multilateralism
The Three T’s in a post-coronavirus world
As countries look to recover from the economic setback caused by the coronavirus pandemic, the three t’s – trade, travel, and technology – are likely to play an important role in getting the global economy back on the rails.
Trade
Even in the midst of the pandemic, countries have been in talks regarding Free Trade Agreements (FTA’s). The UK is seeking to sign an FTA with not just the US but also Japan, so as to buttress the bilateral economic relationship and get entry into the 11-member Comprehensive Partnership for Trans Pacific Partnership (CPTPP). Vietnam’s national assembly also ratified an FTA with the European Union known as EUVFTA (European Union Vietnam Free Trade Agreement) on June 8, 2020. According to the FTA, the EU will lift 85% of its tariffs on Vietnamese exports, while the remaining tariffs will be removed over a period of 7 years. Vietnam on the other hand will lift nearly half (49%) of its import duties on EU goods, while the rest of the tariffs will be removed over a period of 10 years.
The CPTPP is also likely to expand in the near future. Japan is seeking to get Thailand, Taiwan, Indonesia, and the Philippines on board. Tokyo’s aim is to reduce dependence on China by creating an alternative set of supply chains through multilateral networks.
Technology
In recent weeks, there has also been a growing debate with regard to creating new technologies, so that the dependency upon Chinese technologies is reduced. One important step in this direction is the UK’s suggestion for creating an organisation, called D10, which consists of the original G7 countries plus India, South Korea, and Australia. The aim of the D10 is to provide alternative technologies so that dependence upon Chinese technologies is reduced.
At London Tech Week, a report titled “Future Tech Trade Strategy” was given by British Trade Secretary Elizabeth Russ. Russ spoke about a new £8 million initiative which would enable British companies to expand tech ties with Asia-Pacific countries, especially Japan and Singapore. British companies will also be assisted by tech experts stationed in its high commissions and embassies in these countries.
Travel
In recent days, the resumption of international air travel has also also been an important matter of discussion. Three members within the 11-member CPTPP – Japan, New Zealand, and Australia – have already been in talks for resuming air connectivity. Japan is also likely to ease its entry ban from countries like Vietnam and Thailand where Covid-19 cases have reduced.
Singapore, another member of the CPTPP, is also in talks with South Korea, Malaysia, and New Zealand for resumption of air connectivity. (Singapore Airlines and Silk Air have been flying passengers from select destinations in Australia and New Zealand to Singapore’s Changi Airport throughout the pandemic.)
China, too, has been seeking to revive air travel. While China has recently set up a travel corridor with South Korea, it has also signed an agreement with Singapore for reciprocal travel for essential purposes – business and official. Initially, this arrangement will be for 6 provinces – Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu, and Zhejiang (travellers will need to apply for a visa in advance, and get tested for the corona virus both before departing for China and after arriving there).
Vietnam, which removed its lockdown at the end of April and resumed domestic flights, is also reviving international travel with a few select countries, such as South Korea (South Korean students can enter the ASEAN country through a special permit).
The EU is seeking to resume air connectivity with non-EU countries by the 1st week of July (the EU has already opened travel within EU member states), and it is likely that air connectivity with countries considered low risk will also resume shortly.
The resumption of travel will of course be undertaken on a step-by-step basis. Japan, for instance, has indicated that it will open its air connectivity with other countries in stages; first for businessmen, then students, and finally tourists. What is fascinating to observe is that the narrative with regard to the three t’s is not being set by the West, it is being set by Asian countries. Even within Asia, it is not just a China-driven narrative. Japan is playing an important role and, from within ASEAN, it is not just Singapore but Vietnam as well which has emerged as an important stakeholder.
Conclusion
In a post-corona world there are likely to be a number of changes, with geopolitical and economic dynamics in Asia likely to witness a significant shift.
What is also interesting to note is that travel and technology – two of the three t’s – were broadly thought of as key ‘soft power’ tools prior to the Covid-19 pandemic. Post the pandemic, there will be a strong ‘hard Power’ component to these two t’s. While in the context of travel, each country will be cautious with regard to opening up air travel, and stick to linkages with countries that have managed to control the corona virus; as far as technology is concerned, due to the rising tensions with China, the creation of alternative technologies is likely to be viewed as a security requirement (trade, the third t, had already acquired a strong strategic component even before the outbreak of the pandemic).
What will a post-pandemic British foreign policy look like?
Introduction
The United Kingdom’s post-corona foreign policy is likely to be driven by some crucial economic factors. On the one hand, it will continue to work closely with countries like the United States, Japan, Australia, and India to reduce its dependence upon China. On the other hand, the UK cannot totally bank on the US for achieving its economic goals, given the unpredictability of US President Donald Trump.
The UK needs to look at new Free Trade Agreements (FTA’s) and also be part of multilateral arrangements, such as the Trans Pacific Partnership, which will enable it to diversify its supply chains.
Important upcoming economic decisions
Given the changing environment of the post-corona world, London now has an eye on enhancing self-sufficiency and reducing reliance on China.
The Boris Johnson government has set up a committee — ‘Project Defend’ — which seeks to study the UK’s economic dependence with hostile countries (with a specific thrust on China), especially for sensitive imports. Based on the findings of Project Defend’s report, for example, the UK will work towards the relocation of pharmaceutical companies. While changing supply chains overnight may not be an easy task, the Boris Johnson Administration has made an important decision.
The UK’s recent decision on Huawei
The Boris Johnson Administration has also recently decided to reduce Huawei’s participation in the 5G network to zero by 2023. In January 2020, Boris Johnson had given a go ahead to Huawei’s participation in the ‘non-core’ element of the 5G network, with important restrictions, as well as a 35% market share cap. This decision drew flak from a section of Conservative Party politicians, who for long have been arguing that the UK needs to be cautious with regard to close economic ties with China, since this has serious security implications. The Trump administration had also expressed its displeasure with the Boris Johnson administration. The US President and senior officials in his administration have publicly expressed their unhappiness, saying that this decision could have an impact on security cooperation between both countries.
In the aftermath of the coronavirus pandemic, ties between the UK and China have gone downhill (senior officials of the Johnson administration have criticized China for suppressing information with regard to the outbreak of the pandemic), and Johnson’s decision was driven by two factors: 1) increasing pressure from Conservative MP’s who had threatened to vote against the government’s decision, and 2) the fact, that the UK is keen to go ahead with an FTA with the US (there have been differences between the US and UK, however, on the issue of the FTA, with the US urging the UK to make a choice between China and the US).
Apart from this, the recent US sanctions imposed on Huawei have also played a role in Johnson’s decision of reducing Huawei’s participation by 2023 (the Trump administration has made it compulsory for foreign manufacturers using U.S. chipmaking equipment to obtain a license before being able to sell chips to Huawei).
