Insights 2013 by Institute of South Asian Studies ISAS

2013

ISAS Insights No. 196 – 17 January 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Bangladesh Enters Election Year: Perspectives on Polls and Politics Iftekhar Ahmed Chowdhury1

Introduction The Bangladeshi is an intensely political person. It is his, or, as is somewhat more apt in Bangladesh given the gender of its leadership, her historical heritage. This extrapolation is easily derived from behaviour-pattern dating way back to Bengal’s past. Unsurprisingly, therefore, elections in Bangladesh generate considerable heat and dust! This January the nation of nearly 160 million entered its election year. The government, a 14-party coalition led by the Awami League (AL) and Prime Minister Sheikh Hasina, has now completed exactly four years in office. The timeline for election would be anytime this year starting October. In parliamentary systems, it is the government’s prerogative to call for elections even before the expiry of its term (in this case, five years).

Bitter Inter-Party Relations Hasina commenced her campaign with a speech in early January where she enumerated the government’s achievements, while as critics from the Opposition parties were quick to point out, neglecting to mention its failures. The Opposition, a collection of 18 parties including some right-wing Islamic ones is led by the Bangladesh Nationalist Party (BNP) of Begum Khaleda Zia. Both women are extremely powerful, their clout within their parties well nigh unchallengeable (those who chose to offer a modicum of challenge have found themselves 1

Dr Iftekhar Ahmed Chowdhury is Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He is a former Foreign Advisor (Foreign Minister) of Bangladesh, and he can be contacted at isasiac@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

severely discomfited!). Sadly, though, there is no love-lost between the two, and their bitter relations mark the overall tone of politics across the length and the breadth of the country. Khaleda Zia, too, has started her electioneering, more, however, by action in the streets than by the offer of alternative plans and programmes. In the absence of an agreed method for holding the elections, the government recently having used its preponderant parliamentary majority to alter the Constitution by scrapping the earlier prevalent ‘Caretaker system’ and the Opposition insisting on it, the great concern is of an inexorable heading towards a trainwreck!

Positive Economic and Social Matrix The economy, despite this sorry political matrix, is not in shambles. While it will not be easy for governmental spokespersons to claim that this has happened because of the government, it will be just as difficult for detractors to prove that this is taking place in spite of it! The truth is that it is the entrepreneurial spirit of the Bangladeshis that has found fruition in this positive development. Garment exports earn over US$ 18 billion annually. This year over US$ 14 billion has been sent home as remittances by Bangladeshi workers abroad – the penchant for the Bangladeshi to travel anywhere in the world to work and earn is phenomenal, and legendary – and foreign exchange reserves have been growing steadily, to also over US$ 14 billion at this time! But this favourable situation remains shaky. The physical infrastructure remains weak exacerbated by corruption; garment exports are under some threat after labour unrest following fires in some factories leading to many deaths, allegedly because of non-compliance of safety regulations by owners; the job market abroad is shrinking due to global downturn; and declining trade tending to reduce the positive perceptions of large accumulating reserves! The social sector indices show improved performance, with the capacity to meet a number of key Millennium Development Goals of the United Nations by 2015. A rational consideration for the government would be to time the election before the ‘negatives’ override the ‘positives’, which may mean sooner than later. Another factor that could prompt an earlier election is an assessment by the government that the allegations of corruption surrounding the Padma Bridge issue may grow out of hand before long. This was a project, which was also an AL election pledge, designed to improve the poor communications infrastructure. The proposed 6.15-km long bridge spanning the mighty Padma river was to have been one of the largest projects of its kind in South Asia.. The cost was calculated at US$ 3 billion. But in course of the current financial year the World Bank withdrew US$ 1.2 billion as soft credit for the project, alleging corruption. The Asian Development Bank and Japan, both co-funders, followed suit. The government raised Cain, but following some tough negotiations, agreed to an investigation panel set up by the Bank, headed by Luis Moreno Ocampo, a former United Nations prosecutor. On the Panel’s urgings, and because the World Bank’s release of funds hinged on its report, the Bangladesh Anti-corruption Commission (ACC) ordered the arrest and indictment of some senior officials named as ‘conspirators for corruption’. But this list excluded the then Minister, an AL veteran, Abul Hussain, against whom the Bank assessed that sufficient, but not 2

conclusive, proof of culpability existed. The Bank was not amused at this exclusion and wrote a strongly worded letter to the Anti-corruption Commission on 9 January 2013 (made public in the media on 15 January) – making the point. It asked for a response from the ACC, which will undoubtedly have to be more carefully crafted than the preceding correspondence which argued that the reason for the Minister’s exclusion was apprehensions of ‘political uproar’, which the Panel found ‘deeply disturbing’. Should the ACC’s response be unsatisfactory to the Panel, the withholding of funds could be final, with unsavoury political consequences. Ce grand malheur, de ne pouvoir etre seul, so goes a French saying, meaning that sad events do not come singly. The ACC appears to have its hands full with other issues involving financial scandal. Two large corporate entities, ‘Destiny’ and ‘Hallmark’ are alleged to have obtained incredibly huge loans from public sector banks using connections. The major accused persons have been arrested and are likely to undergo trial, but the general view is that there is still ‘something rotten in the State of Denmark’.

Short-term Budget and Long-term Mega Projects The Budget placed on 9 June last year before the Parliament by Finance Minister M A Muhith was indicative of gradual electoral preparations. It had an outlay of Taka 163,589 crores –roughly US$ 22 billion – and projected growth at 7.2 per cent. In deference to practical realities, it was later scaled down. There were three major thrust areas: poverty alleviation, employment generation, and power and energy sector development. Power shortage was a critical issue, but the manner in which this is being addressed – quick rentals – has come in for some criticism in terms of both licit and illicit costs (comparison with the Pakistani situation, where the arrest of Prime Minister Pervez Ashraf has been ordered by Chief Justice Iftikhar Mohammad Chaudhury for graft when he was Power Minister and unkindly nick-named ‘Rental Raj’, may not be out of place for some critics). The debates that followed in Bangladesh identified implementation as key. Food production, an important element in a nation where so many live below the poverty-line, was assessed as being satisfactory. The lack of exposure to the global financial system has stood Bangladesh in good stead, largely sheltering it from the adverse effects of global crises. The Budget was overall carefully balanced, but it was not quite an election-year budget which the one tabled this year is likely to be. The government might want to give the next budget sometime to yield, or at least point towards desired results, before calling for elections. Short-term benefits derived from such fiscal measures may, however, be derailed by the failure to complete some of the long-term ‘mega projects’ the government was committed to. Apart from the Padma Bridge issue, there are some others which are likely to suffer costly delays. One such is the proposed deep sea-port in Chittagong whose first phase was supposed to start at the end of 2011 and be completed by 2015. China has submitted a proposal and says it is prepared to partner with others, but the progress from the governmental side to date has been minimal. Another is the idea of Metro Rail, whose first phase was meant to end in 3

2015, but which is suffering from indecision as to its routes. Yet another project is one of elevated expressway in Dhaka which was awarded to an Italian-Thai joint venture in 2010, and was scheduled to be completed in 42 months. Alas, due to land acquisition problem and lack of investment funds, the project is in cold storage.

Pre-Election Surveys and Possible Election Timeframe Another factor that may feed into the government’s decision with regard to the election schedule is the results of a number of polls or surveys organised by the media recently. One designed by The Daily Star and conducted by the Centre for Strategic Research from 2 December to 14 December 2012, covering 2,510 respondents in 44 of the country’s 64 districts, showed the AL in slight lead, with the BNP closing the gap so much so that the future looked wide open for both parties. It showed the support base of the AL at 42 per cent with the BNP now at 39 per cent but narrowing the gap. The yet undecided constituted 10 per cent and the rest was divided among other smaller parties. The AL did better in rural areas with its popularity in urban areas dipping markedly. If this trend continues, soon the predictions will be too close to call. Another survey was conducted by the popular Bangla language daily Prothom Alo. It was carried out in November 2012 and covered 5,000 individuals. According to its findings, 45 per cent were satisfied with the government’s overall performance over the last four years, and 49 per cent were not. Sixty-five per cent assessed the Prime Minister’s performance positively, and 34 per cent negatively. On whether the country was going the right way, 40 per cent said ‘yes’ and a much larger 60 per cent said ‘no’. Both polls showed that an overwhelming majority preferred elections to be held under a ‘neutral’ or ‘caretaker’ system. In the case of The Daily Star 67 per cent thought that a party-led government would not be able to hold a free and fair election, and 26 per cent believed it to be possible. In the case of Prothom Alo 76 per cent were of the opinion that a credible and neutral election would not be possible without a caretaker government, while 22 per cent considered it possible. In this respect both polls pointed to similar results. A similar poll by another Bangla newspaper Shomokal focused on the government’s fulfilment (or the lack of it) of election pledges made earlier. On the negative side of the ledger, it included the failure to control price-hikes of essential commodities, inability to adopt adequate measures against corruption, non-compliance with the commitment to declare the wealth of political leaders, the persistence of extra-judicial killings, non-appointment of an ombudsperson and the failure to stem politicisation of the administration. In the positive column was the substantial resolution of the power crisis, the on-going trial of the alleged 1971 war criminals, free distribution of text books at the beginning of the academic year, emphasis on rural economy, stabilisation of administrative reforms and freedom of information, and the creation of a new administrative Division in Rangpur in northern Bangladesh. The assessment in other words was a mixed report-card of successes and failures. 4

No opinion polls are perfect. Nor is any of the above that have been mentioned. They can at best be indicative of sentiments. Four were most evident. First, the two major political parties are in dead heat, with the narrow gap, that gives AL the lead, closing. Second, both major parties retain their basic vote-banks/constituencies, which mean the outcome will be decided by those who are yet to make up their mind, and by the other political parties, which mean a small number. Third, any failure of the government is not generally being translated into additional support for the main opposition, reflecting a general disappointment with the nature of overall politics in the country. And, fourth, there is a general tendency to believe that free, fair and credible elections are unlikely to be possible under any party-led government. Particularly the narrow gap between the two major parties will further widen what is already an enormous trust-deficit and aggravate apprehensions that a small amount of engineering could lead to a significant impact on the election outcome. This would sharpen the BNPâ&#x20AC;&#x2122;s demand for a neutral mechanism and also the ALâ&#x20AC;&#x2122;s opposition to it. A Tahir-ul Qadri-type phenomenon, as is being experienced in Pakistan, can possibly be ruled out because a postponement of elections would not perhaps be acceptable in Bangladesh on any account.

Conclusion The government will need to decide soon its preferred time-table for elections. Much careful consideration will go into whether it would gain by having it earlier, or later as per the normal schedule. But this would have to mean that the imbroglio surrounding the method of the elections will require to be addressed forthwith. There is no obvious indication that this is being done. As is often wont in Bangladesh, foreign diplomats, particularly western ones, at such times become very active. But this time round the fall-out from the Yunus issue (the governmentâ&#x20AC;&#x2122;s removal, the stated reason being his advanced age, from the headship of the Grameen Bank of the Nobel Laureate, Professor Mohammed Yunus, who has close links with western leadership including the Clintons of the United States) has increased their distance from the powers that be. The Americans in Dhaka are said to complain privately of their lack of access to the Prime Minister, who tellingly was very warmly received this month in Moscow, while any official visit to Washington is still pending! Luckily Bangladesh prides itself on a very vibrant civil society with vast intellectual resources all of which will be needed to be pressed into service to avoid a collision course that appears to be on the cards.

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ISAS Insights No. 197 – 6 February 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Social Safety Nets in Bangladesh Ishraq Ahmed1

Spending on social programmes to alleviate poverty and address the overall economic needs of the vulnerable segments of the population has been an integral part of the Bangladesh Government’s strategy to tackle poverty. The social programmes/social protection programmes include components of social insurance, labour market policies and social assistance. Social Safety Net Programmes (SSNPs) in Bangladesh – which fall under the aegis of social assistance programmes – are a set of public measures to protect those who are vulnerable to various social and economic hardships arising from significant declines in income and welfare due to loss of cultivable land, crop failure, unemployment, sickness, maternity and old age or death of income-earning members. Up until the 1990s, spending on social safety nets had constituted less than one per cent of GDP. Spending has been increasing in recent years due to a consistent GDP growth of about five per cent a year. Annual expenditure on safety net programmes amounts to around US $1.64 billion, which is approximately 1.6 per cent of the GDP as of 2011.2

Allocation of Safety Nets While safety-net spending in Bangladesh has been traditionally concentrated in the areas of food rations and post-disaster relief, the focus has shifted towards the social and development agendas of the nation over time. The Government has also altered the way resources are being transferred – it has increasingly adopted the policy of using cash transfers while gradually reducing food transfer programmes. For instance, the Food for Education (FFE) programme has been discontinued and replaced by the Cash for Education scheme. Similarly the Food for Work (FFW) scheme is gradually being phased out in favour of the Cash for 1

Mr Ishraq Ahmed is Research Associate at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasishr@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. UNDP-PPRC (2011)

Work programme. One of the rationales for using cash transfers is that the leakages/wastages are less than those from food transfer programmes. 3 A BIDS (2003) study found that cash transfer programmes such as secondary stipend programmes perform better than food programmes with transfer losses of 10-12 per cent. Furthermore, the cost of delivering cash is cheaper than the cost of delivering food to the beneficiaries. It has been estimated that the cost of delivering Taka 1.00 worth of food on average is Taka 0.20, while the cost of delivering Taka 1.00 in cash is virtually nil. Although the bulk of the safety net programmes are implemented through government channels, there are other actors who play important roles such as non-governmental organisations, community and voluntary organisations. Around 97 per cent of the annual allocations are channelled through 30 major programmes, although there is a significant overlap between safety net programmes and sectoral development programmes. 4

Evaluation of Social Safety Nets Although social programmes in Bangladesh have a wide coverage and have targeted the most vulnerable and neglected over time, the targeting of SSNPs has not been as efficient. The Sixth Five Year Plan (SFYP) estimated that spending on SSNPs had to increase to three per cent of the GDP, but even with this proposed increase, Bangladesh would appear to be spending less than other countries in the region. The World Bank (2006) has showed that, on average, South Asian economies spent four per cent of GDP on SSNPs, while the spending in East Asia and Pacific was eight per cent. Exact comparisons between regions are difficult, since the package of interventions used in each region tends to vary, but they provide an interesting perspective nonetheless. The efficiency of the major targeted programmes in Bangladesh is quite modest by international standards. When aggregated, the targeted programmes such as Vulnerable Group Development (VGD), Vulnerable Group Feeding (VGF), Old Age Pensions, Food/Cash for Work, Test Relief and others reach around 59 per cent of beneficiaries in the lowest two quintiles (21 to 40 per cent). These numbers are quite low when compared to similar targeted programmes in the lowest two quintiles of Chile, Honduras and Armenia. Quintile Bait-ulMal (Pakistan)

PRAF PROGRESA (Honduras) (Mexico)

1 29 2 46 3 67 4 83 5 100 Source: World Bank

43 80 94 98 100

3 4

40 62 81 93 100

SUF Family (Chile) Poverty Benefit (Armenia) 67 52 89 73 97 86 100 94 100 100

The World Bank (2006), â&#x20AC;&#x153;Social Safety Nets in Bangladesh: An Assessmentâ&#x20AC;? UNDP-PPRC (2011)

All Targeted Programmes in Bangladesh * 34 59 79 94 100

The Household and Income Expenditure Survey (HIES) of 2010 indicated that overall 25 per cent of households have safety net coverage in Bangladesh (Table 1). However, it is not clear whether the percentage covered is with respect to the whole population or just the population under the poverty line. Proportional coverage has been found to be higher for poverty-pockets such as Monga (famine-prone northern districts), ecologically vulnerable locations such as the char (river islands created by floods and erosion), etc. An estimated 9.6 per cent of chronic deficit households nationwide had VGD coverage in 2009 – a very low number. However, when districts in the Monga belt were surveyed – in this case, the Kurigram district – 45 per cent of similar households had VGD coverage; a more adequate coverage was noticed. The coverage of selected programmes by division reveals that nationwide about 25 per cent of households receive social assistance, with Khulna having the most recipients – 37 per cent of households in Khulna have access to some form of social safety net. Khulna has the third highest incidence of poverty (32.1 per cent) while Rangpur and Barisal have the highest and second highest incidences of poverty – 46.2 and 39.4 per cent respectively,5 much higher than the national index of 31.5 per cent. Commensurate with the poverty levels in Rangpur and Barisal, a greater proportion of households should be beneficiaries of social programmes in these two divisions. Among the households receiving the SSNPs, the Stipend for Primary Students (MOPMED) programme covers the most households, at 19 per cent, with Barisal having the greatest number of beneficiaries. The programme is a conditional cash transfer and reflects the Government’s preferred aim of promoting human development using such a method of transfer. The Agriculture Rehabilitation programme (MOA) has the second largest number of beneficiaries, with Dhaka having the most impact. This suggests that the Dhaka division attracts the most agricultural support.

Table 1: Average Benefit per Household from SSNPs, 2010 (Taka) Type of programme

Total

Barisal

Chitt agong

Dhaka

Khulna Rajshahi Rangpur Sylhet

Total

483

562

624

467

438

429

492

380

Old age allowance (MOSW)

520

583

414

604

523

577

352

350

Allowances for the widow, deserted & destitute

474

392

550

439

418

431

635

547

Gratuitous relief (cash)

499

275

473

1073

1300

254

509

General relief activities

344

494

185

645

384

210

280

HIES (2010)

Cash for work (MOFDM)

2077

5250

4200

757

1524

2209

Housing support

10650

25020

2000

522

Agriculture rehabilitation (MOA)

472

105

800

581

444

406

259

376

Vulnerable Group Development

771

426

208

2150

672

Vulnerable Group Feeding

455

558

340

346

500

397

1900

636

Test Relief (TR) food

530

619

150

1671

262

378

Gratuitous relief

568

632

1272

298

293

424

599

318

Food for work

158

280

Employment generation for hard-core poor or 100 days

771

318

2035

243

Stipend for primary students (MOPMED)

157

161

259

130

118

115

193

199

School feeding programme (MOPMED)

Stipend for drop out students

219

225

461

116

100

Stipend for secondary & higher secondary female student

169

304

211

103

144

212

125

Rural employment opportunity for protection of public

1569

3000

Char Livelihood

943

1400

100

340

3600

580

300

420

840

2050

Rural Employment and Rural 1218 Maintenance Pro.

Source: Household Income and Expenditure Survey (HIES), 2010 The table shows the average benefit received per household from selected SSNPs in 2010. The total average benefit received per household was 483 Taka with recipients in Chittagong division having the highest average of Taka 624. Chittagong has received the highest benefit per household despite having the lowest poverty rates among all the divisions â&#x20AC;&#x201C; 26 per cent. This could indicate that if poverty and programme-participation are correlated, then Chittagong division is receiving a disproportionate share of transfers. Overall, households participating in Housing Support receive the highest benefits with the Cash for Work (MOFDM) programme a distant second. Barisal division enjoys the highest average benefits 4

in both these leading programmes, indicating that both coverage (percentage of households receiving SSNPs) and allocation (benefits accrued) are adequate for Barisal in this case. However, Barisal deserves special attention because of the high prevalence of urban and rural poverty. The incidence of natural disasters in this division calls for specially designed policies to mitigate the adverse impacts. The increase in rice prices in 2007 and 2008, for instance, benefitted a group of large farmers but had an unfavourable impact on the poorest households.6 As such, the severity of hardships in Barisal warrants an even greater coverage and allocation of the social programmes.

Beneficiary Perceptions Evaluations on the effectiveness of the major programmes have been conducted, in which the amount that is wasted from the transfer programmes and actual benefits received were identified. In this case, the recipient households’ perception of a particular social programme is the most important indicator of the overall efficiency of the said programme. This would be the fundamental way to appraise the success of the given programme/s. In a study conducted during the period 2007-2010, comparisons of the stated benefit rate and the actual amount received showed no disparities in the major selected programmes. However, there were delays due to fund transfers, but the recipients did not perceive such delays as significant. The programmes of Old Age Allowances and Allowances for Widows use formal banking channels to make payments, but it was found that beneficiaries were not familiar with the concept of going to the bank and collecting payments made to them – the practice of selfcollection from formal financial institutions is not yet widespread in certain areas. Overall the programmes were positively received with many assessing the impact as “strong” and the others as “moderate”. The most important impact was perceived to be the reduction of extreme poverty and as such, most programmes had a direct income impact. Income was the primary indicator for judging whether welfare had improved. Increase in assets, increased employment opportunities and improved school attendance were the other measures. This emphasis on improving incomes among the recipient households reflects the traditional assessment of one’s well-being. The survey revealed that average nominal incomes rose by 32 per cent over three years of the programme duration. Savings increased dramatically as well – an increase of 170 per cent – with around 61 per cent of households saving, in contrast to only 25 per cent saving before the programmes. There was an improvement in selfassessment of poverty – the proportion of households who considered themselves to be chronically poor declined from 30 per cent to nine per cent. 7

Targeting and Leakages Programmes that have based their transfers on household/geographical characteristics have led to some complications. Unintended beneficiaries have been recipients of transfer 6 7

SFYP UNDP-PPRC (2011)

programmes â&#x20AC;&#x201C; for instance, data suggested that 27 per cent of VGD recipients were not poor. Another study showed that almost 47 per cent of beneficiaries under the Primary Stipend for education programme are actually non-poor and are incorrectly included in the programme. This inaccurate targeting represents a glaring waste of resources and certain segments also get excluded. This calls for a more effective means-testing procedure before social transfers are made. Many safety net programmes use targeting criteria similar to the one used by the VGD scheme such as whether the household owns land, whether it is a female-headed household and whether members are employed in casual labour. When community members or village leaders select participants based on these criteria, some households may be incorrectly classified and as such are unable to access the programmes. Geographical targeting also leads to similar exclusions. Since food aid under VGD relies on food insecurity maps for transfers, it means that all poor households within relatively less poverty-stricken sub-districts are denied assistance. Therefore, individual households with very high food insecurity are left out of the programme. There is mixed evidence of leakage from food and cash transfer programmes. Studies reported varying estimates of transfer losses, with magnitudes of 10-50 per cent for foodbased programmes and 5-25 per cent for cash-based ones. VGD and other food transfers programmes rely on the public food distribution system, with food being loaded and unloaded at various points before they are delivered to the beneficiaries â&#x20AC;&#x201C; there is ample scope for pilferage and other forms of outflows. Various leakage issues have been identified in safety net coverage: informal entry fee for allowance-based programmes, lower-value asset transfer than what was stipulated and undefined and unanticipated deductions from cash grants.

Overlapping Operations Social programmes, more specifically safety net programmes, are directed through numerous agencies, non-governmental organisations as well as international bilateral and multilateral agencies. A World Bank report points out that 57 per cent of the government budget for fiscal year 2007-08 was allocated towards poverty reduction and that all the ministries have a role in this regard. Consequently, there is frequent overlap between programmes, inadequate coordination across ministries and difficulties in reaching consensus on which programmes to focus on. Small infrastructure development programmes such as road maintenance and providing workfare programmes also involve agencies such as Local Government Ministry and the Water Resources Ministry, whose main operations are elsewhere. The incidence of natural disasters leads to the involvement of the Ministry of Food and Disaster Management â&#x20AC;&#x201C; it implements its own safety net programmes during this time. It is the same ministry that also implements its FFW programme. As such, the programmes that are implemented are fairly alike and target similar households; this duplication in efforts is somewhat time-consuming.

Conclusion The allocations towards safety nets have been boosted for the fiscal year 2012-13. More specifically the allocation and coverage of the major programmes –VGD, VGF and food for works programme – have been increased. The number of beneficiaries of these programmes as of 2011 is about 30 million – about one-fifth of Bangladesh’s population.8 The current Government has prioritised the agendas of reducing poverty and also inequality in its overall development strategy. As such, it is imperative that there is adequate investment in infrastructure, sufficient employment generation during lean seasons and increased coverage of social safety net programmes. More priority has to be given to activities targeting the extreme poor, widowed and vulnerable women in poverty and the other disadvantaged groups. Social safety net transfers will also have to address issues of alleged bribery and political affiliation for being included in certain programmes – this posits further problems for programme inclusion.

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Ministry of Finance Government of the People’s Republic of Bangladesh

ISAS Insights No. 198 – 28 February 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Expanding India-ASEAN Connectivity1 S Narayan2 Introduction The last decade has witnessed a sea change in the relationship between India and the Association of Southeast Asian Nations (ASEAN). Several significant economic and political developments have contributed to this. First, the India’s Look East Policy, strongly supported by Singapore, led to the Comprehensive Economic Cooperation Agreement between the two countries, the first that India was confident enough to ink. This has led to bilateral trade growing from a mere US$ 1.5 billion in 2002 to over US$ 17 billion in 2010. India was confident to enter into trade agreement negotiations with the other ASEAN members, and the India-ASEAN free trade agreement is also now a reality. The India-ASEAN Free Trade Agreement (AIFTA), which came into effect on 1 January 2010 with Malaysia, Singapore and Thailand, is central to the country’s growing engagement with the ASEAN region. Bilateral trade volume between India and ASEAN exceeded US$ 70 billion in 2012. By 2015, it is expected to reach US$ 100 billion. The share of total trade of India with Mekong countries has more than doubled in a span of 15 years. India has signed partial FTA with Thailand and Comprehensive Economic Cooperation Agreement (CECA) with Singapore. India’s FTA with ASEAN was signed on 13 August 2009; and India’s Comprehensive Economic Cooperation Agreement with Malaysia was signed on 18 February 2011. 1

This is a paper presented at a plenary session of India-ASEAN Delhi Dialogue V that was held in the Indian capital on 19 and 20 February 2013. 2 Dr S Narayan is Head of Research and Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He was formerly Economic Advisor to the Prime Minister of India. Dr Narayan can be contacted at snarayan43@gmail.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

Second, increased trade has brought about increased investment into the ASEAN member countries from India. Indian companies use Singapore as the hub for their financial, legal and investment activities. Indian entities are investing in natural resources in the ASEAN countries including coal mining in Indonesia, palm oil and rubber plantations in Malaysia and Laos, and in retail opportunities for Indian goods. Indian brand names are being found in retail malls in Singapore, Kuala Lumpur and Thailand. Third, there is increasing tourism and MICE traffic from India into ASEAN. There are over 300 flights every week from different destinations in India to Singapore every week now, as against only around 50 flights a decade ago. This is contributing to the tourism, hotel, transport and entertainment industries in the ASEAN, and there is an estimate of US$5 billion outflow from India in 2011 on this account. In return, there are inward remittances from workers and professionals of Indian origin in the ASEAN countries. While disaggregated figures are not readily available, anecdotal evidence indicates that this has grown multi-fold in the last decade. Next, at the international level, security cooperation and participation by India at the meetings of regional bodies and networks have increased. There is cooperation in joint defence exercises as well as opportunities of training in India for defence personnel. The architecture of security for the Straits of Malacca is now a joint concern, and India is also a participant in discussions on the South China Sea. For several years now, there have been joint naval exercises with Singapore, and Singapore Air Force pilots avail of training opportunities in India. Finally, the opening up of Myanmar is of strategic and trade importance to India. Pulses, rice and other agricultural produce find a ready market in India, and the trade routes are traditional and go back to colonial days. There is growing influence of China in the region, where the ASEAN countries need to examine the re-balance of influence between their northern neighbour and India. There is increasing appreciation of the need to balance the influence of the two large economies in the region and there is realisation that each has distinct opportunities for trade and development to offer. Several aspects of this rapid change have happened sui generis, and only some aspects like security cooperation and trade agreements have been due to strategic policy-level agreements on both sides. Nowhere is this more evident than in the Northeast of India. The seven Northeast Indian states have had a geographical disadvantage of poor linkage with the rest of India. The narrow land corridor had offered limited access to trade with the rest of India. The opening of the land routes from Manipur and Mizoram have multiplied trade with Myanmar multi-fold in the last couple of years, and increasing informal trade across the border of retail consumer items from China is now flooding the markets in Manipur and Aizawl. Interestingly, it is the Myanmar trade that is growing rapidly, but over the years one can expect goods from China to arrive in increasing quantities along the border. It is a geographical reality that the Northeast states of India share a much longer and integrated land border with the ASEAN countries than even with their motherland, India; and it is only 2

natural that economic opportunities for this region arise from greater connectivity with ASEAN. Greater connectivity is essential for the realisation of the full benefits of the regional free trade and cooperation agreements, since one of the major obstacles to the expansion of trade between India and ASEAN is the high cost of moving goods across the borders. There is an unsaid parameter behind these developments. The initiatives taken by China to develop a rail network in Tibet, and a road network to connect with several points in the Kunming province, are likely to open up a number of opportunities for inter-regional trade. The road trade across the Nathu La Pass, which was opened in 2008, is now flourishing, with the gradual addition of permissible goods. Substantial infrastructure has been developed on the Chinese side, and similar infrastructure is being developed on the Indian side. The presence of China in the trade, investment and development patterns of all ASEAN countries would be quite significant, and India needs to pick and choose the advantages, develop cooperation and avoid conflict-prone situations. Diplomacy and international relations would have as much of a role to play as design and construction of infrastructure These ground-level developments have led to a flurry of activity among the governments to encourage, develop and regulate the opportunities of inter-linkages between India and the ASEAN countries and to examine the entire issue of connectivity in a comprehensive manner. At the 17th ASEAN Summit in 2010, the leaders adopted the Master Plan on ASEAN Connectivity, which identifies key strategies and actions to enhance the regionâ&#x20AC;&#x2122;s connectivity in three dimensions: physical, institutional, and people-to-people. The Comprehensive Asian Development Plan (CADP), designed by Economic Research Institute for ASEAN and East Asia (ERIA) for EAS members, provides a grand spatial design for infrastructure development in East Asia. The ASEAN-India Connectivity Report by RIS (Research and Information System for Developing Countries) advocates the enhancement of connectivity between India and ASEAN with an emphasis on two major axes: land connectivity with the northeast region, and air- and sea-connectivity with the southern region, with a thrust on the Chennai-Ennore area.

Land Transport Roads: The most important of the proposed linkages involves land transport. In particular, the road network offers a number of challenges: poor quality of roads and incomplete road networks, including missing links. Highway lanes, lighting system, and quality of roads differ across countries in Asia, and there is a lot of work to be done in standardisation of highway construction. With a long international border and landlocked location, featuring a hilly terrain, access to Indiaâ&#x20AC;&#x2122;s northeast region has been a challenge. Development of roads and railway networks to connect this region to ASEAN countries will provide an avenue for cross-border trade while simultaneously expediting economic development in this region. 3

Completion of the ASEAN Highway Network, including the Trilateral Highway connecting Thailand, Myanmar and India, has been adopted as one of the priorities of the Master Plan on ASEAN Connectivity. The project is expected to be completed by 2016. At the plenary session of the India-ASEAN Commemorative Summit held in December 2012, Prime Minister Manmohan Singh proposed that a second track of the trilateral highway be launched to connect India with Myanmar, Laos, Cambodia and Vietnam. The planned Mekong-India Economic Corridor (MIEC) will integrate Myanmar, Thailand, Cambodia and Vietnam (Mekong Countries) with India through its east coast. It is proposed to connect Ho Chi Minh City (Vietnam) with Dawei (Myanmar) via Bangkok (Thailand) and Phnom Penh (Cambodia) and further linking to Chennai in India. MIEC should be included in the designated Trade Transport Routes (TTRs), which receive special emphasis for implementation by 2015 under transport cooperation in ASEAN. The completion of national road projects such as the Chennai-Ennore Port Road Connectivity Project, the National Highway Development Programme and Dedicated Freight Corridor Projects to improve national connectivity within India is essential to allow smooth flow of goods and services. Rail: Rail is not a widely used mode of transport in Mekong countries. The share of rail transport in total freight is low at three per cent (excluding Cambodia). Presently, the rail network has severe capacity constraints to deliver efficient and reliable services for heavy usage as axle-load is low at less than 20 tonnes (except Thailand). The lack of interoperability constrains the use of rail as a transport method in the region. Track gauges, voltages, and signalling systems differ from one country to another. However, multimodal transportation hubs could be created that would leverage existing rail connectivity. Investments in standardisation of tracks, signals and procedures, along with linkages to markets through a road work, would require the development of a master plan that would take into account national priorities and existing infrastructure. In India, technological up-gradation and modernisation of the existing infrastructure and assets need to be undertaken in the railways sector. There is a plan to establish a rail link from Kolkata to Ho Chi Minh City via Myanmar, Thailand, Cambodia and Vietnam, but this project is more in a wish list than in the realm of reality in planning and design. The investments required are likely to be substantial, and it is not clear whether international traffic alone will provide adequate returns on such investment. Further, there is the question whether such a route would pass through Bangladesh.

Air Transport Air transport is an important mode of transportation for passengers, high-value fragile goods, and perishable commodities; the trade in fragile and perishable goods is expected to grow significantly. The passenger flow will also multiply as the tourism potential of the corridor is 4

enhanced and new sites are developed. There is considerable interest in the ASEAN countries for tourism in the Northeast India, and there is considerable travel by the residents of the seven Northeast Indian states to the rest of Asia. The 14th ASEAN Transport Ministers’ meeting held in Manila in 2008 upheld the proposed Open Skies Agreement and India’s keen interest to join the ASEAN Member States in an Open Skies Regime, covering airfreight and passenger services. Collaboration with Singapore and Malaysia to improve airport infrastructure may be explored by India and other ASEAN nations. Air transport network is expected to be enhanced by the ongoing initiatives to establish the ASEAN Single Aviation Market (ASAM) and the ASEAN’s air transport agreements with its Dialogue Partners including India, China, and Korea. The implementation of the Single Aviation Market is likely to permit integrated trade agreements.

Sea Transport Port network and sea transportation will be the main trade link of ASEAN region, particularly for bulk transport. But many ASEAN countries (except Singapore and Malaysia) rank poorly in the UNCTAD Liner Shipping Connectivity Index. Capacity utilisation at most gateway ports in the region is fairly high, indicating that investments in port expansion are required. Current port capacity will have to be increased after 2014, particularly in India and the Mekong region, in order to meet the expected increase in demand for port services. A JICA study on 47 designated ports in ASEAN revealed a number of challenges in providing more efficient shipping services given the varying levels of port infrastructure development. There is a significant mismatch in the port facilities offered in different countries; these infrastructure gaps create difficulties for port users. Operational efficiency of Indian ports needs to be enhanced significantly to bring them at par with international ports. The construction of new ports in Dawei, Kyauk Phyu, and Pakbaran is under way; and the expansion/upgrading of existing ports, such as Yangon, Sittwe, and Chennai, is expected. Inland waterways along the Kaladan River and Ganga can also enhance the connectivity between the mainland and Northeast India via Myanmar and Bangladesh respectively. In April 2008, India and Myanmar signed the agreement for the Kaladan Multi-Modal Transit Transport Project, financed by India’s Ministry of External Affairs. The project will connect the port of Kolkata with Sittwe port in Myanmar. It will then link Sittwe to Mizoram via river and road transport. The project is scheduled for completion in 2014. This project will reduce distance from Kolkata to Sittwe by approximately 1328 km and provide an alternative transport route to the narrow Siliguri corridor. 5

Conclusion The benefits, in India, are likely to flow not only to the northeast states but to other regions as well. Increasingly, it is being realised that sea trade should be directed to the southern part of India, perhaps to the ports of Chennai, Krishnapatnam and Visakhapatnam. There are historical as well as logistical reasons for this. Historically, there is a large presence of South Indian (primarily Tamil) traders in the Southeast Asian countries, more so in Malaysia and Singapore. Traders from the south, primarily Andhra Pradesh, have been at the helm of commodity trade with Malaysia and Myanmar. Substantial quantity of pulses, primarily Toor Dhall, and also rice and oil seeds, is being imported from the ASEAN countries into south India. The trade in pulses and rice is in the hands of Andhra traders, while oilseeds are more the forte of Gujarati and Marwari traders. These traditional trading patterns in India have existed for centuries and are now getting strengthened through increased volumes and enhanced opportunities. These goods, after landing at the eastern ports, are transported through the local railway and road logistics to the relevant markets. The volumes of trade in these commodities have been growing at a compounded annual rate of close to 25 per cent in the last five years, driven by increased incomes and changing consumption. There is a strong Indian argument for improved connectivity in terms of lowering costs and increasing reliability, thereby raising the efficiency of trade. In the eastern part of India, Kolkata has traditionally been a gateway to product and retail markets of Bihar and Bengal, and the improvement in connectivity will increase opportunities for this movement. With enhanced connectivity, less developed regions may expand their economic activities to leverage their location and resource advantages, particularly in Indiaâ&#x20AC;&#x2122;s northeast region and Myanmar. Industrial agglomerations like Chennai and Bangkok will lead economic growth for the region by providing large markets of goods for neighbouring regions. Integrated connectivity plans will especially benefit smaller countries by giving them access to the international market at a lower cost. Improved infrastructure and connectivity must be accompanied by trade facilitation. Conducive trade climate, through appropriate policies, regulation and private sector participation needs to be created. The key to making all this happen is not just physical connectivity. Physical connectivity should be developed along with institutional connectivity, in the form of institutional arrangements to facilitate cross-border movement of goods and services. Currently, a substantial quantum of trade takes place across informal channels, especially in Manipur and Mizoram. The formal procedures are still quite rigid and time-consuming. As an example, agricultural goods and products coming into India require a certification, for which facilities are available only in Guwahati in Assam â&#x20AC;&#x201C; it is more expedient to move these through informal channels. Facilitation of trade, better customs and border clearance infrastructure, as well as more channels of transportation would increase formal trade and- revenues. It is possible to consider some tariff reductions in the case of locally procured agricultural goods and commodities that are used for retail consumption rather than trade, to improve the flow of 6

these goods. Currently, the growth of these informal channels is giving rise to a parallel and underground economy that is to be viewed with concern, especially in the states where there is a history of insurgency and terrorism. It would be worthwhile for the Indian revenue authorities to study the pattern of trade across these borders and to set up more venues for road movement, improve infrastructure at check points, and also to expedite procedures. Infrastructure is still poor, and the trade is small, it should be possible for the revenue authorities to develop some rapid clearance mechanisms for small-value items. Investments in processes and in procedural facilitation are as urgent as investment in infrastructure. The funding requirement for transport infrastructure is huge, and at least a part of it must be solicited from the private sector through public-private partnerships. In order to improve risk allocation and operational efficiency, India should collaborate with countries that have technological/operational expertise in these areas. Quick project execution in difficult areas requires a considerable degree of planning and logistics management; and collaborative efforts with the ASEAN countries are likely to lead to substantial gains in time and costs. It is clear that better connectivity between India and ASEAN will help bridge the existing development gaps, lead to increased trade and investment, fuel economic growth and create employment. It is now important to convert ideas and wishes into investment in planning, design, institutional improvements. It is also obvious that in terms of each of these aspects, India has considerable leeway to make up. Many of the ASEAN countries, with probably the exception of Myanmar, have the institutional capabilities as well as the financial muscle to carry out their part of the programme â&#x20AC;&#x201C; in India, these need to be developed, funded, implemented and monitored. The benefits of improved connectivity are obvious. Apart from enhancing trade and development, it provides employment and livelihood opportunities. These would arise initially in project construction, and later in logistics, warehousing, trading, retail, as well as in tourism and entertainment sectors. The Nathu La trade has enhanced Gross State Domestic Product of Sikkim by close to one per cent, bestowing considerable benefit on its local population in terms of increased incomes and employment. There is need and opportunity to do the same for Northeast India through connectivity to the ASEAN corridors.

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ISAS Insights No. 199 – 4 March 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Reading between the Lines of Indian Budget S Narayan1

Indian media, including the television news channels and the English-language press, have analysed and dissected the Indian Budget 2013-2014 down to its last ligament, and, at the end of it, decided that it was not as good as it should have been nor as bad as it could have been. Relevant data will help dispel such ambiguity. First, the budget provides for a substantial increase in capital expenditure. The Plan expenditure, which represents capital spending, is targeted to rise from Rs 4.29 trillion in the revised estimates to Rs 5.55 trillion next year (2013-2014). This is a substantial increase which is based on a number of announcements in Finance Minister P Chidambaram’s budget speech – especially with an emphasis on infrastructure projects. It has been announced that funds are being earmarked for the Delhi Mumbai Industrial Corridor (DMIC), a project that has been waiting to take off for the last few years. There is also a promise of the Chennai-Bengaluru (Bangalore) corridor with Japanese assistance, as well as investments in roads, ports and the Northeast corridor to link Manipur with Myanmar, with multilateral assistance. Moreover, 3000 km of roads are to be awarded for construction under the National Highways Authority, and there is considerable emphasis on urban investment in infrastructure, waste- and water-management. These are important and welcome areas of emphasis that badly need attention and investments. The announcements also signal that the Cabinet Committee on Investment will take its responsibilities seriously and monitor project approvals and implementation more effectively.

Dr S Narayan is Head of Research and Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He was formerly Economic Advisor to the Prime Minister of India. Dr Narayan can be contacted at snarayan43@gmail.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

There are promises of funds for the Railways for modernisation. The Railways Minister was unable to do much in the Railways Budget except to revise freight rates by 5.8 per cent and promise better safety and more trains. Investments will have to come from capital provided in the (Indian) Union Budget, and this has been promised. There is recognition of the need to match availability of skills with those needed in the employment market. Welcome too is the focus on creating institutions and opportunities for skill development and linkages with manufacturing and service industry through publicprivate partnerships. The National Skill Development Corporation is already taking initiatives, and the budget announcement reflects the importance of this activity.

Laced with Scepticism The enthusiasm at these announcements gets tempered by scepticism when one looks at the real numbers. Even though there is a substantial increase in the Plan allocation, the increase on capital account is quite modest, from Rs 8.5 trillion in the revised estimate for the current year to Rs 11.2 trillion in the budget estimates for next year. Considerable amounts of the increase in Plan allocation appear to cater for revenue expenditure, leaving one to wonder whether these infrastructure announcements would receive adequate funding for implementation. A source of worry is the comparison between the budget estimates of last year with those of this year. The increase between the two is far more modest, at 10 per cent, signifying that there has been a lot of contraction of expenditure in recent months and that, perhaps, all that is being done in this budget is to provide these funds next year. In short, there is a roll-over of expenditure from this year to the next, which appears to account for the apparent sharp increase in the latest budget allocations. If this argument were correct, then funds will actually flow to those projects which have been starved of funds this year rather than to the new projects that have been so enthusiastically announced. The second critical aspect arises from the projections of revenue. Revenue receipts are projected to increase from Rs 8.7 trillion in the revised estimate for the current year to Rs10.5 trillion next year. This is an increase of approximately 19 per cent. Taking the past trends, this appears to be a very steep increase. The argument appears to be: this is making up for the last year â&#x20AC;&#x201C; the budget projections then were for Rs 9.3 trillion, and the shortfall has been a steep Rs 1.3 trillion between the estimates and actual figures. There are promises in the budget about better tax compliance, a surcharge on tax for those earning more than Rs 10 million a year, as well as some hikes on expensive cars, SUVs, highend mobile phones and yachts. It remains to be seen whether these measures would lead to the kind of revenue receipts that are expected in the budget. The expectations of non-tax revenue receipts, which include disinvestment receipts, revenues from sale of

telecommunication spectrum and other receipts, are expected to be 40 per cent higher than those in the current year – an argument that appears to defy logic.

Credit Rating Concerns While the measures to tax the rich and spare the middle-income groups are welcome, scepticism arises from the concern that, perhaps, these numbers have been tweaked to address quite a different concern. India has been on the brink of its credit rating being downgraded by the international credit rating agencies – any further deterioration would drive the bond ratings to junk bond status. The concern of the rating agencies has been about the fiscal deficit in India. In announcing that the current year’s deficit will be 5.2 per cent of the Gross Domestic Product (GDP) and projecting next year’s deficit at 4.8 per cent, the Finance Minister has done a commendable job of signalling his intention to pursue the path of fiscal prudence. The credit rating agencies would be heartened by these signals, but the worry is whether these signals can be considered reliable indicators of the direction that public finances would take. There are other worries as well. Inflation is very high, and there is little in the budget that signals measures to control inflationary pressures. The Finance Minister admits that these are due to supply-side constraints, especially in the manufacturing sector caused by poor capacity utilisation in industry and reluctance to invest in new manufacturing. The investment allowance announced for fresh investment of Rs 1 billion in capital equipment is an attempt to enthuse industry into investing in fresh manufacturing capacity. However, there are few other measures in the budget to reduce supply-side constraints. On the other hand, the allocation of Rs 100 billion for the Food Security measures signals expenditure that is not matched by improved production or supply; and it is thus an inflationary drag. Another concern is about the current account deficit. The Finance Minister clearly admits that a current account deficit of five per cent of GDP is unsustainable and that energy and gold imports occupy a significant proportion of the total import bill. He argues that he would need US$ 75 billion next year to bridge the current account gap, but there is little in the budget to identify measures to reduce energy imports or to encourage exports.

RBI’s Advocacy The Reserve Bank of India (RBI) has been pointing out, for long, that measures on the policy front are required to encourage exports and improve energy production within the country, but this budget has little in these areas. The Finance Minister must be given credit for avoiding populist measures and adhering to a path of fiscal reform. It is also clear that he is politically constrained, due to coalition 3

compulsions as well as electoral concerns, from doing all that he might have liked to do. It is also clear that the fiscal space created in the last three years can be contracted only over time, and that any steep contraction would affect growth even more. He appears to have done the best he can, but perhaps, not even to his entire satisfaction.

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ISAS Insights No. 200 – 27 March 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Zero Dark Thirty and US-Pakistan Relations: A Hostile Future? Riaz Hassan1

Since its release in December 2012 the film Zero Dark Thirty has received critical acclaim for dramatising a complex and traumatic event in recent American national life as a cinematic narrative. Its portrayal of political violence and the role of torture – euphemistically called „enhanced interrogation techniques‟ – is vivid, arresting, confronting and horrifying. For its cinematic achievements the film received five Oscar nominations including the best film of the year. Its makers claim it is an authentic portrayal of real events and that torture of detainees produced valuable information which was the key to finding Osama bin Laden‟s hideout in Abbottabad, Pakistan. These claims have provoked criticism from journalists and public officials familiar with the Central Intelligence Agency‟s torture regime. According to the Acting Director of CIA Michael Morell, the film‟s depiction that the enhanced interrogation techniques led to finding bin Laden is “false”2. The key members of the United States Senate‟s Intelligence Services Committee and the Armed Services Committee Senators Dianne Feinstein, Carl Levin and John McCain have called the film‟s version of post-9/11

Professor Riaz Hassan is Visiting Research Professor at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasriaz@nus.edu.sg and riaz.hassan@flinders.edu.au. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. Michael Morell‟s letter was posted on the CIA public website on 21 December 2012 and published in Huffington Post 22 December 2012.

counterterrorism history “grossly inaccurate” and “dangerous” because it has “the potential to shape American public opinion in a disturbing and misleading manner”3. Journalists familiar with CIA‟s interrogation programme are critical of the film‟s portrayal of the role of enhanced interrogation programme since most of it is still shrouded in secrecy. According to American journalist Steve Coll, the “problem in assessing Zero Dark Thirty‟s fealty to the facts about torture is that most of the record about the CIA‟s interrogation program remains secret, including the formally sanctioned use of water boarding and other brutal techniques between 2002 and 2006. So does the full record of the CIA‟s search for bin Laden after September 11”4. All CIA documents and records are classified and remain secret. This raises serious questions about the reliability of some of the key features of the movie such as the role of real-life CIA agent Maya and her dogged pursuit of Osama bin Laden. The film shows torture techniques – such as being strung up by ropes, stuffed into a box, water boarding, sleep deprivation, sexual humiliation and other brutal forms of physical abuse – as central to finding clues to bin Laden‟s hiding place. But according to the information from the Senate Intelligence Committee Study released by Senators Feinstein and Levin, the CIA did not learn about the existence of the Osama bin Laden‟s courier or his hideout in Pakistan from CIA detainees subjected to coercive techniques. Instead, the CIA learned of the existence of the courier, his true name and location “through means unrelated to the CIA detention and interrogation program”5. The film grossly overemphasises the role of torture in gathering important clues about bin Laden‟s hideout in Pakistan. In doing so, it completely ignores the serious internal dissensions in the US intelligence community about the role and regulation of torture. The emphasis on torture may be “healing” for Maya and her fellow-Americans‟ bruised psyche, but it offers a potent weapon to Jihadis in their future recruitments. The torture scenes largely revolve around Ammar whose character is based on a CIA detainee Ali Abdul Aziz Ali also known as Ammar al-Baluchi, a nephew of the September 11 attacks mastermind Khalid Sheikh Muhammad. He was arrested in Pakistan in 2003 and held there in a secret CIA prison for three years and then transferred to Guantanamo. Ammar is accused of transferring money to the 9/11 hijackers. The film shows him being subjected to torture and humiliation without any recourse to lawyers. He finally succumbs to the torture and becomes compliant. But in reality, Ali has been a defiant prisoner and an active participant in the Guantanamo court, and his lawyers have asked the military court for the identities of the CIA agents who interrogated and tortured him in custody6. As regards to the purpose of the Navy Seals mission, the film unambiguously suggests that the objective was not to capture but kill bin Laden. Was the killing authorised by President Obama under his “targeted killing” policy? President Obama‟s counterterrorism advisor, the 3

4 5 6

For full text of Feinstein et. al. letter and statement see: http://www.feinstein.senate.gov/public/idex.cfm/2012/12/feinstein-releases-statement-on zero-dark-thirty Steve Coll, „Disturbing & Misleading‟, The New York Review of Books, February 7 2013. Feinstein, op cit. Coll, op cit.

new CIA Director John Brennan, and the Attorney General Eric Holder, however, have publicly stated that targeted killings are authorised only when capture is not “feasible” and a threat of attack is “imminent” or the killing would significantly disrupt terrorist plans and capabilities. It would appear that none of these conditions was applicable and bin Laden could have been captured and brought to face justice for his criminal actions against the United States. However, according to a report published on 20 January 2013 in The Washington Post, the CIA is exempt from following these rules in Pakistan7. Why this exemption and would not this exception accentuate anti-US resentment in Pakistan and further worsen the already-strained US-Pakistan relations? These obvious flaws have not affected the film‟s box office success and the praise from critics. One factor contributing to its popularity may be due to the fact that a majority of Americans support torture and this support is increasing. After the traumatic events of September 11, Americans see revenge and retaliation as appropriate and acceptable responses to terrorism. Zero Dark Thirty has served the purpose of making torture – an immoral and illegal behaviour – more acceptable. The stance taken in the film will reverberate in the political landscape of Muslim countries like Pakistan and accentuate widespread hostility to the United States. This hostility is already undermining the legitimacy of the Pakistani government which many Pakistanis regard as subservient to the US. Such perceptions are creating serious hurdles in countering terrorism in Pakistan. The hostility towards the US is not new in Pakistan but it received a boost in 2002/3 when President Pervez Musharraf‟s government under American pressure withdrew its support for Islamist militants fighting in Kashmir and Afghanistan. This shift was a major factor in undermining Musharraf‟s “Enlightened Moderation” policy which, though never fully developed, nevertheless sought to increase economic growth by addressing the underlying problems of the Pakistani economy such as corruption and by instituting reforms to improve the position of women, education, freedom of the media, local democracy and by rolling back some of Zia ul Haq‟s harsher Islamisation policies8. During my fieldwork in Pakistan in 2005-2007, I was struck by the widespread perception among Pakistanis that Musharraf government was subservient to the US and following its orders to kill its own people. This perception was even shared by the police and intelligence officers I interviewed. A number of senior counterterrorism officers told me that their policies to “reform” high-value terrorists in Pakistani jails were unsuccessful because of their intense hatred of Musharraf government9. I was told that that many detained terrorists were sponsored by Pakistani intelligence agencies to help the Taliban regime. After the Taliban regime was overthrown following the US invasion of Afghanistan, they were arrested and tortured in Afghanistan. They felt betrayed by the Pakistani government. Torture left them bitter, angry and full of hate. During 7 8 9

David Cole, „13 Questions for John O. Brennan‟, The New York Review of Books, February 21 2013. Anatol Lieven, Pakistan: A Hard Country (London: Penguin Books, 2012), Chapter 6. Riaz Hassan, Life as a Weapon: The Global Rise of Suicide Bombings (London and New York: Routledge, 2011), Chapter 5.

these years many high-value Al-Qaeda leaders were also arrested by Pakistani intelligence agencies and handed over to the US. As in the case of Ammar they were kept in secret CIA jails in Pakistan and brutally tortured. Many Pakistani journalists knew about their torture and incarceration and wrote about it in the media. These reports were instrumental in turning even the urban middle classes against the Musharraf government. The filmâ&#x20AC;&#x;s portrayal of torture and its apparent sanction by the US authorities largely confirm widely-held beliefs and perceptions in Pakistan and will further fan hostility towards the US. Perhaps the greatest impact of Zero Dark Thirty will be that it will become a powerful tool for recruiting future generations of Jihadis in Pakistan, who will see helpless and defenceless Muslims being tortured as part of the American policy, and that the Pakistani government was doing the same following American orders. Zero Dark Thirty may be healing for many Americans but deeply troubling for those who think that it makes torture acceptable and a powerful tool for militant groups to seduce future recruits for advancing their political agenda and hostility to America.

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ISAS Insights No. 201 â&#x20AC;&#x201C; 5 April 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

The Expanding Shadow of States over Centre in India S Narayan1

Recent developments in Tamil Nadu politics over the Sri Lankan Tamil issue have highlighted the pressures that regional issues can bring to bear on national politics. There have been agitations in colleges and universities against the alleged human rights violations by the Sri Lankan Army towards the end of the operations against the Liberation Tigers of Tamil Eelam (LTTE) in 2009. There are posters in Chennai and in other towns in Tamil Nadu, alleging that Prabakaranâ&#x20AC;&#x2122;s son was shot down in cold blood, and demanding a commission of inquiry. The start was a proposed resolution in the United Nations Human Rights Council in Geneva, sponsored by the United States. The US had supported the Sri Lankan war on terror till the very end of the war against LTTE, and it was sympathetic to the efforts of the Sri Lankan Government to rebuild the war-torn nation. It was only when the US felt that the Sri Lankan Government was violating all norms in dealing with the Tamil minority that the decision to move the resolution was made. The Americans must have consulted Sri Lanka itself beforehand. This set in motion a chain of political events in Tamil Nadu. The opposition Dravida Munnetra Kazhagam (DMK), in association with local pro-Eelam parties, decided to use this as a plank for agitation. They had been losing political space of late, with the All India Anna DMK (AIADMK) Government firmly in the saddle. At the same time, there were several 1

overseas Tamil Diaspora organisations willing to fund these activities. Interestingly, DMK was the ruling party in Tamil Nadu when the war in Sri Lanka entered its final phase in 2009, and, at that time and even subsequently, remained curiously silent about the developments there.

