clawback” of some of To Americans, this script is all too IChase, considered the “safest, her $15 million salary and bonus. familiar. A bank “too big to fail” best run, smartest” of the Big At an annual meeting in Tampa, has a huge loss. It won’t break the Four banks that dominate the Florida, well away from Wall Street, bank this time, but if several banks U.S. financial landscape, disclosed Dimon apologized to shareholders experienced the same result close to that it had more than a $2 billion but was able to keep his $23 million each other, it could set off another trading loss. A lot has transpired in compensation and his two titles, 2008 financial panic. That would since. Jamie Dimon, chairman of chief executive and chairman. Some mean U.S. taxpayers would be the bank since 2006, admitted that politicians suggested he should expected to fund another bail out. the surprise loss would set back his resign, but U.S. President Barack campaign against tougher regula- Obama called Dimon “one of the So the argument that the banks are tion of trading. smartest bankers we’ve got.” safer does not hold in the public view, even if the regulators say they He agreed that the “buck stops Washington’s bank regulators, are. It was the full Washington with me,” meaning it was his the Securities and Exchange establishment led by Federal ultimate responsibility for allowing Commission, and several commit- Reserve Chairman Alan Greenspan a London-based trader nicknamed tees in Congress will investigate and then board member Ben “the Whale” to violate the bank’s the trades. It’s worth noting that Bernanke who assured the world policy on trading risks. Several top J.P.Morgan passed a Federal “stress as late as 2006 that the financial officials of the bank, including Ina test” for safety and soundness just system was self-regulating and safe. Drew, the woman who directly months earlier so well it was allowed The financial press promoted their oversaw the traders, are stepping it to raise its dividend. views without question. Then came down. It’s still unclear whether Drew the collapse.

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The odds for some reform are it’s clear international financial better now. The U.S. Dodd-Frank and government officials who law, passed over two years ago were blindsided by the subprime to prevent speculative trading by crisis think a repeat is all too likely U.S. banks, was hardly considered while the U.S. and Europe permit stringent. But it’s been stalled as mega banks. At an International “I just want bank lobbyists worked to water Monetary Fund conference of it down further. Leading that Indian and Chinese officials in all of this campaign was Dimon, who said New Delhi in March, the prevailing the regulation called for by the law opinion was not whether there garbage out was unnecessary. European bankers would be another financial crisis, of insured have also been trying to undercut but when – unless Europe and the trading regulation. U.S. enacted believable restriction banks” on their banks. A meeting of the “ The Morgan debacle improves the developing world's BRICS group now control 60% of U.S. deposits, chances for stronger regulation, of Brazil, Russia, India, China far more than before the crash but banks will still work to carve and South Africa, debated setting because of bailout mergers and out loopholes to preserve some up their own currency system to consolidations. potentially profitable trading for insulate themselves from another themselves. Under the so-called Wall Street collapse. A leading regulator, Shelia Blair, Volcker rule which they opposed, the former head of the Federal named after former U.S. Federal It’s taken a long time but an inter- Deposit Insurance Corporation, Chairman Paul Volcker, banks national backlash against the mega which insures bank deposits, wants would be permanently barred from banks may be slowly building. a complete separation of banks trading for their own account, Banks in London and Paris have and trading. “I just want all of this but allowed to hedge risks for been attacked by shareholders for garbage out of insured banks” she customers as long as their positions excessive executive compensation says. “A bank should be making were disclosed. A better outcome and loss-making risk taking. The loans.” That separation still would for the public would be to have all tide could manifest itself in calls for not prevent Wall Street trading trading and banking permanently the size and scope for deposit-taking abuses, but without the banks separated, just as hedge funds are banks, especially if political parties financing them, speculators, hedge separated from banks today. Then if in France and Germany move funds and private equity players a high-risk trade blows up, the need left. Volcker and U.S. regulators wouldn’t be able to amass the for the government to bail out is have suggested limiting the size of gigantic leveraged positions that much less, since the fund’s investors government-insured deposit-taking brought down the world financial are the ones who get wiped out. banks to $100 billion in assets. system. U.S. mega banks still Contrast that with the U.S. today, have a lot of political power with But for the world, the stakes are where J.P. Morgan at $1.7 trillion lawmakers. The next few months much broader. While many in in assets is the largest, followed by will show whether regulators will Washington and Wall Street want to Citibank, Wells Fargo and Bank finally have the spine to stand up to relegate the 2008 collapse to history, of America. The four mega banks them. GH

EU austerity: Room to wiggle

28 May 2012 n the last month, European voters second place at the cost of its two Ambassador Neelam Deo Ionce again reminded their leaders major parties New Democracy Director, that all politics, everywhere, is local. and PASOK, the winners of the Gateway House The French ousted the rightist Nicholas 2009 elections. Within Germany, & Sarkozy to elect Socialist Party leader voters from the industrial provinces Akshay Mathur Francois Hollande with the expecta- of North Rhine-Westphalia and Head of Research, tion that he will force a re-design of Schleswig-Holstein rejected Angela Gateway House the European economic recovery Merkel’s Christian Democratic process to include measures for Party and ushered in the Social growth. The same day, Greeks voted Democratic Party – illustrating in the anti-austerity Syriza party to that the trend is not just in troubled

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institutions such as Eurostat, was reserved to pay interest on responsible for maintaining statis- those same outstanding bonds; tical data for the EU, turned a blind €35 billion was reserved to support eye to this deceit. new bonds issued and guaranteed by the Greek government in global Second, being part of the EU also capital markets. The remnants were means adhering to the rules. No to assist in capitalizing the Greek European leaders provisions exist in the EU treaties banking system in case of a liquidity show their for a country to be forced out of the crisis. To ordinary people, this union; countries have to voluntarily sounded more like the complex but constituents exit. At this time, all Greek political sugar-coated bailouts given to Wall parties including Syrizia are pledged Street banks, while they were stuck a win-all to stay in the Union. There is little with living through the hard times agreement patience to re-negotiate existing without any direct benefit from the “ agreements as each one has to be bail-outs. ratified by the 17 member nations economies. Soon enough, on May of the Euro-zone. Third, election In other words, in the near future, 31, the Irish will vote in a refer- cycles occur more frequently than Greece will stay in the Euro-zone, endum to decide whether to ratify the time required for austerity the bail-out agreement will not be the Treaty on Stability Coordination measures to take effect or for any renegotiated, the harsh austerity and Governance in the Economic of the 15-year bail-out loans to measures are unlikely to accom- and Monetary Union – an updated conclude. That means austerity modate local politicians’ electoral version of the agreement that stipu- measures must be accompanied by compulsions, and the financing lates a fiscal deficit within 3% and some optimistic boosters so politi- is likely to stay as complex and public debt within 60% of GDP for cians can be motivated enough to disconnected to ordinary lives as each EU country starting January sell them to their constituents. they currently are.There’s not much 2013. wiggle room here; at most EU Greek leaders understand this; administrators can consider two These are momentous develop- they voiced their concerns options. First, highlight improve- ments. Nevertheless, their impact even during the last bail-out ments, to keep the momentum of may result in only a miniscule agreement in February 2012. the current austerity programme change in policy-making. There are George Papandreou, president of going. For instance, Greece’s four reasons why. PASOK, wrote to the leaders of the legendary bureaucratic bottlenecks powerful institutional troikia – the and regulatory and legal framework, The first is historical. The International Monetary Fund, the currently considered one of the formation of the European EU commission and the European worst in the EU, are becoming more Union ended hundreds of years Central Bank – requesting growth efficient. Ditto with its increased of fighting between European measures for investments in green digitization of healthcare systems, countries which culminated in the energy grids, broadband transporta- introduction of generic drugs and two world wars of the last century. tion, education and innovation. But reduction of overtime pay. Even Germans are reluctant to no such incentives to support these break up the Union. There is a were included in the agreement, Second, enable growth by shame-faced recognition that a barring a weakly financed Hellenic expanding the mission of the €60 much poorer Greece was dragged fund for entrepreneurship called billion Co-Investment Fund (CIF) into a Union of sophisticated, ETEAN. and European Investment Bank developed nations in 1981, despite (EIB). Currently, they are limited being geographically separated by a Lastly, European voters are increas- to investing in sovereign bonds thousand miles, because it was the ingly becoming confused and and infrastructure projects only. only non-communist country in the impatient with the way the bail-out They could extend funding to Balkans. Reports such as one by agreements are structured. First, the lenders familiar with local markets Nick Dunbar on BBC Newsnight in international private sector holders who could invest in employment 2004, exposed the fact that invest- of Greek bonds took a haircut of generating businesses, making EU ment bank Goldman Sachs helped 53.5% on the nominal value of money visible on the ground. Greece hide its €2.8 billion debt by their investments, reducing debt using currency swap agreements by €107 billion. Then €93.5 billion This then, can be the new “growth with dollars and yen, deferring its was issued for the bailout. Of this, pact” where European leaders liability for 10 years just to meet the €30 billion was kept to pay the show their constituents a win-all Maastricht Treaty criteria. In their same international private sector agreement, and there is less hand- eagerness to have Greece join the bondholders for their reduced, wringing over austerity or lack of

Euro-zone at the time, European remaining investment; €5.5 billion progress. GH

Gateway House 13 Quarterly Review Geoeconomics The case for BRICS swaps

1 June 2012 Samir N. Kapadia Geoeconimics Researcher, Gateway House

t the last BRICS Summit held a second look at what now could This provides valuable insight Abetween Brazil, Russia, India, be the most significant agreement on what kind of currency deal China and South Africa on March in international finance since the could be made in the future. As 29th in New Delhi, the develop- Euro. trade increases, it is possible that ment banks of the participating China will move swiftly to provide countries agreed on a proposal to BRICS countries make up a massive renminbi for importers of Chinese extend credit in local currency for trade bloc. Current intra-BRICS goods. trade, project financing, and infra- trade stands at $307 billion, set to structure projects. reach $500 billion by 2015. Within At this time, China facilitates BRICS, China is the dominant payment in renminbi through a So far, no clear mechanism on how player, exporting nearly $135 billion central bank liquidity swap. Since participating countries will extend in goods and services a year to its 2009, 16 countries have exchanged local currency credit has been partners. India imports nearly $50 local currencies for a total of 1.6 announced. Some financial gurus billion annually from China, and trillion renminbi through these even dismiss the BRICS agreement China accounts for 11.8% of India’s swaps; more are in line to participate. as purely symbolic. Yet banks in total imports, increasing its share of In a March 22 article published in London, New York, Tokyo, and the Indian market by 2% just in 4 the Financial Times entitled“China Singapore would be wise to take years. and Australia in $31bn currency

Depreciation against the U.S. Dollar

20 2 2 0 1 y

a r 15 u r e b e F

i n c 10 s n

r e c i a t o 5 p e D %

0

Source: Bloomberg Data, Gateway House Analysis 2012

Gateway House 14 Quarterly Review Geoeconomics swap,” Simon Rabinovitch and to pay for imports. But it’s getting Neil Hume reported that Japan and harder for BRICS to buy dollars. Great Britain are rumored to be in Brazil has seen its currency depre- queue for the next Chinese central ciate by over 16% since February bank swap. But after the Delhi 2012 and the Indian rupee has meeting, China’s BRICS partners fallen to an all-time low of 56.51 may leapfrog to the top of the list. Russia is to the dollar on Thursday, losing more than 20% of its value in the From the BRICS, Russia is currently currently the last 12 months. To finance imports, the only country that swaps its India is paying more for dollars currency with China. It seems only country than it has done in over a decade. obvious that India, Brazil, and that swaps its India can benefit from a Chinese South Africa should do the same. swap arrangement to hedge against currency with fluctuations in the currency market. Four factors make a central “ China It seems bank liquidity swap particularly Second, following the 2008 financial important for these four BRICS obvious that crisis, rupee-dollar exchange rate partners. First, BRICS countries are India, Brazil, volatility has increased by as much losing purchasing power because of as 50%, making it more difficult depreciation against the dollar. and South to predict the cost of dollars in the currency market. The dollar accounts for 40% of Africa should global foreign exchange trade. do the same This uncertainty places India in The BRICS, hungry for goods a tough situation, given the rising and services to fuel their emerging prices for key commodities like economies, depend on the dollar crude oil, a slowdown in capital

U.S. Dollar to the Rupee

60 U.S. Dollar

50

10 INR 15 INR 40

30 M M M M M M M M M M M M a a a a a a a a a a a a y y y y y y y y y y y y 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 04 0 0 0 0 1 1 1 1 2 3 6 7 8 9 0 1 2

Source: RBI , Gateway House Analysis 2012

Gateway House 15 Quarterly Review Geoeconomics

inflows, and the current account trading partner. Firstly, redundant deficit, now at a decade low of – 4% imports like Indian tea were of GDP. India isn’t alone – Brazil re-exported by Russia to Western and South Africa are facing the markets. From 1958-60, because of same problem as their currencies this trade diversion, or ‘shunting’, have seen deviations of up to 25% the Indian Directorate General to the dollar. Their current account In the late of Commercial Intelligence and deficits too are high, at – 2.1% and Statistics reported that India lost – 3.4% of GDP respectively. 1950s, India up to 20% in signature commodi- ties sold to developed countries. Third, there is an opportunity did not have Then, in the 1960s, Moscow also to save on the transaction costs. the institutions asked for naval base rights in Indian Exchange rate transactions for ports. To avoid setting a precedent, Indian business can typically cost up and capacity then Prime Minister Indira Gandhi to 1%-2% of a deal. InBRICS New “to facilitate refused to buckle under pressure Delhi Summit 2012, the inaugural from the Russian Navy, believing publication of the BRICS Research large-scale that the quid pro quowould also Group, Vladimir Dmitriev, chair foreign exchange threaten regional security in the of the Russian development bank, Indian Ocean. Though national suggested in an article entitled transactions autonomy was not compromised, “Plenty to gain from strengthening India learned an important lesson financial links among BRICS” There is geopolitical risk in this having been on the receiving end of that trading participants will save however. geopolitical pressure from its trade up to 4% by entering into these partner. agreements. Participating countries India entered into a similar currency could alleviate the burdens of agreement with the former Soviet As with the Soviet Union then, so transaction costs, financing fees, Union. In the late 1950s, India is the possibility with China now. and currency fluctuations. Quick did not have the institutions and Given the lessons from its past with math shows that at full potential, capacity to facilitate large-scale Russia, India should be concerned BRICS countries save $12.3 billion foreign exchange transactions. So, with the growing trade deficit with a year in banking services. Based Russian exports were paid for with China, estimated to reach $60 on its share of trade with BRICS non-convertible rupees, which were billion by 2014-15. If it enters into countries, India could save $2.3 used by the Russians to purchase a similar currency agreement, India billion annually from entering into Indian goods like tea, jute, and can expect trade diversion, geopo- such swap arrangements. other commodities. litical pressure, and a long-term commitment with its trade partners. Lastly, a central bank liquidity For Russia and India, the principal swap will benefit small business. motive for rupee-denominated In negotiating its rupee relationship With the credit rating agencies trade was to facilitate arms deals. with Russia, H. V. R. Iyengar, then such as S&P downgrading India, India’s defense imports from Russia Governor of the RBI, wrote to it has become harder to get dollar prompted a large trade deficit. The Prime Minister Jawaharlal Nehru, loans at reasonable interest rates. RBI reports that from 1961-64, warning him of the dangers of such This is especially true for small and India tripled its trade deficit with currency arrangements. Nehru mid-cap companies which do not Russia, from 13.1 to 45.5 crore ignored the Governor’s judgment, have large balance sheets or a long rupees. This trade relationship has declaring that, “political compul- credit history to defend the loan stood the test of time. Since then, sions far outweigh economic requests – and it is these companies Russia has supplied India with over considerations.” that are likely to be the backbone $35 billion in arms. In 2012, Russia of increased intra-BRICS trade is expected to supply $7.7 billion in A half a century later, India’s motives between. arms to India, about 80% of India’s are economic. BRICS swaps make total arms imports. sense – they save money on imports Drawing on a swap line from China, by freeing India from currency the Reserve Bank of India can Because of the trade deficit, the fluctuations and reduce the cost of offer attractive loans to businesses Soviet Union accumulated rupees funds, providing liquidity that busi- through the Export-Import Bank in it didn’t need. From 1955-76, nesses require in a tough financial renminbi, to finance Chinese deals. Russia accumulated upwards of environment. The key for India will At the government level, swaps can $350 million in non-convertible be to negotiate favorable terms of guarantee the mode of payment rupees. As the rupee holdings agreement. Only then will India’s without having to worry about accumulated, Russia sought a economic advantages outweigh the inadequate dollar supply. strategic advantage from its poorer geopolitical risks of such a deal. GH

Gateway House 16 Quarterly Review Geopolitics

Richard Nixon in the late sixties/ Bernd W. Schüttke – Wikimedia China: What Nixon wrought

23 February 2012 Bob Dowling Editorial Advisor, Gateway House

t's hard to believe it was only 40 California's Claremont-McKenna Fourteen years later when I visited Iyears ago this week that Richard college notes that "Nixon could Beijing as a correspondent, people Nixon went to China and opened not have imagined what his gamble were still riding bikes in Mao suits up a nation that has become the would unleash", nor how difficult and huddling with hot water bottles world's second largest economy. it is today for China to transform in buildings. The hulking Capitol itself from producer to constructive Iron and Steel Plant on the city's For Americans like me, the event member of the global economy. edge rained down coal dust so falls between the second by second thick, it dimmed by half the head- recall you have from when Kennedy The first candid pictures I saw of lights of the official black Audi's was shot in 1963 and the night the Nixon trip were from Byron and the tin-box taxis on the streets. when you heard Neil Armstrong Schoemaker, a Washington D.C. Visitors to the first Western auto say "one small step for mankind neighbor and White House photog- plant started by Jeep, were stunned […]" as he stepped onto the surface rapher on the plane. Sitting in his to see workers hand roll the chassis of the moon in 1969. However, on Capitol Hill townhouse we leafed along an assembly line that could a timeline of history, what is indis- through scenes of Beijingers on have served in a 1920's Ford Model putable is the fact that Nixon's visit bicycles in olive green drab suits T plant. changed immeasurably more lives riding to work in the February than what Armstrong or Kennedy cold. Inside buildings they kept on Why does this matter today? did. the long underwear and scarfs and hugged thermos bottles of hot tea. For one thing, it wasn't just Nixon Some scholars are recalling the There was scant central heating. who couldn't imagine today’s trip this week. Minxin Pei of China. Even by the mid 1980's,

Gateway House 17 Quarterly Review Geopolitics

few could have guessed that China candidates from President Obama was destined to become the world's to most of the Republican candi- factory. It was just a ripe-for-picking dates tell voters they'll get tough 1 billion market that every multina- with China and restore the jobs tional CEO said he had to be in. No with phrases like "reshoring". one said it would displace a huge The only rational response I've portion of the industrial West. No one said heard came from Jon Huntsman, the former U.S. Ambassador to No one foresaw that a command- China would China who, when he folded in his and-control regime would lift some command campaign, said that the U.S. had a 300 million peasants out of poverty long history of tough negotiations and create a middle class of another a 3 trillion with China and that was the way it 200 million. No one imagined war chest of will be for years to come. America 50-story skyscrapers, clean fast mostly dollars voters certainly didn't want to hear subways, MAV trains, 30 huge new “ that. airports, very big Audis, Buicks, making it Mercedes, BMW's, Rolls and banker to So what's the answer? As a jour- Bentley's on the streets and millions nalist living in Mumbai, its clear of Chinese in the city sporting tight the world democratic India could never jeans, designer shirts, spiked heels, have politically adopted China's Gucci loafers and iPhones, would Nixon, "the enemy of my enemy command-and-control approach be the new norm. Russia was my friend China." There to development. So don't blame was a lot of official U.S. government India for not trying. It could have No one said China would command aid going to China immediately unshackled hundreds of regula- a 3 trillion war chest of mostly after the Nixon trip. But that could tions two decades ago and may be dollars making it banker to the never have built the nation. afforded an alternative market to world. When the pile got to $1 China for investment. But that's past billion they said maybe $1.5 billion. It was the U.S., European and history too. Friends say the national At $2 billion they said maybe $2.4. Japanese multinationals teaming election in 2014 may launch a new No one now predicts beyond $3 up with the Taiwanese investors brighter future, and everyone pours trillion because the future seems who erected Factory China. And it over regional election results for infinite. If you're doing back-of-the- wasn't until Deng Xiaoping cleared clues. No one of course pours over envelope dating, you can say the rise the way for private investment in election results in China. There are of economic China, the nation that the second half of the 1980s that none. dominates business and govern- the sustained boom commenced. ment and now security thinking, Yet as Professor Pei and other didn't even really get going until 25 Then, to make sure there was a China skeptics point out, China years ago. place for all of those goods, the U.S. also has large bills coming due. kept an open market for China—a It needs to install a better health So: What does that mean for other 30-year dividend that rewards to and education system, pay for the countries? this day. Europe and Japan were retirement of some 600 million doing their utmost to keep China peasants, create a rule of law and One, is that authoritarian govern- out. finally give voting rights. Call them ment works. In just 25 years, Beijing the soft-side needs. Whether India and Shanghai have been entirely And so to be blunt and chauvinistic can use social tolerance, democracy, razed and rebuilt to the hilt. So about it, you can say the lesson of street-level ingenuity, a young popu- gleaming are the cities that it's now this ‘Nixon-to-China-week’ is that lation, a flexible service economy fashionable for Chinese billionaires, the U.S. made modern China. It and modern factories to build party leaders and Westerners like created the Goliath that took away its own growth model between Rupert Murdoch to restore a hutong, the millions jobs U.S. presidential China's command-and-control and the historic alley-way peasant flats candidates say they will get back. the West's reliance on fully open that weren’t bulldozed—just as America's China strategy did pay markets, is the question ahead. actor Robert De Niro turned New off handsomely for investors and What's important to remember in York's Tribeca neighborhood from hooked U.S. consumers on cheap this "Nixon week" is that China built schlock to hip. "Made In China" goods-while its formidable economic muscle in a repulsing them with the idea that little over two decades, not the 40 A second lesson is that it pays to every dollar sent to China stole a years since it was "opened". That have a powerful patron who enlists U.S. job. American presidential means a balanced and committed you in their crusade against the campaign reflects none of this India might do a lot in less than a enemy – in this case Russia. For history. Thirty years too late, generation. GH

Gateway House 18 Quarterly Review Geopolitics China’s global proxy game

27 January 2012 M.D. Nalapat Director, Department of Geopolitics, Manipal University

cross the world, from Iran to with Russia in Afghanistan. It also ASudan, Syria and Venezuela, seems that U.S. President Barack China has been boosting the Obama indirectly recognizes this military and other capabilities of power shift but realizes he has little forces hostile to the NATO powers, scope to change direction. Obama led by the U.S. In doing this it is has understood that while military following a time-worn, low-cost, power can win a territory from low-visibility strategy of draining The PLA will a conventional enemy, it cannot the U.S. in particular through feints hold it unless it is willing to inflict and jabs, conducted by states and have greater human casualties on a scale made organizations that are in effect influence over impossible by cable television and proxy players for Chinese aims. the use of mobile telephones as the Pakistan video cameras. This strategy is as old as the Cold military than War and the doctrine of Mutually “ The same occurred with the British Assured Destruction, or MAD. the Pentagon Raj in India. Once international From 1952-92, the period of the publications had begun to exten- Cold War, the possibility of any ground in the Afghan campaign. sively cover the various protests of form of direct attack by the former At the time, China was nowhere on Mahatma Gandhi, the list of feasible USSR on the United States or vice- the horizon. Today, the view that responses by the Indian Office in versa, was reduced to near-zero China is becoming a significantly London narrowed considerably. by the principle of MAD. Each powerful influence in South East Obama has rather unfairly been had the capability of absorbing a Asia and the Indian Sub-continent condemned on the campaign trail nuclear first-strike and thereafter seems well-ground in U.S. thinking. as being ‘weak’ on national security. inflicting terminal damage on the But the reality is infact that it was he other. Knowledge of such capa- The 2012 U.S. Department of – rather than eight years of George bility kept the peace in Europe, and Defence strategic vision document W. Bush – that saw off Osama bin enabled that continent to escape the recently released by President Laden, just as it is since 2009 that conflicts that broke out in Asia. Obama explicitly mentions the drone attacks on terrorist hideouts Peoples Republic of China (PRC) in Pakistan have accelerated and Indeed, the USSR was so intimi- as being in the same category severely crippled Al-Qaeda. Indeed, dated by the U.S. nuclear arsenal, of hostile nations as Iran, and in 2001, the Bush administration that the Communist Party of the therefore a direct threat to the U.S. had given a free pass to the most Soviet Union (CPSU) lacked the The ultimate goal for China? Being deadly elements of Al-Qaeda and courage to mount even a conven- the pre-eminent power in Asia first the Taliban, by permitting their tional challenge, not simply against – and then the world. Its strategy: evacuation from Kunduz and other the U.S. and its NATO allies, copy-catting the NATO and U.S. locations within Afghanistan. but also against countries such pattern of using military superiority as Pakistan, that were being used for economic advantage, as seen Obama’s withdrawal from the by Washington to conduct a war recently in Iraq and Libya. region comes against a backdrop by proxy against Moscow. Had a where China’s People’s Liberation fraction of the munitions expended As U.S and NATO forces prepare to Army (PLA) seeks increasing by the USSR during its failed leave Afghanistan by 2014, it’s clear influence. It is no secret that the adventure in Afghanistan been that Afghanistan has become the PLA and the U.S. military consider spent on locations within Pakistan first significant theatre of effective themselves rivals. – in particular the regions feeding confrontation between the West the American-led insurgency in and China. China is in fact adopting As this withdrawal takes place, the Afghanistan – it is very probable the 1980s U.S. strategy of using PLA will have greater influence that Russia might have crippled Pakistan to drain and drive the U.S. over the Pakistan military than the U.S. enough to have held its out of the region just as the U.S. did the Pentagon – public perceptions

Gateway House 19 Quarterly Review Geopolitics

and statements to the contrary. hesitation in using Pakistan against Ambani to help him refinance Some may argue it has had greater India –a course of action which the the loans of his telecom company. influence for nearly a decade. Pakistani military has always been That came on top of the $3 billion The evidence of this is that at the eager to follow. Not so, however, syndicated loan to Ambani’s power smallest provocation, Pakistan with China’s commercial interests, company, Reliance Power, last year. now challenges NATO by cutting which see in India a $300 billion India-China trade, at $63 billion, is off supplies to its forces across viable market for Chinese goods, a expected to touch $100 billion in the the Durand Line. The preferred large chunk of it being telecom and next couple of years. A reasonable outcome for the PLA would be a infrastructure. The powerful state- prediction will be that once NATO complete withdrawal, in humili- owned enterprises are as important gets bundled out of Afghanistan, ation, of all NATO forces from to Beijing as the Chinese army, and the state companies will finally Afghanistan and Pakistan, followed they don’t want military tension have an upper hand over the PLA by the Pakistani takeover by a with India. in regard to policies towards India. Taliban affiliate of the ISI. Elsewhere in the world, the NATO Already, Chinese banks are lending humiliation in Afghanistan is likely What of India, caught in the claws to Indian business – last week, a to further a shift towards China as of the dragon’s new great proxy trio of state-owned banks lent $1.1 the new protector of nervous states game? Certainly China has no billion to Indian businessman Anil worldwide. GH Pragmatic Populism: Learning from the new Latin America

23 March 2012 Estefanía Marchán Researcher, Gateway House Dilma Rouseff during her presidential campaign/Aloizio Mercadante – Flickr

udget deliberations in the Plan, the government allocated swells to 55, India remains home Bworld’s largest democracy over Rs. 1.8 lakh crores to 13 social to the largest number of the world’s are a contentious affair. With an programs, and it will continue to poor and hungry. A similar mix increasing fiscal deficit, stubbornly spend Rs. 40,000 crores annually of fruitless populism and macro- high inflation, and growth at its on fuel subsidies with little to show economic imbalances has crippled slowest since 2008, there is broad for it. Marred with inefficiency and many countries in the past, most displeasure with New Delhi’s corruption, the programs scarcely notably in Latin America. And now 2012-13 Budget announced last manage to reduce poverty by 1% a it seems India is treading down the Friday. year. Agricultural growth remains path that once led to that region’s weak at 2.5%, while subsidies economic collapse. At the centre of criticism are the mostly support a powerful minority government’s extensive subsidies of Indian farmers – none of whom Latin America is a connoisseur and poverty alleviation programs, pay taxes. Most unfortunately, even of populist politics. It hit its peak lambasted as populist and ill- as the number of Indian billionaires during the 1920s through to executed. In the 11th Five Year indentified by Forbes magazine the1970s, when the working poor

Gateway House 20 Quarterly Review Geopolitics united behind icons like Brazil’s economically developed countries. Getúlio Vargas and Argentina’s Similarly, aided by improved terms Juan Perón over dissatisfaction with of trade, many Latin American industrialization. Populist govern- countries have reduced public debt ments granted immense benefits and maintained surpluses for much to the poor and chosen special of the past decade. The region has interests – often paying for it with experienced healthier and higher inflationary financing. The growth rates historic rates of poverty reduction. By the 1980s, uncontrolled public region has spending resulted in excessive fiscal experienced There are two types of populism deficits, unsustainable public debt at work in the region. As Mexico’s and intractable inflation. Latin healthier and former Secretary of Foreign Affairs America’s Lost Decade followed. higher growth Jorge Castañeda points out in ‘Latin Growth, at 5.6% in the 1970s, “ America's left turn’, one is mature shrunk to 1.3% and stagnated rates and and pragmatic, representing a real for another decade. By the 1990s, historic rates break from the past. The other inflation had reached 1000% in is rather repressive, nationalist countries like Brazil, and the poor of poverty and amnesic about the pitfalls suffered exponentially. Large reduction of unbridled populism. Relying economies including Mexico, on high oil revenues and high Argentina and Brazil languished short-term prices of raw materials and up to half of Latin Americans to finance steep expenditures, slid into poverty. Venezuela, Ecuador and Bolivia are been responsive and responsible examples of the latter. India could be tempting its own lost leadership. In the last decade a new decade with populist profligacy – cadre of leaders has risen in Latin What is striking is that although and it is jeopardizing its long-term America, advocating economic both have increased social spending, growth trajectory. pragmatism alongside progressive the pragmatic left has enacted more social agendas. The most famous redistributive and transparent social Finance Minister Pranab Mukherjee are former President Luiz Inácio policies. Brazil’s famous conditional has set a goal of reducing the fiscal Lula da Silva of the Workers Party cash transfer program, Bolsa deficit to 5.1% of GDP in 2012-13, of Brazil and his successor, Dilma Família, is a powerful example. It from 5.9% in 2011, but the new Rousseff. There are also Chile’s, has helped Brazil achieve the U.N.’s budget offers few sustainable means Ricardo Lagos and Michelle Millennium Development Goal to accomplish this. Meanwhile, the Bachelet, José Mojica of Uruguay, of reducing extreme poverty and largest poverty alleviation program, and Ollanta Umala of Peru, among hunger by half effectively and at the proposed Food Security Bill, others. a relatively low fiscal cost – about will add up to Rs.1 lakh crore to 0.5% of GDP. This is evidence of a expenditures with no plan for an Their blend of redistributive social well-managed social policy. equivalent increase in revenue. policies with a more disciplined, It is not certain that the Public market-friendly economic approach India can follow a similar pragmatic Distribution System, the engine has given birth to a New Populist path if its leadership is prepared to execute the bill, will be able to Consensus. Latin American govern- to demand results-driven social efficiently deliver food to needy ments increased social spending spending. A solid, technical families; even less so, any other new from 12% of GDP in 1990 to 18% framework needs to be in place to vehicles of distribution. Without in 2008 and introduced new social ensure the efficiency and sustain- strong leadership and management, programs, including direct cash ability of programs before they are it remains unclear whether this or transfers, which have been adopted implemented or expanded. other social programs will reduce in 17 countries in the region. These poverty and hunger. programs have been executed When Brazilian President Lula keeping inflation at bay and while came to power in 2003, he So what can India do? Populist or maintaining economic stability. expanded cash transfers nationally, not, an emphasis on inclusive devel- Chile, for example, implemented but soon realized that an embold- opment is essential. Perhaps the stronger banking regulations and ened approach was not enough to path that Latin America pursued, financial safeguards, plus a counter- catalyze concrete improvements. to lead itself out of populism into cyclical savings plan after the His government then set to simplify policies that are now pragmatic crisis in the 1980s. In 2009, it was the program. It merged overlapping but also pro-poor, can serve as an invited to be part of the OECD, schemes, setting a single registry to example. The key to its success has a group comprising the world’s identify beneficiaries, and created