D10 network
Interestingly, the UK has also proposed that a group of 10 countries, dubbed as D10, joins hands to provide an alternative to Huawei’s 5G network and other technologies with the aim of reducing dependence upon China. The proposed grouping would consist of the US, Italy, Japan, the UK, South Korea, India, Germany, France, Canada, and Australia.
The UK has thus taken the lead in providing an alternative to the now bipolar status quo. Significantly, Trump has also stated that he is keen to expand the G7 and include not only India and South Korea but Russia as well.
UK also keen to play an important role in the TPP
While on the one hand the UK is trying to reduce its dependence upon China by joining hands with the US and like-minded countries, on the other the UK is also seeking membership within the Comprehensive and Progressive Agreement for Trans Pacific Partnership (TPP), which consists of 11 members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).
While the idea of the TPP was proposed by former US President Barack Obama, the first decision taken by Trump after his electoral triumph in 2016 was to withdraw from the agreement. Japan has been playing an important role in the TPP, and efforts are being made to expand its membership so that democratic dependence on China is still further reduced.
The UK faces numerous challenges and while it does need to reshape its economic relationship with China, London recognizes that this cannot be done overnight, so enhancing FTAs and joining the TPP are important steps in geopolitical context.
From a purely strategic perspective, the UK-US relationship has been important and with Johnson and Trump at the helm, and increasing convergence on attitudes vis-à-vis China, this is likely to get further strengthened (though of course there will be differences on both economic and geopolitical issues). The idea of the D10 grouping mooted by the UK has also sent a clear message that in spite of numerous economic challenges, the UK is keen to emerge as an important player, in its own right, in the post-corona world order.
Multilateralism is alive and well in the Indo-Pacific
Introduction
The Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) trade agreement, also known as CPTPP 11, consists of 11 member states (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).
The TPP agreement was a brain child of former US President Barack Obama. The main objective of the agreement was to bolster Obama’s ‘Pivot to Asia’ vision, and it was signed in February 2016.
Significantly, one of the first decisions taken by US President Donald Trump upon his election was to withdraw from the agreement. The main reason cited by Trump for this decision was that the TPP agreement was not favourable towards US workers. During the Presidential campaign of 2016, Trump had repeatedly said that apart from leading to job losses of US workers, the agreement would undermine US independence.
In April 2018, Trump had stated that the US was willing to join the TPP if it was offered a better deal, but by then other countries which were part of the original TPP had moved on, and the CPTPP 11 came into force in the end of 2018 (after a majority of signatories, Australia, Canada, Japan, Mexico, New Zealand, and Singapore ratified the agreement).
How the agreement has enhanced trade linkages between member states
CPTPP 11 has helped in bolstering economic cooperation between a number of member states such as Japan, Canada, and Vietnam. During Shinzo Abe’s visit to Canada in 2019, Canadian PM Justin Trudeau made a mention of how the deal had enabled Canada to increase its exports threefold to Japan. Trudeau also stated that the deal had been beneficial for strengthening economic ties between Canada and Japan.
According to estimates, the agreement has also helped in bolstering trade not just between Vietnam and Japan, but also between Vietnam and Canada.
Efforts to keep supply chains intact
In the midst of the corona virus pandemic, CPTPP 11 member states like Japan, Singapore, and New Zealand have been working assiduously towards keeping supply chains intact.
Singapore has been exporting meat and medical products from New Zealand and has also been seeking to strengthen its economic ties with Japan in the midst of the pandemic. In April, several CPTPP 11 members — Singapore, Australia, New Zealand, and Brunei — issued a joint statement along with Myanmar (a non-CPTPP 11 member) on the issue of opening trade lines, including air and sea freight.
Singapore, Australia, New Zealand, and Canada, along with non-CPTPP 11 member South Korea, have also been exploring the possibility of resuming essential travel.
What is also interesting is the success of some of the CPTPP 11 member states in dealing with the coronavirus pandemic, especially Vietnam and New Zealand. As of May 16, 2020, Vietnam recorded 318 coronavirus cases and did not register a single death. The ASEAN nation began to ease the lockdown in the end of April. As of May 16, 2020, the number of coronavirus cases in New Zealand was 1149, and number of deaths was 21 (New Zealand ended a 7 week lockdown on May 14, 2020).
Efforts to rope in new members into the partnership
After the coronavirus pandemic, more countries are likely to get on board with the CPTPP 11, including the United Kingdom. In Asia, Japan is also trying to get Malaysia and Thailand on board with the CPTPP 11. The main aim of Japan, which will chair the CPTPP 11 in 2021, in getting these countries on board is reducing its dependence upon China (Tokyo imports over 20% of its intermediate goods from China). Thailand could be an important addition to the CPTPP 11 because it has been relatively successful in dealing with the pandemic as of now, and apart from its economic relevance, Thailand has been working closely with several CPTPP 11 members in their endeavor to resume essential travel.
Conclusion
The CPTPP is thus important for a number of reasons. First, it is providing an alternative narrative to China’s Belt and Road Initiative — especially in the context of the Indo-Pacific (Japan’s desire to get new countries on board is a strong reiteration of the same).
Second, the CPTPP is a clear reiteration that globalization in a post-corona world is not likely to be driven by Washington and Beijing (many members of the partnership, such as Japan, New Zealand, and Vietnam, have an important role to play).
Third, it is an interesting instance of an arrangement where not all member states have similar political systems, but are bound by common economic interests.
In the post-corona world, the relevance of the CPTPP is likely to rise, and it remains to be seen how Beijing and Washington react to this.
Expect a new, decentralized narrative in the post-Coronavirus world
Introduction
Many analysts have argued that the US and China will continue to be the two most important global players in a post-corona world, but they will not be the sole drivers of the narrative with regard to economic and geopolitical issues. While the US has become insular under Trump and has failed to foster a spirit of international cooperation even during the midst of the coronavirus pandemic, China’s suppression of crucial information with regard to the coronavirus has been criticized by a number of countries – not just the US.
During the midst of the coronavirus pandemic itself, many countries have risen to the occasion not just in terms of dealing with the pandemic, but also providing assistance to other countries. This includes the Asian countries of South Korea, Taiwan and Vietnam, and Western countries like Germany and France, which have both risen to the occasion by speaking up for removal of sanctions against Iran, and also providing financial assistance.
Increasing importance of South Korea, Taiwan, and Vietnam
If one were to look at the instance of Asia, countries like South Korea, Taiwan, and even Vietnam, which has been successful in controlling the virus, are likely to enhance their stature globally, and will become even more relevant in the economic and strategic sense not just in Asia, but on the global stage.
All three countries have provided medical assistance to a number of countries, including the US. Taiwan and Washington have also joined hands to carry out research and to develop a vaccine for finding a cure for the virus.