Sri Lankan Tamils Issue The AIADMK, on the other hand, has been very vocal about Tamil minority rights, and the Tamil Nadu Assembly passed a resolution on 28 March 2013 asking the Government of India to take up the Sri Lankan Tamil issue at the UN Security Council and propose a referendum on Tamil Eelam. This is not in the hands of Government of India to accomplish. India’s External Affairs Minister Salman Khurshid has dismissed the resolution saying that individual state assembly resolutions cannot become national foreign policy strategies. This is not the first time that South Block in New Delhi, which houses the Ministry of External Affairs, has been taken aback by the incursion of regional parties and local sentiments into what it regards as its exclusive turf, the formulation of external strategy. In 2011, ruining the visit of India’s Prime Minister Manmohan Singh to Bangladesh, the West Bengal Chief Minister Mamata Banerjee dropped out of the delegation. She said that West Bengal had issues with the discussions on the sharing of Teesta waters with Bangladesh. The matter of Bangladeshi enclaves in West Bengal is yet to be resolved, again due to the local government’s sentiments in India. Some years ago, the government of Punjab suddenly decided to be friends with their counterparts across the border in Pakistan, and there were numerous business and cultural exchanges, catching South Block by surprise. The Constitution of India allocates foreign policy to the Union Government, with no role for the states. However, the nature of coalition politics, the lack of a unified ideology for governance at the centre, and the need for regional parties to assert regional issues for political gain, are starting to change this model. The mandarins at the foreign office are necessarily concerned, for this disturbs the ensconced belief that they alone know what is right for foreign policy. The statement of the External Affairs Minister is a reflection of this sentiment that states should not dabble in foreign policy. However, it is increasingly clear that local issues would affect politics in the states significantly. The problem of fishing rights for Tamil fishermen is a local issue, as they are agitating for access to what they call “traditional” fishing rights. It has become an international matter since Sri Lanka claims that the fishermen are violating international 2

boundaries. The emergence of a large number of regional-language TV channels is helping to sensationalise issues for the viewers. For the local parties, this is a local issue; and it surprises them that in all the negotiations with the Sri Lankan Government about fishing rights and disputes, the State Government or its representatives are not present.

Federal versus Local Concerns This is a political paradigm shift that the will increasingly impinge on the federal nature of Indian governance. It is quite clear that for quite some more years to come, government at Delhi will be an amalgam of several political parties, whose strength lies in their states, not at the national level. This will have to be taken into account in strategy and decision-making, even in foreign policy. Even at the state level, issues of governance are changing. The presence of a vocal regionallanguage press and visual media is focusing attention on local problems that demand the attention of state governments. The announcement by the Tamil Nadu Finance Minister in this year’s budget that the government would enable the setting up of a FM radio station in every town above 100,000 population is likely to enhance political and media attention towards local issues. The Tamil Nadu channels are full of local issues every day. There is also the element of funding by non-governmental organisations (NGOs) that is feeding into these agitations. It is suspected that there is some overseas funding of some of the agitations. The Kudankulam nuclear power plant issue and the Sri Lankan Tamils issue are just some of the recent examples of such suspicions. These developments are likely to mark a significant departure in the way governance is delivered. Industry bodies and entrepreneurs are already aware of the significant differences in doing business in the different states – government rules and regulations, distribution and marketing channels, payment systems vary from one regional culture to another. In addition, there is the fact that regional parties are going to be increasingly concerned with local issues. Nowhere is this more apparent than in Tamil Nadu. The southern districts of Tirunelveli, Madurai etc. were at the core of India’s nationalist movement during the British colonial rule. Somewhat ‘militant’ by nature, the population lends itself to extreme views. It is likely that present-day agitations in the state grow from this tradition, possibly fuelled by some extremist elements. Other states could well follow. The worry is that this would affect cohesion and coherence in national policy and the reach of the central government. During the final days of Mughal rule in India, it was said that the rule of Emperor Shah Alam extended from “Alam to Palam” (Palam is on the outskirts of Delhi.) That is scary! .. . . . 3

ISAS Insights No. 202 – 5 April 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Asia and President Obama’s Second Term Shahid Javed Burki1

Abstract How will Asia fare during President Barack Obama’s second term as President? The change in the national security team in Washington would have some relevance but under President Barack Obama the real decision-making is done at the White House. It may, therefore, not matter much that a new cast of characters is now in place to conduct United States’ foreign policy. At the same time, the regime will function without much friction since those in senior national security positions are of the same mind as President Obama. The president has gone from a “team of rivals”2 he recruited for his first term to a team of the likeminded for his second term. Implementing basic policy decisions should, therefore, proceed smoothly. This paper explores what the new players are likely to bring to their desks and how America might, in President Obama’s second term, attempt to shape the world.

Change at the State Department With Hillary Clinton at the State Department, the Americans had an activist Secretary of State. During her four years in office she visited 112 countries, flew nearly a million miles and was on the road for 401 days. But she was not always able to have her way. She wanted, 1

Mr Shahid Javed Burki is Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at sjburki@yahoo.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. During a professional career spanning over half a century, Mr Burki has held a number of senior positions in Pakistan and at the World Bank. He was the Director of China Operations at the World Bank from 1987 to 1994 and the Vice President of Latin America and the Caribbean Region at the World Bank from 1994 to 1999. On leave of absence from the Bank he was Pakistan’s Finance Minister, 1996-97. This term was popularised by Doris Kearns Goodwin, using it as the title of her book on President Lincoln. See Team of Rivals: The Political Genius of Abraham Lincoln, New York, Simon & Schuster, 2006.

for instance, to arm properly-vetted groups within the opposition in Syria who were fighting the regime of Bashar Assad. She was overruled by the White House. But when she pressed for opening to Myanmar, President Obama went along with her to the extent of visiting the country during his fourth Asian trip in November 2012. Secretary Clinton was in his entourage. She also advocated a militarily more aggressive approach in Afghanistan. Only then, she believed, would the warring parties be persuaded to come to the negotiating table. “In Afghanistan, several officials said, she hungered for a success on the order of the Dayton Accords, which ended the Bosnian War. But when her special representative, Richard C. Holbrooke, who had negotiated that agreement, fell out of favour with the White House, those dreams died with him. Then came the Arab awakening, a strategic surprise that eclipsed America’s shift to focusing on Asia, and it plunged Mrs Clinton in a maelstrom. It tested her loyalty to long-time allies like President Hosni Mubarak of Egypt and reinforced her conviction that anger at decades of stagnation, fuelled by social media, would sweep aside the old order in the Arab world.” 3 John Kerry, the new Secretary of State, comes to the office with a rich foreign policy background. He served as Chairman of the powerful Senate Foreign Relations Committee in the United States Senate during the time the Democrats were in charge. When Mr Obama was in the Senate, the two developed good working relations which came in handy when the White House wanted some trouble-shooting to be done in some sensitive areas. Mr Kerry made several trips to Pakistan and Afghanistan when the leadership in those two countries felt that the United States, in pursuing its own interests, was being totally unmindful of those of Islamabad and Kabul. It is likely that as Secretary of State, Mr Kerry will view himself more as an ambassador for the White House rather than as an architect of a foreign policy that carries his stamp. His voice in policy matters will be heard by the national security team but he is unlikely to push forward on his own. Judging from some of the work that Mr Kerry did in the Senate, he is likely to pay more attention to using economic aid and trade as instruments of foreign policy. He partnered with the then Senator Richard Lugar, a Republican from Indiana, to write legislation for putting economic assistance to Pakistan on a firmer ground. Islamabad had long complained that the American interest in Pakistan had followed a roller-coaster course, with Washington’s interest peaking only when an association with Islamabad was in its strategic interest. The Kerry-Lugar bill assured Pakistan of US$ 7.5 billion aid over the five-year period from 2009 to 2014, with US$ 1.5 billion being delivered each year. That flow of assistance was virtually halted in 2011 as relations between the two countries rapidly deteriorated. It was resumed somewhat grudgingly a year later but not with the kind of enthusiasm that was embedded in the Kerry-Lugar bill. If Mr Kerry is given some space to pursue his own interests in foreign policy, there is likely to be greater focus on Europe and the Middle East rather than on Asia and also on economic matters. It is interesting that the new Secretary chose to visit these two parts of the world 3

Michael Gordon and Mark Landler, “Backstage glimpses of Clinton as dogged diplomat, win or lose”, The New York Times, 3 February 2013, pp. 1 and 14.

soon after taking office. His visit took him to nine countries in 11 days, and he talked to more than 30 prime ministers, presidents and foreign ministers. According to Anne Gearan of The Washington Post who accompanied the new secretary on his first foreign visit, “he spoke French beautifully, German well, and English a lot”. But in each of the many speeches he gave, he emphasised that “it’s not the Kerry approach to foreign policy, it’s the Obama approach”. 4 Mrs Clinton, on the other hand, regarded herself as a kind of a mentor to the inexperienced-in-world affairs President Obama. In approaching her for the job he recognised that he needed help from a seasoned player on the international field. For the second term, showing greater confidence he assembled a team of the like-minded. Mrs Clinton first travelled to Asia after joining the Obama cabinet, signalling the higher priority she and the new administration were assigning to that continent. During his first foreign visit, Mr Kerry spoke often and with considerable passion about the need to provide aid to deserving nations and societies. As Susan Milligan wrote for the US News and World Report, “Secretary of State John F Kerry is no longer subject to the whims of voters, ill-informed or not. And that’s why Kerry had the freedom to deliver an important truth in his first speech as secretary: Not only is foreign aid good, not a drain on the budget, but it’s a cost-effective investment toward peace”.5

Change at the Pentagon Former Senator Chuck Hagel was sworn in as America’s 24th Secretary of Defence on 24 February, replacing Leon Panetta who had served in that position for only one year. For most of the first term of President Obama, the Republican Robert Gates was Secretary of Defence, a holdover from the presidency of George W Bush. Mr Hagel had to fight hard before winning confirmation from the Senate. He shares with Mr Kerry a number of experiences. Both were in the Senate and both are veterans of America’s war in Vietnam. The latter experience had made both weary of war as an instrument of American policy. The Senate gave the new Secretary of Defence only grudging consent, after keeping him sweating in the queue for a long time. When the confirmation came, it was with one of the lowest margins of approval given to any secretary of defence after the job was created during the Second World War. He was confirmed with only 58 voting in favour and 41 voting against his appointment. What worried Mr Hagel’s opponents were a number of statements attributed to him in which he was critical of what he called the “Jewish lobby” for influencing the making of America’s foreign policy. He had implied that Washington had to be more even-handed if it were to play a meaningful role in getting a settlement in the Middle East involving the state of Israel and the Palestinians. He was also reluctant to use the threat of military intervention to get Tehran to move away from its suspected programme of developing nuclear weapons. He had expressed several reservations about the approach advocated by Prime Minister Benjamin Netanyahu to use force to persuade Iran to abandon its nuclear-weapons programme. The 4 5

Anne Gearan, “Kerry finds old friends, new rules on his trip”, The Washington Post, 7 March 2013, A9. Susan Milligan, “John Kerry is right to defend foreign aid”, US News and World Report, 22 February 2013, p. 11.

Israeli leader wanted a red line drawn and to give a clear indication to Tehran that it could, by crossing it, expect the bombing of its nuclear development sites. Finally, Mr Hagel didn’t believe that the United States needed to spend as much on defence as it had been doing over the last decade. These positions were of great concern to the conservatives in the American political system and they held up consent to his appointment for as long as they could. There will be two areas of primary concern as Mr Hagel settles down at the Pentagon. He will want to ensure that the US will not lose its military strength relative to other rising powers while reducing expenditure on defence in a financially constrained environment. The other area of preoccupation will be the planned draw-down of the US troops in Afghanistan. Their number declined from 100,000 after President Obama ordered a surge in the size of the American force and dropped to 66,000 by the end of 2012; and by early 2014 its size is expected to fall to only 32,000. The president had not settled on the size of the American contingent after the US would no longer be involved in operational matters. It was in order to advise the president on that score that Secretary Hagel undertook his first overseas trip after taking office. He went to Afghanistan. “We are still at war”, he told the members of the press that accompanied him on the visit. He will be involved with the planning for transferring responsibility for security to the central government in Kabul and to the police and army being trained by the North Atlantic Treaty Organisation (NATO) forces. “The transition has to be done right. It has to be done in partnership with the Afghans, with our allies. Even as we move into more of a support role, this remains a dangerous and difficult mission”, he told the American and coalition personnel at one of the bases of operation.6 Mr Hagel’s first visit to Afghanistan showed how complicated the situation was in the country in which the Americans had fought for 12 years without being certain about the result of this costly engagement. Two weeks before his arrival in the country, President Hamid Karzai imposed a two-week deadline for the expulsion of US Special Operations forces from Wardak, a sensitive province that was critical for the defence of Kabul. He accused the force of murder and other abuses. The US refused to accept the ultimatum, making clear that it would follow its timeline rather than that of the Afghan government. This obviously irritated the mercurial Afghan leader. A week later Karzai balked at the terms of the plan for the transfer of the Bagram detention centre maintained by the Americans, cancelling the handover ceremony. While the new Defence Secretary was present in the country, Karzai took another verbal shot at the Americans and their NATO allies. After bombs exploded in Kabul on 9 March 2013, the Afghan president suggested that they were a part of the conspiracy between the Americans and the Taliban. “In reality, the bombs [which] went off yesterday under the name of the Taliban were a service to the foreigners”, he said, casting doubt on the assertion of responsibility made by the Taliban, which said that the attacks were carried out to mark Mr Hagel’s visit. Karzai said the blasts helped Americans justify a prolonged presence in Afghanistan. “We have been down this road before too many times”, explained the Afghan leader. The American commander was amazed at this claim. “We have fought too hard over the past 12 years” said Joseph F Dunford Jr., the new commander in the 6

Thom Shanker, “New defense secretary checks on transition in Afghanistan”, The New York Times, 9 March 2013, p. A6.

field. “We have shed too much blood over the past 12 years, we have done too much to help the Afghan security forces grow over the last 12 years to think that violence or instability will be to our advantage”.7 If Secretary Hagel needed any confirmation that the task of orderly withdrawal of his country’s troops from Afghanistan would be a difficult one, it was provided during his first visit to that country.

Change at the CIA The approval of John Brennan as Director of the Central Intelligence Agency also came in after a long fight in the Senate which included a 13-hour filibuster by Senator Rand Paul, a Republican from Kentucky. His confirmation was put on hold as he had been singled out as the man responsible for identifying and approving the killing by drones of the people Mr Obama’s White House believed were actively engaged in harming America. The “kill list” prepared by Mr Brennan was finally approved by Mr Obama, the first US president in history to micro-manage to such an extent. The Republicans were not prepared to give so much freedom of manoeuvre to the president that he could, without due process, order the assassination of people. There was special worry if those targeted were American citizens. This was the case with the American-born cleric Anwar al-Awalki who was killed along with Samir Khan, also a US citizen, in Yemen in late-September 2011. A few days later another drone attack took the life of Abdulrahman, Awalki’s 16-year old son, also an American citizen. These killings were the result of years of planning and deliberations. According to one detailed investigation of the operations, it was “apparently the first time since the Civil War, the United States government had carried out the deliberate killing of an American citizen as a wartime enemy and without a trial…If the president can order the assassination of Americans overseas, based on secret intelligence, what are the limits to his power?”8 It is in Pakistan that the drone programme has been the most active. This has produced political backlash in Pakistan as it heads towards another election. “The secret campaign has killed an estimated 4,700 people in Pakistan, Yemen and Somalia. A quarter [is] estimated to have been civilians, prompting anger among human rights campaigners”.9 Most of the civilian deaths occurred in Pakistan where the drone was used as the weapon of choice since 2004. According to research by the Bureau of Investigative Research, drone strikes killed between 474 and 881 civilians – including 176 children – in Pakistan between 2004 and 2012. Most of the deaths occurred during Mr Obama’s first term. For instance, Imran Khan, a rising star in Pakistani politics, identified the attacks by drones as a major concern which he will aggressively address if he were to gain power following the elections in May 2013.10

Ernesto Londono and Kevin Sieff, “Discord greets Hagel in Kabul”, The Washington Post, 11 March 2013, pp. A1 and A16. Mark Mazzetti, Charlie Savage and Scott Shane, “A U.S. citizen, in America’s cross hairs”, The New York Times, 10 March 2013, pp. 1, 12 and 13. Jon Swaine, “Barack Obama ‘has authority to use drone strikes to kill Americans on US soil’”, The Telegraph, 6 March 2013, p. 5. See Imran Khan, Pakistan: A Personal History, London, Bantam Press, 2011.

The debate in the United States about the legitimacy of the use of drones widened with the nomination of Mr Brennan for the CIA. Questions remained even after the nominee won the Senate’s approval. The issue was well summarised by Financial Times in an editorial. “As a constitutional lawyer, Mr Obama is well aware that his actions and classified justifications will be inherited by his successors, who may not be as conscientious in poring over “kill lists” as he has been. The time is past due to put the targeted killing programme on a statutory footing. No constitutional democracy can tolerate an executive that claims unilateral, perpetual and secretive powers over life and death. At the very least the drone programme needs to be subjected to judicial review overseen by Congress…What is clear is that Mr Obama can no longer base his actions on the ‘just trust me’ doctrine. Other powers, including China are developing drones. It will be in the US interest to restrain them. Unless and until Mr Obama proclaims and follows his own rules, he will have no basis to press them on others”.11 Even the liberal press had some serious reservation about the way the drone programme had developed. In a series of editorials, The New York Times, spelled out some of its misgivings and indicated some solutions for addressing the problem. “No American prosecutor can imprison or execute someone except on the orders of a judge or jury. The fundamental principle applies no less to the suspected terrorists that the executive branch chooses to kill overseas, particularly in the case of American citizens”. And then, the newspaper proposed its solution. “A special court, which we first proposed in a 2010 editorial, would be an analogue to the Foreign Intelligence Surveillance Court that Congress set up in 1978. If an administration has evidence that a suspect is a terrorist threat to the United States, it would have to present that evidence in secret to a court before the suspect is placed on a kill list”.12 Liberals and libertarians hardly ever agree in the United States about public policy. On the issue of drones and their use, however, they seem to be of one mind. In a newspaper article, Senator Rand Paul explained why he spoke for 13 hours to filibuster the Brennan appointment. “I wanted to sound an alarm from coast to coast. I wanted everybody to know that our Constitution is precious and that no American should be killed by a drone without first being charged with a crime. As Americans we have fought long and hard for the Bill of Rights. The idea that no person shall be held without due process, and that no person shall be held for a capital offence without being indicted, is a founding American principle and a basic right”.13

Areas of Likely US Concern It is always hard to concentrate on long-term strategic interests in the formulation of foreign policy. This is particularly the case for a country such as the United States that has a global reach. In his second term, President Obama no doubt would like to focus his attention on 11 12

Financial Times, “Obama’s drones and laws of war”, 8 March 2013, p. 8. Quoted in Benjamin Witts, “The New York Times Proposes Judicial Review of Nearly All Drone Strikes”, Lawfare: Hard National Security Choices, 15 February 2013. Rand Paul, “My 13 hours were just the beginning”, The Washington Post: Outlook, 10 March 2013. B1.

adjusting the US’s stance in world affairs in tune with the country’s relatively diminishing economic strength. A new global economic order is taking shape. In it, new centres of economic strength are projecting their weight. Most of these are in Asia. It is not only China that demands attention. Several other Asian economies such as India, Indonesia, and Turkey also want to be noticed. They desire a say in the way the global economy is managed. However, not all American analysts accept President Obama’s position that the US will lose its primacy in world economic affairs. He articulated this view in his speech in Tokyo in November 2009 during the first of his four visits to Asia in his first term. But criticism at home had him pull back. The American political right in particular was not willing to accept that the US was no longer the sole occupant at the top of the global economic pyramid. In a recent article in Foreign Affairs, Roger Altman who had served as Deputy Secretary of Treasury in President Bill Clinton’s first administration, suggested that the “US economy will emerge from its trauma stronger and widely restructured”. He argued that there are indications that that’s already happening as the pressures felt during the Great Recession have begun to lose their strength. “It will take two to three years for these to subside, but after that, US economic growth should outperform expectations”. 14 But some other policy thinkers are less sanguine. In the same Foreign Affairs issue, Fareed Zakaria took the opposite position, noticing, in several trends, a significant decline in the US’s relative economic strength. For instance the time taken after each recession to return to the levels of employment reached before the downturn is becoming longer. “After the recession of the early-1990s, the employment rate returned to the pre-recession level 15 months after GDP did. In the early parts of the next decade, it took 39 months. And in the current recovery, it appears that the employment rate will return to its pre-recession level in 60 months – five years – after GDP did. The same trends that helped spur growth in the past are now driving a new normal, with jobless growth and declining wages”. 15 This slackening in the rate of adjustment has produced a dysfunctional political system that is standing in the way of the US’s ability to make the needed structural changes. If America will not always be able to get its way in economic matters as it often did for more than half a century after the conclusion of the Second World War, it will have to work with other important global economic agents. For Mr Obama, at the beginning of his second term, trade would be the instrument for cooperation. He has already taken some initiatives in this area such as the announcement in 2012 of an 11-nation Trans-Pacific Partnership Initiative and, in early 2013, of a Trans-Atlantic Trade and Investment Partnership with the European Union that would create the world’s largest economic zone. The United States also has joined 47 other countries in discussions to liberalise the services sector. Negotiations have also begun to expand an existing agreement on trade in technology goods. These are some of the attempts to counter what is sometimes called “innovation mercantilism” – policies that force the use of locally written software and requirements that data be stored on local servers.

14 15

Roger Altman, “The fall and the rise of the West”, Foreign Affairs, January/February 2013, p. 8. Fareea Zakaria, “Can America be fixed?”, Foreign Affairs, January/February 2013, p. 25.

These policies are favoured by countries that have the capacity to do research in new technologies. But all these initiatives are at this stage only ideas; their translation into working arrangements will need a great deal of patient work. The fact that the Obama administration has been so focused on trade is, at first sight, surprising. As a senator he had voted against Central American Free Trade Agreement and as a candidate in 2008 had been critical of the North American Free Trade Arrangement. The change in thinking reflects a better understanding of the structural adjustments that are occurring in the US economy. Some game-changing innovations in the country’s laboratories and factories will transform the way industrial processes work. According to one interpretation “it is a wager, in a sense, on robots over running shoes as the administration tries to create trading rules that play to US strengths in innovation, technology, and high-end services but could mean more competition for basic manufacturing”. The large regional pacts the administration would like to promote will take the place of the multilateral Doha round of negotiations which, launched a dozen years ago, have stalled. There is also “fear that trade restrictions incubated in places such as China and India could become the global norm unless countered”. 16 At the beginning of President Obama’s second term, economics will be the focus of attention. And in economics, dialogue and multi-country negotiations will be favoured over the use of force or intimidation. In this way, the global economic reordering that is underway may be less contentious than was the case on previous occasions. The United States, for instance, overtook Europe after two world wars. This time around, other economies may be accommodated in a more benign way. While the Middle East will not let Mr Obama go easily and Secretary Kerry with a rich background in that area of the world will attempt to convince the president to stay engaged, the president will, no doubt, press ahead with his approach towards Asia. This attention to the continent has a name – “pivot to Asia” – but its content is still being worked out four years after Mr Obama declared that given the place of his birth (Hawaii) and years of childhood experience (in Indonesia), he will be America’s “Pacific president”. During his first visit to the Asian continent, the American president sought partnership with China. He chose Tokyo as the site from where to proclaim that change in Washington’s position. But such a sharp swing in his country’s choice of partners in the global arena proved difficult to execute. The American political right was upset and the Chinese were not particularly forthcoming. If Beijing was not willing to step forward to provide substance to the implied G-2 arrangement, preferring to build its military strength, Mr Obama began to look for other partners in his Asian enterprise. He cultivated India during his second Asian visit in November 2010 going to the extent of suggesting that New Delhi deserved a permanent seat in the United Nations Security Council. He famously proclaimed in a speech in New Delhi that “India is not a rising power; it has already risen”. That search for alternatives continued as Beijing went on 16

Howard Schneider, “Trade: Evolving Obama pushes hard for global pacts”, The Washington Post, 9 March 2013, pp. A1 and A2.

putting more resources into increasing its military might. China also became more assertive in pushing its claims to some of the disputed islands in East and South China Seas. These reactions persuaded the first Obama administration to undertake a correction in its Asian course. According to Jim Hoagland, a veteran columnist, Hillary Clinton’s diplomacy during Mr Obama’s first term, “successfully converted anxiety of China’s neighbours over the country’s assertiveness into a common front”.17 At the beginning of his second term, President Obama also shifted his stance towards Japan. During Prime Minister Shinzo Abe’s February visit to the White House, the president showed exceptional warmth towards the visiting dignitary. Mr Obama emphasised the importance of reviving and maintaining the old ties between Tokyo and Washington while encouraging Mr Abe to tone down his penchant for nationalist rhetoric. However, it is in the area of economics that the American president will seek to gain his country’s influence in the Asian continent. And in this endeavour, he will use a variety of trade arrangements to develop new economic links with major Asian economies. A profound change has begun to take place in the structure of the industrial sector in the United States as an economic reaction to the practice of outsourcing to cheap-wage countries in Asia. For a couple of decades China had become the supplier of several types of consumer goods to the markets in the United States. South Korea had been remarkably successful in building its automobile and electronic industries, focusing also on the American markets. Using high-speed communication technologies, India had become an important supplier of many services to the economies in the West in particular the United States. While this repositioning of industrial processes was occurring, several universities in the US began to invest in high-technology manufacturing processes. There were major developments in the use of robots in manufacturing processes, the use of nanotechnology in such diverse activities as electronics and health sciences, and the deployment of genetic-engineering for developing new drugs and their delivery into the human body. These were major developments that were redefining production processes. These were changing the economics of various production processes. With robots being able to perform the tasks that were carried out by relatively lowskill labour, there was no longer much advantage in locating manufacturing in cheap-labour countries. Robots were successfully substituting labour. At the same time, these machines needed to be maintained and improved, and that could be done better by experts closer to the places where the robots worked. Some of the large manufacturing firms began to pull back their operations from Asia to the American mainland. There were also now new opportunities for the United States to exploit. Trade arrangements were to be used to advance into Asia with a number of new products and new product lines.

Jim Hoagland

Conclusion The new Obama administration is likely to follow an approach in world affairs that will reflect the thinking of the president on several matters. No longer constrained by the need to pacify the ever-present nationalist tendencies in his country, the president is likely to accept the notion that America is not entitled to force its way in the world. It will need to accommodate the interests of other large powers, in particular those that are emerging in the economic field. The second Obama administration is likely to work closely with some of the new powers such as China, India, Indonesia, South Africa, and Turkey for world peace. There will be real reluctance to use force to achieve America’s strategic interests. “Boots on the ground” approach to world affairs will be avoided. The drone will remain the weapon of choice for limited-impact warfare. Washington will pick out small groups of people as the targets for drone attacks after being satisfied that they pose real threats to its security. If force is to be used, it will be deployed as the last resort and in the context of multilateral agreements. An effort is likely to be made to find new – or develop those already in place – institutional arrangements to manage world affairs. In Mr Obama’s second term the United States will sometimes “lead from behind”. It will have a large voice but it will be raised as part of a chorus. Other players on the international stage will be allowed to sing as well.

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ISAS Insights No. 203 – 8 April 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Drug Patents in India: Turf Battles Amitendu Palit1

The debate on India’s intellectual property (IP) regime and its implications for pharmaceutical innovations and generic drugs has come into sharp focus following the Supreme Court of India’s recent judgement on the global pharmaceutical major Novartis’s appeal for patenting and exclusive marketing of Glivec in India. Glivec is a drug administered on patients suffering from Chronic Myeloid Leukemia (CML), a rare form of blood cancer. The Court judged that Glivec does not satisfy the patentability criteria of ‘enhanced efficacy’ as mentioned in Section 3(d) of the Patents Act of 2005 and hence Novartis cannot be granted patent on Glivec in India. The decision has been widely hailed as a victory for domestic manufacturers, particularly generic drug producers. Generic drugs are those that are introduced after patents expire on their original formulations. Novartis’s patenting of Glivec in India would have implied that Indian producers could not have produced generic versions of the drug, which they are able to do now. From an affordability perspective, availability of more generics makes a difference to healthcare costs for consumers. This is evident from the differences between costs of patented and generic versions. Glivec, for example, costs INR 120,000 (SGD 2723) per month, which is roughly fifteen times more expensive than its locally produced generic version (SGD 182

Dr Amitendu Palit is Head (Partnerships & Programmes) and Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasap@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

per month), manufactured by the Indian pharmaceutical firms Natco and Cipla. Similar cost differences exist between several other branded and generic drugs.2 While generic producers in India, several low-income countries particularly in Africa that are major buyers of generic drugs from India, and civil society organisations campaigning for greater access to cheaper medicines are exulting over the judgement, global drug majors have expressed their dissatisfaction over the verdict. A disappointed Novartis reacted to the ruling by suggesting that it is likely to discourage multinational investment in drug research and development (R&D) in India and will also affect Indian patients by delaying the introduction of new drug discoveries in the Indian market. Novartis itself is planning not to invest any further in R&D in India though it will continue to introduce its products in the domestic market. The Organisation of Pharmaceutical Producers of India, a body comprising several major global drug multinational corporations (MNCs), echoed concerns similar to those expressed by Novartis. The judgment has cast renewed attention upon the struggle of Indian IP policy makers to balance between the apparently irreconcilable objectives of ensuring affordable access to medicines for consumers, on one side, and offering to pharmaceutical producers marketbased incentives for encouraging innovations, on the other side. It has also underlined new challenges for some of the trade negotiations that India is currently involved in with respect to the new standards for IP rules being introduced by several major economies and significant economic groupings.

Enhanced Efficacy Novartis’s failure to obtain a patent in India, on account of it not being able to satisfy the ‘enhanced efficacy’ condition for Glivec, has raised questions on what constitutes such efficacy. The Supreme Court has taken the view that only an increase in therapeutic efficacy over and above the current and known use of the drug can satisfy the demand for ‘enhanced efficacy’. Improvement in physico-chemical properties leading to better consistency and delivery of the drug – claimed by Novartis as valid grounds for patentability – clearly does not constitute enhanced efficacy. Limiting enhanced efficacy to increase in therapeutic value can discourage patenting of marginal innovations and steady ‘ever-greening’ of patents for minor formulations of the same drug without significant therapeutic value-addition. But it can also be a disincentive for higher investment in R&D on the part of drug producers. R&D investment in pharmaceuticals 2

Pfizer’s Sutent used for kidney cancer costs INR 196,000 (SGD 4445) for a one-and-half month period of medication compared with INR 19,000 (SGD 445) for the generic version. AstraZeneca’s patented Iressa for treating lung cancer costs INR 105,000 (SGD 2382) for 30 pills compared with INR 4250 (SGD 96) for local versions.

is uncertain in outcomes and bears fruit only over a long period in time. With overhead expenses accounting for large chunks of R&D spending and producers keen on recovering the costs, the urge to patent incremental innovations, involving minor and not necessarily therapeutic improvements, is always high. Substantive therapeutic gains can come from only innovations entailing discovery of new chemical compounds, which are rare, and uncertain to predict.

Stronger than TRIPS India had to shift from a process-based to a product-based patent regime in line with its obligations under the Trade-Related Intellectual Property Rights (TRIPS) Agreement of the World Trade Organisation (WTO). The Patent Law of 2005 effected the change. However, India was anxious about the effect of the new law on affordability of medicines for its large population. It therefore tried to introduce â&#x20AC;&#x2DC;checks and balancesâ&#x20AC;&#x2122; in the domestic regulation for minimising the exercise of monopoly power by patent holders. Section 3(d) of the Patent Law of 2005 was one such effort where, in addition to the globally accepted and TRIPS-ratified patentability criteria of novelty and enhanced usefulness, enhanced efficacy was plugged in as a requirement. India also secured the right of compulsory licensing of patented drugs, under which the patent holdersâ&#x20AC;&#x2122; rights could be waived after royalties to the original holders3 are paid, thus paving the way for introduction of generics. While Section 3(d) does introduce an additional yardstick for patents over and above the TRIPS, the compulsory licensing provision is widely applied across the world. Indeed, the first instance of the provision coming into force in India was when Natco was allowed to compulsorily license the Nexavar drug manufactured by the Bayer Corporation for treating kidney and liver cancer, last year. As such, use of compulsory licensing as a TRIPScompliant provision is fairly widespread, with not only emerging markets like India, Indonesia and Malaysia applying it, but OECD countries like Canada and Italy also using it frequently. The United States has also been trying to achieve the same objective through Executive Orders issued by the President and Anti-Trust Laws. Thus while compulsory licensing cannot be held by global pharmaceutical majors as a specific grudge against India, Section 3(d) of the 2005 Law would be construed as one.

Compulsory licensing is a TRIPS-compliant provision. This also helped several developing countries with inadequate domestic manufacturing capacities to import the generics from countries like India where compulsory licensing provisions were applied.

Generic vs. Branded India is one of the largest and fastest-growing pharmaceutical markets in the world, with the size of the market expected to cross US$ 70 billion by 2020 from its current level of US$ 11 billion.4 With a share of 35 per cent in the global generics market, India is expected to remain a major supplier of generic medicines to the rest of the world. The success of Indian pharmaceutical firms like Dr Reddy’s Labs, Cipla, Natco, Sun Pharma and Glenmark in becoming leading global producers of generic drugs has much to do with their making good use of India’s earlier policy of patenting processes, not products. It is, however, ironical that generic drugs do not have a large share in India’s domestic market and are essentially confined to distribution networks in government hospitals and pharmacies. With commercial retailers buying generics at discounted rates from their producers and selling them at maximum retail prices (MRPs), low-income households outside the purview of government hospitals and medical systems are hardly benefitting from the country’s huge production of generics. Generics in India got a shot-in-the-arm through the government policy announced last year for procuring generic drugs and distributing them free through the public health system. While this will enable more than 50 per cent of the population to access cheap generics, the policy prevents doctors from prescribing branded drugs. It clearly drives in a wedge between indigenous generics and branded drugs produced by multinationals. To many of the latter, the Supreme Court’s judgment on Novartis appears to be confirming the policy slant in India favouring generics. The support extended by government procurement policies, the Novartis ruling and the large number of ‘blockbuster’ drugs5 going globally off-patent, are expected to ramp up generic production in India with the range of drugs expanding from life-saving treatments of fatal diseases such as cancer and HIV to lifestyle ailments like diabetes and hypertension.

International Obligations Despite complying with international IP obligations under the WTO, India has utilised the flexibilities under the TRIPS by setting higher patentability standards for its domestic market. While this has made it difficult for pharmaceutical MNCs to obtain patents on many of their incremental formulations, compulsory licensing and procurement policies have additionally abetted growth and expansion of generics. In the process, however, India’s patent regime has 4

‘The importance of generic drugs in India’, Ajay Bera and Ashish Mukherjee, International Journal of Pharmaceutical, Chemical and Biological Sciences, IJPCBS 2012, 2(4), 575-587; http://www.ijpcbs.com/files/2106-22.pdf (Accessed on 5 April 2013) Blockbuster drugs are popular drugs with annual sales of at least US$ 1 billion.

been criticised for being unfavourably inclined towards R&D and innovation. This is expected to be a thorny issue in India’s future trade negotiations with advanced economies that have stronger domestic IP regimes. Several upcoming regional trade and economic framework agreements are focusing on ‘WTO plus’ issues such as domestic IP regulations. The Trans-Pacific Partnership (TPP) is one such example. Though India is not a member of the TPP, it cannot overlook the implications of the IP framework adopted by the TPP, which is expected to award much higher protection to innovations than that currently available under the TRIPS. The growing gap between India’s IP rules and those of frameworks like the TPP is likely to slow down R&D investments in India from members of these blocs and delay introduction of new products in the Indian market. Greater IP protection and less domestic flexibilities might also creep into the Regional Comprehensive Economic Partnership (RCEP), a major trade deal being negotiated by the Association of Southeast Asian Nations (ASEAN) and its existing bilateral FTA (free trade agreement) partners, including India.6 India faces the critical dilemma where it might get isolated and marginalised in influential regional trade negotiations due to its relatively weak IP rules, which, however, it needs to maintain on grounds of affordable healthcare. The immediate implication of this dilemma, reinforced by the Supreme Court ruling, will be felt during the conclusion of the impending India-European Union FTA.

Not the Last Word The euphoria of generic drug manufacturers and civil society groups over the Novartis ruling being a major step towards bringing relief to poor patients in India should not obliterate the fact that till now these patients have hardly benefitted from cheap generics. While generic drug output from India has expanded rapidly due to historic circumstances, favourable domestic regulations and government subsidies, the low-cost products have not reached most of the domestic poor. Price ceilings on essential drugs have encouraged generic manufacturers to focus more on export markets. This is unlikely to change even if government procurement of generics increases by large amounts as profit margins are higher in overseas markets. Benefits of cheap generics are unlikely to extend to poor patients across India and outside the government healthcare system unless incentives change. The Supreme Court’s judgement, particularly the application of Section 3(d) of the Patents Act of 2005 for judging patentability, highlights the uncertainties that global innovators have faced over prospects of R&D and innovations in India. While India has utilised the TRIPS flexibilities to ensure that ‘public benefit’ supersedes private gains when it comes to exercise 6

The TPP includes Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. Japan has recently decided to join the TPP negotiations while South Korea and Thailand have expressed interest. The RCEP comprises the 10-member ASEAN and Australia, China, India, Japan, New Zealand and South Korea.

of monopoly rights of patent holders, it has not, unfortunately, been able to project itself convincingly as a major hub of innovation and R&D in the eyes of the international business community. In the process, it has failed to strike the right balance between concerns of effective distribution of affordable healthcare services and mobilising the much-needed foreign investment for innovation-intensive drug development.

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ISAS Insights No. 204 – 10 April 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India-China Talks: Full-Scope Security is Potential Issue P S Suryanarayana1

Abstract China’s new leader Xi Jinping has called for steps to “deepen” “military and security trust” in Sino-Indian relations. In his first meeting with India’s Prime Minister Manmohan Singh in Durban on 27 March 2013, the Chinese President struck a cordial and upbeat note. Reciprocating these sentiments, Dr Singh suggested that a “joint mechanism” be set up to protect the rights of lower riparian India in the context of China’s ongoing efforts to harness waters of the Yarlung Tsangpo (Brahmaputra). The economic logic of such a ‘mechanism’, if set up, will supplement the political logic of the existing forum of Special Representatives who are trying to settle the Sino-Indian border dispute. In addition, India and China are already engaged in overall economic dialogue. In panoramic strategic terms, therefore, a potential Sino-Indian agenda focused on economic and military concerns can help address full-scope security issues. Full-scope security, as a term being conceived in political diplomacy, is adapted from the idea of full-scope safeguards in civil-nuclear diplomacy.

Mr P S Suryanarayana is Editor (Current Affairs) at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isaspss@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

Introduction: Overlapping Priorities Xi Jinping, the new plenipotentiary head of state and leader of the long-governing Communist Party of China, has signalled his priorities in foreign policy towards key powers like the United States and Russia at one level and India at another echelon. The major talking-points in Mr Xi’s exclusive meeting with India’s Prime Minister Manmohan Singh in Durban (South Africa) on 27 March 2013 show that the two countries share a range of overlapping but not entirely-congruent priorities. However, there was no dissonance in the overarching Sino-Indian message. The two leaders categorically indicated their shared preference to continue cordial bilateral dialogue on issues of contention as also common interest. The timing of the Xi-Singh meeting, which took place on the occasion of a BRICS summit, was of course dictated by the diplomatic calendar of this relatively new forum of emerging and aspiring powers, namely Brazil, Russia, India, China, and South Africa. In economic terms China is decisively ahead of the other four countries in this grouping. In some contrast, Russia – still a military superpower because of its high-tech profile in the domain of nuclear and conventional weapon-systems – is variously distinct from each of the other four countries. However, the Xi-Singh meeting, their first since the latest change of guard at the helm of affairs in China, was in no way influenced by the differentials within BRICS. Of utmost importance to the two leaders, in their get-acquainted and set-the-agenda meeting, was their respective national interest as perceived by them.

Insulating Broad Ties from Border Dispute In a fundamental sense, the respective national interest of India and China, in a purely bilateral context as different from their global aspirations, is still anchored to the Himalayan border dispute between these two Asian mega-state neighbours. Unsurprisingly, therefore, Mr Xi emphasised that “China and India should improve and make good use of the [existing] mechanism of Special Representatives to strive for a fair [and] rational solution-framework acceptable to both sides as soon as possible”.2 In the meantime, he said, “the two sides should continue to safeguard peace in their border areas and prevent the issue from affecting bilateral relations”.3 It is arguable that there is hardly anything new in Mr Xi’s call for insulating the overall China-India relationship from the inertia that might have been generated by their prolonged failure to resolve their long-standing border dispute. Nor is it novel to urge the need for a fair 2

Foreign Ministry of the People’s Republic of China, President Xi Jinping Says World Needs Common Development of China and India When Meeting with Indian Prime Minister Manmohan Singh 2013/03/28, http://www.fmprc.gov.cn. Accessed on 28 March 2013 Ibid.

framework-solution to settle the dispute to mutual satisfaction. What is relatively new, however, is his parallel call to “improve” the existing negotiating forum of Special Representatives and to arrive at a framework-settlement “as soon as possible”. Outwardly, here too, there is nothing exciting about the advocacy of streamlining an existing “mechanism” and injecting some sense of urgency into the negotiations. But those familiar with the glacial pace of the Sino-Indian border parleys will want to know how the current forum of Special Representatives, set up almost a decade ago, can be “improved”. As this is written, neither Mr Xi nor Dr Singh has elucidated this aspect in the public domain. There is also no clear sign that the two leaders had now agreed upon any firm steps to streamline the forum of Special Representatives. After the Xi-Singh meeting in Durban, India has not at all indicated any sense of unease over the Chinese views on these inter-related aspects of border talks. Of continuing relevance, therefore, to this dimension of Sino-Indian dialogue are the recent signs that the two countries have indeed begun to walk the talk in their negotiations on the boundary dispute.4 Of considerable significance to the border talks is an official Chinese view that was now communicated by Mr Xi to Dr Singh on the issue of cooperative engagement between the militaries of the two countries. The Chinese Foreign Ministry has cited Mr Xi as having told Mr Singh in Durban that “China and India should broaden exchanges and cooperation between their armed forces and [also] deepen mutual military and security trust”.5 It is indeed axiomatic in the current post-Cold War logic of international relations that cooperative milto-mil engagement between any two countries with unsettled issues can be a confidencebuilding measure (CBM). For India and China, still engaged in exploring CBMs, Mr Xi’s latest suggestion must be welcome indeed. “Mutual military and security trust”, if attained in good measure, can constitute the fundamental bedrock of future Sino-Indian relationship. With these two nuclear-armed countries seeking detente with deterrence for several years now, especially in the context of their compatible and globally-valid pledges of ‘no-first-use’ of atomic weapons, the proposition of Sino-Indian military and security trust is not unthinkable.

Full-scope ‘Security Trust’ At Durban, Dr Singh clearly sought to enlarge the scope of “security trust” to encompass non-military aspects as well. Talking to Indian journalists after his meeting with Mr Xi, Dr Singh noted that he did discuss with the Chinese leader a cross-border issue of mutual trust in regard to a question of India’s economic (as different from military) security.

For a detailed analysis of these recent signs, see ISAS Insights No. 193, India-China Border Parleys: New ‘Signs’ of Walking the Talk, by P S Suryanarayana, 14 December 2012. http://www.isas@nus.edu.sg Foreign Ministry of the People’s Republic of China, op.cit., http://www.fmprc.gov.cn

Amplifying this aspect of India-China engagement, Dr Singh said: “I also took the opportunity to raise the issue of trans-border river systems and I requested the Chinese Government to provide a joint mechanism to enable us to assess the type of construction activity that is going on in the Tibetan Autonomous Region. The President of China assured me that they were quite conscious of their responsibilities and the interest of the lower riparian countries. As regards the specific mechanism that I had suggested, he said that they would have it further looked into. But as of now, our assessment is that whatever activity [is] taking place on the Brahmaputra region in Tibet, they are essentially the run-of-the-river projects and therefore there is no cause for worry on our part”.6 The Brahmaputra (the Yarlung Tsangpo in Chinese parlance), which flows from Tibet in the People’s Republic of China (PRC) into India, has been in the news in recent years for some economic reasons on both sides. It is felt in some quarters that the dams being built by China across that river system might harm the economic interests of lower-riparian India. Dr Singh has now disclosed that India would like China to agree to a bilateral ‘mechanism’ on a crossborder economic issue. The proposed ‘mechanism’ can be fashioned somewhat (if not entirely) on the lines of the existing forum of Special Representatives who are trying to resolve the boundary dispute. If viewed in this perspective, New Delhi is beginning to be proactive on aspects of Sino-Indian economic security – somewhat on the lines of Beijing’s activism on matters of bilateral military and security trust. Mr Xi’s emphasis on the need to “deepen” “military and security trust” in Sino-Indian relations, if read with Dr Singh’s initiative for a “joint mechanism” to address an economic issue, can be seen to reflect an expansion of the concept of security in the bilateral domain. Already, India and China are negotiating a border settlement. They are also deeply engaged in regular economic dialogue. In a grand sweep, the totality of possible focus on militaryrelated issues and economic concerns can, therefore, be described as potential agenda of fullscope security. An insightful perception of this magnitude is easy to gain. For PRC, an intriguing paradox is that the Sino-Indian boundary dispute has remained unresolved for over half a century despite China’s undoubted triumph in the 1962 Himalayan War with India. For New Delhi, too, the enduring border dispute is surely not a satisfying outcome of the 1962 conflict. However, it will be illogical for either side to trifle with the current bilateral context of CBMs and civilised dialogue on the border dispute. Unsurprisingly, therefore, Dr Singh has now articulated an aspect of India’s economic security in regard to China’s harnessing of the Brahmaputra. From New Delhi’s standpoint, it is logical to have chosen the present climate of a generally peaceful Sino-Indian border to try and add an economic dimension to the goal of “mutual military and security trust”.

Ministry of External Affairs, Government of India, On board media interaction with Prime Minister on March 28, 2013 on return from BRICS Summit, http://www.mea.gov.in. Accessed on 30 March 2013

For China, on the other hand, the harnessing of Yarlung Tsangpo, which in its lower reaches flows through India’s Arunachal Pradesh, is an issue, which in its economic dimension, cannot be easily linked to the basic border dispute. It must also be noted that Dr Singh has taken care to say that China’s current activities across the Brahmaputra, being focused entirely on run-of-the-river projects, is not a cause for worry in the Indian circles that matter. However, his initiative is designed for a win-win outcome for both countries in this sphere in the future.

Conclusion: The Debatable US Factor On a wider Asian and global canvas at the moment, China is widely acknowledged to be second only to the United States on many counts in the superpower scale. At the same time, the larger international community is aware that India is seeking to reposition itself as a rising power which is keen to compete and cooperate with China wherever and whenever possible. These difficult-to-measure attributes of India and China will in some ways determine the future course of their bilateral dialogues on a variety of issues. Relevant to the future course of India-China engagement is a sweeping observation by Aaron Friedberg in his 2012 book on ‘A Contest for Supremacy’. On the triangular US-India-China interactions, Friedberg writes: “... Because of the importance assigned by the [George W] Bush administration (January 2001 - January 2009) to building an Indo-US partnership, China was forced to play catch-up for most of its [Bush administration’s] two terms in office. This put New Delhi in the enviable position of being able to improve its two most significant bilateral relationships simultaneously, and despite clear evidence of deepening strategic ties to Washington, it left open the possibility that India might continue to ‘play the field’, rather than drawing ever closer to the United States”.7 Friedberg’s observation is open to further debate. But the fact remains that India has acquired a position in recent years – regardless of whether, at any given time, this can be seen as enviable position – to engage China against the backdrop of a dynamic global matrix. Much will of course depend on New Delhi’s statesmanship to capitalise on the perceived importance of India in the changing worldviews of both the US and China.

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Aaron L. Friedberg, A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia, p. 205, paperback edition, W. W. Norton, New York, London, 2012

ISAS Insights No. 205 – 31 May 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

The Maoist Attack in Chhattisgarh Ronojoy Sen and Robin Jeffrey 1

The ambush of a convoy of cars returning from a political rally and the murder of 27 people on 25 May 2013 in Chhattisgarh state in central India brings together various threads that make up “the Maoist movement” that has been an intermittent feature of rural life for 50 years. The list of victims makes this clear. Among the dead were the leader of the Congress Party in Chhattisgarh state, Nand Kumar Patel, and Mahendra Karma. Karma was the architect of the Salwa Judum, a controversial and bloody movement of anti-Maoist vigilantes begun in 2005 and later declared illegal by the Indian Supreme Court. Not surprisingly, Karma was high on the Maoists’ hit list. Among the wounded is V C Shukla, 83, from an old Congress family and the reviled Minister of Information and Broadcasting during Prime Minister Indira Gandhi’s 1975-7 “emergency”.

The Motive The Maoists in a statement on 28 May claimed that the primary aim behind the attack was to kill Karma. It also said the attack was “revenge” for the federal government’s ‘Operation Green Hunt’ targeting the Maoists. To the government of Chhattisgarh, however, the Salwa Judum was perfectly legal and performed an admirable public function. A former chief of the

Dr Ronojoy Sen is Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasrs@nus.edu.sg. Professor Robin Jeffrey is Visiting Research Professor at ISAS. He can be contacted at isasrbj@nus.edu.sg and robin.jeffrey514@gmail.com. The views expressed in this paper are those of the authors and do not necessarily reflect those of ISAS.

Chhattisgarh police told journalist Suvojit Bagchi (currently with The Hindu), “I don’t consider it a vigilante group. The moment you say that I refuse to talk”.2 Close to one-third of the population of Chhattisgarh, carved out of the state of Madhya Pradesh in 2001, are tribal people, officially known as Scheduled Tribes. In Bastar district, where last Saturday’s killings occurred, two-thirds of the people are tribals. Karma came from tribal elite that controlled land. In fact, the Maoist statement identified Karma as belonging to a feudal family which had traditionally oppressed the tribals. Beginning as a member of the old Moscow-line Communist Party of India, Karma transited through a period as an independent. He landed softly in the Congress Party in time to be a minister in both the Madhya Pradesh and Chhattisgarh governments until 2003, when the party lost power to its bitter rival, the Bharatiya Janata Party.

The Larger Picture Bound up here are questions of land, ethnicity, ideology, big-time capitalism and small-time political rivalries. The more immediate provocation for the Maoist attack is the state election in Chhattisgarh later this year, which the insurgents will do their best to disrupt in their strongholds. Indeed, the Congress leaders were on their way back from a political rally when they were gunned down. For the past 20 years, Indian capitalism has pushed into remote forested areas to find and extract timber, water and minerals. In the best of circumstances, forced sales and the acquisition of land by outsiders would cause resentment. But the Indian state appears incapable of introducing the schools, health centres and agricultural improvements that might mitigate the disruption to tribal ways of life that are harsh but at least are known and understood. Maoist ideologues, usually caste-Hindus, have found a rewarding refuge by taking to the remote forests. Fired with schemes for a Maoist-style insurgency, these leaders have invoked the bloody legacies of Naxalbari, a village in West Bengal where similar insurgencies began in 1967. The village gave rise to the term “Naxalite” to refer to violent insurgents inspired by the cry that “China’s chairman [Mao] is our chairman”.3 Just as there are class divisions among tribal people, there have been numerous Maoist and Naxalite splinters since the 1960s. Sectarian and ethnic divisions led to the emergence of rival groups, but in 2004, most hatchets were buried and a Communist Party of India (Maoist) was born. At the same time, the Maoists became adept at striking deals with local criminals and politicians in resource-rich areas to ensure flow of money and weapons for survival. The recent ambush and killings were another in a series of carefully planned guerrilla assaults on high-profile targets. The Maoists tried to murder the Chief Minister of Andhra Pradesh in 2003 and the Chief Minister of West Bengal in 2008. They killed 76 paramilitary police, beheaded a captured policeman and derailed a train killing 140 people in 2010. In 2012, Maoists kidnapped a district collector but released him alive. 2

Vishwa Ranjan, Director-General of Chhattisgarh police, in Robin Jeffrey, Ronojoy Sen and Pratima Singh eds., More than Maoism (New Delhi: Manohar, 2012), 436. Jeffrey, Sen and Singh, 69.

The Indian state usually strikes back with ham-handed and often brutal counter-insurgency. Tribal villages suffer the stationing of lonely, frightened paramilitary units. Schools are occupied, huts burned, villagers beaten, women molested. Strange soldiers living in one’s midst are no more popular in rural Chhattisgarh than they were in eighteenth-century Boston.

The State Response The security forces struck back in 2011 and 2012 and captured or killed Maoist leaders, while civil authorities attempted to improve the provision of basic services in remote areas to lessen the Maoist appeal. This had led to a decline in the number of incident involving Maoists over the past two years. The federal Minister for Rural Development, Jairam Ramesh, an advocate of the developmental approach, said right after the attack that the government’s “two-track” strategy of development along with security will continue in Maoist-affected areas. The poor record of national and state governments in resettling people who lose their lands as a result of “development” projects is widely known. Tribal people are especially vulnerable since they have few skills with which to make new lives on the streets of chaotic towns and cities. The link between high-caste, well-read Maoist leaders and tribal people lies in a willingness to share deprivation and suffering. The readiness to suffer stems from the utopian belief that rural revolt can capture the Indian state. The combination of the short, hard lives of tribal people with the calculated ruthlessness of Maoist ideology can be brutal. “One who has not smeared his hands red with the blood of the class enemy is not fit to be called a communist”, Charu Majumdar, a leader of the 1960s Naxalites told his followers.4 That is perhaps why Karma was brutally stabbed some 78 times before his death, according to the post-mortem report. For today’s Maoist leaders, this is Mao Zedong’s China 1930, and victory is at least a generation away. It’s a misguided belief — India 2013 differs vastly from China 1930 — but the thought provides inspiration to some. For the Indian state, the insurgencies in central and eastern India are an annoyance, not an existential threat; but it is an annoyance to which the state seems incapable of responding effectively. The sad cycle of atrocity and retaliation looks set to continue, while economic forces of an industrialising, capitalist India nibble away at the country’s remote, resource-rich regions.