Gateway House 21 Quarterly Review Geopolitics

rules and incentives to promote adopting an inflexible framework has thus far shown that prudent highly efficient service delivery. into law. Populism is a term often economic and progressive social used pejoratively. But modern Latin policies are not mutually exclusive. In contrast, India’s Food Security America illustrates that it can be a Bill has confusing cut-offs for positive phenomenon if channeled India will do well to bring the poverty levels, lacks reach, and will to produce tangible and sustain- experience of its distant peers depend on an already weak distribu- able results. When an economy closer to home. After all, when tion that lacks accountability. The shows signs of weakness, criticism populist measures stop reaching the risk of failure runs high. It would of populist policies becomes most poor, they soon also cease to yield better to simplify the bill before damning. Yet Latin America political dividends. GH India-U.S.-Iran: A tightrope walk

4 April 2012 Seema Sirohi Journalist and Analyst, Washington

ashington – The recent The wise words of former U.S. they are not about to “apply” for an Wvisit of Wendy Sherman, ambassador Robert Blackwill, who exemption. It is up to U.S. officials U.S. under secretary of State for warned against forcing India into a to look at the scenario, read the political affairs, to Delhi has helped corner on the question of Iran, are statistics – and the tea leaves – and ease some of the tension between being ignored. Blackwill, without decide where India stands on the India and the United States on whom there would be no strategic question. After all, they say, India the difficult question of sanctions partnership between the U.S. and didn’t support the U.S. decision on against Iran, an issue that has India, was perceptive about India’s imposing the crippling sanctions on divided Washington and New compulsions. He warned in 2005, Iran. Delhi lately. “It would be a serious U.S. mistake to attempt to force New Delhi to India was also criticised by unnamed The Obama Administration says choose between its burgeoning U.S. officials who accused India India stands out for the wrong strategic relationship with the of skirting the sanctions. There reasons on an issue on which most United States and its cordial ties were some sharp public comments of the world, including the Arabs, is with Iran. India will not do so.” too, especially by Nicholas Burns, united: that Iran must be punished Sherman’s predecessor in the Bush for its nuclear ambitions. While the But forcing New Delhi is exactly Administration, who wondered political discourse in Washington what Washington appears to be whether India was fit for a global is binary and stark, the reality of doing for the past six months. leadership role. Burns, a friend of Indian actions and decisions is The political noise in the U.S. and India, was instrumental in the nego- complex. the resulting pressure has created tiation of the 2008 India-U.S. Civil a degree of unnecessary friction Nuclear Agreement and in moving Although India is being portrayed in bilateral relations with India. It a reluctant U.S. bureaucracy toward as defiant on the sanctions issue, it is came into sharp focus last month its successful conclusion. His words in fact reducing its oil imports from after the U.S. announced a list of are taken seriously in New Delhi. Iran, diversifying to other regions ten countries – Japan and European despite the fact that many Indian countries – which were exempt In an article in The Diplomat, refineries are geared for handling from U.S. sanctions because they which received wide publicity – Iranian crude. India is also quietly had “significantly” reduced their and acidic responses – he said he telling its private sector to make oil imports from Iran. What is found India’s decision to continue the hard choice between doing considered “significant” has never buying Iranian oil as “bitterly business with Iran vs. business with been defined but U.S. officials have disappointing” news when the U.S. the US. But this is not sufficient hinted it would be in the range was trying to isolate Iran. When for American politicians who want of a 15% to 18% reduction in oil he added that India was impeding countries to line up behind them, imports. the Indo-U.S. strategic partnership produce statistics, and prove their because of its stance on Iran, the loyalty. In an election year, the Stung by the certificate given to the accusation hurt deeply, prompting fervour can spill over. Europeans, Indian officials stressed many analysts to respond that he

Gateway House 22 Quarterly Review Geopolitics was indulging in “if-you-are-not- Iran once China was ensconced in with-us-you-are-against-us” kind Gwadar in Pakistan with an eye and of black-and-white reasoning. A ear on Indian naval movements. letter from the American Jewish The Chabahar port was used Committee to Indian Ambassador recently to send Indian wheat to a Nirupama Rao did not help. It food-strapped Karzai government. accused India of capitalizing on The geopolitical opportunities “created by the Iran also provides a possible future European withdrawal from the situation in entry into Central Asia, where Iranian market.” It said India was China already is making major taking “advantage of sanctions” Asia hasn’t inroads. India’s attempt to link and elevating “commercial interests changed much Chabahar by road to Afghanistan over vital security concerns.” (the Zaranj-Dilaram highway) and except that the by rail through Central Asia to For the record, Iran is India’s “ Russia – the North-South corridor fear of Chinese second largest oil supplier after as it is called – is designed with an Saudi Arabia. India imported dominance has eye on China and Pakistan. 370,000 barrels per day (bpd) from increased among Iran in 2010-11 but the figure was If one of the main planks of the expected to come down to 320,000 Asian countries Indo-U.S. strategic partnership is bpd in the fiscal year that ended to send China a signal that it can’t last month. Imports from Iran are Administration it needs time but run or rule Asia, then surely India’s declining as avenues for payment voluble and valuable members of the futuristic moves must be supported. shrink, but it is not happening U.S. Congress counter that India Iran is one of the best options in fast enough for Washington. From has had many years to get smart the medium term to protect Indian supplying nearly 14% of India’s to the game. After all, U.S. policy security interests in Afghanistan oil needs a few years ago, Iran toward Iran is nothing new. It has and potential strategic openings supplied a little more than 10% of been in the making or unmaking in Central Asia. The passage to the total oil imported by New Delhi for more than 30 years. and through Pakistan is expected in 2010-11. What caused outrage to remain blocked for some years in Washington was the spike in Sherman, the third highest officer given the Pakistan Army’s trenchant January 2012, which showed India in the State Department, came to opposition to Indian influence in as the largest importer of Iranian India against this background of the region. It might be worthy to crude. The hike in one month’s bill hard feelings and raised hackles. once again quote Blackwill, who does not negate the overall trend. Only after a series of candid discus- fought for the nuclear deal with Meanwhile, Indian officials have sions with senior Indian officials India against the non-proliferation said that Saudi Arabia’s oil exports who explained that public commen- hardliners who put forth every to India are expected to increase to tary on issues of divergence only argument against it and wanted plug the gap. makes the management of differ- more curbs on Indian defense capa- ences more difficult, did she seek bilities. In 2005, he asked, “Why Some recent moves bear repeating. to assuage her counterparts and should the United States want to Threatened by U.S. sanctions, India publicly said the U.S. did not want to check India’s missile capability stopped payments for Iranian oil undermine India’s energy security. in ways that could lead to China’s through the Asian Clearing Union Even though there is an under- permanent nuclear dominance over on Nov. 27, 2010, making it clear standing of India’s dilemma within democratic India?” to the international community the State Department, feelings on that the Reserve Bank of India Capitol Hill are in freefall. The geopolitical situation in Asia would not facilitate payments for hasn’t changed much except that Iranian oil imports. Indian private But here are some counter the fear of Chinese dominance has companies have already walked out arguments to the spate of criticism increased among Asian countries. of Iran at considerable financial loss coming from Washington. For Washington needs to give India to themselves because they don’t India, Iran is a possible ally with an space and India in turn needs to want to be on the wrong side of the open avenue to the region if things articulate its needs better. If India U.S. financial system. India, where fall apart and the centre does not wants to be a valuable pole in a 400 million people have no access hold in Afghanistan. India has to multi-polar world, it might have to to commercial energy, is not in the keep the Iran option open in case defend its choices and compulsions same league as European countries Pakistan is handed the keys when with the same ardour that it once or Japan. It is still a developing U.S. and NATO troops depart in used to berate western imperialism. country where hard choices are 2014. It is for this reason that India But for now, India is executing an even harder. It has told the Obama developed the Chabahar port in excruciating tightrope walk. GH

Gateway House 23 Quarterly Review Geopolitics Petit, not grand geste on India-Pakistan

6 April 2012 Ambassador Neelam Deo Director Gateway House

akistan's President, Asif Zardari, bites, actual actions will be further Pwill be in India on 8th April. It delayed by the need to pander to was to have been a private visit to both the army and intelligence the shrine at Ajmer Sharif. Naturally network, let alone the inflamed Prime Minister Manmohan Singh Pakistani street. Beating conven- invited him to Delhi for a meeting tional wisdom, President Zardari, followed by lunch. Equally naturally the US move with the weakest hand imaginable, the Pakistanis accepted. has managed to hold on to elected has ensured that office longer than predicted. He The Americans inserted themselves has also been low-key and generally into this congenial India-Pakistan terrorism will flown below the radar on recent relative normalcy. On 3rd April, top the list of testy exchanges with Americans Wendy Sherman, Under Secretary on Afghanistan, allowing the of Political Affairs at the State issues Indian hapless Prime Minister Gilani to Department, who was visiting New “ take the flak from Parliament, the and Pakistani Delhi, announced a bounty of US$ armed forces, the judiciary and the 10 million on the head of Hafiz principals will be fundamentalists. Saeed, chief of the Lashkar-e-Toiba obliged to take (LeT) believed to be responsible for Zardari has also tried to reach out the horrific attack on Mumbai in public positions regionally. Through announce- 2008. ments and strategic visits, he The U.S. announcement was greeted has made it clear that China and Press reports say India was given no with scorn by Saeed asking that the Pakistan remain best friends, and advance intimation of this hugely money be given to him directly since he has worked on opening up significant decision. But our Home he is not in hiding. Equally farcical relations with the Russians, possibly and External Affairs Ministers was the bureaucratic response of with the end game in Afghanistan welcomed the move as additional the Pakistani government, which in mind. For the same reason, he pressure on Pakistan to act against sought information from the U.S. assured the Iranians that if the terrorist groups in general and the in order to act. It reveals simultane- U.S. were to attack them, Pakistan LeT and Saeed in particular. There ously the power of the Army and would stand beside Iran. Lastly, is some speculation that the timing Inter-Services Intelligence (ISI)- the Arabs, especially Saudi Arabia, of the Sherman announcement may nurtured groups like the LeT, and remain strategic and to some extent, have been a calculated quid for an the absolute dysfunctionality of the financial supporters. Indian quo on Iran. Pakistani government. In addition to the recognition that More plausibly, it could be a way Whatever their motives may have Pakistan's greatest threats come for the U.S. to corner Saeed, been, the U.S. move has ensured from within, Zardari has shown who is leading the opposition to that terrorism will top the list of flexibility on nuclear and trade the reopening of NATO supply issues when Zardari arrives in India, issues. Although his announcement lines into Afghanistan. Given the on which Indian and Pakistani prin- immediately after the Mumbai complex and extended processes cipals will be obliged to take public attacks that the ISI chief would involved in bounty-setting, the positions. That is a pity because come to India for discussions was Americans may be given the President Zardari has previously torpedoed by the Pakistani army, benefit of doubt that it is related made some sound pronouncements it was an act of courage. Similarly to the killing of six Americans in on the terrorism issue including his efforts to bring the Army under the 26/11 Mumbai attacks and the that the Taliban is a greater threat civilian control may have failed in growing internationalization of the to Pakistan than India. So although the immediate, but have been part LeT threat. we may get some positive sound of the dynamic of the erosion of

Gateway House 24 Quarterly Review Geopolitics its image after the Osama killing. by stealth. Over time, this process than on a whole raft of pending Again, Zardari’s statement that he may generate sufficient cumulative issues. It has been the political hoped that Pakistan would not ever benefit to have a qualitative change, history of both countries to reject think of using nuclear weapons which can then be taken to the next rational solutions on accounts of against India, is the nearest any stage. That would be more or less the perceived inability of public Pakistani leader has come to a the route followed on nuclear issues, acceptance; similarly the smaller "no first use" policy. And it is his where the two countries have been the target available to anti-Indian government that is implementing exchanging lists of installations forces, the greater the possibility of the significant step to grant Most as an annual confidence-building its attainment. President Zardari, Favoured Nation status to India, measure. with his reputation and alleged albeit step by single step, which interest in business affairs, may be could eventually yield a mutually Both India and Pakistan must work willing to abjure glory for lucre. profitable commercial relationship. hard to avoid a Musharraf-type Small and innocuous deal-making Agra debacle – where hopes were may work – we should be modest There is a pattern here. It may be raised sky-high and the immediate and low-key. The grands gestes have time for India and Pakistan to results were non-existent. never been achieved. Zardari is not eschew dramatic and decisive agree- Sarkozy, nor is Manmohan Singh. ments on Kashmir etc. and work for It may also be a better strategy to On Sunday, remember that here, incremental improvement, almost work on one issue at a time, rather small may well be better. GH Iran: An opportunity for BRICS

9 April 2012 Ambassador Peter Jenkins Permanent Representative to the IAEA

he winter months saw the cooled. U.S. President Barack President Sarkozy, are moving Tcontroversy over Iran’s nuclear Obama seems to have felt able towards the Russian and Chinese programme become dangerously to tell Israel’s Prime Minister position of accepting Iranian heated. Western media were Netanyahu that a military attack enrichment as long as Iran offers encouraged to interpret recent is unnecessary at this juncture, the best possible guarantees that all International Atomic Energy even though the U.S. President is its nuclear material will remain in Agency (IAEA) findings as proof vulnerable to Israeli influence on non-military use. Public diplomacy that Iran is bent on making nuclear U.S. public opinion in an electoral has moderated rude aggression weapons, despite the assessment of year. The five Permanent Members yielding to civility and reason. the U.S. intelligence community of the UN Security Council, the EU remaining that a weapons decision and Germany have agreed to talk to The risk of disruption to oil and has not been taken and is in no Iran’s nuclear negotiator despite the gas shipments has receded – for the sense inevitable. The U.S., UK, latter’s failure to commit Iran to full time being at least – although recent and European Union (EU) used implementation of the resolutions U.S. and EU measures are causing the concern aroused by media passed by the UN Security Council problems for some of Iran’s tradi- reporting to justify a further sharp- since 2006 (Notably these require tional customers, and are hurting ening of their attack on the Iranian Iran to suspend all production of consumers everywhere through economy, while Israel pressed for a the enriched uranium that can be their effect on prices. different sort of attack, to wipe out converted into reactor fuel, but Iranian nuclear facilities before the which Iran could divert to military So it is not irrational to hope that programme enters a so-called “zone use if it decided to withdraw from when the eight parties – Britain, of immunity.” Iran reminded its the Nuclear Non-Proliferation China, France, Russia and the U.S., adversaries that it could retaliate by Treaty [NPT], or to ignore its NPT the permanent members of the UN closing the Straits of Hormuz to oil obligations). Security Council, plus Germany, and gas shipments. the EU and Iran – meet on 14 April There are signs that the U.S., UK in Istanbul, they may find some As spring has come, passions have and Germany, if not France under way of launching a process that

Gateway House 25 Quarterly Review Geopolitics

Dr. Homi J. Bhabha of India, President of the Conference, and Prof. Walter G. Whitman from the United States, Conference Secretary General. (Switzerland, August 8, 1955)

can, over time, lead to agreement. Abandoning its enrichment plans Equally disturbing are the wider At long last, perhaps there can be would be intolerable; volunteering political realities.Since 1992 both concurrence on handling Iran’s full access to IAEA inspectors, leading Israeli parties, Likud and nuclear ambitions in accordance and other measures that can allay Labour, have sought to convince with the treaty to which Iran is a the concerns aroused by the clan- Washington that Iran is a mortal founder-party, the NPT. destinity of some of its past nuclear threat to U.S. interests in South activities, need not be. West Asia. This they have done in An NPT deal would recognise order to maintain Israel’s value to Iran’s right to enrich uranium and To say that hope is permissible is not the U.S. as an ally in a post-Cold would accept its taking advantage of to say that the odds on yet another War Middle East and to avert a that right, in return for Iran placing disappointment are long. In 2007 a thaw in U.S.-Iranian relations that all nuclear material in its posses- promising opening vanished when they fear might entail a cooling sion under IAEA safeguards and Iran’s chief negotiator clashed with in U.S.-Israeli relations. For these renewing its commitment to refrain President Ahmedinejad. In 2009 Israelis, Iran’s nuclear programme, from manufacturing or otherwise it was President Ahmedinejad’s and especially its undeclared activi- acquiring nuclear weapons. turn to be thwarted by domestic ties prior to 2003, has been a gift rivals; and President Obama, under from heaven. In one sense, the West approaches pressure from hawks, withdrew his these talks from a position of negotiators rather than wait for the Iran’s transgressions are a matter weakness. The Iranians have shown Iranians to sort out their differ- for persuading Americans that no sign of buckling under the ences. In 2010, the timing of Iranian Iran is bent on acquiring nuclear pressure of ever-tighter sanctions. assent to a confidence-building weapons, that these weapons will They know that the West’s military proposal brokered by Turkey and be used to destroy Israel, they say. option is deeply unattractive to any Brazil cast doubt in Western minds Iran’s programme, if left unchecked, of sane mind. on Iran’s sincerity. will precipitate nuclear prolifera- tion in an unstable region, leading In another sense, the West has In other words, the scope for any Saudi Arabia, Egypt and Turkey many good cards in its hand. process to founder on distrust, to acquire similar capabilities. U.S. Sanctions are hurting Iran and it misunderstanding and political conservatives, in thrall to dreams has an interest in having them lifted in-fighting in both Tehran and of re-shaping the Middle East and provided the price is not intolerable. Washington remains formidable. regime-change in Iran, have been

Gateway House 26 Quarterly Review Geopolitics eager echoers of these (highly ques- BRICS partners, Russia and China, tionable) arguments. whose role in a negotiating process will be to help narrow differences. These constituencies, Israeli and India could use its influence in American, have no interest in the Washington and European capitals normalisation of the Iranian nuclear to urge patience and the turning of case through an NPT deal. On the deaf ears to special pleading from contrary, they have every interest in Israel and Saudi Arabia. making it as politically difficult as possible for any U.S. administration It could draw attention to the way to arrive at such a deal. Iranians have in which Western slowness to accept evidence that the Iranian Saudi Arabia has been even less a tendency nuclear threat had been exagger- transparent than Israel. It is not to give ated, has damaged Indian economic obvious that the Saudis have been interests. India could also stress the poisoning the wells of American way to the unacceptability of any attack on opinion to thwart a deal with Iran. “ Iran that has not been authorised temptation But Saudi-Iranian rivalry, multifac- by the Security Council, both on eted and acute since the advent of to retaliate legal grounds and on account of its an Islamic Republic that challenges probable consequences for Indian the legitimacy of Saudi occupa- when instead living standards. It could draw on tion of the Holy Places, seized keeping a 2,500 years of cultural affinity with from the Hashemites in 1924, and Iran to offer advice on Iranian which shows up the undemocratic stiff upper sensibilities: the dos and don’ts that nature of the Saudi monarchy, is lip would matter in any negotiation. well-documented. There have been veiled threats that Saudi Arabia will be wiser The underlying need is for the ignore its NPT obligations if Iran is negotiators will be made to feel like BRICS to make their voice heard on left in peace to exploit nuclear tech- criminal suspects invited to engage this issue, to counter-point the tunes nology that the Saudis themselves in plea-bargaining. composed by the West’s Middle East are decades away from mastering allies. The BRICS are qualified to without outside help. Saudi Arabia For their part, the Iranians have a argue against seeing Iran’s nuclear too has an interest in thwarting any tendency to give way to the temp- programme in isolation. They can deal that leaves Iran in possession tation to retaliate when instead point out that the programme is a of enrichment plants. keeping a stiff upper lip would be symbol of a geostrategic shift: Iran wiser. For instance, they retaliated is slowly returning to the ranks of There are additional factors. Ever for the 2006 reporting of their Asia’s greater powers. since the NPT opened for signature IAEA non-compliance to the in 1968, U.S. officials have found Security Council by ceasing to allow This shift is unwelcome to some it hard to accept that the treaty the IAEA the access it needed to of Iran’s neighbours, it seems. allows non-nuclear-weapon states arrive at the conclusion that there They have sought to prevent it by (NNWS) access to technologies that are no undeclared nuclear activities distorting Western perceptions, by can serve both civil and military or material in Iran. encouraging Western governments purposes. There’s been a 44-year to assume the worst of a state itch to close what Americans see as They retaliated for recent UK whose intentions the West finds it a loop-hole, despite all the evidence sanctions on financial dealings hard to fathom, and by playing on that many NNWS are unready to by trashing the British embassy the negative prejudices that are the concede a back-door renegotiation in Tehran, an act of vandalism ill- legacy of past clashes with Iran. of a carefully-balanced instrument. calculated to make it easier for the British government to accept their But this kind of shift cannot be There is also in the U.S. a tendency enrichment activities. Will they be prevented without a conflict that to blind self-righteousness that able to resist the urge to retaliate if would entail hardship or suffering can lead Americans to treat non- some indignity is inflicted on them for most of mankind. So the Americans as miscreants when the while negotiations are underway? global family has an interest in latter err. Iran’s failure to respect Iran’s neighbours accommodating its NPT safeguards commit- These wider factors suggest that what can hardly be prevented, and ments prior to 2003, ill-disposes India, Brazil and South Africa according Iran a say in the affairs American officials to accord could play a part in resolving this of South West Asia – what the Iranian representatives the respect controversy if they chose. They Iranians see as their rightful place the latter crave. There’s a risk Iran’s could act as auxiliaries of their in the world. GH

Gateway House 27 Quarterly Review Geopolitics

The Bahrain Grand Prix – LGEPR The Bahrain formula

24 April 2012 Ambassador Neelam Deo Director Gateway House

year ago the Grand Prix in Shia majority is known to be much bin Hamad Al Khalifa, “as a force A Bahrain was cancelled because poorer than the privileged 30% for good” and a way to celebrate of demonstrations by the country’s Sunni minority. Bahrain is reported and unite their great country. He approximately 70% Shia majority, to have spent $90 million to build also warned that its cancellation protesting their second class status. the track, and paid some $40 million would “empower extremists.” Bahrain was a creation of the British to Formula 1 event-managers for and the ruling Al-Khalifa family the privilege of hosting the race. It The chief executive of F1, Bernie derives its present stability from its was viewed as a matter of pride for Ecclestone, had earlier stated that alignment with Saudi Arabia. This the royal family, which first brought the protests had “nothing to do with year the event went ahead on April the event to Bahrain in 2004. This us” and that there was no problem 22 despite continuing protests. year, the event was expected to in Bahrain with free speech since Even though the usual champagne yield $500 million in endorsements protesters were able to talk with the popping seemed a bit forced, the and visitor spending, easily a more press. race was attended by the King of important consideration than a Bahrain and was won by Red Bull fleeting protestors’ tarnish to the While such disdain for the courage driver Sebastian Vettel. Kingdom’s reputation. of the protesters was only to be expected from Formula 1, what was The kingdom of Bahrain, with a The royal family, whose wealth is more objectionable was that the population of 1.2 million, had a estimated upwards of $5 billion, did Prime Minister of the UK would GDP of over $20 billion in 2010, not see the event as a ‘Formula for come in with a strong endorsement the latest year for which statistics Blood’ as the opposition dubbed for the government of Bahrain. are available. Per capita income it. Instead they projected it, in the Perhaps encouraged by the support is approximately $16,500, but the words of the Crown Prince Salman of only 17 MPs to a cross-party

Gateway House 28 Quarterly Review Geopolitics motion calling for its cancellation, responsible for naval forces in the Budh International Circuit. In Prime Minister David Cameron Persian Gulf, Red Sea, Arabian Sea all the excitement over Bahrain, helpfully clarified that “Bahrain and coast of East Africa (including the outcome of a 2012 study by is not Syria. There is a process of Somalia) as far south as Kenya, is Berkeley psychologists Paul Piff and reform under way and this govern- based in Bahrain. Given the turmoil Dacher Keltner carried in Scientific ment backs that reform and wants in the Middle East, the drawdown American which showed that the to help promote that reform.” Not in Iraq and Afghanistan, active wealthier a person is, the less he/ at all surprising from a govern- piracy off the coast of Somalia and she is likely to empathize with the ment that will not even consider the close identity of interests with problems of the poor and disad- dropping Dow Chemicals as a Saudi Arabia over Iran and Syria, vantaged, received no notice. That $100 million sponsor of the forth- the U.S. is unlikely to speak about the organizers of sporting events coming London Olympics simply democracy or the human rights of a for the super rich are unconcerned because some 20,000 people died few hundred Bahrainis. with the protests of the disempow- and thousands more are suffering ered and the discriminated, should the after-effects of the Bhopal gas Nor can India, for more than half not come as a surprise. What is tragedy perpetrated in 1984 by its the expatriate population of 500,000 more worrisome is that globally, recent acquisition, Union Carbide. in Bahrain are Indians whose remit- politics now responds only to the tances are significant especially concerns of elites – dressed down Despite Human Rights Watch to the economy of Kerala. India as the middle class as revealed by saying that in Bahrain “normalcy itself hosted Formula 1 in October the campaign rhetoric in the U.S. doesn’t exist,” the United States 2011 in the vicinity of New Delhi Presidential election, which inevi- government was tight-lipped – after spending at least $40 million tably trickles down to Europe and perhaps because the Fifth Fleet, on the inappropriately-named to our own developing world. GH U.S.-Afghanistan agreement: A welcome start

27 April 2012 Seema Sirohi Journalist and Analyst, Washington

ashington–The draft of countries engaged in the “waiting U.S. presence would be a threat to Wthe strategic partnership game.” From India’s point of “Islamic countries in the region” agreement between the United view, this is good news in terms of (read Pakistan and Iran) and it would States and Afghanistan was signed regional stability. prevent Afghanistan from devel- on April 22 in Kabul, and is an oping political and military ties with important achievement in the With the U.S.-Afghan document its neighbours. To the extent that a continuing process of the 2014 U.S. in hand, the Europeans too can U.S. presence would be a deterrent drawdown from Afghanistan. The begin to make their pledges for the against excessive meddling by Iran rather thin document is expected stable future of Afghanistan. They and Pakistan, the Taliban have got to grow in substance by May 20, had been quiet, waiting to judge it right. But whether a few thousand when NATO leaders meet in the dynamic between Kabul and U.S. troops can impose real order Chicago for a summit and discuss Washington before putting forth is anyone’s guess, especially when the question of Afghanistan. For their own plan, and mindful of the 100,000 troops couldn’t do so. now though, the draft raises more active opposition to any long-term hard questions than it answers. The U.S. presence from both Pakistan That Washington and Kabul most important take away from the and Iran, two key neighbours of were able to agree on a strategic preliminary document is that the Afghanistan. partnership against a background Americans are not packing their of horrific recent events involving bags and leaving as they did in the The Taliban, predictably, denounced U.S. troops is significant. The 1990s. A continued U.S. presence the U.S.-Afghanistan agreement, incidents of Quran-burning, the for at least 10 more years after 2014, saying it was nothing but an attempt killing of 16 Afghan civilians by a when the bulk of NATO and U.S. by Washington to inject secularism U.S. soldier and ugly photos of U.S. troops depart, should give pause and prevent the rise of a “true” troops with dismembered body to the Taliban and neighbouring Islamic government. A continued parts of Afghan militants, poisoned

Gateway House 29 Quarterly Review Geopolitics

the atmosphere. It took more than surge. The budgetary support would a year of hard negotiations to get depend on the number of Afghan a draft acceptable to both sides national forces that will be trained. because of differences over night The goal was to train and equip raids which have killed civilians, 350,000 Afghan security forces by creating strong opposition among early 2014 but some in the Obama ordinary Afghans. The U.S. agreed Administration want that number to give Afghan forces the lead role reduced to 250,000 for budgetary in night raids while relegating itself reasons. It is also clear that the U.S. to a supporting role. However, it There is Congress will have an easier time is unrealistic to expect that the no way to approving aid for Afghanistan – U.S. will not take unilateral action any amount – if the Afghan govern- against top insurgents if there is determine ment were to take concrete steps to good intelligence. how many US fight corruption. An undercurrent “ of anger against sending American Control of the keys to the main troops would taxpayers’ money to a “corrupt” military detention centre was Afghan government is palpable another cause of contention for be adequate among Congressional staffers and months. But the U.S. found a way to fight the Washington policy wonks. around it. According to Lisa Curtis of the Heritage Foundation, the insurgents What the Obama Administration Memorandum Of Understanding who will will argue is that while al-Qaeda that dealt with detainees leaves the has been severely hurt by counter- door open for the U.S. to “block the continue to terrorism operations over the release of detainees even after they operate in years, it has not disappeared. are transferred to Afghan authority.” As Bruce Riedel, a former CIA There are likely to be several other the border official and currently an analyst such MOUs which will help avoid at the Brookings Institution, said the problem Washington faced in areas of Thursday, the new al-Qaeda leader, Iraq, where the Pentagon wanted to Pakistan and Ayman al-Zawahiri, should not be leave behind thousands of troops as underestimated. “He is trying to a “residual force” but was unable to. Afghanistan rebuild the al-Qaeda core. There is a The Pentagon wanted “immunity” heavy propaganda flow from him,” for U.S. forces from future pros- Riedel said. In addition, a “syndicate ecution by the Iraqi government, a President Hamid Karzai wanted of terror” is developing inside promise that was politically unac- a firm commitment “in writing” Pakistan under the rubric of Difa- ceptable to the Iraqi leadership. from Washington on U.S. financial e-Pakistan or Defence of Pakistan, support but U.S. officials impressed where prominent militants openly In the end, the whole question upon him that it was not possible, advocate jihad against America and became embroiled in the very idea given the mechanics of the India. of “foreign troops” in Iraq. The American government. The U.S. same question is swirling around in Congress approves foreign aid on There is no way to determine how Afghanistan but this time the U.S. a yearly basis, and for the executive many U.S. troops would be adequate negotiators are better prepared to branch to make a commitment to to fight the insurgents who will handle it. a foreign government is essentially continue to operate in the border meaningless. Karzai had said in a areas of Pakistan and Afghanistan. Details of the draft agreement are speech last week in Kabul, “Give In addition, the underdeveloped under wraps mainly because they us less, but mention it in the Afghan economy is unlikely to are neither filled nor final. At this agreement. Give us less but write it improve dramatically by 2014 to stage, it is essentially an executive down.” The fact that the draft was sustain the additional burden of agreement, more conceptual than signed a few days after his speech is departure of NATO forces. Many concrete. It envisages a “significant” an indication that Karzai withdrew Afghans in the urban areas make presence of U.S. Special Forces his demand. a living from the jobs generated by to conduct successful counter- “foreign troops.” terrorism operations. The figure being discussed for American support ranges between There are no easy answers to the The tougher battle in Washington $10 billion to $2.5 billion annually, a hard questions. But now, there is will likely be over a 10-year fraction of the estimated $110 billion also no appetite in Washington to financial commitment to support a year that Washington currently continue the war in Afghanistan on

Afghan security forces. Afghan spends in Afghanistan after the a full scale. GH

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Suu-kyi-gives-speech-in-khawmu/Htoo Tay Zar-Flickr Sanctions on Myanmar: Have they worked?