The success of South Korea and Taiwan blunts the narrative about authoritarian governments being in a position to control the epidemic better, an argument which Beijing has been trying to push. The success of Vietnam has shown that resources are helpful, but not necessary, for handling situations like pandemics. Even with meagre resources, the ASEAN nation has restricted the number of cases and not recorded a single death so far. This has been attributed to the timely response by the country’s leadership. Vietnam has also been able to relax the lockdown and open certain businesses.
India too has been able to contain the spread of the virus and has provided aid and assistance to a number of countries in spite of a paucity of responses.
In a post-corona world, China is not likely to drive the Asian narrative.
Western narrative: Not driven by the US
In the West, while Trump has been criticised for his handling of the coronavirus, Germany has been relatively successful in containing the outbreak of the virus compared to other EU member states. What is interesting is that while Germany has publicly criticised China it has not taken the US stand on a number of issues.
First, along with the UK and France, Germany provided medical assistance to Iran via the Special Purpose Vehicle (SPV), which had been set up to circumvent sanctions imposed against Iran (the medical assistance reached Iran on March 31, 2020).
Second, when Trump reduced US funding to the World Health Organisation (WHO), Merkel spoke in favor of greater international cooperation, and support to WHO at this point of time, while also indirectly criticizing the step taken by Trump. Even in the past, Merkel has been at variance with Trump on numerous issues including the US approach to Iran and Trump’s approach towards globalization.
Emmanuel Macron too has been critical of China, but not necessarily echoing the US line. Both leaders have also been emphasizing the need for revival of the European Union (EU) and making it relevant.
Conclusion
In a post-corona world, a number of changes are likely to occur in the world order. First, if smaller countries have been successful in dealing with the pandemic their stature will rise, and they will benefit both in economic terms as well as geopolitical clout.
Second, the belief that a democratic system is incapable of dealing with a crisis like the coronavirus has also been challenged.
Third, the international world order will have numerous layers, and the influence of both Washington and Beijing on the narrative are likely to reduce with new players likely to speak up on crucial economic, environmental, and strategic issues. While trade and travel may be restricted, there is a possibility of greater ‘international cooperation’ and a new narrative which does not emanate merely from Washington or Beijing, but collectively from a number of countries.
Finally, cooperation will not be restricted merely to regional blocs or geography. In a number of instances, medical aid and assistance has been extended by one country to another far flung country. The new world order promises to be an interesting one, though it will be complex.
Nightcap
- A crisis of mundane absurdity Pascal Bruckner, City Journal
- Can economic multilateralism survive? Jean Pisani‐Ferry, Economic Affairs
- On Louër’s Sunnis and Shi’a Karen Taliaferro, Law & Liberty
- In Russia, death becomes you Sophie Pinkham, The Nation
The view from New Delhi: Pakistan and the coronavirus
Introduction
The number of cases arising out of coronavirus in Pakistan continues to rise steadily. As of April 14, 2020, there were well over 5,000 cases (5,716) and deaths due to the virus totaled 96. China is providing assistance to Pakistan in dealing with the virus, and apart from medical assistance in the form of materials (including ventilators, masks, test kits, protective clothes), a team of medical experts reached Pakistan on March 28 for a period of two weeks. The team of Chinese medical experts argued for the extension of the lockdown in Pakistan (especially the province of Punjab, which has been hardest hit by the epidemic), arguing that one of the factors which helped China in controlling the further spread of the outbreak was the lockdown.
While the Chinese delegation laid great emphasis on extending the lockdown, and greater ‘social distancing’, one of the major challenges for the Pakistan PM, Imran Khan, has been the state of Pakistan’s economy. It is for this reason that he was reluctant to go in for a lockdown, but eventually pressure from opposition parties (the province of Sindh went for a lockdown even before the Federal Government) and, more importantly according to some, from the Army was what finally compelled Khan to go in for the lockdown.
On April 12, in an appeal on social media to the international community, the United Nations Secretary General, and the world’s international financial institutions, Khan appealed for ‘debt relief’ to developing countries.
Khan also pointed to the fact that the challenges faced by developing and developed countries were markedly different. Said the Pakistan PM:
While in the developed world, the main dilemma is containing with the coronavirus through lockdowns and then dealing with the economic impact, in the developing world, apart from containing the virus and dealing with the economic crisis, our biggest worry now is people dying of hunger.
He also pointed to the need for an initiative with a thrust on ‘Global Debt Relief’, one where all stakeholders are brought on board for coming up with a well-thought out economic and health response to the pandemic.
Welfare measures by the government
As the number of cases has been rising continuously, Khan has warned people to take the necessary precautions, saying that the country’s hospitals may not be able to cope with the rising number of cases. The Pakistan PM – who had earlier announced a stimulus package (to the tune of Rupees 1.2 Trillion Pakistan) to provide relief to labourers, businessmen, as well as the middle class – also stated that the government would start distributing cash to poor families through a program: ‘Ehsas Emergency Cash Program’. According to this program, Rs. 144 billion (Pakistani) would be distributed amongst 12 million low income families.
Chinese Assistance
While Chinese assistance to Pakistan has been drawing attention, with both countries laying emphasis on the point that the bilateral relationship is an all weather one and that the ‘Pakistan-China All-weather Strategic Cooperative Partnership’ has grown under the leadership of Chinese President Xi Jinping and Khan. Pakistan Foreign Minister, Shah Mehmood Qureshi, while receiving the team of Chinese medical doctors which arrived in Pakistan on March 28 stated:
Chinese have once again shown to the world that they are friends of Pakistan. They care for us. We stand with each other in difficult times. This is a unique relationship and such testing times tell us how close we are to each other.
China on more than one occasion has thanked Pakistan for the assistance, which it had provided when the coronavirus outbreak had begun and has assured full support to Pakistan. Pakistan’s President, Arif Alvi, had also undertaken a trip to China in March, in order to show solidarity with it’s ‘all weather’ ally (he was the first head of state to visit China after the outbreak of the deadly epidemic). Alvi’s China visit took place days before the lockdown was initiated in Pakistan, and a number of MOU’s were signed between both sides to counter the deadly epidemic. While Pakistan wanted to extend its solidarity with China, something which was acknowledged by Beijing, it also got assurance regarding its own fight against the coronavirus.
Commenting on his China visit, Alvi said:
China trip was very beneficial to show support & counter propaganda. We also need to get technical help from them for biggest health crisis Pakistan is going to face. Their experience is unique. Six hours of exhaustive meetings took place. Signed many MOUs for #iFightCorona.