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Jeffrey, Sen and Singh, 71.

ISAS Insights No. 206 – 3 June 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

An Unusual Sino-Indian Summit and After P S Suryanarayana1

Abstract Chinese Premier Li Keqiang’s recent state visit to India, 19-22 May 2013, was neither a classical charm offensive in diplomacy nor a post-modern crisis-busting political journey. What he did achieve was to place the political and economic “concerns” of space-faring China and India at the centre-stage of their discussions. This has raised the possibility of a ‘new model’ of Sino-Indian dialogue, driven by a sense of optimism after their recent military standoff eased. At another level, though, there is still a lot of circumspection, if not also scepticism. India, for its part, must begin addressing its asymmetric equation with China across the entire spectrum.

Introduction: First Choice China’s new Premier Li Keqiang exuded a lot of charm towards his hosts in the country he chose, with much care, for starting his first overseas tour in his exalted position. The Indian leaders and people, too, did not cold-shoulder him at all. However, while receiving him warmly and hosting him graciously from 19 May 2013 to 22 May, they did not also conceal their circumspection, if not scepticism. For his part, Mr Li, too, did not raise false visions of Hindi-Chini Bhai-Bhai Mark-II, the original slogan of this genre in the 1950s (hailing the fraternal India-China ties) having faded. The reasons for this new state of play in Sino-Indian relations today are not far to seek.

Mr Li’s visit was preceded by a military standoff, which took few weeks to defuse, at a stretch of territory along the undefined Line of Actual Control (LAC) in the general area of the disputed Sino-Indian boundary. At the same time, the Chinese leader did not have to exert efforts to break that crisis, which had come under control by the time he made a choreographed touchdown of friendship at New Delhi airport on 19 May. In the final analysis, the Chinese leader succeeded, going forward, in placing the “concerns” of both India and China at the centre-stage of their diplomatic engagement. This does not, however, mean that the major “concerns” on either side have already eased. More precisely, Mr Li has now resorted to a policy elucidation of the earlier public exhortation by the new Chinese helmsman Xi Jinping that India and China “should accommodate each other’s core concerns”. 2

Nuanced Accent on ‘Concerns’ A relevant nuance is noteworthy in this context. Mr Xi had, in a media interaction in Beijing on 19 March, propounded that China and India should actually yield space to each other’s “core concerns”. In contrast, Mr Li told India’s Prime Minister Manmohan Singh, during incamera discussions in New Delhi on 19 and 20 May, that the two countries would “need” to “take into account each other’s concerns”3 going forward. It is easy to detect that Mr Li has dropped the adjective, “core”, from Mr Xi’s idea of Sino-Indian “core concerns”. However, this does not detract from the fact that Mr Li has now voiced, in policy terms, China’s willingness to address India’s “concerns” on a reciprocal basis. Mr Xi had earlier outlined his preference during the course of public diplomacy of talking to journalists – not in policyrelated discussions with the Indian leaders. In a different but related diplomatic theme, it is not enough if India and China address each other’s concerns or core concerns. Prospects of peace and tranquillity in the relations between the two Asian mega-state neighbours are likely to look up, only if their core interests, not just concerns, are addressed. Core interests are fundamental to the well-being of any state which will have concerns over specific issues at any given time. Viewed in this perspective, the Joint Statement issued after the Li-Singh talks on 20 May is devoid of substantive signs of new progress in addressing the core interests of either China or India. New Delhi’s core interests, in its diplomatic engagement with China, span these varied aspects: (1) political detente as a requisite step towards peaceful coexistence with China on a durable basis, (2) India’s compulsion to build its capabilities in nuclear and other domains of military deterrence to checkmate the perceived Chinese “designs”, (3) the status of entire Jammu & Kashmir as an integral part of the Indian Union, (4) an end to, or at least a 2 3

Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/zxxx/t1023070.shtml Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/lk qipsg/t1043443.shtml

substantive mitigation of, the suspected anti-India focus in the incremental Sino-Pakistani “all-weather partnership” and “all-weather friendship”, (5) a level-playing field in New Delhi’s economic engagement with Beijing (inclusive of India’s “rights” as a lower-riparian state in regard to the Brahmaputra (Yarlung Tsangpo), (6) the need for Beijing’s explicit support of India’s aspiration to become a veto-empowered permanent member of the United Nations Security Council, much like China itself, and (7) the requirement of Beijing’s support for India’s bid to become a member of elite multilateral groups and forums on issues like nuclear-non-proliferation. A sample of Beijing’s core interests, in regard to New Delhi, are: (1) China’s compulsion to establish stable or manageable bilateral relations so that India would have no reason to try and tilt towards the United States or become a pro-America swing-state in Asia’s power politics, (2) Steps, if the Chinese could take, to wean India to their side in Sino-US competition; (3) the preservation of Beijing’s sovereignty over Tibet as an intrinsic part of the People’s Republic of China, and (4) the non-negotiable policy of translating the One-China dream into a living reality. As for the immediate concerns of India and China in their bilateral engagement, distinct from their core interests, some specific areas of mutual concern have been addressed in the Joint Statement.

A Defused Standoff and After First, the Joint Statement contains no whiff of direct reference to the recent military standoff that lasted several weeks from 15 April – emphatically, with no exchange of fire at all. In an indirect reference to the defusing of that standoff, “the two sides [now] noted with satisfaction that the meetings of the China-India Working Mechanism for Consultation and Coordination on Border Affairs held till date have been fruitful”. 4 Apart from this Mechanism, which was set up following a Sino-Indian summit in January 2012, India and China used several other diplomatic and military channels to defuse this particular military standoff. There is a storyline as evident from the manner in which the standoff was reversed: Neither country seems inclined to cross the invisible red lines of military escalation as of now. A relevant cautionary note is that such a conclusion is still very much a tentative one. However, a passage in the Joint Statement reinforces this conclusion: “Pending the resolution of the boundary question, the two sides shall work together to maintain peace and tranquillity in the border areas in line with the previous [confidence-building] agreements”.5 Moreover, Dr Singh and Mr Li “encouraged” the Special Representatives of the two countries to “push

Foreign Ministry of s/lkqipsg/t1042798.shtml Ibid

the

People’s

Republic

China:

http://www.fmprc.gov.cn/eng/topic

forward the process of negotiations”6 to resolve the basic but complex boundary dispute itself. Second, the Joint Statement is silent on the Chinese proposal for a Border Defence Cooperation Agreement. Annotating this omission, India’s Ambassador to China, S Jaishankar, said, in a media briefing after the Singh-Li talks, as follows: “The Chinese gave us their draft on the 4th of March. I think we gave them our draft on the 10 th May. Obviously now we will be discussing it with the Chinese. Since our draft is pending their consideration, to me it is not at all surprising the matter did not come up [at the Singh-Li talks] because it is still something on which we need to engage them in detailed discussion”.7 As for another trans-border issue, i.e., India’s “rights” as a lower-riparian state in regard to the waters of the Brahmaputra (known as Yarlung Tsangpo on the Chinese side), the Joint Statement is silent on India’s plea for a new mechanism. Mr Li, in his talks with Dr Singh, emphasised the “need” to “make full use of the existing mechanisms to beef up cooperation on issues concerning cross-border rivers”.8 Echoing Mr Li’s version, Dr Jaishankar noted as follows: “I would really characterise the Chinese response as sympathetic. I think they recognise that we have concerns. They pointed out that they were [a] responsible [state], that they would not do something which would damage our interests. And essentially what we agreed upon was that we would strengthen our cooperation based on our existing mechanism and now we have to work further on that”.9

Civil Nuclear Exchanges Third, a truly significant – and relatively new – dimension of India-China engagement is spelt out in the Joint Statement as follows: “The two sides will carry out bilateral cooperation in civil nuclear energy in line with their respective international commitments”.10 Amplifying this ‘surprise’ in the new Sino-Indian package, Dr Jaishankar interpreted as follows: “We have had bilateral civil nuclear cooperation with China in the past, not in the recent past but in the past. Today the issue came up again. And you must bear in mind that we are today probably the two countries who have the largest planned civil nuclear energy programme. So, it makes great sense for us to exchange views and have other exchanges”.11

6 7

Ibid Ministry of External Affairs, Government of India: http://www.mea.gov.in/media-briefings.htm?dtl/21724/ Transcript+of+Media+Briefing... Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/lkqipsg/t1043 443.shtml Ministry of External Affairs, Government of India: http://www.mea.gov.in/media-briefings.htm?dtl/21724/T ranscript+ of+Media+Briefing... Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/l kqipsg/t1042798.shtml Ministry of External Affairs, Government of India: http://www.mea.gov.in/media-briefings.htm?d tl/21724/Trans cript+of+Media+Briefing...

Fourth, economic issues, including two-way investments and India’s huge trade imbalance with China, were discussed at great length. It is specified in the Joint Statement that “the two countries agreed to take measures to address the issue of the trade imbalance”.12 Of equal or greater significance on the economic side of the Sino-Indian ledger is the emphasis on the prospect of “initiating the development of a BCIM (Bangladesh, China, India, Myanmar) Economic Corridor”.13 On this project, Chinese Foreign Minister Wang Yi has noted that “the consensus of constructing BCIM Economic Corridor jointly proposed by China and India receives much attention from all walks of life”. In a briefing on the outcome of Mr Li’s visit to India, Mr Wang said: “The propelling of this idea combines China’s opening up to the west [inside China itself] with India’s ‘Look East Policy’. The linking of the world’s two important growth poles of East Asia and South Asia will surely release enormous growth energy and provide new vitality for the Asian economic integration and global growth”.14 In Beijing’s geo-economic perspective, there is another project which can link China’s underdeveloped western region with another country, Pakistan, and its economic priorities. Mr Li, who travelled to Pakistan from India, spoke about this after his talks with the Pakistani leaders in Islamabad on 23 May. He said: “The two sides agreed to combine the expanding of domestic demand in China and the strategy of developing China’s western region with the process of domestic economic development in Pakistan..... Both sides decided to ... build up a China-Pakistan Economic Corridor”.15 Such a corridor is generally expected to link China to Pakistan’s southern port of Gwadar, which recently passed into Beijing’s hands. He also expressed China’s willingness to help Pakistan upgrade the strategically crucial Karakoram Highway, an issue that bristles with overtones of concern in official Indian circles.

Geo-economic ‘Encirclement’ of India Some official and non-official observers will possibly see China’s parallel advocacy of the BCIM Economic Corridor and the China-Pakistan Economic Corridor as a potential ploy to encircle India in geo-economic and strategic terms. Such a view will be an extension of the current theory in some Indian circles that China has more or less completed a geo-political encirclement of India by gaining access to various ports in the South-Southeast Asian region. Regardless of whether or not this kind of argument is reflective of mainstream opinion in India at this time, some recent commentaries in China’s People’s Daily have raised the possibility of a “new model of China-India relations”. Mu Yongpeng, a special commentator of the paper, which belongs to the stable of China’s state-party system, has written that the 12

13 14

Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/lkqipsg /t1042798.shtml Ibid Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/lk qipsg/t1044286.shtml Foreign Ministry of the People’s Republic of China: http://www.fmprc.gov.cn/eng/topics/l kqipsg/t1044071.shtml

new model “is a continuation and development of the Five Principles of Peaceful Coexistence and a useful attempt to establish new relations among major powers of the 21st century”.16 A key factor in such a formulation is the perception that India is now seeking resolution of the boundary dispute with China on “the basis of reality” and that New Delhi wants to avoid a zero-sum game with Beijing. Whether or not such a new model could be built at the present moment, India will have no cause to suspect or fear ‘encirclement’ by China in only one scenario. It is entirely up to India to address the huge asymmetric equation with China across the board. China’s growing external reach has been made possible by progressive improvements in most indices of the country’s comprehensive national strength – the economy and the military, to mention just two domains. Regardless of whether New Delhi can or should follow Beijing’s political as also economic and social values, it stands to reason that India must put its house in order and begin to rebalance with China so as to attain an adequate degree of equivalence. This and related aspects call for sophisticated debate and serious follow-up action in India with regard to its focus on China.

.....

People’s Daily of PRC: http://english.people.com.cn/90883/8239808.html

ISAS Insights No. 207 – 3 June 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

President Karzai’s Visit to India: Setting Policy Markers for post-2014 Afghanistan Shanthie Mariet D'Souza1 Abstract President Karzai’s three-day official visit in May 2013 to India with a wish list of military equipment has reignited speculation regarding an increased Indian military presence in post-2014 Afghanistan. Amid frayed Afghanistan-Pakistan relations, difficulty in the negotiations of a Bilateral Security Agreement (BSA) between Afghanistan and the United States, waning international interest in the Afghan war and dwindling financial assistance to the conflict-ravaged country, uncertainties loom large on the prospects of peace and stability in Afghanistan. President Karzai who, prior to the 2014 drawdown of international forces and the presidential elections in Afghanistan, is continuing his effort to bring a negotiated end to the war and reclaim the sovereign status of his country and thereby mark his legacy, is seeking help from a trusted ally and friend. While much of what happens in the coming months will test the intent and capacity of New Delhi to come to Karzai's aid, it will also define how India perceives its role in post-2014 Afghanistan and how prepared it is to confront the future of Afghanistan in pursuance of its national interests and strategic objectives.

Introduction President Karzai’s three-day visit from 20 May to 22 May 2013 to New Delhi was his twelfth visit to India in official capacity. While his earlier visits had generated a lot of media attention, this time around the 'wish list'2 Karzai carried with him evoked maximum interest. The list apparently contained requests for supply of military hardware and arms from India, thereby constituting yet another invitation to New Delhi to be involved in the Afghan security sector at a time when the western powers are showing relative disinterest in heeding to such requests. With Karzai's visit coming under the shadow of the Chinese premier’s visit at about the same time and the prospects of improving ties with Pakistan as promised by the new political leadership, the Afghan leader’s request did not receive adequate policy attention in New Delhi. While New Delhi aspires for a major power role as a net security provider in the sub-continent, and its neighbours look towards India in fulfilling that role, it appears that it has yet again fallen short of capitalising and building on such available opportunities.

India-Afghan Relations Indo-Afghan ties have expanded and deepened during the last decade. Having pledged more than US$ 2 billion in various aid and developmental programmes, India is Afghanistan's fifth largest bilateral donor. As the West signalled its egress from Afghanistan, India demonstrated its long-term commitment and staying power by signing the Agreement on Strategic Partnership (ASP) in October 2011 and organising an Afghan investment summit in Delhi in June 2012. Most of its efforts have been directed at stabilising Afghanistan by attempting to change the narrative from a narrow securitydominated approach to one that emphasises on potentials for economic opportunities and investment prospects aimed at generating employment, revenue and establishing regional connectivity through greater trade and economic integration. India’s aid and assistance has been crucial in the rebuilding of various critical sectors of the Afghan economy, security and society. However, several questions remain. As international financial assistance dwindles and may eventually dry up in the coming years, will India be able to match the expectations of the Afghans and fulfil the requests of increased aid and assistance? Despite transforming itself from an aid-recipient to an economic donor in recent times, should India focus on countries in the neighbourhood or 2

According to Indian media reports, the wish list included requests for 105-mm howitzer artillery, medium-lift aircraft, bridge-laying equipment, and trucks. This is not the first time that such a request has been made by the Afghans. Ahead of the signing of the Agreement on Strategic Partnership (ASP), there were such ‘wish lists’ provided but New Delhi did not heed to the requests. Author’s discussions with senior officials in the Ministry of Foreign Affairs, Kabul and Ministry of External Affairs, New Delhi, March 2011, May –June 2011 and October 2011.

diversify aid to other developing countries?3 More importantly, can the pattern of aid include high-value military aid at the cost of development and humanitarian assistance, especially when Indian growth story has met some unexpected barriers?4

Karzai’s Pressure Tactics President Karzai is currently navigating the difficult contours of domestic and regional power politics. This makes his visit to India more than an act of symbolism. By presenting the wish list for military supplies and thereby, raising the ante for Pakistan, Karzai could be using the Indian card to achieve twin purposes of reducing the border tensions with Pakistan and gaining tangible results from the negotiation process with the Taliban. The mounting domestic criticisms and anti-Pakistan demonstrations inside Afghanistan as a result of continuous firing from Pakistan into border provinces of Afghanistan have complicated President Karzai's outreach towards peacemaking with the Taliban and Pakistan. With such widening differences, this visit to India could well be a tactical ploy to achieve a larger strategic objective. Thus, the timing of the visit and the request for arms supplies is likely to be seen as more of a signalling to the other regional and global actors by the beleaguered Afghan leader. Coming at the heels of increased tensions in the Af-Pak relations, an increased Indian presence in Afghanistan may lead to a heightened India–Pakistan competition, further complicating the Afghan end-game.5 This could complicate the exit plans of the western powers from Afghanistan and might result in some concessions for Karzai which he has struggled to receive from the West before the drawdown. Would those benefits include giving Karzai an upper hand in the negotiated end to the Taliban-led insurgency or improve his bargaining position vis-a-vis the US and Pakistan remains to be seen. In any event, for a country that needs to manoeuvre the difficult contours of regional and global power politics in its quest to regain its sovereign status, and for Karzai to mark his legacy such pressure tactics and bargaining position might yield greater dividends.

Afghanistan is the second largest beneficiary of India’s aid policy. There is a debate in New Delhi if aid should be diversified from unstable conflict-ridden countries in the neighbourhood to other developing countries, particularly Africa- in the spirit of South-South Cooperation . Author's discussions with senior government officials, Ministry of External Affairs, New Delhi, February 2013. During author's discussions with officials in the Ministry of External Affairs, Government of India, in New Delhi, May 2013 and February 2013, the inability to fund new projects in Afghanistan due to financial constraints emerged as an area of concern. Also see Lorenzo Piccio, "India’s foreign aid program catches up with its global ambitions", Devex (13 May 2013), https://m.devex.com/news/indias-foreign-aid-program-catches-up-with-its-global-ambitions/80919 "Afghanistan: Stirring Indo-Pak tensions?", Al Jazeera (21 May 2013), http://www.aljazeera.com/programmes/insidestory/2013/05/2013520154858517875.html

US-Afghan Relations In the first week of May 2013, US deputy Secretary of State William Burns and Afghan Foreign Minister Zalmai Rasoul met in Kabul for the second round of negotiations over the implementation the US-Afghan Strategic Partnership Agreement (SPA) signed in May 2012 by President Barack Obama and Hamid Karzai. Both countries continue to have disagreements over the amount of funds the US would provide to Afghan security forces, on the actual number of US forces to be stationed after the final withdrawal, and the legal immunity these forces would enjoy in Afghanistan. Moreover, Karzai's repeated requests of supply of arms and artillery guns for the Afghan forces too have not been fulfilled by the US. The Afghan Ministry of Defence (MoD) has repeatedly expressed the need for fighter planes, transport planes and drones within a few years. Weary of generating a negative response from Pakistan, the US has stopped short of providing what Karzai and his military commanders think are 'must have' instruments to tackle insurgency and Pakistani misadventure.6 It is in this complexity of negotiations that Karzai's desperation to improve his bargaining position can be contextualised. In a spate of public salvos, to assuage domestic ire over civilian casualties, issues of sovereignty and the Talibanâ&#x20AC;&#x2122;s caricature of him as an American stooge, Karzai has demanded that US special operations forces leave conflictridden provinces, accusing both the American-led coalition and the Taliban of working to destabilise his government. Although he has signalled his willingness to consider a proposal to maintain the nine American bases in post-2014 Afghanistan,7 difficulties in the negotiations over the BSA persist. While Pentagon could be assesing the Afghan appetite for larger troop presence, Karzai too could be testing the appetite for continued Western presence among Afghan society and the regional powers like Iran and Pakistan. Thus, an improvement in his bargaining position leaves considerable wiggle room for a potentially amenable middle ground.8 In order to elicit a long-term commitment, Karzai has also insisted that any agreement must be tied to US resolve to support Afghanistan's political and economic transitions. Negotiations should deal with partnership and

6 7

Author's discussions with senior Afghan Army officials in Kabul, June-July 2012. Matthew Rosenberg, "Karzai Says U.S. Bases Can Stay, Raising Some Eyebrows in West", New York Times (9 May 2013), http://www.nytimes.com/2013/05/10/world/asia/karzai-says-us-can-keep-afghanbases-after-2014.html?ref=world&_r=0 Adam Cohen, "Far Apart on Bilateral Strategic Agreement, Congress Should Make Politics, Economy Center of Afghanistan Partnership", Huffington Post (13 May 2013), http://www.huffingtonpost.com/adam-cohen/afghanistan-bilateral-strategicagreement_b_3265924.html; "Afghanistan to allow US bases to remain", Al Jazeera (9 May 2013), http://www.aljazeera.com/news/asia/2013/05/201359111938488590.html

cooperation on improving governance and access to services, strengthening the internal economy and promoting regional stability and trade.9

Afghan-Pak Relations Afghanistan's relations with neighbouring Pakistan have deteriorated. In spite of the occasional warm words of affection Karzai used to shower on the country's eastern neighbour, on-ground tensions on the Durand Line10 have increased subsequent to Pakistan taking steps to build border posts and making moves to solidify the border. On 2 May, border fighting erupted in the rugged Goshta area of eastern Afghanistan’s Nangarhar province, following growing complaints over construction of the outposts.11 Both Kabul and Islamabad have accused each other of harbouring militants who launch cross-border raids. A fence that prevents such trespassing should have been acceptable to both. However, for any Afghan leadership to recognise the Durand Line sounds a death knell. Dividing the Pushtuns, the largest and most influential ethnic group in Afghanistan, by a physical fence that has the approval of Kabul, is not a viable option for the Afghan political elite. A silent acceptance of Pakistani tactic goes further against Kabul's fond project of stoking Pushtun irredentism to contain Pakistan’s ‘interventionist’ designs. Any military assistance, or at least a promise, from India could play a deterring effect on Pakistan's unilateral move. President Karzai has made repeated requests to the Taliban to abjure violence and join the peace process in Afghanistan. Reports from the field indicate that Karzai has even offered the Taliban leadership based in Quetta (also known as Quetta Shura Taliban) senior positions in the Afghan government and has even asked Taliban supremo Mullah Omar to contest elections. His efforts of getting the Afghan Taliban ‘inside the tent’ have been frustrated by the Pakistani security establishment which makes any meaningful 9

Adam Cohen, A New Framework for U.S.-Afghan Relations After 2014: The Need for a Smooth Transition, Friends Committee On National Legislation, (7 March 2013), http://fcnl.org/issues/afghanistan/transition_one-pager.1_7_MAR_2013.pdf Historically, Afghanistan has refused to recognise the Durand Line, drawn by the British in the 19th century to delineate British India from Afghanistan as it divides the lands inhabited by Pushtun tribes, the largest ethnic group in Afghanistan. Since its creation in 1947, Pakistan has recognised the Durand Line as the de-facto border between the two nations. In stark contrast to Afghanistan’s position, Pakistan considers the Durand Line a settled international boundary and has consistently refused to discuss its legitimacy. Of late, it has pushed forward proposals on fencing the border to curb the crossborder insurgent movements which is not acceptable to Afghanistan. In recent weeks, the Afghan government has loudly denounced a slew of new Pakistani border posts, which officials in Kabul claim are being built in their territory. Pratyush, Afghan-Pakistani Border Row: A Double-Edged Sword for India, The Diplomat, 16 May 2013, http://thediplomat.com/thepulse/2013/05/16/afghan-pakistani-border-row-a-double-edged-sword-for-india/; Thomas Ruttig, Trouble at the Goshta Gate: New tensions and old wounds along the Durand Line, Afghan Analysts Network , Kabul, ( 14 May 2013), http://www.aan-afghanistan.org/index.asp?id=3392

reconciliation an impossible task. While Karzai hopes to have direct access to these Afghan Taliban leaders, the Pakistani military establishment's obsession with using them as strategic assets to regain the strategic depth has not come to an end. To make things difficult, reports from the field indicate that with the increased infighting and fracturing of the insurgency, the more lethal Peshawar Shura Taliban (PST) is being strengthened as a counterforce. With the reported willingness of the likely new Pakistan Prime Minister to negotiate with the Pakistani Taliban (TTP) and his silence on the presence of the Afghan Taliban in his country, Karzai's military gamble with India could be a tactic to pressure Pakistan to open the channels of communication with the extremists.

The Afghan Wish List and India’s Policy Responses Contrary to the media narratives, military aid, both lethal and non-lethal, has been on the wish lists Afghanistan has been submitting to New Delhi over the past years. Of late, Afghan officials have explicitly linked the appeal for military assistance to a continuing series of recent clashes between Pakistani and Afghan border guards.12 Prior to President Karzai's arrival in New Delhi, Shaida M Abdali, Afghan Ambassador to India, stated that the ASP was ambiguous on lethal and non-lethal military equipment and Afghanistan was looking for India’s help to get “equipment and weapons to fight".13 During his meeting with India’s Prime Minister Manmohan Singh, Karzai stated his desire for an arms deal, which included purchase of military weaponry such as aircraft, missiles and field guns. The list, running into 18 pages, not only contains Afghanistan’s demands for arms and ammunition, communication and electronics equipment but also technology for construction of barracks and electricity projects.14 However, there is little hope that much of these requests would actually be fulfilled. Indian officials have indicated willingness to supply transport helicopters, trucks and non-lethal equipment to Afghanistan. They further point out that while their capacity to train Afghan soldiers and officers is limited, they are willing to "train the trainers". Other offers include training in logistics, repair and maintenance works.15 Indian military 12

Jason Burke, "Afghan president Hamid Karzai to seek military aid as he arrives in India", The Guardian (20 May 2013), http://www.guardian.co.uk/world/2013/may/20/hamid-karzai-military-aidindia Nayanima Basu, "Hamid Karzai leaves India empty-handed", Business Standard (23 May 2012), http://www.business-standard.com/article/current-affairs/hamid-karzai-leaves-india-empty-handed113052200912_1.html “India may strengthen Afghan military to promote stability”, Deccan Herald, (22 May 2013), http://www.deccanherald.com/content/334088/india-may-strengthen-afghan-military.html Indian Army is set to double the number of ANSF personnel who receive training in India. Currently, more than 100 officers of Afghanistan Army and 300-odd personnel from other wings of ANSF receive training on counter-insurgency and counter-terrorism operations, signals, engineering and medical. The

thinkers have advocated options of putting boots on ground to help the Afghan forces to deal with the contingencies of post-2014 Afghanistan as a demonstration of commitment. However, "Indian foreign policy establishment has been content in suggesting that India’s developmental role makes India an important player in Afghanistan”.16 New Delhi's dithering and preference to “impale itself to the fence”17 at times when hard decisions need to be made is far too common to be repeated. Not just the military requests, New Delhi appears to be dithering on its aid- policy as well, both in terms of its commitment and spending. An additional military aid commitment could add to the complexities of overstretch and persistent inability to fulfil the commitment to the civilian reconstruction projects. Not surprisingly, New Delhi has stalled such outward proposition of arms and equipment supplies to the Afghans. The issue of supplying military hardware to Afghanistan would figure in the first meeting of the Joint Working Group on Political and Security Cooperation – one of the four bilateral forums set up under the Strategic Partnership Council – within the next three months.18 While one line of thinking in New Delhi seems to contend that Pakistan security establishment be kept preoccupied on its western border by keeping the Durand Line issue alive, this strategy does not envision supplying arms or militarily equipment to the Afghans. The low levels of terrorist-related violence in Jammu & Kashmir, due to the perceived preoccupation of the Pakistani handlers of the terrorists on the Pak-Afghan border, underline the need to pursue such an approach. Yet, India, anticipating an outbreak of peace with Pakistan, especially after Nawaz Sharif's election, has found another tight rope to walk. Maintaining a low level of tension without escalation and an ambivalent position on the Durand Line appear to be the preferred policy for New Delhi to keep the pressure on Pakistan, rather than provoking a direct confrontation or a border flare-up between Pakistan and Afghanistan. For India, the Afghan-Pakistan border row could be a double-edged sword.19 Supplies of arms and cross-border misadventure could

number is set to double from July 2013 as the Army will train close to 800 ANSF personnel. The new courses on offer for Afghan soldiers include English language, information technology, military policing, and stores and vehicle management. “India may strengthen Afghan military to promote stability”, Deccan Herald, (22 May 2013), http://www.deccanherald.com/content/334088/india-maystrengthen-afghan-military.html; "Karzai says peace in Afghanistan depends on Pakistan", Business Standard (23 May 2013), http://www.business-standard.com/article/economy-policy/karzai-says-peacein-afghanistan-depends-on-pakistan-113052300051_1.html Harsh V Pant, "No short-cuts for India in Afghanistan", Daily News & Analyses (21 May 2013), http://www.dnaindia.com/analysis/1837427/column-no-short-cuts-for-india-in-afghanistan Praveen Swami , "Why India is concerned about supplying arms to Afghanistan", First Post (22 May 2013), http://www.firstpost.com/world/why-india-is-concerned-about-supplying-arms-to-afghanistan800711.html "India may strengthen Afghan military to promote stability", Deccan Herald (23 May 2013), http://www.deccanherald.com/content/334088/india-may-strengthen-afghan-military.html Pratyush, Afghan-Pakistani Border Row: A Double-Edged Sword for India, The Diplomat, 16 May 2013, http://thediplomat.com/the-pulse/2013/05/16/afghan-pakistani-border-row-a-double-edgedsword-for-india/

be counterproductive in the long-term. More importantly, the use of such pressure tactics to elicit cooperation would require more imaginative and forward-looking approach in the foreign policy making circles.

India’s Policy Options As uncertainty looms large over the future of post-2014 Afghanistan, New Delhi would be confronted with various scenarios in the coming months as Afghanistan heads for transition in the security and political sectors. Political transition, which includes the presidential elections in April 2014 and negotiations with the Taliban, could become murkier and challenging, and at the same time would remain critical to long-term stability. Any delay in holding elections, either a deliberate decision or one circumstantial, or elections being marred by fraud or other electoral malpractices, could drag Afghanistan to a civil war situation. Likewise, any power-sharing arrangement or secretive deal with the Taliban would invite stiff resistance by the opposition and civil society groups. A nomination process rather than an election choosing a president would also invite chaos and turbulence. The opposition groups would use it as a staging post to call for a regime change which could lead to fracturing of the Afghan society on ethnic lines or fragmentation of the Afghan state into spheres of influence with regional powers supporting their proxies. In short, Afghanistan faces the real prospect of further instability, created not just by the insurgency and their untamed potential, but also by the aspirations of power blocs both within and outside the country. However, India's post-2014 Afghanistan policy appears to be glued to the best-case scenarios of a successful democratic transition with the conduct of a free and fair election process . Other elements of the scenarios include- Afghan national security forces (ANSF) would be able to thwart the Taliban-led insurgency; violence may continue, but would not escalate enough to destabilise the government. New Delhi hopes that it would remain ‘business as usual’ and would not necessitate a drastic revisiting of its continuing strategy. This, in short, is a strategy of convenience. Even to ensure the best case scenarios, New Delhi would need to work towards ensuring free and fair elections and at the same time broad-base its level of engagement with other political groups to help build an inclusive political order. In a rapidly closing ‘window of opportunity’ between now and 2014, New Delhi will have to use its military, diplomatic and economic leverages to set clear policy markers for protecting its primary national interests and achieving larger strategic objectives, if it intends to play the role of a major power in the region. Heeding to regional sensitivities, India appears to have yet again missed an opportunity of deepening its engagement with Afghanistan. Playing second fiddle to the great powers, or hoping to 8

achieve peace with difficult neighbours at the cost of its larger strategic interests, might bind New Delhi eternally to a highly unfulfilling mirage for stability in the backyard. At the same time, a decade of investment and goodwill accrued in Afghanistan could be lost simply because New Delhi failed to give shape to a coherent long-sighted policy of engagement with a traditional ally in need.

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ISAS Insights No. 208 – 17 June 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

A Tale of Two Leaders S Narayan1

Veteran political leader L K Advani’s resignation last week from even the primary membership of the opposition Bharatiya Janata Party (BJP) in India and the withdrawal of that resignation a couple of days later made national news. This came close on the heels of the appointment of Gujarat Chief Minister Narendra Modi as Chairman of the BJP’s Election Campaign Committee. The ruling Congress party has refrained from commenting about these developments, stating that these are internal party matters of the BJP. Internally, Congress should be quite pleased at the dissension in the ranks of the BJP and at the announcement by Bihar Chief Minister Nitish Kumar that his party would not like to align with the BJP in the forthcoming general election, if they projected Narendra Modi as the leader. Nitish Kumar has made a call for a third front, free of BJP and the Congress, which has had only lukewarm support so far. It is not easy to untangle this web of developments, unless they are seen from the point of view of the actors. At the top of these is the media that has been interpreting these events. Tavleen Singh’s comments on this are as follows: “Modi is hated by most journalists working in the national media so they have taken great pleasure in pronouncing that if he can have such a polarising effect within his own party, he will certainly destroy the NDA (National Democratic Alliance). No sooner did Advani take back his resignation letter than the English news channels began to speculate about when Nitish Kumar would withdraw the Janata Dal (United) from the alliance. There is the additional problem that most political pundits from academia are even more leftist than us 1

hacks so they hate Modi even more than we do. They say this is because of what happened in Gujarat in 2002 but you only need to scratch a little to discover that beneath that veneer lies the real reason. They hate Modi most of all because he has been articulating an economic vision for India that is the direct opposite of the one that the Congress Party has followed for most of its years in power. They hate the way in which he talks about aiming for a prosperous India instead of just one in which poverty removal is the goal. And, to demolish his ideas they spout so-called statistics that seek to prove that Gujarat has not done as well as Modi says it has. Any casual visitor to Gujarat cannot fail to notice the new roads and the new prosperity in the villages but academics rarely bother to travel out of Delhi so they base their opinions on information that they claim is from the Planning Commission”.

Advani as Administrator Having interacted with Mr Advani over the years, I have always known him to be a humble, decent man whose integrity is beyond reproach. In 1977, he was a minister in the Morarji Desai Government at the centre, and visited the district where I was Collector and District Magistrate; and I was struck by his humility and down-to-earth approach. In later years, in the BJP-led Vajpayee Government at the centre, Advani distinguished himself as a balanced, sober administrator, ready to take on a reformist and not necessarily a populist agenda. The post-Vajpayee years have not been kind to him. Advani resigned earlier, in the wake of his comment hailing Pakistan’s founder Jinnah as a secular leader, and there is common comment that he is embittered that the party (and the country) have not given him his rightful role. He wishes to lead; and the appointment of Mr Modi as the numero uno for the BJP for the forthcoming elections must rankle with him very much. He ascribes the Modi model to be divisive, and holds the primacy of Modi to be responsible for an important ally, Nitish Kumar, walking away from the NDA.

Modi’s Agenda and Electoral Mood However, the ground realities appear to be a little different. Mr Modi has articulated a clear economic vision of prosperity that focuses on governance and delivery. He has succeeded in implementing ideas in Gujarat that has made it an investor-friendly state at a time when many Indian businessmen are looking to invest outside the country rather than within. The Modi rhetoric appeals to the younger generation, which is tired of the Congress homilies of subsidies and ‘aam aadmi’ (common man). In short, he comes across as a clear leader, strong, articulate and with a vision for prosperous India. The rank and file of the party appears to be strongly behind him and his vision. And the media hates him even more for being so sure of himself. At another level is a subtle analysis of the electoral mood. The BJP has little presence in the southern states, and cannot win any seats in Tamil Nadu, Kerala and Andhra Pradesh. Its

strongholds are Madhya Pradesh, Chhattisgarh, Goa, Rajasthan, and, to some extent, Uttar Pradesh (UP), Bihar, Maharashtra, Delhi and Himachal Pradesh. It needs to do well in this belt, and secure as many seats as or more than the Congress. The mood in these states is anti-UPA (the Congress-led United Progressive Alliance); and the BJP needs to capitalise on this changing perception. Even in Bihar, Nitish Kumar would be hard put to hold his own without the BJP support – it is likely that others may take away even some of the existing seats. Most importantly, it is UP which is crying out for change. Tired of Samajwadi Party and the Bahujan Samaj Party, tired of the empty Congress promises, it is looking for an alternative. In UP, Modi’s man, Shah, will be the chief election organiser for the BJP; and it will be a Modiled initiative. Bringing back Kalyan Singh, a respected leader in UP, is an important move. It is clear that there is a different articulation of election strategy – positive, development-driven and aggressive – and, perhaps, this makes Mr Advani feel redundant. Corporate India would also wish for a clear reformer to lead rather than indecisive leaders. It is also clear that the Modi plank is likely to be an inclusive plank that will appeal to all minorities (in spite of the popular perception), and not an exclusive plank that Mr Advani is likely to be associated with. It is also clear that the other BJP leaders are willing to fall in behind this articulation, even though they may be nurturing ambitions of eventual leadership of the party. In the circumstances, perhaps Mr Advani has only hurt his own image by this resignation and its subsequent withdrawal. There will always be place for him as a senior adviser, and the rank and file can never forget that they came to power in the nineties on the strength of the Advani strategy and Advani rhetoric. However, 2013 is not 1991, and the Rath Yatra rhetoric would no longer work; and the Modi alternative appears to be an interesting one. Whether these initiatives would translate into significant number of seats still remains to be seen.

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ISAS Insights No. 209 – 20 June 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

The Prospects for Modi’s Prime Ministerial Ambitions Robin Jeffrey and Ronojoy Sen1

What does the rise and rise of Narendra Modi mean for India? The question consumes vast amounts of Indian newsprint and electricity as it rockets around the newspaper-reading, all-atwittering public. There are at least three views of Modi, the Chief Minister of the state of Gujarat. One is that he is India’s best hope for substantial economic and political change. A second is that he is an ardent communalist and the tool of the worst sorts of global capitalism. A third view is agnostic about how good or bad he is, but holds that his reputation makes him too divisive to win a national election. On 9 June, the opposition Bharatiya Janata Party (BJP) appointed Modi as chairman of its national election committee to prepare for next year’s general elections. This move suggested that the BJP would later project Modi as its prime ministerial candidate.

Modi’s Success and Failures The known details of Modi’s life have been widely publicised. From a lower caste (Ghanchi) though by no means the lowest, he had a formal marriage at an early age but seems never to have lived with his wife. He joined the Rashtriya Swayamsevak Sangh (RSS), the Hinduchauvinist organisation with roots in the 1920s inspired by the fascist movements of Europe. 1

Professor Robin Jeffrey is Visiting Research Professor at ISAS. He can be contacted at isasrbj@nus.edu.sg and robin.jeffrey514@gmail.com. Dr Ronojoy Sen is Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasrs@nus.edu.sg. The views expressed in this paper are those of the authors and do not necessarily reflect those of ISAS.

He became Chief Minister of Gujarat in 2001 after the huge earthquake in the state. In 2002, he presided over one of the worst inter-religious killings in independent India. After Hindus returning from a pilgrimage were murdered at a wayside railway station, Hindu mobs attacked Muslims throughout Gujarat. For three days, Modi’s government was ineffectual in halting the murders. Critics allege - and court cases over these allegations continue - that the government encouraged the murderers. Muslims are only 10 per cent of Gujarat’s population, and Modi led his party to the first of three whopping victories in state elections at the end of 2002. In the 2012 Gujarat assembly elections, his party did not field a single Muslim candidate. His popularity in Gujarat is undeniable. He has claimed credit for the state’s impressive economic achievements and its reputation as the place where business can be done, the roads are good and electricity works. The state’s record in education and primary health is not particularly impressive, but visible economic progress and Modi’s reputation for honesty in money matters have stifled criticism of slow social progress. India’s next national elections are due within a year. The current government, led by the Congress Party, is in disarray and disgrace. Sections of the BJP see Modi as the answer to India’s problems – and to getting them back to power. The RSS, which always plays a role in the BJP’s decision-making, backed Modi to head the poll campaign panel despite earlier reservations about his larger-than-life persona. And Modi, there is no doubt, wants to be prime minister. His own party, however, is not united. Its elder statesman Lal Krishna Advani has publicly shown his displeasure at Modi’s recent elevation. He resigned from all party posts on 10 June only to retract the next day. The dream team, according to some BJP adherents, would be to have Modi and Sushma Swaraj, the leader of the party in the lower house of the national parliament, lead the party into the next election, rather as Advani and Atal Behari Vajpayee led it to victory in 1999. But neither Swaraj nor Modi looks like being good sharers.

Social and Economic Progress Modi’s critics point out that Gujarat’s social record is no better than the average for India. The infant mortality rate2 is officially around 44 per 1000, about the Indian average, ranking 10th among India’s major states and far off the Kerala rate of 13. Gujarat stands at the same middling level for life expectancy (66 years against league-leader Kerala’s 76). Rates for completion of primary and secondary education are also unimpressive, and Gujarat stands about eighth among the big states on the overall Human Development Index scale. Research completed in 2008 estimated that 45 per cent of children under 5 were underweight, more than double the rate in Kerala. Against this, Modi’s supporters point to rapid growth in the state’s domestic product in the first decade of the twenty-first century. Indian and foreign businesses enthuse about reliable communications and power and administrative efficiency and probity.

Babies who die in the first year, expressed out of 1,000 live births.

Critics downplay Modi’s role in the good things in Gujarat. Gujarat, they say, has always been an economic leader. The pre-historic town-site of Lothal was a port city 3,000 years ago. Europeans set up their earliest trading posts on the Gujarat coast in the sixteenth century because that’s where the commercial action was. And M K Gandhi, the father of the nation, went to South Africa as a young man because Gujaratis were already there and doing business. India’s oldest still-publishing newspaper, Mumbai Samachar (1822), is in Gujarati, not English, Hindi or Urdu. Modi, critics argue, is a product of skilful public relations. The celebrated keeper of India’s left-wing conscience, the Economic and Political Weekly, told its readers that “Modi is telling India’s dominant classes … that he can successfully overcome the obstacles to higher economic growth … by ‘managing’ democracy as he has done in Gujarat through a combination of communal terror and sops to some sections”.3 Modi’s admirers strike back by arguing that “most political pundits from academia … hate Modi most of all because he has been articulating an economic vision for India that is the direct opposite of the one that the Congress Party has followed for most of its years in power”.4 For his business supporters, Modi promises economic development as no other Indian politician. At the two-yearly ‘Vibrant Gujarat’ summit held in January 2013 India’s most prominent captains of industry, including Ratan Tata, Mukesh Ambani and Anand Mahindra, were present.

The Muslim Vote India’s electoral system is simple – first-past-the-post territorial constituencies – but its electoral arithmetic is complex. In many areas, voters tend to vote for members of the same caste or religion. Analysts usually argue that Muslims are particularly likely to vote as a bloc. About 13 per cent of India’s people are Muslim, but they are unevenly dispersed. In 73 of the 543 electoral seats in the lower house they constitute over 20 per cent of the vote and in 218 seats, they are more than 10 per cent of voters. In an Indian election, 60 per cent voter turnout is good. If Modi’s presence as a prime ministerial candidate galvanised Muslim voters, the BJP would run the risk of writing off 70odd seats before the campaign even began. And another 140 or so seats, where the Muslim presence is between 10 and 20 per cent, would be at risk if Modi’s aggressive appeal to a militant Hinduism was insufficient to unite Hindu voters as a bloc. Uttar Pradesh, which sends 80 members to the lower house of parliament and has a Muslim population of around 18 per cent, is a good example of the risks run by the BJP. In the last state elections held in 2012, despite Modi hitting the campaign trail the BJP won only 47 seats in a 403-seat Assembly, which was down 4 seats from the 2007 polls. Though Assembly election results are not always a good indicator for national elections, the challenges before the BJP in its efforts to widen its support base are obvious.

3 4

Economic and Political Weekly, April 2013, p. 8. Tavleen Singh, “Narendra Modi’s march continues as Advani gets in his own way”, June 16, 2013, http://www.niticentral.com/2013/06/16/narendra-modis-march-continues-as-advani-gets-in-his-own-way90416.html

Coalition Politics Modi’s detractors point out that he has so far generated little enthusiasm outside of Gujarat, the BJP’s committed supporters and corporate circles. Indeed, on 16 June one of the BJP’s key allies, the Janata Dal (United), the leading party in the state of Bihar, ended a 17-year alliance because of Modi’s rise to power in the national party. Other possible allies in the next election would be similarly wary. What Modi does next is a hot issue for India’s media, tea shops, bus stands and breakfast tables. It is hard, however, to imagine him in the Prime Minister’s chair, partly because he has few national political allies and has a reputation for being a one-man band who keeps even his most senior ministers in Gujarat in tight harness. In an age of coalitions, this could be the biggest obstacle for Modi and the BJP. Indeed, there is much that he can learn from former Prime Minister Vajpayee who managed to keep a disparate governing coalition together from 1999-2004. India has seen flurries over “new leaders” in the past. In the 1960s, the respected C Rajagopalachari founded a free-enterprise party called Swatantra, but in spite of his reputation as a freedom-fighter and state administrator, he and the party faded away. Similar were the stories of Jayaprakash Narayan’s 1970s movement and the rapid rise and fall of V P Singh in the 1980s. The Modi for prime minister movement has a long way to run and a lot of hurdles to leap.

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ISAS Insights No. 210 – 2 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Regional Security Cooperation in South Asia: The China Factor Iftekhar Ahmed Chowdhury1 In this vast swathe of the Asian region, China and India are two global ‘mega states’, home to a third of the world’s population. They are both rising stars in the contemporary international firmament, particularly against the backdrop of America’s and the West’s perceived ‘elegant decline’, as Robert Kaplan would have us believe. Theirs is a relationship that could largely define the politics of our age. It is an acknowledgment of the importance of this relationship that caused India to be the country that Premier Li Keqiang chose to make his first foreign visit. Leaderships of both countries speak of cooperative partnership. They are agreed on what they call ‘the ten strategies’ to develop bilateral relations. At the same time there are palpable competitive elements in the relationship. These include irredentist issues, as well as the problem of 3,500-km of un-demarcated borders, a legacy of colonial times. Both enjoy a rich cultural heritage. However they have conformed, and still do, to two distinct political philosophies, some points of convergence in economic ideas notwithstanding. Both are nuclear–weapon powers, whether formally recognised as such or not, and according to the latest SIPRI Report, with expanding arsenals. Both also possess enormous conventional military capabilities. Their bilateral trade is expected to reach a significant figure of US$ 100 billion by 2015. However, India suffers a large trade deficit currently, to the extent of US$ 40 billion according to some calculations. The point is: there are great possibilities of cooperation. At the same time, also of competition and confrontation. Neither tendency is inexorable. That is, neither can be ruled out. The ‘Thucidydes trap’ or syndrome is unfortunately ever present. That ancient Latin historian had said: ‘When Athens grew strong, there was great fear in Sparta’. That implies that apprehensions bred of an adversary’s rising power have the potential to lead to conflict. This axiom is derived from history. It must be

avoided. The best way to do so is to create institutional mechanisms, as this piece will endeavour to demonstrate.

China in South Asia China’s relationship with India remains the centrepiece of its South Asian policy. Most others revolve around it. That with Pakistan, as we shall see, enjoys a status of its own. Some see China and India as being the two powers, eventually, albeit ever so slowly, leading the process of Asian integration. This is just as France and Germany, despite their historically divergent paths, have done for Europe. Indeed Asia’s great contemporary challenge is building its capacity for the coexistence of divergent views. The Sino-Pakistani relationship, on the other hand, is qualitatively different. This ‘allweather, all-dimensional’ friendship evolved into a ‘comprehensive strategic partnership’ due to categorical imperatives on both sides. Against many variables in international relations, this has been one constant. It cannot be judged by the data on the precise content of their bilateral interactions. It is larger than the sum of its parts. China sees Pakistan as a key to attaining its broader foreign policy objectives. Once, Pakistan was the conduit to America. One recalls how Zhou Enlai had reminded Henry Kissinger not to forget the bridge that helped close the gap between China and the US. Today Pakistan links China to the Middle East at which China looks to satisfy its thirst for energy. Pakistan’s Gwadar port provides China a toe-hold to regional waters. Beijing wishes to hold up Pakistan to the rest of the world as an example of benefits to be had for good relations with China. Just as America is ‘pivoting ‘or ‘rebalancing’ towards the Pacific, China is looking west, its own ‘westward march’. The important point then is, there is nothing conflicting or contradictory about China’s relationship with India, and with Pakistan. With India, it is an end in itself; with Pakistan it is a means to an end. There is no reason why both cannot co-exist harmoniously. With other regional states China retains close links. Bangladesh, the third most populous country in South Asia, is like Pakistan, viewed by China as an ‘all-weather friend’. The two enjoy linkages spread across a large spectrum of activities. There is one important element in the relations that is distinct from China’s ties with Pakistan. It is the concept of a ‘quadrilateral grouping’ comprising Bangladesh, China, India, and Myanmar, or BCIM as it is called. There are connectivity projects that are on the drawing board. They acquire saliency with Myanmar getting increasingly linked to the outside world. Also China and Bangladesh are working together to set up a mechanism for exchange of data on the Yarlung Tsangpo/Brahmaputra river, which would also benefit New Delhi, given the positive nature of the current Bangladesh-India connections. As for Sri Lanka, China maintains good links with the Rajapakse government. While Beijing has stated its belief that Colombo should appropriately address post-civil war issues, it has urged the United Nations ‘not to complicate matters’. This must be music to Colombo’s ears! The Colombo connections have given Beijing a strategic ally near the crucial Indian Ocean shipping lanes that carry supplies from the Middle East, and a possible presence at Hambantota port. In Nepal, Beijing has been circumspect about taking sides between the Maoists and the others, and in the past has actually ceded some territory to Nepal to facilitate boundary demarcation, also endorsing Nepal as a ‘zone of peace’. China’s good neighbourly relations also extend to the mountain Kingdom of Bhutan, with its penchant for the ‘happiness index’, and to the isles of the Maldives, located in a strategic area. 2

Intra-South Asian Relations Within South Asia itself, some silver linings are discernible in what used to be a clouded set of relationships. The new Pakistani Prime Minister, Nawaz Sharif, has held out, it seems, an olive branch to India; and his Indian counterpart, Prime Minister Manmohan Singh is appropriately reciprocating. The Pakistan Army has gone public in saying that it no longer considers India as an existential threat. A significant economic conference was called in Islamabad in June 2013 to address trade issues by a dozen top business leaders in both countries giving an impetus to the implementation of Pakistan’s MFN status to India. Certainly major issues of difference such as on Kashmir remain, but there is perhaps an intellectual acceptance of the need to first pluck the ‘low hanging fruits’, leaving the others for later. The same is the case between Bangladesh and India, who already enjoy good relations, and seem to be inching closer towards the resolution of the issue relating to the sharing of the Teesta waters, probably to be signed when Prime Minister Sheikh Hasina visits Delhi come September. To date it has hung fire due to the assertiveness, which is notably growing, of the Indian states, the components of the Indian Union, in foreign-policy making. This in itself is a phenomenon that merits serious study and analyses. Of course as long as separate sovereign states exist, there will remain issues among them, including some seemingly irresolvable ones. This region is no different. The important thing is to keep the differences manageable. Having examined China’s relations with each of the South Asian State actors, I shall argue that there exists an opportunity for China to play a role in the creation and operation of a structure that would buttress regional security cooperation.

The Chinese Dream Such a role would be in consonance with what is now increasingly becoming the most favoured policy expression of the new Chinese leadership in Beijing. It is called the ‘Chinese Dream’ or Chunguo Meng. This might become the catch-word driving the new Chinese policy under Xi Jingping. Xi Jingping, who is clearly in command having consolidated his power by attaining all major posts early in his tenure (General Secretary of the Communist Party of China, President of the People’s Republic, and the Chairman of the Military Commission) has already used the expression several times. Other leaders have followed suit. It is an evolving concept and views vary as to what it entails. As of now, there appear to be three elements to the ‘Chinese Dream’. The first is ‘equality’(in negotiations with the US in particular and the West in general; the second is ‘non-confrontation’ (achieving aims without engaging in actual conflict with adversaries/rivals); and the third is ‘win –win cooperation’ (that is improving the quality of life of the Chinese people by close mutually rewarding collaboration with friends, allies and partners). This is entirely in line with the suggested role for China in the restructuring of the South Asian architecture of security cooperation, as elaborated below.

Reinforcing Regional Security At the apex there could be an informal forum of the leaders of the South Asian States and China. They could meet, say biennially in different capitals. Unlike formal regional 3

cooperation arrangements there would be no secretariat or bureaucratic meetings. These would only encumber the leaders, as sadly, tends to happen in South Asian Association for Regional Cooperation (SAARC). Indeed, this is one of the principal reasons why SAARC, to many, now appear dysfunctional (Two other primary reasons are the need for consensus in all decision-making, and the avoidance of all contentious issues. As a result meetings in corridors and ante rooms in SAARC conferences supersede in importance the substantive plenary sessions with their set-piece speeches!) Concurrently there could be a parallel TrackII initiative involving thought leaders, and separate fora of business leaders, media, and womenâ&#x20AC;&#x2122;s issues, representing segments of societies that play critical roles in the relevant communities. (It is noteworthy that South Asia prides itself in having one of the most vibrant civil societies in the world.) Common challenges would be discussed, in a â&#x20AC;&#x2DC;Big Tentâ&#x20AC;&#x2122; setting, across the broadest possible societal spectrum. This would include the non-traditional challenges to security such as hunger, disease, environmental degradation, poverty and others. Their outcome would feed the biennial summit with ideas. In this way cooperation can be institutionalised. The larger and powerful actors, such as China and India, may need to lead the way. Yes, it is a huge challenge. Yes, it will be difficult. But today there is a palpable sense of the growing importance of Asia in the world, and in particular, of South Asia. It is necessary to make the best and appropriate use of this sentiment and utilise it in a positive fashion. The Asians, including South Asians, have not come thus far without the realisation that if there is a hill to climb, waiting will not make it any smaller!