1 May 2012 Ambassador Neelam Deo Director Gateway House

he by-election which Myanmar’s the UN Secretary General, the U.S. fair by-election, Naypyidaw has Topposition party National Secretary of State, the U.K. Prime moved swiftly towards political League for Democracy (NLD) Minister and the Foreign Minister reconciliation with Suu Kyi and the swept to victory on April 1, was a of Japan. Our own Prime Minister ethnic minorities, media openness tribute to the fortitude and abiding Manmohan Singh, who had received and economic reforms. A majority popularity of its leader, Aung San President Thein Sein in New Delhi of political prisoners have been Suu Kyi. It is also reflective of the last October is scheduled to visit in released and exiles welcomed back low-key but steadfast manner in May. He will no doubt be followed in time for some of them to partici- which the Myanmarese govern- by many other senior leaders from pate in the by-election. The legisla- ment, led by former members of the the ASEAN countries, China, Latin ture, written off as a puppet a year military Junta, especially President America and Europe. In return, Suu ago because of the dominance of Thein Sein, has taken the reform Kyi will make her own first foreign the military and its Union Solidarity process to an important – and visits – to the U.K. which was her and Development Party legislators, hopefully irreversible – juncture. home for decades and where her has actively supported reforms sons live, and to Norway because through legislation and those There is much to celebrate about her Nobel Laureate status contrib- promoted by the President. These the rapid democratization in uted much to her global profile. relate to commerce, tax and labour Myanmar. In grudging recognition, regulation as also bills on microfi- numerous foreign dignitaries have Apart from conducting an nance and foreign investment. visited Myanmar this year including internationally-certified free and

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A controlled float of the currency form of western sanctions since has begun and Naypyidaw has the Armistice of 1953, never lifted started to prepare its own accounts since there has been no formal end at the market rate of 800 kyat to the to the Korean War. Even after the dollar from the earlier fiction of 6 dissolution of the Soviet Union and kyat to the dollar. Restrictions on the subsidies that it gave North the media have been lifted and a Mugabe Korea, the latter has survived. The Human Rights Commission estab- remains in resultant distortion of its economy lished. Ceasefire agreements have is reflected in the fact that while already been concluded with 11 power and there its people suffer malnutrition – of 12 dissident armed groups that has even been and maybe even hunger – it has have long battled the state. Even developed a formidable nuclear constitutional changes that could an economic weapons and missile capability re-order the sharing of power and with which it continues to threaten the natural wealth of the country “resurgence in South Korea and the world. Iran is with the ethnic groups as envisaged Zimbabwe another lifer, under sanctions since by the Panglong Agreement of 1947, the siege of the American Embassy are no longer ruled out. – that they are almost invariably in Tehran in 1979 and now being imposed on developing countries strangled by more sanctions that The western countries have been by the rich, developed world seek to force the rest of the world to quick to claim that it was their to force political processes and stop purchasing Iran’s oil and gas. sanctions against Myanmar that economic rules that open the There is no doubt that the Iranian brought about these astonishingly society and economy to Western people are hurting; but the regime swift and wide democratizations in entities. The only known case of remains unrepentant, despite open the last one year, and they have begun developing countries ganging up avowals of regime change by the the process of removal or relaxation to try to impose sanctions against a U.S. Even as negotiations over of long-standing sanctions against member of the rich, white club was Iran’s nuclear programme resumed, Myanmar. The EU announced the that of the Arab countries against the Iranian foreign minister stated suspension of sanctions for one Israel in 1967 after the Six Day War. that if western sanctions against year and Australia followed, lifting Although their boycott of Israeli Iran were lifted, all disputes with the sanctions against the country and products did cause some disloca- west could also be resolved quickly. some senior military figures. Lifting tion, the impact of the sanctions Clearly, the west has learnt nothing U.S. sanctions will be lengthy was overcome by Israel finding new from pushing Myanmar into the because it requires legislative markets for its products and sources arms of China – a colossal strategic action. Nevertheless Washington of essential supplies for its needs in misstep – and it has so far ignored announced the opening of an developed countries. the Iranian overture. Zimbabwe has embassy in Nypyidaw and withdrew been sanctioned since 2002 because its earlier objections to interna- Another feature of sanctions is their of the undoubted brutality of the tional organizations including UN stickiness – which means that once Mugabe government but initially Agencies, the World Bank and IMF imposed, they are hard to lift and to protect the interests of barely and the Asian Development Bank become a way of life. Upon their 5000 white farmers sitting on some to begin extending financial and imposition, affected governments 70% of arable land. Despite the technical assistance to Myanmar. hunker down and look for ways suffering imposed on the people for The ill-natured and bullying around them, often with popular the last decade, and forcing an ill- suspensions rather than outright support on the issue of soverignity advised coalition government with removal of sanctions, are signals and national honour. Simultaneously his principle challenger Morgan to the Myanmar government that Western imposers find it difficult to Tsvangarai, Mugabe remains in it is on notice; any thwarting of the walk away from their own heated power and there has even been an wishes of Aung San Suu Kyi could violation-of-human-rights rhetoric economic resurgence in Zimbabwe. result in their re-imposition. This and the inertia of legislative and is also underlined by the TV grabs bureaucratic procedure which do These prolonged time frames for of press conferences with visitors not allow these processes to be sanctions prove the old Greek including Ban Ki Moon, Hillary junked overnight. This has created saying that “while the strong do Clinton etc. with Suu Kyi where a community of sanction ‘lifers.’ what they can and the weak suffer she is treated almost as though she Countries like Cuba have been what the they must” In fact such were the Head of the Myanmarese sanctioned for half a century, since bans do not usually achieve their government already. the Cuban Missile Crisis. Most stated purpose of forcing regimes Cubans alive today know no other to change their behavior even as This underlines one of the most way of life. Similarly North Korea they distort economies and cause important features of sanctions has continuously been under some much suffering to ordinary people.

Gateway House 32 Quarterly Review Geopolitics

Less spoken about these days is that being overwhelmed politically and India itself first began to be sanc- economically by China. Has this tioned by Canada, the U.S. and west entrenchment of Chinese influence Europeans after the nuclear test of on Myanmar benefitted the sanc- 1974. Numerous technology-denial tioning countries in their strategic regimes such as the Australia group and commercial objectives? Can which controls exports of biological lifting sanctions be more produc- and chemical agents, Wassenar Secretary General tive than their imposition? Agreement which bans dual use technologies, Missile Technology of the UN in Almost certainly so. A well- Control Regime etc., were devised his address to researched, balanced April 2012 with India as the principal target. report by the respected International Ironically, the U.S. and the U.K. the Parliament Crisis Group concludes that the were disappointed at the award of in Naypidow impetus for reforms in Myanmar the French Raffaele as the choice of “ has been internal, not the result our fighter jet; yet they continue to on April 30, of sanctions imposed externally. It deny many advanced technologies also states that lifting the sanctions to us under the rubric of “dual use” ungenerously piecemeal could actually harm technology. termed the the Myanmar democratization project by exposing the reformers The questions that arise are: Is long- reforms “fragile” to criticism and a pushback from sanctioned Cuba, with its world class their opponents in parliament and education and health systems, worse the armed forces.Unfortunately off than its Caribbean neighbours 1962, incremental sanctions have the Secretary General of the like Panama with their lopsided been imposed starting from trade United Nations in his address to dependence on rich American and investment bans to travel and the Parliament in Naypidow on tourists? Could Mugabe have confiscation of assets held abroad April 30, ungenerously termed the been dislodged by following some by military leaders and finally – and reforms “fragile” – in line with the other course of action as sought reluctantly – to barring western view of western governments. What by South Africa? Are the Iranians oil companies from exploiting the UN really needs to do is to better off after decades of isolation Myanmar’s substantial fossil fuels. assist Myanmar in capacity building which has completely distorted Did the crushing of the Myanmarese to absorb foreign aid and advice. their first world oil revenue fueled economy and denial of financial and Myanmar also needs to ensure that level of economic development? technical multilateral assistance, it does not hop out of the Chinese Could not the current imbroglio result in the democratization we are wok into the resource curse as the with Iran have been resolved by celebrating today? world begins to exploit its wealth of confronting Israel's security issues natural resources. more honestly? Could we argue Unlikely – especially considering that India persevered in developing that China alone has invested more Here, India can play a role, notwith- nuclear and space technologies than $20 billion in that country’s standing the paralysis in New Delhi. and scientific competencies under infrastructure and fossil fuel sector Even as it does in Africa, India can sanctions, which it may otherwise in the last couple of years. ASEAN accelerate its academic and human have purchased from developed accepted Myanmar as a full member resource development programmes countries? in 1997 and sought constuctive especially in the area of information, engagement, including through communications and technology. Things change with economic stepped up trade and investment. It has experience to share in agri- might. Some restrictions on the The fossil, forest and precious culture and institution – building, sale of weapons and dual use tech- stones resources of Myanmar have particularly the machinery of nologies on China remain, but most served to benefit corrupt Thai elections. And it can help incubate other sanctions introduced after generals enormously but not the non-governmental organizations, a the Tiananmen Square incident in Myanmarese people. critical and necessary national asset 1989 have fallen by the wayside as for liberalizing Myanmar which that country’s economic profile has India, after initially extending will otherwise be overwhelmed grown rapidly. Does this mean that support to Suu Kyi, sought to engage by wealthy western NGO seeking sanctions against big countries and the military regime to address to further the adoption of their economies are shrugged off more insurgencies in the Northeast, seek world view. Such moves can easily? fossil fuels in its vicinity and build a lift the fortunes of the ordinary bridge to its ASEAN neighbours. It Myanmarese – and put the trauma In the case of Myanmar which was also responding to misgivings of decades of sanctions behind has been under military rule since within the Myanmarese elites to them. GH

Gateway House 33 Quarterly Review Geopolitics Qatar: Geopolitical Cosmopolitanism

3 May 2012 Akshay Mathur Head of Research, Geoeconomics Fellow

atar topped the Middle East Central Command, the liberal U.S. Qrankings in the just-released think tank Brookings Institution, 2012 MasterCard Worldwide Index several multinational companies, for Consumer Confidence. To those and a rotating calendar of intellec- who have followed the trajectory of tual international conferences such this nation, it comes as no surprise as the Doha Forum and United that this tiny peninsula off Saudi Nations meetings. These institu- Arabia has transformed into a tional interactions coupled with the Simultaneous city-state of commercial energy and grandeur of the city of Doha with with Qatar’s urban magnificence. its beautiful seaside esplanades, shining skyscrapers, refurbished international Less known is Qatar’s growing role ethnic villages and opulent theatres, in international geopolitics; and is a magnet for international profile is those who are aware of its position diplomats and executives. a growing are puzzled by what Qatar hopes to “ achieve from it. BOLD ASPIRATION cosmopolitanism within the Since the beginning of 2011, Qatar Some indication of their strategy has raised its profile as an active is evident in the Qatar National country participant in world affairs. During Vision 2030. It is a statement of 2011-12, when Qatar simultaneously bold aspiration – one that puts held the Presidency of the Arab building a knowledge economy and Similarly, the World Innovation League and of the UN General international engagement at the Summit for Education organized Assembly, it used the platform same level of priority as oil and gas by the Qatar Foundation for successfully to oust Libyan leader exploration. Education, Science and Community Moummar Gaddafi while indepen- Development began in 2009. It dently providing Qatari military The 2,500 acre Education City supports innovative ideas for raising and monetary support to the rebels. supported by the government- the awareness of education as a Similarly, it supported the revolu- owned Qatar Foundation, is the means to development and has seen tions in Tunisia and Egypt through largest foreign cluster of American entries from Paraguay to Ghana. the reportage of its state-owned Al universities outside of the United Every year, they choose six winning Jazeera Network which blanket- States. Georgetown University is ideas to support with finance and covered the protests. Qatar was the teaching foreign affairs, Carnegie advice. Nanhi Kali, an NGO that first country to recall its ambas- Mellon focuses on informa- promotes education for girls in sador from Syria before calling tion technology, Northwestern India, supported by Mahindra & for President Assad to step down, University teaches journalism. Mahindra (which also supports and was host to the peace accords Gateway House) won the award the between Sudanese government and Where entrepreneurship, enterprise first year it was launched in 2009. Darfur rebels in 2011. and cosmopolitanism are not instinctive, it is being enabled by Away from the limelight, geopoli- Simultaneous with Qatar’s interna- creating forums that reward these tics is being practiced from the tional profile is a growing cosmo- skills. On January 29th, 2012, bottom-up. Georgetown University politanism within the country. Enterprise Qatar, a joint initiative organized its first ever Young Doha is already home to the United between Carnegie Mellon University Leaders Seminar in Qatar in April Nations offices, the Al Jazeera and the Qatar Business Association, 2012. It brought together 18 leaders Network which is an established launched a business plan competi- under the age of 35 from different popular voice of the Middle East, tion called Al-Fikra for identifying regions of Africa, Middle-East and the controversial office of the and promoting creative business South Asia with varied backgrounds Taliban, the headquarters of the US ideas that would be based in Qatar. such as social activism, journalism,

Gateway House 34 Quarterly Review Geopolitics political dissidents and scholars for that Qatar wants to go further authoritarian governments purely a healthy discussion and under- in influencing the developments on western pressure. Norway is the standing of global developments. in the region – either as a neutral only country that has had some The same weekend, Reach Out peacemaker or through the use success of being a neutral peace- To Asia (ROTA), an NGO set up of hard or soft power – simply maker. It has done so with Israel by the Emir of Qatar for engaging because it can. It is a more anodyne and Palestine resulting in the Oslo the expatriate community in stakeholder than perhaps any other Accords in 1993, and then again Qatar – 80% of Qatar’s population in the region where leadership is with the Sri Lankan government comprises expatriates on work visas split between the Western powers, and the rebel Tamil Tigers in 2002. – also organized a youth conference Saudi Arabia, Iran and Turkey. Its history as a non-colonizer and that brought participants from Qatar seems determined to use its economic strength made gave it the Yemen to Japan. The 350-strong developing intellectual heft to play necessary credibility to be a neutral student conference discussed how an active role in the region, even if participant with no direct stakes. sports and conservation of the envi- not neutral, while it bulldozes its ronment can provide a platform for way into becoming a commercial CHALLENGE OF DIVERGING dialogue between countries which hub like Dubai or Singapore. INTERESTS do not engage with each other. One direct benefit is its new friend- As Qatar engages further interna- POWER OF ENERGY WEALTH ship with United States, which is tionally, it will face the challenge happy to befriend another Sunni of absorbing and responding to Beyond the diplomacy and intel- monarchy besides Saudi Arabia and diverging international interests lectual pursuit, is the power of increasingly depends on Qatar to and implications of its participation Qatar’s energy wealth – used for its communicate with non-state groups in the world. By training the Libyan geopolitical goals. With the third such as the Taliban. military and flying bombing sorties, largest natural gas reserves and it won the accolades of NATO and the 13th highest oil reserves in the Unfortunately, there are not too revived an ailing Arab League but world, Qataris are the richest people many successful precedents to has certainly lost the credibility on the planet, with a per capita follow. In the past, Jordan has of a neutral peacemaker. Many at GDP of over $100,000. At the played a similar role in the Middle- home and in the region are already April 21, 2012 World Investment East, mediating between Israel troubled by difference of coverage Forum meeting in Doha, Qatar and Palestine. In fact, there is an between Al Jazeera English and Al Investment Authority revealed that uncanny resemblance between the Jazeera Arabic as was obvious in the its Sovereign Wealth Fund is now royal couples — King Hussein and reporting of the recent protests in over $100 billion and will have $30 Queen Noor of Jordan, and Sheikh Bahrain. billion more to invest in 2012 alone. Hamad and Sheikha Mozah of So far, it has invested the money Qatar – both glamorous, worldly Internally, Qataris remain satisfied in European markets such as the and cultural icons. More recently, with their leadership so far. No French energy company Total, and Turkey has played a similar role one but a few journalists showed in the London-based property of between Iran and the P5 +1. But up for the “Day of Rage” in Qatar the tony Harrod’s department store. Jordan’s role was limited to Israel on March 16th, 2011 to protest and Palestine. against the administration of the But now, many developing countries ruling Sheikh Hamad. Women such as Sudan, Colombia, Djibouti, Dubai and Singapore have largely have the right to vote in national Namibia, Rwanda, and Uganda remained commercial centres. India, elections, have 100% literacy and are wooing Qatar for investments Brazil, and South Africa have only over 30% are part of the workforce. in food processing, infrastructure now started to identify and vocalize Some gender disparities remain and agriculture sectors. Sudan has their global role after acquiring with regard to marriage and travel successfully even won $2 billion some economic confidence. but Sheikha Mozah has promised loan in March 2012 that includes changes. the purchase of government bonds Those who tried were not always which saved the country’s sliding effective or proactive. Turkey’s Regardless of the uncertainties, currency. roadmap for negotiations with Iran the cosmopolitan education being was never accepted. India, Brazil, imparted in Education City to GEOPOLITICAL and South Africa have only now domestic and international students COSMOPOLITANISM started to identify and vocalize their will certainly help Qatar make and global role after acquiring some retain friends all over the world. All these developments exemplify economic confidence. India does At least just enough to maintain a kind of geopolitical cosmopoli- not support interference in foreign internal solidarity while it begins tanism that is new to Qatar and the countries and Russia and China the learning process of playing the world. So far, all moves indicate remain reticent about overthrowing international role it aspires to. GH

Gateway House 35 Quarterly Review Geopolitics Deconstructing the Muslim Brotherhood manifesto

28 June 2012 Ambassador Neelam Deo Director, Gateway House

Egyptian rallying/ Gigi Ibrahim – Flickr

n 24th June Mohammad Morsi give itself the authority to appoint a and the Egyptian armed forces, Oof the Muslim Brotherhood Constitution-writing body. but for now, attention has shifted was finally anointed the elected to the economic and social policies president of Egypt. His installa- A year ago the Muslim Brotherhood of the new government. At play tion came after almost a week of had decided not to contest the within the tussle will be the 30% of suspense during which the country presidential election or dominate the Egyptian economy owned and teetered on the edge of chaos when Parliament. Yet, today it has won operated by the Armed forces. his rival Ahmed Shafiq, Mubarak’s the Presidency and over 50% seats last Prime Minister, also claimed a in the annulled Parliament. An The Brotherhood has been at pains win. Despite Morsi’s small margin of Islamic orientation then, is both to project itself as holding moderate victory – 52% vs. Shafiq’s 48% – the expected and feared. There is no and liberal economic and social latter did not challenge the verdict. doubt that the Brotherhood will policies. Although there is a group What probably won Morsi the day challenge, probably in stages, the within attracted to intervention were backroom deals with the emasculation of the powers of the and support for unspecified “prime powerful Supreme Council of the President and the effort by the SCAF sectors,” the majority argue for Armed Forces (SCAF), which just to entrench a constitutionally- a “liberal market economy with days earlier carried out a soft coup guaranteed superior position for a business friendly climate.” The through a pliant judiciary, annulling the military. The next few months Brotherhood’s economic and social the parliamentary election and or years will witness a struggle policies are set out in a document enacting a hated Emergency law to between the Muslim Brotherhood entitled the Nahada (Renaissance)

Gateway House 36 Quarterly Review Geopolitics

Project. Its implementation will be last year. The high-level exchanges led by the Brotherhood’s previously between the two governments, disqualified presidential candidate, including the March 2 visit of India’s the conservative successful foreign minister to Cairo, have businessman Khairat Al Shater, discussed active Indian engagement who remains the most powerful in the revival and growth of the member of the Brotherhood. This Egypt will face economy. is important for a government that will soon need support from many “unknown The Nahada document has, refresh- the IMF and indirectly the US, to ingly, referred to both diversity address its $190 billion deficit. unknowns” from and equality as an objective. It the military and has sought, in particular, women’s While the Nahada manifesto is participation in “society, politics, rich in generalizations, it is short how it handles and priorities of national develop- on specifics. It “aims to build a “ ment.” An advisor to President them will have state that provides people access to Morsi announced that in a first education, healthcare, jobs, invest- significance for for Egypt, a woman and a Coptic ment, and business-building oppor- the awakening Christian would be appointed as tunities; and protects their rights vice-presidents; brooding beneath and dignity within and outside the in the whole the surface have also been hints country.” It does not, however, that Sharia and the Koran could be name any specific sectors other Arab world the source of legal practice. And the than a reform of the banking sector has a large pool of educated and Brotherhood’s intent to defer to the and a focus on education for which tech-savy but unemployed youth. Salafists on religious matters has it hopes to raise the allocation from Although not a major oil exporter, naturally generated concerns for the existing 3.3% to 5.2% of the the Brotherhood’s Freedom and maintaining the rights of women. budget. This is being interpreted to Justice Party (FJP) has speculated While the manifesto has reassured mean that there will be no wholesale about a review of oil and gas export the roughly 10%minority Coptic move of the nearly $200 billion deals to raise some $18 billion for Christians that it intends to respect banking sector towards Islamic its depleted state coffers. This has “all our fellow Copts’ rights of citi- (interest-free) practice. That should huge political implications as the zenship and realizing their full legal reassure foreign banks like our State most important deal will be the equality as Egyptian citizens while Bank of India. Less reassuring have continued supply of gas to Israel at maintaining their right to appeal to been the hints about making Zakat, the old heavily discounted rates. It their religious strictures on matters the 2.5%of wealth that Muslims is unlikely that Israel (and the US) pertaining to personal status and traditionally contribute to charity, would be willing to reopen any old their religious affairs”. Sadly, a more compulsory (this possibly has agreements. likely scenario is a slow seepage resonance with the Indian govern- of Christian emigration – as has ment’s own discussion on making a Tourism, which employs 1 in 9 already occured in other Arab 1% Corporate Social Responsibility Egyptians, has suffered but can nations, including Iraq. contribution compulsory for its revive quickly if the new govern- companies). ment’s focus on infrastructure Unsurprisingly the Brotherhood, fructifies, as does a softer attitude which has been banned for most In order to achieve a transition from towards alcohol and beachwear. of its 75 years of existence, has a a “rentier economy to a value added While this is good news for India’s commitment to the strengthening economy,” the Nahada plans “100 Oberoi hotel group and Air India, of civil society institutions to national projects, each exceeding some forward and backward safeguard democracy and prevent a billion US dollars within the movement must be anticipated in state control through “acknowl- boundaries of an information an environment where conservative edgement of the judiciary as the and production society, guaran- religious forces come up against the governing reference.” But faith in teeing the multiplication of Gross pushback of more hard-headed and the judiciary has already received a Domestic Product in five years at powerful businessmen. rude shock given its meek compli- an annual growth rate of 6.5-7%.” ance with the military in dissolving There are already 100 Indian Parliament. While no further details can companies operating in Egypt, be found, at the very least this in sectors from steel to transport, Egypt will face many “unknown means rich potential for Indian paints and beauty products. unknowns” from the military and IT companies like Wipro and Notwithstanding early nervous- how it handles them will have Mahindra Satyam, already in Egypt, ness, most of them have continued significance for the awakening in and others like NIIT, as the country to function throughout the volatile the whole Arab world. GH

Gateway House 37 Quarterly Review Geopolitics

Tripuras woman in Bangladesh/MRHASAN – Flickr

Bangladesh: A passage through Tripura

13 January 2012 Ambassador Neelam Deo Director, Gateway House

orshed Khan, Bangladesh’s than in any other civil war situation Mforeign minister from 2001 in history. Prime Minister Sheikh The future of to 2006, was fond of stating that if Hasina’s current visit to Tripura Bangladesh was India – locked, then is significant. Since its inception natural gas Tripura was Bangladesh – locked. in 1971, no Bangladeshi head of as a source of state or government has visited Tripura and Bangladesh have a India’s North-East. This visit has energy for the special history – the two share a the potential to rebalance the still “South Asian porous border, which stretches tremulous relations between India over 800 kilometers. During and Bangladesh. region is vital Bangladesh’s struggle for inde- and could be pendence, the people of Tripura Historically, Bangladesh’s attention welcomed more Bangladeshi has been focused primarily on West promising refugees per capita into their homes Bengal (once the eastern part of

Gateway House 38 Quarterly Review Geopolitics undivided Bengal), with which it constraints. However, this gas can shares a love-hate relationship. By now be linked to the pipelines of now turning its gaze toward the the Bibiyana gas field in Eastern north – east, Bangladesh could be Bangladesh for consumption within heralding a strategic change in the the country, or swapped for power dynamic of its relationship with for West Bengal or Assam. The India. If such a paradigm shift Bangladesh future of natural gas as a source of commences, then West Bengal’s energy for the South Asian region Chief Minister Mamta Banerjee’s has looked is vital – and could be promising. tantrum, last September, over If India and Bangladesh can the Teesta Waters Accord, could westwards to effectively advance their strategic become a blessing in disguise. Assam and partnership, a link to Myanmar’s Shwe gas field becomes a realistic Bilateral relations between the two West Bengal goal. However, if Delhi and Dhaka countries have been fractious since “ cannot strengthen their diplomatic to engage with the 1974 assassination of Sheikh ties and cooperate to develop their Mujibur Rahman, the father of India; it must energy, infrastructure and financial current Prime Minister Hasina. now pivot and sectors, then futuristic projects Differences over illegal immigra- such as TAPI (The Turkmenistan tion into India, support for terrorist look east to – Afghanistan – Pakistan – India activities, especially in Assam, pipeline project) or IPI (The Iran – cattle-smuggling, and Bangladesh’s Tripura and Pakistan – India pipeline), become reluctance to grant India access Mizoram ever more ephemeral. to its transit facilities, made the exchanges infructuous. This has Tripura, rather than Bengal or now begun to change. the Feni river, easier perhaps than Assam, is an inspired Indian partner addressing the sharing of the waters for Bangladesh. Like most people Prime Minister Hasina’s visit was of the Teesta river. in Tripura, Manik Sarkar, the chief preceded by the establishment minister, is a Bangla speaker, and of tentative links including bus Fifteen years ago, the Chambers there is a key cultural affinity that services between Dhaka and of Commerce of Agartala and will surely make social and intel- Agartala, the proposed revival Chittagong met to discuss economic lectual exchanges with Bangladesh of the rail link from Akhaura to exchanges between south – eastern more meaningful. Sheikh Hasina’s Agartala, and the announcement Bangladesh and Tripura. But little visit began with the inauguration of to allow our North Eastern States came of it. For decades, the porous an open – air theater and a statue the use of the Chittagong Port. This border between the two has facili- of Rabindranath Tagore at Tripura could be the ballast which can cause tated the entry of smugglers and University, followed by the confer- the two countries to build a genuine terrorists into India. ment of an honorary degree. and mutually constructive future. For the first time, Bangladesh even Now is the time for our countries to Both countries now have a mutual allowed heavy power equipment for recognize the tremendous value and and abiding interest in ensuring that the Palitana project in Tripura, to potential from increasing legal cross Tripura leads the India-Bangladesh be transported along its fragile road – border trade. Exchanging domes- relationship. For too long, system, in exchange for which it is tically produced goods: household Bangladesh has looked westwards to seeking a stake in the project. gadgets, saris and readymade Assam and West Bengal to engage garments, pharmaceuticals, agricul- with India; it must now pivot and Such exchanges are tentative, but tural products, small machinery etc. look east to Tripura and Mizoram. can usher in a process of normalcy can provide India with an opportu- While the former are stalwart but for the movement of goods nity to crush the smuggled – goods still troublesome prospects, far in between the two countries. India market in Agartala, one that is the distance, a more realizable and and Bangladesh have already been also being replenished by Chinese immediate strategic partner is the somewhat successful in addressing products brought in illegally from state of Tripura. For Bangladesh complex issues related to terrorism Bangladesh. too, Tripura can be the gateway to – they have completed the demarca- Myanmar and ASEAN, through tion of the border, which is helping This is also the moment for the Mizoram. The troubles of Manipur to curb the infiltration of militant national and provincial govern- – which is the only existing link groups principally into Assam. ments of both countries to think between India and Myanmar – What also needs to be addressed is ambitiously about gas swaps. Until can thus be transcended, making the management of the waters and recently, gas from Tripura could not Morshed Khan’s gentle but ominous the maintenance of the banks of be exploited due to geographical threat wrong, twice over. GH

Gateway House 39 Quarterly Review Democracy & Nation Building Can Pakistan sustain its democracy?

20 January 2012 Tasneem Noorani CEO, TN Associates, Lahore

akistan is clearly struggling to Pmake democracy a sustainable form of government. In the 64 years of its existence, it has only succeeded 50% of the time and that too as a democracy that keeps looking over its shoulder.