Assistance from other quarters
While it is true that Beijing has been quick to provide logical assistance to Pakistan, China’s financial assistance would not have been sufficient for Pakistan to provide much-needed relief to the not-so-privileged in Pakistan. In this context, the International Monetary Fund has acceded to Pakistan’s request of $1.4 billion (under the Rapid Finance Instrument for fighting the coronavirus) according to sources. This amount would help Pakistan to increase it’s foreign exchange reserves as well as provide budgetary support at a time when the country faces a serious economic slowdown. The World Bank and Asian Development Bank (ADB) have also provided Pakistan aid – to the tune of $1 billion and $1.5 billion, respectively. The Pakistan PM had referred to the assistance provided by international financial institutions in his social media recording on Sunday.
It would be pertinent to point out that Pakistan is already working with the IMF on a three year program called the Extended Fund Facility Program (EFF). The organization had sanctioned $6 billion and, according to analysts and rating agencies, it is the reform program of the IMF, which had played a key role in Pakistan being able to stabilize its economy (in December 2019, Moody’s Investors Services had raised Pakistan’s credit rating to ‘stable’ from negative). Pakistan has reiterated its commitment to the EFF (due to the current crisis, the IMF will be unable to release the third trance, $450 million, of the $6 billion total loan).
Not only has the assistance from IMF, ADB, and World Bank come as a major relief for Pakistan as it battles the coronavirus, Islamabad will also be heaving a sigh of relief after the review of Pakistan’s greylisting by the FATF (Financial Action Task Force) has been pushed from June to August/September 2020. Pakistan, which was put on the watchdog’s greylist in 2018, was given 27 points to comply with, and it has only been given two extensions after failing to convince FATF on 13 of the 27 points (Beijing has been extending support to Pakistan). While Islamabad was supposed to submit its progress in April 2020, it has now got time till July 2020 to address the points it needs to comply with. In the long run, it will need to address the points raised by FATF if it wants access to international financial institutions and needs to carry out transactions without any problem.
Imran Khan’s dilemma with regard to the lockdown
In the last few months, Pakistan’s economy was beginning to show some signs of a revival, and this was acknowledged by international agencies and a number of countries who had begun to show interest in investing in the country. There is no doubt whatsoever that the coronavirus has come as a sudden setback. With the number of cases steadily rising, Khan’s challenges are only going to increase and the dilemma for the Khan administration will be the length of time of the lockdown. Businesses have been opposed to the lockdown and sooner or later are likely to pressure Khan to lift lockdown orders (a decision has already been taken to open some companies, which supply to brands like Puma and Nike, with only essential employees, while taking key precautions such as ensuring regular disinfection), as well as a more comprehensive package which Khan’s government may not be able to provide. Opposition parties, the Pakistan army (which has not been on the same page as Khan on a number of issues, including the handling of the coronavirus), and China, upon whom Pakistan is dependent, have of course been backing the lockdown. Given the lack of medical facilities, there may not be any other option but to lockdown.
Conclusion
In the midst of all these challenges, there is some relief for Pakistan:
First, while Islamabad may publicly hail China for its assistance, the assistance from multilateral bodies like the IMF, World Bank, and ADB has been what’s helped Pakistan deal with the coronavirus crisis. The assistance provided by these institutions also raises the point of whether the obituary of ‘internationalism’ and ‘multilateralism’ and the relevance of international institutions, with all their flaws, was rather premature.
Second, the delay in the FATF gives Pakistan some more time, though it will have to address the remaining points and can not be evasive in the long run. Turning a blind eye to the activities of terror groups and their financing is not likely to benefit Pakistan in any way.
Islamabad’s task is cut out however, and it remains to be seen how the government deals with the multiple problems arising out of the coronavirus (Pakistan’s growth forecast for 2020 has been reduced from 2.6% to 0.8% for the current fiscal year). In the short run, it may be able to weather the storm, albeit with great difficulty, but in the longer run it is in for some serious problems. Pakistan’s government would however be relieved with the above two developments at this point of time.
Iran-US tensions: Why Tokyo and New Delhi should arbitrate (But will they?)
After the drone attacks on Saudi oil facilities
Iran’s ties with the rest of the world, especially Washington, have witnessed some interesting developments in recent weeks. While there was a possibility of a thaw between Washington and Tehran after the G7 Summit (held in August 2019 at Biarritz, France) with both sides making the right noises.
Tensions between both countries have risen yet again after two oil facilities, Abqaiq and Khurais, of Saudi Aramco (a Saudi state-run company) were attacked by drones and missiles on September 14, 2019. The Houthis of Yemen have claimed responsibility for the attack, though the Saudis and the US blamed Iran. US President Donald Trump warned of retaliatory action against Iran (the US also sent troops to the Gulf to prevent further escalation), while US Secretary of State Mike Pompeo described the attack as an ‘act of war’.
Iranian reactions to US statements
If one were to look at Iranian reactions to US statements, Iranian Foreign Minister Javad Zarif, in an interview on September 19, stated that if the US or Saudi Arabia launched a military attack on Iran, in retaliation for the strikes on the Saudi oil facilities, he did not rule out an ‘all out war’. Zarif did say that Iran wanted to avoid conflict and was willing to engage with Saudi Arabia and the United Arab Emirates.
On September 22, the anniversary of Iraq’s invasion of Iran, Iranian President Hassan Rouhani warned against the presence of foreign troops in the Gulf, saying that this would lead only to more apprehensions and insecurities. The Iranian President also stated that Tehran had extended its hand of friendship towards countries in the region for maintenance of security in the Gulf, as well as the Strait of Hormuz. On the same day, Zarif made a much more measured statement, arguing that Tehran wanted to make September 22 a day of peace not war. Referring to Saddam Hussein’s invasion in 1980, he stated that this act, which received support of global powers, has been one of the reasons for turmoil in the region. Hours before Rouhani’s speech, Zarif, in an interview with the American media company CNN, stated that Iran was ready for a re-negotiated deal, provided Donald Trump lifted economic sanctions. The Foreign Minister made a telling remark:
We continue to leave the door open for diplomacy. In the meantime, our campaign for economic pressure will continue.
Rouhani had expressed his openness towards meeting Trump on the sidelines of the United Nations General Assembly (UNGA). Hours before his speech, one of his spokespersons stated that Tehran was willing to give commitments with regard to not expanding its nuclear program, provided the US lifted sanctions. During his speech, Rouhani made it clear that while he was willing to engage with the US, he would not do so under any sort of pressure, and Tehran would only engage with Washington if the US-imposed economic sanctions are removed. Rouhani dubbed these sanctions as economic terrorism.
Statement (and remarks) issued by France, the UK, and Germany with regard to the attack on Saudi’s oil facilities
What was significant, however, was the statement issued on September 23 by the UK, Germany, and France that Tehran was responsible for the attack on the oil facilities run by Aramco. The three countries, which have been firmly backing greater engagement with Iran, and have been so far critical of Trump’s approach, in a statement held that Iran was responsible for the attacks, and that these could lead to greater conflict in the region. The statement issued by the three countries did make the point that these countries supported the Iran and P5+1 nuclear agreement/JCPOA (Joint Comprehensive Plan of Action), asking Tehran to comply with the deal and adhere to the commitments.