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ISAS Insights No. 211 – 2 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Election Year in Bhutan – Litmus Test of Happiness? Siegfried O Wolf1

On 23 April 2013, the people of Bhutan went to the polls to elect a new upper house, or National Council (NC), for the second time ever in their country’s history. This marked the beginning of the national parliamentary election process, which will conclude before the end of July this year after the second round of polls for the lower house – the National Assembly (NA) – is held. The NA was dissolved on 20 April and has to be reconstituted within 90 days. Based on a first assessment, one can state that, besides some weather-related concerns and hurdles, the NC elections were held relatively smoothly. Most importantly, they were not disturbed by any ‘politically motivated’ violent incident of significance or by undue interference by any state institutions or other actors. In short, the elections were free and fair. A positive development was the increase in the number of nominated candidates for the 20 Dzongkhags, the country’s constituencies for the NC elections. This ensured that each constituency, unlike in the 2008 elections, had at least one candidate to vote for. Only the decline in the voter turnout, from 53 per cent to around 45 per cent (171,544 out of 379,819 registered voters), clouded the enthusiasm for the latest NC elections. Nevertheless, this performance is still a great achievement, considering the fact that Bhutan’s democratic procedures are still in their infancy. There is hardly any information available on how deeply entrenched democratic norms and values are in the kingdom’s polity and society. Many

Dr Siegfried O Wolf is Lecturer in International Relations and Comparative Politics at Heidelberg University (South Asia Institute, Department of Political Science). He can be contacted at swolf@sai.uniheidelberg.de. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. The author wants to express his gratitude to Mr. Sander Ruben Aarten for his valuable comments on an earlier draft of this paper.

analysts2 seem to agree that the country is progressing well on the path of democracy. The country’s process of democratic transition is commonly praised for several important reasons. While the state’s shift towards democracy is indeed a unique and laudable process, the context within which it is taking place deserves closer evaluation.

A ‘Royal Gift’ First of all, one cannot deny that the decision of the King to deliberately give up much of his power to his people – as a ‘royal gift’ that transforms the country from an absolute monarchy into a parliamentary democracy – is a rare phenomenon in the world. The rationale behind such a process is usually twofold. The establishment of democracy is an elite-driven process in the form of a top-down model. As such, it is not an outcome of a social-political movement or a revolutionary act. Additionally, it should also conceal the potential notion that it was a move by the King to voluntarily share power before he gets forced to do so. Since the 1950s, several attempts were made to set up organisational platforms to mobilise political opposition among ethnic groups, especially among Bhutanese of Nepalese origin. The most prominent examples are the Bhutan State Congress (BSC) in 1952, the People’s Forum for Human Rights Bhutan (PFHRB) in 1989, the Bhutan People’s Party (BPP) in 1990 and the Bhutan National Democratic Party (BNDP) in 1992. The BPP was the instigator of anti-government protests which were immediately quelled by the government. Although an outright rebellion was prevented, the protests did initiate a political transition in the country. As such, the monarch is in control of the transfer of power and is able to secure a significant role for the royal family in the country’s future. Second, closely related with the argument of ‘giving up power voluntarily’, there is the persistent view about the ‘apathy’ of the Bhutanese people towards democracy. More concretely, there are claims – by critics of democracy and by proponents of a slow and gradual democratic transition – that the Bhutanese people are not in favour of democracy since it is perceived to be something which does not fit into the Bhutanese culture and traditions. Third, as is pointed out time and again, the creation of a democratic system of governance in Bhutan needs time. Therefore, the Bhutanese monarchy intentionally abstained from a hasty development in order to avoid any undesirable side-effects of opening up the country in socio-economic and political terms. The reason for this is the conviction of the royal administrations that Bhutan is only able to achieve sustainable progress through a gradual approach towards tackling the issues of underdevelopment, not only economically but especially politically. Therefore, a highly innovative idea got conceptualised; the so-called 2

For example: Marian Gallenkamp. Consolidating Democracy in Bhutan A Retrospect and a Rebuttal of Democracy Measures. Spotlight South Asia, APSA (Applied Political Science of South Asia; Heidelberg), Paper Nr. 5, 2012; Medha Bisht, ‘Bhutan: elections 2013’, in openDemocracy, 21 January 2013; Phuntsho, Karma, Bhutan’s unique democracy: a first verdict, openDemocracy, 2 April 2008; Kaul, Nitasha, ‘Bearing Better Witness in Bhutan’, in Economic and Political Weekly, Vol - XLIII No. 37, September 13, 2008.

Gross National Happiness (GNH). As the overarching philosophy of economic growth and socio-political progress, the GNH expresses the conviction that all development strategies must contribute to both the material well-being as well as the spiritual, emotional and cultural needs of the Bhutanese people. Each modernisation strategy must maintain a balance between the material and non-material needs of individuals and society. The GNH is, among other things, calculated on the basis of economic growth; promotion of cultural heritage (i.e., that of the ruling elite); environmental preservation and sustainability; and good governance. Underlying these pillars is the belief that Gross National Happiness is more important than Gross National Product.

A Democratic Buzz However, even though the country has demonstrated its ability to hold successful elections, one cannot help but get the impression that the overall ‘feel good approach’ is starting to lose some of its appeal and glamour, especially for the uneducated people who are confronted with fewer socio-economic opportunities in the country. Despite the fact that the governmentfriendly media put in much effort to evoke a democratic buzz in the country, there was a remarkable drop of eight per cent in the voting turn-out compared to 2008. It is argued that this is partly due to the ‘silent emergence’ of social, economic and political rifts among the Bhutanese. These grievances are reflected in the growing polarisation of the society. It is stressed here that the appearance of polarisation is due to the growing disparities based on an increasingly distorted access to economic and political resources. This phenomenon finds expression in a slowly-emerging rift between the small newly-urbanised and educated middle class vis-à-vis the rural people who constitute the bulk of the Bhutanese population. In order to understand this, one should keep in mind that politics in Bhutan still remains an exclusive and, as already indicated before, elite-driven process. However, Bhutan’s political elite does not comprise merely the King and his closest advisors. Rather, elitist politics are characterised by an informal but persistent and mutually-influencing interaction between the royal family and the newly-emerged middle class. This small but growing middle class consists of bureaucrats and an increasingly-vocal group of economic entrepreneurs in the country’s few ‘urbanising centres’. Because of their economic interests, Bhutan’s middle class was instrumental in the opening up of the country, and are also a driving force behind the ongoing democratisation process. The idea of mutual consultancy in the political decision-making process is nothing new in Bhutan. Its origins date back to the old Chhoesi system, which was a dual concept of government that prevailed from 1650 to 1907, comprising a temporal head (Druk Desi) and a religious leader (Je Khenpo) as the leading institutions of the country’s socio-political system. It was established by Ngawang Namgyal, the founder of the modern state of Bhutan, and is recognised as a significant landmark in the genesis of Bhutan’s structure of governance. Various aspects of the Chhoesi-system still exist and continue to play a significant role in the country’s development process. This finds expression not only in the 3

fact that the religious institutions still have a significant say in political decision-making processes, but also in the notion that political processes are based on power-sharing, mutuality and exchange. The contemporary power-sharing system got enhanced through the broadening of the country’s political and economic upper crust, combined with the appearance of informal inter-elite arrangements. This phenomenon can be best seen in the ‘behind the scenes’ incorporation of members belonging to the middle class, especially of those who received specialised higher education abroad, in the political decision-making process. In sum, the democratic transition is not a process that was ordered by the King only; it was also initiated and supported by a middle class which is guided by its own interests in enhancing democratic enthusiasm in the country. Without the help of this middle class, neither the build-up of functioning institutions nor the introduction of meaningful elections would have been possible.

A Myth of Popular ‘Apathy’ One should also place the myth about the ‘apathy’ of the Bhutanese people under scrutiny. It is true that in the first phases of the introduction of electoral process, the Bhutanese did not demonstrate overwhelming enthusiasm. Certain political commentators attributed this to a collective state of apathy of the Bhutanese people towards democracy. However, this could be better explained as an expression of prudence when being confronted with something that was not only absolutely new but also constituted a fundamental change in the country’s political and socio-economic environment. In this context, one must recognise that Bhutan is an extraordinarily remote and isolated place, not only regarding its geographic location but also in terms of its connections with the international community, apart from India: until 1907, when the hereditary monarchy was established, Bhutan was completely cut off from the outside world. One of the most significant features of this remarkable phenomenon is that the Himalayan state, approximately the size of Switzerland, is in a persistent struggle to keep a balance between state development and the maintenance of a suitable but also quite peculiar socio-political structure. ‘Ground breaking’ developments among the Bhutanese are not automatically perceived as a helpful evolution of a much-missed modernity but as a revolutionary occasion that may challenge their time-tested and honoured traditions, norms and values. Because of the far-reaching consequences, the initial scepticism among the people towards elections and democracy did not come as a surprise. Since the first general elections in 2008, Bhutan has witnessed one of its most significant political transitions in its modern history. Since then, the processes of democratisation – like the building up of political parties, development of parliamentary culture and procedures – are moving forward at a leisurely pace. The electoral processes in particular are getting more and more entrenched not only in the political system but also in the people’s mind-set, at least among the middle class. On a more cynical note, it seems that the transition from an absolute monarchy to a constitutional parliamentary monarchy had emerged not only from an act of altruism but also 4

from a line of thought driven by realpolitik. It was likely based on a clear assessment of the potential trajectories for the viability of the monarchical system in Bhutan. Several trends and phenomena indicated a rather pessimistic future for an absolute monarchy in the country. Some factors at work were: Bhutan’s sense of being surrounded by semi-communist and democratic systems; Bhutan’s experience of a ‘pseudo coup’ in 1964 which involved an uncle of the king and led to the assassination of the prime minister; the emergence of an opposition in Bhutan (1990s); the debatable integration of the kingdom of Sikkim with the Indian Union, as well as a decline of Bhutan’s image on the international stage because of the expulsion of around 100,000 Bhutanese of Nepali origin; and the appearance of militant opposition like the Bhutan Tiger Force or the Bhutan Maoist Party. In those circumstances, the king had to act in order to maintain at least a minimum of monarchical elements in Bhutan’s future political system in order to guarantee the survival of the Wangchuck dynasty. Finally, with the repetition this year of the successful 2008 parliamentary elections, democracy has arrived in the Himalayan kingdom. As in any other country, a process with such tremendous impact on state and society does not come without any side-effects. First of all, it created a power vacuum which got immediately filled with the newly-emerged and largely-foreign-educated middle class. It was perceived by the politically-aware segments of the rural population that the rising significance of this class was or would be at the expense of the traditional stakeholders like village representatives as well as the uneducated, poor population. It is argued here that this will further enhance the socio-economic inequalities due to a distortion regarding the access to national resources like governmental posts and national revenues. This conflict will gain further prominence, with the country’s development continuing in regard to the untapped resources in the context of negotiation over a fair mechanism for the distribution of national wealth (especially regarding the revenues that are derived from the rapidly-growing hydropower sector). The fact that Bhutan still lacks a significant civil society, which could serve as an extra-parliamentary mechanism to aggregate interests and demands of the common Bhutanese people, further aggravates the challenge of managing social harmony.

National Assembly Polls However, in order not to deepen this polarisation, the rural population has to be further included in the political process. Until now, the people in the more remote areas of the country showed only limited interest in taking part in the elections either as candidate or as voter. Much more has to be done to build up awareness among the ‘rural Bhutanese’ about the benefits of political participation and their ability to have a say in matters that relate to them. It will be most interesting to observe how far this cleavage will be reflected in the party-focused two-round National Assembly elections, now under way. In sum, the problem is not only about a rural-urban divide, but also about the uneducatededucated divide. This cross-cutting cleavage appears especially in tertiary education. 5

Regarding primary and secondary education, the country has already made much progress. The fact that candidature for elections requires a Bachelor’s degree does not help enhance the voter turn-out. Furthermore, women should be encouraged more, not only to vote but also to stand up for elections. In the latest NC elections, only five out of the 67 candidates were female. The fact that Bhutan has more females (50.8 %) than males (49.2 %) registered voters might have some positive effects on the voter turn-out. Since there is no minimum quota for women in the parliament, an introduction of a quota might give an additional impetus for higher political participation by Bhutan’s female voters. The transition towards democracy is irreversible, although the affection of the people towards the monarchy is deep. It is therefore crucial that more Bhutanese familiarise themselves with the new political developments and that they understand that there is no contradiction between practising democracy and appreciating their King and traditions. Despite the incorporation of more actors in the country’s decision-making process, politics in Bhutan remains an exclusive business run by the elite, which now has got some new stakeholders as well. The King’s decision to delegate his executive power could also be interpreted as a strategy to save as much as possible of the new status quo for his heirs. Most important in this context is who will control the armed forces, the king or the elected parliament. Until now, formal mechanisms for parliamentary oversight have remained rudimentary. Additionally, there is a substantial Indian influence in Bhutan’s ‘security sector’; and it is unlikely that any fundamental change will be made without ‘advice’ from New Delhi. In addition to the question of civilian supremacy, the issue of who owns the country’s most lucrative businesses will gain significance. In other words: who has the power of the purse? The decision-making processes should be under the auspices of law-makers rather than elitist groups who greatly influence the decision-making procedures in consultation with the King. Only a strong parliament, legitimised by a high voter turn-out, can protect the country from extra-constitutional influence.

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ISAS Insights No. 212 – 5 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Bangladesh: Evolving Political Situation Imtiaz Ahmed1

Bangladesh is in the midst of contradictory pulls: whereas economic indicators point to robust development, polarisation and violence are threatening the sustainability of democratic politics. The moot question now is whether such contradictory pulls can be reconciled for the sake of greater economic development and the institutionalisation of democracy. Although the national election is due in less than eight months and there is no sign of a compromise between the ruling Awami League (AL) and the opposition Bangladesh National Party (BNP), yet there is hope that the tenure of the current regime will end not with a ‘hard’ but rather ‘soft’ landing. Let us have a closer look.

State of the Economy Remittances and export of ready-made garments (RMG) are the mainstays of the economy. As of December 2012, according to data from Bangladesh Bank, remittances from nearly 7 million migrant workers settled in over 140 countries reached USD 14.17 billion, up from USD 12.17 billion in December 2011. On the other hand, RMG exports, worth USD 24 billion in 2011-2012, account for nearly 80% of the country’s total exports and over 13% of GDP. The sector includes 4,500 factories with a workforce totalling 4 million. It may be mentioned that, in January 2013, despite concern about Bangladesh’s reputation after the November 2012 fire in which 190 workers died, apparel exports rose by over 20%, compared with the year before, to USD 2.09 billion. 1

Professor Imtiaz Ahmed is Professor of International Relations at the University of Dhaka in Bangladesh. He can be contacted at imtiazalter@gmail.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

While this may not be ideal for a developing economy to graduate to the status of a middle income country (MIC), yet having a growth rate of over 6% for more than a decade does suggest that Bangladesh is poised to emerge as a MIC in another decade or so, if it could sustain its economic development and reach a higher growth rate. Bangladesh, in fact, succeeded in reducing poverty by an impressive 26.4 percentage points to 31.5% in 2010 and also is on track for achieving several Millennium Development Goals (such as reducing poverty, child and maternal mortality, and approaching gender parity in primary and secondary education) by the target date of 2015. Furthermore, the share of the agrarian economy in GDP declined from 33% in 1980 to 20% in 2012; and the per capita availability of rice (a local staple) increased from 453 gm/person/day in 1992 to 605 gm/person/day in 2010. All these suggest that Bangladesh has made a significant difference to its development. The strength of its economy ironically lies in having cheap labour and producing goods catered not to the high-end market but to the middle-income market of the developed economies. Any recovery of the latter, as is the case in many of the developed economies in recent times, is a boon for the relatively cheap goods from Bangladesh. But risks to its economy prevail not only for reasons of slumps in the global economy or poverty at home (the country still has over 80 million people living with less than USD 2 per day) but also for reasons of environmental insecurity (cyclones, floods, sea-level rise), energy deficit and polarised politics. Currently the latter is the most worrying of all.

Polarised Politics, Intransigent Parties Tensions between the governing Awami League (AL) and the main opposition Bangladesh National Party (BNP) have intensified in the wake of the governmentâ&#x20AC;&#x2122;s decision in 2011 to discontinue the system of establishing a neutral, caretaker administration to oversee national elections. The tensions have manifested themselves in public protests, sporadic violence and frequent strikes to the detriment of Bangladeshâ&#x20AC;&#x2122;s political stability, investment climate and economy. Economic losses on account of strikes from 1995 to 1999 stood at an estimated USD 10 billion as of 2001, with each strike costing around USD 50 million. In 2012 the figure will likely be twice that much if not more. There have already been over 25 nationwide strikes since 2009. Despite such adverse consequences, the government remains unwilling to reinstate the caretaker system. The ALâ&#x20AC;&#x2122;s intransigence appears to be motivated by the fear of losing the 2014 elections. The government is mired in a perceived range of high-profile corruption scandals, such as the share-market scam of 2010-2011, involving members of the ruling party, and charges of corruption in the Padma Bridge project. Its reputation has suffered still further in the wake of allegations of dubious business activities and illegal loans from public sector banks to shadowy outfits and due to its failure to curb lawlessness and prices of 2

essential items. As a result, even some senior AL officials fear that the government may not be re-elected. The worst outcome of such intransigence could be a replay of the 11-January-2007 scenario (also called 1/11), that is, the imposition of a military-led caretaker government through the proclamation of a state of emergency. The latter not only remained in power for two years before holding the national election in December 2008 but also arrested many businesspersons and politicians on charges of corruption, including key leaders of both AL and BNP. The AL may prefer this option to a BNP electoral victory, since a government by the latter may seek retribution for the alleged harassment of its leaders under the current government. But the question that merits attention is what makes AL or BNP so intransigent?

Political-Business-Bureaucratic Nexus These rifts reflect the broader malaise in domestic politics, which is characterised by ‘electoral authoritarianism’ and excessively close ties between politicians, businesses and bureaucrats. Notably, an overwhelming majority of current parliamentarians have business links (52% are self-declared businessmen) and about 30% of them own RMG factories. More specifically, AL has 235 members in the parliament, with 120 of them being self-declared businessmen; while BNP has only 30 parliamentarians, with 18 of them self-declared businessmen. Business, for all purpose, is believed to thrive through underhand dealings with politicians and government officials. Business houses are able to flout all rules and regulations, from getting licenses, acquiring land and building infrastructures to ignoring safety measures. Following a recent building collapse near Dhaka, which housed several RMG factories and killed more than 1,100 workers, Charles Kernaghan, the Executive Director of the Institute for Global Labour and Human Rights, said: “You can’t trust many buildings in Bangladesh. It’s so corrupt that you can buy off anybody and there won’t be any retribution”. Since no one was brought to justice in earlier instances of similar kind, Kernaghan has good reasons to remain sceptical about the rule of law in Bangladesh. The owners of such buildings can easily get away from any kind of retribution largely because of their connections with the ruling party, be it AL or BNP. And it is this connection that the business houses tend to cultivate with the political party, either AL or BNP, hoping to take advantage once the party of their choice is in power. The party, of course, benefits from donations, more illegal than legal on account of non-transparency, from the businesses. The political-bureaucratic nexus is no better. In fact, incumbent bureaucrats get promotion through political blessings. Both AL and BNP have used their powers while in office to politicise the civil administration by making it a means of patronage. This has bred pressure among civil administrators to remain close to one party or the other in order to secure good postings and promotions. One estimate indicates that, in the first two years after the AL-led 3

government assumed office, as many as 276 officials of the civil bureaucracy (six secretaries, 30 additional secretaries, 162 joint secretaries and 78 deputy secretaries) were made officers on special duty (OSDs), while 285 officials (presumably AL sympathisers) of the civil administration were recruited on the basis of contracts. On the other hand, during the first 20 months of the BNP-led government, 300 officers of the civil administration were made OSDs and 144 (presumably pro-BNP) officers of the civil administration were recruited. It may be mentioned that in Bangladesh the OSD has the stigma of being called the “officer on sleeping duty”, as they have a reputation for ending up in the corridors of the administrative building, often without a room, doing nothing. As a result, the machinery of government and the civil administration itself have become a means of serving the narrow interests of the ruling party: a critic offered an apt appraisal of this situation in an article entitled “Of the Party, by the Party, for the Party”. Indeed, so partisan has been this relationship that any change in the regime is a total loss for those who have profited from this double nexus, whether politician, bureaucrat or businessman. And hence the compulsion to remain in power by all possible means, from constitutional amendment to ‘governmentalising’ the war crime trials to making alliances with non-democratic forces. This requires further elaboration.

Constitutional Amendment The government decided to abolish the neutral, caretaker administration to oversee national elections, indeed, by bringing an amendment to the Constitution (Fifteenth Amendment) following a court judgment on 10 May 2011 that declared the caretaker system (Thirteenth Amendment) ‘void and ultra vires to the Constitution’. But, in the same judgment the court explicitly stated: “The election to the Tenth and the Eleventh Parliament may be held under the provisions of the above mentioned Thirteenth Amendment on the age old principles, namely, quod alias non est licitum, necessitas licitum facit (That which otherwise is not lawful, necessity makes lawful), salus populi suprema lex (safety of the people is the supreme law) and salus republicae est suprema lex (safety is the Supreme law)”. But contrary to the judgment, the government hurriedly brought the Fifteenth Amendment and had it approved in the parliament on 30 June 2011 with a majority of 291–1, indeed, with the main opposition party, the BNP, boycotting the parliament. Ironically, it was the BNP which had objected to the caretaker system when it was in power while the AL campaigned for it when it was in the opposition. Now the reverse is the situation. So the question that merits attention is: why the need for a neutral, caretaker administration to oversee the national elections and why is it that the opposition campaigns for it? The political-bureaucratic nexus is largely to be blamed for it. This is because during the national elections the government officials play a critical role, including by becoming returning officers and working closely with the Election Commission. Some are even deputed and housed at the Election Commission. The police and other security agencies also play an 4

active role during the elections. But since the government officials, including those manning the police, are promoted not so much for their professional efficiency as for their partisanship they become a ready suspect in the eyes of the opposition. The caretaker government is otherwise required mainly to create a level-playing field, which it carries out, as experiences in the past have shown, by reshuffling the postings of key government officials, particularly those with strong ruling party affiliations. In this context, it may be pointed out that the very fact that several by-elections were held under the ruling AL regime in the past four years and were deemed ‘free and fair’ cannot be the basis for abolishing the caretaker system and assuaging the suspicion of the opposition, because such by-elections would not bring about a change of regime. The national election, however, is a qualitatively different matter. Trying to turn the national election in the ruling party’s favour through constitutional amendment is nothing new. BNP too did the same thing when it was in power (2001-2006). In fact, BNP enacted the Fourteenth Amendment on 16 May 2004 which increased the retirement age of the Supreme Court judges from 65 to 67 years with the objective of having a favourable person as the head of the caretaker regime! AL just went one step further and abolished the very system it had campaigned for and gave birth to, when it became the ruling party. Bangladesh politics is indeed full of ironies.

War Crime Trials and the Shahbagh Protest Questions were raised whether the AL was using the 1971 war crime trial for partisan interests. There are good reasons for such questions. Firstly, the government established a relatively weak prosecution team, indeed, with no prominent lawyers, some even lacking experience, which frustrated even those who were campaigning for such a trial for many years. Why would the government do such a thing on such a sensitive issue, knowing well that those charged with war crime are not only resourceful but also are well-connected nationally as well as internationally, unless the government has some ulterior motives? Influencing the 2014 national election, the critics allege, could certainly be one! Secondly, the government did not constitute an international tribunal, nor did it invite someone from the United Nations. Moreover, the government made it mandatory to appoint only national lawyers, duly registered at the national courts, for the tribunal, both for prosecution and defence. The tribunal is otherwise a domestic tribunal, run without international oversight, although the government insists that the ‘process’ is at par with international standards. Making the tribunal ‘national’, however, came to be questioned not only by those charged with war crime and now standing trial but also by the international community, particularly the United States and the European Union. In this respect, it remains different from the Nuremburg, Tokyo, Rwandan or Kampuchean genocide tribunals. Thirdly, charges of war crime were brought mainly against the members of Jamaat-e-Islam (JI). But the recent agitation of JI saw the police either being beaten up by the agitators or receiving flowers from them, which became suspicious in the eyes of many. Rumours began 5

to spread that there must be some kind of understanding between the JI and the government, mainly to create divisions within the ranks of BNP-JI alliance and influence the upcoming national election. Finally, since the election issue has remained unresolved, that is, in the backdrop of the Fifteenth Amendment and the BNP’s rejection of it, many suspect that the AL is trying to have a deal with the JI on the issue of such trials, so that the latter participate in the national election without the BNP. It is in the midst of such politicking that the verdicts were pronounced. The first verdict in absentia on 21 January 2013 sentenced Abul Kalam Azad, a Muslim cleric and televangelist, to death for war crimes against humanity. But since Azad is hiding and no one came to defend his case it was largely irrelevant if not ineffective. The second verdict on 5 February 2013 found Abdul Quader Mollah, a senior member of JI, guilty on five counts out of six but he was sentenced to life imprisonment and not death. And it is this that led to the protest at the Shahbagh Square, initially by a handful of non-partisan bloggers who were later joined by the ordinary masses in thousands, all protesting the verdict and calling for death penalty for genocide. In the light of the difference between the two verdicts, although the charges and the evidence provided were similar in nature, the protestors felt that it must have resulted from a ‘tacit alliance’ between the government and JI. Non-AL members of the ruling party alliance also raised this issue in the parliament. In the beginning, therefore, the Shahbagh protest was anti-government in nature. In fact, the protesters did not even allow some senior AL members to speak at the Square. The government, sensing the mood of the crowd, quickly backed the protesters and directed the AL cadre to join the Shahbagh protest and began what could be labelled as the politics of co-option. With the non-partisan bloggers sidelined and the Shahbagh Square effectively in the hands of pro-government elements, the demand for death penalty for the perpetrators of genocide now extended to the banning of the JI. Bangladesh politics is back in the making-and-unmaking of alliances, indeed, with an eye on the national election.

Alliance Politics and the Rise of Islamist Forces JI, as an electoral force, has never been significant. In the 2008 national elections the JI got two seats and only 4.55% of the vote, while in 2001 the JI had bagged 18 seats and 4.62% of the vote. In 1996, however, the JI received 8.61% of the vote but only three seats. It may be mentioned that in 2001 and 2008 the JI had an ‘open alliance’ with the BNP, while in 1996 it had a ‘tacit alliance’ with the AL, which, some critics allege, allowed the latter to come to power. If the last three national elections are any indication of the nature of electoral politics in Bangladesh, then it can easily be deduced that JI, on its own, is not a formidable electoral force but acquires strength by having an alliance, open or tacit, with the mainstream political parties, namely BNP and AL. But the JI pursues precise ‘religio-political’ goals, albeit contradictory in nature, which has become a worrying factor. On the one hand, it advocates a particular variant of Islam similar to what is advocated by the Hambali, Salafi or Wahhabi mazhab (school of thought) and remains intolerant of pluralist traditions. This becomes clear 6

from some of JI’s declared goals: making Bangladesh an ‘Islamic state’, declaring the Ahmadiyas non-Muslims, objecting to the reverence at Sufi shrines. On the other hand, ever since the ban on the religious party was lifted in Bangladesh in 1979 and the JI resumed its activities, the latter never boycotted any election, whether held under military or civilian regimes. And it is precisely because of this that the BNP is reluctant to let the JI go, lest the JI agree to participate in the AL-formulated national election as per the Fifteenth Amendment. And here also lies the suspicion that the AL, on the one hand, is trying to break the BNP-JI alliance, using the issue of 1971 war crime trial, while, on the other hand, is trying to form a ‘tacit alliance’ with the JI, the outcome of which could range from providing milder sentence to war criminals to prolonging the execution of the verdicts until the national election of 2014 is over. The rise of Hefazet-e-Islam (HI) in the final year of the tenure of AL regime further adds to the suspicion. There are two theories, not necessarily one contradicting the other. One theory is about the AL regime having a hand in the rise of HI, more to counter the power of JI and off-balance the BNP. The second theory relates to the possibility of JI being encouraged to open a ‘second front’ in case the court or the Election Commission decides to de-register the JI and bar the latter from participating in the coming election. HI then could take the mantle of JI and continue to do what it was doing, politically as well as ideologically. Both could be true. In fact, save on the question of leadership and the reverence for Abul A’la Maududi (the founder of JI in British India in 1941), there is hardly any difference between the HI and JI. A critical assessment of the 13-point demand put forward by the HI in April 2013, which includes, among others, declaring the Ahmadiyas non-Muslim, banning sculptures, limiting women’s access to property and interactions among males and females, clearly shows that the HI, like the JI, has been ‘infected’ by the Wahhabi discourse. It remains a surprise as to why the government would promote such a platform, indeed, allowing the HI to organise mass meetings at the Shapla Chattar in the commercial area of Dhaka city when such permission is hardly given to the BNP, unless the government was interested in dividing the Islamist groups and bringing a bad name to the BNP-JI alliance for backing the HI. The AL regime did succeed in many ways in doing precisely this when the HI refused to vacate the Shapla Chattar after holding the meeting there on 5 May 2013. As violent means were used, with the HI and some opposition members claiming that over 3,000 people were killed while the government put the figure at less than 30, it is still too early to tell whether such forcible action against the HI members would cost the AL a good number of votes in the 2014 national election. The government, on the other hand, is claiming credit for striking a hard-line and maintaining a secular, anti-fundamentalist, identity – a worthwhile venture in winning over the support of a large section of people both within and outside the national boundaries. But, will this embolden the AL and make it intransigent as ever? Or, is this a reflection of desperation on the part of AL, now that only seven or eight months are left for the national election? How will it end then?

Quest for ‘Soft’ Landing: Formula Sans Dialogue The ‘soft landing’ is premised on the fact that the AL would face tremendous opposition if it goes alone on the issue of election, not only from the main opposition party but also from other stakeholders, including the business community. The latter, as part of the nexus and prominent beneficiaries of Bangladesh’s integration into the global economy, would be less inclined to support the AL if its unwillingness to compromise brings another military-led caretaker administration to power. Since businesses suffered under military rule between 2007 and 2008, they will pressure politicians to seek a civilian solution. The politicalbusiness-bureaucratic nexus otherwise, somewhat ironically, has put a limit to political intransigence, with the business community increasingly seeking a civilian than a military resolution of things. This is what promises a ‘soft landing’. But will the ‘soft landing’ come through dialogue, with the AL regime inviting the BNP for a formal talk to resolve the impasse? Given Bangladesh’s political culture, it is unlikely since this would be viewed as a defeat for the ruling party. But such dialogue is also not required. What is, however, required is that the ruling party come up with a ‘formula’ which the opposition would find acceptable. And this is possible within the framework of the stands taking by the ruling and opposition parties. A non-partisan person, albeit elected through a by-election, can be made the Chief Advisor of an interim government with the mandate of holding the election in less than three months. The interim cabinet can consist of elected members from both the ruling and opposition parties, along with some non-partisan technocrats, all, however, barred from becoming candidates in the election. Already there are indications of this happening, with some senior AL members pointing out that the post of the Chief Advisor is subject to discussion. But, given the nature of politics in Bangladesh, pressure from national, regional and international stakeholders would be required for a formula of this kind or another to materialise. Hegel once remarked that all great world-historic facts and personages appear, so to speak, twice. But Marx pointed out that Hegel forgot to add: “the first time as tragedy, the second time as farce”. There is no reason to believe that the politicians of today, given their experience in recent times, would be willing to end up as ‘tragi-farcical’ players! And there lies the hope.

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ISAS Insights No. 213 â&#x20AC;&#x201C; 8 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Countering Left-Wing Extremism in India: Conceptual Ambiguity and Operational Disconnect Bibhu Prasad Routray & Shanthie Mariet D'Souza1

Abstract

The inability to craft an effective national policy to deal with the surge of left-wing extremism (LWE) is a subject of intense policy debate and mounting public concern in India. A shortsighted counter-insurgency (COIN) strategy, an apathetic political class, an unresponsive state machinery, bureaucratic inertia, problems of coordination (between the centre and state governments)and the growing disconnect between a prospering and an impoverished India, have been flagged as some of the factors that contribute to the lack of an effective strategy and the near-unassailability of the extremists. At the heart of such inadequacies, however, is the persistent conceptual ambiguity regarding the nature of the movement and the threat it poses to the Indian state. Authorities have been periodically compelled to revisit their strategies after each successful extremist attack. And yet, a comprehensive and unified national strategy providing a long-term solution to LWE remains a far-fetched goal. The 25 May 2013 extremist attack in the state of Chhattisgarh provided yet another opportunity to 1

Dr Bibhu Prasad Routray is a Security Analyst/Consultant based in Singapore. He has served as Deputy Director in the National Security Council Secretariat (NSCS) Government of India, New Delhi. He has also carried out extensive field research on left-wing extremism in the affected Indian states and published a number of articles and opinion pieces on this subject in professional journals and forums. He can be contacted at bibhuroutray@gmail.com. Dr Shanthie Mariet Dâ&#x20AC;&#x2122;Souza is Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. She can be contacted at isassmd@nus.edu.sg. The views expressed in this paper are those of the authors and do not necessarily reflect those of ISAS.

rethink and reset the COIN strategy. Whether the new strategy would end the ambiguity and explore alternate mechanisms for conflict resolution, however, remains to be seen.

Understanding Left-Wing Extremism (LWE) Left-Wing Extremism (LWE) in India, spearheaded by the Communist Party of India-Maoist (CPI-Maoist), poses a significant conceptual problem. In spite of the sustained campaign of intimidation and violence by the outfit2 with the stated objective of overthrowing the democratic system of government, there is little unanimity among the policy makers and practitioners on the strategy to counter this form of violent extremism. The fact that LWE is not a secessionist movement has scuttled isolated moves to deploy the Indian Army3 in extremist-infested areas even when the law enforcement agencies and police have been found to be lacking in their abilities to protect the local populace from violent extremist onslaughts. The dilemma of proportional ‘use of force’ to deal with what is essentially perceived as home-based and home-grown extremist movement has complicated the search for an appropriate strategy  counter-terrorism (CT) versus counter-insurgency (COIN).4 The ‘use of force’ against its own population, although not a rarity in the history of Indian counterinsurgency campaigns, continues to evoke strong counter reactions and is restrained under the country's liberal democratic order. As a result, labelling the Maoists as ‘terrorists’ remains problematic even for the ardent supporters of a force-centric approach of crushing the extremists. In a September 2011 media interview, then Home Minister P Chidambaram, under whose directives the Indian state launched the biggest-ever coordinated security force operations in 2010, refrained from branding the Naxals as terrorists. "The most violent movement in India is not terrorism or insurgency but Left-Wing extremism",5 he said advocating a move to provide enough manoeuvring space and at the same time win public support. A range of incongruous policies

The history of LWE in India goes back to the 1960s. However, following the 2004 merger between two erstwhile outfits, the Maoist Communist Centre (MCC) and the People's War Group (PWG), leading to the formation of the Communist Party of India-Maoist (CPI-Maoist), the new party is largely described as spearheading a violent campaign. Once described as active in one-third of India's geographic expanse, the movement has claimed 8,498 lives between 2003 and 2012. India's Prime Minister has termed the movement the most serious internal security challenge. The CPI-Maoist's armed cadre strength was estimated officially to be 8,680 in 2010. Additionally, the group derives support and sympathy from a very large tribal population inhabiting India's resource-rich and yet-ungoverned and undeveloped regions. The CPI-Maoist, unlike the insurgents in India's Northeast and Jammu & Kashmir, has not received any external assistance from foreign powers. Shanthie Mariet D’Souza, Countering the Naxalites: Is there a need to ‘bring in’ the Army?” Journal of Defence Studies, Vol.3, No.3, pp. 125-132 (New Delhi, July 2009). Shanthie Mariet D’Souza and Bibhu Prasad Routray, “India's COIN approach and Left-Wing Extremism” , Open Security, London, August 13, 2012, http://www.opendemocracy.net/opensecurity/shanthie-marietdsouza-bibhu-prasad-routray/indias-coin-approach-and-left-wing-extremis. Accessed on 15 June 2013. "Naxalism is a bigger challenge than terrorism: Chidambaram", Times of India, 14 September 2011, http://articles.timesofindia.indiatimes.com/2011-09-14/india/30153889_1_naxalism-bigger-challenge-homeminister. Accessed on 16 June 2013.

has originated from such lack of conceptual clarity.6 While some of the extremist-affected states have pursued a militaristic approach against the LWE by deploying security forces and trying to neutralise the military might of the CPI-Maoist, others have espoused recourse to development-led solution, dialogue and peace negotiations as effectual alternatives. However, every major extremist attack has drained support from the camp that considers the extremists as estranged tribals who can be brought back to the mainstream by a humane state. Support for a militaristic approach against LWE, on the other hand, has increased. The disinclination of the CPI-Maoist towards a peaceful resolution of the conflict has led to a gradual consolidation in the coalition of the willing favouring the use of security forces to expand and implement the writ of the state.

Winning the ‘Hearts and Minds’ Strategy India's interior ministry, the Ministry of Home Affairs (MHA) propagates a two-pronged approach to counter LWE – combining security force kinetic action with accelerated development of extremist-affected areas. Critics, however, allege that the two-pronged approach merely masks an overtly security force-centric strategy to annihilate the extremists and clear the tribal inhabited areas for exploitation by the multinational corporations and the mining companies. Such criticism notwithstanding, developing the areas under CPI-Maoist domination and addressing governance deficit among the tribals remain a key pillar of the overall official strategy. Several ministers and officially appointed committees have underscored the need to win the ‘hearts and minds’ of the tribal population who constitute the primary strength and local support base of the extremists through a sustained development campaign. The Integrated Action Plan (IAP), launched since 2010 to develop 82 LWE-affected districts,7 is one of the key developmental initiatives in operation. There are additional schemes for generation of rural employment, to build road infrastructures, schools, hospitals, and efforts to activate the public distribution system (PDS) with a bid to reach subsidised food items to the impoverished population. There have also been efforts to reform the land acquisition laws for new industrial units as well as mining activities in the tribal inhabited areas. Legislations have been enacted to protect the forest rights for the tribal population and initiate land reforms in various states. Implementation of each of these measures, however, remains a key challenge, affected by bureaucratic inertia, political myopia as well as challenges posed by the extremists.

Bibhu Prasad Routray and Shanthie Mariet D’Douza, Inde: la reponse de l'Etat a l'insurrection des extremistes gauchistes, (Co-authored) in Aurelie Campana & Gerard Hervouet (ed.), Terrorisme et insurrection. Evolution des dynamiques conflictuelles et reponses des Etats., Presses de l'Universite du Quebec (PUQ) Montreal/Quebec, January 2013. The plan began with 35 districts under its ambit and has subsequently been expanded to cover 82 districts.

In the past decade, extremist violence has remained an impediment to such development efforts. The CPI-Maoist has destroyed schools, offices of local self-government institutions, roads, and mobile phone-towers to prevent the state agencies from making inroads into their stronghold areas. This, however, has not prevented the state from pouring money into extremist-affected areas. The total annual budgetary allocation for the 82 worst-affected districts for four financial years stands at Rupees 10 billion.8 In the battle to win the ‘hearts and minds’ and to meet the challenges posed by the extremists who target the developmental schemes, a 'clear, hold and develop' strategy has been implemented with varying degrees of success. However, the proportion of money being siphoned off by the political-bureaucraticcontractor nexus in the burgeoning war economy9 remains substantial.

(Dis) proportionate Use of Force? The preference for using force to quell LWE is not necessarily linked to the state's inadequate gains from the developmental approach. However, the difficulties in pursuing a developmental approach in areas under extremist domination have created a constituency which believes in the need to neutralise the extremists before unleashing developmental measures. The CPI-Maoist has carried out a sustained and systematic campaign of violence targeting the security forces, police informers and civilians seen as sympathising with the state. This has justified the security force operations model. Moreover, since most of India's previously perceived COIN/CT successes (in Punjab, Mizoram, Tripura and Andhra Pradesh) have been achieved through security force kinetic operations, this model has its ardent supporters both in the official as well as strategic circles. Deploying security force battalions into the conflict-affected areas has always been a convenient strategy of gaining control over the liberated zones. The development model, on the other hand, is perceived as tedious, costly and liable for disruption by extremist violence. The myriad military measures employed against the CPI-Maoist include multi-theatre operations (Operation Green Hunt), localised small area operations (Operation Anaconda and Monsoon in Jharkhand and Operation Maad, Kilam, and Podku in Chhattisgarh), use of civilian vigilante groups (Sendra in Jharkhand and the disbanded Salwa Judum in Chhattisgarh), and covert intelligence operations targeting the extremist leaders. As per the Government of India (GoI) data, as on May 2013, 532 companies of the central armed police forces have been deployed in the affected states to carry out joint operations with the state police forces.10

"Rs 1,000-cr fund for 82 Naxal-affected areas to continue", Times of India, 15 June 2013, http://articles.economictimes.indiatimes.com/2013-06-15/news/39993105_1_backward-districts-integratedaction-plan-central-assistance. Accessed on 17 June 2013. Shanthie Mariet D’Souza and Bibhu Prasad Routray, “Red kitty and beyond", Business Standard, New Delhi, May 20, 2010. http://www.business-standard.com/article/opinion/shanthie-mariet-d-souza-bibhuprasad-routray-red-kitty-and-beyond-110052000002_1.html. Accessed on 15 June 2013. Deployment of CRPF in Naxal Affected States, Press Information Bureau, Government of India, http://pib.nic.in/newsite/erelease.aspx?relid=95723. Accessed on 8 May 2013

Achievements from each of these measures have been marred by setbacks. In the ensuing asymmetric warfare, security forces have lost personnel and weapons in some of the neatly executed ambushes by the CPI-Maoist. In 2010, the outfit killed an entire company of the Central Reserve Police Force (CRPF) in Chhattisgarh's Tadmetla area. Inadequate knowledge of the terrain and lack of human intelligence (HUMINT) resulted in some of the worst incidents of civilian casualties during encounters, further contributing to the existing alienation among the tribal population. The lack of coordination between the central and the state police forces made the operations far less effective. And the worst among them all, the divergent approaches and the varying intensity of counter-extremist responses across different Indian states have resulted in the inflation of insurgent balloon, allowing the Maoists to move and establish safe havens/sanctuaries in different ungoverned spaces of the country. At the same time, each of these force-centric tactics, along with continuing efforts to modernise the state police and paramilitary forces, has made several tangible gains. The CPIMaoist has lost a number of cadres to arrests, killings and surrender, a fact claimed by the official machinery and acknowledged in the outfit's published literatures. According to official data, 1,707 extremists were killed between 2003 and 2012. Another 6,849 were arrested and 1,100 surrendered during 2010 and 2012.11 The area under extremist domination has shrunk after security forces cleared some CPIMaoist strongholds in Jharkhand, West Bengal, Odisha and Chhattisgarh. In 2011, the chief of the Central Reserve Police Force (CRPF) claimed that his forces managed to free about 5,000 square kilometres of area previously controlled by the Maoists. Police stations, previously the most vulnerable among the Maoist targets, turned into impenetrable fortresses after available resources were used efficiently to augment their security, grossly undermining the 'raids for weapons' strategy of the CPI-Maoist. The overall impact has been reflected in the extremist ability to inflict injuries and fatalities on the security forces and civilians. Fatalities among civilians and security forces declined to 301 and 114 respectively in 2012, from 720 civilians and 285 security forces in 2010.12 Number of violent incidents during the same period declined from 2,213 to 1,412.13 Maoists also were affected by a range of self-generating deficiencies. Rapid expansion facilitated the entry of a large number of insufficiently motivated cadres into the organisation. Mutation along caste lines in states such as Jharkhand and Bihar initiated a phase of internecine warfare. The state agencies roped in the renegade factions and made them unofficial partners in the COIN campaign against the CPI-Maoist. Moreover, craving for media publicity also led to some senior CPI-Maoist leaders coming under the radar of the forces and consequently getting eliminated.

11 12

"State-wise extent of naxal violence during 2008 to 2012", Ministry of Home Affairs, Government of India. "State-wise details of Civilians killed, Security Forces (SFs) killed, Naxals killed and Naxals arrested", Ministry of Home Affairs, Government of India. "State-wise extent of naxal violence during 2008 to 2012", Ministry of Home Affairs, Government of India.

Case Study: The Chhattisgarh Attack In the Bastar district of Chhattisgarh, the worst extremist-affected state in India, the CPIMaoist, on 25 May 2013, carried out a well-planned attack targeting a convoy of vehicles carrying political leaders and activists belonging to the Indian National Congress (INC). A group of 350 Maoists consisting of men, women and children exploded improvised explosive devices (IEDs) to bring the convoy to a halt, overpowered the security forces and went about selectively killing political leaders. Among the killed were Mahendra Karma, the leader of the controversial Salwa Judum vigilante programme, and the INC's Chhattisgarh unit leader and his son. The death toll in the attack was 30 with no casualties on the Maoists side. A former union minister who was injured in the attack succumbed to his injuries on 11 June in a New Delhi hospital. The attack carried out on the convoy did not constitute a significant military victory for the CPI-Maoist. The motley of security force personnel, mostly personal security guards protecting some of the leaders, either ran out of bullets or were overpowered by the numerically superior adversaries. Neither did the attack advance the Maoist objective of capturing state power. The attack took place in an identified extremist stronghold and did not demonstrate an audacious outreaching capacity into an area devoid of Maoist influence. However, the violence, termed by Indiaâ&#x20AC;&#x2122;s Prime Minister Dr Manmohan Singh as a "frontal assault on the democratic foundations of our nation",14 did pose questions on the exaggerated claims of the state about its gains vis-a-vis the extremists in the recent months. Whether optimistic official assessments regarding the on-ground situation had encouraged such bravado of the INC leaders too came under scanner. Two months before the attack, the Union Home Secretary had told a parliamentary committee, "There has been an absolute turnaround in Chhattisgarh and Jharkhand and now we are chasing the Naxal groups".15 A month before the attack, an internal assessment of the Intelligence Bureau (IB) had emphatically noted, "If the current momentum could be sustained for a period of few more months, it could perhaps lead to decisive tipping of scales in favour of security forces".16

Rethinking COIN Strategy: Old Wine in New Bottle The 25 May incident in Chhattisgarh was neither the worst strike by the Maoists, nor did it constitute the first-ever attack on politicians. However, it was for the first time that the extremists had managed to annihilate a number of prominent politicians in a single attack. The incident generated intense media attention. Predictable reactions called for swift punitive 14

"PMâ&#x20AC;&#x2122;s opening remarks at the All Party meeting on Naxal violence", 10 June 2013, Office of the Prime Minister of India, http://pmindia.nic.in/speech-details.php?nodeid=1325. Accessed on 17 June 2013. Aloke Tikku, "MHA told Parliament panel Naxals are on the run in Chhattisgarh", Hindustan Times, 25 May 2013. Rahul Tripathi, " Bastar Bloodbath: Alert on Naxal build-up came a month back", Indian Express, 28 May 2013.

measures against the extremists. The Chhattisgarh Chief Minister categorically rejected the possibility of peace negotiations and vowed to aggressively pursue the extremists.17 The Union Home Secretary R K Singh predicted an intensification of the COIN operations. 18 The Union Home Minister Sushil Kumar Shinde promised a "joint operation"19 of state and central forces against the Maoists. The attack also brought about some noticeable shifts in the proclaimed perceptions of some of the key government functionaries regarding the nature of extremism. Minister of Rural Development, Jairam Ramesh, a long-standing advocate of the politico-developmental approach against the Maoists, termed the attack a "holocaust"20 and its perpetrators, "terrorists".21 Home Minister Shinde summed up the shift in the following words. "So far we were thinking that this (violence) would be some other way of movement. But in 2010 incident (Tadmetla massacre in which 76 security personnel were killed) and May 25 (attack on Congress rally) we have seen it is nothing other than a terror (activity)", he said. Shinde concluded, "The (May 25) incident is bigger than terrorism".22 Amid the convergence of views, some dissenting voices, however, remained. The Tribal Affairs Minister K C Deo, for example, opined that the end of the conceptual problem alone will not help addressing the Maoist issue. "Calling them terrorists... is it going to help or improve the situation? You can use different terms but ultimately you have to get at the root of the problem",23 he said. Apart from such predominantly rhetorical official assertions, the 25 May extremist attack did herald the possibility of a reset to the existing COIN strategy. The need to end the partisan differences on the issue and evolve consensus at the national level to formulate a policy on LWE led to a meeting of different political parties on 10 June. The Prime Minister, inaugurating the meeting, underlined the need to "fine tune and strengthen"24 the defensive and offensive capabilities of the state against the extremists. While declining to disclose the 17

"No talks, fight against Naxals to intensify: Chhattisgarh Chief Minister Raman Singh to NDTV", NDTV, 5 June 2013, http://www.ndtv.com/article/india/no-talks-fight-against-naxals-to-intensify-chhattisgarh-chiefminister-raman-singh-to-ndtv-375448. Accessed on 17 June 2013. "Anti-Naxal operations will be intensified: Home Secy RK Singh", Zee News, 28 May 2013, http://zeenews.india.com/news/maharashtra/anti-naxal-operations-will-be-intensified-home-secy-rksingh_851348.html. Accessed on 17 June 2013. "We will launch a joint operation: Shinde", The Hindu, 31 May 2013, http://www.thehindu.com/news/national/we-will-launch-a-joint-operation-shinde/article4769407.ece. Accessed on 17 June 2013. "Naxal attack was a 'holocaust': Jairam Ramesh", Daily News & Analysis, 26 May 2013, http://www.dnaindia.com/india/1839766/report-naxal-attack-was-a-holocaust-jairam-ramesh. Accessed on 17 June 2013. "Maoists terrorists, should learn from Arvind Kejriwal, fight polls: Jairam Ramesh", Indian Express, 29 May 2013, http://www.indianexpress.com/news/maoists-terrorists-should-learn-from-arvind-kejriwal-fight-pollsjairam-ramesh/112202/. Accessed on 16 June, 2013. "Naxal attack: Shinde speaks of joint action, Greyhound forces", Daily News & Analysis, 31 May 2013; http://www.deccanherald.com/content/335731/naxal-attack-shinde-speaks-joint.html. Accessed on 16 June, 2013. Sindhu Manjesh, "Calling Naxals 'terrorists' will not solve problems: Tribal Affairs Minister KC Deo", NDTV, 31 May 2013, http://www.ndtv.com/article/india/calling-naxals-terrorists-will-not-solve-problemstribal-affairs-minister-kc-deo-373522. Accessed on 16 June, 2013. "PMâ&#x20AC;&#x2122;s opening remarks at the All Party meeting on Naxal violence", 10 June 2013, Prime Minister's Office, Government of India. http://pmindia.nic.in/speech-details.php?nodeid=1325. Accessed on 17 June 2013.

measures initiated to "permanently root out this menace" he assured the nation that his "government will not be found wanting in this regard".25 A resolution passed at the end of the meeting called upon the state and the central governments to "adopt a two-pronged strategy of sustained operations to clear the areas of Maoist influence and pursue the objectives of effective governance and rapid development".26 The parties resolved to "remain united and shall speak in one voice and act with a sense of unified purpose and will".27 The content and direction of the new strategy remains a matter of speculation. Some of its key parameters, however, can be inferred from the statements of bureaucrats and ministers. While an overwhelming opinion against the participation of the Indian Army against the CPIMaoist continues to persist, the government appears prepared to abandon the policy of trying to develop the extremist-affected areas, pending its sanitisation by the security forces. Underlining the difficulties of implementing development schemes in extremist-controlled areas, Finance Minister P Chidambaram told journalists, "In Bastar (Chhattisgarh), what development can you attempt if people can't enter?"28 The Home Secretary R K Singh also added that security action must precede developmental work and cannot be carried out simultaneously.29 A further hardening of the force-centric policy is visible through the attempt by New Delhi to coerce all states to pursue a unified national strategy against the CPI-Maoist, using preferential deployment of central police forces as a leverage tool. New Delhi intends to rapidly fill up the shortage of 27,000 in the central forces' ranks to ensure an optimal force deployment in the extremist-affected areas.

Lessons Learnt? The new strategy appears to have assigned a disproportionate use of force, representing a return to the mindset that prevailed in 2010. Operation Green Hunt (OGH) launched in the early months of that year, involving over 70 battalions of central security forces and an equal number of state police personnel, had envisioned to surmount the military challenge posed by the extremists through a rapid and decisive demonstration of strength. Within a few months, the security forces met with a series of setbacks leading to the abandonment of the operation. Lacklustre response of the civil administration failed to address the governance and development deficit both in the OGH and the subsequent focused area operations. Surprisingly, the discourse on the new strategy appears to have given very little attention to these shortcomings. 25 26

27 28

ibid. "Unanimous Resolution by the All Party meeting on Naxal violence", Prime Minister's Office, Government of India, 10 June 2013, http://pmindia.nic.in/press-details.php?nodeid=1635. Accessed on 17 June 2013. Ibid. "States agree to adopt Andhra-style anti Naxal policy; national policy soon", Economic Times, 6 June 2013, http://articles.economictimes.indiatimes.com/2013-06-06/news/39788812_1_chief-ministers-bastardantewada. Accessed on 17 June 2013. Aman Sharma, "Naxal violence: Security action must precede developmental work, says RK Singh", Economic Times, 11 June 2013, http://articles.economictimes.indiatimes.com/2013-0611/news/39899514_1_naxal-violence-home-secretary-rk-singh-chhattisgarh. Accessed on 17 June 2013.

Whether a real turn-around can be achieved through the new strategy remains unclear. It may still be possible for a determined state to neutralise some of the senior Maoist leadership and effect some fatal blows on the movement through the force dominated approach. However, unless the state demonstrates its willingness to fill in the vacuum of underdevelopment and absence of governance, Maoists in some form or the other will find an opportunity to return. The purported objective of an extremist takeover of the country has always been unrealistic. Without a unified strategy and a coherent national policy that nips the strength and the support base of the extremists, the government's objective of reclaiming the liberated zones, too, would be defeated, even with the prevailing state of heightened alert.

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ISAS Insights No. 214 â&#x20AC;&#x201C; 10 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India: A Destination Nightmare for Tourists? Implications of Sexual Violence Rahul Advani1 Introduction In the past few weeks, there were two significant rape cases involving foreign tourists in India. The first featured an American tourist who was gang-raped on 4 June 2013 by a group of men in a hill resort in the town of Manali in Himachal Pradesh. The 31-year-old woman was leaving the Vashishth Temple site at around one oâ&#x20AC;&#x2122;clock in the morning that day. After failing to get a taxi to take her back to her hotel, she accepted a ride from a group of men who took her to a wooded area where they raped and robbed her. Subsequently, three men have been arrested in connection with the incident. Just one day earlier, it was announced that a 21-year-old Irish national, who was volunteering as a charity worker in Kolkata, was raped. It was suspected that she was drugged and raped by a local businessman. The two cases are just the latest in a series of sexual attacks against foreign female tourists. In March this year, a British tourist, fearing a sexual attack, leapt from the second floor of a hotel balcony in Agra. In another incident, a Swiss tourist was reportedly gang raped whilst on a cycling trip in Madhya Pradesh. In January, a South Korean tourist was allegedly drugged and raped, in the same state, by the son of the owner of the hotel where she was staying. All five cases have 1

Mr Rahul Advani is Research Assistant at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasra@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

made international headlines and do not bode well for the future of India’s tourism industry. This is not new to India. In fact, “female tourists have been the subjects of high-profile attacks in India before, most notably in 2008 when a 15-year-old British girl was raped and left for dead on a beach in the resort area of Goa”.2 However, what has been especially troubling over the past few months of this year is the spike in the number of cases of sexual assault against foreign tourists in India and that these were reported so frequently and within such a close timeframe. Despite the international outrage over the gang-rape of a 23-year-old Indian physiotherapy student in New Delhi in December 2012 and the stricter laws governing rape and sexual harassment that were consequently put in place several months later in April, the problem of sexual assault against women in India shows no sign of slowing down. While it is too early to indicate any sort of substantial impact these cases could have on India’s tourism industry, it is clear that they will adversely affect the numbers of tourists visiting India. The December Delhi rape did not involve any foreigners, yet it had a significant impact on the number of tourists coming into India. Due to fears about the risk of sexual assault, “the number of foreign tourists arriving in India dropped by 25 per cent during the first three months of this year”, while the number of female tourists “fell by 35%”.3 One can only imagine how much stronger the impact of the cases directly involving tourists will be on India’s foreign tourist market.