Today, the fight for democracy has gained strength because of the emergence of two new pillars of the state i.e. the judiciary and the media. While the judiciary has asserted its independence with an unprecedented activism (sometimes swinging to other extremes, like trying to control the price of sugar), the media has made the age-old tool of governments’ [mis]management President Asif Ali Zardari /U.S. Joint Chief of Staff-Flickr of the media almost impossible to implement. A case in point is the open vendetta between the Jang the judiciary. While the judiciary state revoking all corruption cases group and the Presidency. has a foot on the government’s against Zardari and PPP stalwarts tail in a number of cases, the two – was considered as a legitimate President Asif Ali Zardari and Mir matters that are destabilizing bonanza of the Ordinance. But it Shakeel-ur-Rehman, part-owner the government are the National was struck down by the Supreme and group editor-in-chief of the Reconciliation Order (NRO) case Court in 2009. Amongst the most Jang Group, have been contempo- and the so called ‘memogate’ case. critical cases against the Zardaris, raries as young men in Karachi in was a case in Switzerland, where the 1960s and 70s. It has not stopped The NRO was a document nego- the Government of Pakistan pros- the TV channels and newspapers of tiated between General Pervez ecuted Benazir Benazir and Asif the Jang Group from taking on the Musharraf and Benazir Bhutto in Ali Zardari for kickbacks from government frontally, seizing every 2007, whereby all corruption and the Swiss inspection and certifica- opportunity it can to expose and criminal cases against the latter, tion services companies SGS and embarrass it. In return, the govern- her husband Asif Ali Zardari and Contecna. ment repays in kind, opening up her party stalwarts were supposed old tax cases and using other such to abate. In return, she would allow As the prosecution in the Swiss weapons against Jang at its disposal. Musharraf to continue as President. Court was about to be completed, In this confrontation, the public has The implementation, however, was the then Attorney General of benefitted from learning all about marred by bad intentions on both Pakistan, reportedly unauthoriz- the sleaze in government. While sides before the ink of the agreement edly, requested, in a letter to a Swiss useful, this excessive and repetitive could dry – resulting in the assas- Court that it withdraw the govern- government-bashing often leads to sination of Benazir Bhutto, and the ment’s case. The Supreme Court naked sensationalism and a demor- subsequent ouster of Musharraf by took serious note of the letter, and alization of the public. now President Zardari under the at once asked the government to threat of being impeached. resume prosecution with the Swiss The current standoff, however, Court. For two years, the ruling is between the government and The NRO’s main benefit – of the government dithered and the

Gateway House 40 Quarterly Review Democracy & Nation Building

Supreme Court kept quiet on the case. The next hearing, scheduled government: just as it completed pretext that the Government filed a for February 1, will determine the three years of being in power, it review – even though the Supreme fate of the Prime Minister. As for began to shake. It has now been ten Court had not yet issued a stay order the government, it seems safe for months under this condition, and against its decision of declaring NRO now. It still has a majority in parlia- continues to be under enormous illegal. After the review petition ment – along with its three main pressure. Under the circumstances, of the government was declined a coalition partners, ANP, PML(Q) what role does the army play? Is a few weeks ago, the Supreme Court and MQM. The first two are likely coup imminent? has finally become proactive. The to stay with the government, with latest act of the apex court was to some doubts about MQM, known In view of the firm resolve of the summon Prime Minister Yousuf for its ‘pragmatic’ politics. Supreme Court to conform to the Raza Gilani personally on a show letter and word of the Pakistani cause for contempt of court (for not The average tenure of a democratic Constitution – a determination writing a letter to the Swiss authori- government (other than under a aggressively backed by the media ties to reopen the corruption case General) in Pakistan in the first – an army intervention is unlikely. against Zardari). Gilani presented eleven years (before the first The only option available for himself before the Supreme Court martial laws), was under one year. change is for the opposition to on January 19 and pleaded that his During the eighties and nineties force the government to call an government did not comply. (when the two main parties, i.e. early election – which at the earliest PML(N) and PPP, took two turns could be after six months. Why? Because they are under the each) the average life was two years. impression that the President is Given that, expecting a democratic So while the Prime Minister can immune to prosecution, both inside government to survive five years rightly claim to be one of the longest and outside the country. To the under the current dispensation is an serving in Pakistan’s history, the disappointment of many, the apex unrealistic expectation. The demo- instability of the government and court has given Gilani’s lawyer an cratic maturity and level of patience its poor governance record make opportunity to convince the court of the Pakistani public is about the common man wonder about the of the claimed immunity in the three years. Evidence is the current wisdom of democracy. GH What Iran's election means for India

17 February 2012 Azadeh Pourzand Researcher, Gateway House

he threat of a military attack to a complex situation. The general With the exception of a small Tagainst Iran has grown ever political climate leading to election, number of highly moderate more imminent. At the same time, the outcome and state decisions that candidates, reformists are essen- the country is fast approaching follow will have direct and indirect tially absent in the parliamentary a ninth parliamentary (Majles) implications for India. election. Objecting to the house election March 2, 2012. As the arrest of the leaders of the Green first national poll after the largely The presidential election of 2009 Movement and the detention of disputed presidential elections of resulted in the reelection of President their supporters, reformists have June 2009, this vote is of unprec- Ahmadinejad. It also generated the refrained from running. Further, edented value for the legitimacy of Green Movement in response to they aim to boycott the election, the Islamic Republic of Iran. While the allegedly fraudulent elections. thereby creating anxiety about the prepared to forcefully clear off any This set an entirely new stage in the possibility of low voter turnout possible uprising, the leadership politics of Iran. The government among the ruling elite. Ultimately, is visibly concerned about low responded with organized violence this year the competition is merely turnout rates. The unpredictability against these uprisings leading among conservative candidates. surrounding this election and the to the marginalization of Green Interestingly, due to escalating composition of the ninth Majles add Movement and reformist figures. disputes among the Supreme

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surrounding Iran’s nuclear program. Moreover, this week India has unin- tentionally become even further involved with Iran-Israel clashes. Israel blames Iran for the recent bombings in New Delhi and Tbilisi that injured an Israeli diplomat. India currently While Iran denies these accusations, India is refraining from putting the has three blame on Iran until investigations interlinked are complete. areas of concern Secondly, Iran’s role in West Asia with regards to is currently of high relevance for India. In Afghanistan, Iran “today’s Iran An Iranian casts his vote/Amir Ebrahimi- and India aim to outmaneuver Flickr Pakistani influence. India seeks to limit Pakistan’s strategic presence Leader, President Ahmadinejad in the post-US Afghanistan while mechanism have led to the increase and the eighth Majles, competition Iran aims to deter the Sunni and of costs for India and the decrease among conservative factions is now Wahhabi hegemony. Essentially, of revenue for Iran. unusually fierce. Nevertheless, India needs Iran’s cooperation in in the complex structure of the deterring Pakistan and countering Therefore, this mechanism might Republic’s governance where there the Taliban in Afghanistan. Another not prove sustainable for India due are a number of power centers, complexity concerning Iran-India to taxation issues and increasing national security and foreign policy relations is Syria. pressures put on India by Israel to decisions often supersede the power refrain from seeking energy sources of the Majles. Thus, it is important While the Iranian leadership in Iran. to closely follow power dynamics in allegedly contributes to Bashar all key institutions of the leadership Assad’s uncompromising violence All in all, India will have to develop and not only the Majles. Currently, against the uprisings, India has highly calculated and fluid strategies the single most influential power voted in favor of the UN resolu- toward today’s Iran. The unpredict- struggle development is arguably the tion aimed at stopping violence in ability of domestic affairs and the deepening clashes of the Supreme Syria. Similarly, Iran is a key player impact of escalating international Leader and President Ahmadinejad. in Iraq. Independently of the ninth pressures on Iran only make it more With various conservative factions Majles election results, Iran is likely challenging for India. Also, India choosing sides in this unparalleled to continue exerting influence in currently has two vital concerns: clash, this disparity will continue Iraq. Should a military strike arise maintaining its strategic alliance to manifest itself at the Majles and against Iran, its leaders will utilize with the US and Israel and, not beyond. Iraq to further complicate matters losing ground in the region to its in the region.If strategically desired, rival, China. Iran’s political future India currently has three inter- it has the power to create further is key to both of these concerns. linked areas of concern with instability and corruption in Iraq. Given the subtle situation of Iran, regards to today’s Iran: First is Given India’s interest in West Asia even a highly domestic event such deepening anxiety in the West and and its strong ties with the US and as the ninth Majles election has Israel pertaining to Iran’s nuclear Israel, India will suffer from the imperative implications for India. program, second is the geopolitical implications of any such strategy influence of Iran in West Asia, and shifts. Moreover, the deepening clashes third are Iran’s energy exports to of conservative factions in various India. Thirdly, energy trades shape bilateral power centers will also have implica- India-Iran affairs. Iran remains tions. Essentially, the less politically Israel and the US are running out India’s second major oil supplier. aligned the various key institutions of patience with Iran’s nuclear Tighter sanction regimes against of Iran, the more clashes are to be program. In particular, the possi- Iran have created payment issues seen in the state’s decision-making bility of an Israeli military strike between the two countries. Stating process. In short, the configuration against Iran is fast materializing. that reducing oil imports from Iran of conservative factions at the ninth Given India’s strategic ties with is not a possibility, India has agreed Majles and beyond will play a role the US and Israel, the future of to make part of the payments to in shaping strategies in response to its relations with Iran will highly Iran in rupees. However, taxation the world’s growing concerns with

depend on the events unfolding complications involved in this respect to Iran. GH

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reminding us that things were not all that better before.

The bullets fired by Nathuram Godse into Gandhi were intoler- ance in its most distilled, carefully- reasoned form. Later, during his trial, in an eloquent speech Godse argued that Gandhi did a great injustice by reciting from the Quran in Hindu temples but never reciting the Bhagavad Gita in a mosque: “He knew what a terrible Muslim reaction would have been if he had done so. But he could safely trample over the feelings of the tolerant Hindu. To believe this belief I was determined to prove to Gandhiji that the Hindu too could be intol- erant when his honor was insulted.” [Nathuram Godse, Answer to the Charge Sheet (Para. 35)]

Equating tolerance with passivity, M.K. Gandhi and aggression with honour, was the crux of why Godse needed to eliminate Gandhi. For the 21st century liberal mind, these are primitive concepts existing before the dawn of civilization. But clearly Competitive a wide variety of people across the world disagree. Rushdie may be the intolerance: most famous target for a particular variety of intolerance but he is part of a large volume of artists, thinkers, Reflections on writers and political workers who are increasingly threatened, not just Gandhi’s death in India but in every corner of the world, by those who disagree with anniversary them. As Hindi film lyricist Javed Akhtar pointed out, it was also in Rajasthan 27 January 2012 – of which Jaipur is the capital – Rajni Bakshi that the film Jodha Akbar depicting Gandhi Peace Fellow, the love story between a Muslim Gateway House emperor and a Hindu princess, was not screened because some Rajput groups declared its story to be an his year’s Jaipur Literary How might we view these flares of offence to their version of history. TFestival was laid siege by competitive intolerance on what is those who vowed not to let Salman probably the most poignant day on So what is the implication of Rushdie speak there. Even before the calendar of contemporary India Gandhi’s legacy for those of us who nerves jangled by this experience – 30th January, the date on which oppose such an assertion of ‘might’ could recover, a new controversy Mahatma Gandhi was assassinated? over the ‘right’ of free expression erupted. Outraged Sikhs demanded and open exchange? that the Indian government take Lamenting, ‘Oh, what has become action against U.S. talk show host of Gandhi’s India!’ is always a First of all it helps us to remain alert Jay Leno for his allegedly insulting waste of time but more acutely so to the risk of becoming intolerant remarks about the Golden Temple. on the anniversary of his murder, towards those who are intolerant.

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It might be a knee-jerk reflex to Initially the Sena troops stormed Sena opposed the release of the demonize those who threatened to several of these meetings and film My Name is Khan, the govern- storm the literary festival if Rushdie violently disrupted them. But the ment of Maharashtra deployed appeared even on a video link. But campaign continued to persist in armed police contingents at cinema this too, is a raw emotional response defiance for two months till the halls in order to ensure that people not conducive to building a social disruption of meetings finally could watch the film safely. This ethic that is both open and creative. stopped. This did not alter the happened again more recently with character or tactics of the Shiv the film Aarakshan, a movie about The challenge for us all lies in Sena – but left behind a lingering caste-based reservation, which was finding creative ways to actively feeling of empowerment for those released in Mumbai recently under manifest the faith that acceptance who value and respect differences. heavy armed police protection. of differences is true strength. Eliminating, or even shouting This takes us to the most vital But is freedom of expression under down, those who disagree is element of Gandhi’s legacy. It police protection a victory at all? It cowardice. This may sound like a inspires us to build strength in might be far more powerful if we cliché within liberal circles but it is a community and society rather than cultivated collective mechanisms truth worth acting upon collectively seeking constant recourse to the for defying acts of intolerance. more often. It has been more than state as either provider or protector. a decade since a group of journal- Of course the state’s presence is It was the state machinery of newly ists and writers launched a Nirbhay needed when there are acts of Independent India that appre- Bano (‘Be Unafraid’) campaign violence or infringement of basic hended, tried and punished Godse. in Mumbai to stand-up against rights. So if there is fore-warning But he was really defeated by the both physical and verbal attacks that a group intends to storm a outpouring of active opposition to by the Shiv Sena, a Maharashtrian peaceful gathering or someone’s his execution, by the family and right-wing group which routinely home or office, it is the duty of the followers of Mahatma Gandhi – ran rough-shod over anyone who state-machinery to prevent it. and above all by his fellow Hindus, opposed them. who instead of feeling liberated However, state action cannot by his act, felt so ashamed that an The campaign consisted of public replace or subsume our own role entire generation very decisively meetings to celebrate the greater as members of a sabhya samaj or turned away from the very idea of strength of freedom of expression. civilized society. When the Shiv Hindutva or Hindu dominance. GH A significant election in Kuwait

30 January 2012 M.D. Nalapat Director, Department of Geopolitics, Manipal University

n 1962, when democracy was not This year, in the upcoming Ieven a dream in the Arab world, February 2 national elections, the Emir of Kuwait promulgated a significant changes are expected to constitution that introduced male take place – with potential reper- Shia in suffrage, albeit with qualifiers. cussions around the Arab world. Since then, periodic elections This time, 23 women are contesting Kuwait have have been held in the small but the 50 elective seats in the National improved their wealthy country (GDP per capita is Assembly. The 15 other seats will $41,365). Since 2006, women have be filled by nominees of the Emir, representation been given the right to vote and to who appoints both the Prime in the National get elected. The last Kuwaiti parlia- Minister as well as the cabinet, ment had four women Members usually from among the nominated “Assembly by of Parliament (MPs), including the MPs. Thus, Kuwait has what may tending to vote formidable campaigner for women’s be called “a democracy with Arab rights, Massouma Al-Mubarak. characteristics.” The emirate in that en bloc for the sense serves as an example to Saudi Shia candidates

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interests, there are only five mega constituencies in Kuwait – each of which elects ten MPs i.e. the top ten in vote-share in each constituency.

Of course, such a system cannot avoid sectarian and tribal influ- ences, because like most other democracies in the world, members of a group are likely to vote en bloc for their particular candidate to ensure that she or he figures within the top ten. Apart from the Shia, the blocs within the Sunni MPs include religious conserva- tives as well as liberals. Fortunately, relations between the two are not frayed, the way they are in some other countries. The Al-Sabahs have ensured that Kuwait remains moderate, and a country where – for example – women are free to wear what they please, and to work where they like.

Sheikh Jaber Al-Sabah/Khalil Al-Hamar-Flickr Kuwait is therefore an example for its more conservative neighbours. Although all three are hereditary Arabia on how political reform can the ministries of Defense, Interior, monarchies, Kuwait differs from be carried out in a way that retains Foreign Affairs and Finance, Bahrain and Saudi Arabia in its the pre-eminence of the royal family. besides other key posts including treatment of the Shia minority. Should such incremental changes key diplomatic assignments abroad About 20% of the 970,000 Kuwaiti be denied in countries such as Saudi such as the embassy in Washington. citizens are Shia, the rest being Arabia and Bahrain, what will result It needs to be said that several of overwhelmingly Sunni. About are Egypt-style meltdowns in the the royals are well-qualified, and a third of the Sunnis follow the coming years, especially if oil prices have been successes in their tasks, Wahabbi strain of their faith, backed drop. While the previous ruler of despite their promotions being by Saudi Arabia and Qatar. Unlike Kuwait, Sheikh Jabber, pushed the owed to bloodline rather than merit. in Bahrain, where the Shia majority envelope on reform, his successor, suffers severe discrimination and Sabah Al-Sabah, has been more However, there is tension between grossly inadequate representation respectful of the Saudi Arabian the Emir and the elected MPs; in the agencies of governance, or model. consequently, his hand-picked in Saudi Arabia where Shias are Prime Minister Nasser Al-Sabah treated as second-class citizens and He has sought to guard the royal – who is also a nephew – resigned deprived of representation in the prerogative of formulating policy and was re-appointed no fewer than middle and upper reaches of state and deciding who should be tasked six times. The standoff has led to agencies, in Kuwait there is no with implementing it. This has repeated mid-term polls – in 2006, discrimination between Sunni and often brought his nominees into 2008, 2009, and now in 2012 – a Shia, despite the famil thats ruling confrontation with MPs, many situation that needs to be resolved being Sunni. of whom have been calling for a by the selection of a Prime Minister Westminster-style system where who can take the majority of the The Shia in Kuwait have improved the Emir reigns but the National elected members of the National their representation in the National Assembly rules. Some members of Assembly with him. That will Assembly by strategic voting – the Al-Sabah family have supported create a healthy Westminster-style tending to vote en bloc for the this unorthodox idea, calling for precedent. Also under the scanner Shia candidates most likely to only the Emir and the Crown Prince this election is the Sunni-Shia do well overall in the constitu- to come from the family, with the representation in the Kuwaiti ency. Interestingly, this has led to other posts held by commoners. parliament. At the moment, to constituencies where their strength Presently the Al-Sabahs control avoid the election of candidates has been disproportionately larger not only the premiership but also reflecting narrow sectarian or tribal than their percentage share in the

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population. The First Electoral or gender discrimination is far District, for example, has 38,000 below the regional norm. Even the Sunnis (including Wahabbis) and hitherto-ignored Bedouin (who only about 32,000 Shia. But because are nomads with roots in Iraq and of a higher turnout by Shia voters Saudi Arabia) are at the cusp of as compared to the rest, and their Kuwait finally getting Kuwaiti citizenship. strategic voting for particular Christian churches are openly candidates, as many as seven of presents permitted in West-leaning Kuwait, the ten MPs of the First Electoral a valuable but temples or Gurudwaras are district are Shia. technically not. However the latter model or the exist within the cloisters of resi- This time around also, they are sheikhdoms of dential buildings, tolerated by the hoping to maintain their numbers. authorities, and provide spiritual Kuwait’s Al-Sabah ruling family has the Arab world succour to the more than half- historically been far more advanced “Palace, it is known that his eldest million Indians working in Kuwait in its thinking than their cousins in son, Sheikh Nasser Al-Sabah (most of whom are from Kerala). West Asia, especially those in Saudi (not the former premier), favours Arabia. However, 1962 was a long comprehensive reforms as do Kuwait presents a valuable model time ago, and the 2011 Arab Spring other members of the Al-Sabah for the sheikhdoms of the Arab has made a second wave of political family, especially the lady royals. world; Hopefully the Al-Sabahs reform an imperative for Kuwait. Should Sheikh Nasser succeed in will retain their lead over the other persuading his father, the Emir, West Asian royals by aligning the Friends of Kuwait are looking towards further political liberaliza- Kuwaiti democracy closer to those forward to Emir Sabah Al-Sabah tion, he will once again show that of the more developed democracies proactively implementing changes “Sabahism” is a far better model of the world rather than the more that will further expand democratic to follow than Wahabbism. Kuwait rigid states of Bahrain and Saudi freedoms in Kuwait. Within the is already a country where tribal Arabia. GH Maldives: Nasheed outpaced his people 16 February 2012 Ambassador Neelam Deo Director, Gateway House

ne year on, the Arab Spring has been a regime change in the managed the Maldivian political Ocontinues to spread even as the tiny Indian Ocean Republic, the establishment that his entire cabinet early hopes raised by the uprisings Maldives. had been forced to resign in 2010 by wither. Democratisation is neither the threat of a vote of no-confidence easy nor has it historically been a The circumstances surrounding the from former President Maumoon linear process, even in older well- change become more ambiguous Abdul Gayoom's Maldivian established democracies. So while daily with ousted President People's Party (DRP), which had Tunisia appears to be in a relatively Mohamed Nasheed claiming that more representation in the 77 more peaceful transition, Egypt is he was forced to resign at gunpoint. member Majlis and enough other riven with disappointment and frus- The televised resignation on the 7th Members of Parliament willing to trations. Libya is, as anticipated by of February was preceded by weeks vote against Nasheed. According everyone except its willfully blind of unrest on the street as Nasheed's to the press, he had managed to benefactor, NATO, descending secularising and democratising stay on as President only because into regional and tribal chaos. The agenda brought the conflict with of the support extended by the media, focused on regime change religious conservatives and the elite Government of India. in Syria, has lost interest in Yemen supporters of the previous govern- as the US and Israeli drumbeat for ment, especially the appointees in This time it was not to be. military action against Iran rises the judicial, police and armed forces, Unusually, all the major players to a crescendo. Meanwhile there to a head. So poorly has Nasheed were quick to extend support to the

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The slowcoach Commonwealth Ministerial Action Group (CMAG), a nine-member committee, will send a Ministerial mission to probe the circumstances of the change of Government in the next few days. This rare unanimity underscores The events the stakes involved for everyone. That is that Maldives not disturb in Maldives the peaceful flow of trade from the highlight oil-rich Middle East to the energy- hungry growth magnets in East some Asia, or that it become a haven for important terrorists, as happened in Somalia and to a lesser extent in Yemen. “aspects of the process The Maldives occupies a strategic position in sea lanes in the Indian of change Ocean, with Sri Lanka and India as its nearest neighbors. China’s entry into the Indian Ocean on the back politics, with their demand for of 'legitimate' concerns regarding Sharia to be the law of the land. piracy in the Persian Gulf and its aggressive investment policies is The events in Maldives highlight a new and destabilising factor in some important aspects of the Fmr. Maldivian President Mohamed the region. Therefore, internal process of change. In countries Nasheed/ UNDP-Flickr stability is not important just to the where the politics has been frozen Maldives, but also to the interna- for decades under dictatorships tional community, and most of all, that the rest of the world accepts new government. The day after the to India. Lending substance to these and works with. Nasheed reck- ouster, Prime Minister Manmohan concerns, Nasheed has told the lessly, as it turned out, took on the Singh wrote and assured Dr. Indian Express that the Maldivian religious establishment, even trying Mohamed Waheed Hassan that National Defense Force (MNDF) to amend the school curriculum India remained committed to had sent him a document that on religious instruction, without working with the Government of the constituted a security agreement having neutralised important Maldives. U.S. Assistant Secretary with China. He claims that his parts of the old establishment. He of State Robert Blake pronounced security ministers told him “you thought his record as an agitator for that this was not the right time for have to sign the agreement” but that human rights and democracy would new elections “because the police, he refused because his Maldivian see his agenda through and retain the Election commission and the Democratic Party (MDP) was the support of the outside world, Judiciary are not prepared for a pro-India by ideology. especially its democracies. This can vote.” The UN Assistant Secretary also be seen in the fragility of the General told the press in Male Despite its own problems with ‘democracy’ that the West leaves that “the Maldives cannot afford a strengthening democratic institu- behind in Iraq after eight years of descent into violence and protracted tions, Pakistan has long sought to mayhem and bloodshed. The same instability that would jeopardize the play a role in the Maldives. In an is playing out in Egypt today as it progress achieved by the country unintended irony, it underwrote the surely will in Syria or Libya. since 2008.” Therefore there was an building of the ‘Majlis’ (parliament) urgent need for all sides concerned in Male and has provided training to The second important caution is to come to an agreement on forming the Maldivian armed forces. More contained in the statement of Indian a government, based on the princi- worryingly, Maldivian students Special Envoy, M. Ganapathi, ples of inclusiveness and national seeking a university education in which asserted clearly that India unity. Even normally reticent China Pakistan often returned radicalised will remain engaged but will not said that “as a friendly neighbor after encountering Wahhabist interfere. Instead of looking for of the Maldives China respects Islamic ideologies in the madrassas. reasons to intervene, as can surely the Maldivian people’s choice and Despite its small size, the ‘long be found in countries with 30-year- sincerely hopes that the country beards’ of the Adhaalath or ‘Justice’ old dictatorships, it might allow for can realize national stability, social party have wielded the same agenda a more harmonious outcome if the harmony and economic develop- setting influence in the Maldives as internal dynamic is allowed to play ment at an early date.” the extremist parties do in Pakistani out and find a better balance. GH

Gateway House 47 Quarterly Review Democracy & Nation Building Rethinking human rights

1 June 2012 Azadeh Pourzand Senior Researcher, Gateway House

the guise of the “War on Terror” or Responsibility to Protect (R2P) to show how such initiatives foster deeper anti-Western sentiment.

A look at the numbers and conse- quences of the “War on Terror” in Afghanistan and Iraq exposes the impact of the intervention in the region. Afghanistan became the first target of the “War on Terror” and the human rights violations of the Taliban was used to justify the continuing NATO presence.

More than a decade later, this war has left irreversible costs. According to a report by the UN Office of High Commissioner for Human Rights, a decade after the war began “the armed conflict in Afghanistan again incurred a greater human cost in 2011 than in previous years.” The Posters of protests /Tao_zhyn-Flickr report documents 3,021 civilian deaths in 2011, an increase of 8 percent over 2010 (2,790 civilian he Arab Spring has once again Moreover, the goals of the human deaths) and a 25 percent increase Traised pressing questions about rights organizations are widely seen from 2009 (2,412 civilian deaths) the effectiveness of international as synonymous with the agenda caused by anti-government groups, human rights organizations. Along of the Western powers—regime such as the Taliban and al-Qaida, with the United Nations Security change, securing a supply of oil, as well as Afghan and international Council (UNSC) and Western maintaining security of Israel, military forces. Similarly, according powers, these organizations are and restraining terrorism in the to a report by Iraq Body Count, being increasingly castigated for region. This does not bode well for the total number of violent civilian their failure to stop violence in the human rights organizations that deaths due to small arms gunfire, Middle East-North Africa region need credibility to do effectivein explosive weapons, and airstrikes generally, and in Syria in particular. order to work. The best way for recorded since the 2003 invasion these organizations to avoid being exceeded 114,000 as of December Despite the nobility of their cause, seen as handmaidens to Western 2011. These casualty rates indicate Western human rights organiza- governments is to anticipate how that neither of the governments in tions are losing legitimacy because their findings will be used and do Kabul or Baghdad can secure peace they fail to assess the repercussions detailed cost-benefit calculations in the absence of Western troops. of their call to Western powers and to reform the United Nations to take immediate action against Security Council. The recent military interventions human rights violations. All too of Western powers have also led often the response of Western Critics such as Mahmood to problems in countries facing powers is military intervention. Mamdani, professor at Makerere the Arab Spring. For example, This usually results in more of the University in Uganda and Columbia there are serious concerns over the loss of life and human rights abuses University in New York, point to initiation and conduct of NATO’s that the organizations were trying the recent NATO-led operations air strikes against the Qaddafi to prevent in the first place. that have forced regime change in regime in Libya. UNSC Resolution

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1973 authorizes states to “take all though the Security Council is still necessary measures” to protect the most important source of legiti- civilians in Libya. However, doubts macy for international action, this remain over whether the word body has remained unaltered since “necessary” included a military 1965, and is overdue for reform. intervention by NATO forces. Western human rights organizations According to a report by Middle Without a healthy should advocate for the expansion Eastern human rights groups of the council to facilitate a more led by the Arab Organization of questioning of the inclusive and comprehensive range Human Rights, NATO’s attacks on of human rights definitions and towns and cities held by Qaddafi consequences, paradigms, in turn re-orienting forces and their choice of targets and without the mission of the Council. The such as a regional food warehouse perspectives and historic experi- could be categorized as “offensive the diverse ences of emerging countries such as actions.” NATO’s actions did not “ India, Brazil and South Africa must perspectives of protect all Libyan civilians, just be seriously considered. In essence, those allied with the rebels. Yet, the the emerging these new perspectives will change Libya NATO intervention is still world, these the terms of the current discourse promoted as a human rights inter- on and timing of military interven- vention that toppled a repressive well-meaning tion, and whether intervention is a dictator by the same powers that, fitting response to begin with. for years, had turned a blind eye to organizations his atrocities. will continue The contemporary history of these emerging countries can offer The direct cost of these attacks to be perceived insightful perspectives. To list a few: aside, NATO intervention has as biased India, against all odds and despite not achieved its goal of securing its lingering poverty, has become a long-term peace and stability institutions key democratic nation with myriad for the country. Instead, a year religions and ethnicities. Brazil after the NATO strikes, Libya intervention in countries like Syria. overcame a long period of military faces potential disintegration and They need to alert the world to the rule that undermined the rights of partition. Also, according to Navi risks of and ways to avoid the post- its indigenous populations for years Pillay, the Chief of the United intervention chaos evident in Iraq, and, with a critical eye to its past, Nations High Commission for Afghanistan, and Libya. is re-emerging. South Africa’s Truth Refugees (UNHCR), in Libya today and Reconciliation Commission, in there is still “torture, extra-judicial The challenge is, of course, that the aftermath of a brutal apartheid killings, [and] rape of both men and regardless of how inappropriate, regime, is a model of collective women.” inconsistent, or ineffective the experience with key lessons for the Western framework of human rights international community. Though Western humanitarian protection may be, the world cannot organizations criticize these acts afford to lose Western participation The inclusion of these perspectives of violence, these groups seem in the call for justice. Therefore, it in the UNSC will make human to accept this loosely defined, ad is important that Western human rights organizations more effective, hoc framework for international rights organizations, especially the independent, and globally accept- intervention in future troublespots most visible and influential ones, able in their efforts to minimize such as Syria. Of course, they right- revisit their approach in the Middle violence around the world. fully highlight the brutality of the East and beyond. For as long as Moreover, the inclusion of the regime in Syria, but when these these organizations continue to perspectives of emerging countries organizations ask the international blindly support the business-as- will help in seeking appropriate community and UNSC to act, they usual practices of human rights solutions for the historically multi- often overlook how their advocacy protection led by the West, their ethnic and multi-religious people of could lead to an attack, resulting legitimacy will continue to erode. the Middle East and North Africa. in large-scale consequences for the masses.Thus, before prescribing the One way is to stop stigmatizing Without a healthy questioning of immediate involvement of the inter- emerging democracies for not the consequences, and without the national community, these Western supporting intervention and to diverse perspectives of the emerging human rights organizations must include them in the dialogue for world, these well-meaning organiza- make an in-depth cost-benefit solutions instead. Such an approach tions will continue to be perceived analysis of the short-term, medium- has not happened yet, but it is as biased institutions seeking to term, and long-term implications of possible through the UNSC. Even propagate Western interests. GH

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aircraft, bringing the total number of Indian-owned Sukhois to over 250.