Significantly, British PM Boris Johnson spoke in favor of Trump renegotiating the JCPOA, while French President Emmanuel Macron stated, in a conversation with reporters, that he was not ‘married to the JCPOA’. German Chancellor Angela Merkel, while speaking in favor of talks between Tehran and Washington, stated that Tehran’s conditionality of sanctions being lifted before talks take place was unrealistic.
Why France’s statement was especially surprising
Statements made by Macron came as a surprise, given that he has played a pivotal role in keeping the JCPOA intact and differed with Trump’s approach towards Tehran. Apart from fervently supporting the JCPOA, the UK, Germany, and France had also set up a Special Purpose Vehicle (SPV) to circumvent sanctions from Iran. This move had been criticized by senior officials of the Trump Administration, including Mike Pence, John Bolton, and Pompeo.
Macron also attempted to organize a meeting between Zarif and G7 Ministers on the sidelines of the G7 Summit held at Biarritz (the French President did meet Zarif, with G7 leaders giving him a go ahead to negotiate with Iran). A statement made by Trump, where he stated that he was willing to meet with Rouhani and described Iran as a country of great potential, raised hopes of possible engagement with Iran. Trump in his usual style did put forward conditionalities, and did state that he was not party to a joint statement by G7 on Iran.
It would be pertinent to point out that Macron even attempted a meeting between Rouhani and Trump on the sidelines of the UNGA meeting, though this did not work out. The French President did meet with the Iranian President on the sidelines of the UNGA. A tweet by the Iranian representative to the UN stated that apart from bilateral relations, Macron and Rouhani discussed ways in which the JCPOA could be saved.
Trump’s approach towards Iran: Back to square one?
The removal of John Bolton, a known Iran hawk, as National Security Adviser also raised hopes with regard to US engagement with Iran. In fact, Bolton’s approach vis-à-vis Iran was cited as one of the main reasons for growing differences between Bolton and Trump.
The attacks on the oil facilities have made Trump more aggressive
The attack on Saudi facilities however acted as a spoiler, and has given Trump the opportunity to act aggressively and put more pressure on France, Germany, and the UK to adopt a tough stance vis-à-vis Iran. Washington has already imposed sanctions on Iran’s Central Bank, and while Iran has warned of retaliations in case there is any sort of military action, US cyber attacks on Iran can not be ruled out. At the UNGA, Trump attacked Iran by saying it is a security threat to ‘peace-loving nations’. The US President also said that there was no chance of lifting sanctions as long as Tehran’s ‘menacing’ behavior continued.
With the UK, Germany, and France also backing US claims with regard to Iran being responsible for the attacks on Saudi oil facilities, Trump has become further emboldened.
Role of countries like Japan and India
While the reactions of European countries and the UK are important, one country, which has been very cautious in its reaction, has been Japan. Japan’s Defence Minister Toro Kono, in fact, stated that ‘We are not aware of any information that points to Iran’.
Japan has close economic ties with Iran. Earlier, Shinzo Abe had made efforts to intervene between Iran and the US. Abe, who visited Iran in June 2019, met with Iran’s supreme leader, Ayatollah Ali Khamenei, stating that it was a major step toward peace. The Japanese PM had also sought the release of US citizens detained by Iran.
Interestingly, Brian Hook, US Special Envoy to Iran, while alluding to Japan, China, and other Asian countries, stated that countries must not shy away from unequivocally acknowledging that Iran was responsible for the September 14th attack on Saudi oil facilities. Hook gave the example of the UK, France, and Germany. He also sought Asian participation, especially Japan and South Korea, in Washington’s maritime initiative to protect oil shipments through the Strait of Hormuz.
It would be important to point out that Japan, which has close economic ties with Iran, has already started looking at other sources of oil given the situation in the Middle East.
It is not just Japan. Even India would not like escalation of conflict with Iran, though so far it has stayed out. While New Delhi is looking to various sources for its oil needs (during Modi’s recent visit, one of the issues high on the agenda was closer energy ties with the US), the Chabahar Port, in which New Delhi has invested, is of strategic importance. Some recent statements from the Iranian side suggest a growing impatience with New Delhi, not merely due to toeing the US line with regard to the importation of oil from Iran (India had stopped buying oil from Iran, after the US removed the temporary waiver which it had given), but also slow progress on the Chabahar Port.
During the G7 Summit, Macron had urged the US to allow India to import oil from Iran, while Modi, during his meeting with Trump, also is supposed to have raised the Iran issue. While India has not made any statement with regard to the attack on Saudi oil facilities, Indian Foreign Secretary Vijay Gokhale visited Iran days after the attack (a number of issues, such as the progress of the Chabahar Port, and issues pertaining to trilateral connectivity between India, Afghanistan, and Iran, were discussed). The Indian PM also met with the Iranian President on the sidelines of the UNGA. Both of them are supposed to have discussed issues of bilateral and regional importance.
Conclusion
It is time that countries which have close ties with the US and robust economic engagement with Iran find common ground, rather than speaking in different voices. While at the G7 meeting, there was an opportunity for the same, but this was short lived. This is essential, not just for economic and strategic purposes, but also to ensure that Iran does not become totally dependent upon China. Beijing’s recent commitments of investing over $400 billion in Iran are a clear indicator of the point that, as a result of economic isolation, Tehran is left with limited options, and is tilting towards Beijing.
China has not just made important commitments in oil and infrastructure projects, but Beijing will also be stationing its troops to protect it’s investments in the oil sector. It is not just European countries (Germany, France and the UK) but countries like Japan and India, which should be wary of the growing proximity between Tehran and Beijing. New Delhi and Tokyo would be advised to work in tandem, to get both Washington and Iran to moderate their stance. While this is no mean task, given Trump’s unpredictability it is absolutely imperative.
Nightcap
- The Second Earl of Liverpool SJD Green, Law & Liberty
- Multilateralism is cooperative, not imperial Ankit Panda, Diplomat
- Should we worry about deplatforming? Arnold Kling, askblog
- Eating someone Lori Marino, Aeon
Southeast Asia, China, and Trumpian foreign policy in 2019
A survey titled, ‘State of Southeast Asia: 2019’ conducted by the ASEAN Studies Centre (between November 18 and December 5, 2018 and released on January 7, 2019) at the think-tank Iseas-Yusof Ishak Institute came up with some interesting findings. The sample size of the survey was over 1,000 and consisted of policy makers, academics, business persons, and members of civil society from the region.