Does Increased Reporting Reflect Increasing Violence? Mumbai police have noted “a three-fold rise”4 in the reporting of rape this year compared to 2012, while Delhi police have seen a “more than two-fold rise”.5 However, given the difficulties of reporting and proving rape, especially in India, it is a challenge to tell whether the increase in rape cases is an indication of an actually increasing level of sexual violence, or simply a result of more women coming forward to report rape due to 2

Mahr, K. 2013. Will Indian Tourism Be Tarnished By Attacks On Women? TIME [online]. Available from World Wide Web: <http://world.time.com/2013/03/20/will-india-tourism-be-tarnished-by-attackson-women/>. Rahman, M. 2013. India Tourist Visits Down by 25% Following Fatal Delhi Gang Rape. The Guardian [online]. Available from World Wide Web: <http://www.guardian.co.uk/world/2013/mar/31/indiatourist-visits-down-delhi-gang-rape>. Sood, M. 2013. Rape Cases on the Rise: Police Record. The Indian Express [online]. Available from World Wide Web: <http://www.indianexpress.com/news/rape-cases-on-the-rise-policerecord/1106427/>. Press Trust of India. 2013. More Than 2-fold Increase in Rape Cases in Delhi This Year. The Indian Express [online]. Available from World Wide Web: <http://www.indianexpress.com/news/more-than2fold-increase-in-rape-cases-in-delhi-this-year/1111793/>.

the increased awareness of their rights and the machineries that have been put in place to make the reporting process easier. The difficulties Indian women face in reporting cases of rape (India, which has more than 1.3 billion people, recorded 24,000 cases of rape” 6 in 2011) can be linked to socio-cultural factors such as shame, the importance of upholding family honour, the risk of threatening marriage eligibility and pressure from the rapist’s family to keep quiet. These factors, however, cannot be used to the same extent to question whether the increasing number of reports of sexual attacks against foreign tourists in India is indicative of an actual rise in attacks against them. Foreign female tourists would be far more likely than their Indian counterparts to report sexual violence – India, with “about four times the population of the U.S.”, has “fewer than a third as many rapes reported”.7 Therefore, the increasing number of rape and sexual assault cases over the past few months, involving foreign female tourists in India, provides a somewhat more accurate picture of the reality of increasing violence. It reveals that the country is more dangerous for foreign female tourists than ever before.

India’s Tourist Demographic The fact that foreign tourists, across gender, are less likely to visit India than ever before conveys that sexual harassment impacts the entire tourist market rather than solely female tourists. This may very well be because India remains most popular among the demographic of tourists within the age group of 35-44 years (making up “21.2%”8 of tourists in India in 2011), according to a 2011 report by India’s Ministry of Tourism. The majority of women within this group would most likely be accompanied by their husbands or partners in India. Therefore, those who object to travelling to India would likely have husbands or partners similarly unwilling to consider India as an attractive travel destination. Most tourists visit India for vacation purposes and would therefore, especially if they are over the age of 35, only travel as a couple or a family. This would, thereby, result in a large proportion of tourists within this age group, both male and female, being less likely to travel to India. The third most popular demographic of foreign tourists in India, those within the age group of 25-34 years (“16.6%”9), would probably be less affected on the whole. Many tourists in this age bracket may not be attached, and so it is likely that the men would not 6

7 8 9

Singhal, J. 2012. How Many Rapes Go Unreported In India? The Washington Monthly [online]. Available from World Wide Web: < http://www.washingtonmonthly.com/political-animala/2012_12/how_many_rapes_go_unreported_i042077.php>. Ibid. Bhatnagar, S.R.K. 2012. India Tourism Statistics 2011. New Delhi: Ministry of Tourism, 33. Ibid.

be dissuaded from visiting India by the issue of women’s safety. Women from this age group, however, would probably be even more cautious about travelling to India than tourists from any other category, given that they fall within the age group of the female foreign tourists who were raped or sexually assaulted in India this year.

No Guarantee of Safety for Female Tourists It is likely that female tourists, accompanied by their male partners, would also be wary about travelling to India, considering that even they are not entirely free from the possibilities of sexual assault. The reported rape of a Swiss tourist highlights the threat of rape even in cases where female tourists are accompanied by men. In this case, the men beat up the husband, tied him to a tree and then raped the woman. The fact that many of these recent cases, including that of the Swiss tourist, involved gangs of men, further demonstrates the extent to which male accompaniment does not guarantee women’s safety in India. Even with a male companion, the advantage in numbers means that a gang is easily able to overpower and assault both the male and female tourists. The global focus on India’s gang rape problem will certainly make it harder for both men and women to consider travelling to the country. If travel agents and websites were previously able to convince women that India was a safe travel destination, based on the condition that they did not travel alone, such precautions may now be more difficult to use to justify travel to India. This is clearly evident from how the British government urges women to “exercise caution” in India, even when travelling as part of a group. 4

The India-wide Problem of Sexual Violence Another factor that is damaging India’s tourism is the widespread nature of sexual assault in the country. Contrary to popular perception, the risk of sexual assault of foreigners is not limited to Delhi alone. In fact, it is occurring in a number of places, such as Kolkata, Himachal Pradesh and Madhya Pradesh, all locations in which female tourists were sexually assaulted or raped. This raises implications for several of India’s top tourist destinations, given that these states host some of the highest numbers of foreign tourists in India. Foreign tourists may be less likely to visit these states and some may even forego the option of visiting India at all. Prior to being featured in the headlines for all the wrong reasons, these states had drawn many tourists to visit India in the past. India’s natural advantage over other countries is that its sheer size and regional diversity mean tourists have a wide variety of locations to choose from. Whether it is “Mumbai, with the old-world feel of 18th century Europe”, “Goa with the beautiful scenery of the Arabian Sea” or “Kerala where the abundant nature and freedom of thought meet the lives of the Indian people”,10 India has something to suit the specifications of every type of tourist. With rape and sexual assault of tourists happening across India, however, choice becomes severely restricted. The nationalities of the tourists in the five cases in question (of which two were from the United Kingdom and one from the United States) will also play heavily into the consideration of many potential visitors to India. This is because the US and the UK are the top two source-countries for foreign tourist arrivals in India. In 2011, nationals from the US and the UK made up “15.54%” and “12.65%”11 of all foreign tourists in India, respectively. Given the likelihood that there was greater coverage of these stories in the home countries of the tourists who were assaulted, it is possible that travellers from the US and the UK (those who represent the largest share of the market for India’s tourism industry) would be more hesitant to consider a vacation in India. Going further than simply documenting the stories of sexual assault, many newspapers and websites in these countries have themselves explicitly raised the question of whether India is safe for female tourists, thereby presenting a further obstacle to India’s tourism industry.

10 11

Ji-hoon, K. 2012. India has Potential to Become a Travel Powerhouse. POSRI Chindia Quarterly. 9, 64. Ibid, 41.

Conclusion The cases of sexual violence against foreign tourists in India could not have come at a worse time, just when the possibilities for India’s tourism business were beginning to seem better than ever before. In recent years, Hollywood has prominently featured India in several of its films, such as the 2012 film Life of Pi (the entire first act of which was “shot on location in the coastal town of Pondicherry” 12), the 2008 film Slumdog Millionaire which was set in Mumbai and the 2011 film Mission Impossible – Ghost Protocol, of which several scenes were filmed in Mumbai and Bangalore. With India as a starring character in some of the most popular films of the past few years, the future for India’s tourism industry could not have seemed brighter. In China, which is “poised to become the world’s largest tourist nation by 2015”, the film Life of Pi broke box office records and “raked in US$16 million in its opening weekend alone”.13 A large number of young Chinese, after seeing the film, “expressed a desire to explore India on the social network platform Weibo (China’s version of Twitter)”.14 Films such as Eat Pray Love (released in 2010) and The Best Exotic Marigold Hotel (released in 2012) even directly promoted India as a tourist experience. The former featured Julia Roberts as a tourist

Carter, J. 2012. Life of Pi: On Location in Pondicherry, India – in pictures. The Guardian [online]. Available from World Wide Web: <http://www.guardian.co.uk/travel/gallery/2012/dec/20/life-of-pi-onlocation-pondicherry#/?picture=401343431&index=0>. AGI. 2012. Can Life of Pi Boost Incredible India’s Tourism? Asian Global Impact [online]. Available from World Wide Web: <http://www.agimag.co.uk/portfolio/can-life-of-pi-boost-incredible-indiastourism/>. Ibid.

praying and meditating in an Indian ashram while the latter starred Judi Dench and Maggie Smith as travellers from Britain to Rajasthan. However, the cases of rape and sexual assault that have rocked India and the rest of the world seem to have dampened the effects any of those films may have had on India’s tourism industry. Aside from the falling numbers of tourists, one can already see the impact of sexual violence on the way in which the tourism industry operates in India. Both hotels and tour operators have been heavily affected. For example, “Thomas Cook India has started exclusive tours for women”, while “The Imperial, a luxury hotel in New Delhi, has created a ‘single lady corridor’ of 12 rooms, each with a security camera on the door, staffed by an all-female staff”.15 Even police forces stationed at tourist spots “are already present in the states of Goa, Rajasthan, and Jammu and Kashmir”.16 Whether this will further reassure tourists who are more cautious about safety or detract from the experiences of those seeking to enjoy India in its natural state remains to be seen. Conducting business has certainly become harder for those on the other end of the phone call, the tour operators. No longer having to merely sell India as a vacation spot for tourists seeking to experience history, nature or a spiritual retreat, they have started “scrambling to reassure would-be visitors”17 of the country’s safety. According to Arun Varma, the Chief Executive at Prime Travels, a tour operator, “we need to tell the world that Indian cities are as safe or unsafe as any other metropolitan cities like London, New York, Sydney, Paris, etc.”18 Security aside, other issues such as improving gender relations within the country itself, and modifying India’s tourism campaign in a way that explicitly presents the country as a female-friendly destination, are all important factors that will need to be considered by the government. India’s tourism industry plays a critical role in the country’s economy, contributing (both directly and indirectly) to “4.5%”19 of India’s GDP in 2011 and sustaining “39.3 million jobs”20 that same year (7.9% of total employment). It is “almost three times bigger than the size of the country’s automotive manufacturing industry and generates more jobs than the chemical manufacturing, automotive manufacturing, communications and mining

16 17 18 19

Bagri, N.T. and Timmons, H. 2013. Rape Cases Are Making Tourists Wary of Visiting India. New York Times [online]. Available from World Wide Web: <http://www.nytimes.com/2013/06/11/world/asia/rape-cases-are-making-tourists-wary-of-visitingindia.html?_r=0>. Ibid. Ibid. Ibid. Chaudhary, M., Babu, S. and Gupta, P. 2011. IITTM-ICC Report - Travel and Tourism Industry in India: Looking East. Kolkata: Indian Chamber of Commerce, 7. World Travel and Tourism Council. 2012. India: How Does Travel and Tourism Compare to Other Sectors? World Travel and Tourism Council [online]. Available from World Wide Web: <http://www.wttc.org/site_media/uploads/downloads/India_sector_release_study.pdf>.

sectors added together”,21 according to the World Travel Tourism Council. In an otherwise slowing economy (“GDP growth fell by almost 2% to 6.5% in 2011–12”22), India’s tourism sector represents a bright light. Furthermore, “the foreign currency that tourists inject into the economy” is especially needed by the Indian government “to offset huge payments for imported oil and coal, which cannot be paid in rupees”.23 The numbers provide a hopeful picture, yet the reality of sexual violence in India acts as an obstacle to the continued growth of the country’s tourism industry. If India is to achieve its potential of becoming a global tourism powerhouse (the number of tourists visiting India is “increasing exponentially each year, recording double digit growth rates from 2003 to 2007”24), measures need to be taken that resonate internationally. Trying to prevent stories of rape from coming out into the public domain in the hope of projecting a ‘safer’ India will be almost impossible when foreigners are involved, given that their cases would be publicised by their own countries and the international media. Instead, the government needs to continually demonstrate its commitment to eradicating India’s culture of sexual inequality and violence.

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World Travel and Tourism Council. 2012. Tourism in India Contributes More to GDP than Automotive Manufacturing. World Travel and Tourism Council [online]. Available from World Wide Web: <ttp://www.wttc.org/news-media/news-archive/2012/tourism-india-contributes-more-gdp-automotivemanufacturing/>.

Chadda, M. 2013. India in 2012: Spiraling Down? Asian Surve y. 53 (1), 48. Bagri, N.T. and Timmons, H., above n 15. Ji-hoon, K., above n 10, 62.

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ISAS Insights No. 215 – 25 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

South Asia: A Story of Key Development Indices Riaz Hassan and Ishraq Ahmed1

South Asia is now home to almost one-quarter of the world’s population. Consequently, the development trends in South Asian countries have not only regional but also global ramifications. In particular, the spectacular economic growth in India, the largest South Asian country, over the past two decades has made it a global economic power-house. The Indian economy is currently the third largest economy in the world by purchasing power parity (PPP), after the United States and China. What are the developmental consequences of this surging economic growth for India’s 1.2 billion people? Has economic growth benefited the living conditions of its citizens? An exploration of this aspect is one of the aims of this paper. We first examine the impact of India’s economic growth between 1990 and 2011 on the Indian society, using nine key indicators of health and social wellbeing. We then examine how India is faring in its immediate ‘neighbourhood’, that is, how it compares with its four larger South Asian neighbours namely, Pakistan, Bangladesh, Nepal and Sri Lanka. Finally we examine how India compares with its largest neighbour, China whose economy has experienced stellar growth over the past two decades.

Professor Riaz Hassan is Visiting Research Professor at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasriaz@nus.edu.sg and riaz.hassan@flinders.edu.au. Mr Ishraq Ahmed was until recently a Research Assistant at ISAS. The views expressed in this paper are those of the authors and do not necessarily reflect those of ISAS.

Table 1 - Indicators of Health and Socio-economic Wellbeing in India, 1990-2011 Description of Indicators

1990

2011

GNI per capita, PPP (current international $)

860

3620

Life expectancy at birth, total (years)

Mortality rate, infant (per 1,000 live births)

47.2

Percentage of children under-weight for their age (below 5 years)

59.5

42.5 b

Maternal mortality ratio (deaths per 100,000 live births)

600

200 b

Improved sanitation facilities (% of population with access)

34 b

Immunization, DPT (% of children ages 12-23 months)

4.4

49 a

74b

Mean years of schooling Literacy rate, youth female (% of females ages 15-24) a

Data is for 1991

Data is for 2010

Source: World Development Indicators, The World Bank (2013) & International Human Development Indicators, The United Nations (2012).

India’s economic growth since the 1990s has been spectacular. Between 1990 and 2011 India’s economy grew at a compound rate of around 7 per cent per year in current US dollars, and the per capita income (in current dollars) has increased over four times from $860 to $3,620. The rapid rise of the urban middle class in India illustrates the magnitude of economic growth and income levels. According to the Asian Development Bank, one-quarter of India’s 1.2 billion people can now be classified as ‘middle class’. They are all the top-third of Indians by wealth, and in numbers they are as big as the entire American population. A study by India’s National Council of Applied Economic Research estimates that the Indian 2

‘middle class’ more than doubled in size from 5.7 to 13.8 per cent of all Indian households between 2001 and 2010. This corresponds to 28.4 million households with a total population of 153 million people (Shukla 2010). It is estimated that by 2015 the size of the ‘middle class’ will double to 25 per cent of all Indian households. (Mustafi 2013). Economic development has obviously boosted household incomes of the ‘middle class’. But, have the fruits of India’s economic growth been shared widely and enhanced the wellbeing of its masses? We examine this question by focusing on nine widely-used indicators of social wellbeing listed in Table 1. The evidence shows that health and education indicators have displayed significant improvements, with maternal mortality, infant mortality and youth female literacy showing the fastest improvements. Maternal deaths at the time of childbirths have fallen three times, while infant mortality rates have declined from 81 to 47. Youth female literacy rates have increased to 74 per cent. Average life expectancy, the percentage of the population with access to sanitation facilities, immunization rates and average years of schooling have all increased over the last twenty years, but not as rapidly as India’s per capita income increase. These trends clearly indicate that economic growth between 1990 and 2011 has significantly enhanced the health and wellbeing of the wider Indian society.

India’s Indicators in relation to its Neighbours (1990-2011) Are these beneficial changes related to India’s surging economic growth or, largely, a consequence of the country’s ongoing public policies? We explore the answer to this question by contextualising India’s development and comparing the relevant indicators with its neighbours’. While economic growth is absolutely crucial in raising the living standards of the population, the nature of growth and the public policies with respect to basic education, public health and other associated welfare also determine the development trends and how much welfare citizens enjoy. The data in Table 2 gives an overview of the Gini coefficients and income distribution among the top 20 per cent and bottom 20 per cent of population in the five South Asian countries in 2010. Sri Lanka had the highest Gini coefficient of 36.4. The top 20 per cent had a share of 44.6 per cent of income while the bottom 20 per cent had just 7.7 per cent, indicating that Sri Lanka was the most-unequal country in South Asia. A large fraction of national income is concentrated among the few, and income distribution is heavily skewed towards the rich. India was the second most-unequal country, while Pakistan

was the most-equal country in South Asia with a Gini index of 30.0. Bangladesh’s and Nepal’s Gini coefficients were 32.1 and 32.8 respectively.

Table 2 - Income Distribution in South Asia (2010) Country

Gini Index

Bangladesh 32.1

Income Share Income Share (Top 20%) (Bottom 20%) 41.4 8.9

India

33.9

42.8

8.5

Pakistan *

30.0

40.0

9.6

Nepal

32.8

41.5

8.3

Sri Lanka

36.4

44.6

7.7

*Data as of 2008 Source: World Development Indicators (2013).

Do the income inequalities among South Asian countries impact the health and social wellbeing of their citizens? India is the second most-unequal country in South Asia, but as noted above its social indicators show significant improvements.

The data in Table 3

compares India with its four neighbours on various indicators between 1990 and 2011. Sri Lanka, the most-unequal South Asian country, appears to be well ahead of India and other countries on all indicators. Compared with its four neighbours, the health and social development trends in India have not been proportional to either the rate of economic growth or its high per capita income. India has enjoyed the fastest growth in per capita income among the four countries. Incomes in Nepal and Pakistan have grown at an annual average rate of four per cent, while incomes in Bangladesh and Sri Lanka have grown at six per cent and 6.6 per cent respectively. Despite India’s rapid per capita income growth, Nepal and Bangladesh have overtaken India on various basic social indicators. In 1990 the average life expectancy in India was comparable to Bangladesh’s and higher than Nepal’s. In 2011 life expectancy in India was lower than that in Nepal and Bangladesh. A similar pattern holds for infant mortality. In 1990 India’s infant mortality rate was about 20 per cent lower than that of Bangladesh’s, Nepal’s and Pakistan’s. By 2011, India’s infant mortality rate was higher than both Nepal’s and 4

Bangladesh’s, but lower than Pakistan’s. India has also fared poorly in providing sanitation facilities and increasing its immunisation rates. In 2010 only about one-third of its citizens had access to improved sanitation facilities. While its neighbours achieved almost universal DPT immunisation coverage of children aged two years (with the exception of Pakistan), India barely increased its immunisation rate to 72. Furthermore, India’s efforts in curbing maternal deaths pale in comparison to Nepal’s impressive achievements in that area. Nepal’s maternal mortality ratio was 170 in 2010, compared to India’s 200. India has also fallen behind on the schooling indicators such as average years of schooling and youth female literacy rates. Bangladesh has overtaken India on both measures despite being some way behind a few decades earlier.

Table 3 - Indicators of Health and Socio-economic Wellbeing in India, Bangladesh, Nepal, Pakistan and Sri Lanka Description of Indicators

Years India

Bangladesh Nepal

Pakistan

Sri China Lanka

1990

860

550

520

1220

1450

800

2011

3620

1940

1260

2870

5520

8390

1990

2011

1990

96.5

93.5

94.6

24.2

38.7

2011

47.2

36.7

59.2

10.5

12.6

1990

59.5

61.5

2011

42.51

411

38.61

31.31

21.11

3.81

1990

600

800

770

490

120

2011

2001

2401

1701

2601

351

GNI per capita, PPP (current international $)

Life expectancy at birth, total (years)

Mortality rate, infant (per 1,000 live births)

%Children under-weight for their age (below 5 years)

Maternal Mortality ratio ( per 100,000 live births)

Improved sanitation facilities (% of population with access)

Immunization, DPT (% of children ages 12-23 months)

1990

2011

341

561

311

481

921

1990

2011

1990

2.9

2.3

8.3

4.9

2011

4.4

4.8

3.2

4.9

9.3

7.5

1990

492

382

332

2011

741

78.51

781

611

991

Mean years of schooling

Literacy rate, female (% of females ages 15-24)

Data for 2010.

For India, Nepal and Bangladesh, data is for 1991

Source: World Development Indicators, The World Bank (2013) & International Human Development Indicators, The United Nations (2012).

Table 4 presents India’s ranking in South Asia on the various social indicators in 1990 and in 2011. India’s per capita income is very high when compared to the others excluding Sri Lanka; it is currently ranked second, up from third place in 1990. However, with respect to other indicators, India’s rank has actually fallen. Its rate of social development has lagged behind Nepal and Bangladesh. During the 1990s, India was ranked near the top-two in most of the indicators. Two decades later and notwithstanding its stellar economic performance, India was in the bottom-two and for some indicators (proportion of underweight children and immunisation rates) it is the worst-performing country. Despite Bangladesh’s per capita income being almost half of India’s, it performed much better on most of the basic indicators and it has exhibited the most dramatic improvements in basic living standards among the five countries. Nepal has also caught up with India and has surpassed India in curbing maternal mortality, immunisation rates, youth female literacy and life expectancy at birth, and this in spite of Nepal’s average income being one-third of India’s. 6

Table 4- Indiaâ&#x20AC;&#x2122;s Rank in South Asia 1990-2011 Description of Indicators GNI per capita, PPP (current international $)

1990 3

2011 2

Life expectancy at birth, total (years)

Mortality rate, infant (per 1,000 live births)

%Children under-weight for their age (below 5 years)

3 to 4a

Maternal mortality ratio

Improved sanitation facilities (% of population with access)

Immunization, DPT (% of children ages 12-23 months)

Mean years of schooling

Literacy rate, youth female (% of females ages 15-24)

Rank is estimated due to missing data for Nepal

Source: World Development Indicators, The World Bank (2013), and International Human Development Indicators, The United Nations (2012).

From these trends it appears that compared to its much-poorer neighbours India has performed poorly and has gone backwards. One can postulate that Indiaâ&#x20AC;&#x2122;s comparatively poor performance was due to inadequate funding in areas such as health and education. This is indeed the case. Despite the small size of the Bangladesh and Nepalese economies compared to Indiaâ&#x20AC;&#x2122;s, the share of total government spending on education and health in these two countries is quite significant. Bangladesh and Nepal spend around 25 per cent (2009) and 29 per cent (2010) respectively of the total government expenditure on health and education. By contrast India spends only 17 per cent of total government expenditure on education and health (WDI, 2013). It can be argued that the quality of service delivery has been hampered by inadequate public allocations for social welfare services, resulting in the modest performance of India in improving the health and wellbeing of its citizens over the past two decades. Some factors that can partly explain this phenomenon have been observed over time. For instance, India still does not quite address the concerns of women, the relevant gender issues and the other social issues in which women have a much stronger stake than men. Furthermore, the rise of the corporate sector, although a boon in many ways, has led to its 7

influence being extended to many spheres of public policy. Jean Dreze and Amartya Sen have argued that the “unrestrained search for profits” has resulted in corporate interests taking precedence over public policies that should be reoriented towards addressing the needs of the underprivileged. (Dreze and Sen, 2011). In India, the corporate interests threaten to derail the susceptible public policies that are already beset by the political influence of the upper-caste, landowning and professional urban classes. It will be useful to assess how Bangladesh has succeeded in increasing its level of socioeconomic development. Bangladesh has witnessed a social mobilisation at the local level, led by female empowerment in household decision-making and the prevalence of small-scale entrepreneurship due to the success of microfinance loans. Studies have shown that the improvements in women’s welfare in rural areas have contributed to improved maternal care, better family planning, higher levels of child-literacy and increased household-incomes (Comings et al 1994; Sandiford et al 1995; Burchfield 1997 and 2002). In addition, the rise of non-governmental organisations (NGOs) has facilitated numerous development activities in Bangladesh in tandem with government policies; these NGOs run small health clinics in rural areas, operate primary schools for dropouts, provide prenatal and postnatal care, among other services. While incomes have grown at a much slower pace than in India, this has been more than compensated by the NGOs’ being involved in promoting socio-economic development. Development has taken place on a “micro-scale” at the household level; rural households particularly have been empowered to improve their own welfare, and increased public awareness about health and education has enabled them to make informed choices, thereby further maximising their welfare. One conclusion that can be drawn from Table 4 is that the rate of economic growth and per capita incomes appear to be not related to a country’s performance in enhancing the basic living standards of its citizens. The implementation and efficacy of public policies appear to play a more vital role in this.

India in relation to China India and China had similar income levels in the 1990s – India’s GNI was higher than China’s (see Table 3) – but over the past two decades China has galloped ahead and in 2011 its per capita income was ten times higher compared to 1990. This surging economic growth has led to very high income inequality in China. Its Gini coefficient in 2009 at 42.1 was significantly higher than India’s. The income distribution was also highly skewed in favour of 8

the rich. The top 20 per cent had 47.1 of the income and the bottom 20 per cent only 4.7 per cent. These statistics are significantly higher compared to India’s. Notwithstanding these inequalities, China has done much better than India in improving the living conditions of its people (Table 3). It is difficult to conclude that these improvements were directly a result of China’s economic growth. China’s centralised and authoritarian political system allows it to implement and enforce its public policies more efficiently. Whereas in the democratic setting of India, the state does not enjoy the same kind of authority and is amenable to public and political pressures of various kinds. The evidence also suggests that unlike India, China has utilised its rapid economic growth to increase public resources for social development. For instance, China devotes around 2.9 per cent of its GDP on public health expenditure, while India spends approximately 1.2 per cent of GDP. While India is competing strongly with China with respect to economic growth, it is still behind in terms of using government resources to stimulate concrete social development. India appears to have performed poorly when it comes to translating impressive economic growth to improving the social welfare of its population. The Chinese evidence also supports the key conclusion of this paper that planning and efficient implementation of public policies that seek to enhance collective wellbeing are more pivotal than the scale of economic growth. But it cannot be denied that economic growth does help in generating state revenues for public-welfare expenditures.

Concluding Remarks The aim of this paper is to present a broad comparative picture of the development trajectories of South Asian countries. Our study shows that in the case of India, indicators of social wellbeing did improve in the period of India’s rapid economic growth. But when examined in the context of its South Asian neighbours, India has gone backward, not forward. With respect to the indicators examined in this paper, India’s ranking has slipped badly in comparison to its South Asian neighbours. India cannot afford to have the living standards of many millions of its citizens at levels comparable to those of some of the poorest countries in the world and, at the same time, aspire and compete for global economic supremacy. The development strategy that is being implemented is not working. This paper shows discrepancy between economic growth and living standards. Economists take the causal relationship of these two indicators as given, but the case of India and its neighbours 9

tells us something different. The realm of civil society organisations and NGOs knows well that growth does not translate into better living conditions and human development, as the growth is not equal. We have argued that it is the planning and implementation of public policies that seek to advance collective wellbeing which appear to be more important than the scale or rate of economic growth. It is likely that given India’s size, there may be significant regional variations in development trajectories. This, however, may also be true in the case of other South Asian countries and requires further study.

References Comings, J., Smith, C., Shrestha, C. (1994) ‘Women’s literacy: the connection to health and family planning’, Convergence, Vol XXVII, No, 2/3, 93-100 Burchfield, S., Hua, H., Baral, D., Rocha, V. (2002), ‘A longitudinal study of the effect of integrated literacy and basic education programs on women’s participation in social and economic development in Nepal’, USAID/World Education Inc. (December 2002) Burchfield, S. (1996) ‘An evaluation of the impact of literacy on women’s empowerment in Nepal’, Report for USAID ABEL project, Cambridge MA: Harvard Institute of International Development Dreze,

Jene

and

Sen,

Amartya

(2011)

‘Putting

Growth

Its

Place’.

http//www.outlookinida.com Mustafi, Sam Buddah Mitra (2013), ‘India’s Middle Class: Growth Engine or Loose Wheel’, New York Times May 13, 2013. Sandiford, P.J., Cassel, M. Sanchez, G. (1995) ‘The impact of women’s literacy on child health and its interaction with access to health services’, Population Studies 49, pp 5-17 Shukla, R. (2010). How India Earns, Spends and Saves – Unmasking the Real India. New Delhi: Sage and CMCR

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ISAS Insights No. 216 – 25 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Prospects for Border Trade in Mizoram Laldinkima Sailo1

In his recent budget speech, India’s Finance Minister P Chidambaram said: “Combining the Look East Policy and the interest of the Northeastern states, I propose to seek the assistance of the World Bank and the Asian Development Bank to build roads in the Northeastern states and connect them to Myanmar”.2 Prior to this, New Delhi had expressed interest in building the India-Myanmar-Thailand highway, which would go a long way in the economic integration of India’s Northeast with Southeast and East Asia. This may, however, be a while in the making; and the benefits that would accrue to India’s Northeast from such projects are yet to be articulated. If implemented, Mr Chidambaram’s plan could have a significant impact on the border regions of the Northeast, particularly in areas where border trade flourishes. Almost 4,500 kilometres, or 98 per cent of the boundaries of the Northeast states constitute India’s international borders with China and Bhutan in the north, Myanmar in the east and Bangladesh in the south and west. India’s border trade with Myanmar takes place mainly through

Mr Laldinkima Sailo is Research Assistant at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasls@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. ‘To 'Look East', Chidambaram Takes N-E Route to Myanmar’ (2013, March 01), Hindustan Times. <http://www.hindustantimes.com/India-Budget-2013/Chunk-HT-UI-IndiaBudget2013-Politics/To-Look-EastChidambaram-takes-N-E-route-to-Myanmar/SP-Article1-1019266.aspx>. Accessed 01 July 2013

Moreh in Manipur and to a lesser degree Zokhawthar in Mizoram. With Bangladesh, the Indian states of Tripura, Meghalaya, Mizoram and Assam share a 1,880-km border; but much of the cross-border trade takes place through Assam, Meghalaya and Tripura. Mizoram, which benefits as a peaceful state and as the only Northeast state to border both Bangladesh and Myanmar, has been unable to capitalise on such an advantage of location that it enjoys. Having signed a Peace Accord in 1986, the state saw an end to over two decades of insurgency. This frees it from the concerns of political violence, road blockades, strikes, kidnap and ransom by insurgent groups that are often cited3 as some of the main impediments to the development of trade in Northeast India. Despite historical, cultural and economic links across the border, the stumbling block that prevents trade from taking off in Mizoram continues to be the lack of soft and hard infrastructure that is crucial to the development of border trade. As such, cross-regional studies of border trade highlight its importance to border areas, which are often least-developed. Studies4 reveal that border trade positively impacts the lives and incomes of traders, strengthens local production, and fosters service-provision such as storage facilities, transportation and ancillary services in the local bazaars. In the remote regions, where employment is scarce and salaries are low, border trade has the potential to generate income for a whole household and is more profitable than most available economic activities. Cross-border trade lowers the import-process hassles and enables exporters to benefit from the higher value-add factors. Furthermore, by strengthening commercial ties, promoting cultural understanding and deepening community relationships, border trade helps to nurture amicable relationship among neighbouring countries. Some studies5 have also observed that border trade has a gender dimension – women are more actively involved in border trading activities such as selling goods in bazaars as well as moving goods through the border-crossing points. 3

Prabir De. ‘Challenges to India-Myanmar Trade and Connectivity’, Presentation at Brainstorming Session on India-Myanmar Strategic Partnership, 04 February 2013. RIS, New Delhi. <http://ris.org.in/images/RIS_images/pdf/IndiaMyanmar%20Meeting%204%20feb%202013%20PPT/PrabirDe.pdf>. Accessed 01 July 2013. See Alejandro Figueroa, Erik Lee and Rick Van Schoik, ‘Realizing the Full Value of Crossborder Trade With Mexico’, North American Center for Transborder Studies, Arizona State University/New Policy Institute & ‘Cross Border Trade within the Central Asia Regional Economic Cooperation’ prepared by the World Bank (2007), CAREC Program. See ‘Cross Border Trade within the Central Asia Regional Economic Cooperation’ prepared by the World Bank (2007), CAREC Program & ‘Unleashing the Potential of Women Informal Cross Border Traders to Transform Intra-African Trade’ (2010), UN Women.

Yet, cross-border trade is vulnerable to government policies, and the lack of infrastructure can determine the extent of its success. Mr Chidambaram’s task is made easier because the Asian Development Bank (ADB)6, one of his choice funding partners, assigns high importance to the development of infrastructure that will facilitate cross-border trade. The ADB is keen to develop infrastructure as an important determinant of productivity, development and poverty reduction within international borders and across them. Increases in income and overall national growth create new and greater demands for better infrastructure-based services, such as transport, telecommunications, energy, and water supply and sanitation, all of which are important services for fuelling and sustaining growth. In turn, it is argued that national and regional growth can contribute to regional security and economic development.7 The challenges of bridging the infrastructure gap in Asia include high investment costs, uneven distribution of benefit (and the related issue of who should pay for the infrastructure), financing constraints and varying regulatory responses, which make coordination very difficult. These are also relevant in the case of Northeast India. The visit by India’s Prime Minister Manmohan Singh to Myanmar in 2012 was a welcome initiative that brought the development of the border areas into sharp focus. The visit saw the signing of several Memorandums of Understanding (MoUs), which included a MoU on IndiaMyanmar Border Area Development and a MoU on Establishing Border Haats (markets). In October 1999, the Federation of Bangladesh Chamber and Industries signed a MoU with the Mizoram Chamber of Commerce and Industry. This was followed up, with a trade delegation, under the Government of Mizoram, visiting Bangladesh (Dhaka, Chittagong, Sylhet and Rangamati) to explore the viability and marketability of local Mizoram products such as ginger and chillies.

‘Cross-Border Infrastructure Development Way to Boost Trade, Poverty Reduction’ (2006, May 05). Asian Development Bank. <http://www.adb.org/news/cross-border-infrastructure-development-way-boost-tradepoverty-reduction>. Accessed 28 June 2013. Ibid

The first Indo-Bangladesh 'Border Haat' came up in 2011 at Kalaichar in Meghalaya's West Garo Hills district, and the two countries agreed to set up eight more border ‘haats’ in Tripura, Meghalaya and Mizoram.8 The Government of Mizoram, mainly with the help of India’s Union Ministry of Commerce, has made some progress to promote border trade with both Myanmar and Bangladesh.

Bangladesh Border In December 2011, a Border Trade Facilitation Centre was jointly inaugurated at the MizoramBangladesh border town of Tlabung (in south Mizoram's Lunglei district) by Bangladesh’s State Minister for Chittagong Hill Tracts, Dipankar Talukdar, and Mizoram’s Trade and Commerce Minister, Lalrinliana Sailo. The two ministers also unveiled the India-Bangladesh Shared Vision of Peace, Prosperity and Partnership stone at Kawrpuichhuah, the proposed border trade centre for Indo-Bangladesh trade.9 While the setting up of an integrated check post (ICP) at Kawrpuichhuah began with a survey by RITES Ltd. in 2005, there has been a delay in its completion mainly due to the pending approvals from India’s Ministry of Home Affairs. Four locations have been identified along the Mizoram-Bangladesh border where ‘haats’ are to be developed. These are at Marpara and Tuipuibari in Mamit District, Sillsury and Nunsuri in Lunglei District.10 The opening of these ‘haats’ is expected to generate bilateral trade worth US$ 20 million.11 The opening of the border ‘haats’ will allow for the exchange of agricultural and horticultural products, small agricultural and household goods, for example spices, minor forest products (excluding timber), fresh and dry fish, dairy and poultry products, cottage industry items, 8

‘Border Trade Talks Put Off With Bangladesh Due to ‘Mahasen’’ (2013, May 16). Zee News. <http://zeenews.india.com/news/north-east/border-trade-talks-put-off-with-bangladesh-due-tomahasen_849028.html> ‘Bangladesh and Mizoram Ministers Inaugurate Trade Centre’ (2011, December 11). Money Control. <http://www.moneycontrol.com/news/wire-news/bangladeshmizoram-minister-inaugurate-tradecentre_631941.html>. Accessed 01 July 2013. Border Haats in NER. Website of Ministry of Development of North Eastern Region, Government of India. <http://www.mdoner.gov.in/content/proposed-border-haats>. Accessed 28 June 2013 ‘India’s North-East: Diversifying Growth Opportunities’ (2013). Report by PwC for Indian Chamber of Commerce (ICC). <http://www.pwc.in/en_IN/in/assets/pdfs/publications/2013/north-east_summit-2013.pdf>. Accessed 02 July 2013.

wooden furniture, handloom and handicraft items, etc.12 For Mizoram, border â&#x20AC;&#x2DC;haatsâ&#x20AC;&#x2122; will boost exports of agricultural, horticultural, sericulture items and floricultural goods besides forestbased products. There is also a high demand in Bangladesh for quarry stones from Mizoram. The current proposal is that there will be no imposition of local taxes, and the Indian as well as Bangladeshi currencies will be accepted. Currently, the Government of Mizoram is keen to supply bamboo, either in raw or semiprocessed form, to Karnaphuli Paper Mill of Bangladesh. Mizoram is also keen to export ginger, chillies, chow-chow (squash), passion fruit, grape, anthurium, oranges, sesame, bananas, cotton, papaya and pumpkin to Bangladesh. In turn, Mizoram looks at the opportunity to import crockery, cement, iron and steel, meat on hooves, poultry items, cosmetics and toiletries, garments, gas, jute, rubber, shoes, ceramic, fish etc. On the back of these developments, the argument for greater trade between Northeast India and Bangladesh is that the latter needs the Northeast India market to sell its products, while the former needs investments. This is also an opportunity for Bangladesh to rectify its trade imbalance with India while Northeast India can capitalise on this and bargain for investments in lieu of opening its markets to Bangladesh. Another argument is that importing goods from Bangladesh will be cheaper than products which are brought into the region from other parts of India, as the cost of transportation will be reduced. While there is much to be done in the Mizoram-Bangladesh border trade sector, the Government of Mizoram has requested the Governments of India and Bangladesh to look at ways to open up the traditional river route from Tlabung to Chittagong. An alternative suggested by the state government was to develop a land corridor between Tlabung and Kaptai Dam in Bangladesh. The opening of Karnapauli river route between South Mizoram and Rangamati can also have positive economic impact. Further, requests have been made to Bangladesh to reactivate the Land Custom Station at Thegamukh.

ibid

Myanmar Border According to the Myanmar Department of Border Trade, the border trade turnover between India and Myanmar has ranged from US$10 million to US$ 22 million, though it is probably higher if the huge unaccounted informal trade is also taken into account. Major imports from Myanmar include betel nut, dried ginger, green moong beans, black matpe, turmeric roots, resin and medicinal herbs. Major exports into Myanmar include cotton yarn, auto parts, soya bean meal and pharmaceuticals.

Table 1: Trends of India-Myanmar Bilateral Border Trade (in million US$) Year

Myanmar Imports 4.13

Total trade

Balance of Trade

2005-2006

Myanmar exports 11.28

15.41

7.14

2006-2007

11.02

4.75

15.77

6.27

2007-2008

10.91

3.92

14.83

6.99

2008-2009

5.49

4.43

9.82

1.05

2009-2010

7.79

5.95

13.73

1.84

2010-2011

8.30

4.50

12.80

3.80

2011-2012

8.87

6.54

15.41

2.33

2012-2013

25.09

10.57

35.66

14.52

Source: Department of Border Trade, Ministry of Commerce, Myanmar

To facilitate a limited movement of the people residing along the Indo-Myanmar border, the Governments of India and Myanmar have permitted the entry of persons residing within 16 km from the international border on the basis of permits but not visa with certain terms and conditions. Local nationals of both sides can stay in the other country for three days within 16 km from the border on either side.

Of the four Land Custom Stations along the India-Myanmar border, most of the trade takes place at Moreh in Manipur while a much smaller quantum of trade takes place through Zokhawthar in Mizoram and a negligible amount through Nampong in Arunachal Pradesh and Avakhung in Nagaland. The current infrastructure in place at Zokhawthar includes the main building of the LCS, a State Bank of India outlet which opens three days a week, a weighbridge and a plantquarantine building. Border â&#x20AC;&#x2DC;haatsâ&#x20AC;&#x2122; along the Mizoram-Myanmar border would be located in Hnahlan and Vaphai in Champhai District, Hruitezawl in Lawgtlai District and Chakhang in Saiha District. Besides these, three other locations have been identified in Manipur and four each in Arunachal Pradesh and Nagaland. Even as the government speeded up the completion of LCS infrastructure in Zokhawthar, the 28km road between the LCS complex and the nearest district headquarters, Champhai, however continues to be in a very poor condition and needs substantial upgrading. The road connecting Zokhawthar from the Myanmar side is in a poorer condition. The road from Zokhawthar to Kalemyo via Tiddim-Falam is a poor-grade single-lane kutcha road where the transportation of tradable commodities, in bulk quantity, is not possible. A project for the improvement of the RihKalemyo road via Tiddim-Falam was proposed and a survey conducted by the Border Road Organisation. The total cost of this road was estimated at Rs 711.47 crores and has been approved by the Government of India, but actual work is yet to commence. This road is expected to have an enormous impact in facilitating trade across the Mizoram-Myanmar border.

There is also a proposal to open a Land Custom Station at Zorinpui in Lawngtlai District on the India-Myanmar border, where traditional, informal trade-transactions have been carried out for generations. Zorinpui LCS will be the main border post for goods that come through the Kaladan Multi Modal Transport Project once it is up and running. The Kaladan Project is also anticipated to provide access to the Southeast Asian countries and shorten the distance between Kolkata and Northeast India. The multi-modal transport infrastructure will connect Aizawl in Mizoram to Sittwe port in Myanmar via Lawngtlai, Zorinpui, Kaletwa and Paletwa. Work on the segments on the Indian side on National Highway 54 is targeted to be completed by September 2014. The corresponding work, however, needs to pick up pace on the Myanmar side. Zorinpui LCS to

Kaletwa and Paletwa is 129 km by road, and the distance from Paletwa to Sittwe port is 158 km by the inland water transportation system on the Kaladan river.

Ready for Take-off? The development of border trade is crucial to the success of the grand plans that will link Mizoram and India’s entire Northeast region to Bangladesh and Southeast Asia through a web of transportation and communication infrastructure. Accrual of benefits to the communities residing in the border regions – often the most neglected and underdeveloped areas – has the potential to create a mindset that is open to greater trade and economic activities. The buy-ins, which are created over time, will help foster an environment conducive to the development of infrastructure and greater economic activities. For Mizoram, this is an opportunity to position itself at the heart of a sub-regional trading bloc in which it can benefit from the trade of its high-in-demand exportable consumer goods at lower prices. The development of logistics and related services can also enable it to benefit from transit trade in the future. Yet, the challenges are enormous. The continued dependence on funding from the central government means delay in projects, especially those that need clearances and financial sanctioning from the central government. Security agencies, particularly the Ministry of Home Affairs, continue to hold the key to the pace of development of the border-trade infrastructure. Interestingly, a recent media report13 suggested that insurgent groups are already taking advantage of the relative peace in Mizoram to conduct meetings and transfer arms from Myanmar to Bangladesh. The working out of security modalities and delays in the grant of security clearances, often requiring the visit by a team from New Delhi, can hold up progress inordinately. For India, the management of complex relations with two important neighbours, Bangladesh and Myanmar, places the role of the Ministry of External Affairs at the centre of developing trade with them. Then, there are questions about the state government’s capacity to capitalise on the 13

‘Delhi Asks NIA to Probe Weapons Haul in Mizoram’ (2013, June 11), The Telegraph. <http://www.telegraphindia.com/1130612/jsp/frontpage/story_16997445.jsp#.UdOpuJzz2X1>. Accessed 02 July 2013.

infrastructure that is being developed as well as its ability to ensure a corresponding planning of its agro-processing sectors, industries and value-added services that will bring in the muchneeded revenue to traders and the government. A comprehensive stocktaking of some of the current challenges and working towards a solution of those issues that can be solved quickly, is one of the ways to move forward. For instance, until now, the nearest food testing laboratory located in Guwahati was a hindrance for traders at the border, as the bulk of the traded goods consists of perishable consumer items such as fruits, vegetables, pickles etc. While the border-trade infrastructure â&#x20AC;&#x201C; hard and soft, including customs procedure streamlining â&#x20AC;&#x201C; comes under the purview of the central government, there is much that the state can do. In the short-to-medium term, the state government can strengthen its agricultural production capacity in terms of both quality as well as quantity, while assessing the sectors in which it can develop a comparative advantage over time. For the long-term, a composite augmentation of its agro-processing along with industries and services that would generate employment with higher value-add component, would be crucial for the development of the state. Mizoram must seize the opportunity presented by its location and the peaceful environment that it enjoys, and New Delhi needs to understand that any success on this front will have an impact on changing the mindset in the entire Northeast towards the building of infrastructure that will facilitate greater economic integration of this region with Southeast Asia.

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ISAS Insights No. 217 – 29 July 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Biden’s Visit to India: Pushing the Asia-Pacific ‘Pivot’ S D Muni1

The visit by the US Vice-President Joseph R Biden, Jr to India in July (22-25) 2013 may be seen in the context of the US efforts to reinforce its commitment to the “pivot”/“rebalancing” strategy for the Asia-Pacific region. The reinforcement of this commitment is required to address both the domestic doubts as well as external anxieties. Within the US, while there is widespread bipartisan support for the strategy, doubts linger about its direction and the capability to implement it. On 23 July, four members of the US Congress addressed a letter to the newly appointed National Security Advisor Susan Rice asking for an “inter-agency” review of the “Asia-Pacific Strategy”, “in order to better define the ends-ways-means of the Administration’s strategic objectives in the region”.2 Within Asia-Pacific region, many countries have anxieties if the US would remain fully committed to this strategy in view of its budgetary constraints under the proposed ‘sequestration’ and moves to work out strategic understanding with China.

Professor Sukh Deo Muni is Visiting Research Professor at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isassdm@nus.edu.sg and sdmuni@gmail.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. “Zachary Keck, “US Lawmakers Call for Strategic Review of Pivot”, The Diplomat, 25 July, 2013, http://thediplomat.com/the-editor/2013/07/25/us-lawmakers-call-for-strategic-review-of... (accessed on 26 July, 2013).

The Pivot Context The “pivot” context of Biden’s India visit was clearly evident in the continuation of that visit to Singapore where the US Vice-President also had a meeting with the Japanese Prime Minister Shinzo Abe who had carefully timed to be in Singapore. Abe has strengthened his political position with a decisive victory for his party in the Japanese Upper House a week earlier. India, Japan and Singapore are considered by the US to be among the key partners in its “pivot” strategy. On the eve of his departure from India and arrival in Singapore, US Vice-President Biden urged closer India-ASEAN ties, saying: There is an important reason why I have chosen to travel from India to Singapore. We want to highlight and reinforce the growing links between India and Southeast Asia, and the growing importance of both to regional prosperity and security. We see some of the same opportunities in Southeast Asia that we see in India.3 He concluded his visit to India and Singapore on 27 July, by asserting: “We are, we will remain, a resident Pacific power. Let me say that again. We are, and we will remain a resident Pacific power. And it is in the interests of all nations, especially Pacific nations, that we be there”. 4 The “pivot” strategy announced by President Obama in November 2011 in Australia5 and forcefully articulated by the then US Secretary of State Hillary Rodham Clinton in her article “America’s Pacific Century”,6 in large part, has been driven by China and its growing military and diplomatic assertiveness in the Asia-Pacific region.7 There is, however, a careful attempt not to project this strategy as being targeted towards China, as was also evident during the IndiaSingapore strategic congregation. While in India, Biden rejected the proposition that US-China relationship will either precipitate a new Cold War or lead to the formation of G2. (Sino-US duopoly). He said that both India and the US “have to get our relationship right with China”.8 In Singapore, Biden reiterated that the Islands in East China Sea disputed between China and Japan were a part of the US commitment under its security treaty with Japan. And he urged all the parties to “reject coercion, intimidation, threats and the use of force” and hasten to conclude the pending code of conduct in relation to these disputes.9 Japanese Prime Minister Abe, proposing a 3 4 5 6 7

The Straits Times (Singapore) 26 July, 2013. p. A1. The Sunday Times (Singapore), 28 July, 2013. P.6. President Obama’s address to the Australian Parliament in November 2011. Foreign Policy, November 2011. See an insider’s version on the evolution of the Asia-Pacific “pivot” strategy, Jeffrey A Bader, Obama and China’s Rise: An Insider’s Account of America’s Asia Strategy, Brookings Institution Press, Washington DC, 2012. Biden’s address to the Bombay Stock Exchange in Mumbai, India, on 24 July 2013. http://www.whitehouse.gov/the-press-office/2013/07/24/remarks-vice-president-joe-biden... (Accessed on 26 July, 2013). The Straits Times (Singapore), 27 July, 2013. P. A1.

Sino-Japanese summit on the bilateral territorial dispute “with no preconditions attached” said “we are neighbours and we should meet and try to resolve this”. The Singapore Prime Minister Lee Hsien Loong declared that “Singapore is friends with America; also with India, with Japan, with China and other major powers, and we would like to maintain our good relations with all countries”. 10

Revamping Strategic Partnership with India The significance of Biden’s visit to India was enhanced by the fact that his was the first visit of an American Vice-President in the past 30 years, and he was only the third American VicePresident to do so. Further, Biden’s visit has been in quick succession to that of John Kerry, the US Secretary of State who was in New Delhi only in June 2013, for the annual Indo-US Strategic Dialogue. This underlines the US resolve to maintain high level political contacts with India. In India, Biden set two tasks before him: one to dispel any doubts about the US capabilities to lead the world and remain the strongest economy, and two, address the issues that were holding up greater momentum in the growth of India-US strategic partnership. He told his elite Indian audience at the Bombay Stock Exchange that “America is back, and it has never been a good bet to bet against America…We have had the biggest increase in domestic manufacturing in the past 20 years, 40 months of private sector job growth – we need more and more rapidly, but constant growth. We are now the recipient and we have access to and know how to safely extract over 100 years of natural gas reserves, driving the price of energy down…we will be a net energy exporter…during the decades of the 20s, 2020”.11 In order to give a boost to the slow pace of India-US strategic partnership, Biden picked up four areas, namely, trade ties, energy, defence cooperation and regional cooperation. In the area of energy, he reminded Indians that “I fought so hard in the United States Senate to champion the US-India Civil Nuclear Agreement”, and expressed his disappointment that India had yet to fulfil its part of commitment under that Agreement “to work with American companies as well as you build out those nuclear plants”. He was disappointed that this has not happened as yet. The American companies are unhappy with the “liability clause” in India’s civil-nuclear legislation and want it to be softened. There are, however, hopes that if the current negotiations between the US company Westinghouse and the Nuclear Power Corporation of India bear fruit, the stalemate in this sector will be removed. While General Electric is strongly resistant to the Indian nuclear liability law, Westinghouse seems willing to explore the possibility within the existing law as it already has a nuclear reactor cleared by the United States Nuclear Regulatory Commission to 10 11

Ibid. Biden’s address to Bombay Stock Exchange, op.cit, n. 8. Most of the following references to Vice-President Biden’s statements are from this address, unless otherwise indicated.

meet Indian requirements.12 Biden also emphasised the need for using clean energy to protect environment and fight climate change. He asked India to reduce the emission of hydro fluorocarbons (HFCs) and commit itself to “Montreal Protocols to phase down the production and consumption of HFCs” which China has also now agreed to accede to. On regional cooperation, Biden encouraged India to strengthen cooperation with East Asia through its Look-East Policy as “India is an indispensable part of our rebalance towards the Asia-Pacific”. He also lent his country’s support to an early outreach between Indian and Pakistani Prime Ministers. He said: It‘s not our place to lecture. It’s not our place to dictate. Our relationship will not be defined by India’s relationship to Pakistan. But America and the world have a deep stake in closer ties between India and Pakistan – an incredibly difficult nut to crack, but it’s yours to crack.13 For breaking the lethargy in strategic partnership in the areas of economic and defence cooperation, Biden asked India to enhance trade by removing or lowering India’s barriers to market access and shedding off the old Cold War mind set and bureaucratic procedures. The impressive growth in India-US trade was acknowledged. In all, the US exports to India have grown 491 per cent since 2000, of this the export of non-military commercial services to India account for a growth of 351 per cent. The total Indo-US trade which stood at US$ 9bn in 1995 was almost US$ 100bn in 2012. But it was underlined that this was far below the potential that the two countries have in bilateral trade which can be enhanced at least five-fold. To harness this potential, Biden asked India to remove the “obstacles that exist”. These obstacles were: “protection of intellectual property, requirements that companies buy local contents, limits on foreign direct investments, inconsistent tax treatment, barriers to market access”.14 Biden was obviously voicing the concerns of the American companies, particularly in multi-brand retail sales and pharmaceuticals sectors. In doing so, he accepted that, in democracies like India, it was not easy to ignore domestic stake holders. In his words, “The instinct to protect your industries is fully comprehensible and easy to understand…Now look, I understand – believe me – how making even the most modest of changes of opening your markets impacts on interest groups. It happens in my country and it clearly happens in yours”.15 The US side should however, also understand that the American companies are rather rigid and selfish in dictating their terms of engagement. Wal-Mart, for example, was insisting that India open its multi-brand retail market; and after India taking that bold step, is now asking that the 30 12

13 14 15

Ajai Shukla, “Biden visit reveals potential and pitfalls of US-India ties”, Business Standard, (New Delhi), July 25, 2013. Speech at the Bombay Stock Exchange, op.cit. n.8. Ibid. Ibid.

per cent limit be lowered to 21 per cent of sourcing local Indian products. Why can’t Wal-Mart accept the limit already set in the offer? Similar is the case with some of the pharmaceutical companies of the US with regard to their patented products. What appears to American companies as excessive barriers to market access are, from India’s point view, essential measures to avoid the recurrence of experiences that India has had earlier with some of the American companies like the Union Carbide (The Bhopal gas disaster) and Enron. India also has its own issues where it needs a sympathetic understanding from the US side. The question of immigration is one such issue where a restrictive visa regime is now being put in operation in the US. This will seriously affect the Indian Information Technology (IT) companies and also the US corporations dealing in the IT sector. The President of Indian IT giant NASSCOM has addressed an open letter to the US authorities in this respect.16 Biden’s assurances to ease some of the visa hardships for the Indian IT professionals will be keenly awaited, for actual delivery. Biden invited India to join the Trans Pacific Partnership (TPP) in trade and economic cooperation and hoped that India and the US would soon conclude their negotiations on a Bilateral Investment Treaty. In defence cooperation, there is a standing promise, since last year, made by the US Deputy Secretary of Defence Ashton Carter that the buyer-seller relationship in defence products with India will be upgraded to the one of joint development and production. Five co-production projects (Seahawk naval multi-role helicopters, anti-tank missiles, 127-mm naval gun, and two other projects)17 have been proposed by the US, for which India has not yet given its full response. India is weighing these proposals in the light of its specific defence needs and the terms of joint production offered. The Indian negotiators often cite the most favourable terms in the joint production of sophisticated weapons systems offered to them by the former Soviet Union, and this irks the US side. The frequent use of phrases like “strategic autonomy” by the Indian side also does not go well with the US in defence negotiations. To meet India’s concerns in this respect, Biden assured: “although we are already helping India meet its defence needs – we can significantly increase our defence cooperation by what it already is without in any way compromising each other’s sovereignty”.18 The lingering trust deficit in India’s security establishments in relation to the US also gets complicated by US reliance upon Pakistan in relation to the end-game in Afghanistan. Biden hopefully assured his hosts in New Delhi at the highest political level that no deal will be cut with the Taliban in Afghanistan through Pakistani facilitation unless the Taliban “break with Al Qaeda permanently, stop the violence, accept the Afghan Constitution and guarantee free and equal treatment for women”.19 There were also media reports suggesting that Biden was to leave a firm message in New Delhi that the days of 16 17 18 19

The Times of India (New Delhi), 24 July 2013. Ajai Shukla in Business Standard, op.cit, n.12. Bombay Stock Exchange address. op.cit, n.8. Ibid.