This deal is neither new nor game-changing despite the many problems that remain to be addressed in the two countries’ military partnership. Overall, the diplomatic function was small-scale and quickly forgotten, sandwiched chronologically between two events that received much greater exposure in Russia and internationally. The protests that shook the Russian public sphere and unnerved its rulers was a pent-up reaction to the state’s brazen determination to keep the current Prime Minister Vladimir Putin in the saddle until he can again run for president in the spring of 2012—helping him retain power for a total of twenty- four years. They also reflect the declining standard of living that A scene from the Bhagvad Gita which Siberia threatened to ban followed the financial crisis of 2008, and the widespread disaffec- tion with the corruption pervading Russian society at all levels. Clearly, Russia’s growing Putin needs legitimacy around the world, since the continued support for his government by the majority nationalism of the Russian population may not be as reliable as once believed.

7 February 2012 Just a few weeks later, a case Katherine Foshko simmering in the Tomsk law Russia Studies Fellow Gateway House court since June came to a boil. The regional governor had put on trial the Russian edition of the he recent India-Russia annual to them—stand witness to the Bhagavad Gita, As It Is. According Tsummit which took place forces of nationalism that hold a to the prosecutor’s assessment, the December 16-18 in Moscow could potential threat for the India-Russia teachings of the Bhagavad Gita have been a victorious engagement relationship, already suffering from inspired “religious hatred,” and of two old friends who grew apart neglect on both sides. were “extremist in nature.” The but who recently recognized the move pushed the Russian Hindu importance of their relationship. A mere five agreements were signed community into energetic protest— Instead, the summit achieved this time, instead of the thirty inked which extended back to India. Swift only some modest gains and at the 2010 summit. The most diplomatic footwork by the Russian was overshadowed by two other important of these had to do with Ambassador to India, Alexander events—one, the large-scale civil the first two Russian-made nuclear Kadakin, as well as Indian Foreign protests in Russia’s cities following reactors that were finally installed Minister S. M. Krishna, were the allegedly rigged Russian parlia- at Kudankulam, Tamil Nadu, after quick and decisive in dousing mentary election on 4 December, the Indian government signalled its some of the fury. The response and two, the threat by a Siberian readiness to proceed despite protests from Russia, with several major court to ban the Bhagavad Gita, a from local residents (however, no newspapers expressing embarass- case that broke out in the worldwide agreement on reactors 3 and 4, ment with the court case and the media shortly ahead of its verdict in long in the works, was concluded). Russian Foreign Ministry pointing December. Both these significant In defense, India announced the out that only the Gita’s translated events—and the popular response purchase of 50 more Russian Su-30 version was going on trial, testified

Gateway House 50 Quarterly Review BRICS & Bi-Laterals to the importance still accorded participated in nationalist politics. to the India relationship. Within In the parliamentary election, India, Prime Minister Manmohan Russia’s Communist Party, whose Singh and Congress leader Sonia platform is as nationalistic as that Gandhi cautiously abstained from of their ideological predecessor, commentary or intervention with India needs to the Communist Party of the Soviet the Russian authorities. But the Union, came in second (and may opposition Bharatiya Janata Party invest more in have led in some districts had it not (BJP) shook the Indian Parliament its increasingly been for the ballot-box stuffing). with fiery speeches in defense of the text and even a proposal to ban threatened While this was largely a protest Russian vodka in reprisal—hardly ties with its vote, some of the support the an equal measure, financially or Communists got was emblematic symbolically. “historic partner of the “Russia for Russians” slogan that is being heard more and more The nationalist fervor stirred by dynamic, one. Up to now, the two in recent years, both in the streets the BJP constituted a response to countries have never experienced and within the higher circles of what was actually a Russian legal any problems with one another at power. The Putin-led government move steeped in xenophobia. While the cultural level. that seems poised to assume the absurd on the surface, the attack on reins of power—given the lack of the Bhagavad Gita was reportedly Yet, while the recent unprecedented credible alternatives—in 2012 is instigated by the local branch of attack on the major Hindu text likely to be an increasingly wary the Russian Orthodox Church – an has no precedents in Indo-Russian one, and the forces of nationalism arm of the state – and the Federal ties, attacks on the 30,000 – to will be evoked on both sides of the Security Service (FSB), successor to 40,000-strong Indian population political barricades once again. The the KGB, to sideline and eventually in Russia do. In 2006, a slew of Gita scandal which closed the last repress the Hare Krishna movement. violent crimes against students of year is therefore a warning sign that There is a robust group of devotees Asian origin—including reported Russia’s state-anointed xenophobia of the sect, also known as the murders of three Indians—caused and nationalism could act as a International Society for Krishna the Indian Embassy in Moscow to dampener for the formerly solid Consciousness (ISKCON), which issue an advisory warning. Indo-Russian relationship. has attempted to build ISKCON temples in Tomsk and Moscow – Previously, in 2002, the Neo-Nazi India needs to invest more in its with opposition from the Russian Association of Russian Skinheads increasingly threatened ties with government (both these projects sent a message to the Embassy its historic partner. Specifically, have been put on ice, permanently). threatening to kill all Indians living it should pay greater attention to The larger trend is that of religious in the country. These were isolated building up a stronger relationship minorities—especially foreign incidents, yet Indian citizens are in such mutually beneficial areas ones—increasingly coming under still often wary of visiting Russia, of cooperation as new technolo- persecution in Russia. Finally, the informed of the violence that has gies—one of the Russian govern- ban was overturned just in time for been periodically directed against ment’s current focuses—and the new year, yet its roots in Russian racial minorities—especially natives pharmaceuticals. It is up to the politics’ strong-arm tactics make it of North Caucasus and the Central Indian government to assure its more than a quaint Siberian echo. Asian states, but others as well. embattled partner of its continued commitment to cooperation and, The Gita scandal was a shock to The current trend of growth in rather than responding with its Indian society, which was patently Russian xenophobic nationalism own nationalistic outcry, it should unprepared to objections to is both state-driven, fomented continue to work on establishing a any manifestation of the Hindu by the increasingly jittery Putin more productive and accountable religion coming from Russia, of all government, and public, practiced relationship. countries. The historic warmth of by the broader society. The tenor the two countries’ ties manifested of the December protests, for The two Eurasian powers need in Russia’s love of Raj Kapoor instance, has been as much liberal each other for commercial as well films and ongoing pilgrimages democratic as nationalistic. The as geopolotical reasons, particularly to the Sathya Sai Baba birthplace opposition blogger Alexei Navalny, an important future partnership and India’s enchantment with who was known for his exposés of will be in a post-war Afghanistan. the Russian circus, to cite some corruption in the Russian govern- It is crucial that the demons of examples, is an anchoring point ment before emerging as one of national hatred do not pose an in a bilateral relationship that the main instigators and leaders obstacle to their developing future continues to be a trusting, if not a of the December events, has long relationships. GH

Gateway House 51 Quarterly Review BRICS & Bi-Laterals India and Russia: A new Central Asian engagement

8 February 2012 Katherine Foshko Russia Studies Research Fellow, Gateway House

Oil piplines being laid/Ulrichulrich-Flickr

n the past five years, India’s India’s engagement has come not a Kazakhstan, the energy power- Ipolicy towards the countries moment too soon. Unlike its Asian house of the CAS, agreed to supply forming the core of Central Asia— neighbour China which has a large India with over 2,000 tons of Kazakhstan, Kyrgyzstan, Tajikistan, energy and commercial presence uranium by 2014 and gave Indian Turkmenistan, and Uzbekistan— in the CAS, energy-starved India oil major ONGC Videsh a 25% has shown the greatest progress needs a strong relationship with the stake in the Satpayev oil field on the since these states ceased to be central states region. The political Caspian Sea. But to find a strategic republics of the Soviet Union. Since impossibility of establishing land place in Central Asia, and be a real its independence in 1991, the little- routes through Afghanistan, player, India will have to energeti- known region of 62 million people Pakistan, or China’s Aksai Chin cally multiply its efforts. It is just the has drawn increasing attention territory means that India has no latest in a long line of countries that as the sixth-largest producer of pipelines into those states, and does have been vying for a presence in, hydrocarbons in the world and the not figure on the list of the top ten and ultimately influence over, the fourth-largest producer of gas. It is countries involved in exploitation region. These are led by the former also rich in other resources such as of Central Asia’s rich hydrocarbons. regional hegemon Russia and rising uranium and hydropower. It also lags in trade, far behind the superpower China, as also Iran, first – and second-rank players like Turkey, South Korea, and the more Geopolitically, the Central Asian Russia, China, or the European distant United States. states (CAS), an economy of $217 Union. India’s bilateral commerce billion, occupy a crucial position with Central Asia in 2010 was a How can India, a latecomer to bordering Afghanistan. That makes mere $467.7 million. the game and at a disadvantage it a hub of regional security – or, geographically and financially, to the contrary, an area of desta- There are a few positives, of course, strategize its arrival on the Central bilization through networks of in terms of new infrastructure, Asian scene? And how can it international terrorism and drug health, and education initiatives position itself to overcome its lack supply that extend right from begun by India in the region. And of access to the valuable energy Afghanistan all the way to Europe. some energy successes: last year, routes in the CAS?

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One sure and still available route to military missions and a vested further strengthen the three success is through strategic collabo- interest in assuring Afghan stability states’ collaboration in other high rations with other players. Rajiv after the projected NATO pullout in technological fields, particularly Sikri, India’s former Ambassador 2014. They can pool their resources bio – and nano-technology, clean to Kazakhstan, said in 2007, “in to develop the war-devastated and renewable energy and water order to protect and preserve its nation’s development—here, India conservation. Once the paths to interests in the region, India has can use and learn from Russian cooperation are established, India no alternative but to closely consult technical expertise and specialists and Russia can work together on and cooperate with the other major in engineering and information providing professional training powers who have an interest and a technology, while Russia, perpetu- via IT centers opened throughout presence in Central Asia.” ally short of manpower, can learn the Central Asian region, with the to work with India’s vast human aim of raising the qualifications of More specifically, India can align resources. Together they can local specialists – a much-needed with an experienced partner which provide joint anti-terrorism training infusion of skills in the region. is also invested in securing better for local Afghan troops and oversee access to Central Asian resources security. 2) Coordinating aid and pooling funding and the geopolitical influence they through joint facilities. bring. That partner is India’s old Since their Afghan involvement friend, Russia. will dominate Indo-Russian Both Russia and India can increase strategic relations for years to and coordinate their aid-giving to Some effort will be needed to make come, extending that partership the CAS, in particular by creating that partnership work. The India- into neighboring Central Asia is a a Joint Central Asian Fund for the Russia bilateral relationship, while natural next step. development of the region’s private positive, has suffered from benign sector, with initial contributions by neglect in the past, and the two are Immediately viable is a financial both governments on a 50-50 basis. currently passive allies in the region, partnership between India and The fund can have downstream sharing the same goals of stability Russia to invest in Central Asia. linkages to the Russian and/or and security yet not cooperating on Determined to maintain its Indian businesses in Central Asia. specific projects. economic influence, Russia has Most importantly the Fund can existing plans to break down the benefit the inherent artisanal skills Even so, the two allies have common customs borders with the various and small-craft industries of the strategic goals in the region. Russia, states, enshrining economic inte- CAS such as textile embroidery like India, is in some sense a late- gration; this will open a channel for and silversmithing by providing comer to the game in Central Asia, India to do business in the region. subsidies to small-scale manufac- as it has been preoccupied for the turers and markets. last two decades with reviving its An example that is already working own economy and infrastructure. well is the Customs Union that 3) Cooperation on aero-space industry Consequently it has failed to Russia created with Belarus and projects. establish a coherent strategy in the Kazakhstan in 2010. Kyrgyzstan, region for years, and ceded ground and potentially Tajikistan, are One of the most fertile venues of to China, which swept into the likely to join, leading to a common CAS cooperation for India and vacuum and captured the valuable regional market planned for 2012. Russia, and an area both have energy relationships that were once This is a unique opportunity for skills in, is space. Both can jointly Russia’s. India which can use its strategic establish large R&D facilities and partner as a gateway to Kazakhstan testing grounds for experimenta- Now, under its current budgetary and any other CAS that might join tion at Kazakhstan’s Baikonur constraints – dating back to the in the futuristic union. Cosmodrome, the principal space fallout from the financial crisis of facility in the former Soviet Union 2008 – and its subsequent economic The two countries can also work and still the launching pad of over slowdown, Russia may not ever be together to develop joint economic 70% of Russia’s space rockets. able to reassert itself as a regional development projects in Central Together, the two countries can force unless it has a partner familiar Asia, by the following means: also build simulation facilities for with its ways and one with existing flights and institutes for training goodwill in the CAS. India, is ideal. 1) Encouraging joint Russia-India IT astronauts. Kazakhstan’s vast empty projects in region with a transfer of skills. spaces, far from human habitation, As a prelude to a strategic Central can be used for facilities to process Asian entry, Russia and India can A trilateral IT partnership between rocket fuel and other hazardous gain quick experience in joint Indian, Russian, and Kazakh operations as well as for space engagement in Afghanistan, where entrepreneurs – the latter are the launches, such as the man-in-space both countries have civilian and most active in the CAS – could operation that India has long been

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preparing for in conjunction with educational and medical institutions. will help to promote India’s afford- Russia. able pharmaceutical products and Such long – term projects for the low-cost Russian technologies, as 4) Collaboration on infrastructure CAS will benefit from India’s also encourage medical education development. abundance of English – language exchanges and doctor upscaling educators and Russia’s pool of programs focused on the CAS, in All of the Central Asian republics talented specialists, across a both Russia and India. These are all are infrastructure deprived, espe- number of disciplines. This can institution-building initiatives that cially in railways, roads, and power well be the Technological Silk Road China, with its minimal commit- plants. So far, China has dominated, Institute, jointly administered by ment to economic development, particularly active in railway- the two nations and staffed with has not done. building projects in Kazakhstan. Indian and Russian educators as However, Russia and India are also well as local experts and affiliated While working on strengthening well positioned to jointly propose with reputable, internationally bilateral relations with the CAS, the and bid on infrastructure projects known universities in the two Indian diplomatic community will in the CAS. For instance, Russia countries, such as Jawaharlal Nehru do well to expand its positive and can construct hydroelectric power University in Delhi and Moscow trust-laden cooperation with Russia plants in Central Asia with the State University. in commerce, technology, and help of Indian labor, providing the education, into a broader regional region with a much-needed steady The goal for this institution will one. supply of electricity. Both countries result in the training of a new can and should involve skilled generation of Central Asian special- By establishing a more meaningful and unskilled labor from the CAS ists and help fill the great unem- presence in Central Asia, India will in their collaborative projects— ployment and development gap in be better positioned for the future something that China has been their countries. Key to this will be acquisition of energy resources and notoriously unwilling to do. the institutionalization of programs avoid becoming an also-ran in the focused on advancing the medical modern iteration of the geostrategic 5) Creating partnerships through infrastructure in Central Asia. This power struggle for Central Asia. GH India-Brazil: Pioneers of a new development agenda

13 March 2012 Estefanía Marchán Researcher, Gateway House

xpectations are high for the Efourth summit of Brazil, Russia, India, China and South Africa, to be held in New Delhi on March 29th. With economic crisis ablaze in the Eurozone and signs of another global recession, anticipa- tion is mounting for how the leaders of the so-called BRICS will address the world economic slowdown and how far they will push to reform the institutions of global governance.

Yet with the spotlight on the economy, a promising and tangible Sustainable farming/ photofarmer-flickr development agenda could be

Gateway House 54 Quarterly Review BRICS & Bi-Laterals overlooked. At every summit, India and Brazil have invested members have renewed their $1 million each in joint research pledge to strengthen cooperation on common diseases through on social protection, public health, the Indo-Brazil Science Council. food security and agriculture. But This alliance can and should be little has been achieved so far. For strengthened. India – home to one third of the Brazil’s Zero world’s poor – these efforts should Hunger Healthcare, poverty alleviation and be a major priority. The potential market-driven social innovation are benefits of cooperation are espe- strategyhas been just a few areas where cooperation cially clear in the case of Brazil. India between these powers can produce and Brazil have declared inclusive successful at broad social benefits. A formal part- development an imperative and reducing poverty, nership is needed between Brazil’s have engineered creative solutions “inequality Ministry of Social Development and to meet their developmental chal- Fight Against Hunger and India’s lenges. But both also face many and hunger Central Planning Commission to obstacles to equitable development institutionalize knowledge-sharing – some of which can be overcome products, services and employment and technical cooperation on social through mutual learning and that enhance living standards. India protection programs. Chambers targeted bilateral investment. has produced the world’s cheapest of commerce, including FICCI car; electronic tablets that cost and the India-Brazil Chamber of Brazil’s Zero Hunger strategy, $50; large, successful retailers that Commerce, can drive private sector for instance, has been successful link thousands of rural workers collaboration, connecting Indian at reducing poverty, inequality to modern urban markets; and and Brazilian entrepreneurs. At and hunger by developing profit- family-sized apartments in cities a time when both countries are able small farms and delivering that sell for $4,200. In the afford- beginning to use foreign aid as a cash to poor families through able housing sector the long-term diplomatic tool, it is tempting to innovative payment systems. As opportunities for partnerships with regard them as competitors. But the debate rages in India about Indian entrepreneurs are particu- these countries should instead how best to reduce poverty, curb larly significant. Brazilian officials recognize each other as strategic growing inequality and boost predict a deficit of 23 million homes partners and pioneers of a new agricultural production, Brazil’s for low-income families in the next development agenda – one that experience can help. Brazil’s social 20 years. pragmatically addresses the needs schemes are among the worlds best of developing nations. India and targeted and they’re transparent. In healthcare, the benefits of India- Brazil’s strategies for inclusive They have demonstrated how to Brazil collaboration are already development are complementary streamline the delivery of services evident. Faced with common in nature and together hold great across all levels of government. By diseases and limited resources, value. collaborating with Brazil, India can India and Brazil have used each improve the reach and efficiency of other’s comparative advantages, Foreign aid provided by BRICS its own, notoriously leaky schemes, and challenged the international countries has more than doubled including the Public Distribution intellectual property regime to since 2005, and the surge is System, whose losses are estimated combat HIV/AIDS. In 2007, for intimately tied to their efforts at to be around 44% a year. example, Brazil broke a patent on reforming global governance. Since an antiretroviral drug produced the end of World War II, global There are of course vast differences by Merck Pharmaceutical in the governance has been a Western-led between the two countries. India’s wake of rising drug costs. Indian enterprise. The rules that govern poor are twice Brazil’s entire popula- firms were the only producers of aid and influence the development tion, for example. But that shouldn’t the generic version of the drug, of other nations have been made stop India from borrowing some and Hyderabad-based Aurobindo by the victors of the war and have good ideas. It’s not necessary for ultimately provided Brazil with the evolved to rest within a small group India to indiscriminately adopt cash active ingredient to produce it. It of powerful countries – which now transfers or other Brazilian schemes was estimated that this would save face a self-made crisis. With the to benefit from knowledge sharing. Brazil $237 million through 2012. rise of these new powers, partner- India can leverage its private sector ships that once seemed weak are skills to scale up programs. In turn, Brazil has taken advantage of their gaining traction. Prime Minister Brazil can benefit from India’s joint campaign for greater access Manmohan Singh should take innovators, who are finding novel to life-saving medicine and seen advantage of his position as host ways to provide the country’s low- an extraordinary decline in HIV/ of the upcoming summit to drive a income population greater access to AIDS. Recognizing such synergies, new development agenda. GH

Gateway House 55 Quarterly Review BRICS & Bi-Laterals BRICS: Moving in the right direction?

30 March 2012 Manjeet Kripalani Executive Director, Gateway House

he five most important It isn’t just economics on which the Temerging economies – BRICS diverge from the West. It’s India,Brazil, China, Russia and also politics. In the last year, for South Africa, or BRICS – met in most of the U.S. or European-led New Delhi on March 29th. It was resolutions on Libya and Syria, the the fourth meeting of these nations BRICS have voted together. Like since they decided to take their India, they don’t believe in inter- acronym seriously. This was also “Inclusive fering in the affairs of sovereign the most significant of the meetings growth is a nations; better to let people sort so far, and one that should have out their own problems organically, the Western-dominated developed BRICS-wide the solutions that emerge are more world worried about its eroding likely to endure. In a joint statement position at the top of the global problem,” says issued after the meeting in Delhi, heap. Catherine Grant the BRICS nations declared that “Makokera of the diplomacy would work better in Much of the worry centred on the Iran and Syria, than war-mongering. announcement of the formation of South African Such determined unity, seen for a South-South development bank the first time among developing which would facilitate Intra-BRICS Institute of countries, will seem surprising for trade and finance projects in local those who are not paying attention. currencies. Western commentators International view this as a challenge to the World Studies But to those in the bloc, it is Bank, which disperses development high time. “Inclusive growth is funds largely to the third world, a BRICS-wide problem,” says with conditions attached. Of course is a level playing-field with the Catherine Grant Makokera of it is a challenge to long-held privi- developed world. They’ve created the South African Institute of leged positions. The idea of a South- new models of business, new International Studies, who was in South bank is overdue. In fact, the development methods and a new Delhi addressing a pre-Summit very powerful idea of South-South international engagement. They networking meeting by Jaipur think economic comity is overdue. In the are impatient with the lecturing tank CUTS International. “How last five years, there has been heady and hectoring that comes with the do we, as emerging players, balance growth in the developing world, funding given by the multilateral national interests with common and the arrival of China on to the institutions. BRICS countries don’t interests? How do we keep the world stage has given the group want to be blamed for the trade balance between development and new heft. On average, the BRICs impasse in Doha, nor do they want redressing global imbalances?” she countries put together have seen an capable candidates from their part of added. annual 7.1% GDP growth rate since the world to be denied a fair shot at 2005, powerful compared to the the top international jobs in Geneva Clearly, the BRICS countries are slowdown in the developed world and Washington. They have similar starting to feel responsible for the due to the financial crisis. issues, and can share solutions that world that they have inherited, and will make a positive contribution to want to take a more active global But the BRICS don’t really see their the world’s future. So they decided role. It’s a good thing. The West, goals as a defiance of the established to start their own shop, one which groaning under a massive pile of order. These countries have many will consider their particular needs, debt and a thoroughly unfashion- preoccupations, of which poverty use their common experiences and able victor’s overhang from the alleviation and failures of govern- learnings, and lend to joint projects Second World War, should allow ance are of primary importance. in their own currencies, decreasing them to share the stage. A BRICS Taking over the world isn’t on their exchange rate volatility and saving bank would not displace the Bretton agenda. What they are looking for millions in transaction costs. Woods system in a hurry, or snatch

Gateway House 56 Quarterly Review BRICS & Bi-Laterals the role of global policeman from at the University of Toronto, says the U.S. tomorrow. the BRICS grouping should be that space used to “accelerate the Instead, the BRICS will use their modernization” of their economies, new co-operation to learn how to expand public support for mutual act in concert at multilateral fora; benefit and create a “common to trade fairly amongst themselves information space for BRICS.” and learn how to negotiate well; to Clearly the That means staying as an informal share valid experiences especially mechanism, and relying on regular in the development of agricultural BRICS summits and meetings between the economics and on issues of tech- countries are representatives on issues of security, nology transfers; to work together foreign policy, finance and trade. on the environment. starting to feel responsible This is an eminently sensible sugges- They need to think about ironing “ tion, and the group has already out the distortions created in the for the world moved in the right direction: rather global economy from subsidies that they have than set up yet another large and by both the North and the South; inefficient bureaucracy, there is no and to link investment in manu- inherited, and plan to start a ‘secretariat’ for the facturing to services which will want to take BRICS bank; instead, it would focus lead to increased people-to-people on extending credit in local curren- contact. “It is so much easier to deal a more active cies and facilitating a multilateral with the advanced countries with global role letter of credit for trade, according their established systems,” says T.S. to the Delhi Declaration. Vishwanath, principal adviser at the Delhi law firm APJ-SLG, “so The test of the BRICS’ strength we did. Now we need to develop within BRICS: Each of the five will come soon. On March 23, U.S. linkages with each other.” Some of countries suffer from lack of trans- President Barack Obama announced the new efforts of the BRICS will parency, shaky governance, populist his nominee for the position of World Bank president, which will fall vacant by June 2012. There are already two candidates from the developing world – Nigerian finance minister Ngozi Okonjo-Iweala, and Colombia’s former finance minister José Antonio Ocampo. Next year, the post of Director General of the World Trade Organization, another key multilateral body, will be up for nomination.

For both, the BRICS countries will have to reach a consensus and rally behind a strong common candidate. Then they will disprove the snarky remarks of prominent Western commentators like the New York Times and the U.K’s BBC, who Leader at the 4th BRICS Summit, Delhi 2012/ Kremlin.ru dismiss the BRICS as an “era that has yet to arrive” and the summit as “an organization without any work; some will not. Analysts point politics, mutual suspicion over structure at all. Just a little bit of out that the idea of a regional bank tariffs and other intra-BRICS trade unity but nothing more.” The UN has been tried by the Gulf countries, barriers. But this is the first time in took years to become an effective and not worked. In a BRICS bank, history that such an effort is being union, and the Euro took nearly the clear fear is that the Chinese made. The BRICS seem determined four decades to become a reality. Renminbi will dominate – China to make it work amicably, and Given technological advancements already conducts some bilateral with pragmatism. Russia’s foreign and political endorsement, it is trade in Renminbi. The stand-off minister Sergey Lavrov, writing likely that the BRICS will coalesce in Doha can easily cause a stalemate for the BRICS Research Group sooner than expected. GH

Gateway House 57 Quarterly Review BRICS & Bi-Laterals BRICS: Their case against the U.S.

30 March 2012 Bob Dowling Editorial Advisor, Gateway House

he U.S. stock market is testing suffering from that,” she said. Ta four-year high. Jobs are slowly coming back and Wall Streeters So when the leaders of Brazil, who had shrunken bonuses this Russia, India, China and South year are hoping memories of the Africa ended their fourth annual bad old days will be gone by fall. BRICS meeting in New Delhi on Four years after America’s banks March 29, the message was clear: We toppled the global economy, the need an alternative to the Federal U.S. is into a slow rebuilding. To Reserve and the dollar. It was the “The BRICS be sure, the majority of Americans same sentiment behind a meeting have the whose savings are in their depressed about India and China sponsored homes don’t feel it yet. And for U.S. by the International Monetary Fund economic commuters, gas at $4 a gallon is (IMF) in Delhi a week earlier, and like a painful tax that cuts into the it’s been the subject of countless potential to weekly food and rent budget. It’s papers, books and seminars in the “do that, do investors who see a brighter spring. last two years. The agenda: How to fend off another financial shock, they have But leaders of the developing that clobbers the high-growth the will?” countries aren’t celebrating the Southern nations? How to build U.S. recovery as they might have and sustain an alternative financial a decade ago. That was then. This network that dilutes the impact of years in the making from idea to time there’s a long memory about Wall Street? launch, no one has made a dollar U.S and European monetary rival work. The Gulf States tried failures creating financial catastro- To be sure, there was plenty of it against a sagging dollar in the phes with once-esteemed regulators posturing and image-making as the 1970’s but failed. “You have to show losing control and credibility. And five leaders inked a commitment them the money by creating an so developing world leaders are to move toward their own BRICS alternative reserve currency before rallying around ways to counter bank. They are on a high, delivering they will change their ways,” says the next American crash, which strong growth for about half the European economist Nicolas Krul, they think is highly likely given the world’s population while America a Gateway House advisor. “The trillion dollar mega banks and weak and Europe faltered. Soon they will BRICS have the economic potential regulation. start to offer letters of credit and to do that, do they have the will?” lines of credit in their own curren- It’s important to remember that the They’re also furious that the cies – tiny steps toward a bank that euro was born out of deep frustra- Federal Reserve’s bailout for the would one day make real loans. tion with the U.S., not unlike the banks through quantitative easing BRICS frustration of today. or printing money, and with Europe Then there’s the problem of the following suit, has created an ocean money. If not dominated by China’s The U.S. had printed dollars to of stateless money chasing the renminbi, what would nations with pay for the Vietnam War, then highest returns in their fast-growing bills called the renminbi or yuan, rocked the world by ending the economies. the real, the rupee, the ruble, and gold standard on August 15, 1971, the rand call it – the R5, the Ryi, allowing a floating dollar to weaken This exacerbates inflation and the Realruprub, or the 7, after the so badly it took an iron-fisted Paul drives up their currency, weakening ‘R’ digit on your mobile keyboard? Volcker three years from 1979 to industry and agriculture, says And how many faces can you put on 1982 to wring out inflation and lay Brazil’s President Dilma Rousseff. one bill? the foundation for two decades of “There’s been an avalanche of sustained U.S growth. The U.S. money, dollars and euros…thrown There’ll be time to work on a name. borrowing from China over the into developing countries…we are Except for the euro, which was 40 last decade is similar, regarded by

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BRICS members as money that will never to become heavily indebted in The international monetary system never be re-paid. dollars again. will be dominated by the dollar for some time. But we must find a way It’s also important to consider Many are now using China’s to constrain the U.S. from printing that Asia stands as a case study of Yuan as an emerging transaction dollars indiscriminately.”That still monetary reform. Hot money and currency to settle payments, but the leaves the door open for Asians reckless lending broke Thailand, odds of China agreeing to an open and BRICS to consider their own Indonesia, Malaysia, South Korea market for the Yuan are slim. Zong hybrid currency. It may take years, and Singapore in 1997. Facing Liang, deputy manager of the Bank and may disappoint like the euro depression, they got a bailout from of China, said at the IMF meeting: now. But the backlash against U.S. the IMF with harsh terms. But by “Hot money comes like a flood into monetary and too-big-to-fail bank 1999, they’d started on a successful your market but leaves in a flash “arrogance” is familiar. You never long-term growth path with a vow creating all kinds of financial risks. know. GH Myanmar in the ASEAN Matrix: An opportunity for India?