It would be fair to say that some of the findings of the survey were along expected lines. Some of the key points highlighted are as follows:
According to the survey, China’s economic clout and influence in South East Asia is steadily rising, and it is miles ahead of other competitors. Even in the strategic domain, Washington’s influence pales in comparison to that of Beijing’s. As far as economic influence in South East Asia is concerned, a staggering 73 percent of respondents subscribed to the view that China does not have much competition. A strong reiteration of this point is the level of bilateral trade between China and ASEAN (Association of Southeast Asian Nations), which comfortable surpassed $500 billion in 2017. After China, it is not the US, but ASEAN which has maximum economic clout in the region. If one were to look at the strategic and political sphere, 45% of respondents opined that China is the most influential player in South East Asia, followed by the US at 30 percent.
Second, China’s increasing influence does not imply that it is popular in South East Asia. In fact, a large percentage of the respondents expressed the opinion that China’s lack of integration with global institutions is not a very positive omen. South East Asian nations also have clear reservations with regard to the Belt and Road Initiative (BRI). 50% of respondents believed that the project would increase ASEAN countries dependence upon China, and there were serious apprehensions, with one third of respondents raising question marks with regard to the transparency of the project. A small percentage of respondents (16%) also felt that the BRI was bound to fail. Many ASEAN countries have been alluding to some of the shortcomings of the BRI, of course none was as vocal as Malaysian Premier Mahathir Mohammad. In the survey, respondents from Malaysia, Thailand, and the Philippines expressed the view that their countries should be cautious with regard to the BRI. Interestingly, even respondents from Cambodia, a country where China has made significant inroads, Japan is the most trusted country and not China.
Third, US isolationism, especially under Trump, has led to an increasing disillusionment with Washington DC in the region. The current administration has been aggressive on China, and it has sought to take forward former US President Barack Obama’s vision of ‘Pivot to Asia’ in the form of the Indo-Pacific Narrative. Senior voices within the Trump Administration, including current Secretary of State Mike Pompeo, have been trying to give a push to the Indo-Pacific Narrative and reaching out to South East Asian Countries. In July for instance, while addressing the Indo-Pacific Economic Forum at the US Chamber of Commerce in Washington, Pompeo said that the US was going to invest $113 million in new U.S. initiatives in areas like the digital economy, energy, and infrastructure. Pompeo also stated that these funds were a ‘down payment on a new era in U.S. economic commitment to peace and prosperity in the Indo-Pacific region’. Pompeo’s address was followed by a visit to South East Asia (Singapore and Indonesia), where he met with leaders from a number of ASEAN countries.
On December 31, 2018, the US also signed the ARIA (Asia Reassurance Initiative Act), which sought to outline increased US economic and security involvement in the Indo-Pacific region. ARIA has flagged US concerns with regard to China’s expansionist tendencies in South East Asia. Other key strategic issues, such as nuclear disarmament on the Korean Peninsula, have also been highlighted.
The Trump Administration has also earmarked $1.5 billion for a variety of programs in East and South East Asia.
Trump’s decision to pull the US out of the Trans Pacific Partnership (TPP) led to a lot of disappointment in the region, with allies like Singapore putting forward their views. Speaking at the ANZ Forum in November 2018, Former Prime Minister of Singapore, Goh Chok Thong stated:
…It is still a superpower but it has become less benign and generous. Its unilateral actions in many areas have hurt allies, friends and rivals alike […] America First is diminishing the global stature, moral leadership and influence of the US.
This view was also echoed by a number of experts who commented on the finding of the survey.
The Former Singapore PM also made the point that Asia needed to recalibrate its policies in order to adjust to the new world order.
ASEAN
What is clearly evident is that ASEAN needs to build a new vision which is in sync with the changing geopolitical situation. While Malaysian PM Mahathir Mohammad, by scrapping Chinese projects and referring to a new sort of colonialism emerging out of China’s BRI project, has taken an important step in this direction, it remains to be seen whether other countries in the region can also play their role in helping ASEAN weave its own narrative. For a long time now, countries have been dependent upon both the US and China, and have thought in terms of choices, but there has never really been a concerted effort to create an independent narrative.
What ASEAN actually needs is a narrative where it does not shy away from taking an independent stance, and where it is also willing to take a stand on issues of global relevance. One such issue is the Rohingya Issue. Apart from Malaysia and Indonesia, none of the other members of ASEAN has taken a clear stand. In the past, many ASEAN countries thought that they could refrain from commenting on contentious issues. Respondents to the survey felt that ASEAN states should be more involved in the Rohingya Issue.
The United States and other countries which are wary of Chinese influence should come up with a feasible alternative. So far, while members of the Trump Administration have repeatedly raised the red flag with regard to China’s hegemonic tendencies, and predatory economics as has been discussed earlier, it has not made the required commitment. While the Trump Administration has not been able to pose a serious challenge to Beijing, it remains to be seen if the Asia Reassurance Initiative Act is effective.
It is also important for Washington, and other countries, not to look at Chinese involvement from a zero-sum approach. Perhaps it is time to adopt a more pragmatic and far sighted approach. If Japan and China can work together in the Belt and Road Initiative, as well as other important infrastructural initiatives in South East Asia, and India and China can work together in capacity-building projects in Afghanistan, the possibility of US and China finding common ground in South East Asia should not be totally ruled out. Amidst all the bilateral tensions, recent conversation between US President Donald Trump and Chinese President Xi Jinping, and statements emanating from both sides are encouraging.
Conclusion
An isolationist Washington DC and a hegemonic Beijing are certainly not good news, not just for ASEAN, but for other regions as well. The survey has outlined some of the key challenges for ASEAN, but it is time now to look for solutions. Hopefully, countries within the region will shape an effective narrative, and be less dependent upon the outside world. The survey is important in highlighting some broad trends but policy makers in Washington as well as South East Asia need to come up with some pragmatic solutions to ensure that Beijing does not have a free run.
How the United States can woo Africa away from China
On December 13, 2018, US National Security Advisor John Bolton, while speaking at the Heritage Foundation, highlighted the key aims and objectives of ‘Prosper Africa,’ which shall probably be announced at a later date. The emphasis of this policy, according to Bolton, would be on countering China’s exploitative economics unleashed by the Belt and Road Initiative, which leads to accumulation of massive debts and has been dubbed as ‘Debt Trap Diplomacy’. A report published by the Centre for Global Development (CGD) (2018) examined this phenomenon while looking at instances from Asia as well as Africa.
During the course of his speech, Bolton launched a scathing attack on China for its approach towards Africa. Said the American NSA:
bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.
Bolton, apart from attacking China, accused Russia of trying to buy votes at the United Nations through the sale of arms and energy.
Bolton also alluded to the need for US financial assistance to Africa being more efficient, so as to ensure effective utilization of American tax payer money.