Pakistan being the US’ “favourite friend in South Asia” are over.20 How credible such assurances will turn out to be remains to be seen.

Summing Up No new agreements or commitments were expected during Biden’s visit to India and none were concluded. After all, the issues raised by Biden had also been raised by Kerry and were discussed in detail in the structured bilateral strategic dialogue. They will be further taken up at the highest political level when India’s Prime Minister Manmohan Singh visits the US later this year. There are in fact no major problems in the Indo-US strategic partnership which stands on a firm political ground. This partnership has entered a phase where concrete interests of the two sides in vital areas of economic and security cooperation have to be harmonised. No perfect harmony in this respect is possible, nor should it be expected; but creative compromises and mutual win-win deals are possible and will be forthcoming. This will take time, continued commitment and serious efforts, as both countries are functional democracies with robust institutional identities and interests. US Vice-President Joe Biden’s visit will surely go a long way in preparing the ground and smoothening the ways through which many of the conflicting bilateral interests can be moderated and synergised. .....

The New York Times, 23 July, 2013.

ISAS Insights No. 218 – 2 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Birth Pangs of ‘Telangana State’ in India S Parthasarathy1

The creation of a new southern Indian state of Telangana, consisting of 10 districts, has at last been announced. The new state is to be carved out of the 23 districts in the present state of Andhra Pradesh. It has taken over 50 years for the Telangana demand to be conceded, perhaps the longest time taken in similar cases in post-colonial independent India. It will be the 29th state in the Indian Union. In its long journey to statehood, Telangana’s path has been strewn with agitations marked by violence, sacrifices and setbacks. The student community in recent years played a big role in the successful outcome and have been at the forefront of the movement. One is tempted to draw a parallel with similar contemporary movements elsewhere. The Government of India has settled one set of issues but there are many more issues awaiting resolution, covering a wide gamut of political, economic, constitutional, and administrative aspects. Before we analyse these issues, we should look at some basic facts concerning the new state, compared with the residual state of Andhra Pradesh (by this or some other name).  While the residual Andhra Pradesh would be the 8th largest state in the country, Telangana will be the 12th largest.

Mr S Parthasarathy is a former officer of the Indian Administrative Service (IAS). He can be contacted at iieaer@yahoo.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

 Andhra Pradesh would spread over an area of 1.60 lakh sq.km while Telangana would have an area of 1.14 lakh sq km.  Telangana’s population would be about 3.5 crore while that of Andhra Pradesh would stand at 4.9 crore. Source: Deccan Chronicle 31 July 2013. (10 lakhs make a million, and 10 millions make a crore.)

These facts will set at rest the comment about Telangana being a small state to be treated on par with Uttarakhand, Jharkhand, Chhattisgarh etc.

Constitutional and Economic Issues at Stake The process leading to formal statehood for Telangana requires at some stage a response from the existing Andhra Pradesh Legislative Assembly, before a relevant resolution is tabled in the Indian Parliament. The likelihood of a positive response from the Andhra Pradesh Legislative Assembly is anybody’s guess, given the lack of consensus within that legislative chamber. There is already an undercurrent of protest from the anti-Telangana wing of the ruling Congress party in the legislature. Whether the reference to the Andhra Pradesh Assembly will be treated as merely a consultative process, or one requiring concurrence, is a matter of popular debate. Constitutional pundits opine that this is a consultative process and it will be for the Parliament to decide on the Assembly’s views. It is somewhat ironic to reflect on a similar development in Uttar Pradesh some years ago where a resolution was passed by the Uttar Pradesh Assembly for the division of that state into four parts, a resolution that is gathering dust in the Ministry of Home Affairs of the Central Government. Another interesting constitutional question that has been raised in the case of Andhra Pradesh (but not satisfactorily answered) is: in the event of a governmentintroduced resolution endorsing the formation of Telangana being defeated in the Assembly, will a constitutional crisis ensue, leading among other things to President’s Rule (rule by the Centre) being imposed on the existing state? These are issues that have a bearing on the federal structure laid down in the Indian Constitution. There are a number of economic and administrative issues, like river-water sharing, power generation and distribution, creation of separate administrative cadres and equitable allocation of financial resources which are complex in nature. These have been sorted out in the past when other states were formed and can therefore be handled comfortably. If one goes back over time and reflects on how such issues were handled following the partition of British India in 1947, one is encouraged to believe that these are localised issues which pale by comparison.

Twin Capitals A peculiar complication has been caused by the announcement that Hyderabad would be the respective capitals of both Andhra Pradesh and Telangana for a period of 10 years. It would have been better if this temporary period had been limited to three years by which time a new capital for Andhra Pradesh could be made ready. Hyderabad should have been left with Telangana because of its geographical contiguity and positioning with the rest of Telangana. Andhra Pradesh’s access to Hyderabad will now have to be through a corridor slicing through Telangana districts. This will inevitably create issues about movement of goods and people and levy of state taxes. In looking at this decision of a shared capital city, the comparison with Chandigarh is not apt, since Chandigarh can be accessed through Punjab and Haryana without either intruding into the other’s territory. A 10-year arrangement is going to be difficult to work out. I am sure the Andhra Pradesh policy makers are alive to this and will work on the new capital with expedition and vigour as this would give them a more centrally located and easier-to-operate location. Apparently (and this is guesswork) the retention of Hyderabad as a shared capital is perhaps partly motivated by the fact that entrepreneurs from coastal Andhra (in the territory of the proposed residual state) have invested in Hyderabad in real estate development, capital, and business enterprises since the existing state was created in 1956. This however is not a compelling argument, if you examine the case of Bombay (now Mumbai) when Maharashtra and Gujarat were formed as neighbouring states in western India. The policy makers had then set aside the special pleading that Gujarati businessmen had invested heavily and therefore had high stakes in Bombay. The geographical location of Bombay inevitably and logically placed it in Maharashtra.

Concerns over Maoism, Secularism, and National Cohesion There are apprehensions that the advent of Telangana as a state would be accompanied by an upsurge in Naxalite (Maoist) violence, somewhat on the analogy of the central Indian state of Chhattisgarh after its creation. Added to this, are the fears of the minority Muslim community based on the possibility of the Bharatiya Janata Party (BJP) dominating the politics of Telangana. Time alone will tell whether these fears are justified. One thing is clear. The decision on Telangana will lead to the vigorous pursuit of similar demands simmering in other parts of the country (Gorkhaland in West Bengal, Harit Pradesh in Uttar Pradesh, Bodo Land in Assam, Vidarbha in Maharashtra etc). If Sardar Vallabhbhai Patel, a leader of India’s freedom struggle, had ably managed the integration of princely states with the newly independent India in the late-1940s, one cannot help reflecting on how busy Indians are in breaking his creative work into fragments now. Whether this will lead to a rapid balkanisation of the country, no one can tell as yet.

Route to the New State What then now? The road to Telangana statehood is expected to take seven months to traverse, according to one reliable estimate. This process will involve 12 steps. 1) Refer the new-state proposal to the existing Andhra Pradesh state legislature. 2) Preparation of a Cabinet note at the Centre, based on the existing state government’s proposal. 3) A newly constituted Group of Ministers (GOM) at the Centre to examine the economic issues arising from the move to create Telangana. 4) Preparation of a Cabinet note at the Centre, along with a re-organisation bill, based on advice from the GOM. 5) Central Cabinet’s approval for Telangana state bill and recommendation to the President of India to refer the draft bill to the existing Andhra Pradesh legislature. 6) President’s recommendation. 7) State Assembly and Legislative Council’s consideration of the bill. 8) Vetting of the bill by the Ministry of Law at the Centre. 9) A Central Cabinet note, along with the vetted bill, to be approved by the Cabinet. 10) Notice for the introduction of the vetted bill to be given by the Home Ministry to the Lok Sabha /Rajya Sabha (the two Houses of India’s Parliament). 11) Passing of the bill by the Lok Sabha / Rajya Sabha by a simple majority. 12) President’s assent, after the bill is passed by both Houses of Parliament. Source: Deccan Chronicle 31 July 2013

The long road ahead as sketched here will not be without some difficulties. Telangana Rashtra Samithi (TRS) party, which was in the vanguard of the movement for this new state, is therefore not celebrating as yet, waiting for India’s Parliament to put its stamp of approval on the bill. For the same reason, silence reigns on the expected merger of TRS and the Congress party, which is a trump card sought by the Congress to do well in the general election of 2014. Their political rivals suspect and allege that this reasoning underlies the Telangana decision itself. Political expediency rules the roost as always!

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ISAS Insights No. 219 – 14 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Reading the West Bengal Panchayat Poll Results Ronojoy Sen1

Elections to the panchayat – comprising the three tiers of village, block and district of a state in India – often go unnoticed at the national level. That the recent panchayat elections in West Bengal, which were won convincingly by the governing Trinamool Congress Party, made news is due to several reasons. For one the state is seen as one of the success stories of the panchayati raj or decentralised rule in India. Unlike most other Indian states, West Bengal has held regular panchayat elections since 1978. This time around, however, the run-up to the elections was marked by uncertainty and acrimony. There was an unseemly tussle between the Trinamool Congress government in West Bengal and the State Election Commission over the poll dates and use of federal security forces. Eventually the Supreme Court had to step in, ruling that the elections must be held in five phases — a common practice for national and state-level polls but unheard of in panchayat elections — from 11 July to 25 July, and in the presence of 15,000 federal security forces for the first two phases, 25,000 for the next two and 2,000 for the last. Such unprecedented steps were taken on the plea of the state election body which feared violence during the elections.2

Dr Ronojoy Sen is Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasrs@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. The Hindu, June 29, 2013.

Despite the security arrangements, the elections were marred by violence, casualties and allegations of malpractice. The electoral campaign was also tarnished by verbal attacks of Trinamool leaders on the state poll panel and intimidation of the opposition. For example, a district president of the Trinamool Congress urged his supporters at a public meeting not to allow the opposition to field candidates. Another Trinamool leader called for the beheading of a political rival.3 If the election rhetoric of the Trinamool Congress was disappointing, the election results were a resounding success for the party. At the highest tier of the three-tier election, the Trinamool won in 13 of the 17 districts.4 At the next two tiers too the Trinamool won convincingly. The Communist Party of India (Marxist) [CPI(M)]-led Left Front, which had governed the state for a record 34 years before it was voted out in 2011, won only one district. The Congress party too could only win in one district. The remaining two districts threw up hung verdicts.

A Barometer of Rural Support The results were clear evidence that the popular wave that swept the Trinamool Congress to power in 2011 remains intact in rural Bengal. The panchayat elections had always been a reliable guide to the rural support enjoyed by Left Front in its three decade-plus stint in power. Indeed, the last panchayat election in 2008 was the first indication of the cracks in Left Front rule. Then the Left Front’s vote share had dropped to 52 per cent from previous highs which had gone up to 90 per cent.5 The situation has been reversed to the extent that the Left Front is struggling to gain a foothold in vast swathes of rural Bengal where it was once dominant. The reversal is so complete that in 14 per cent of the constituencies the Trinamool won uncontested since the Opposition could not even put up candidates. This was a throwback to the days of Left Front dominance when the opposition parties could not muster the will or the strength to put up candidates for many seats. Only this time it was the Left Front that was at the receiving end. What is disconcerting, however, is the high level of violence in rural Bengal. During the tenure of the Left Front, the CPI(M) and its partners were not averse to resorting to violence in the countryside and had an iron grip on social institutions. Analysts have termed this phenomenon the “party-society” where rural life was inconceivable without the CPI(M).6 Indeed this was one of the key elements of the Left Front’s success in holding on to power for so long in West 3

4 5 6

Kumar Rana, ‘2013 Panchayat Elections in West Bengal – A Role Reversal?’ Economic and Political Weekly, July 27, 2013. The Hindu, August 2, 2013. Rana, ‘2013 Panchayat Elections in West Bengal – A Role Reversal? Dwaipayan Bhattacharyya, ‘Of Controls and Factions: The Changing Party-Society in West Bengal,’ Economic and Political Weekly, February 28, 2009.

Bengal. With the tide having turned against the Left, the rural elites as well as lumpen elements have shifted allegiance to the Trinamool. The Trinamool has proved to be a good student of the Left Front and is in many ways replicating the latterâ&#x20AC;&#x2122;s tactics in rural Bengal. While this might foretell a bleak future for West Bengal, the Trinamoolâ&#x20AC;&#x2122;s fortunes are likely to be on the upswing in the near future. The support for the party in the countryside will have a positive impact on its showing in the general elections due in 2014. Opinion polls predict that the Trinamool will increase its tally to 22 seats in the Lok Sabha.7 There are others who believe that the number could be even higher. Currently it sends 19 MPs to the Lower House of Parliament

Implications for National Polls Given the predictions for a hung Parliament in the next general elections, the Trinamool is likely to play a key role in the formation of government. Two recent opinion polls have predicted that the Congress-led United Progressive Alliance (UPA) and the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) will both fall well short of a majority. The one conducted by the Centre for the Study of Developing Societies (CSDS) predicts a maximum of 180 seats for the NDA and 153 for the UPA.8 This would make the Trinamool one of the key players in formation of the federal government. The Trinamool, because of its large Muslim support base, is more likely to ally with the Congress despite having earlier pulled out of the UPA. It must however be kept in mind that the Trinamool was at one time part of the Prime Minister A B Vajpayee-led NDA. There is also the distinct possibility of a Third Front with the CSDS poll indicating parties currently not with either the UPA or NDA will win over 200 seats. Here too the Trinamool with 20-plus seats could play a decisive role. In the past few months, Trinamool Congress chief Mamata Banerjee has been an enthusiastic votary of a Third Front. The violence around the panchayat elections does not bode well for West Bengal. Indeed, the Trinamool has not yet been able to deliver on most of the promises it held out when it rode to power in 2011 on a mandate of poriborton or change. But with the rural voters solidly backing it, the partyâ&#x20AC;&#x2122;s hold on power is likely to remain firm in the medium term. .....

7 8

The Times of India, July 30, 2013. The Hindu, July 26, 2013.

ISAS Insights No. 220 – 14 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

John Kerry’s Islamabad Visit: A Possible Thaw? Shahid Javed Burki1

Abstract With a new government in place in Islamabad and with the United States needing Pakistan’s help in winding down its operations in Afghanistan, there is some hope that relations between the two countries can be restored to some kind of normalcy. This was the expectation that took the US Secretary of State John Kerry on a two-day visit to Islamabad on 30-31 July 2013. Judging by the statements made by the two sides, it appears that the downward slide in relations that began in January 2011 has been arrested but much remains to be done. This paper explores what was achieved during the Kerry visit and what kind of trajectory the two countries are likely to follow as they move forward.

John Kerry was familiar with his principal interlocutors in Islamabad. He had met Prime Minister Nawaz Sharif during the many visits he made to the country before taking up the position of Secretary of State in the second Obama administration. He had visited Sharif at his residence at Raiwind near Lahore. Sartaj Aziz, the Prime Minister’s Special Advisor for External Affairs and National Security, was well-known to Kerry since he had served as Foreign Minister in the second Sharif administration. Kerry called on General Ashfaq Kayani during his earlier visits especially when he was sent by President Obama to secure the release of Raymond Davis, a Central Intelligence Agency operative who had killed two Pakistani young men in broad daylight on a busy Lahore street. It was the “Raymond Davis” incident in January 2011 that had sent relations between Washington and Islamabad spiralling downwards. There were several items on the agendas drawn up by the two sides. The Americans went to Islamabad with three concerns. Pakistan had many more. Washington wanted Pakistan to make the American pullout from Afghanistan less troublesome for them. This meant that Islamabad had to move on a number of different fronts. The easiest of these was for Islamabad to keep its communication network open and operational while a large amount of heavy equipment they had accumulated in the country over a period of a decade was pulled out. According to some estimates this equipment was worth $60 billion and the cost of taking it back home was about $6 billion. While Islamabad was happy to help it was concerned that the movement of heavy vehicles would do serious damage to the Pakistani roads. It wanted Washington to provide Pakistan with the resources that would be needed to keep the system operational.

America’s Prime Concern Most important for the American side was the continuous harassing of their troops by the militant groups who operated from the Pakistani side of the Afghan border. The activities of the Haqqani group that had a sanctuary in Pakistan’s tribal agency of North Waziristan were especially worrying for the United States. Washington had been pressuring Islamabad for years to move against this group. According to an account by David Sanger in his recent book Confront and Conceal, the Obama administration had gone to the extent of giving an ultimatum to Pakistan that if an operation carried out by the Haqqanis caused American deaths, Washington would move its troops into North Waziristan in an effort aimed at taking out the camps used by the group for training and mounting attacks.2 Pakistan had resisted this pressure in the belief that in post-America Afghanistan, the Haqqanis would of help to protect its strategic interests in its north-western neighbour. The only solution to this conflict of interests was to provide Pakistan with a seat at the table as Afghanistan’s political future was discussed in the promised negotiations between the 2

David Sanger, Confront and Conceal: Obama’s Secret Wars and Surprising Use of American Power, New York, Broadway Books, 2013, p. 23.

warring sides – the government in Kabul led by President Hamid Karzai and the main Taliban group headed by the Pakistan-based leader, Mullah Mohammed Omar. The attempts to begin negotiations got stalled in June when the Taliban gave the indication that the office they were allowed to open in Doha, the capital of Qatar, would be used as a quasi-embassy of the Islamic Emirate of Afghanistan, the name they had given to their country when they governed for five years (1996-2001). This was acceptable neither to the government in Kabul nor indeed to Washington. Kerry wanted Pakistan to help out with Mullah Omar’s group, implying that the Inter-Services Intelligence (ISI), the country’s premier spy agency, had considerable influence with the former ruler (Emir) of Afghanistan. Islamabad was not prepared to acknowledge that it maintained a working relationship with the group. The second issue for the American team was the use of drones as the weapon of choice by Washington in the various conflicts in which it was now involved. Initially Pakistan had agreed to this strategy to the extent of allowing the Americans to build a base from which these unmanned vehicles could be operated. The base was located at Shamsi, in the province of Baluchistan. Islamabad ordered the closing of the base as its relations with the United States deteriorated in 2011 to the point that a number of tit-for-tat policies were adopted by the two sides. In the campaign leading up to the elections of May 2013, the use of drones and the civilian casualties that had been caused by then had become an active issue. Nawaz Sharif in his campaign promised that if he came to power he would have the Americans stop their drone operations. He reiterated this policy stance in his first speech to the National Assembly after being sworn in as Prime Minister.

The Drone Dilemma Pakistan has borne the brunt of the drone war. According to the Bureau of Investigative Journalism, drone strikes had killed 3,136 people between 2004 and 2012, mostly in Pakistan’s tribal areas. Among those were 555 civilians, including 185 children. The Washington-based New America Foundation also keeps a count of the attacks. According to it, the peak of the operation aimed at Pakistan was in 2010 when the tribal areas were struck 122 times. The number of strikes began to decline after this peak. There were 73 in 2011 and 48 in 2012.3 There were only 16 strikes in 2013 up to the time of the Kerry visit.4 It was not clear whether this decline was because of the Pakistani concerns or because the United States had run out of high-value targets. In a speech in April 2013, President Barack Obama laid down a new policy for the use of drones, indicating that the use would be restricted. Pakistan’s tribal areas, he said, would continue to be targeted. In an interview to a Pakistani TV channel, Kerry seemed to indicate that the “drone war” on Pakistan would soon be over. “I believe that we’re on a good track. I think the program will end as we have eliminated most of the threat”. Asked if the United States had a “timeline” for the ending the drone strikes, Kerry said: “Well, I think so. And I think the President has a very real timeline, and 3 4

New America Foundation, “The Drone War in Pakistan”, 8 July, 2013, Washington DC. Matthew Lee, “Kerry in Pakistan to discuss drones and Afghanistan”, The New York Times, 31 July, 2013, p. A11.

we hope it is going to be very, very soon”. But he did not specify what the timeline was. A State Department statement issued later clarified what the Secretary wanted to indicate. “Today the Secretary referred to the changes that we expect to take place in that program over the course of time, but there is no exact timeline to provide”.5 A couple of days after Secretary Kerry left Pakistan, a drone attack killed two motorcycle riders in North Waziristan, drawing a rebuke from Prime Minister Nawaz Sharif. Addressing a meeting of businessmen in Faisalabad, he said that the United States must respect Pakistan’s sovereignty and stop all attacks immediately. John Kerry was also interested in having Pakistan move decisively against the various groups that had taken up arms against the Pakistani state, using extreme forms of violence to pursue their interests. Washington, fearing that some of these groups could target its assets across the globe wanted Islamabad to move against those who were particularly opposed to the United States. Once again the Taliban and the Haqqanis were of special interest for the Americans. While Islamabad shared the US’s concerns about domestic terrorism, the new administration was still engaged in finding the right balance between negotiations and the use of force. The terrorist groups were testing the resolve of the government headed by Nawaz Sharif. In the two months since he had assumed office, dozens of attacks were launched by several different groups claiming more than 200 lives.

Pakistan’s IMF Imperative High on the Pakistani agenda was the help the United States could give the country so that it could pull out of the economic recession that had lasted nearly six years – the longest in its history. Washington had been a major provider of assistance to Pakistan. It had also helped the country with the international financial and development institutions. Islamabad had concluded the first phase of discussions with the International Monetary Fund in June. The institution’s staff was planning to go to its board for an Extended Fund Facility programme that would provide the country with more than $5 billion of long-term assistance. The Pakistanis also took up with Secretary Kerry the question of sluggish disbursements from the amounts the United States had committed to Pakistan under a bill he had piloted through the US Congress. Called the Kerry-Lugar-Bergman Bill it was signed into law by President Obama in October 2009. Its aim was to provide Pakistan with $4.5 billion grants at the rate of $1.5 billion a year over a period of five years. Since in the American financial system the executive branch proposes while the legislature disposes, funds had not flowed from Washington to Islamabad at the envisaged pace. Pakistan was not a popular country on Capitol Hill. There were two concrete outcomes of the Kerry visit. He delivered an invitation to Prime Minister Nawaz Sharif on behalf of President Obama, to visit Washington. The two sides also 5

Michael M. Gordon, “Kerry in Pakistan expresses optimism on ending drone strikes soon”, The New York Times, 31 July, 2013, p. 11.

agreed to resume the strategic dialogue between the two capitals that was suspended when relations soured in 2011-12. There was an expectation that the items covered in the talks in Islamabad would receive more thorough treatment in the revived dialogue. Kerry seemed to link the resumption of the strategic dialogue with Pakistan to greater effort by Islamabad against the terrorists operating in the country. “Choice for Pakistan is clear”, he told the press: “It would be very unfortunate if the forces of violent extremism be allowed to grow more dominantly, overpowering the moderate majority. Addressing the threat by cross-border militancy is a key aspect of our strategic dialogue”.6 The importance Kerry had attached to efforts by Pakistan to curb extremism was underscored by the attack carried out by a group of militants on a jail in Dera Ismail Khan, a city in south Punjab on the province’s border with Khyber-Pakhtunkhwa. The attack took place on the eve of Kerry’s visit and led to the freeing of hundreds of prisoners including some Taliban who were serving jail-terms for carrying out terrorist activities in the country. About the same time as the attack in Dera Ismail Khan, there were also attacks on the jails in Iraq and Afghanistan also leading to the release of prisoners. There was some speculation in the Western press whether these were coordinated operations linked with Al Qaeda and were the reason why the United States issued a high alert to its citizens travelling in many parts of the Muslim world. Washington also took the extraordinary step of closing 22 of its embassies around the globe on 4 August, indicating that the “chatter” it had picked up on the various communication channels pointed to the possibility of an attack on that day. Since the primary purpose of the talks was to produce a thaw in relations, Secretary Kerry’s visit can be termed as successful. The American side took note of the fact that Prime Minister Sharif, a devout Muslim, had postponed his visit to Mecca by a day to accommodate Kerry’s schedule. The Mecca visit, coming during the last ten days of the holy month of Ramadan, held special significance for the Pakistani chief executive.

.....

Quoted in Baqir Sajjad, “US agrees to revive strategic ties, but with a caveat”, Dawn, 2 August, 2013, p.1.

ISAS Insights No. 221 – 14 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

The Changing Moods on the Sino-Indian Front P S Suryanarayana1

Abstract The goodwill call by a Chinese naval hospital-ship at India’s Mumbai port on 8 August 2013 has followed the Sino-Indian agreement on “an early conclusion of negotiations” for a border defence cooperation pact. These two developments have occurred in the context of a serious episode of military standoff in April-May and the Chinese Premier’s subsequent visit to India. These changing dynamics in the Sino-Indian relationship are explored in the light of China’s military prowess and India’s concerns.

Introduction: Fragile Dynamics Globally there is general consensus that the most important relationship between any two countries is the evolving equation between the United States and China. This is believed to be true as of now and into the foreseeable future. Within Asia, however, it is not easy to determine the most important bilateral relationship. Such a dilemma overarches the fact that there is no doubt whatsoever about the centrality of China to the politics and economics of this continent. The tenuous Sino-Japanese relationship does cause concern to many countries and peoples in Asia. Not widely recognised, though, the fragile dynamics of a progressively intense dialogue between China and India are equally relevant to peace and stability in Asia now and into the future.

Mr P S Suryanarayana is Editor (Current Affairs) at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

The reason is not far to seek. Both China and India are nuclear-armed and space-faring neighbours with a hugely unresolved border dispute. In this broad context, the recent meeting between India’s Defence Minister A K Antony and his Chinese counterpart Chang Wanquan in Beijing on 6 July 20132 was really significant on two counts. First, the defence ministers were meeting in the shadow of a military standoff between the troops of these two Himalayan neighbours. Although the standoff did not flare up into a firefight, it caused considerable international concern. Surely, the standoff, which began in midApril, was defused several weeks later through diplomatic and military channels at the bilateral level. In a sense, such a development cleared the diplomatic air considerably before the new Chinese Premier Li Keqiang’s visit to India between 19 and 22 May. Unsurprisingly, therefore, Mr Li held what turned out to be an unusually productive summit with his Indian counterpart Manmohan Singh.3 The military standoff had occurred at a spot in the Depsang/Tianan section along the undelineated Line of Actual Control in the disputed Sino-Indian border area. Bewildering the international observers the standoff had actually followed a cordial and positive meeting between the new Chinese President Xi Jinping and Dr Singh.4 Viewed in this perspective, Mr Antony’s meeting with General Chang has sent out a political signal. Hopes have been raised that these two Asian mega-state neighbours may have now risen above and gone beyond the bitterness of their recent border standoff.

‘Border Defence Cooperation’ Talks Flowing from such an interpretation is the second and more important aspect of the ChangAntony talks. This is fully reflected in the Joint Statement they issued after their meeting in Beijing on 6 July. At stake is the issue of maintaining peace and tranquillity along the disputed Sino-Indian border, pending a final settlement of the basic dispute. The two defence ministers “agreed on an early conclusion of negotiations for a proposed agreement on border defence cooperation between the two Governments”.5 Even a bare outline of the proposed accord with India, Beijing’s initiative, has not been spelt out so far in an authoritative fashion in the public domain. Relevant, however, is the track record of China in having signed similar agreements with some of its other neighbours. This has caused much speculation. Some Indian analysts argue that New Delhi should not sign a border cooperation pact with China in the absence of a final settlement of the basic border dispute itself.

3 4

Chinese Foreign Ministry Spokesperson Hua Chunying described Mr Antony’s visit as “an opportunity to enhance mutual trust and understanding between the two militaries”. http://www.chinaun.org/eng/fyrth/t1057224.htm Accessed on 23 July 2013 ISAS Insights No. 206 - 3 June 2013: An Unusual Sino-Indian Summit and After, by P S Suryanarayana ISAS Insights No. 204 - 10 April 2013: India-China Talks: Full-Scope Security is Potential Issue, by P S Suryanarayana Chinese Ministry of National Defense, Full text of joint statement by Chinese, Indian defence ministers, http://eng.mod.gov.cn/DefenseNews/2013-07/07/content_4457638.htm

There is fear in some non-official Indian quarters that the Chinese proposal might only have the effect of freezing India’s current military fire-power at its current level along the LAC. In the eyes of many, the density of India’s military deployments along the LAC falls far below that of China’s on its side of the disputed frontier. Obviously, however, the Indian officialdom does not share this view. Having already exchanged draft pacts with China in this regard, India thinks that the relevant issues could be negotiated to mutual satisfaction. This is the only possible rational explanation of Mr Antony’s consent to “an early conclusion of negotiations”. China’s joint statements with other powers in general, and India in particular, are usually replete with emphatic utterances about the “need” for one or other course of action. So, the latest announcement of an actual agreement favouring “an early conclusion of negotiations”, albeit in a limited sphere, is of unusual significance. In this respect, the Chang-Antony Statement goes way beyond the “additional exchanges and visits”6 that the two leaders agreed upon for the coming months. Quickly beginning to implement this new accord on heightened military exchanges, China sent its naval hospital-ship, ‘Peace Ark’, to Mumbai for a goodwill call. The officers and men of the ship were hosted a ceremonial reception by India’s Western Naval Command on 8 August. China had tasked the officers and men to “aim at contributing to cooperation between the two sides in non-traditional security”7 areas. In the longer run, however, the overall mil-to-mil ties between India and China will be determined by their relative strengths, going forward. It hardly needs to be emphasised that India trails China in their overall military capabilities as of now. The reality is marginally moderated, not absolutely altered, by the views of international experts that India has had an earlier start over the Chinese in its efforts to deploy a blue-water navy. On the whole, instructive is David Shambaugh’s concise assessment of China’s current military capabilities.

Chinese Military’s Global Rank In his 2013 book, China Goes Global The Partial Power, David Shambaugh has this evaluation: “Thus far China’s global security presence has not evolved in the ‘traditional’ great power manner of establishing alliances, acquiring bases and dispatching troops abroad, building global power projection capabilities, sailing its navy around the world, coercing others, or fighting in conflicts directly or via surrogates. At the same time, China has been steadily improving and expanding its military capabilities over the past two decades and, by some measures, can be considered to possess the No. 2 military in the world today”. 8 A counter-argument is indeed possible. Such a sweeping assessment lends itself to a poser whether China or indeed post-Soviet Russia (which is still a nuclear superpower) has the No.

6 7

Ibid Chinese Ministry of National Defense, India welcomes Chinese hospital ship, “Peace Ark”, http://eng.mod.gov.cn/DefenseNews/2013-08/08/content_4461137.htm David Shambaugh, China Goes Global The Partial Power, Oxford University Press 2013, p. 269

2 military in the world. However, it is indisputable that India’s current military profile does not measure up for this exalted position. Shifting the focus from Beijing’s strengths to its relative weaknesses, David Shambaugh, a veteran Sinologist, has presented the other side of China’s military as follows: “Other than cyber warfare, its space program, and intercontinental ballistic missiles, it has no global power-projection capabilities. To be certain, these are not insignificant capabilities, but China’s air and ground forces cannot operate away from China’s immediate periphery, and the naval forces have very limited deployment capacity beyond China’s ‘near seas’. When China had to evacuate 35,000 civilians from Libya in 2011, it had to rely completely on leased ships, ferries, and civilian aircraft from neighbouring countries – as it did not have the air or naval capacity to deploy that far and did not possess military base arrangements in the Mediterranean region”.9 In his overall view, “China is a partial power”10 in the military/strategic domain. Such a judgment, arguably true in the Sino-US context as of now, is of no solace to the Indian military establishment, though. Surely, India does pursue a vigorous space programme with civil and military applications. New Delhi is also actively seeking capabilities in developing and deploying ballistic missiles, including “intercontinental” delivery systems.11 However, what is more relevant to India are China’s formidable military coefficients – even as an arguably “partial power”.

China, India Reach for Space It may not be out of place to quote David Shambaugh again, because of his well-known expertise on China’s military prowess. Citing data-sources ranging from China’s State Council Information Office in 2006 to the Pentagon in 2010, he sums up Beijing’s outreach to the new frontier of space as follows: “China sent its first satellite into orbit in 1970 and since that time has launched nearly 130 satellites, currently with 69 in orbit. China also has an active anti-satellite weapons program, as demonstrated in 2007 when it shot a meteorological satellite out of low earth orbit with a ballistic missile. As the U.S. Department of Defense 2010 report on the Chinese military noted, ‘China is developing the ability to attack an adversary’s space assets, accelerating the militarization of space.’ The United States is very concerned about this growing Chinese anti-satellite capacity, given the heavy reliance of the U.S. military and intelligence community on such space-based assets”.12 In terms of terrestrial military prowess itself, “the Chinese military has not yet gone global”. 13 But “it remains an Asian regional military power and strategic actor to be reckoned with, and its

9 10 11

12 13

Ibid., p. 270 Ibid ISAS Brief No. 238 – 23 April 2012: Beyond the Sparks and Fumes of India’s Agni-V Test, by P S Suryanarayana David Shambaugh, China Goes Global The Partial Power, Oxford University Press 2013, p. 296 Ibid., p. 269

strengthened strategic posture is affecting the balance of power throughout the Asia-Pacific region”.14 The encapsulated data of this order shows that India, which trails China in the outer space except for having sent a successful unmanned mission to the Moon, must feel concerned. In terrestrial terms too, China’s dominating relevance to the Asia-Pacific balance of power, now and into the future, is of material consequence to India’s own rising military profile. Significant, therefore, is the latest Sino-Indian move to aim at “an early conclusion of negotiations” on a border defence cooperation pact. The two sides have already in place a series of military-related confidence-building measures (CBMs) with reference to peace along the undefined LAC in the disputed border area. And, a Working Mechanism, one of a host of relevant Sino-Indian task forces (no military-oriented pun intended), met on 25 July in the context of the earlier Chang-Antony talks. The Sino-Indian border dispute and the related matters of peace and tranquillity are conspicuous in the public domain, even in the absence of details about the bilateral parleys. Far less known, however, is the actual state-of-play in regard to the issue of deterrence in the China-India nuclear-security domain, a matter of their atomic weapons and their deployments. As of now, there is no official dialogue between India and China on their nuclear-security doctrines, postures, and plans. A series of Sino-Indian CBMs, possible but not necessarily feasible right now in this domain, has been spelt out by former Chinese Ambassador to India, Cheng Ruisheng; Professor Zhang Li at Sichuan University; and Ma Jiali, Executive Deputy Director of the Centre for Strategic Studies at the China Reform Forum. Expressing their personal views, unrelated to their affiliations, they have written as follows: “China and India maintain a number of identical stands on the issue of nuclear arms control and disarmament. ... Both sides also reaffirmed [in December 2010] their firm opposition to the weaponization of and an arms race in outer space. Enhanced cooperation on [such] points of synergy should be explored”.15

A Nuclear Common Ground On the tricky issue of the nuclear-armed India remaining outside the Nuclear NonProliferation Treaty, these three Chinese experts have called for unspecified innovative ideas. “On the question of India’s nuclear status, China articulated a flexible attitude in 2008, so that the resolution to lift the nuclear embargo against India could be passed by the Nuclear Suppliers Group. At present, among all the nuclear-weapon states, only China and India have announced a no-first-use policy. With new thinking on both sides, cooperation between the two countries on this question could be explored”.16

14 15

Ibid., pp. 269 & 270 Lora Saalman (Editor & Translator), The China-India Nuclear Crossroads, Carnegie-Tsinghua Center for Global Policy, Carnegie Endowment for International Peace, Washington, 2012, p. 162 Ibid., pp. 162 & 163

Envisioning an unspecified role for China in the India-Pakistan nuclear equation and in the triangular nuclear stability, the three have further written: “... on China’s part, there is a growing interest in helping to strengthen the rudimentary nuclear confidence-building measures that are being attempted by New Delhi and Islamabad. Credible rapprochement and a sustainable peace process in South Asia, after all, will greatly heighten China’s interest in doing this”.17 Shining the spotlight on a promising area of possible Sino-Indian cooperation in the civil sector of atoms for peace, the three Chinese scholars have traced an optimistic thought-line. “In the 1980s, China once supplied heavy water to India. And in the 1990s, China supplied low-enriched uranium to India. During Chinese President Hu Jintao’s visit to India in 2006, the two countries issued a joint declaration advocating civil nuclear cooperation. However, only limited progress has been achieved until now (2012). Both sides could start with technical exchanges in areas of mutual interest, such as breeder reactors, high-temperature, gas-cooled reactors, thorium development, and nuclear reactor security and safety”.18 Such impressive ideas about nuclear-security CBMs, matched by the thoughts from some non-official Indian experts, acquire unusual importance in the latest Sino-Indian context. Civil nuclear cooperation emerged as a pleasant surprise in the package of topics during the new Chinese Premier Li Keqiang’s visit to India in May this year. Hopeful signs, too, are the Sino-Indian move for an “early conclusion of negotiations” on a border defence cooperation pact and the visit of Chinese ‘Peace Ark’ to the Mumbai port. However, the fate of such warm perceptions of the diplomatic kind may still be determined in the cold mil-to-mil environment along the LAC in the Sino-Indian border zone! .....

17 18

Ibid., p. 163 Ibid., p. 164

ISAS Insights No. 222 â&#x20AC;&#x201C; 21 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Pressures on the Indian Rupee S Narayan1

The Indian rupee fell to an all-time low of close to 64 to the US dollar on Tuesday 20 August 2013, and the Indian media as well as well as the analysts have been extremely critical of the policies announced by the Government of India. The Government, on its part, is pointing to the exit of funds across all emerging markets as US yields are set to rise, and is putting all the blame on external factors. There is some truth in both the averments. Financial markets across emerging markets did fall significantly, and Tuesday 20 August saw a significant fall in markets in Malaysia, Hong Kong, Singapore and Indonesia. Indian markets had fallen steeply on 14 and 19 August, and the fall on 20 August was comparatively less. Investors and funds expect an announcement from the US Federal Bank that the quantitative easing and the era of easy money are over. US growth figures have started to improve, and any such announcement would result in increasing interest rates in the United States, and financial flows would move towards such improved returns. There is some good news coming out of the European Union, especially from Germany, and signs of recovery are likely to brig funds back in. When compared to global financial flows, investment in the 1

emerging markets is comparatively small. Indian financial markets are considered shallow and small by international markets, and the total investments have been only around 1.5% of all global fund allocations. Any pull-out of even a couple of billion dollars from Indian markets in a day is likely to result in a significant fall in the equities index. In addition, there is a growth in negative sentiments about the state of the Indian economy. As a consequence, the Indian markets have had a decline of close to 12% in Indian equity market indices just in the week of 14-21 August. In addition, there has been the concern in India about the volatility in the exchange rates, the current account deficit, and the growing inflation. From 15 May to 16 August, the rupee lost 12.6% and Nifty lost 10.4%: one of the worst three-month periods in 20 years. The exit from the rupee is, in part, related to exit from financial markets. The current account deficit is very high, at over 4% of GDP. India is a major importer of energy, both oil and coal, and there is a huge demand for gold imports – these three commodities account for close to 40% of all imports. Gold imports in terms of value stood at $56 billion for 2011-12, $40 billion in 2010-11 and $28 billion in 2009-10.2 “The rise in imports of gold is one of the factors contributing to India's high trade deficit and CAD in 2011-12, forming 30 per cent of its trade deficit”, India’s Minister of State for Finance, Namo Narain Meena, has said in the Lok Sabha, the country’s Lower House of Parliament. On oil imports India’s oil import bill in terms of value increased from Rs. 409,077 crore in 2009-10,3 to Rs. 726,386 crore in 2011-12:

Import Bill from 2009-10 to 2011-12 (Prov.)

(A) Crude oil import (B) Product import Total Import(A+B) (C) Total product Export Net Import (A+B) – (C)

2 3

2009-10 Quantity (MMT) 159.3

Value (Rs crore) 375277

2010-11 Quantity (MMT) 163.6

Value (Rs crore) 455276

2011-12 (Prov.) Quantity Value (MMT) (Rs crore) 171.7 672220

14.7

33800

16.8

52106

15.0

54166

174.0

409077

180.4

507382

186.7

726386

51.0

144229

59.1

196862

60.8

284643

123.0

264848

121.3

310520

125.9

441743

The Hindu April 26, 2013 Press Information Bureau of India press release August 23, 2012

The figures for the current account deficit (CAD) are also quite revealing.4 In the first quarter of 2013, the CAD was US$ 18.10 billion.

TRADE

LAST

CURRENT ACCOUNT CURRENT ACCOUNT TO GDP EXTERNAL DEBT FOREIGN DIRECT INVESTMENT REMITTANCES TERMS OF TRADE BALANCE OF TRADE EXPORTS IMPORTS

HIGHEST

LOWEST

FORECAST

UNIT

-18.10

2013-03-31

-32.63

7.36

-32.63

-14.69

2013-06-30

-4.80

2012-12-31

-4.20

1.50

-4.80

-4.88

2013-12-31

345819.00

2012-12-31

305931.00

345819.00

75858.00

349301.29

2013-12-31

1954.00

2013-05-15

2802.00

5670.00

58.00

2488.33

2013-06-30

7845.07

2013-02-15

8173.09

8549.25

5999.10

7401.50

2013-06-30

113.00

2011-06-30

91.00

113.00

77.00

114.74

2011-12-31

-733.33

2013-07-15

-715.31

13.91

-1111.46

-740.74

2013-08-31

1544.27

2013-07-15

1389.02

1678.36

3.75

1439.41

2013-08-31

2277.60

2013-07-15

2104.33

2475.94

4.98

2263.72

2013-08-31

The figures reveal imbalances in the last year in foreign investment, balance of trade as well as external debt. Foreign investments have been heavily into short-term flows to financial markets. Long-term investment (FDI) flows into the real economy of goods and services have not been significant. Outflows from the financial markets, coupled with serious trade imbalances, have put pressure on the rupee, which has slid against the dollar. The responses to these events appear to have been ad hoc. Duty on imports of gold has been hiked to 10%, and all sales of gold bars and coins to retail customers have been banned, on the argument that these purchases have been for purposes of hoarding. Channels of finance have been cut drastically, with only exporters and jewellery makers having relatively easy access. This has helped, going by the government data on import of gold, though one is not really sure whether the harvest and festival season will cause a reversal. On 13 August, there were announcements on curbs on outflow through remittances. Companies were earlier allowed investments overseas up to four times their net worth, which has now been curbed. Individual remittances overseas were reduced to US$ 75,000 per annum from the existing US$ 200,000 per annum. A ban on purchase of real estate overseas by individuals has been imposed. Add to these restrictions an outward FDI, and the measures have been fairly stiff. The next target could be non-essential imports, which cannot be ruled 4

http://www.tradingeconomics.com/india/current-account

USD BILLION PERCENT

USD MILLION USD MILLION USD MILLION INDEX POINTS INR BILLION INR BILLION INR BILLION

out considering that a very determined Finance Minister P Chidambaram has averred with certainty that the CAD will be at 3.7% just as the fiscal deficit will be at 4.8%. It is not clear whether these steps are likely to have the desired effects. Imports are lower at this time because these months are not the marriage season, but with the festive season ahead, imports and the consumption of gold are likely to go up. The curbs on gold are likely to drive the gold trade underground, and the hawala route for gold and currency exchange are likely to come back in full force, as prevalent prior to 2002. The Reserve Bank of India has simultaneously squeezed liquidity by tightening the CRR norm, half-closed the LAF window, sold bonds through OMOs, introduced weekly CMB auctions to ensure that no speculative positions are taken in the forex market on account of arbitrage opportunities. This worked in a time frame of 1-2 days, after which it appeared to be a ‘fall as usual’.5 The NDF market has been held responsible at some point of time, but all legitimate participants have to inform the RBI of their actions, and while the volumes are substantial in this market, the impact would be low, as it is only the difference in price that has to be paid for, which will impact the spot market locally. The forex derivative market which is mainly on NSE and MCX-SX have witnessed volumes halve in the last month with curbs being placed on margins and position limits. The RBI had sold US$1.8 billion up to June (the number would be higher in July) while foreign currency reserves have declined by US$8.4 billion. The decline in reserves is symptomatic of the decline in the value of the rupee, while the sale of dollars by the RBI indicates that this also has not really helped. Quite clearly, the sentiment factor has been working in pushing the rupee down. Media and analysts’ concern over the last few weeks has been the lack of coherence in Government policy. This has added to the negativity of sentiments about the economy. Once there is an additional curb on imports, the Government would have put in place all that is possible from the point of view of fundamentals. Speculative activity has been addressed, especially through the institutional route. Stepping back, there are several points to be noted in this developing story. Firstly, sentiments appear to be riding ahead of facts. There is little evidence that the Indian economic story is any different from what it was in May 2013, or that Government decisionmaking is any poorer than last year. However, market sentiments, as well as flight of FIIs, possibly due to US growth improvement, have added to the negativity of sentiments. A number of large corporates have been openly expressing reluctance to invest in India, and there have been no signs of improvements in FDI. These negative sentiments are not borne out by numbers, as the foreign exchange reserves still stand above US$ 290 billion, enough for over six months of imports (as against two-weeks’ cover back in 1991).

The RBI has reversed its position on 21 August, and returned to Open Market operations to buy back bonds and infuse liquidity in the markets—a clear sign that that the earlier decision was not well thought out.

Secondly, the actions of the Government have been perceived as retrograde. A striking feature of recent months was the willingness to reverse reforms. The gains of the last 22 years in the form of reduction of controls, removal of harassment by customs, currency trading at exchanges, outward capital flows for households and firms, have all been given up. â&#x20AC;&#x153;The reversal of reforms on trade, capital controls, financial development and the operating procedure of monetary policy are a body blow for optimism about India. We used to think that while India reforms slowly, changes are irreversible once they are made. Now, we see that the hard work of decades can be undone in moments and that decision makers are not embarrassed about central planningâ&#x20AC;?.6 This is indeed a serious concern that Government would look back to its economic policies of pre-1991 to correct the current situation. Third, there is the pressure of domestic inflation as well. The Planning Commission in India has argued that wages in income in the rural areas have risen much faster than prices, and thus inflationary impact for the rural population has been negligible. However, India has been urbanising rapidly over the last decade; and the young, in employment, are increasingly in urban areas, and wages have not kept pace with inflation. The fixed-income-earning middle class appears to be bearing the brunt of rising prices. In particular, food inflation is affecting all those on fixed incomes. The Reserve Bank of India has been concerned about inflationary pressures, and its steps to tighten liquidity and to keep interest rates unchanged have signalled its concern over inflationary pressures. The Ministry of Finance, on the other hand, appears to be less concerned about this and more about growth and rupee volatility and there is clearly a lack of coordination between fiscal and monetary stances. In balance, it does appear as though that there have been some errors of policy. It is clear that there is no significant dent in the Indian growth story, even though the growth numbers may be less than what they have been in the period 2003-2008.The fundamentals of the economy remain sound. Perhaps it would have been better not to try to defend the rupee and to allow it to find its own level, while at the same time taking measures to improve the output in the economy. The depreciation of the rupee is an opportunity to improve exports, and either through lower interest rates for exporters, or through lower input tariffs for value-adds, there is an opportunity to provide fiscal as well as monetary incentives to exporters. Automobiles and ancillaries, pharmaceuticals, light engineering, textiles and garments in the manufacturing sector and all value-added IT-based services would benefit from such targeted relief measures that would improve exports. At the same time, supply side measures to improve production and output in sectors where demand pressures are high would open up opportunities for greater output, growth and therefore greater balance between supply and demand. It is worrying that even in this crisis; there are no announcements of supply side measures, even though the Finance Minister has been repeatedly talking about supply constraints. Finally, capital allocation to infrastructure, and some decisions to keep infrastructure projects on track, would revive sentiments and confidence in the economy.

Ajay Shah, Economic Times 21 August 2013.

The India story is still intact, and requires only a few governance-based decisions to set the economy back on track. It is unclear whether the Government has the strength to follow through.

.....

ISAS Insights No. 223 – 30 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India-Pakistan Dilemma: To Talk or Not to Talk Iftekhar Ahmed Chowdhury1

August 2013 was a bad month for India-Pakistan amity. Sixty-six years ago that month British India was bifurcated into two independent and sovereign countries: India and Pakistan. That partition was accompanied by unspeakable violence. As the writer Sadat Hasan Manto poignantly describes in his remarkable short story, ‘Toba Tek Singh’, also utter and inhuman mindlessness. The feelings that occasion generated were bred of deep-seated distrust. Thereafter, it led to several bloody wars between the two nations. To this day the strength and power of those negative sentiments have not fully abated. However, from time to time silver linings do appear amidst the dark clouds. One such example lay in the immediate aftermath of Nawaz Sharif’s assumption of office as Prime Minister of Pakistan in June this year. But, sadly, like others before it, it was soon to be engulfed in the gathering storm. To the olive branch that Nawaz Sharif then held out, the reaction of his Indian counterpart, Manmohan Singh, was positive. For a brief shining moment, hope appeared to have surfaced, but only to be submerged once again in a sea of mutual recrimination. Bad moments do not come singly. In the first half of August five Indian soldiers died of shots fired in anger from across the Line of Control in Jammu and Kashmir. Pakistan denied involvement, hinting at terrorists outside its Army’s ambit. Repeated exchanges of fire ensued. The ceasefire agreement of 2003 appeared to have been thrown to the winds. Jingoism reigned supreme in electronic talk shows in both India and Pakistan. It was unabashedly tinged with war-mongering. Each side claimed to have lost patience with the

other. Armchair security experts began to make clarion calls for retaliatory and retributive action. It seemed that truth was not the only casualty of the conflict. So was reason.

Travails on Both Sides For Manmohan Singh it was not a pleasant time. He paid a price for keeping his cool, and as his detractors alleged, for his perceived inaction. His Independence Day speech on 15 August, a normally apolitical event usually designed to reflect national unity, drew flak from his current electoral nemesis, Narendra Modi. The irrepressible Chief Minister of Gujarat, the primus inter pares among the Bharatiya Janata Party (BJP) leadership, also a prime ministerial aspirant, subjected Singh to trenchant criticism for his apparent docility. To him, the Prime minister should be made of much sterner stuff. It also showed that in politics dare can often have a premium over decency. Singh’s discomfitures seemed to mount relentlessly. The rupee was in a tailspin. Good news from the US economy quickly translated into bad news for India. Investors pulled funds out of India to park in a recovering Western economy. These, added to the lack of stomach to implement reforms, caused the economy to hit a new low. The rate of growth slumped to 4.5%. This was half of what it was during the halcyon days of reforms. The visions of ‘incredible India’ were dimming fast. These did not help matters. To compound the travails, a tragic naval accident in Mumbai witnessed the explosion on board and thereafter the sinking of a submarine, Sindhurakshak. All 18 sailors in the vessel were killed. It was the worst naval tragedy in years. It shocked the nation. Defence Minister A K Antony was no Mark Antony, and his explanations satisfied very few. Analysts revisited, with understanding cynicism, the comment of the Harvard economist Lance Prichett that India was a ‘flailing state’. It meant that the head (Centre) was misaligned vis-àvis the rest of the body (the States) causing the nation to ‘flail about’ in an uncoordinated fashion. The reference was obviously to poor governance. Yet another rape case was reported, this time in Mumbai, normally considered a safe place for women, this time of a journalist, shredding the already battered reputation of personal safety into tatters. The writer Gurcharan Das argued vehemently in favour of a ‘liberal case for a strong State’, as India, as he saw it, was a private success but a public failure, growing only at night, when an incompetent government slept! The story emanating from Pakistan was no better: this, despite a good beginning by the new Prime Minister Nawaz Sharif. He sent out positive feelers to India, selected a responsible President, hosted a good visit by the US Secretary of State John Kerry, made a wise choice for the Chief Minister of Balochistan, did not impede – despite an opportunity – the formation of government by Imran Khan’s Tehreek-e-Insaf, and the like. But then suddenly hell seemed to break loose. The extremists and the Taliban had had enough of restraint. Explosions and killings resumed with astounding ferocity. In one incident, a single person held centre-stage in the Islamabad for hours, by wielding a gun and holding his own family hostage. He demanded Islamic Sharia laws for the country, and added the dismissal of the 2

government, for good measure. He was finally shot and taken prisoner. The energy situation failed to improve. Also, the overall economy. The Army, after a short and appropriate display of tolerance of Sharif’s initial ‘peace politics’, was soon advising the slowing down of rapprochement with India and Afghanistan. This could cause Sharif to be cautious with the Army. Its current chief, Ashfaq Kayani, is due to retire in November. Rather than choose the next most-senior general as his successor, as would have been seen as the norm, Sharif, it is being said, may be looking down the pecking order to choose someone he is more comfortable with. This could be problematic for the future, as the past would tend to show. With the border conflict with India escalating, so are the strident calls by the hawks on both sides that a planned meeting in New York, come September, on the sidelines of the regular United Nations session, between the two Prime Ministers be called off.