18 May 2012 D. Jesudas Bell CEO, Futurelinks International

he desire of Myanmar’s leaders as the next. This has often led to Tto open the country to the a situation where India’s interests outside world has led to consider- have been supported by certain able euphoria in India – which sees members within ASEAN, only to its policy of engagement with the be vehemently opposed by others. once-isolated nation paying off. To be fair, South Block, assisted There’s also speculation that lifting by businesses, academics and economic sanctions could create a Myanmar think tanks, have tried to provide stimulus that might facilitate India’s is going to continuity and engagement with access to other ASEAN countries all ASEAN countries including and be especially beneficial to India’s see itself as the smaller ones. However, without underdeveloped northeastern engagement at a political level in states. This burst of optimism, much more India this is not an easy task. however, must be tempered by aligned with the fact that India’s ‘Look East’ “ Would the rapid emergence of policy with Asian nations has been ASEAN and Myanmar as an economic power- more wishful thinking rather than East Asia house on India’s doorstep change economic development. The long- all that? There is the advantage that awaited road and rail connections being next door to India makes between India and countries to its cultural, historical and political Myanmar accessible. However, east, remains a vision. ties of India with many of these it would take a concerted and countries. Not to be forgotten that a unsparing effort on India’s part to India has been handicapped by the generation or two of Indian leaders keep relations with Myanmar on an fact that while its relations with and diplomats grew up honing their even keel and focus on their special certain countries have been more foreign policy skills in the political relationship as neighbors. assiduously cultivated – such as minefields of Indochina! Singapore, Indonesia, Thailand It is likely that Myanmar is going to and Malaysia – there has been Such selective relationship building see itself as much more aligned with less attention to Cambodia, Laos, is also disadvantageous when ASEAN and East Asia – rather Brunei and the Philippines. Even dealing with an association of than where economic, political and Vietnam which enjoys a ‘strategic countries where the chair rotates commercial policies are concerned. partnership’ with India has only every year and where, in decision- This would be particularly so if, as merited attention in a desultory making by consensus, every commonly believed, one of the main fashion. This is a loss given the long member country is as powerful reasons for the current opening of

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Myanmar to the outside world is border as well as attending to other need to be translated into action to that its leaders wish to emulate the needs as neighboring countries. ensure that assistance promised at economic successes of Thailand, On the other hand, India should high-level meetings is implemented Vietnam and Indonesia. use Myanmar’s increasing weight quickly. India’s engagement with in ASEAN – starting from its ASEAN has been seen as lacking The Myanmar strategy for India chairmanship of the bloc in clarity of purpose and drive in the should therefore be two-pronged. 2014 – to build stronger ties with past. If Myanmar’s new openness On the one hand continue to the association and, in particular serves to reinforce ties not only strengthen ties based on commonly with the members which still have between India and that country but shared objectives: of developing catching up to do – the so-called also with the whole of the ASEAN the largely underdeveloped areas CLMV countries, Cambodia, Laos, bloc, this would indeed be a great on both sides of the common Myanmar and Vietnam. Words step forward. GH

India-Tonga: Old friends, new engagements

29 May 2012 Tevita Motulalo

n 18th April, India lost a friend Oin the South Pacific when the King of Tonga, George Tupou V, 63, died in a Hong Kong hospital. Tupou V’s death plunged the tiny South Pacific island kingdom of 100,000 into mourning, and raised questions about the future direction of Tongan foreign policy at a time when China is gaining increasing sway in the Pacific.There has been a long and deep relationship between the world’s largest democracy, India, and one of the world’s newest and smallest democracies, the Kingdom of Tonga. Tupou V, in power for just over five years, made a point of re-emphasizing the deep and traditional linkages between India and Tonga when, right after his coronation, he undertook a 19-day visit to India, one of his majesty’s longest state-visits. In so doing, he was following a family, and national, tradition.

His late father, King Tupou IV, visited India twice, in 1971 and 1976, and Indian Prime Minister Indira Gandhi visited the island kingdom in 1981. The warm rela- tionship shared between the two Late King Tupou the V/ Government Of Tonga countries is expressed through many anecdotes. According to

Gateway House 60 Quarterly Review BRICS & Bi-Laterals former Indian Ambassador to Fiji difficult economic times. and Tonga, T. P. Sreenivasan, when King Tupou IV, a large man, was The new king, Tupou VI, the bestowed a medal by Indira Gandhi, English-educated 52-year-old, is she “had to stretch herself to the inheriting an extremely complicated extent possible on her high heels to foreign policy dynamic. Tonga is reach his chest.” Sreenivasan called The importance supportive of the U.S. (to the point Tupou IV the “Heaviest King of of sending troops to Afghanistan), the Smallest Kingdom,” and then of the Pacific is indebted to China, and enmeshed admiringly stated, “The smaller the with Australia and New Zealand country, the bigger the leader.” growing in the which are undergoing strategic minds of Indian shifts. Tupou IV showed a keen interest in learning from India's Green policy makers The question is: where will India Revolution, its non-aligned position “ fit into this increasingly important during the challenging times of the region, and can it build on tradi- Cold War, and India’s military tradi- perfectly dangerous.” He pointed tional ties with Tonga?During tions. Tonga’s nobility and members out to the Australian interviewer: the 1990s, Tupou V, then foreign of the royal family (including the “Your country is about to send two minister, was responsible for the current King’s brother) regularly thousand troops into the Solomon kingdom’s “Look West” policy, receive military and administrative Islands! That’s what happens which ramped up Tonga’s engage- training in India, and Tonga was when you impose democracy ment with Asia. Simultaneously, amongst the first to recognize an overnight for the most undeni- India developed and executed its independent Bangladesh after 1972. able reasons, without bothering own “Look East” policy, which was to build an economic structure tailored for engagement with the When Tupou V came to the which would support democracy burgeoning economies of the Asian throne, Tonga was an absolute and give politicians an incentive to Tigers. Oddly, these two traditional monarchy. While long committed behave ethically.”The transition to friends both considered themselves to democratizing the nation, democracy finally happened, peace- part of a growing Asia, and yet were perhaps influenced by what he saw fully, with elections in 2010, which so focused on the Asian ‘core’ that in India, critics attacked Tupou V were widely lauded for being free they largely missed out on each for what they considered to be the and fair. other. slow pace of reform. Soon after he came to power, in 2006, reformist For traditional reasons, the king Now, the importance of the Pacific rallies turned violent, resulting in still works closely with government is growing in the minds of Indian over 80% of the capital, Nuku'alofa, on foreign policy. In recent years, policy makers. The importance of being looted and burnt, and eight Tonga, like many countries in the India is also clear to all in the region, people dead.This was a defining Pacific, has been pulled closer to including Tonga, and it may be time moment for the new king. Rather China. After the riots of 2006, the for old friends to look at each other than retaliate, he directed the only country to come through with in new ways, especially now that armed forces to “Protect the people a large enough loan to rebuild the Tonga has followed India’s lead in and harm no one,” irrespective of capital was China, and within the embracing democracy. Engagement political creed. Buildings can be last decade, Chinese immigrants would be mutually beneficial as rebuilt, he said to his commanders, have taken over about 90% of the there are myriad commonalities but fathers, mothers, and children retail sector. between the two; most importantly, are irreplaceable, and protection Tonga may prove a useful bridge for against loss of life and injury were There is growing hostility in the India as it pursues a broader ‘Indo- to be the ultimate goal. Normal life country over the increasing Chinese Pacific’ strategy. was restored with minimal violence. influence. During the riots of 2006, around 30 Chinese shops were Tupou V, friend of India, will be In spite of the pressure from looted or burned, and 300 Chinese deeply mourned. But the passing of reformists and some Western nationals evacuated back to China. one King gives way to another. All countries, Tupou V wanted the Chinese nationals are regularly in the eyes are on Tupou VI and the new democratic transition to be stable, Criminal court in Tonga, including government for signs of change and thought a rushed change could a recent case of human trafficking in Tonga’s foreign policy. This is be problematic. In an interview and prostitution. Regardless, those a critical moment. The Pacific is with Australia’s ABC he said: “We at the top continued the growing viewed by the great powers as a don’t want a third world democracy. engagement with China, in part due strategic play and the countries, It’s quite laughable, (being) to a failure of traditional partners, small and big, in the region, are unstable. In some cases it would be like New Zealand, to help it during being courted as never before in

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their history. U.S. Secretary of State traditional relationships are there to in India, which like Tonga, values Hillary Clinton has emphasized build on, and the compatibilities are family, learning, community, the U.S.’ ‘Asian Pivot’ and put the enormous. Recently, as part of the democracy and hard work. Since spotlight on the region.Renewed Tonga Energy Road Map (TERM), returning home they have literally U.S. interest means more Chinese two Tongan grandmothers attended enlightened their communities engagement. Even the Arab League India’s Barefoot College to learn with what India has to offer. is looking to improve relations with how to install solar panels in their With little effort, that light can countries like Tonga. India has been villages. They loved their experi- shine even stronger in the years slow to actively engage, but the ence, saying how at home they felt to come. GH India-U.S.: More equal partners

12 June 2012 Ambassador Neelam Deo Director, Gateway House

s a welcome curtain-raiser of the International Security India is already rubbing up against Ato the third round of the Assistance Force (ISAF) from China on its north and north- Indo-U.S. Strategic Dialogue Afghanistan. While praising India’s eastern borders, the South China in Washington DC on June 13, support to Afghanistan through Sea, the Indian Ocean, and in the U.S. Secretary of State Hillary trade and investment, reconstruc- global hunt for natural resources Clinton announced that India was tion and help (training) for Afghan to fuel economic growth. Having among the eight countries exempt security and police forces, the U.S. asserted the principle of freedom of from sanctions to our financial has not been sensitive to India’s navigation in international waters, institutions because of significant Afghanistan-related security for India greater naval cooperation reductions to our imports of oil concerns while being overly protec- with the U.S. is highly desirable. from Iran. While this is a relief, tive of imaginary Pakistani fears of Especially so in the context of the it does underline once again the India-friendly regimes in Kabul. massive planned Chinese naval unilateralism that makes it difficult The U.S.’ antipathy towards Iran expansion, its already heightened for India to work with the United complicates its own approach and presence in the Arabian Sea and the States despite wanting to do so. India’s response to developments in claim to the whole south China Sea the Muslim world that no amount of as a “core” interest. The broad setting for the third dialogue can smoothen out entirely. round of the Dialogue is the global Consequently there has never been a shift of economic weight eastward To our east, the U.S. is seeking to greater convergence in the interests to Asia, and U.S. resistance to the draw India and other non-treaty and concerns of the U.S. and India: outcome of its relative economic Asian powers like Vietnam into its U.S.-Pakistan relations are sinking, decline, military exhaustion and “pivot to Asia” global strategy by and India and the U.S. both feel the indebtedness to its greatest strategic promoting new nomenclatures like economic and military heat from rival, China. Along with a better the ‘Indo-Pacific.’ Vietnam, China. If U.S. President Barack economic performance and our Obama called India and the U.S. more mature relations with other along with the Philippines, “natural allies” in 2010, that reality regional powers in Europe and Malaysia, and Brunei, are all facing- has happened only now – at a time Asia, India’s relationship with the off against China in the South when India is unfortunately held U.S. has dynamically transformed China Sea. While the U.S.’ treaty back by its economic and strategic over the last decade. That has alliances with Japan, South Korea weaknesses and political indecision. raised Indian expectations of more and Australia will remain the most mutuality in the bilateral exchanges important elements of its strategy Defense Secretary Panetta took up with Washington. to remain the dominant Asian all the issues that will figure in the power, it is also looking for new strategic dialogue during his visit The Asian strategic environment, partners. For example, during her last week to Delhi. India will have already destabilized by the rapid rise Asian swing last month, Secretary likely given assurances in private; of China and its military assertive- Clinton spoke of the importance of but publically we have only spoken ness in the region, is set to be further Bangladesh to the security of the of freedom of navigation. India roiled by the impending withdrawal Bay of Bengal. is clearly unwilling to antagonize

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China, even though the latter has past shibboleths on the sharing the installation of the first 1,100 shed its own past peaceful protesta- of defense technologies (with or MW nuclear reactor to be installed tions. It would be unfortunate if without the enabling bilateral agree- in India by Westinghouse under the in adapting to a multi-polar distri- ments), and India should agree to a India-U.S. nuclear deal, without bution of military and economic qualitative upgradation of defense India changing its liability laws. power, India continues to act out a ties. Then the two countries may ‘survival of the timid’ credo which achieve another shift – one that Movement in this sensitive area other Asian powers will likely can be as much of a regional game- only goes to prove, yet again, that mimic to the detriment of India changer as the U.S.-India Civil if the U.S. gets beyond the terms of and the U.S. – leaving China the Nuclear Agreement of 2008 was its post-World War II NATO-type dominant player in Asia. globally. alliances with partners beholden to it, and India looks for equal It is all the more essential then, That it is possible to move forward partnerships in which it must learn for the two countries to take bold is amply demonstrated by reports to give and not just expect to take, decisions in the forthcoming that the two countries are firming then indeed the sky is the limit for dialogue. The U.S. should shed its up an Early Works Agreement for our natural alliance. GH

BRICS: An alternate financial framework 27 June 2012 Ambassador Neelam Deo Director, Gateway House & Akshay Mathur Head of Research, Senior Geo-econmics Fellow

wo recent developments – West has over the world. BRICS crude oil pricing benchmarks in Tthe $10 billion contribution together form a larger oil-importing the world: the WTI and the Brent. announced by India to the IMF for bloc than the entire European This is important because save the European bailout, and the June Union. Although none of the for the U.S., most countries in the 28 deadline on China to submit to BRICS are in confrontation with world including India use the Brent US and EU sanctions against Iran Iran, they are nonetheless hostage benchmark to determine crude oil – show how exposed the BRICS to the western sanctions imposed on pricing. (Brazil, Russia, India, China and that country because the conduits South Africa) economies are to of international finance, trade and There is the much-used Society western financial architecture. It is transportation used for crude oil for Worldwide Interbank Financial clear that the grouping must now trade are controlled by the West. Telecommunication or SWIFT, the urgently organize itself to build code used globally for most elec- institutions of mutual economic The entire pricing framework – tronic banking transactions, retail benefit. including the currency which is or institutional. In March, SWIFT U.S. dollar-based – is Western. The banned Iran’s central bank and The BRICS’ $75 billion contribu- New York Mercantile Exchange commercial banks from conducting tion to the IMF, announced June (NYMEX) and the International business, leaving fuel-dependent 19, is also indicative of how the Commodities Exchange (ICE), importers such as India lurching for West has successfully co-opted the both based in London, conduct payment mechanisms. emerging economies into submit- the largest trades in the world for ting to western dominated existing crude oil futures contracts. ICE Similarly, the sanctions imposed institutions –leaving them little alone conducted $14 billion worth on insurance agencies which insure motivation to build their own. of Brent and $4.8 billion of West the ships which carry oil from Iran, Texas Intermediate (WTI) crude have cut off transportation options The sanctions against Iran are an futures and options in 2011. This for BRICS countries. The London- acute example of the grip that the enables them to derive the leading based International Group of P&I

Gateway House 63 Quarterly Review BRICS & Bi-Laterals

Clubs which aggregates 80 rein- trading in local currencies will leave collective backing to the effort. surers – like Lloyds – and insures Iran with a large account of mostly 90% of the world’s ocean-going unused local currency deposits. Now is surely the time to activate tonnage for liabilities of up to $60 alternate payment regimes. It will million, will not issue coverage to The sanctions are not just an issue require adjustments by the BRICS ship-owners starting July 1, the date for importers. Brazil and Russia are and their trading partners. China’s when the EU insurance sanctions energy exporters, and the Western- reserves are largely still in dollars; against Iran kick in. dominated system that is strangling it will have to balance preserving Iran, can do the same to them that value with internationalizing In the absence of alternatives, should their geopolitics be deemed the Renminbi – a stated Chinese the BRICS have been trying find inconvenient. Iran today, could be goal achievable under a new system. creative ways to pay Iran. India Russia or Brazil tomorrow. External trade partners such as Iran worked through banks in Europe, will also have to make a concerted Dubai and Turkey before finally It is therefore urgent that the effort to increase trade with the using its own state-owned bank, BRICS quickly work together to BRICS countries to avail of the new UCO Bank, to pay for its $10 billion create new institutions to counter system’s benefits. annual oil import bill from Iran. the domination of the dollar and Other small banks, so far hidden the West. Apart from the already Countries like India, a net importer from the reach of the sanctions, proposed multilateral BRICS within BRICS, will have to step up such as Russia’s First Czech-Russian bank, the financial infrastructure economic activity to create export- Bank, China’s Bank of Kunlun should include a clearing union and able products and services of value and Iran’s Saman Bank, Karafarin insurance club to facilitate interna- to its compatriots. In return, China Bank and Pasargad Bank, are tional trade, finance and transpor- and Russia, both net exporters, making up for the constrictions and tation. For instance, even though may have to patiently hold weaker capitalizing on the opportunity by China and India have a deficit with currencies like the Rupee until a charging hefty transaction fees of Iran, Brazil and Russia do not. balanced equation is achieved. up to 8% on transactions – on top of the 3% banking fees, according If a new trade settlement system is Of course there is going to be to western reports. created – on the lines of the Asian resistance from the United States Clearing Union set up in Tehran in and Europe. Not only will they Finding insurance has been harder. 1974 or the International Clearing lose control of instruments like The Iran Insurance Company and Union that was proposed at Bretton sanctions, but an alternative the Chinese P&I, two companies Woods in 1944 – but with BRICS platform will be a direct threat to not part of the London-based currencies, it will enable Iran to pay the almighty dollar-denominated IG P&I which so far have been Brazil with the accumulated Rupees trade and its use as the international covering shipments to India and or Renminbi, and not be compelled reserve currency. The rise of alter- China, do not seem to have the to accumulate rice and toys. native commodity exchanges will financial heft to make up for the be a direct hit to NYMEX and ICE shortfall. Chinese P&I is not even Brazil can use the same system – lucrative businesses which earned confident it can support Chinese to pay India for its bilateral trade, record-breaking revenues of over $3 ships. thereby facilitating multilateral billion and $1.3 billion respectively local currency swaps for intra in 2011. As payment options run out, BRICS – and inter-BRICS trade. This countries are making individual will side-step the constraints of If the BRICS grouping thinks efforts. India and China considered non-convertible currencies like the creatively, it can overcome the risks paying in gold. Bilateral currency Rupee or Renminbi. of facing down the dollar and the swaps of the Iranian Rial with West. Much will depend on how Renminbi, Rupees and Rubles are Gradually, new commodity China reacts to the June 28 deadline being used as viable options. India exchanges can also be promoted for responding to U.S. sanctions recently lifted the 40% tax on this to enable alternate means of price against Iran. It has leverage: China special foreign rupee payment to discovery and benchmarking is a member of the P5+1 negotiating Iran. In return, Iran is planning in currencies other than the group and is a major energy client to use the local BRICS currencies dollar. India’s Multi-Commodity for Iran. it has accumulated to buy Chinese Exchange (MCX) is already doing toys, Indian rice and Russian wheat. crude oil futures contracts. Iranians The West has dismissed the work- also launched their own Oil Bourse ability of BRICS. But if 28 countries However, none of these options are in Kish in 2008 for trading oil in in NATO could unite to contain sustainable. Iran has a trade surplus non-dollar denominated contracts. Russia, surely the five nations of of $7 billion with China and $8 At the time, BRICS was only an BRICS can come together to ensure billion with India. That means emerging grouping, and gave no their geo-economic future. GH

Gateway House 64 Quarterly Review Foreign policy analysis West and Wahabi vs. Shia

24 February 2012 M.D. Nalapat Director, Department of Geopolitics, Manipal University

of governance by the Shia. But this was never followed by other Shia-specific policies. The result is the goodwill created within the Iraqi Shia by the toppling of Saddam Hussein, has been almost entirely dissipated. The constant demonization of Iran (as distinct from the mullahcracy, which is not at all representative of the people of that country) and now the moves against Bashar Al-Assad in Syria, have helped feed a perception that NATO has joined with the Wahhabis in the latter's war on the Shia.

Mosque in Kuwait- by Kuwaitsoccer/Wikimedia A perusal of either Shia or Wahhabi literature would reveal the distaste each feels for the other, although hile there was a strong and 20% Shia population suffers from the ideology of Khomeinism (which Wovert congruence of interests serious discrimination at the at its root is a repudiation of the between the NATO powers and hands of the Wahhabi-oriented basic tenets of Shia Islam) shares Wahhabi extremists during the administration. Only in Kuwait do many common characteristics with 1979-94 Afghan war, 9/11 reversed the Shia (who form a quarter of Wahhabism. Both fuse the state and the situation, leading to a pullback the citizenry) enjoy the same civic religion into a single entity. Both from the earlier policy of coordina- rights as Sunnis. Outside the Arab use the bitterest terms to describe tion between the two, and NATO states, Sunnis in Shia – dominated rivals. And both are authoritarian, support to armed Wahhabi groups. Iran suffer from several forms of with no pretence at democracy or The 2003 invasion of Iraq by the discrimination, although not to matters such as gender justice. US and the UK had the unexpected the extent seen by the other sect in effect of creating the grounds Bahrain or Saudi Arabia. The 1980s Afghanistan-oriented for a fresh partnership between alliance between the NATO powers the NATO powers and Wahhabi In Iraq, the influence of the US and Wahhabi extremists was as extremists. Both loathed Saddam has helped to ensure that Sunnis beneficial for the former as backing Hussein, although post-Saddam, are given rights greater than their from the UK was for followers of several extremists groups turned on proportion; this situation may the creed in the early part of the last NATO, angered by that alliance's slowly change, once the effects of century. But for such support, it is call for democratic processes that the US military withdrawal become doubtful that the Al Saud would would place the Shia in Iraq in a more obvious. The US has been ever have succeeded in driving away dominant role that till then had deeply solicitous of Sunni/Wahhabi the Turks from the Hejaz, and in been the monopoly of the Sunnis. interests in Iraq in a way that it has taking over what has since been never been about the plight of the named as Saudi Arabia. By the close of the last decade, Shia in Saudi Arabia or in Bahrain. Iraq joined Iran as the other large This fusion of interests took place Shia-dominated state, eclipsing Still, the fact remains that it was despite an existing (Wahhabi) Lebanon. The case of Bahrain mainly US firepower that toppled world-view that was in absolute has been different thus far, in that the secular Sunni dictatorship contradiction with that of the West. the country's estimated 70% Shia of Saddam Hussein and after an Its restrictive, regressive vision majority is ruled by the Sunnis. interval of six years, ensured the makes it impossible for Wahhabis In Saudi Arabia, however, the takeover of the centre of gravity to ever be genuine partners of

Gateway House 65 Quarterly Review Foreign policy analysis

the West, in a way that India (and fighters’ battling a cruel state. its 300 million English-speaking The small print – such as ethnic population) has the potential to. cleansing and the imposition of Any partnership between them can Wahhabi variants of Sharia law – only be opportunistic, discarded were not noticed by the Western once the need for it is extinguished. media, and to a considerable extent, are still not. Once the Wahhabi extremists It took 9/11 saw the blowback from 9/11, they before there was The "Kashmir Model" (of using the understood that the West had language of democracy and human the capability to comprehensively a comprehensive rights to win Western support, even humiliate them. From 2001, the year while adhering to a contrary policy the Taliban fled from NATO and turning away in practice) was next widely used by its newfound allies in Afganistan, from the Taliban the Libyan opposition to Muammar the course of action propagated by “ Gaddafi. The Arab dictator was Al Qaeda (of using violence against loathed by the monarchies of the the West in an effort to get them inevitable failure is explained away Middle East, because of his often- to retreat) has become discredited. as prejudice, thereby deepening their expressed contempt for such rulers. Today, Ayman Al Zawahiri has hatred against modern segments of Wahhabis hated him for the fact become a joke, even an embar- society, most notably populations that he ran a secular – albeit harshly rassment, when he joins with US living in the West or more progres- authoritarian – administration, with Secretary of State Hillary Clinton in sive developing societies in Asia. no quarter given to such demands calling for an immediate overthrow as the imposition of Sharia law or of Bashar Al-Assad in Syria. Their philosophy and world-view the banning of women’s dress other make them the antithesis of the than the abaya. Even as Al Qaeda has become a major thought systems in the West; ghost organisation, visible mostly in yet sections of the Wahhabi fringe Once he was defeated and killed, the virtual world, the philosophy of have shown dexterity in convincing those who took over (as a result Wahhabism – especially its extreme key segments of Western opinion of generous help from Nicholas variants – remains a long-term about the need to support them. Sarkozy and David Cameron) have security risk to the civilised world. This has usually been done by lost no time in imposing a Wahhabi In particular, through the spread camouflaging their actual aims in version of Sharia law across the of Wahhabi education in tens of a fog of talk about human rights, parts of Libya controlled by them, thousands of religious schools high ethical principles and self- and in executing or jailing those across the globe, the practitioners determination. Press coverage of who disagree with their extremist of this creed are breeding tens of the Taliban was almost uniformly world-view. Fortunately for them, millions of youth who are certain favourable in the Western world, Western media channels that were to remain outside the productive until the militia showed the world once filled with news about Libya economy, and as a consequence, exactly what kind of order they under Gaddafi are now silent about seethe with resentment and anger sought to impose on the people the immense human rights viola- against the rest of society. of Afghanistan. Even then, it took tions taking place in that country 9/11 before there was a comprehen- after its ‘liberation’ in 2011. Consequently, the need of the sive turning away from the Taliban. hour is to engineer a broad-based Seeing the success of such a pitch rollback of Wahhabism, a position After the 1980s Afghan jihad, in Libya, groups in Syria which have put in motion soon after 9/11 but the 1990s Kashmir jihad too a theological opposition (as distinct abandoned after the 2003 Iraq generated a considerable amount of from political) to Bashar Al-Assad, war. The young within the Sunni/ favourable media coverage in the have begun cultivating the Western Wahhabi population of the world NATO countries, because of the media and public opinion, the need to be intellectually equipped way in which Wahhabi goals were way the jihadists in Kashmir or to deal with the challenges of concealed beneath a flow of ideal- the elements loosely known as the globalisation, something possible istic words. Even the forced exodus Taliban, used to do in the 1990s. only if they are exposed to modern of the Hindu Pandit community education. Unfortunately, in large from the Kashmir Valley during So extreme has the identification parts of the world, the reverse is the initial years of the 1990s, and with such elements become, that taking place. Wahhabi curricula the destruction of dozens of Hindu even the largest media outlets are displacing modern teaching and Sikh shrines by the Wahhabis accept without question ‘facts’ such systems, with disastrous effects on in Kashmir, failed to slow down as that Bashar Al-Assad bombed his the ability of students to compete the volume of laudatory coverage own troops and facilities in order in the global marketplace. Their of what were portrayed as ‘freedom "to blame it on the Opposition."