The BUILD
It would be pertinent to point out that the Trump administration, while realizing increasing Chinese influence in Africa, set up the US IDFC (International Development Finance Corporation), which will facilitate US financing for infrastructural projects in emerging market economies (with an emphasis on Africa). IDFC has been allocated a substantial budget — $60 billion. In October 2018, Trump had signed the BUILD (Better Utilization of Investments Leading to Development) because he, along with many members of the administration, felt that the OPIC (Overseas Private Investment Corporation) was not working effectively and had failed to further US economic and strategic interests. Here it would be pertinent to mention that a number of US policy makers, as well as members of the strategic community, had been arguing for a fresh US policy towards Africa.
Two key features of IDFC which distinguish it from OPIC are, firstly, deals and loans can be provided in the local currency so as to defend investors from currency exchange risk. Second, investments in infrastructure projects in emerging markets can be made in debt and equity.
There is absolutely no doubt that some African countries have very high debts. Members of the Trump administration, including Former Secretary of State Rex Tillerson, had also raised the red flag with regard to the pitfalls of China’s unsustainable economic policies and the ‘Debt Trap’.
According to Jubilee Debt Campaign, the total debt of Africa is well over $400 billion. Nearly 20 percent of external debt is owed to China. Three countries which face a serious threat of debt distress are Zambia, Republic of Congo, and Djibouti. The CGD report had also flagged the precarious economic situation of certain African countries such as Djibouti and Ethiopia.
US policy makers need to keep in mind a few points:
Firstly, Beijing has also made efforts to send out a message that BRI is not exploitative in nature, and that China was willing to address the concerns of African countries. Chinese President Xi Jinping, while delivering his key note address at the China-Africa Summit in September 2018, laid emphasis on the need for projects being beneficial for both sides, and expressed his country’s openness to course correction where necessary. While committing $60 billion assistance for Africa, the Chinese President laid emphasis on the need for a ‘win-win’ for both sides.
African countries themselves have not taken kindly to US references to debt caused as a result of China. While Bolton stated that Zambia’s debt is to the tune of $6 billion, an aide to the Zambian President contradicted the US NSA, stating that Zambia’s debt was a little over $3 billion.
At the China Zhejiang-Ethiopia Trade and Investment Symposium held in November 2018, Ethiopian State Minister of Foreign Affairs Aklilu Hailemichae made the point that Chinese investments in Ethiopia have helped in creating jobs and that the relationship between China and Ethiopia has been based on ‘mutual respect’. The Minister also expressed the view that Ethiopia would also benefit from the Belt and Road Initiative.
During the course of the Forum of China-Africa cooperation in September 2018, South African President Cyril Ramaphosa had also disagreed with the assertion that China was indulging in predatory economics and this was leading to a ‘New Colonialism,’ as had been argued Malaysian Prime Minister Mahathir Mohammad during his visit to China in August 2018.
Washington DC needs to understand the fact that Beijing will always have an advantage given the fact that there are no strings attached to it’s financial assistance. To overcome this, it needs to have a cohesive strategy, and play to its strengths. Significantly, the US was ahead of China in terms of FDI in Africa in 2017 (US was invested in 130 projects as of 2017, while China was invested in 54 projects). Apart from this, Africa has also benefited from the AGOA program (Africa Growth and Opportunity Act), which grants 40 African countries duty free access to over 6000 products.
Yet, under Trump, the US adopts a transactionalist approach even towards serious foreign policy issues (the latest example being the decision to withdraw US troops from Syria) and there is no continuity and consistency.
US can explore joint partnership with allies
In such a situation, it would be tough to counter China, unless it joins hands with Japan, which has also managed to make impressive inroads into Africa, in terms of investments, and has also been providing financial assistance, though it is more cautious than China and has been closely watching the region’s increasing debts. Japan and India are already seeking to work jointly for promoting growth and connectivity in Africa through the Africa-Asia Growth Corridor. The US is working with Japan and India for promoting a free and open Indo-Pacific, and can work with both countries for bolstering the ‘Prosper Africa’ project.
Perhaps, Trump should pay heed to Defence Secretary Jim Mattis’ (who will be quitting in February 2019) advice where he has spoken about the relevance of US alliances for promoting its own strategic interests.
There are of course those who argue that US should find common ground with China for the development of Africa, and not adopt a ‘zero-sum’ approach. In the past both sides have sought to work jointly.
Conclusion
African countries will ultimately see their own interests, mere criticism of China’s economic policies, and the BRI project, and indirectly questioning the judgment of African countries, does not make for strategic thinking on the part of the US. The key is to provide a feasible alternative to China, along with other US allies, or to find common ground with Beijing. Expecting nuance and a long term vision from the Trump Administration, however, is a tall order.
American protectionism and Asian responses
On October 10, 2018, a senior Chinese diplomat in India underscored the need for New Delhi and Beijing to work jointly in order to counter the policy of trade protectionism being promoted by US President Donald Trump.
It would be pertinent to point out that US had imposed tariffs estimated at $200 billion in September 2018, Beijing imposed tariffs on $60 billion of US imports as a retaliatory measure, and US threatened to impose further tariffs. Interestingly, US trade deficit vis-à-vis China reached $34.1 billion for the month of September (in August 2018, it was $31 billion). Critics of Trump point to this increasing trade deficit vis-à-vis China as a reiteration of the fact that Trump’s economic policies are not working.
Ji Rong, spokesperson of the Chinese Embassy in India, said that tariffs will be detrimental for both India and China and, given the fact that both are engines of economic growth, it is important for both to work together.
The Chinese diplomat’s statement came at an interesting time. Continue reading
Tokyo’s holistic approach to Africa needs to be applauded
A Ministerial meeting attended by representatives from 52 African nations was held ahead of the 7th Tokyo International Conference for African Development (TICAD) to be held in Yokohama in August 2019.
TICAD (which is co-hosted by the Government of Japan, The UNDP, World Bank Group and African Union Commission) was launched over two decades ago, in 1993, with the main objective being to bring back global interest in Africa (a number of key geopolitical developments, such as the end of the Cold War, had resulted in the global community shifting its focus away from Africa).
In the past two decades, TICAD forum has played a key role in Africa’s development. In recent years, the government of Japan has contributed to Africa’s development in a number of important areas. In the phase between 2008-2013, for example, the Government of Japan built a number of elementary and middle schools, upgraded healthcare and medical facilities, and also provided drinking water to rural villages.
During the last TICAD event, in 2016, held at Nairobi (Kenya), Japanese PM Shinzo Abe had committed $30 billion in assistance over a period of three years for key areas such as infrastructure and health care.
Beijing would be closely observing the recent meeting for a number of reasons. Continue reading
The EU’s laudable Asia Connectivity Strategy
The European Union (EU) has put forward a plan for enhancing connectivity within Asia, and has been dubbed as the Asia Connectivity Strategy.