A Window Ajar for Talks That would be a mistake. Though Singh is at the end of his current prime ministerial term, Sharif is anxious for the meeting for symbolic reasons. The public on both sides are weary of conflict. Their leaderships should cash in on this sentiment. As a positive gesture Pakistan has announced the release of 367 Indian prisoners it has been holding. War between the two is no longer an option. Both sides being nuclear powers, neither side can win a total war, ‘Mutually Assured Destruction’ of both being a possibility. Testing of conventional capabilities at lower levels would be dangerous, as the risk of escalation to qualitatively higher levels of conflict would be very high. A bloodied history and an arguably dubious ‘command and control capabilities’ combine to create a situation where an Armageddon cannot be ruled out. This is not a risk worth taking. The nuclear deterrence in South Asia is still brittle. This is a reality that cannot be wished away. It is, therefore, better to talk, and continue to talk if initial talks fail. This calls for the kind of patience for peace that Robert Bruce displayed with regard to war. One notable factor in the current India-Pakistan spat is the palpable goodwill of the political masters directly involved, on both sides. The two, Sharif and Singh, are not gladiatorial by nature. Not to meet in New York would be missing out on this advantage. This they, the region, and indeed the world, can ill afford. In a relationship where windows of opportunity are so few and far between, it would be unwise to ignore even one that is slightly ajar.

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ISAS Insights No. 224 – 30 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Pakistan and the New Ethos of Muslim Middle Class Shahid Javed Burki1

Revolutions confuse and confound even those who bring them about. They also puzzle those who watch them unfold from some distance. This is certainly the case with the rapid changes occurring in the Muslim world. The change is not only affecting the Middle East but also the Muslims in South Asia. And it is being brought about by the rise of the middle class. Economists have been studying for quite some time the role the middle class plays in shaping and reshaping economic systems and structures. It is now the right moment for other social scientists, in particular those who study politics, to catch up with them. The current turmoil in the Muslim world has one important reason. In Egypt, Syria, Tunisia, and Turkey, the rapidly growing and increasingly assertive middle class wants to have a say in the way political, economic and social systems work. Means of modern communication – in particular, the extensive use of social media – have made it possible for the middle class not only to find its voice but also to have that voice heard. In asserting themselves the members of the middle class are not following any political philosophy, not even any religious preference. Street chaos in Cairo within the space of thirty months is a good reflection of the political preferences of the middle class youth. They forced the longsurviving government headed by Hosni Mubarak to leave office since it was not meeting the needs of this segment of the population. Thirty months later, the street judgment about the 1

substance of the rule by the elected Muslim Brotherhood administration was equally harsh. What the street wants is an inclusive political system. The street has also found a way of fighting the establishment which holds the reins of power but does not necessarily use it for the good of the heterogeneous middle class. While Egypt has seen extreme swings in the pendulum, the Islamic-leaning government in Turkey has also met with considerable resistance. This occurred when it was felt that those who led it were inclined to define public policy in a very narrow sense. Istanbul’s Teksim Square erupted in the summer of 2013 to push back the attempt by Prime Minister Tayyip Erdogan to establish a political system that had a narrow social reach. The Turkish middle class youth found a cause to express its displeasure. They were not prepared to have one of the few open spaces left in the city to be used for celebrating the country’s Islamic past. Erdogan wanted to construct a large mosque in the area; the youth wanted the area to remain untouched. Their preference was guided by modernity, that of the ruling establishment by nostalgia about the past. The past has lost relevance for most in the middle class. The conflict in Turkey as well as the one in Egypt will get resolved only when inclusive political systems are established that, by their very nature, will have to respect plurality and find a way of accommodating the many minorities. The Turkish example reflects one other important aspect of activism by the middle class. While it appreciates economic progress it does not want it at the expense of constraints on political rights. In the middle class’s thinking, political development takes precedence over economic advance. This line of thought was also advanced by a highly respected Turkish economist who teamed up with an American political scientist to publish in 2013 an important book titled Why Nations Fail? Daron Acemoglu and James Robinson put considerable emphasis on the importance of inclusive political development as a precursor for sustained economic growth. Many political systems in the emerging world, they argued, were narrow in their reach and exclusive in their preference and thus became unstable. Equilibrium requires inclusion in both politics and economics.

Pakistan is the ‘Surprise’ Good Example One large Muslim country seems to be set on a course that would absorb the aspirations of the middle class youth while maintaining its Islamic identity. Pakistan will not be the example that will come to many minds as a country that may be able to set an example for the rest of the Muslim world to move forward and reach a state of equilibrium in politics as well as economics. The country’s move in that direction was not easy. It has passed through periods of extreme political, economic and social turbulence. But as the election held in May 2013 and the conduct of the government it created show, the country may be set on a course to finally achieve political stability and thus prepare the ground for sustained economic growth. What Pakistan and, to a somewhat limited extent, Turkey have achieved in the last few years is to push the military off the centre of the political stage. In the post-colonial period in the 2

Muslim world, it was the better organised military that filled the space that should have been occupied by civil political institutions. The creation of these institutions is a slow process. Repeated military interventions come in the way of orderly political development. This has happened in all large Muslim nations – Egypt, Indonesia, Pakistan and Turkey. The rising middle class has begun to move these countries in another direction, and that is a testimony to the power it now wields. The middle-class thinking, attitudes and aspirations don’t stop at national borders. If there is anything universal about ideas it is those to which the middles classes are attached not in one country but all over the world. The middle class system of beliefs, knowing no physical borders, have produced what economists call “network externalities”. These come about when those who believe in something talk to those who believe in the same things. This way ideas spread and people cohere, especially now when it is so easy and almost costless to communicate. The spread of these ideas can only be resisted at a great cost. This is particularly the case in the realm of politics. Take the case of Egypt. As the political order evolved after the middle class finally rebelled against authoritarian rule, the revolution that was the result was hijacked by another force that was equally intolerant of opposing views. Two years after Hosni Mubarak was dislodged the middle class rose again in even larger numbers than in January 2011. They wanted Mohammed Morsi, the president belonging to the Muslim Brotherhood, to change his approach to governance; to make the system he was creating inclusive rather than exclusive favouring one point of view – the Islamic way. The military intervened and removed Morsi and a lot of blood was shed. The West watched but did little to prevent the old authoritarian system from returning. It was confused by the rapidly unfolding events. Had US President Barack Obama re-read the speech he gave in May 2011 he and his government would have reacted differently. “But the events of the past six months show that strategies of repression and strategies of division will not work anymore”, the American President had told his audience in the State Department. Talking about the rolling change in the Middle East, Obama had asserted “that we have a stake not just in the stability of nations, but in the selfdetermination of individuals. Then status quo is unsustainable. Our support of these principles is not a secondary interest. Today I want to make it clear that it is top priority that must be translated into concrete actions and supported by all the diplomatic, economic and strategic tools at our disposal”. The middle class understood these words and the sentiment that was behind them. That power increased for several reasons, most important of these was demographic. Most large Muslim countries have very young populations with their median age in the middle to upper ‘twenties. The fact that more than one-half of the populations of these countries is below 25-30 years has helped to move forward their political development. The youth have also found the street and the public square as the places where they can congregate and express themselves. There cannot be any stepping back from where these countries have arrived at in terms of gaining political maturity. General Abdul al-Sisi’s intervention in Egypt should be seen as a part of a process, not a reversal in the trend set in place by middle-class activism. 3

An Emerging South Asian Commonality This is also the context in which South Asiaâ&#x20AC;&#x2122;s failure to create working regional economic structures need to be looked at. Economists recognise that there needs to be some commonality among the political systems before countries can work together in the field of economics. The Indian independence movement was led by the middle class. The movement for the creation of Pakistan was shepherded by the upper segments of the Muslim society. It is not surprising that once independence was achieved the two countries moved in different political directions. In Pakistan, as long as the middle class had not entered politics in some strength, issues such as the roles of the military and Islam remained central to the countryâ&#x20AC;&#x2122;s political discourse. This is now changing in the two Muslim countries to the west and east of India â&#x20AC;&#x201C; Pakistan and Bangladesh respectively. In both the middle class is gaining political and economic strength. Conditions therefore are being created that will move all of South Asia in the same political direction. At long last South Asia may have some similarity in the way political systems are shaped. That will make it easier for the countries in the region to work together in the economic arena.

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ISAS Insights No. 225 – 30 August 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Musharraf’s Indictment: Going through the Act? Sajjad Ashraf1 In a country where a military officer could not be charged for a traffic offence, a Pakistani court has now indicted former military strongman General Pervez Musharraf in the case relating to the 2007 assassination of former Prime Minister Benazir Bhutto. Ms Bhutto returned to Pakistan under an infamous National Reconciliation Ordinance 2007, brokered by the-then US Secretary of State Condoleezza Rice and promulgated by President Musharraf. The deal pardoned Ms Bhutto and many others in all convictions, allowing her to become prime minister again if she were to win the then-imminent elections, with Musharraf remaining President. Following her killing, however, the deal went sour; Musharraf was compelled to quit as President, and he then went into a self-imposed exile – returning to Pakistan earlier this year, after four years, ostensibly to contest in the general elections held in May this year. The election results brought Musharraf’s nemesis Nawaz Sharif, whom he toppled in 1999, back to power. Musharraf also faces a ‘hostile’ Supreme Court (SC), headed by Chief Justice Iftikhar Mohammad Chaudhry (CJ), whom Musharraf had dismissed and incarcerated twice. The tenacious CJ bounced back both times and still presides over the court. He retires in December. 1

Mr Sajjad Ashraf is Consultant at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS). He is also an Adjunct Professor at the Lee Kuan Yew School of Public Policy at the NUS, and an Associate Fellow at the Institute of Southeast Asian Studies, Singapore. He was Pakistan’s High Commissioner to Singapore 2004-2008. He can be contacted at sppsa@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS.

Charges against the Former Strongman Musharraf faces four main charges. First, that on 3 November 2007, he declared a state of emergency, “suspending” parts of the Constitution, forcing ‘errant’ judges out of the court and ordering their house arrest. Article 6 of the Constitution provides for death penalty for anyone “subverting” the Constitution. Second, that he did not provide Ms Bhutto with enough security, despite threats to her life, leading to her assassination. The third charge relates to the security crackdown on the Red Mosque in Islamabad in 2007 which killed 103 people. The fourth case is about the killing of the elderly Baluch tribal chief Nawab Akbar Bugti, who was arguably leading a campaign for greater provincial autonomy and control over Baluch resources. Since the rejection of bail for Musharraf following his indictment now, he remains in his plush farmhouse, on the edge of Islamabad, which has been declared a sub-jail. Rumours abound in Pakistan on Musharraf’s legal challenges. Some speculate that Sharif took the military into confidence before proceeding against Musharraf on a plethora of charges. Others say that Sharif’s return to power was conditional upon his commitment to leave Musharraf alone. Hence, allege these theorists, the recent general election was ‘rigged’ in Sharif’s favour. The treason charge against Musharraf stems from a private petition to the Supreme Court which then ordered the government to frame charges under Article 6 of the Constitution. The Constitution, under Article 232, empowers the President to declare a state of emergency. In doing so, Musharraf had held some parts of Constitution in ‘abeyance’, which became an offence under the 18th Constitutional Amendment that was enacted in 2010 – three years after Musharraf committed the impugned act. How do you try him retroactively?

Coup of 1999 is Not the Issue Unsurprisingly logic does not prevail in Pakistan. Musharraf is not being charged for the original military takeover in 1999. The SC, which included the present CJ, validated that takeover. Another twist – Musharraf was flying back home from Sri Lanka, far from the other Pakistani commanders, when the military arrested Sharif in Pakistan and took over, leaving Musharraf with a fait accompli. 2

Musharraf’s Emergency proclamation of 3 November 2007 lists the provincial governors, Chairman Joint Chiefs of Staff Committee, the other service chiefs, and the Corps Commanders as partners in the act. Then, why accuse him only? There are judges who legitimised the 2007 emergency too, but no charge is contemplated against them. Holding him alone responsible for these actions is a “carefully contrived legal justification for targeting one person alone, despite overwhelming evidence of wrongdoing by many”, wrote The Friday Times, an independent Pakistani paper. Musharraf’s attorneys argue that such a course is not sustainable and can derail the civilian system again in Pakistan. The prosecution’s case over Ms Bhutto’s killing reportedly rests upon a statement by Mark Siegel, her friend, who quoted her, after she hung up the phone on Musharraf, as saying that “she would be responsible for what happened to her”. No secret that Musharraf continually warned her of her security before and after her arrival in Pakistan, and he may have used these words reminding her of the danger. This is no evidence. On that fateful day, she made a public address, secured by over 1,300 security personnel. Later, while on the way out, she threw all the security cover aside, opened the hood of the car and sprung out, exposing herself to a suicide-bomber, as it turned out. Even Musharraf’s worst detractors do not believe that he is culpable in the case relating to Ms Bhutto’s assassination. The Red Mosque case is weak. The clerics there were in effect challenging the writ of the state. An assault on a mosque to flush out the militants who were holding Islamabad hostage was no crime. Indian leader Mrs Indira Gandhi gave her life, too, in establishing the writ of the state, but no one ever accused her of killing those who died by rebelling against the state. With hindsight many argue that Bugti could have been handled differently, but he too died in a military action of quelling a rebellion against the state. The Pakistani society is deeply divided on Musharraf. One group wants to punish him to prevent future takeovers by the military. Facing existential issues, Pakistan cannot, however, direct attention to one man when hundreds aided and abetted him, argues another group. A sober assessment is indeed necessary. The sensationalist media gloats every time there is an adverse decision against Musharraf. Sensibly, the politicians have publicly shown restraint. The cases against Musharraf also raise serious questions about the power-equations in Pakistan. Sharif’s two previous terms as Prime Minister were marred by his conflicts with the military 3

that led to his eventual downfall. There are of course pressures on him from amongst his inner coterie to avoid another mess-up with the military over Musharraf.

Pak Army’s Place in Society This is the army, which did not even brook contempt of court proceedings against a former army chief. In an unprecedented move the Pakistan Army had restored three retired generals nominally back in service to be court-martialled within. The National Assembly’s Public Accounts Committee had earlier accused the three of making illegal investments that led to heavy losses when they served in the National Logistics Cell. The message is clear from the Pakistan Army – hands off, civilians! Many agree that justice must prevail. But it is also widely believed that this is a ‘witchhunt’ against Musharraf, as both Sharif and the CJ are the aggrieved parties. Some are hedging their bets that the cases will fizzle out after the CJ retires in December. Those who want Musharraf punished, giving examples of Latin America, miss out an essential difference – no such country faced an existential threat, and in no other country the army is eulogised to the extent it is in Pakistan. The cases against Musharraf are not just a matter of law in Pakistan where civilian institutions are deeply troubled. The police and the civil armed forces have failed to quell militancy. Many a time, when the army could constitutionally be called in aid of civil power, the civilian leadership balked. The Pakistan Army – under its current Chief, General Ashfaq Pervez Kayani – has scrupulously kept away, awaiting a call only when worsening conditions need a unified civil-military action. The army, being the only organised institution left, confronts a mounting militancy in the country. Over 4,500 men have been lost in fighting armed extremists. Five years of weak-kneed Zardari Government have actually widened fissures within the society. The new political dispensation is deeply divided between those who want to talk to these groups and those who want to take them head on. In times like these, unless full backing is given to the army, the ordinary soldier who fights for the chief will not put himself in the line of fire if his chief is seen dragged to courts and insulted. The state of Pakistan cannot afford this kind of situation. The civil authority, which struggles to provide security cover to hold elections or dispense polio vaccines, may stop short of pushing the cases against Musharraf to their logical end. They may only run through the motions up to a point. Given Pakistan’s security psyche and its internal challenges with wider regional implications, the country needs a motivated army which, despite its transgressions in the 4

past, must pursue an agreed national agenda in sync with the civil authority. This is needed now, more than at any other time. For now, this is for the larger good of the region. This, indeed, is the challenge facing Pakistan.

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ISAS Insights No. 226 – 4 September 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India’s Food Security Bill: Grave Digger or Game Changer? Amitendu Palit1

The much-debated National Food Security Bill, 2013, was passed by the Lok Sabha and the Rajya Sabha – the Lower and Upper Houses of the Indian Parliament – on 26 August 2013 and 2 September 2013 respectively. The Bill is the latest legislation in a series of measures (e.g. Right to Information (RTI) Act, Forest Rights Act, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)) aiming to establish rights-based economic governance in India for achieving inclusive growth. The objective of the Bill is to legally entitle 75 per cent of the rural population and 50 per cent of the urban population to a minimum supply of foodgrains at subsidised prices. With around 800 million people expected to receive subsidised food, the programme is arguably one of the largest targeted food security schemes in the world. The need for an elaborate food security programme can hardly be over-emphasised in India, which ranks 65th on the Global Hunger Index,2 despite recording impressive economic growth of more than 8 per cent annually, for several years in the last decade. Nonetheless, the Food Security Bill has been a controversial legislation with the incumbent United Progressive Alliance (UPA) Government being accused of pushing the Bill as a populist measure. There 1

Dr Amitendu Palit is Head (Partnerships & Programmes) and Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasap@nus.edu.sg. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. The Global Hunger Index (GHI) is computed by the International Food Policy Research Institute (IFPRI). The rankings for GHI 2012 can be at seen at 2012 Global Hunger Index, Table 2.1, page 19; http://www.ifpri.org/sites/default/files/publications/ghi12.pdf (Accessed on 2 September 2013)

has also been widespread concern over the ability of the Government to mobilise adequate resources for financing the ambitious programme. This paper reviews the main features of the Food Security Bill and examines the concerns and issues surrounding it.

National Food Security Bill, 2013 The main features of the Bill are:3 1. Each individual in priority households will receive 5 kg of foodgrains (rice, wheat and coarse grains) per month from state governments at subsidised rates under the Targeted Public Distribution System (TPDS). The TPDS specifically targets poor or below-poverty-line (BPL) households in each state for targeted supply of foodgrains from the ration (fair price) shops. The Bill specifies poorest families among the BPL households to be entitled for larger supplies. These are families currently receiving subsidised foodgrains under the Antyodaya Anna Yojana (AAY) scheme. The AAY covers around 25 million BPL families and provides each family 35 kg of foodgrains per month at subsidised rates.4 The beneficiaries under the AAY will continue to receive 35 kg of foodgrains per month under the food security programme. 2. The number of persons with entitlements in eligible households for receiving subsidised foodgrains will be 75 per cent of the rural population and 50 per cent of the urban population. 3. Grains will be distributed to households at subsidised prices of Indian Rupees (Rs) 3 per kg for rice, Rs 2 per kg for wheat and Rupee (Re) 1 per kg for coarse grains. These rates, which will be valid for the next three years, are upper ceilings implying that actual issue prices can be even lower. Subsequent issue prices will be fixed by the Central Government with the caveat that such prices will not exceed minimum support prices for foodgrains. 4. Eligible households are entitled to receive food security allowance from the State Governments if they have not been supplied subsidised foodgrains under any circumstances. 5. Foodgrains will be distributed from the Central pool of grains, built and run by the Central Government by periodically procuring grains from farmers through designated agencies like the Food Corporation of India (FCI). The Central Government will allocate grains from the pool to State Governments for distribution 3

See ‘The National Bill Food Security Bill, 2013’ for greater details. http://www.thehindu.com/multimedia/archive/01404/National_Food_Secu_1404268a.pdf (Accessed on 30 August 2013) ‘Antyodaya Anna Yojana’ (AAY), Department of Food and Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, Government of India. http://dfpd.nic.in/?q=node/101 (Accessed on 30 August 2013)

to eligible households. It will also meet the expenses for transporting grains to states, as well as the costs incurred by States in moving grains within their territories including margins paid to ration shop dealers. 6. The Bill proposes extensive revamp and reform of the current functioning of the TPDS through application of information technology and effective targeting of beneficiaries through unique identification contained in ‘Aadhar’ numbers. It also proposes the possibility of introducing cash transfers and food coupons for beneficiaries in lieu of grain entitlements in future. 7. Women’s empowerment is strongly emphasised by making the eldest woman in every eligible family the ‘head’ of the household for receipt of new biometric food security ration cards. The Bill also provides for supplying free meals to pregnant women in eligible households along with maternity benefits in cash. States have been urged to ensure specified minimum nutritional standards in food served to pregnant women and children.

Who Benefits and How The Food Security Bill is hardly a conceptual novelty and is an extension of the existing TPDS with additional features. A comparison of current entitlements under the TPDS and those proposed by the Bill can be gauged from Table 1.

Table 1: Comparing TPDS and NFSB, 2013

Household Category 1. Antyodaya Anna Yojana (AAY) 2. BelowPoverty-Line (BPL) – nonAAY 3. AbovePoverty-Line (APL)

Targeted Public Distribution System (TPDS) Foodgrain Entitlement Rate (Rs/Kg) (Kg/Month) 35 Rs 3(rice), Rs 2 (wheat)

National Food Security Bill (NFSB), 2013 Foodgrain Entitlement Rate (Rs/Kg) (Kg/Month) 35 Rs 3(rice), Rs 2 (wheat)

Rs 5.65 (rice), Rs 4.15 (wheat)

Rs 3(rice), Rs 2 (wheat)

15-35 (depending on availability of stocks)

Rs 8.30(rice), Rs 6.10 (wheat)

Rs 3(rice), Rs 2 (wheat)

Source: 1. Department of Food and Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, Government of India. http://dfpd.nic.in/?q=node/101 (Accessed on 30 August 2013). 2. FAQs on National Food Security Bill, Press Information Bureau (PIB), Government of India; http://pibmumbai.gov.in/scripts/detail.asp?releaseld=E2013PR1051 (Accessed on 30 August 2013)

The main beneficiaries of subsidised foodgrains under the current TPDS are BPL families. These also include the beneficiaries under the AAY. Currently both the AAY households, as well as the non-AAY BPL families, receive 35 kg foodgrains per month under the TPDS. While the AAY families receive grains at Rs 3 per kg (rice) and Rs 2 per kg (wheat), the nonAAY BPL families face issue prices of Rs 5.65 per kg (rice) and Rs 4.15 per kg (wheat) respectively (Table 1). Compared with the current TPDS, the Food Security Bill does not provide any additional improvements for the AAY families, except for legally protecting their rights to receive 35 kg of foodgrains per month at specific subsidised rates. For the non-BPL families, the Bill has mixed outcomes. These families are now legally entitled to receive 5 kg foodgrains per month, which is lower than the 35 kg they were receiving under the TPDS. Under the new scheme, they will be receiving their monthly entitlements at lower issue prices of Rs 3 and Rs 2, at par with the AAY families. With the welfare of AAY families remaining unchanged, and those of non-AAY BPL families uncertain to predict, who does the Bill benefit in terms of unquestionable gains in economic welfare? The real beneficiaries will be the new households to be covered under the Food Security programme as it extends to 75 per cent of the rural population and 50 per cent of the urban population, amounting to around 67 per cent of the total population. Several households, both BPL and APL, are expected to be included as eligible households. There are complaints over the current TPDS not covering as many BPL households as it should and also over non-poor households being classified as BPL. The new food security programme hopes to rectify these errors by identifying the right beneficiaries and expanding the coverage. Simple arithmetic helps in illustrating the point. The TPDS currently covers 6.5 crore (65 million) BPL and 11.5 crore (115 million) APL families.5 Assuming average family size of 4 persons, the current coverage should approximately include around 260 million BPL individuals and 460 million APL individuals. The BPL population also includes the AAY families. This is the priority segment under the TPDS, receiving 35 kg foodgrains per month. In terms of proportion of the national population, the current TPDS therefore prioritises only around 22 per cent. The new scheme aims to expand this coverage to 67 per cent, i.e. around 800 million people. The APL families currently covered under the TPDS that receive rations only after the BPL quota has been taken care of will also now be legally entitled to at least 5 kg per month at lower issue prices. But part of the foodgrains to be distributed to the new beneficiaries will be redistributed from the current non-AAY BPL families, who will now receive lower entitlements at cheaper rates.

â&#x20AC;&#x2DC;Review of Foodgrains Procurement Policyâ&#x20AC;&#x2122;, Ministry of Consumer Affairs, Food and Public Distribution, Government of India, December 17, 2012; http://pib.nic.in/newsite/erelease.aspx?relid=90797 (Accessed on 2 September 2013).

The decision to cut entitlement of non-AAY BPL families to 5 kg has obviously been influenced by the thought of making this minimum amount of foodgrains available to a much larger population on a per capita basis. Indeed, even at 5 kg per household, the total procurement requirement will be much higher than the current average annual procurement of 60.2 million tons.6 Higher procurement will be one of the drivers of greater fiscal burden imposed by the scheme on Central Government.

Fiscal Implication The Bill has been heavily criticised for its adverse fiscal implications. Rating agencies and economists have joined hands in slamming the Government for introducing the bill at a time, when the fiscal health of the economy is precarious.7 The last financial year (2012-03) ended with the Central Government recording a fiscal deficit of 5.2 per cent of GDP, which has been budgeted to be reduced to 4.8 per cent in the current year (2013-04). But with prospects of revenue collections not particularly bright given the subdued performances of domestic industry and exports, an expansive food security programme is apprehended to worsen the deficit.

How real is the Concern? The Central Government’s subsidy bill is made up of three major subsidies – food, fertilizer and petroleum. Petroleum products accounted for the largest share (39.1 per cent) of subsidies last year, followed by food (34.3 per cent) and fertilizer (26.6 per cent) (Table 2). These shares are budgeted to change significantly in the current year. While food is projected to account for the largest share (40.7 per cent), fertilizer’s share is to increase to 29.8 per cent. At the same time, the share of subsidy on petroleum products is expected to decline to 29.4 per cent.

2. FAQs on National Food Security Bill, Press Information Bureau (PIB), Government of India; http://pibmumbai.gov.in/scripts/detail.asp?releaseld=E2013PR1051 (Accessed on 30 August 2013) ‘Food bill credit negative for India, says Moody’s’, The Times of India, 30 August 2013; http://timesofindia.indiatimes.com/business/india-business/Food-bill-credit-negative-for-India-saysMoodys/articleshow/22154254.cms (Accessed on 1 September 2013)

Table 2: Subsidy Burden

1. Food Subsidy

2. Fertilizer Subsidy 3. Petroleum Subsidy Total

2012-13 (Revised Estimate)

2013-14 (Budget Estimate)

Rs 85,000 crore (S$ 18,888.9 million) Rs 65,974.1 crore (S$ 14,660.9 million) Rs 96,879 crore (S$ 21,528.9 million) Rs 247,854 crore (S$ 55,078.7 million)

Rs 90,000 crore (S$ 20,000 million) Rs 65,971.5 crore (S$ 14,660.3 million) Rs 65,000 crore (S$ 14,444.4 million) Rs 220,971.5 crore (S$ 49,104.8 million)

2012-13 (Share in Total Subsidy Bill) 34.3%

2013-14 (Share in Total Subsidy Bill) 40.7%

26.6%

29.8%

39.1%

29.4%

Source: Statement 4, Non-Plan Expenditure by Broad Categories, Expenditure Budget. Volume 1, 2013-14; Page 18; Union Budget (2013-14), Government of India; http://indiabudget.nic.in/ub2013-14/eb/stat04.pdf (Accessed on 1 September, 2013) Note: a) Figures have been converted to S$ applying the nominal INR-S$ exchange rate of 1S$=INR45. b) All figures have been rounded off to first place of decimal point.

As far as the current year is concerned, the Government plans to meet the higher subsidy on food by cutting subsidies on petroleum products. The year-on-year increase in food subsidy (5.9 per cent) is much less than the corresponding year-on-year reduction in petroleum subsidy (32.9 per cent). While food subsidy has been budgeted to increase by Rs 5,000 crore (around S$ 1,111 million), petroleum subsidy is budgeted to decline by Rs 31,880 crore (S$ 7,084 million). The more than proportional decline in petroleum subsidy accounts for the projected total expenditure on subsidies for the current fiscal to decrease by 10.8 per cent over last year. The Government hopes to end the year with an overall lower expenditure on subsidies despite allotting higher food subsidy for accommodating the requirements of the Food Security Bill.8 The Government’s intention of rationalising petroleum subsidies is clear from petrol and diesel prices being increased within a few days after the passage of the Bill by the Lok Sabha. The increase in diesel prices is significant given that they are not market-determined and continue to be controlled by the Government. The sharp slide in the value of the Rupee along with the flare-up in global crude oil prices has inflated India’s import bill. The pressure on 8

The aggregate food subsidy bill of INR 90,000 crore (S$ 20,000 million) for the current year includes INR 10,000 crore (S$ 2,222 million) for National Food Security. ‘Notes on Demands for Grants 2013-14’, Page 63, Ministry of Consumer Affairs, Food and Public Distribution, Demand no. 17, Department of Food and Public Distribution; Expenditure Budget, Volume II, Union Budget (2013-14), Government of India; http://indiabudget.nic.in/ub2013-14/eb/sbe17.pdf (Accessed on 1 September, 2013)

the current account deficit from high imports is unavoidable given that the Government has no handle on global oil prices, more so after the outbreak of volatilities arising from developments in Syria. But what it can control are its own subsidies by increasing retail prices of petroleum products. The latest round of diesel price increase was the 8th in this year. Given the worries expressed by the Petroleum Minister over high petroleum subsidies,9 and the imperative of rationalising these for funding the food security programme, bigger hikes in petroleum product prices in near future, including even in inflation-sensitive products like diesel, kerosene and LPG, are inevitable. The eventual fiscal impact of the food security bill in the current year will depend upon the Government’s ability to cut petroleum subsidies and ‘pass through’ higher prices on to consumers at a time, when state elections are drawing close, and elections to the Parliament also eight-nine months away. With almost half the financial year over, it will still be some months before the food scheme is ready to be rolled-out by States. To that extent, the fiscal implications for the current year will be partial. The bigger worries are over funding the scheme in future. Greater fiscal discipline is essential for successfully funding not only the food security programme but also other major public expenditure programmes introduced by the UPA Government, such as the National Rural Employment Guarantee Scheme (NREGS). For the food security programme specifically, the Government will have to rationalise other major subsidies over time for creating more room for food subsidies and will also need to rein in procurement prices for foodgrains. Larger gap between prices for procuring grains and issuing grains through the TPDS will mean greater subsidies. With the issue prices currently frozen at subsidised rates of Rs 3, Rs 2 and Re 1 respectively, the challenge will be to keep procurement prices low. The current year is expected to be a good year for the Government in this respect with an abundant monsoon and good harvest reducing the need for supporting farmers through high procurement prices. Other years, though, might be different and difficult. Apart from weather, the political economy of influential farmer lobbies exerting pressure for high procurement prices will continue to remain a concern, given that procurement will have to increase under the food security programme. Doing so may not be possible without incentivising procurement through higher prices.

The Big Picture Once implemented as an Act, the Food Security Bill will be a landmark rights-based economic measure introduced by the UPA Government. Establishing legal rights of almost 70 per cent of the population to entitlement of a fixed minimum quota of foodgrains at subsidised rates can significantly enhance the welfare of the economically marginal 9

Petrol price hiked by Rs. 2.35 per litre, diesel by 50 paise’, 31 August 2013; http://profit.ndtv.com/news/commodities/article-petrol-price-hiked-by-rs-2-35-per-litre-diesel-by-50-paise325905 (Accessed on 1 September 2013)

population. To that extent, the legislation, despite not being a conceptual novelty and despite being an expanded edition of the food security currently extended through the TPDS, can be a game-changer for India. The fiscal implications of the scheme, however, make it a doubleedged sword. Apart from the Central Government’s fiscal capacity, the success of the scheme will depend upon a couple of other factors. The first is the choice of beneficiaries. With the scheme aiming to provide subsidised food to 67 per cent of the population, new households will be brought under the TPDS. These will be selected by states on the basis of a pre-decided per capita consumption cut-off. Much will depend upon the decision on this cut-off and the ability of states to identify eligible BPL and APL households. Identification of beneficiaries has been a problem in India as mentioned earlier for the TPDS. Unless subsidised food reaches the needy, the goal of securing food security will be obfuscated. Second, an equally important factor determining the success of the scheme will be its integration with other measures aiming to reduce systemic leakages like the unique identification ‘Aadhar’ scheme and direct transfer of cash subsidies. The challenge in this respect is to synchronise the implementation of these well-meaning but expansive and ambitious schemes which, needless to say, is a tall task given the complexities of the Indian federation. The successful passage of the Bill in both the Lok Sabha and Rajya Sabha underlines its political appeal cutting across parties. Despite the proposal of several amendments, the Bill went through unobstructed, as no political party wished to convey an ‘anti-poor’ signal. The discussion in Parliament on the fiscal ramifications of the Bill, a point being ceaselessly harped upon by analysts and the media, was hardly intense. Indeed, the Bill was passed soon after the Finance Minister’s drawing attention to the rising fiscal deficit of recent years as one of the major factors in precipitating the current macroeconomic difficulties.10 It is ironical that a potential game-changing and welfare-enhancing legislation like the Food Security Bill is being debated more for its vices than virtues. It reflects the common sentiment of interpreting the Bill as a populist step by the UPA for winning votes while paying scant attention to the deep hole to be dug in the country’s finances. Only time will tell whether the sentiment was correct; or whether it was an unduly cynical assessment produced by frustrations over prolonged economic difficulties and the explicit lack of faith in the desire of political parties and their leaderships to think beyond electoral gains.

.. . . .

‘P. Chidambaram unveils 10 steps to redemption of Indian economy’, The Indian Express, 27 August 2013; http://www.indianexpress.com/news/p.-chidambaram-unveils-10-steps-to-redemption-of-indianeconomy/1160852/ (accessed on 1 September 2013)

ISAS Insights No. 227 – 12 September 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Karzai’s Diplomacy of Hopes and Wishes Sajjad Ashraf1

Speaking to reporters before leaving Kabul for Islamabad towards the end of August 2013, Afghanistan’s President Hamid Karzai sounded resigned when he said: “I will travel to Pakistan hoping to get a result out of it. I’m hopeful, but not sure, I will only go with hopes; and wish they materialise”. Mr Karzai’s 20th trip to Pakistan since 2002, the first in 18 months and the first since Nawaz Sharif assumed office as its Prime Minister for the third time, came when Afghanistan is in the process of an important political and security transition. Afghan presidential election, which Mr Karzai cannot contest due to term limits, is scheduled for April 2014. The United States’ troops-withdrawal, announced for the end of 2014, will then follow. In between he faces the challenging question of how many troops the US can leave behind and under what conditions. The residual forces will continue to be a source of military conflict amongst various factions of Afghans. While the current dispensation survives because of the presence of foreign forces, Afghan resistance in the shape of Taliban wants them out. In addition, the never-comfortable relations between Afghanistan and Pakistan, each country vital for peace in the other and in the wider region, have been getting strained in the recent past. While earlier Afghanistan, overlooking the fact that same tribes straddle a historic non1

border, accused Pakistan of providing sanctuaries to the Afghan Taliban, Pakistan too now regularly accuses Afghanistan of harbouring the Pakistani Taliban.

Kabul Places Onus on Pakistan “The first item with Pakistan will be the peace negotiations”, Mr Karzai told a news conference in Kabul before leaving for Pakistan. Praising Prime Minister Nawaz Sharif for having “all the right intentions for stability and peace”, Mr Karzai complained still that his previous visits had not achieved the goal of improving security in his country. Afghanistan accuses Pakistan of playing a double game in the 12-year-old war by making pronouncements about peace but turning the other way when elements of its military allegedly play a spoiling role. Mr Karzai has insisted many times that Taliban’s alleged safe havens in Pakistan are the main cause of increased violence in his country. Little does he realise that 40 per cent of Pashtuns, the main Afghan tribe, live in Pakistan across a porous border called Durand Line that was drawn in its present form only in 1893 and has remained unrecognised by the subsequent Afghan governments. In June 2013, when the Doha talks with the Taliban failed to take off, Mr Karzai’s chief of staff claimed that the nature of the Taliban office was a plot to break up Afghanistan as orchestrated by Pakistan or the US. In a complete misreading of the situation, Afghan General Sher Mohammad Karimi alleged in July that Pakistan could end the war in Afghanistan “in weeks” if it were serious about peace. Perhaps, to put Pakistan on the back-foot, the Afghan side later publicly announced the main points of the agenda it wanted to discuss while Mr Karzai was in Pakistan. Seeking to explore cooperation in the security and economic fields and push the peace process forward, Kabul demanded “Pakistan’s practical steps” to convince the Taliban to directly talk to the Afghan High Peace Council (HPC), a government-appointed body. Afghan Ambassador to Pakistan Umar Daudzai was more explicit. “We say that if you can facilitate a contact between the Taliban and the United States, you can also facilitate a contact between the Afghan government and the Taliban”, said Mr Daudzai in Islamabad before Mr Karzai’s arrival. Mr Daudzai was made Minister for Interior soon after Mr Karzai returned to Kabul. Mr Karzai landed in Islamabad, publicly hoping to get some Afghan prisoners released, something that could help the peace process. This actually meant the release of Mullah Abdul Ghani Baradar, the Taliban Chief Strategist, held in Pakistan since 2010 when he was suspected of covert contacts with Kabul officials.

Since several Taliban activists released earlier by Pakistan had reportedly returned to the battlefield, the expectation that the release of more such activists would facilitate the peace process seemed exaggerated.

Accent on ‘Afghan-Led’ Initiative At the joint press conference after an hour-long meeting with Mr Sharif, Mr Karzai raised the issue of all Afghan prisoners in detention in Pakistan “without any judicial orders” and of those “whose release can benefit the peace process”. However, Mr Sharif only reaffirmed Pakistan’s strong and sincere support for peace and reconciliation in Afghanistan. “We fully agreed that this process has to be inclusive, Afghan-owned and Afghan-led”, he added. Mr Sharif also promised Pakistan’s support for regional efforts to stabilise Afghanistan. While there was no finger-pointing at the press conference, the emphasis of the two leaders was starkly different. The Afghan President, many insiders claim, had pinned hopes on a breakthrough in the release of some Afghan prisoners like Mullah Abdul Ghani Baradar who could then be flown out to Afghanistan in the glare of international media spotlight. This would have won Mr Karzai kudos back home. Even though he extended his visit by a day these hopes did not materialise. “Afghan-owned” and “Afghan-led” also mean different to the Taliban who believe that the Karzai government is a US-installed puppet. Any discussion with the HPC amounts to his recognition, which they are not prepared for. Expressing disappointment at the outcome of the visit, Barhan Osman of Afghanistan Analysts Network, an Afghan think tank, commented: “The two leaders are not on the same page… it was not what the Afghans were looking for". Mr Karzai’s insistence on talking to the Taliban directly stems from two reasons: that he is fearful of a deal directly between the Americans and the Taliban in which he is jettisoned. And two, a direct conversation between his government or the HPC and the Taliban actually amounts to the recognition of his government by the Taliban. This is not acceptable to the Taliban. Afghan attempts to use Pakistan as a channel with Taliban are not new. Peace and stability in Afghanistan is in Pakistan’s interest more than that of any other external country. This prolonged conflict has disfigured Pakistani society almost beyond recognition. Pakistan’s worst fears are a resumption of a ghastly civil war within Afghanistan after the US withdrawal when ‘jihadis’ will cross from Pakistan into Afghanistan to help their brethren and refugees will stream into Pakistan.

Living with such an insecurity psyche Pakistan wants to retain a degree of leverage in shaping the future government in Kabul which might at least be not hostile to its interests. Mr Karzai, whose first strategic agreement was with India followed by several more with other countries, is disinclined for one with Pakistan. His intentions, therefore, remain a suspect in the eyes of Pakistan’s powerful military and civilian leaderships. Mr Karzai is aware he is a figure fading away in history. So, the Americans have reasons to sign a deal with the Taliban without him, even if he is seen thwarting it, especially when they want their troops out of Afghanistan within the next 16 months. For now he seems to be walking a tightrope in negotiating with the Americans over a residual force to be left behind after the 2014 withdrawal and the Status of Forces Agreement. He has to offer a deal sweet enough for them so that chaos does not immediately ensue on their departure. His visit to Islamabad was also aimed at securing some kind of a deal where he could go out of the presidency with a degree of security and by leaving a legacy of a stable Afghanistan. Policy circles in Islamabad view Mr Karzai’s trip as an attempt that was to reignite the peace process which, after Kabul’s own walkout in Doha, came to a halt. The expectation that Pakistan could get the Taliban to the negotiating table with the Karzai-appointed HPC was an inflated assessment of the degree of influence that Pakistan has had over the Taliban’s decision-making. Cases of Pakistan’s failed attempts to make the Taliban give up on the Al Qaeda leader Osama bin Laden and desist from destroying the Bamiyan Buddha statues are well-known.

Taliban’s Disdain The Taliban, who were following Mr Karzai’s Pakistan visit closely, have rhetorically dismissed any idea of a third-country involvement in the peace process. Pakistan remains involved, nonetheless, and has even hinted at an understanding to shift the venue of talks out of Doha. The visit was also a test for the new government in Islamabad on how much its internal stakeholders were on board in dealing with the crucial issue of Afghanistan. The Murree luncheon for Mr Karzai on the extra day of his visit, attended by Pakistan’s Chief of Army Staff and Advisor on Foreign Affairs, confirmed that Mr Karzai received a message of unity from Islamabad. Afghanistan and Pakistan have many shared interests relating to security and stability in each country. Both aspects are necessary for the recovery of their economies that could improve the lives of ordinary citizens and ensure regional peace. The leaderships of both these countries and others in the region need to appreciate mutual concerns and contribute to peace in this troubled area.

The registration for nominations for the Afghan presidential elections starts in Kabul in a few days. Mr Karzai’s high expectations from his recently-concluded Pakistan trip, made public prior to his visit itself, have now been met, as evident in Pakistan’s dramatic late-evening announcement on 10 September that an in-principle decision had been made to release Mullah Baradar. This would give Mr Karzai some leverage at home. The date of Mullah Baradar’s handover to the Afghan authorities is yet to be announced. Pakistan released seven Taliban prisoners at the end of last week. With the Afghan presidential clock beginning to tick, Kabul’s engagement with Pakistan is crucial for the resolution of the impasse; and the results of Mr Karzai’s Pakistan trip seem to have bought him some time. The big question, however, remains: given his time constraints, if his hopes are not realised quickly, how long will the Karzai-led Afghanistan and Pakistan stay on the same page in the lead-up to the critical times ahead?

.....

ISAS Insights No. 228 – 30 September 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

A ‘Power-Sharing’ Moment in Sri Lanka P S Suryanarayana1

Abstract The outcome of the latest elections to Sri Lanka’s Northern Provincial Council can indeed catalyse the search for an equitable political settlement of the troubled ethnic equations within the framework of a truly united country. For this to happen, the Sri Lankan leaders across the ethnic divide face the formidable task of harmonising President Mahinda Rajapaksa’s agenda of ‘political empowerment and reconciliation’ with the Tamil National Alliance’s focus on parity (as different from secession) .

Hopes Laced with Doubts By the general standards of nation-building in the context of a prolonged internal war, Sri Lanka’s latest success in holding elections to the Northern Provincial Council (NPC) in a conflict-scarred area deserves to be commended. In this limited but significant sense, due credit should certainly accrue to Sri Lankan President Mahinda Rajapaksa and his administration. This applies also to the electoral authorities in the Sinhala-majority islandrepublic that nestles near India. At another and equally significant level, praiseworthy indeed is the democratic instinct of those who participated in the polls in the Northern Province, which is widely regarded as the emblematic home of Sri Lanka’s Tamil-minority.

However, it is too early to judge the sustainability of emerging realities which are traceable to the NPC elections held on 21 September 2013 in the troubled context of the decades-long Sinhala-Tamil ethnic turmoil. The turmoil has defined and defiled Sri Lanka almost since its independence 65 years ago. Not surprisingly, the new promise of genuine hopes is now laced with cautious optimism and even outright scepticism in both Sri Lanka and the wider international community. For a variety of reasons, the global community has been evincing much interest in the affairs of this strategic Indian-Ocean state – more so today because of Sri Lanka’s blooming ties with China. Grasping the coincidental opportunity to ‘internationalise’ Sri Lanka’s latest success, Mr Rajapaksa has happily taken the matter to the annual United Nations General Assembly (UNGA) session. Addressing the UNGA on 24 September, Mr Rajapaksa said: “I am proud that Sri Lanka has eradicated separatist terrorism, spanning three decades, and is in the process of addressing the issues of development and reconciliation”2 since 2009. He was referring to the military defeat of the Liberation Tigers of Tamil Eelam (LTTE), which had resorted to an armed conflict with the Sri Lankan state to carve out a new sovereign entity out of the island-republic. There is near-universal consensus that terrorism became an integral aspect of the political DNA of the secessionist LTTE as it took on its rivals among Sri Lankan Tamils and waged a war against the island-republic besides angrily targeting India, which was a ‘benefactor’ of the Tigers at one stage.3

New Mantra of ‘Political Empowerment’ Shining the spotlight on the latest bright spot of the NPC elections, Mr Rajapaksa told the UNGA: “A significant event in this regard [of ongoing post-conflict national ‘reconciliation’ in Sri Lanka] is the opportunity, which the people of the Northern Province enjoyed at the elections, held three days ago, to elect their representatives in the Provincial Council. It is a matter of legitimate satisfaction to me that this was made possible after the lapse of almost a quarter of a century. There can be no doubt regarding the crucial importance of this measure in the context of political empowerment and reconciliation. It is clearly the responsibility of the international community to assist with these efforts and to ensure their success for the benefit of all the people of Sri Lanka”.4 (Emphasis is added by the author). In Sri Lanka’s latest moment of hope for ethnic reconciliation, Mr Rajapaksa has identified three critical factors – political empowerment, benefits for all the communities in the state, and the responsibility of the larger global community. Despite being highly unexceptionable, 2

Sri Lankan President’s address to the United Nations General Assembly in New York on 24 September 2013, http://www.president.gov.lk/speech_New.php?Id=133 For details of the LTTE’s strategies until and immediately after the Indo-Lanka Accord of 1987, see P. S. Suryanarayana, The Peace Trap: An Indo-Sri Lankan Political Crisis, Affiliated East-West Press, Chennai,1988 Sri Lankan President’s address to the United Nations General Assembly in New York on 24 September 2013, http://www.president.gov.lk/speech_New.php?Id=133

these three aspects have come to mean different things to the different protagonists in the island-state: the Sinhala-majority and the Sri Lankan Tamils as the principal minority. The challenge before these protagonists as also the global community, inclusive of the Sinhala and Sri Lankan Tamil Diasporas, is to reconcile their different perceptions of these critical aspects, in the first place. This is easier said than done, but the outcome of the latest NPC elections in Sri Lanka has raised the prospect of a congenial atmosphere to attempt genuine reconciliation across the country’s ethnic divide. Riding the crest of an emphatic victory in the latest NPC polls, the Tamil National Alliance (TNA), a coalition of non-secessionist moderates including those who drifted away from extremism, has sounded as conciliatory a political note as Mr Rajapaksa might have wanted. Winning 30 out of the 38 NPC seats, the TNA, in its “victory statement”, spelt out a political agenda as follows: “The democratic verdict of the people [i.e., the Sri Lankan Tamil minority] is clear. Within the framework of a united, undivided country, they want to live in security, safeguarding their self-respect and dignity with adequate self-rule, to be able to fulfil their legitimate political, economic, social and cultural aspirations. The Tamil National Alliance is committed to the achievement of the above objective and expects that the [Sri Lankan] Government [dominated by the Sinhala-majority] would also extend its fullest cooperation to the achievement of the same. The result of this election offers everyone an opportunity which should be fully utilised in a positive manner”5. (Emphasis is added by the author).

TNA appears to be in ‘Sync’ with Rajapaksa It stands to reason that the TNA’s latest provincial agenda, as articulated in this “victory statement”, is by and large in sync with Mr Rajapaksa’s pan-national agenda of political empowerment and reconciliation. The accent here is on a by-and-large synchronisation of the relevant agendas of the TNA and the Sri Lankan President’s governing United People’s Freedom Alliance (UPFA). There is abundant harmony between Mr Rajapaksa’s desire to keep Sri Lanka intact and the TNA’s stated willingness to work “within the framework of a united, undivided country”. Under this overarching commonality, perceptible indeed are some nuances of differences between the TNA’s agenda and the President’s ideas. “Adequate self-rule” – the TNA’s hold-all catch-phrase of real political substance – has not yet been tested on the touchstone of the President’s idea of “political empowerment”. Going forward, it will be necessary to re-address and resolve an old and recurring issue of reconciliation. The Sinhala-majority’s idea of a measured “empowerment” of the Sri Lankan Tamil minority needs to be reconciled with the notions of self-rule as periodically articulated by the moderates among this community’s leaders and opinion-makers.

NPC Election 2013 Victory Statement by R Sampanthan, Leader, TNA, 22 September 2013, http://tnapolitics.org/en/npc-election-2013-victory-statement/

Going forward, central to this new challenge is the ongoing government-initiated move to determine the future of the 13th Amendment to Sri Lanka’s 1978 Constitution. It should be noted that the existing provincial councils in the essentially-unitary Sri Lanka owe their origin to the 13th Amendment which was enacted towards the end of 1987 as a result of the Indo-Lanka Accord of July 1987. While the existing provincial councils enjoy a somewhatminimal degree of powers devolved from the central or national government, the issue of optimal or Sri Lanka-consistent devolution of powers is far from settled yet. This, in a sense, is the crux of Mr Rajapaksa’s post-LTTE dilemma in the current environment which is not skewed by any overtly-secessionist agenda of any particular group.

Focus on 13th Amendment The President’s move on the future of the 13th Amendment must be settled to the satisfaction of all communities in Sri Lanka and also, arguably, to the diplomatic ‘pleasure’ of India, which looks upon itself as the legitimate external ‘stakeholder’. For a denouement, if it is at all possible, on the future of this Amendment, it is quite immaterial as to how the constituents of the TNA have collectively come to acquire their present political complexion. Moreover, two assumptions, relevant to the government-initiated process over the fate of the 13th Amendment, are: (1) the TNA is genuinely willing to settle for “adequate self-rule” within a truly united Sri Lanka, and (2) Mr Rajapaksa and the Sinhala-majority are indeed seeking to evolve a nationally-acceptable framework of “political empowerment and reconciliation”. Outwardly at least, the President’s latest comments on this particular mantra, in the specific context of the 21-September NPC elections, do signal his willingness to seek a nationallyacceptable formula in this regard. Two issues – one of them being a politically-volatile procedural matter and the other being a substantive constitutional question of power-sharing across the ethnic divide – will determine the future of the 13th Amendment. The politically-explosive procedural issue centres on the legitimacy and competence of the existing Parliamentary Select Committee (PSC) that has been mandated to decide the future of the 13th Amendment. Speaking to India’s National Security Advisor Shiv Shankar Menon, Mr Rajapaksa said in Colombo on 9 July (before the latest NPC elections) that the “PSC is the best forum to reach a [national] consensus on the implementation of the 13th Amendment”.6 Outlining “the practical problems that exist with devolving land and police powers to the provinces of a small country such as Sri Lanka”, the President told Mr Menon that “the

http://www.presidentsoffice.gov.lk/index.php?option=com_k2&view=item&id=116:psc-the-best-forum-forreaching-consensus-on-13th-amendment-president-to-menon

structure [of devolution] that is [finally] implemented should apply and be acceptable to all parts of the country [not just the Tamil-majority areas]”7 (Emphasis is added by the author). Addressing the issue of the PSC’s perceived lack of plenary political authority, “the President agreed with Mr Menon [that] the participation of the Tamil National Alliance in the PSC is important ... and urged India to encourage the TNA to participate in the PSC”.8 The political punch-line in Mr Rajapaksa’s message to Mr Menon, on that occasion, was that the UPFA Government “is committed to taking the process forward despite any obstacles”9 (Emphasis is added by the author). There is nothing in the celebratory statement, issued by the TNA upon its latest NPC poll victory, indicating any immediate change of heart on the part of the Tamil moderates to make a beeline for the PSC. The TNA’s attitude will be shaped substantially by the practical amplification of Mr Rajapaksa’s latest pledge to uphold “political empowerment and reconciliation”. Closely linked to the overall political environment for re-distribution of powers as between the national or central government and the provinces in Sri Lanka are some issues that are still hanging fire. These relate to the President’s ongoing projects of reconstruction and rehabilitation in the internal-war-scarred territory, especially the Tamilmajority areas. There is an emotive dimension to Sri Lanka’s generally-lukewarm enthusiasm for the 13th Amendment. In the eyes of the Sinhala-majority, India really has no moral or political authority to insist that the 13th Amendment – a Sri Lankan follow-up on the 1987 Indo-Lanka Accord – is sacrosanct. Such Sinhala sensitivities can be traced to some practical logic which cannot be easily brushed aside by the Indian side. For whatever permutation and combination of reasons, India had singularly failed to disarm the LTTE, contrary to the basic framework of the 1987 Indo-Lanka Accord and the documents related to it. In simple terms, two key dimensions of this basic framework were discerned as New Delhi’s commitment to disarming the LTTE and Colombo’s willingness to devolve powers to the Sri Lankan Tamil minority.

Parity as the ‘Plus’ As for India’s stand on this devolution issue, the External Affairs Ministry noted, in a statement on 24 September, as follows: “The Government of Sri Lanka has honoured its commitment to the international community to hold elections to the Northern Provincial Council. We look forward to the implementation by Government of Sri Lanka of other important commitments made to the international community, including the full implementation of the 13th Amendment and going beyond it”.10

7 8 9 10

Ibid Ibid Ibid http://www.mea.gov.in/press-releases.htm?dtl/22248/Northern+Provincial+Elections+i...