Gateway House 66 Quarterly Review Foreign policy analysis

Such fantasies are in the same who prey on western idealism by of Europe and North America as league as tracts which claim that couching their own sectarian and civilisational enemies are seeking 9/11 attacks were a joint operation extremist views in the language to entice NATO into backing their of the U.S. CIA and Mossad. What of democracy and human rights. theological wars of conquest – first is happening in Libya post-Gaddafi Yes, there are indeed secular, sane against non-Wahhabi Sunnis, and ought to be a wake-up call for elements in the Middle East. But thereafter against the Shia. those from the NATO countries these are not the ones getting analysing the Middle East. It is not. favourable media attention in Backing them now will invite the the West. Instead, those who in same blowback that backing the They remain easy targets for those reality look upon the countries fanatics did in Afghanistan. GH UN: A return to 'mandated colonialism'

21 April 2012 M.D. Nalapat Director, Department of Geopolitics, Manipal University Koffi Annan is the UN-Arab League envoy to Syria/ UN Photo gallery

ven when compared to his Council (UNSC). It has two reflect the views and the strategic Eemollient competitor for the European countries (the UK and and tactical needs of NATO. The job Shashi Tharoor who is beloved France), another where the ruling non-NATO elements, Russia and in Europe and North America in a elite considers itself part of Europe China, usually parley their initial way that few international diplomats (Russia) and a fourth that has since opposition to NATO-centric reso- are, UN Secretary-General Ban its inception been happy to be lutions and statements into private Ki-Moon is a bargain. Since taking regarded as a slice of Europe trans- deals between themselves and the office in 2007, Ban has hewed even planted in the American continent, NATO countries. more closely to any agenda set by i.e. the U.S. Only China falls outside NATO than even Barack Obama. this category within the permament They thereby leave in the lurch Indeed, following on the UN's 21st members of the UNSC, an 'honour' those countries that had depended century replay of the 1930s League which Winston Churchill and his on their veto to avoid hostile of Nations principle of trusteeship successor Clement Attlee succeeded actions which suit only the interests in 2001 in Afghanistan and in 2003 in keeping India away from. of NATO, but which are given an in Iraq, the UN Security Council international gloss by becoming approved resolutions that in effect Today, the UNSC has in effect the subject of a UNSC resolu- made the two countries colonies of become the UN, with the rest of the tion. Hence Russia and China's their military occupiers. The local "international" body's membership unwillingness to seek a reversal of population was given zero rights. reduced to irrelevance. The UNSC the 2011 UNSC resolution used by Interestingly, no time limits were "Permanent 5" usually manage to NATO as cover for giving military placed on such an occupation. get another European country, assistance to armed elements in Germany, into "P-5 plus 1" arrange- Libya that sought not dialogue, but Such a return to "Mandated ments, for example while dealing regime change in that country. Colonialism" may be said to be with Iran. Why Germany, and not Kofi Annan's contribution to Argentina or Indonesia, is never a The odds are that Syria will witness the ideals of the UN, which have point of debate within a UN head- a similar trajectory, when the U.S. most clearly been expressed in the quarters that has over the decades and the EU's (usually off-camera) composition of the UN Security been completely house-trained to offer of concessions to China and

Gateway House 67 Quarterly Review Foreign policy analysis

Russia reach a level that will ensure Tahrir Square were abandoned, and a Libya-style abstention in a future Egypt and the rest of the Arab world UNSC resolution that targets the entered upon a period of ferment, Bashar Assad regime in Syria. the consequences of which are still opaque. For reasons that are not It is this propensity of Moscow self-evident, it was the authorities and Beijing to exchange commit- Hosni Mubarak in Qatar which gave a boost to the ments to their allies for concessions scattered demonstrations that took from NATO members, that has was seen as place in Tunisia and in other Arab given UN General Secretary Ban countries beginning December Ki-Moon the confidence needed to expendable, even 2010. There was almost certainly a once again go four-square on the by the generals prod from the Obama administra- side of the Western alliance in an tion to local Arab satraps to remove issue before the UN. While Kofi in Cairo those leaders who were symbols of Annan covered up his cheerful, “ greed and inefficiency. carrying-the-weight-of-NATO, the leadership position to Paris to commitments with sometimes fine-tune the response of the "inter- Was this the reason why Al Jazeera acerbic language against the national community" (otherwise emerged as the cheerleader of alliance – more notably the US – his known as NATO) towards what became known as the "Arab successor Ban Ki-Moon has been Damascus. Spring"? Few know, and those endearingly honest in declaring his who do, are not talking. However, fealty to supporting the interests of This is nothing short of regime the fact is that the upsurge was NATO all across the globe. Indeed, change. The "Arab Spring" would, immensely fuelled by the 24/7 Ban has evolved his own doctrine, it was hoped, lead to so many coverage given by the news channel which is that former colonial manifestations of dissent within to the demonstrations, especially masters know best how to deal with Syria that the country would go the in Egypt. Exaggerated accounts issues that concern their former way of Egypt. What was forgotten of crowd strength were repeat- colonies. was that the Egyptian military is a edly aired, such as the frequent creature of NATO, while Syria's is estimates (first by Al Jazeera and Thus, he backed France in the Ivory not. Despite his decades of service subsequently CNN and BBC) of a Coast, when Paris armed a faction to the alliance, Hosni Mubarak million "protestors" congregating loyal to itself against another which was seen as expendable, even by in Tahrir Square, when independent sought autonomy from its former the generals in Cairo, in large reports never put the number as colonial master. Under Ban, France part because of the cupidity of his higher than 200,000 within the has once again become the arbiter family members (who in their greed square itself. The figure of a million of the destinies of several of its resemble certain political families was obviously arrived at by adding former colonies in Africa. Italy in India) and his determination to bystanders as well as local residents was given pride of place in the have his headstrong, intellectually- to the number of actual protestors. 2011 conferences on Libya, and challenged son Gamal succeed him France has been the location of as President of Egypt. While the Barack Obama's decision to back his choice for the numerous "Friends Egyptian military was happy to Secretary of State Hillary Clinton of Syria" meetings whose single aim allow Mubarak to continue in office in giving full-throated backing to is to ensure that Bashar al-Assad, till natural causes supervened, the "Arab Spring" may, in time, be the President of Syria, follows his increasing ill-health made it seen as a decision as momentous as Muammar Gaddafy and Saddam likely that Gamal would get speed- that of the French to give asylum to Hussein into oblivion. About the promoted through the hierarchy so Ayatollah Khomeini just before the only exception that Ban observes as to take over from his father. change of regime in Tehran in 1979, for his "former-colonial-masters- and of President Carter's injunction know-best" doctrine seems to be Unfortunately for the Mubarak that year to an ailing Shah of Iran to Japan, which he has not thus far family, such a transition plan was avoid the use of force when dealing tapped to be the lead actor in UN put off to 2013, or about three with protestors. Teheran could have moves on the Korean peninsula. years too late for it to succeed. By been cleared up in a week, had the Ban is clearly aware of the distaste 2010, even the military had realized Iranian military been given freedom that Koreans have for their former that Mubarak and his brood were a to do so, while Tahrir Square could colonial master, even while he burden on the brass, and needed to have similarly been denuded of ignores similar sentiments among go. Hence the January 2011 signal protestors, had the Egyptian army African and Arab peoples. from the Obama White House enforced the same policy as that and State Department to dump followed by the People's Liberation As Syria was once a colony of Mubarak was accepted almost Army in Beijing in 1989. However, France, the Ban-led UN has given instantly. Operations to clear up it needs to be remembered that

Gateway House 68 Quarterly Review Foreign policy analysis militaries in the Mideast are almost Doha) seek to significantly increase Arabia, in contrast to the situation all clients of the principal NATO the flow of weapons, it may lead to in Syria, or that neither Qatar nor powers, and lack the freedom to act a conflict with the Syrian military Saudi Arabia are democracies. independently in such matters. as well as a militarization of the Somehow, in her calls for the world Kurdish areas of Turkey, that for to embrace democracy, these two Unlike in the case of Libya, where long have been eager for inde- countries seem to have been left out Secretary General Ban was able to pendence. It is telling that within even by Hillary Clinton. ensure the execution of both Colonel Syria, the Kurds – even though Gaddafi as well as his regime, such Sunni – are keeping away from the Even within the majority-Sunni a result is unlikely in Syria. For one, NATO-backed insurgency. Should community, the overwhelming there is no Saif Al-Islam in Syria. the regime in Damascus decide masses are terrified that their In Libya, Saif and other sons of on a tit-for-tat policy of providing country will go the way of Libya, Muammar Gaddafi prevailed upon a safe haven for armed Kurdish should NATO succeed in swapping their doting father to place his fate groups active in Turkey, Istanbul the Assad regime with the in the hands of NATO by surren- may find itself paying a steep price Wahabbi-Salafi mix now in control dering his weapons of mass destruc- for joining hands with Doha and of the ground in Libya. Alawis – the tion and his intelligence trove. Riyadh to remove a Shia from same group to which Bashar Assad NATO would like Asma Assad, the power in a country that is 66% belongs – form 11% of the popula- spouse of Bashar al-Assad, to play Sunni (including Kurds). tion, and other Shias a further 13%. such a role in Syria, by "persuading" More than a third of the population her husband to, in effect, concede Interestingly, the question of is from the minority communities. defeat unilaterally by ceasing opera- casualties has been framed in the tions against irregulars focussed on context of the Syrian Army being None of these considerations seem his destruction. solely responsible for them. The likely to prevent the Sarkozy- reality though, is more complex. Obama-Cameron trio from backing But there is no evidence that the More than 6000 members of the Ankara, Riyadh and Doha in siren calls (and threats) from NATO security forces and their relatives forcing regime change on Syria. A capitals is having any effect on Asma have been killed by the "freedom beginning has been made by sending Assad's views. The spectacle of the fighters," while the figure of deaths UN observers, within which those final days of Muammar Gaddafi for the latter is around 3000. As in from countries like Morocco and must be sufficient reason for her Kashmir in the past, the narrative Denmark who are against the Assad to disbelieve the promises made by omits the reality of conflict, giving regime, predominate. These can NATO of safe conduct, or the same the impression that all such killings be expected to twist their mission inducements that were offered to are unilateral, committed by the from monitoring the ceasefire to Gaddafi (and in large part accepted, Syrian security forces on innocent locating military targets for future until it became clear that nothing civilians. In fact, as in Libya, several attack, as well as detecting vulner- except his downfall would satisfy armed groups have sprung up on abilities in Syrian defenses that NATO). It is clear that what NATO the anti-regime side, who have scant can be exploited in a future attack seeks is the physical end of the hesitation in taking civilian lives. on the country by NATO and the Assad regime, including its highest GCC. tier, and this has brought together Oddly, despite their commitment the leading elements of the regime to "Christian values," Obama, By first forcing regime change in in a way that has not been seen Sarkozy and Cameron are siding Libya and now Syria, and by promis- before in Libya, where high-level with Wahabbis in locations such cously arming disparate groups of defections are frequent. as Homs, where the Christian Wahabbis and Salafists to achieve minority is comprehensively this aim, NATO is creating the same Second, unlike Saddamite Iraq opposed to the CNN/BBC/Al instability that Brzezinski-Casey and Gaddafi's Libya, Syria has not Jazeera-fuelled insurrection in that caused in Afghanistan following unilaterally disarmed in response city. The Christians there and in their arming of extremists against a to the siren calls of NATO. The the rest of Syria, who ccomprise moribund Soviet Union. UN-imposed arms embargo has more than 9% of the population, not stopped the constant flow are terrified that NATO's allies What Syria needs – as did Myanmar of weapons from Turkey to Syria will succeed in Syria the way they – is engagement, and not isolation. via its 600-kilometre land border have in Libya, and replace a secular What it needs is dialogue and not (the prohibition is imposed only regime with a Wahabbi substitute. the arming of rebels. on weapons sold to the regime in Perhaps because of gaps in their Damascus), and it is yet to reach intelligence-gathering mecha- The world will pay a heavy price a scale sufficient to threaten the nisms, as yet Cameron, Sarkozy for the mistakes being made in dominance of the Syrian military. and Obama seem unaware that the Mideast by the trio of Sarkozy,

Should Ankara (together with Christians have zero rights in Saudi Cameron and Obama. GH

Gateway House 69 Quarterly Review Foreign policy analysis Hillary Clinton’s ‘Pivotal’ Moment

18 May 2012 Ambassador Neelam Deo Director, Gateway House

his month, U.S. Secretary of TState Hillary Clinton made what may be her farewell visit to the region – a region growing in impor- tance to the U.S. as per its much- hyped ‘pivot’ to Asia announced by the Obama administration last November. The much-touted visit may not have left the lasting impact she desired.

Clinton was in China for an annual dialogue. The visits to India and Bangladesh, however, were virtually forced upon them at short notice. Bangladesh was a pure last-minute add-on while India was made necessary, presumably to press the Iran issue – this, despite the U.S.- India dialogue being only a few weeks away. U.S. Secretary Hillary Clinton/marcn-Flickr Perhaps the choice of countries had some perverse strategic and Mamata Banerjee respectively. issues of human rights and freedom significance, starting with China, of expression. A week later it is the rise of which the U.S. hopes In China, where the United States is becoming clear that while the U.S. to stall, followed by Bangladesh neck-deep in debt, Secretary Clinton has won an increase in foreign and India. India is often flagged, and U.S. Treasury Secretary Tim holdings in Chinese banks (from especially in the U.S. Congress, to Geithner still tried to bully their 26% to 49%) and tariffs have been play the role of balancing the rise Chinese counterparts during the lowered, Mr. Chen has had trouble of China. A strategic understanding Strategic and Economic Dialogue, applying for a passport and his with Bangladesh was in the works on the overvalued Yuan by claiming family, including his mother and to make it the chief lieutenant in that the roughly 13% revaluation of nephew, have been tortured – all the Bay of Bengal. Myanmar had the last two years was not enough no doubt in keeping with American already been drawn into the fold by to address America’s trade deficit. values. Secretary Clinton in a November Even as Mr. Chen was unceremoni- 2011 visit. ously bundled out of the American In Dhaka, Clinton signed a “Joint Embassy before the commence- Without doubt, some serious ment of the talks, Secretary Clinton Declaration on Bangladesh-U.S. business must have been conducted said that “he was leaving in keeping Dialogue on Partnership” which in all three destinations but the with his wishes and our values.” establishes a bilateral framework sound of the debris created by an for an annual dialogue. Bangladesh arrogant superpower trampling the Obviously Chinese media followed probably hopes to use this sensitivities of her interlocutors was the official line, characterizing framework to obtain “duty-free deafening, including in the U.S. the fourth session of the Strategic and quota-free” access to the putative rival, China. and Economic dialogue as having U.S. market for its ready-made helped to manage their differences garments. However by referring Not that the international or local and deepen strategic trust. The to Bangladesh as “a key player in media covered itself with glory. As Western media, on the other hand maintaining security in the Bay of far as they were concerned, the visits sought to use the diplomatic disaster Bengal, Clinton gave the game away were about the blind activist, Chen to remind the Chinese government and exposed her own agenda: that Guangcheng, Muhammad Yunus, that it needed to do much more on of incorporating Bangladesh into a

Gateway House 70 Quarterly Review Foreign policy analysis network of countries that will prop that the Communists would attack up its “pivot to Asia” and resist an Banerjee on the issue. expansive and aggressive China. It will be interesting to see how By the time Clinton met foreign Bangladesh manages to balance its minister S.M. Krishna, India interests and obligations to its new had moved on – or was trying to, best friend, the U.S., with those of It is past time for notwithstanding the striking Air its old close friend, China and now India pilots. So aggressive was even Russia, both of which have the US to match Clinton at the joint press confer- undertaken to supply Dhaka with ence on the purchase of oil from up to $1 billion worth of weaponry. its assurances to Iran, that even the normally mild And there is always its neighbor India by using Krishna was constrained to read out India to be kept in good humour. a statement asserting India’s multi its political faceted relationship with Iran. The Old habits die hard. Clinton’ “ presence of an Iranian trade delega- capital to ensure decision to spend equal time with her tion in India helped to save some friend Muhammad Yunus, recently that India is at shred of dignity – for a week. India removed from the Presidency of the negotiating has since announced that it will Grameen Bank because he had buy 11% less oil from Iran than last crossed the retirement age of 70, high table year. It is unclear whether this will and the gratuitous warning to the be enough to save us from the truly government of Bangladesh not to draconian sanctions announced by undermine all the good work done scrambling to accommodate the the U.S. against countries that don’t by him and the institution, would somewhat last-minute desire of do enough to reduce oil purchases have been hard for Bangladesh Clinton to visit. from Iran. Prime Minister Sheikh Hasina to swallow. Equally unacceptable was Nevertheless the encounter with In the end, India will have to view the public admonition to both the Mamata Banerjee, the Chief the Clinton visit from the lens of Bangladeshi Begums – the present Minister of West Bengal, certainly self-interest. The second Indo-U.S. and former Prime Ministers – of her flattered the latter who was strategic dialogue is scheduled (Clinton’s) vision of their country reported to have blushed telling to take place from June 11-13 in as a democracy and the injunction the press that Hillary Clinton, who Washington D.C. Prior to that, on that they must act responsibly to knew all about her struggle against May 20th, is the NATO summit maintain unity and investigate the communists, had wanted to in Chicago which will focus on the disappearance of opposition meet her in Kolkata because of Afghanistan. The Pakistanis have political figures. Time magazine’s recent listing of been invited, subsequent to their her among the world’s 100 most announcement of the probable The India visit started with influential. She also claimed that re-opening of NATO supply routes blemishes. The logistics for the visit the U.S. (through its companies) to Afghanistan. So far it appears were all upside down. Clinton first would invest billions in West that India – so often referred to as met Mamata Banerjee, then the Bengal, which they had earlier been a valuable partner in Afghanistan Prime minster and Sonia Gandhi, unable to because the communists – will not be at the table where and lastly her counterpart, the were in power. Clearly Banerjee has the post-NATO scenario in External Affairs Minister. Normal forgotten the many visits made by Afghanistan is determined. protocol has it the other way around. the communist finance minister The whereabouts of the Indian and to the U.S. and the West, to invite It is past time for the U.S. to match Bangladeshi players in such high- foreign investment to Bengal. its assurances to India by using level visits, were also helter-skelter. its political capital to ensure that Pranab Mukherjee, India’s Finance But then parody took over, after India is at the negotiating high Minister – hopefully soon-to-be Bengal’s Banerjee asserted that table. There’s little in the bilateral President – was in Dhaka when neither the sharing of the Teesta for India if the U.S .continues to Clinton landed in Delhi. The waters nor FDI in retail had figured club us together with not-invited Bangladesh Foreign Minister was in in her talks with Clinton, and Iran and staying-away Russia – the Delhi at the same time as Clinton, the visit dissolved in ill-will and three regional leaders with the most as was a large trade delegation from confusion. The U.S. Consulate in at stake in deciding the future of Iran. This may have been the result Kolkata countered asserting that Afghanistan. The new secretary of of the governments of India and they had, followed by Bengal finance state would do well to keep this in Bangladesh, already in the delicate minister Amit Mitra’s letter to the mind when he or she begins to give process of normalizing their consul general demanding that they substance to the U.S. ‘pivot’ to Asia. commercial and political relations, say no such thing – perhaps worried GH

Gateway House 71 Quarterly Review Foreign policy analysis Rio + 20: Accommodating new global donors

14 June 2012 Estefanía Marchán Researcher, Gateway House

emerging and middle-income economies are gradually beginning to fill. As these new actors rise to global prominence however, the standoff also points to the difficult path we face in solving global challenges.

In an age fraught with economic malaise and fragmented political interests, can there truly be a unified vision of a future we want?

Rio +20 is unlikely to yield any binding international agreements, and most experts have already deemed the summit a failure. Even so, a look at how some of the largest emerging economies including India, China and Brazil are lever- aging their growing economic heft as donors of development aid can provide a glimpse into the kind of future they envision for the world.

Official data on development assis- Prime Minister Manmohan Singh addressing the delegate at the RIO + 20/ PMO tance by so-called ‘emerging donors’ varies considerably as countries lack transparency in reporting and eads of state from over one constitute the roadmap to sustain- have varied definitions for what Hhundred countries and tens of able development. Developing constitutes aid. Still, even conserva- thousands of representatives from countries are cautious to commit tive estimates show that emerging non-governmental organizations to a framework that might restrain economies are aggressively joining and businesses will descend on Rio their economic development, and the ranks of international donors, de Janeiro this month for the United developed countries – most battling backed by a philosophy that – at Nations Rio +20 Conference on severe economic crises – are reticent least theoretically – represents an Sustainable Development. With to include language that would alternative to that of traditional the slogan, ‘The Future We Want,’ require them to aid poorer nations donors, specifically members of participants will aim to put in place with implementation, financing the Organization for Economic a universal framework to tackle the and the technology needed to meet Cooperation and Development interlinked challenges of economic agreed goals. (OECD). and social development, poverty eradication and environmental The deadlock is emblematic Members of the OECD’s protection. of a broader shift in the global Development Assistance power structure where developed Committee (DAC) continue to Leading up to the summit however, countries, now less able to commit be the largest contributors of negotiations are stalled amidst disa- significant levels of resources to development aid globally. But greements between developed and multilateral efforts, are leaving foreign assistance by Brazil, developing countries on what should a void in global governance that Russia, India, China and South

Gateway House 72 Quarterly Review Foreign policy analysis

Africa (BRICS) is growing rapidly China’s “Angola Model,” where environment we need to accom- against the backdrop of declining China finances infrastructure modate myriad modes of develop- assistance from traditional donors. projects through oil-backed conces- ment. The 2005 Paris Declaration Development aid by the BRICS sional loans; Chinese companies and Accra Agenda for Action, grew by an average of 19% in 2010, are contracted for the projects, and which make up the backbone of the compared to a 1.5% growth in supplies and labor are sourced from developed world’s aid regime, were OECD's top aid programs, and a China. issued against a clear North-South subsequent 3% drop in 2011. divide – a divide that is ever more Critics, particularly in the West, elusive. Today, the BRICS and other China provides the bulk of foreign fear that such aid doesn’t create emerging countries are reshaping assistance, giving $3.9 billion in horizontal relationships and can the world, and the international 2010 according to conservative instead result in higher levels community must find a platform estimates. High-end estimates for of indebtedness for developing that reflects this new reality. 2009 show China’s contribution at countries. Echoing the trouble $25 billion, making it the second- with the Rio +20 negotiations, they Moving away from the DAC to a largest provider of development argue that unconditional aid also more decentralized platform for aid after the US. India and Brazil’s undermines the rules-based regime negotiations on aid and develop- assistance remains more modest at that developed countries have been ment is a good start. Here, the $680 million and $1 billion respec- moving towards over the last two OECD’s voice can be represented as tively, although recent reports decades – an aid regime intended to equally as other donors’. In return, by the International Monetary foster transparency and macroeco- the BRICS and other non-DAC Fund and the Center for Global nomic stability, and protect human members should strive to be more Development argue that India’s rights and the environment. transparent in reporting foreign infrastructure financing in Africa assistance and its effectiveness. is now comparable to that of DAC Beyond the obvious double donors, and that Brazil’s foreign standards embedded in such Their reluctance to sign on to a global assistance can be as large as $4 criticism (after all the U.S. and framework that requires transpar- billion a year – roughly equivalent Soviet Union spent decades giving ency stems partly from a lack of to that of Sweden, Norway and aid to dictators during the Cold capacity to track data, but also from Canada. War, and aid by most nations their unwillingness. Many of these continues to be influenced more by ‘emerging donors’ are also large To be sure, China, India and Brazil realpolitik than by selflessness or recipients of aid and house much have a longstanding tradition goodwill) – one cannot argue that of world’s poor, making foreign of assisting fellow developing more choice is inherently bad for aid a politically sensitive subject countries, and have historically developing nations, or expect that at home and abroad. Engaging in done so under the umbrella of what emerging economies will not try to more common projects between they call South-South coopera- advance their own interests. Northern donors, Southern donors tion. Rhetorically, this means that and a recipient country (what is often they regard recipients of foreign Southern donors have a lot to called ‘triangular cooperation’) assistance as equal partners and offer developing countries. Even can help transfer knowledge about recognize the mutual benefits of in the case of Angola, it was the data collection and build goodwill aid. In turn they stress a policy of local government that appealed to among participating countries. non-interference in their affairs and China for loans to build critically tend to provide aid bilaterally and needed infrastructure when loans Ultimately, countries like India, without conditionalities. by the IMF seemed too inflexible. China and Brazil use foreign aid Aid by Southern donors tends not only to advance their interests, In practice, mutually beneficial to be targeted to infrastructure but also to gain more clout in cooperation means that Southern and other productive sectors, Western-dominated international donors tie their assistance to which developing countries need institutions. They seek to be a part economic or geopolitical consid- and developed nations shy away of the system as much as they want erations. For instance, theOECD from, preferring to fund poverty to democratize it. And their inten- reports that China and India alleviation and social sector initia- tions are not so different than the often provide aid in the form of tives. Being themselves developing West’s. Brazil is hosting the Rio+20 “packages” that can include loans, countries, Southern donors also Summit, whose agenda has been grants, debt relief, preferential trade have relevant knowledge, experi- largely driven by the government and investment agreements and ence and technical expertise to of Colombia. These countries have provisions that require a recipient offer other nations. similar long-term goals, they just country to purchase the donor’s need more flexible platforms for goods and services. An extreme Without leaving lessons and rules international engagement. GH example has come to be known as behind, in today’s fragmented

Gateway House 73 Quarterly Review Foreign policy analysis Taliban in Qatar: An Afghan view

6 January 2012 G. Rauf Roashan Director, Institute for Afghan Studies, Kabul

wo issues of relative impor- democratic system is to be put to Ttance to Afghanistan are work? currently being played out. One, a political development in the form And how should this perplexing of a Taliban office in Qatar, and development in U.S. foreign policy two, an economic issue that has be read: a possible conciliatory been on the table in Turkmenistan, gesture by the U.S., to strike off Afghanistan, Pakistan and India Taliban leader Mullah Mohammad (TAPI) for a considerable period The question Omar, from its “most wanted of time – namely the extension of terrorists” list? The U.S., which a gas pipeline from Central Asia to then is this: not long ago strongly believed energy-hungry South Asia. Both are Who would go that the Taliban was the main significant in relation to the existing threat to regional peace, has now Afghan quagmire of many years. to the meeting taken a 180-degree about-turn and “ is showing signs of camaraderie from a position The opening of a Taliban office towards that group. in the Gulf State of Qatar is more of strength – significant to a tiny sheikdom than Many endeavors have been made in to the issue of peace in Afghanistan. the Taliban the past to talk with the Taliban; but The ‘office’ will give credence to the or the Afghan none resulted in the group’s interest international recognition given to or readiness to discuss peace. It the Taliban movement by the Gulf government? consistently and adamantly called countries – the first being Bahrain the Afghan government a puppet which, about a decade ago, became of the Western powers. Whatever one of only three countries that may be the result of the opening of officially recognized the Taliban document they have not supported the Taliban office in Qatar – and regime. While Afghanistan would as they do not believe in the basic not in Saudi Arabia or Turkey as the prefer to call the office ‘a liaison principle of separation of religion Afghan government had proposed office,’ the Taliban would like it to from the state. On the other hand, – thick clouds of uncertainty now be viewed more as an Embassy. the acceptance of a diplomatic hover over the region. office will most certainly give the More important though, is the fact Taliban the feeling that it has won Regarding the TAPI pipeline: it was that the U.S. has shown support its long war against the mighty to benefit all parties concerned. for the move. This, apart from its forces of the U.S. and of the Afghan Since its inception a decade ago, regional implication, is significant. government. a general agreement was drafted, It shows a direct acceptance of an but security remained a hurdle. offer of dialogue by the Taliban, The question then is this: Who Now, many more questions arise: which had so far abstained from would go to the meeting from a Is Afghanistan strong enough holding talks with the Afghan position of strength – the Taliban to guarantee the security of the government or its primary or the Afghan government? pipeline, both during construction supporter, the United States. A and afterward? Can the Taliban and condition placed by the Taliban for So far, besides standing by their the insurgency be trusted to view talks – the complete withdrawal of basic and existing demands, the project with an open mind, and foreign forces from the country – is neither side has come up with a consider it an economic asset for also drawing closer. Those sentient truly conciliatory solution. Will Afghanistan? And even if so, will of the mentality of the Taliban and the peace talks offer the Taliban a they take part in the provision of their reactionary stance, are dubious part in the government? And if so, its security? These questions need about the outcome of talks. As which ministries would be offered to be answered, after considerable envisaged by the Afghan govern- and how would the work of those diplomatic scrutiny.Another state in ment, the Taliban wouldn’t ideally ministries be coordinated with the region, namely Iran, will not like accept the Afghan constitution – a other parts of the government if a to see the project succeed, as it has

Gateway House 74 Quarterly Review National Security, Ethnic conflict & Terrorism its own plans to export energy to If the pipeline becomes a reality, the Silk Route of yore, is required the Sub-continent. Tehran may use the benefits to Afghanistan will – for the provision of an interna- whatever influence it has in Afghan be manifold: the country will, in tional security arrangement for affairs to see to it that the TAPI short order, acquire the status of a the pipeline, as well as to the new project does not take off. This issue hub in regional commerce when its transportation routes.If diplomacy has to be considered as well. communication and transportation wins in the talks with the Taliban, projects, including the extension that in itself will be a giant step in But there is no doubt as to the of railways, materialize. Of course the right direction for Afghanistan, economic benefits to all of the security will have a major role. Thus, and greatly enhance its international four countries directly involved. a combined solution, reminiscent of standing. GH

The Dassault Rafale/Ronnie Macdonald-Flickr MMRCA: Building empires, not security 27 March 2012 Brigadier (Retd.) Xerxes Adrianwalla Cheif of CIS & Group Security of the Mahindra Group

n times of increasing fiscal Does India have a defined national armed forces; each arm separately Ideficit, India is in the process security objective and is this procurement spends such funds mostly to retain of the largest defence purchase in in consonance with that objective? and expand their turf and to gain its history. The acquisition of 126 national visibility rather than to multi-role medium range combat In the absence of public debate and enhance combat-effectiveness in aircraft (MMRCA), at an approxi- a systematic analysis of our security a balanced manner. Today, there mate cost of $15 billion to $17 billion concerns, India has no declared is no critical examination of the dollars, would further enhance the strategic security doctrine which necessity, relevance or complemen- strength of the Indian Air Force – can direct a balanced development tarity of the many weapon-systems already one of the most powerful of the armed forces. As a result, stridently demanded by the forces. in the world. This procurement, the Government allots funds Therefore all wish-lists items exorbitant even by global standards, independently (as opposed to a become ‘strategically necessary’ and raises many intriguing questions. consolidated fund) to each of the ultimately receive sanction – just

Gateway House 75 Quarterly Review National Security, Ethnic conflict & Terrorism

like the MMRCA deal has. won from the air at little or no cost Fighter vs, Drones in lives.In the midst of on-going Does the fighter aircraft fit into a balanced conflicts around the globe, two The Indian Air Force may be application of force? important aspects are generally increasing its inventory of combat ignored or soft-pedaled: Firstly, aircraft but many other advanced Historically, the balance in the appli- most recent conflicts have been countries are reducing their cation of force has tipped in favour asymmetric. They have involved manned fighter strength in favour of the Air Force. Armed forces the both forces which have the latest of drones and other unmanned world over have always felt their in advanced technology and adver- vehicles.Though at present this shift Air Forces pursue their own aims saries whose weaponry and tactics remains controversial – encour- at the cost of the Army and Navy. were technologically-challenged. aged by incidents like the death of Two fundamental changes were put Secondly, in none of these conflicts Pakistani Taliban leader Baitullah to effect, by many countries around has victory been swift, decisive Mehsud in a drone strike on 5 the globe, to resolve that problem: or cheap. The wars in Iraq and August, 2009 – the U.S. air force is First, national Armies and Navies Afghanistan are testimony to this. looking to hugely expand its fleet of developed their own tactical, well- In the former, overwhelming air unmanned aircraft by 2047. Even equipped, air-strike capability. power victory was never achieved, today, the U.S. trains more drone and in the latter, it is yet to be operators than fighter or bomber The second was the institution achieved. pilots. of a joint command, where a theatre commander has absolute Conflict in India is largely in two An imbalance in the force structure in the operational command over the spectrums: counter-insurgency Indian armed forces three services to execute a nation’s and the asymmetric spectrum, mission. In India this has not come as interpreted by the conflict in Within the air force, modern into being. The navy developed its Kashmir against Pakistan. In both fighters are heavily dependent on own, limited air-power capability cases, an expensive resource such support systems. The optimal use in the 70s, and the army has recon- as the MMRCA fighter can quickly of a high-performance aircraft naissance helicopters, but no strike be rendered irrelevant. Besides, to requires air-borne controllers, air- capability – leaving the Air Force as counter our advanced technological to-air refueling and a host of other the dominant power. capability, a potential adversary can support systems which India has quickly shift into asymmetric mode little competence in. The acquisi- India has no joint combat command – marginalizing the high technology tions of these support systems are amongst the three services, leaving fighter. Iraq is a case in point, where not as high-profile and hence tend them all to operate in silos; each massive air-borne forces were to be at the bottom of the priority service commander fights his own deployed but were at a disadvantage list.At present, India possesses few war in the theatre, rendering what in asymmetric combat. air-to-air refueling tankers and support he wants to or which he can air-borne fighter controllers – both spare, to the other services. In the Even if we agree to the purchase of the essential for modern combat – and absence of both these alterations in fighter aircraft, what is the adverse effect of lacks the mechanism and training the Indian context, the MMRCA a loss of such an expensive asset? for the optimum utilization of certainly looks like too expensive a aircraft like the MMRCA. weapon to be used at the capricious- In the case of high-cost combat ness of one Air Force Chief alone. assets, their utility is inversely Over the past decade, India’s proportional to the loss of prestige in defence budget has consistently Due to the change in the dynamics of their being shot down or destroyed increased by an average of roughly conflict, is air power as we know it, still by an adversary. No combat asset 10%. But the capital and revenue relevant? should be such that the cost of shortfall for each year has been protecting it is more than its utility, anywhere between 4% to 49% – There is considerable truth in the or that its cost precludes its use for meaning much of it has been left statement that generals “invari- fear of being destroyed. unused and many demands made ably fight the previous war.” Many by the defence sector have not been believe that air power alone can be A classic example is the destruc- met. Now, at times of declining the fundamental and singular means tion of a Black Hawk helicopter in growth rates and marginal economic of achieving national political and Somalia resulting in the withdrawal reforms, there is a genuine need for military objectives, on the grounds of U.S. forces from the mission. leaders to balance their needs with that once air-superiority has been Incidentally, the cost of anti-aircraft their budgets. With the absence achieved, the war is virtually won. weapons is a fraction of the cost of of a coherent and comprehensive They also believe that air power the aircraft itself. Hence Air Forces national security doctrine, India renders ground forces obsolete, around the world are reluctant to use simply cannot afford such high-cost as swift military victories can be aircraft in asymmetric situations. acquisitions. GH

Gateway House 76 Quarterly Review National Security, Ethnic conflict & Terrorism India: A unified defence command?