The EU does not want to give an impression that the Asia Connectivity Strategy (ACS) is a counter to the Belt and Road Initiative (BRI). Yet, senior officials of the EU, while commenting on the broad aims and objectives of the project, have categorically stated that the primary goal of the Asia Connectivity Strategy is enhancing connectivity (physical and digital) while also ensuring that local communities benefit from such a project, and that environmental and social norms are not flouted (this is a clear allusion to the shortcomings of the BRI). There are no clear details with regard to the budget, and other modalities of the project (EU member countries are likely to give a go ahead for this project, before the Asia-Europe Meeting in October 2018). The EU has categorically stated that it would like to ensure that the ACS is economically sustainable.
Other alternatives to BRI: the US
It is not just the EU, but also the US, along with Japan and Australia, which are trying to create an alternative vision to the BRI.
India’s approach towards BRI: Need for pragmatism
(new title)
Recently, China’s consular general in Kolkata, Ma Zhanwu, while speaking at a function, proposed a bullet train connecting Kunming (in China’s Yunnan Province) with Kolkata, the capital of India’s eastern state of West Bengal. Said Ma:
With joint efforts of India and China, a high-speed rail link could be established between the two cities.
It would be pertinent to point out that the proposal for a bullet train connecting Kunming and Kolkata had been discussed earlier at the Greater Mekong Subregion (GMS) meet in 2015. In fact, enhancing connectivity between India and China through the Kolkata-Kunming multi-modal corridor (officially the Bangladesh-China-India-Myanmar Economic Corridor, or BCIMEC), which covers a distance of 2,800 kilometres, has been under discussion for over 2 decades, through the Track II K2K (Kolkata-Kunming) dialogue. During former India Prime Minister Manmohan Singh’s China visit, in October 2013, sister city relations were established between Kunming and Kolkata.
In recent years, China has been pro-actively reaching out to West Bengal Chief Minister Mamata Banerjee, and has invited her to visit on repeated occasions, though she has been unable to visit (she was all set to visit in June 2018, but her trip was cancelled at the last moment). Apart from this, a number of Chinese investors have expressed interest in investing in West Bengal and even attended the Bengal Global Business Summit 2018.
Given the increasing emphasis on connectivity with South East Asia, through India’s North East (one of the key aims of India’s ‘Act East Policy’), it was believed that the BCIMEC would tie in neatly with India’s vision for connectivity.
However, tensions between India and China – due to the Doklam standoff as well as Beijing’s insistence that BCIMEC be included in its official Belt and Road Initiative (BRI) – have contributed to a wane in New Delhi’s interest in the project, at least for the time being. The Rohingya crisis, and more general tensions between Bangladesh and Myanmar, are also a major impediment to the project.
The China Myanmar Economic Corridor: Why New Delhi should pay close attention
While a high speed train is an ambitious project, New Delhi can not be closed to the BCIMEC and should pay close attention to the China-Myanmar Economic Corridor (the Memorandum of Understanding for this project was signed on September 9, 2018). While the China-Myanmar Economic Corridor (CMEC) has been under discussion for some time, there have been numerous debates with regard to the economic implications for Myanmar (the Kyaukphyu Deep Sea Port project, as well as Special Economic Zones, have been contentious). The increasing debate on the issue of ‘debt trap diplomacy’ has only increased apprehensions within sections of the Myanma government (the stake of Chinese conglomerate CITIC in the deep sea port has been reduced from 85 percent to 70 percent due to domestic pressures). Myanmar has also made it clear that it would not like to depend only on Chinese investments, and the recently-signed MOU categorically states that third party investments from Japan, South Korea, and Thailand in CMEC projects are more than welcome. Interestingly, an article on CMEC in Chinese media acknowledges some of the apprehensions vis-à-vis CMEC, and also bats for closer cooperation between China and other Asian and Western countries.
The proposal for the bullet train connecting Kolkata-Kunming came days after the agreement had been signed between China and Myanmar. China would like to extend this corridor all the way to India (while speaking about rail connectivity between Kunming and Kolkata, the Chinese diplomat also spoke about an industrial cluster along the route).
How should New Delhi play it?
While New Delhi’s objections to the BRI are valid, it does need to shed blinkers. It is free not to participate in those components of the project with which it is not comfortable, but there are projects, like the BCIMEC, where it can easily find common ground with China. This will give a boost to India’s infrastructure in the eastern and northeastern part of the country, and complement it’s Act East Policy. If third countries are allowed to invest in CMEC, Indian companies should explore opportunities, as this will enhance their presence in Myanmar while also bolstering the Act East Policy.
China’s narrative in South Asia
Post the Wuhan Summit, there has been a clear change of narrative from the Chinese side. China has expressed its keenness to work jointly with India in Afghanistan – in capacity-building projects. This was unthinkable a few years ago.
China’s burgeoning economic relationship with Nepal has sent alarm signals in New Delhi. China’s decision to give Nepal access to its ports (Tianjin, Shenzhen, Lianyungang and Zhanjiang) raised the hackles in New Delhi. Pragmatists realize that New Delhi can not dictate Nepal’s ties with China, and the fact is that Kathmandu would like to benefit economically from its ties with both China and India.
Interestingly, China has been urging Nepal to strengthen economic ties with India. During his visit to Beijing, Nepal’s Prime Minister, K.P. Oli, made an unequivocal pitch for strong ties between Kathmandu and New Delhi (as well as Kathmandu and Beijing). He stated that the economic progress of both India and China was an opportunity for Nepal, and stated that Nepal wanted to emerge as a bridge between both countries, and would not like to get embedded in zero sum geopolitical games. Nepal’s former Prime Minister, Prachanda, during his visit to India, also referred to the need for close ties with both India and China.
India should also keep in mind a few other points
While many in New Delhi are pointing to Malaysian Prime Minister Mahathir Mohammad’s stand against Chinese projects, it is important to keep in mind that while the Malaysian PM has scrapped a few projects, he has continued to reiterate the relevance of the China-Malaysia relationship (there is need for nuance). Second, it is one thing to point out the shortcomings of the BRI project, but India needs to prove its own track record in big ticket connectivity projects (New Delhi has been extremely slow when it comes to the implementation of connectivity projects within the neighbourhood). Third, there are areas where India is already working with China, so rigidity and paranoia do not make much sense. If even Japan is willing to participate in certain projects of BRI, there is absolutely no reason why India should not at least be open to elements of the project. It is also important to look at connectivity from an economic dimension and not a narrow security prism as large sections of India’s strategic community do. Finally, New Delhi can not put all its eggs in the American basket. While India’s strategic relationship with the US has witnessed an improvement, and Washington has repeatedly spoken about the need for greater connectivity within the ‘Indo-Pacific’, the US is not likely to invest significantly in economic connectivity projects. India thus can not be totally dismissive of Beijing-led connectivity initiatives.
While New Delhi needs to exhibit pragmatism, Beijing on its part needs to address the concerns of India, and other countries, with regard to the BRI.
Notes On Liberty 