10 April 2012 Brigadier (Retd.) Xerxes Adrianwalla Cheif of CIS & Group Security of the Mahindra Group

General VK Singh inspecting /Ministry of Defense

ndia is an aspiring super power; one of the largest arms deals ever Iit is also believed to be one of the in the acquisition of the Medium largest arms importers in the world. Multi-Role Combat Aircraft But last week, after the defence (MMRCA); the Navy which has procurement corruption exposé by developed 'Blue Water' capabilities army chief General VK Singh and far beyond coastal defence; the the hullabaloo over supposed troop Army which is raising two strike- the most movements near Delhi, it seems corps capable of offensive opera- that India is not ready to either tions into Tibet and for possible problematic effectively absorb the battle-ready use against China. But we still don’t equipment being imported, or even have the necessary organizational one is the command it well. Once again, there structure to wield such massive fire archaic was heated discussion over the power as a coherent force, and be necessity for India to have a unified a truly well-supported defence to Second World command system, under which the repel external aggressors or project “ War defense three chiefs of the army, navy and India’s power overseas. The reasons air force, can operate coherently are many, but the most problematic institutions and to mutual benefit. one is the archaic Second World on which our War defense institutions on which The debate should be even louder our armed forces are organized. armed forces than it is. Our strategic and super- They were adapted from the needs power ambitions are manifest in of a colonial power, whose main are organized all the three armed forces: the Air concern was the subjugation of the Force, which is in the process of indigenous population, and not to

Gateway House 77 Quarterly Review National Security, Ethnic conflict & Terrorism

repel external aggressors. There has services remain fiefdoms without been little or no change since then. any ability to use their awesome Post the Kargil conflict in 1999- power as a single, war-fighting 2000, the Kargil Review committee machine. The armed forces will headed by noted strategist RK never accept such change from Subrahmanyam also recommended within; such change has always a unified command. This organiza- been politically driven from the top. tion needs to be restructured and India must updated, and the quickest way to The U.S. is a typical example. The start is to have a joint Chiefs of urgently revisit Goldwater-Nichols Act, 1986, Defence staff, to co-ordinate and was enacted by the U.S. senate to synergise operations and equipment. the need for a ensure unified command in the unified command American armed forces, amongst In war, the application of maximum other aspects. By this organisa- combat power at decisive periods “structure, to tion, each combatant command influences the outcome of a effectively use is headed by a four-star general or battle. Maximum combat power, admiral. One of the best-known however, is not an arithmetic sum the enormous unified combat commanders was of the forces used; it is the result of combat power we Norman Schwarzkopf, commander synergies – generated by using arms of U.S. Central Command during and services coherently. Today, the are developing Operation Desert Storm. He had three services are autonomous and absolute command over all land, any synergy that may exist is purely or no executive power. The current sea and air forces operating in his by chance. Examples are the lack system of command by committee theatre during the war in Iraq, of, or minimal, use of the Air Force results in a situation where a service resulting in the successful prosecu- in 1962 against the Chinese and in chief or a theatre commander tion of that conflict. 1999 during the Kargil incursion (usually Army) is ‘advised’ by an Air by Pakistan. In both instances, the Force advisor on whether or not India must urgently revisit the need Indian Air Force resisted the use air power will be suitable (or even for a unified command structure, of air power on various grounds, available) for a particular operation. to effectively use the enormous resulting in sub-optimal outcomes If aircrafts are not released by the combat power we are developing for the country. In 1962, air power Air Force, the theatre commander at such astronomical cost (India was not used at all and in 1999 the has no choice but to soldier on accounts for about 10% of global Air Force came in many days later, without air support at a huge cost arms imports with a defence budget arguably on orders of the civilian in casualties and outcomes (China of approximately US$ 34 Billion). government in New Delhi. 1962, Kargil 1999). This is hardly For example, anti-piracy operations the first time a unified command require naval power bolstered by India does not follow the integrated system is being recommended. some army and air power. Anti- command system during peace or in The Group Of Ministers (GOM) Maoist operations need the army combat. So each armed force pros- report, under the Chairmanship of supported by air and naval power ecutes war as they see appropriate L.K. Advani, including the then in coastal areas. Both operations (and possibly in a manner where Defence Minister, External Affairs would benefit tremendously from a they get the most glory). There are Minister and Finance Minister, unified command.Many models for very few instances when the combat recommended such a system in such a joint command have been power of one force was deployed 2001. The Cabinet Committee proposed, we just need to adopt under a commander of another – but on Security considered the GOM one that suits our needs. In view of they do exist. One is the Andaman report on 11thMay, 2001, and the current infighting between the Command, which has elements of “decided that the recommendation government and the armed forces, all three services operating under a in respect of the institution of the this structure, currently used by single commander in war and peace. Chief of Defence Staff (CDS) be most countries around the world, Other than that, at no time has the considered later, after Government could also be the most beneficial: country has fought a war under a is able to consult various political a chief of defence staff will provide single commander. parties. It accepted all other recom- single-point advice to the govern- mendations contained in the GOM ment, allowing for a balanced force- Another reason is the inadequate report.” The appointment of CDS restructuring based on operational executive power given to the has remained in limbo since. needs and not individual service apex body of the armed forces, turf; and most importantly, it would represented by the Chiefs of Staff Without such a system and a CDS, enable the armed forces to project Committee, an organization that is combat power (comprising men and itself as a single, viable, effective just that – a committee. It has limited materiel) accretions by individual war machine. GH

Gateway House 78 Quarterly Review National Security, Ethnic conflict & Terrorism AFSPA: National necessity or human rights violation

10 May 2012 Brigadier (Retd.) Xerxes Adrianwalla Chief of CIS and Group Security of the Mahindra Group

Independence day Parade/ Alonioa Milena

mong the recommendations her death, the then Union Home To determine that, it is necessary to Areleased on May 24 by the Minister visited Manipur and insti- examine the context in which the government-appointed interlocu- tuted a commission under Justice AFSPA is used. tors for Kashmir, is a review of the Jeevan Reddy, which also asked for Armed Forces Special Powers Act the modification or repeal of the During exceptional situations of (AFSPA). Its recommendations are AFSPA. In 2011, the chief minister internal disturbance in India, the reflective of the rising public ire of Jammu and Kashmir (J&K), Indian Army is called in to quell against the Act and the presence Omar Abdullah, too asked for the the potential and actual violence. of the army in Kashmir and India’s AFSPA to be lifted from the state. In such a context, the army is north east. given extraordinary powers under In March this year, the UN and the Armed Forces Special Powers Over the years, there have been other organisations, both nation- Act. According to the Indian several voices of protest. There ally and internationally, have also Constitution, the armed forces is the 11-year-long fast of Irom jumped into the fray, asking for the cannot be deployed against Indian Sharmila, a Manipur activist repeal of AFSPA in the North East citizens unless a local government demanding a repeal of the law, and Jammu and Kashmir. or the central government asks the which has recently received much army to intervene in a situation media attention. In 2004, various The law, however, has been misin- that the government is unable to civil society groups in Manipur terpreted by many to mean that it handle. In short, the army is called launched an intense agitation after allows the army to commit “atroci- in only after local police action has the death of Manorama Devi, a ties” against the Indian people. Are failed and insurgents have gained civilian, while in the custody of the these calls for the revocation of the an upper hand. The danger in such Assam Rifles. In 2005, following AFSPA warranted or misplaced? a situation is that it is possible for

Gateway House 79 Quarterly Review National Security, Ethnic conflict & Terrorism

insurgents to take over and make a the police in counter-insurgency army personnel, the army demon- state secede from the Union. This operations. The army’s efficiency strated that only 54 out of 1511 is obviously unacceptable in any translates into pressure on rebels, reported cases since 1994 were democracy. and the insurgents may force the found to be true; 129 persons have local population to agitate against been punished by the army in these The AFSPA was first enforced in the “draconian” AFSPA. Unlike cases. The punishments awarded by the North East in 1958; due to the many in the general population, the the army are severe and exemplary, extreme law and order situation, the insurgents know that revoking the including dismissal from service central government classified the AFSPA would mean withdrawing and life imprisonment. North East as a “disturbed area.” the army – which is exactly what After 1958, the AFSPA has been they want. The army has become a target of incrementally applied to cover the criticism by default, when the real seven states in the North East. The On its part, the army has a poor and responsibility rests with the govern- law has also been in force in large archaic public information system. ment. Deploying troops under parts of Jammu and Kashmir from The inadequacy of the information the AFSPA is aimed at preventing the 1990s. system comes from the army’s secession of strife-torn states from ostensible need for “secrecy” which the Indian Union. Keeping poten- The AFSPA grants the army “special requires hierarchical sanction at tially separatist states in the Union powers” which have to be used with various levels. The army’s explana- by deploying the army is always extreme care. The law gives the tion for what occurred after an a political decision.Without the army powers to shoot to kill, destroy incident is usually defensive and army's counter-terrorism measures property and temporarily detain too little, too late.The human rights under the AFSPA, India could have suspects. Army personnel acting aspects of this law also need to be lost Jammu and Kashmir in the under the AFSPA are immune clearly understood. Civilian casual- 1990s. The government at the time from all actions taken under other ties in areas of insurgency tend to had almost given up, but the army laws of the Indian Penal Code, the be cited as “atrocities” committed stood firm in its constitutional duty Criminal Procedure Code and civil by the army. It is important to to safeguard and retain every inch suits, unless otherwise sanctioned remember that in most counter- of Indian territory. This remains by the central government.By any insurgency situations the rebel fires the standing order for the army to reckoning the AFSPA enables harsh first, he also almost always takes this day. powers, but tough situations require cover behind innocent bystanders, tough measures. he is not in uniform and the weapon The army could work on building is the only thing that differenti- an informed and broad-based Critics of the AFSPA may not ates him from a civilian. In such consensus on the dangers of recognise that insurgents are now crossfire, civilians will be injured or secession through a more effective often well-trained. Insurgent or killed as in any war zone. The army public information system. In many rebel groups may be funded and cannot be faulted for this. instances, once the insurgents get armed by foreign powers with the across their version first—and intention of creating a secessionist This does not mean that atrocities this has happened in Sri Lanka, movement within India. The or human rights violations should J&K, the North East, and Punjab trained rebels carry modern arms be condoned. The differentiator in 1984—it becomes very difficult and munitions which are often should be casualties caused in the for the army to correct the picture better than what the local police heat of battle versus those caused in already painted and to rectify the carry, and they use this fire power cold blood to gain awards or recog- information imbalance. to inflict huge casualties on the nition. Killing to gain recognition security forces. A case in point is does occur on occasion, but when The debate then should focus not the massacre, in a single ambush, seen as a percentage of the quantum on whether to invoke, modify or of more than 70 men of the Central of troops deployed, the duration of dismantle the AFSPA, but on how Reserve Police Force by Maoist their deployment and the number best to use the army in situations rebels in Dantewada in the state of of times they have been in violent of internal conflict. When the Chattisgarh in April 2010. situations, such casualties are too army is used, the nation needs to small a number to justify revoking see the use of military power as a The army is called in only when the AFSPA in the name of “gross failure of governance. Secessionist secessionist violence crosses the misuse.” movements in the country signify threshold of being a law-and-order the failure of politics, and it is up problem that the police cannot The army is more than fair about to the government to resolve the handle. The armed forces are trained investigating abuses and if they root causes. Until then, the AFSPA to be aggressive, to fire for effect, to err, it is usually against their own keeps the army empowered, and the be lethal; it is this training that makes men. In an analysis done in 2011 of law remains a necessary weapon of the army more successful than human rights violations involving last resort. GH

Gateway House 80 Quarterly Review Science, Innovation and Technology Should India emulate China in space?

Dinshaw Mistry Associate Professor, University of Cincinnati

June 18, the Shenzhou docked with the Tiangong lab module, where the astronauts will stay for several days. This was another milestone for China’s ambitious space programme, creating fresh pride in the country.

Should India emulate China to become the world’s fourth country with such capabilities? This depends on whether India can actually develop such capabilities, at what cost, and for what benefit.

India’s space programme has advanced incrementally over the past four decades. In the 1970s and 1980s, it built small satellites and light rockets, and since the Carrier Rocket Shenzhou-5AAxanderr/Flickr mid-1990s, it has built heavier satel- lites and more powerful rockets. India thus has one of the world’s six space programmes that launch hina affirmed its status as one woman astronaut, into space. On satellites, alongside those of the Cof the world’s three leading June 16, China’s powerful CZ-2F U. S., Russia, Europe, China, and space powers by sending three rocket lifted the Shenzhou 9 space- Japan. Its annual space expenditures astronauts, including its first craft, carrying the astronauts; on of around $1.5 billion are far lower

Gateway House 81 Quarterly Review Science, Innovation and Technology

than the $3 to $5 billion each for launcher to lift a spacecraft to Russia, China, Japan, and Europe, LEO. Its reliable Polar Satellite and several billions for the United Launch Vehicle (PSLV), which has States. Also, India conducts fewer had 21 successive successful flights, launches than its space peers—in cannot lift a large payload. But the the past two years (2010 and 2011), more powerful though unreliable it conducted six launches, compa- Geostationary Satellite Launch China spent rable to Japan’s five, but less than Vehicle (GSLV), which has failed Europe’s 11, China’s 34, the U.S.’ 31 in four of its seven flights, can lift $25 billion and Russia’s sixty-six. a 5-ton spacecraft to LEO. The for the first GSLV’s successor, the GSLV-Mk 3, Three of these countries have sent which is expected to first fly in early five Shenzhou men into space—the United States 2013, can carry an 8-ton Shenzhou- flights and Russia began their manned like payload to LEO. By 2020-2025, space programmes in the late 1960s, if they prove their reliability after its“ space budget toward a manned and China has done so in the past many consecutive successful flights, programme. However, this would decade. these rockets would be available for reduce the scope of important launching spacecraft. current projects—India’s satellites China began with four unmanned have many economic developmental missions from 1999 to 2002, when Second, India will have to build applications and also have military- the CZ-2F rocket carried the 7.8 the required spacecraft to ferry strategic applications. ton Shenzhou spacecraft to low astronauts. In 2007, its 0.6 ton space earth orbit (LEO). China then sent recovery experiment tested the Manned space programmes have no astronauts aboard the fifth (2003), heat-shields needed for spacecraft real economic or military applica- sixth (2005), and seventh (2008) re-entry to earth. India’s space tions. They mainly have scientific Shenzhous, which orbited the earth agency has also conceptualized applications, because some useful for three to four days. In September a 3-ton spacecraft that supports scientific research is conducted in 2011, China launched the 8-ton two astronauts for two-day space space (most significantly, on the Tiangong lab module, which will missions. Within a few years, International Space Station). The stay in space for a few years, and India can build such a spacecraft, technologies used in a manned space can support three-person crews followed by a more capable 5-8 programme may also have indus- for about ten days. In November ton spacecraft. After three to four trial spinoffs. Still, the magnitude 2011, China launched an unmanned unmanned flights to test the tech- of these benefits is modest. Shenzhou to successfully test its nology, these spacecrafts can be docking with the Tiangong. The available for manned missions. In the end, it would only be prudent end result: on June 18, the ninth for India to follow in China’s Shenzhou carrying three astronauts China reportedly spent $2.5 billion space footsteps if it can develop docked with the Tiangong. for the first five Shenzhou flights. the required technologies, keep It will be just as, or even more, costs low and promise significant The Tiangong is the stepping stone expensive for India. In 2007, India’s benefits. Since costs will be high to a space station. By around 2020, space agency projected that the and the benefits remain unclear, China plans to build a 60-ton station, first steps to manned space flight – an alternative option for India is based on several Tiangong-like involving launchers, spacecraft, and to partner with the United States, modules, which can support crews an astronaut-training facility – will Russia and other states, and draw for many months. China thereby cost $2 billion over eight years; upon their proven heavy launchers, aims to emulate the International more substantial capabilities would spacecrafts, and space labs. Thus, Space Station, which was developed cost $5 billion over several years. Indian astronauts could fly on primarily by the United States and India’s $1.5 billion space budget, U.S. and Russian spacecraft, and Russia, with additional contribu- even if it grows at 10% to 15% each Indian spacecraft could be lifted by tions from Europe, Japan, and year, cannot support such expen- international launchers, while India Canada, although the Chinese ditures. Consequently, India can simultaneously develops its own station will be much smaller than only follow China’s manned space manned space programme. For its the 440-ton international station. trajectory if it considerably increases space partners, India can bring cost- its space budget – an outlay that can sharing and future co-production In purely technological terms, India come only at the expense of other possibilities to the table. could acquire capabilities similar developmental priorities. to China’s, but it will take 15 to 20 In short, piggy-backing to space years. Another option is for India to may be better for India than taking reduce expenditures on its existing the slow, indigenous route to a First, India will have to build a space activities and divert some of manned space programme. GH

Gateway House 82 Quarterly Review Maritime Piracy: A dangerous eco-system

Sudeep Chakravarti Author and analyst

iracy has arrived as a subject India’s concern with piracy is, and to the “trans-national dimensions” Pof Indian policy-making. will, in the foreseeable future, of Somali piracy, and re-flagged an The urgency with which it needs remain three-fold: on-going global alarm that pirates to be implemented was high- appeared to possess data on the lighted earlier this month, when One is the direct effect of piracy. movement of targeted vessels and India’s National Security Advisor The threat to Indian-owned on-board security arrangements. Shivshankar Menon addressed a shipping, India-oriented cargos high-level global meeting in St. through ships owned by flags of Established and continuing research Petersburg to specifically discuss other nations, and to Indian citizens points to a seamless method of ways and means of fighting piracy. directly. As Menon emphasized pirates reaching ship-owners, and As Menon discussed measures India in his St Petersburg talk, nearly funds in cash — ransom — finding has taken to combat piracy, he also an eighth of “global seafarers” its way to designated places and mentioned that 43 Indian sailors are of Indian origin. (Increased people. Lifestyles led by pirate-lords were at that moment held hostage insurance costs for shipping, cargo in sanctuaries along the Somali coast by Somali pirates. “With over 237 and personnel travelling through are the stuff of legend. There is talk hijacking attempts in 2011, piracy is high-risk corridors are a corollary.) of ransom money fuelling invest- no longer sporadic attacks by small, ment in several African countries, unconnected criminal groups,” The second factor is how to deal and pushing up real-estate prices in Menon unambiguously stated. with piracy and hostage-taking on their capital cities and resorts. More “Piracy today is a growing industry the high seas, which brings with it intriguing is the manner in which and a significant threat to maritime a combination of preventive naval acts of piracy are believed to be shipping and to global commerce.” reach, prosecutorial legal reach, underwritten by financiers across and geopolitical reach by working continents and profits from ransom The operative phrase is “growing the United Nations, and other then shared along the importance industry.” Globally, security multi-lateral and bilateral systems to of the food-chain, as it were. officials and shippers laud the diminish the need to take to piracy; diminishing of piracy in the eastern make extradition of pirates easier; Specific security concerns for Indian Ocean area, specifically and make multi-nation communica- India from such organized crime along the critically important Straits tion, patrolling, and interdiction include money-laundering and of Malacca and South China Sea. efforts more robust. counterfeit currency—and also This is on account of multi-nation include Al-Qaeda derivatives and naval patrolling and, alongside, The third factor, increasingly seen splinters secure specially in the addressing the root causes of as being a fulcrum-factor, is the radical Islamist-controlled parts of demographies susceptible to piracy squeezing and shutting down of southern Somalia, and Yemen, that as an occupation. However, piracy what has, over the past five years are suspected of using piracy to and hostage-taking remains undi- or so, rapidly coalesced into an generate funds and followers. minished in the Western African organized industry. India’s national coast abutting Nigeria and Benin, security advisor quoted figures This collective danger, both real and absolutely thrives off the East which estimated that $160 million and potential, has now come further African coast near Somalia and the paid to pirates as ransom in 2011. east, with expansion last year of Gulf of Aden—a region of great “This money not only finances the definition of the high risk area importance for world shipping piracy but leads to money laun- related to piracy. It has expanded as it straddles the Sea Lane of dering,” he asserted. from the 65th meridian east—a line Communication that connects the on the map that extends south from Mediterranean and Arabian seas “We need to trace and shut the Balochistan region of Pakistan through the Suez Canal and the Red down the networks operating in into the Arabian Sea—to the 78th Sea. A little further to the east is the support of piracy, monitoring and meridian east, which covers the Persian Gulf; nearly 90% of India’s punishing the security companies entire west coast of India; and oil imports move through this zone, and financial operators who work effectively covers the sea lanes that specifically through the Straits of in the background and enable and travel to and skirt Sri Lanka, along Hormuz. abet piracy.” He specifically pointed which moves a vast chunk of Indian

Gateway House 83 Quarterly Review Maritime

and global merchant traffic. This of External Affairs, S.M. Krishna to development assistance to risk and the mitigation of it is all the formally introduced the Piracy Bill minimize the need for impoverished more immediate for India – using 2012 in Parliament on 21 March this fisher-folk to take to piracy, and the United Nations Convention on year. Covering acts of piracy against legal issues that include extradition, the Law of the Sea, it has applied to ships on the high seas as well as incarceration and prosecution of extend its exclusive economic zone within India’s exclusive economic pirates. In early June a major inter- from 200 nautical miles (370 kilom- zone, the designated penalty for national conference on Somalia in eters) off the coast, to 350 nautical acts of piracy in the Bill is emphatic. Istanbul followed this effort. And miles (647.5 kilometers). over 27-28 June 2012, United Arab “Whoever commits an act of piracy Emirates will host in Dubai its With greater territory will arrive shall be punished with imprison- second international “public-private greater responsibility. ment for life,” the Bill proposes, counter-piracy conference” as the “except where the accused has organizers bill it, formally titled, At this point, Indian reach is rela- caused death in committing the “A Regional Response to Maritime tively limited in the overall scheme act of piracy or attempt thereof in Piracy: Enhancing Public-Private of things, though attempts are which case he may be punished Partnerships and Strengthening on-going to make legal, diplomatic with death…” Global Engagement”. and security initiatives more robust. Part of it is achieved by India Any attempt to commit piracy or New Delhi will have its eyes and directly participating in patrolling “unlawful attempt intended to aid, ears — and views — in such places. operations off Somalia as part of abet, counsel or procure for the Alongside, as its national security a multinational task force. India commission of an offence of piracy” advisor has stated in several forums, has deployed ships with marine will attract a maximum of 14 years it will continue to aid efforts such commandos and helicopters of jail term in addition to fines. as the African Union Mission in since 2008; escorted more than (There is as yet no globally accept- Somalia, or AMISOM, sometimes 2,000 ships along the high-risk able legal framework for anti-piracy described as the “mainstay of secu- corridor (the Internationally action. In some cases, signatories to rity-related operations in Somalia” Recommended Transit Corridor, United Nations conventions against to which Government of India has which is sometimes referred to as piracy are yet to initiate specific thus far contributed US$ 3 million. Internationally Recognized Transit anti-piracy laws in their territories.) Corridor) in the Gulf of Aden over This, in addition to UN resolu- the past three years. About a tenth There is greater push in the diplo- tions securing and expanding the of these have been Indian flag- matic arena. While the Indian mandate of AMISONM would, as carriers. Such escorting has passed position calls for an UN-led effort Mr Menon stated in St Petersburg, without incident. to combat and curb piracy, it has “constitute helpful steps towards tracked with interest several other sanitizing the Somali coastline The Indian Navy too, has actively initiatives. A major initiative was and deprive Al-Shabaab [a Somali prevented several dozen acts of the 23rd February 2012 London jihadist group] of revenues earned piracy. (This is in addition to Conference on Somalia held at from port facilities and the export the Indian Navy energizing and Lancaster House. of charcoal. expanding its “blue water” capabili- ties for the strategic projection of It was attended by US Secretary of Further steps are necessary to effec- force across the Indian Ocean area, State Hillary Clinton, UK Prime tively sanitize the Somali coastline and along with the coast guard, Minister David Cameron, UN and ensure that the Somali pirates ensuring real-time patrolling to Secretary General Ban-ki Moon, are not able to use their bases on the safeguard its already vast exclusive and several high-level representa- coast to launch attacks.”All of this economic zone that exceeds 2 tives from east African nations. Of will collectively add to anti-piracy million square kilometers.) particular note was the presence of efforts—as, surely, will focus on leaders from Somalia’s Transitional human and socio-political develop- A fallout — at this time an outright Federal Government as well as of ment of the entire Horn of Africa. complication — is the incarceration some breakaway regions, including But the Third Factor, the unseen yet of over a hundred Somali pirates the pirate havens of Puntland and emphatically-heard puppet-meisters in Indian jails. In the absence of Somaliland. of piracy, will likely remain elusive. specific anti-piracy law in India, It is to tracking this network that various aspects of the Indian The conference spent considerable India’s anti-piracy energies must Penal Code and Code of Criminal time on piracy issues, trying to also focus. As the current chair of Procedure are being applied to work on strategies and mechanisms the Indian Ocean Rim Association these pirates, with confusing results. that ranged from peace deals in this for Regional Co-operation, India To redress the situation and plug strife-torn region that has emerged can play a leadership role in this legal loopholes, India’s Minister as the cradle of 21st century piracy, effort. GH

Gateway House 84 Quarterly Review Gateway House Meetings: January to July

The Politics of No Growth January 10,2012 Deven Sharma, Former President, Standard & Poor’s Corporation, In discussion with K.N. Vaidyanathan Senior Geoeconomics Fellow, Gateway House; former Executive Director, SEBI. Exclusive interactive session with the Honorable Kamla Persad- Bissessar, Prime Minister of the Republic Trinidad & Tobago January 12, 2012 A panel discussion on ‘Trinidad & Tobago and India: An Engagement for the Future’ with the Prime Minister, and Moderated by Ambassador Neelam Deo. Challenges in the Indian Ocean region February 10, 2012 Ambassador Mohammad Osman Omar, former Somali Ambassador to India, in conversation with Michael Pinto, Former Director General (shipping) Government of India. An informal lunch with Ambassador Sudhir Devare February 20, 2012 Ambassador Sudhir Devare, Director General of the Indian Council of World Affairs (ICWA), New Delh, in conversation with Ambassador Neelam Deo. The U.S.-India-Iran impasse March 21, 2012 Ambassador Neelam Deo in conversation with Ambassador Frank Wisner former American Ambassador to India, Egypt and the Philippines and Member, Advisory Board, Gateway House. Innovative strategies on entrepreneurship March 14, 2012 A 28-member delegation of African Parliamentarians to discuss Innovative Strategies on Entrepreneurship in Mumbai. A panel disscussion with Gautam Shewakramani from Audio Compass Sasha Mirchandani from Kae Capital, moderated by Ambassador Neelam Deo. Dasra’s Indian Philanthropy Forum March 21, 2012 Gateway House hosts table at Dasra’s annual forum, for Gateway House Members. Launch ‘Global Stability Map 2012’ followed panel discussion on Beyond BRICS March 22, 2012 Akshay Mathur, Head of Research, Gateway House, author of the map presents the and its findings to Gateway House members in a meeting in Mumbai.

Gateway House 85 Quarterly Review Confronting Iran: Implications for energy security March 27, 2012 Ambassador Talmiz Ahmad, ormer Indian Ambassador to Saudi Arabia, Oman and the UAE in discussion with K.N. Vaidyanathan, Senior Geoeconomics Fellow, Gateway House. Food Security and Inequality: The Dangers Within April 10th, 2012 P. Sainath, Rural Affairs Editor, The Hindu; author of “Everybody loves a good drought” in conversation with Manjeet Kripalani, Director Gateway House Cyber Threats and Evolving International Protocol April 13th, 2012 Rangu Salgame, President, NIKSUN; Nandkumar Saravade, Director, Citi Security and Investigative Services in conversation with K.N.Vaidyanathan, Senior Adjunct Fellow, Geoeconomics, Gateway House; Chief Risk Officer, Mahindra Group IMF’s 2012 Asia Economic Outlook May 7th, 2012 Panel discussions on ‘Asian Regional Economic Outlook’ with Anoop Singh, Director, Asia and Pacific Department, IMF; Ashima Goyal, Economist, IDIGR; Sajjid Chinoy, JP Morgan; and moderated by Dr. Subir Gokarn, Deputy Governor, RBI. Panel discussion on ‘Financial Market and Banking Spillover’ with Neeraj Ghambir, Nomura; Ajit Ranade, Aditya Birla Group; Laura Papi, Asia Pacific Department, IMF; Selim Elekdal, Asia Pacific Department, IMF; in conversation with Ambassador Neelam Deo, Director Gateway House India’s North-East: The Heart of Regional Integration May 10th, 2012 Sudeep Chakravarty, journalist, author, Highway 39: Journeys through a Fractured Land; Ambassador Neelam Deo, Director, Gateway House; moderated by Akshay Mathur, Geoeconomics Fellow, author, A Winning Strategy for the North East, Gateway House Syria Briefing: Detangling the complex June 5th, 2012 Ambassador Rajendra Abhayankar, former Indian EU, Syria, Turkey, Azerbaijan in conversation with Ambassador Neelam Deo, Director, Gateway House Israel Briefing: Israel’s position in the Middle East June 14th, 2012 Benjamin Krasner, Director of Political-Economic Research and Analysis, Center for Policy Research, Ministry of Foreign Affairs; Oren Anolik, Director of the Department for Non-Proliferation of Weapons of Mass Destruction, Ministry of Foreign Affairs moderated by Ambassador Rajendra Abhayankar, former Indian EU, Syria, Turkey, Azerbaijan India’s Energy Future: Central Asia & the Caucuses June 20th, 2012 Ambassador Debnath Shaw, Indian High Commissioner to Tanzania, former Indian Ambassador to Azerbaijan in conversation with Ambassador Neelam Deo, Director, Gateway House. Launch of Gateway House research paper India in Central Asia: Time for a New Strategy by Katherine Foshko, PhD

Gateway House 86 Quarterly Review New Scenarios for India’s Future June 22nd, 2012 Arun Maira, Member, Planning Commission, in discussion with scholars and members of Gateway House comprising businessmen, academics and armed forces personnel US-India relations: Tackling India differently June 23rd, 2012 Thomas Nides, Deputy Secretary of State for Management and Resources, US State Department in conversation with Ambassador Neelam Deo, Director, Gateway House Egypt: Beyond the Social Media Revolution June 26th, 2012 Ambassador Navdeep Suri, Indian ambassador to Egypt, former Head of Public Diplomacy Department, Ministry of External Affairs in conversation with Ambassador Neelam Deo, Director, Gateway House

Gateway House 87 Quarterly Review G A T E W A Y H O U S E I n d i a n C o u n c i l o n G l o b a l R e l a t i o n s Q u a r t e r l y R e v i e w | O c t o b e r - D e c e m b e r 2 0 1

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