The issue of “13th Amendment-Plus” is not a big new idea in Sri Lanka’s political discourse in recent years. Given the huge trust hiatus between the Sinhala-majority and the Tamil minority in Sri Lanka – something far more acute than trust deficit – the search for a fair devolution-quotient remains as formidable as before the latest NPC polls. However, a statement by C V Wigneswaran, the TNA’s chief minister-designate for the Northern Province (as at the time this is written), is as moderate in tone as the President can get in Sri Lanka’s deeply-polarised ethnic context. In a statement in Tamil, Mr Wigneswaran, a former judge of the Sri Lankan Supreme Court, said: “What Younger Brother Prabakaran [the slain leader of the LTTE] had demanded was an independent state [of Tamil Eelam]. However, what the TNA is asking for is a solution based on parity [for the Tamil-minority] within the framework of a united Sri Lanka. ... In fact, if only the Sinhala [-majority] Government [of Sri Lanka] had kept in mind the [interests of the] Tamil [minority] as well when the SinhalaOnly [language] law was enacted in 1956, we [the Tamils] would not have come to this [sad] state”.11

‘A Struggle for Final Solution’ Mr Wigneswaran’s statement, issued during the campaign for the NPC elections, must be read with the TNA leader R Sampanthan’s comments after the Alliance swept the national UPFA’s Tamil-constituent party off its feet in those polls. Declaring that the poll results would not lead to any course-correction in the TNA’s long-term agenda, he called upon the newly-elected councillors of the Alliance “not to give up the struggle for a final settlement”12 of the issues concerning the Sri Lankan Tamil minority. The firm but somewhat-conciliatory comments by both the President and the TNA leaders, before and after the latest NPC elections, signal the possibility of a protracted but perhaps civilised battle of wits for a Sri Lanka-consistent devolution-quotient. A new civilised dialogue will be in tune with the earlier efforts of Sinhala and Tamil leaders who had sought a practical solution through political means. On the Sri Lankan Tamil side in this regard, mention can be made of S J V Chelvanayagam, Appapillai Amirthalingam, M Sivasithamparam, and Neelan Tiruchelvam, among others. Illustratively, on the Sinhala side, Sri Lanka’s former President Chandrika Bandaranaike Kumaratunga ranks very high among those who have tried to find a minority-friendly pan-Sri Lankan solution. In addition to the practical or political quantum of provincial rights over land and police, the battle of wits over the final package will be determined by a host of other issues. These relate to the nature and scope of “security, self-respect, dignity, and adequate self-rule” for the Sri Lankan Tamil minority in an overall ambience of a fair and equitable deal for the Sinhalamajority as well. This forms the core of Mr Rajapaksa’s theme of “benefit of all the people of Sri Lanka”.

11 12

http://tnapolitics.org/en/news-2/ (Mr Wigneswan’s statement in Tamil has been translated by the author) http://tnapolitics.org/en/news-2/ (Mr Sampanthan’s comments in Tamil have been translated by the author)

A close corollary is Rajapaksa’s latest call to the international community to assist Sri Lanka in its post-conflict nation-building. There is more to this call than meets the eye, and the reason is not far to seek. The United Nations Human Rights Council (UNHRC) has consistently pulled up Sri Lanka for failing to translate the momentum of a decisive military victory over the LTTE in 2009 into a development dividend. Broadly, the global community has conceptualised the possible development dividend in terms of a quick rehabilitation of the affected survivors of the conflict and a simultaneous reconstruction of the war-ravaged areas.

The India Factor India has been supportive of the UNHRC’s moves,13 and this is still rankling in the minds of the Sri Lankan authorities. That apart, Mr Rajapaksa has now told the UNGA about the UN system’s “disproportionate emphasis on Sri Lanka”. According to him, the global organisation “should be astute enough to ensure ... that there is no room for suspicion of manipulation of the UN system by interested parties to fulfil their agendas”.14 It can be argued that Mr Rajapaksa’s current disappointment with the UN system flows from a suspicion that the United States and its associates, including India, are looking more closely at Sri Lanka because of its incremental ties with China now. He is also aware of the activism of Sri Lankan Tamil Diaspora over the issue of rights of the Tamils in the Sinhala-majority island-republic. While the current dynamics of the equation between Sri Lanka and the UN system are quite complex, these dynamics apply principally to Sri Lanka’s humanitarian issues, inclusive of the alleged ‘war crimes’ by the Sri Lankan armed forces and the LTTE. Relatively, a secondary but not-at-all insignificant UNHRC concern is about Sri Lanka’s political process of devolution of powers to the provinces, particularly the minorities. Such a big-picture reading of the equation between the UN system and Sri Lanka can be inferred from the remarks made by the United Nations High Commissioner for Human Rights, Navi Pillay, during her visit to Colombo on 31 August.15 The political ambience for the current slow-paced devolution saga in Sri Lanka is in a vast measure determined by the cross-sensitivities of that country’s principal ethnic communities. The Sri Lankan Tamils share historical and ethnic links with not just Tamil Nadu but also the other ‘Dravidian’ or South Indian states like Andhra Pradesh, Kerala, and Karnataka. It is indeed arguable that the Sri Lankan Tamils are the descendants of those ‘South Indians’ who had migrated to Sri Lanka long before the advent of linguistic plurality in peninsular India in ancient times. It can also be argued that historical reasons of amnesia and neglect on the part 13

14 15

For details of how India decided to make common cause with the United States against Sri Lanka at the UNHRC, see P. S. Suryanarayana, India’s Diaspora Vote, ISAS Brief No. 234, 28 March 2012, http://www.isas.nus.edu.sg http://www.president.gov.lk/speech_New.php?Id=133 For details of Ms Pillay’s comments, see http://www.ohchr.org/EN/NewsEvents/Pages/D isplayNews.aspx?NewsID=13673&LangID=E

of Indians account for Indiaâ&#x20AC;&#x2122;s failure to count the Sri Lankan Sinhala-majority, too, as an important branch of the Indian Diaspora. These are the concealed cultural aspects that Sri Lanka may well have to recognise or contend with, going forward.

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ISAS Insights No. 229 – 4 October 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Ordinance Confusion in Election Season Robin Jeffrey and Ronojoy Sen 1

It is festival season in India, but it’s more than that. Election season is in the air. You can hear it, see it and almost taste it. Five state elections are due before the end of 2013, and the big one, the national general election for 543 seats to the Lower House of Parliament, is due by May next year. These elections are awaited with rare anticipation, because in spite of widespread cynicism, there’s a sense that changes in government are in the offing and that a lot of careers hang in the balance.

Criminal MPs The big buzz in October 2013, however, was over convicted criminals. Should they be allowed, if they were members of Parliament (MPs) or state legislatures, to retain their seats? It all began with a Supreme Court ruling on 10 July overturning a section of the Representation of the People Act which protected convicted MPs and members of state legislative assemblies (MLAs) from disqualification if they appealed before a higher court. The Supreme Court said that a criminal conviction should bring an immediate ban from the legislature. During the monsoon session of Parliament the national government led by the Congress Party sought to nullify the court ruling by introducing a Bill. Though it claimed to have the support of all major political parties, the opposition Bharatiya Janata Party (BJP) forced the government to send the Bill to a standing committee. Once the monsoon session

Professor Robin Jeffrey is Visiting Research Professor at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS). He can be contacted at isasrbj@nus.edu.sg and robin.jeffrey514@gmail.com. Dr Ronojoy Sen is Senior Research Fellow at ISAS and the Asia Research Institute (ARI) at NUS. He can be contacted at isasrs@nus.edu.sg. The views expressed in this paper are those of the authors and do not necessarily reflect those of ISAS.

was over, however, the federal Cabinet on 24 September cleared an ordinance to allow convicted MPs and MLAs to keep their seats. Newspapers, television channels and large numbers of citizens exploded in anger. Here again was the loathed political class showing contempt for ordinary people and looking after itself. On 26 September, BJP leaders met the President of India, Pranab Mukherjee, to petition him not to sign the ordinance. The same day, Mukherjee, who will most likely play an important role if the general elections throw up a hung verdict, summoned the federal home minister and law minister to seek “clarifications” about the ordinance. This was most unusual since the President usually rubber stamps Cabinet submissions.

Rahul Gandhi’s Intervention This tortuous, election-focused story, however, was just beginning. The proposed ordinance, agreed though it had been by the Cabinet, got dumped within days by the actions of a backbench MP. The MP was Rahul Gandhi, the reluctant heir-apparent to the throne of the Congress Party. At a public forum of journalists on 27 September, Rahul made what was supposed to be an unscripted appearance to pour scorn on the ordinance and say it should be torn up. Suddenly, wisdom burst upon the Congress, and its members realised that that they had all along been steadfastly and unyieldingly opposed to letting convicted criminal MPs sit in Parliament. Observers interpreted the attempt to overturn the Supreme Court’s ruling and let convicts stick to their seats as an attempt to protect a Congress ally, the inimitable Lalu Prasad Yadav, best known for his ready wit and political acumen. On 30 September, Lalu was convicted of involvement in fraud worth millions of dollars going back more than fifteen years. Lalu’s party contributes three seats towards the current coalition government’s majority in the lower house of Parliament. Three seats are not a lot; the government could get along without them. “Why the hasty solicitude?” observers asked. “Next year’s elections,” came one answer. Lalu was Chief Minister of the large state of Bihar (40 seats in the lower house), and is thought still to have a faithful base. His party expects to bounce back to win more than its measly three seats in 2014. Lalu might be a valuable ally during the horse-trading expected after next year’s poll. But why did Rahul so publicly denounce an action that his mother, Sonia Gandhi, the Congress Party president, must have endorsed and that was agreed at a cabinet meeting presided over by the Prime Minister? And Rahul did the denouncing while Prime Minister Manmohan Singh was out of the country. Not just out. He was in the US meeting President Barack Obama and attending the United Nations. The feeling among clued-in observers is that Rahul’s action was a pre-meditated one. It was meant to indicate that Rahul was in touch with the popular mood as well as send a signal to Nitish Kumar, whom Rahul seems to prefer over Lalu as a potential ally in Bihar. Indeed, Nitish has publicly praised Rahul’s action. It 2

has also gone down well with the Congress cadre and some believe that the stage is being set for him to lead the party’s campaign in the coming elections. A day after Singh returned to New Delhi, the Cabinet on 2 October decided to withdraw the ordinance. The net effect was a further weakening of a Prime Minister who is now widely seen as ineffective and a strong indication, if one was needed, that it is Rahul’s writ that runs within the Congress. The allies of the Congress, who were party to the original decision on the ordinance, are also cut up that Rahul undermined the Cabinet’s authority.

A Gung-Ho BJP The BJP has had great sport at the hapless Prime Minister’s expense, depicting him as a puppet and lame duck. The BJP believes it is onto a good thing. It has declared that it already has a credible candidate for Prime Minister to lead it into next year’s election. Their newly anointed leader is Narendra Modi, Chief Minister of Gujarat, a man with a carefully crafted reputation for economic development and for a less-than-caring attitude towards India’s 170 million Muslims. The famously energetic Modi, 64, lives to be prime minister and is stumping the country to build a wind of support to blow him and his party to power. Modi has in fact given India one of three four-letter words now in common use. His followers call him NaMo (Narendra Modi), which suggests motion, movement and momentum. The two other N-words are Neta, meaning “leader”, but in fact usually spat out to mean “despised politician”, and the newest of the three, NOTA – None of the Above.

Changes in Voting Law NOTA is another manifestation of the election season and the authority of India’s unelected institutions. India’s Election Commission, one of the country’s admirable institutions, has advocated giving voters the option to vote for None of the Above – that is, to record their distaste for all the candidates. In the current mood in the country, NOTA might be expected to win a good few seats. Last month, the Supreme Court gave the go-ahead for the NOTA option to be included for the coming elections. India votes using 1.2 million self-contained electronic voting machines – one or two in every polling station. It will be simple to include NOTA in the list of candidates. In India’s first-past-the-post system, candidates often win with only a third of the votes cast. NOTA might easily win in a number of electorates. In other places in the world where this option is available, various practices are followed if NOTA claims the largest share of the vote. In some places, new elections are called and new candidates nominated. In others, the real candidate with most votes still wins; NOTA is simply a shaming measure. The argument in favour of NOTA is that a heavy NOTA vote will shame political parties to run upright

candidates. But shame is not a strong point among most Indian politicians, and NOTA might not have the desired effect. So the election and festival seasons unfold. State elections are due by December in the states of Madhya Pradesh, Chhattisgarh and Rajasthan, the National Capital Territory of New Delhi and tiny northeastern Mizoram. Whether Netas who are convicted criminals will be on their ballots, whether NaMo will be risking his reputation by campaigning for the BJP in these state elections and whether NOTA will be a winner are moot questions. An even bigger one is about the credibility of Manmohan Singh for the rest of his term as Prime Minister. .....

ISAS Insights No. 230 â&#x20AC;&#x201C; 4 October 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

A Common Economic Recipe for India and Pakistan Shahid Javed Burki1

Abstract Both India and Pakistan are passing through delicate political times. India is getting ready to hold the next general election no later than the spring of next year when the term of the current government expires. Pakistan, having held elections in May 2013, has a new government in place. In both cases the government will be tested in the field of economics. How the performance of the two governments will be judged is a question that is being debated in the two countries. The Indian Government under Prime Minister Manmohan Singh has chosen to allow its performance to be determined essentially by the prices that people have to pay for the items of everyday consumption. Inflation has been relatively high in recent months. The new Pakistani Government, headed by Prime Minister Nawaz Sharif, seems half-inclined to treat the level of prices as an important test for his ability to restore economic health to the country. In adopting these policy decisions, the two governments are making serious political mistakes. Their electoral appeal will be determined by the rates of growth of their national economies and not by the modest changes in the level of prices.

Mr Shahid Javed Burki is Visiting Senior Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at sjburki@yahoo.com. The views expressed in this paper are those of the author and do not necessarily reflect those of ISAS. During a professional career spanning over half a century, Mr Burki has held a number of senior positions in Pakistan and at the World Bank. He was the Director of China Operations at the World Bank from 1987 to 1994 and the Vice President of Latin America and the Caribbean Region at the World Bank from 1994 to 1999. On leave of absence from the Bank, he was Pakistanâ&#x20AC;&#x2122;s Finance Minister, 1996-97.

Fluctuating Currency Values For the last several months the South Asian currencies have been under a great deal of stress. The Indian rupee has lost 20 per cent of its value in terms of the American dollar since the beginning of the year. The Pakistani rupee lost close to 14 per cent of its value in the same period. Both governments have taken some steps to steady their currencies. Both have had some success. In both cases the rupee has pulled back from the lows it reached. But in focusing on the value of their respective currencies they have made one big mistake that will prove to be politically costly. They have opted for stabilisation over growth. For this they have been punished by the markets. The markets will continue to be sceptical for as long as the policy makers don’t change the long-term course they are taking. It is recognised even by those who focus on their occasional failures that markets are good at a number of things. They can sense when the making of public policy is being done in a state of panic. That is what happened in India when the Indian rupee plunged in value with respect to the American dollar. That was in mid-August. At one point it took seventy Indian rupees to purchase one American dollar. In pushing the value of the rupee down, the markets were responding to a series of ill-advised moves by the country’s economic managers. The most troubling of these was the focus on reducing the level of inflation even if it meant hampering growth. This was done by using such monetary instruments as the rate of interest controlled by the Reserve Bank of India. The central bank took other steps as well. It provided foreign exchange to the oil-importing companies so that their presence in the market did not create a US-dollar liquidity problem. These were essentially short-term measures with a short-term outcome – the partial recovery in the value of the rupee. It will take an entirely different strategy to put the rupee on a firmer ground.

Gold ‘Flow’ Across Pak-India Divide Even though the economies of India and Pakistan are not connected in any meaningful sense, they share a long and somewhat porous border which means that in some cases when shortages build up in one country, supplies flow in from the other. This has happened in the case of gold. India, in order to save its reserves from being depleted, sought to control the demand for the metal, imposing a heavy duty on its import. This created a sharp price differential across the border which resulted in gold imports rocketing in Pakistan. The additional supplies were brought in essentially to satisfy the large Indian demand for the precious metal. The plunge-and-recovery by the Pakistani rupee was equally spectacular. While the quick fall and some recovery of the Indian rupee happened over a period of two weeks, the Pakistani rupee moved down and up in just two days, on 26 and 27 September. After the rupee traded at more than 110 to the American dollar, the State Bank of Pakistan stepped in and pumped US$ 50 billion to US$ 60 billion into the money market. With dollar liquidity thus restored, 2

the rupee recovered and the week closed with the exchange rate at a little over 106 to a US dollar. By flooding the market with American dollars the authorities have bought a little bit of time. They are also attempting to open a line of credit with a consortium of banks to have more foreign exchange at hand if the pressure on the rupee does not ease. The Pakistani markets are testing the resolve and competence of the new policy makers who have been in place for about four months. Will they pull back some of the measures that were incorporated in the budget presented in early June. Some of these have produced jitters among the relatively well-to-do segments of the society. These have perfected the “taxdodge” – the ability to avoid the taxman by playing games with the system. The most cited reason for the market’s nervousness was the permission given to tax authorities to access the bank accounts of high net-worth individuals. The people holding large accounts reacted by withdrawing them from their banks, converting them into US dollars, and sending a good part of the acquired amounts overseas. This resulted in a sharp build-up in demand for the American dollar which in turn increased its price in terms of rupees. The result was a five per cent plunge in the value of the rupee, the sharpest one-day fall in the country’s history.

Restoring Market Confidence The only way to steady the markets on both sides of the border is to give a clear signal to them that the policymakers have well-thought-out strategies in place to address the longerterm issues the two countries face. Here India has greater degrees of freedom than those available to Pakistan. To some extent the policy makers in Islamabad have their hands tied because of the programme they have signed with the International Monetary Fund. The choice they have to make is between growth and stability. Even though the IMF’s traditional focus on the latter at the expense of the former has been softened somewhat by its experience in the late-1990s during the Asian Financial Crisis, the institution has not significantly departed from its long-held philosophy. Then the countries receiving help from the institution had to drastically reduce public expenditure; curtail domestic demand by raising interest rates; and open the economies to foreign trade. The strategy worked but at the expense of a sharp economic contraction, loss of jobs and increase in the incidence of poverty. The approaches being followed by both India and Pakistan are less drastic but both countries are leaning towards achieving economic stability even if it means reducing the rate of growth. Both are using the interest rate as the instrument for stabilising the economy. The policy makers fear inflation more than a slowdown in the rate of economic growth but they don’t have the political muscle to rein in government expenditure. Not being able to use fiscal policy as a stabiliser, the policy makers are using monetary tools. That is a mistake. They should take some risk with inflation to get growth back on track. That approach will also create greater confidence in the markets and help with the exchange rate.

Importance of Economic Growth Growth versus price stabilisation is not a new debate. Nor is the debate about the most effective instrument for increasing the rate of economic growth. Liberal economists have always put growth above stabilisation. It is only with growth that the poorer segments of the population can be helped. There is a virtual consensus among policy analysts that interest rates are the most important tool available to governments for promoting growth. Economists use a formulation called the IS curve (the Investment-Savings equation) to show how interest rates can slow or increase the rate of economic growth. For economies such as those in South Asia, slight interest adjustments can produce telling results. With sharp declines in GDP growth in India over the last year and a half, the country needs to lower interests to reignite growth. With Pakistanâ&#x20AC;&#x2122;s economy stuck in a recession for the last six years, it is also the lowering of the interest rate that should be the policy of choice. In both cases, however, the currency markets have pushed the policy makers in the opposite direction. Sharp declines in the values of the two currencies have persuaded the economic managers in the two countries to raise interest rates. By doing so they have stabilised â&#x20AC;&#x201C; perhaps only momentarily â&#x20AC;&#x201C; their currencies but they have achieved that result by jeopardising growth.

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ISAS Insights No. 231 – 8 October 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Manmohan Singh Meets Obama: Firming up Indo-US Strategic Partnership S D Muni1

India’s Prime Minister Manmohan Singh and US President Barack Obama had their third summit at the White House in Washington on 27 September 2013. This would probably be their last summit, unless Dr Singh gets a third prime ministerial term after the Indian general elections expected to be held by April-May 2014. President Obama made a special gesture to make Dr Singh’s visit memorable. He organised a working lunch at the White House – only second such lunch so far by him for a visiting head of state/government. And, he personally walked down the White House portico ignoring the set protocol to see Dr Singh off. US First Lady Michelle Obama also extended a special courtesy to Dr Singh’s wife, Mrs Gursharan Kaur, by hosting her over tea at the White House while the two leaders were engaged in official deliberations. The context in which this meeting took place had two notable aspects. One, both the leaders were under their respective domestic political pressures: Mr Obama on account of budget standoff with the Republicans, which later led to a federal shutdown, and Dr Singh for opposition-led attacks on his government for corruption, inefficiency and mal-governance. To add to Dr Singh’s predicament, just ahead of the summit, Rahul Gandhi, the powerful Congress Party Vice-President had rubbished the ordinance brought up by his government to 1

shield corrupt politicians even after their conviction in a court of law. Two, the two leaders were also meeting when a perception of an eroding momentum had built up around the IndoUS strategic partnership, with little movement in civil-nuclear deals and the growing US frustration with regard to Indian barriers to market access and over investment climate. Clarifying doubts in this respect, India’s National Security Advisor, Shivshankar Menon, said on the eve of the summit that: One reason for this perception may be the fact that it is now a full spectrum relationship, no longer focused on one big transformational idea like the civil nuclear cooperation initiative in 2005-8. To me that breadth is the strength of the relationship. The impression of drift is also partly due to economic factors. It arises from the macro-economic situation. US friends mention concerns about economic reforms and specific policy issues in India. These concerns are not unique to the US. They are, first and foremost, of concern to Indians.2

Strategic Coordination in Asia The Singh-Obama summit covered all the important aspects of the “comprehensive global strategic partnership”, involving bilateral cooperation in the fields of “security, bilateral trade and investment, energy and environment, higher education and global architecture”. The Joint Statement issued at the end of the summit clearly underlined that there was no drift in IndoUS partnership in strategic and security matters. The two countries reiterated their resolve to “work together across Asia and around the globe”.3 India has often been hesitant in claiming that it endorsed the US strategy of rebalance in the Asia-Pacific region, but the Joint Statement, for the first time publicly declared a convergence between the “U.S. Rebalance to Asia and India’s Look East policy” and underlined an expressed desire to “partner more closely with other Asia-Pacific countries, including greater coordination with Japan, China and ASEAN” (emphasis added). In this respect, the two leaders extended support to “regional multilateral institutions as they continue to develop into effective bodies built on international rules and norms that can address shared challenges”. One of the unnamed shared challenges between India and the US has been China’s rise and assertiveness. There are approximately 32 Indo-US discussion groups institutionalised for mutual consultations on various aspects of their shared concerns. These consultations also cover “East Asia, Central Asia and West Asia”. It was disclosed that such consultations would also be extended to Indian Ocean. From the existing “trilateral dialogue mechanisms with Afghanistan and Japan” to the agreement to “deepen coordination on cross-cutting issues including maritime security and conservation of natural resources” were taken note of in the Statement. In the Indian Ocean region, the US wants India to emerge as a major security provider. 2

See Menon’s article, entitled “Relations with the US: India remains optimistic”, in The Tribune (Chandigarh), 23 September 2013. Citations from the Joint Statement in this paragraph and subsequently are from the Text of “India-U.S. Joint Statement Following Obama-Singh Summit” available at http://iipdigital.usembassy.gov/st/english/texttrans/20130927283736.html. (accessed on 1 October 2013)

Two significant aspects of strategic cooperation and coordination between India and the US highlighted in the Joint Statement were the references to Iran and Pakistan. On Iran, the “leaders stressed the need for diplomacy to resolve outstanding issues relating to Iran’s nuclear programme, and called on Iran to comply with its IAEA and UN Security Council obligations”. Such a reference echoed the possibility of quiet Indian help in facilitating US contacts with Iran on the nuclear question. With regard to Pakistan, the Indo-US approach on terrorism-related issues seems to be getting closer. This can be sensed from the paragraph devoted to the subject in the Joint Statement that said: President Obama and Prime Minister Singh strongly condemned the September 26 terrorist attack in Samba in Jammu and Kashmir. They reiterated their condemnation of terrorism in all its forms, and reaffirmed their commitment to eliminating terrorist safe havens and infrastructure, and disrupting terrorist networks including Al-Qa’ida and the Lashkar-e-Taiba. The Leaders called for Pakistan to work toward bringing the perpetrators of the November 2008 Mumbai attacks to justice. Pakistan’s Prime Minister Nawaz Sharif, who was in the US when this statement was issued, waiting to have a bilateral meeting with Dr Singh, got irked by the latter raising the question of cross-border terrorism from Pakistani side in his discussions with the US President. Rejecting allegations against Pakistan, Mr Sharif said, “far from being a sponsor, Pakistan was actually a victim of a foreign funded well organized wave of terrorism”. 4 He must have been reminded of a somewhat similar experience in 1999 when he was strongly urged by the then US President, Bill Clinton, to stop Pakistan’s aggression against India in the Kargil sector of Jammu & Kashmir.

Bilateral Defence Cooperation An essential component of the Indo-US strategic partnership has been their bilateral defence cooperation. Defence trade between the two countries has been growing steadily, reaching US$ 9 billion level, and the two countries are exploring huge potential available. The latest Indian acquisitions from the US include heavy-lift C-130J Super Hercules and C-17 Globemaster aircraft, advanced maritime reconnaissance aircraft and attack helicopters. The two leaders “expressed satisfaction with the progress achieved” and further “emphasized the need for more intensive defense cooperation on both sides”. This relationship has now been upgraded from “buyer-seller” level to, what India’s National Security Advisor Menon described as, that of “joint research, co-development and co-production of defence products through partnership between our defence industries”.5 To boost this cooperation, a separate Declaration was issued after the summit. This Declaration raised India to the level of “closest partner” of the US on reciprocal basis, for “defence technology transfer, trade, research, co4

“I never called Manmohan Singh a ‘village woman’: Pak PM Nawaz Sharif”, The Times of India, 2 October 2013. Menon, op.cit.

development and co-production for defence articles and services, including the most advanced and sophisticated technology”. 6 The Declaration further promised that “specific opportunities for cooperative and collaborative projects in advanced defence technologies and systems” will be identified “within the next year”.7 In signing this Declaration and elevating India’s status as US’ closest defence partner, Washington has shown a special gesture of accommodating Indian sensitivities. It dropped its insistence on India signing three agreements; Communication Interoperability and Security Memorandum of Agreement (CISMOA), the Logistics Agreement (LSA) and the basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation), as a precondition for freer defence technology transfers. Explaining this, US Deputy Secretary of Defense Ashton Carter, who has been a driving force in the Pentagon for closer Indo-US defence ties said during his visit to Delhi weeks before the Washington summit: We are not ignoring them but we are working around so that they (these agreements) do not become obstacles…Obviously, we would like these to be concluded but we needed to get on with the work. We are trying to succeed in doing practical things together even though India has not shown keenness to sign these agreements…many find our foreign military sales programme cumbersome, and many of my Indian colleagues say the same thing to me, and I readily acknowledge that we need to get better at making it more user-friendly…The goal is to make it so that the only limitations on what we can do together at two defence establishments are limitations that arise from our different interests or different policies, but that there otherwise isn’t any mechanical or bureaucratic impediment to doing things together that we want to do…8 America’s purpose behind this accommodating gesture was to match Russia as India’s defence partner which has about 70 per cent share of the Indian defence acquisitions. Admitting this, Carter said: “Yes, that is exactly the same kind of thing where two industry teams are involved in whole product life cycle where the product is both co-produced and developed. That is a new way for the US and India. We do not have the history that Russia does. We are trying to replicate that”. 9 Soon after signing the defence cooperation Declaration with India, the US assured: “No, it’s not about China…It’s about ensuring the peace and stability that the Asia-Pacific has enjoyed for over 60 years and ensuring that it continues…We also seek to strengthen and grow our military-to-military relationship with

7 8

“India-US Joint Declaration on Defence Cooperation”, Text issued by Press Information Bureau, Government of India, Prime Minister’s Office, 28 September 2013. http://pib.nic.in/newssite/Printrelease.aspx. (accessed on 1 October 2013). Ibid. “US: We want to replicate Russian model of defense co-operation with India”, (Discussion in The War Room started by Alamo, September 21, 2013), http://forums.spacebattles.com/threads/os-we-want-toreplicate-russian-model-of-defen... (accessed on 2 October 2013). Ibid.

China”.10 India on its part tried to reassure Russia that deepening defence cooperation with the US to cover joint production was not at the latter’s cost. External Affairs Minister Salman Khurshid said: “Everybody knows that we have to diversify and expand. But we do not do this at the cost of traditional friends of ours. There is massive cooperation between India and Russia, which continues apace, that is not going to be affected”.11

Trade and Investment The hype on defence cooperation resulting from the summit was not evident in Indo-US economic engagement. The steady growth in bilateral trade between the two countries that has registered a “five-fold” increase since 2001, now reaching “nearly $100 billion” was acknowledged, but the Joint Statement also recorded President Obama’s “expressed confidence that the ongoing Indian economic reforms and policy measures to liberalize India’s economy would accelerate economic growth, opening greater avenues for trade and creating jobs in both countries”. The US business lobbies have been up in arms against barriers to market access in India. Concerns in this respect were also raised two months earlier when US Vice-President Joe Biden visited India in July 2013. 12 On the eve of Dr Singh’s journey to the US, the leaders of India Caucus in the US Senate proposed a resolution asking the summit to “pave the way for greater economic liberalization, facilitate easier foreign direct investment and lead to a bilateral investment treaty”. But the signing of the “high-standard Bilateral Investment Treaty” did not come through as the summit could only underline “the need for expeditious progress” and “agreed to consider establishing a Joint Committee on Investment in Manufacturing”. There was, however, some movement in the area of civil-nuclear cooperation. The two leaders took note of the fact that the “government–to-government procedures” had been agreed and “commercial negotiations between US companies and the Nuclear Power Corporation of India (NPCIL) are proceeding”. The preliminary contract signed between NPCIL and the US companies, Westinghouse and General Electric-Hitachi, for proposed nuclear power plants in Gujarat and Andhra Pradesh states of India was referred to in the Joint Statement. Indian commentators remain intrigued as to why the US companies are so rigid on India’s nuclear liability provisions when Russian and French companies, with their equally strong reservations on these provisions, have moved forward to work in India’s civilnuclear sector.13

China Daily, October 01, 2013. http://usa.chinadaily.com.cn/epaper/201310/01/content_17006372.htm.(accessed on 2 October 2013). The Deccan Herald (Bangalore), October 02, 2013. http://www.deccanherald.com/content/360447/defenceties-us-not-russias.html. S D Muni, Biden’s Visit to India: Pushing the Asia-Pacific ‘Pivot’, ISAS Insights No. 217, 29 July 2013, http://www.isas.nus.edu.sg Indrani Bagchi, “Pick up that dropped ball”, The Times of India, (blogs) 24 September 2013, http://blogs.timesofindia.indiatimes.com/Globespotting/entry/pick-up-that-dropped-ball. (accessed on 30 September 2013).

The Singh-Obama summit has definitely reinforced Indo-US comprehensive strategic partnership by raising the level of defence cooperation between the two countries. The world would carefully watch the unfolding of this cooperation in the coming months and years. The challenge before the Indian leaders is to convince their national constituencies as well as the world that greater defence collaboration with the US will not compromise Indiaâ&#x20AC;&#x2122;s strategic autonomy. Prime Minister Singhâ&#x20AC;&#x2122;s visits to Russia and China in the coming months will provide an appropriate opportunity to address this challenge. .....

ISAS Insights No. 232 – 14 October 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Back to the Basics in Indo-Pak Puzzle P S Suryanarayana1

Abstract The issue of inviolability of the India-Pakistan Line of Control in Jammu and Kashmir is once again in prime focus – this time, in the context of the latest meeting between the Prime Ministers of these two South Asian neighbours. While not being entirely clouded by the Indian media discourse on a ‘Second Kargil’, the new India-Pakistan move for peace and tranquillity along the LOC requires much sunshine diplomacy from both the civil and military officials of the two sides.

Much ‘Ado’ about ‘Second Kargil’ Sino-Indian relationship and Indo-Pakistan engagement has often come under intense pressure from the foreign-policy ‘hawks’ of various hues in India. Significant in this context is the latest Indian domestic discourse on the so-called ‘Second Kargil’ – a new wave of clandestine ‘Pakistani infiltration’ into India across the Line of Control (LOC) in Jammu and Kashmir. The Pakistani authorities have by and large stayed away from the politics of this controversy. Interestingly, however, this discourse has been strongly discounted by some ‘informed’ authorities in India itself, on the basis that the latest non-intensive wave of ‘Pakistani infiltration’ could not be accurately described as ‘Second Kargil’. 1

Among Indians, ‘Kargil’ is the political shorthand for Pakistani ‘aggression’ or clandestine ‘infiltration’ into India across the LOC in 1999. This led to a conflict that ended only when the Indian Army regained total control over the territory where the infiltrators had entrenched themselves. On the diplomatic front, the then President of the United States (US) Bill Clinton intervened to exert pressure on Pakistan to respect the sanctity of the LOC. The sanctity of the LOC is in sharp focus this time, too, involving just India and Pakistan as the sole stakeholders – and not the US as well. The Indian Army is widely believed to have rolled back the so-called ‘Second Kargil’ ‘infiltration’ by 9 October 2013. However, the ‘second Kargil’ has cast a faint shadow over, but not shattered, the importance of the meeting that India’s Prime Minister Manmohan Singh and his Pakistani counterpart Nawaz Sharif held in New York on 29 September 2013. Identifying the principal “takeaway” of that Singh-Sharif meeting, the Pakistan Foreign Office Spokesman, speaking in Islamabad on 3 October, said that “the two Prime Ministers agreed to stabilize the situation on the Line of Control”.2 (Emphasis is added by the author.)

Mechanism for LOC ‘Stability’ In view of this agreement, the so-called ‘Second Kargil’ is of disconcerting relevance to the outcome of the latest Singh-Sharif meeting. Moreover, it is because of this very aspect that some key stakeholders in India have categorically denounced the talk of ‘Second Kargil’ as media hype. Chief Minister of the Indian state of Jammu and Kashmir, Omar Abdullah, told journalists in Srinagar on 9 October that the Indian Army, the civil authorities and indeed the Indian Government had “not spoken of any ‘Second Kargil’”. He emphasised, however, that the Pakistani “infiltrations” into India “occur incessantly” as also the “ceasefire violations” by Pakistan. Dr Singh and Mr Sharif had now agreed to “reintroduce”, or rather resurrect, the mechanism of talks between each other’s Director General of Military Operations (DGMO) to address the issue of violations of the sanctity of the LOC, Mr Abdullah pointed out.3 As for the “hype” over the so-called ‘second Kargil’, he said Pakistani “infiltrators” were now being sent into India in bigger batches of 30-40 persons each instead of five or six in a batch as before. So, the entry of at least five or six out of a batch of 30-40 would be deemed by their masters as “a success” in the current context of a heightened alert on the Indian side, Mr Abdullah explained.4

The quotation is from “a rush transcript” of the Pakistani press briefing on 3 October 2013; and this “may be updated”, the Pakistan Ministry of Foreign Affairs said. http://www.mofa.gov.pk/pr-details.php?prID=1488 (accessed on 7 October 2013) These significant comments, in Urdu, by Jammu and Kashmir Chief Minister Omar Abdullah are taken from a video-recording of his media interaction in Srinagar on 9 October. This video on the website of ‘Greater Kashmir’ newspaper in Srinagar (http://www.greaterkashmir.com) was accessed on 11 October 2013.The translation from Urdu is by the author. Ibid

In an op-ed piece, Syed Ata Hasnain, a former Corps Commander of the Srinagar-based 15 Corps of the Indian Army and an architect of its ‘hearts-and-minds approach’ in Jammu and Kashmir, has also sought to debunk the hype over the so-called ‘Second Kargil’. In his view, “there is no need to go hyper”. His assessment: “This was never Kargil II. Kargil had strategic importance because of the Leh-Srinagar Highway and the link with Siachen. The Keran/Shalabatu episode [of infiltration, dubbed as ‘Second Kargil’] was [just] a clever ploy to push the maximum number of terrorists into the [Kashmir] Valley [on the Indian side]. This is not the first time that Shalabatu has been used for infiltration or concentration”. 5 The references to various strategic locations should be seen in the context of their salience to either the Kargil conflict of 1999 or the current “hype” over ‘Second Kargil’, as the case might be. A not-so-subtle message in this sub-plot – the media hype over ‘Second Kargil’ – is that the latest and apparent bonhomie between Dr Singh and Mr Sharif could now be undermined by Pakistan’s Army and military Inter-Services Intelligence (ISI) – in a repeat of recent history. The “hype” over ‘Second Kargil’ is a reminder that the military spadework for the 1999 Kargil conflict was already under way even as Mr Sharif and the then Indian leader A B Vajpayee issued their optimistic Lahore Declaration a few months earlier. On balance, it is clear from the professional assessment by Lt Gen (Retired) Ata Hasnain and from the political perspective of Mr Abdullah that India thinks that it can better ward off unpleasant surprises from Pakistan now than at the time of the Kargil conflict of 1999.

Sharif’s ‘Right’ Note Dr Singh’s own view, as expressed by him on 1 October, aptly characterises the present state of Indo-Pak talks as diplomacy of sentiments rather than substance. He was responding to questions during an onboard media interaction while on his way back home from New York. He was specifically asked whether Mr Sharif “is being held back by the ISI and the Pakistan Army”. Dr Singh skirted the questioner’s references to the ISI and the Pakistan Army and, instead, summed up the essence of the current state of Indo-Pak relations as follows: “I very much hope that Nawaz Sharif succeeds. He is the democratically elected Prime Minister of a neighbouring country, and he has said all the right things about Indo-Pakistan relations. So, I sincerely hope and pray that he does succeed in carrying out his mission”.6 Positive sentiments and personal chemistry do facilitate difficult talks between the leaders of neighbouring countries with unresolved disputes. However, the bottom-line for improved relations between such neighbours is the building of mutual trust on a verifiable basis. These

http://www.thehindu.com/opinion/op-ed/an-ambitious-ploy-in-the-heights/article52148... (published and accessed on 9 October 2013) Transcript of Prime Minister’s onboard media interaction during his return from USA, http://www.mea.gov.in/media-briefings.htm?dtl/22278/Transcript+of+Prime+Ministers...

aspects, surely not as novel as some high-tech artificial intelligence in diplomacy, are relevant to the outcome of the Singh-Sharif meeting in New York on 29 September. Their informal talks, not to be mistaken for serious summit-like parleys, were held on the occasion of the United Nations General Assembly’s annual session. The much-awaited meeting was preceded and followed by frequent narratives and counter-narratives about actual ceasefire violations across the Pakistan-India Line of Control (LOC).

‘The Precondition’ for Progress Unsurprisingly, the only outcome of the meeting was a decision by the two leaders to mandate the DGMO on each side “to come up with a clear plan to restore the ceasefire and to make sure that it is enforced and stays in place”.7 Annotating the decision immediately after the meeting, India’s National Security Advisor Shivshankar Menon, who briefed Indian journalists, said: “They [the two leaders] were both agreed that the precondition for a forward movement in the relationship, which they both desire, is really an improvement of the situation on the LOC where there have been repeated ceasefire violations and incidents [since the truce that was agreed upon several years ago]”.8 (Emphasis is added by the author). The official Indian perception of the outcome of this Singh-Sharif meeting is essentially one of guarded attitude of giving the DGMOs a chance to succeed. A more categorical hope was voiced by the Pakistan Foreign Office Spokesman nearly four days after the talks. At a regular press briefing in Islamabad, the Spokesman, answering questions on the Sharif-Singh meeting, said: “The DGMOs of the two countries were directed to discuss the matter [of stabilising the situation on the LOC] and ensure that the ceasefire is respected. We hope that this would lead to further engagement between the two governments for the resumption of composite dialogue”.9 (Emphasis is added by the author.) Favoured by Islamabad today, the Indo-Pakistan “composite dialogue”, also initiated several years ago, has meandered because of frequent complications in the bilateral interactions. Unsurprisingly, the most notable negative development was the terrorist attacks in Mumbai in 2008, which New Delhi and the wider international community have traced to the proactive anti-India forces in Pakistan. In its current democratic transition, Pakistan is keen to persuade India to resume dialogue on all substantive issues including the “dispute” over Jammu and Kashmir. India’s priorities, as spelt out by Mr Menon after the latest Singh-Sharif meeting, are different in a nuanced 7

8 9

This was disclosed by India’s National Security Advisor Shivshankar Menon after the Singh-Sharif talks. For details of the Indian perception of the outcome of these talks, access: http://www.mea.gov.in/mediabriefings.htm?dtl/22270/Transcript+of+Media+Briefing+by+National+Security+Advisor+on+Meeting+betw een+Prime+Ministers+of+India+and+Pakistan+September+29+2013 Ibid This quotation is also from “a rush transcript” of the Pakistani press briefing on 3 October 2013; and this “may be updated”, the Pakistan Ministry of Foreign Affairs said. http://www.mofa.gov.pk/prdetails.php?prID=1488 (accessed on 7 October 2013)

manner. Mr Menon said: “Prime Minister Nawaz Sharif mentioned the incidents of terrorism that Pakistan is also suffering from. But he also said that there would be action on the Mumbai cases now that the Judicial Commission [of Pakistan] has been in India and has gathered depositions and evidence which they could use. ... My understanding is that both sides wish to see a better India-Pakistan relationship than [what] we have today, and that, in this [Singh-Sharif] meeting, it was also clear that for both of us [the] precondition is really to address the immediate issues that we have, which is to restore peace and tranquillity along the Line of Control. From our [Indian] point of view, an issue that is very important is to address the terrorism issue, and we are making progress on that. Prime Minister Nawaz Sharif mentioned many issues from the Pakistani point of view as well. But I think, right now, our effort [on both sides] is focused on making it possible to move towards a broader dialogue, and that stage has not come yet”.10 (Emphasis is added by the author.)

Sensitivities beyond LOC Concerns The new India-Pakistan agreement to task their DGMOs to restore ceasefire and to stabilise the LOC is a clear sign of going back to the basics. However, the two countries are also looking at their respective equations with both the United States and China. These equations are in a transitory or even transformative phase. Islamabad is concerned about the nature and scope of the discussion on Pakistan that Dr Singh had with US President Barack Obama at the White House on 27 September, two days prior to the Singh-Sharif meeting that we are discussing. This is somewhat reminiscent of New Delhi’s consternation, a few years ago, at the way the US and China discussed South Asia for the first time. (South Asia is diplomatic shorthand for India-Pakistan equation). From the Pakistani perspective, an issue to be watched closely is the implementation of the ‘U.S.-India Joint Declaration on Defense Cooperation’ that was issued after the Obama-Singh meeting on 27 September. The crux of the Declaration is that “the United States and India share common security interests and place each other at the same level as their closest partners”.11 It is possible to discuss whether the US has now become India’s “closest partner” in the defence domain (replacing Russia), or whether India is to America just as good as Washington’s closest partner (not ally) prior to September 2013. Arguably, one of America’s closest partners today, as distinct from closest military ally, is Singapore. Is Obama placing India in this league or on an altogether different plane? An additional factor, however, is that the US has now agreed to partner India in co-research, co-development, and co-production of high-tech military hardware. In all, therefore, India is being accepted by the US, and vice versa, as a military partner just below the rank of an ally. 10 11

These comments are drawn from the same source as cited in the N.7 above ‘U.S.-India Joint Declaration on Defense Cooperation’, http://www.whitehouse.gov/the-pressoffice/2013/09/27/us-india-joint-declaration-defense-cooperation

At another level, India, while tending its ties with China, will watch Beijing’s interactions with Islamabad more closely than before. Significant new developments in this regard are the Sino-Pakistan moves for Karakoram Highway modernisation, the likely new steps towards a ‘China-Pakistan economic corridor’ and the development of Gwadar port in Pakistan as strategic projects. Also not lost on India is the likely heightened relevance of Pakistan to the US in its calculus for post-2014 Afghanistan and in America’s China policy into the future. For Pakistan, too, a matter of particular interest and concern is India’s increasingly vibrant engagement with China, although the improving Sino-Indian relationship is not problem-free at all. In such a grand sweep of emerging realities, interesting, if not also intriguing, is New Delhi’s accent on “peace and tranquillity” along the India-Pakistan LOC – the standard terminology which India and China have adopted with reference to their Line of Actual Control. Diplomats and scholars have, over the decades, deployed various terminologies to describe the deeply troubled Pakistan-India relationship. Stephen P Cohen has now focused on ‘Shooting for a Century: The India-Pakistan Conundrum’.12 With Mr Menon using the phraseology of “peace and tranquillity” in the Pakistani context, it is possible that New Delhi prefers to apply the somewhat-practical Sino-Indian model of engagement to the problematic efforts at striking some form of Indo-Pak equilibrium.

.....

This is the title of Stephen P Cohen’s new book on the India-Pakistan equation.

ISAS Insights No. 233 – 6 November 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

A New Way to Manage an Old Dispute P S Suryanarayana1

Abstract China and India have now travelled the proverbial extra mile towards each other to proclaim that a qualitatively new ‘Panchsheel’ spirit is attainable in their chequered relationship. When ‘Panchsheel’ – the Five Principles of Peaceful Coexistence – were enunciated by China and India, acting in concert in 1954, there was not much asymmetry between their respective national strengths. Today, while both China and India are nuclear-armed space powers, China overshadows India in a big way in the economic domain and is ahead in a number of aspects of military preparedness. It is this contrast in time and political space that brings the latest Sino-Indian Border Defence Cooperation Agreement (BDCA) into the futurist focus. This aspect of the Sino-Indian summit held in Beijing on 23 October 2013 stands scrutiny as a sign of renewed statesmanship. But the hopeful sign must still pass the test of realpolitik until the two countries resolve their basic border dispute.

Seizing a Symbolic Moment China and India have now “reaffirmed their commitment to take forward their Strategic and Cooperative Partnership for Peace and Prosperity”. It is possible, though, to view this commitment as nothing more than a standard diplomatic formulation with no historic importance. Such a reading is not necessarily cynicism writ large, given the hugely1

chequered and somewhat-competitive equation between the two Asian mega-state neighbours. The new pledge is contained in the Joint Statement issued at the end of a cordial summit between Chinese Premier Li Keqiang and India’s Prime Minister Manmohan Singh in Beijing on 23 October 2013. More significantly, it must be noted that an accompanying pledge does dramatically raise the quality of this standard formulation. As a qualitative update, this concomitant pledge is also contained in the same Joint Statement which is styled as “A Vision for Future Development of China-India Strategic and Cooperative Partnership”. The crux of the accompanying pledge, a quality-multiplier, is that China and India would take their Partnership forward “by following the Five Principles of Peaceful Coexistence [Panchsheel] and displaying mutual respect and sensitivity to each other’s concerns and aspirations”.2 Here, too, while there is nothing really novel about Panchsheel in Sino-Indian relations, huge symbolism marks the current countdown to the 60th anniversary of the enunciation of these Principles in 1954. There is also some nuanced focus, now, on this “sensitivity to each other’s concerns and aspirations”. However, what is conspicuously absent in this particular formulation is a shared commitment to respect each other’s ‘interests’ or ‘core national interests’. Interestingly, as Sherlock Holmes would say to Mr Watson, it is “elementary” logic that the abiding ‘national interests’ of a state rank above its ‘national concerns’ which are no more than anxieties, mostly over more immediate issues. By significant contrast to ‘national concerns’, ‘core national interests’ are fundamental to the well-being of a state at any given time as also over the long-term. In such a perspective, it cannot be argued that the absence of ‘core national interests’ in this latest China-India formulation is a simple matter of a drafting lapse. The two countries are known to talk to each other with a great deal of precision, even if that be in coded language at times.3

Core Interests: No Reciprocity Paradigm It is, therefore, obvious that China has not yet come to a stage of openly conceding reciprocity in dealing with India’s “core interests”. The imperative of such reciprocity is a theme that Indian diplomats are known to have frequently emphasised. Relevant to this line of argument is the new sign of some distinct progress towards such reciprocity in the specific domain of Sino-Indian cooperation on regional and global issues (not bilateral issues). The latest Vision Statement emphasises that Mr Li and Dr Singh “encouraged the various mechanisms and dialogues covering relevant issues [of regional and global importance such as climate change etc] to meet regularly”. Such regular meetings are tasked to “ensure a 2

Foreign Ministry of the People’s Republic of China, Joint Statement – A Vision for Future Development of China-India Strategic and Cooperative Partnership 2013/10/23, http://www.fmprc.gov.cn/en g/zxxx/t1092256.shtml This is evident to the author from his conversations with Chinese and Indian diplomats, behind the scenes, over a period of years. 2

proper appreciation of each other’s concerns and interests”4 – a clear reference to the national interests of India and China, albeit in a regional or global context and not the purely bilateral domain. In diplomatic parlance, this kind of “appreciation of ... [national] interests” can only be a prelude to, but not a prescription for, the national interests being addressed or accommodated in a bilateral framework such as China-India relationship. Add to this kind of diplomatic rider the fact that the latest China-India Vision Statement has no clarity about whether the “appreciation of each other’s concerns and [national] interests” will also apply to the day-to-day dynamics of ties between Beijing and New Delhi. It is possible indeed that India and China have consciously chosen to ignore the importance of an agreed formulation about each other’s national interests (as different from just concerns) in the purely bilateral domain. More accurately, it is evident that Beijing and New Delhi have not yet reached a stage where they can agree to address and accommodate each other’s long-term national interests in the exclusive framework of the Sino-Indian relationship. The Vision Statement, which Mr Li commended5 after meeting Dr Singh on 23 October, is notable for their more immediate concern of maintaining “stability”6 along the undefined Line of Actual Control (LAC) in the disputed Sino-Indian border areas. Yet, Mr Li was emphatic in describing the current state of Sino-Indian engagement as “the most promising bilateral relationship in the world”.7 The idea of stability is embedded in the Border Defence Cooperation Agreement (BDCA), which was signed following the Li-Singh talks on that day. The BDCA is the fifth in a series of Sino-Indian confidence-building measures (CBMs) which were initiated in 1993 with the explicit objective of maintaining peace and tranquillity along the LAC which is neither delineated on maps nor physically demarcated. The BDCA is anchored in the firm belief that “the India-China Strategic and Cooperative Partnership for Peace and Prosperity serves the fundamental interests of the people of the two countries”. In fact, the Partnership, just cited, predates the BDCA, which in essence is a subsidiary Agreement, as well as the latest Sino-Indian Vision Statement. It should also be noted, however, that the belief cited here is not a treaty-like substitute for a firm Sino-Indian commitment to respect and accommodate each other’s core national interests in the purely bilateral domain. While it is indeed arguable that such a reciprocal commitment is not a sine qua non for improved Sino-Indian relations, the glaring absence of a bilateral pledge regarding national interests in the latest Vision Statement cannot be discounted at all. The argumentation on these lines, while being relevant to the long-term peaceful coexistence of these two Himalayan neighbours, does not at all devalue their latest Border Defence Cooperation 4 5

6 7

Same as in Note 2 above Mr Li’s statement to the media after his talks with Dr Singh in Beijing on 23 October 2013, China Central Television News Ibid Ibid 3

Agreement. In an interview to this author in Singapore, India’s External Affairs Minister Salman Khurshid described the BDCA as an “incremental ... version of cooperation”. Speaking a day after the BDCA was signed, Mr Khurshid said: “We have understood, and I think China understands this as well, there will not be any dramatic changes in our positions”. He was responding to a question whether the BDCA could be seen as a game-changer.8

Doctrine of ‘Mutual and Equal Security’ The language of the guiding principles in this Agreement can be traced way back to the SinoIndian CBMs of 1993 and 1996, both formal agreements, relating to the policies and procedures of maintaining peace and tranquillity along the LAC. These cardinal principles centre on the Sino-Indian acceptance of the doctrine of “mutual and equal security”. Significant corollaries to “mutual and equal security”, variously embedded in the latest BDCA as also the earlier Sino-Indian CBMs, virtually amount to no-war declarations (not formal non-aggression pacts). “Neither side”, according to the BDCA, “shall use its military capability against the other side”. Also specified is that China’s or India’s “respective military strengths shall not be used to attack the other side”. As spelt out in a slightly garbled English version of the Hindi and Chinese texts of the BDCA, India and China have reaffirmed that “neither side shall use or threaten to use force against the other side by any means nor seek unilateral superiority”9. The transparent message is that each side will not use force against the other and will not seek unilateral military superiority over the other. The latest pledges of non-aggressive intentions are essentially echoes of the previous SinoIndian CBMS in the same genre. Newly significant, though, is the evident reality that positive political messages are sought to be conveyed by both countries through their shared pledge against the seeking of unilateral superiority. The BDCA is the result of a Chinese initiative which had, in the first place, triggered some suspicions in India about Beijing’s real game-plan and ‘ulterior motives’. Indian officials as also opinion-makers have had to grapple with the vexed question of whether Beijing, by proposing the BDCA, was seeking to ‘freeze’ military build-ups along or near the LAC at current levels that would only favour China immensely. The logic behind such thinking in India’s official quarters, as articulated in the opinioncircles, was traceable to the recent history of diplomatic and military developments on the Sino-Indian front. In 2003, New Delhi comprehensively acknowledged (and some would say, conclusively accepted) the status of the Tibet Autonomous Region, which borders India, as 8 9

The full interview has not yet been published. In this paper, all references to the salient features of the latest Sino-Indian Border Defence Cooperation Agreement are taken from the English version of the Chinese and Hindi texts. The English text has been purveyed by India’s Ministry of External Affairs. http://www.mea.gov.in/bilateraldocuments.htm?dtl/22366/Agreement+between+the+... 4

an integral part of the People’s Republic of China. Palpable, too, in 2003 was New Delhi’s calculation that China would reciprocally accept Sikkim as an integral part of India – a form of quid pro quo that did not happen at the speed of thought (as viewed from the Indian perspective).

The Tibet, not Tibetan, Factor Regardless of the speed of such reciprocity, China has, since 2003, intensified its ‘militarisation’ of Tibet in a manner that India has gradually come to see as a disconcerting development. As a follow-up, India recently announced plans for the formation and deployment of a massive mountain strike corps along the Himalayas in the Sino-Indian border areas. Predictably, this did not amuse China in the least. This development can be interpreted in a novel fashion. Tracing the China-India bonhomie that preceded the paradoxical drift of the two countries along “the road to the border conflict” of 1962, India’s former Ambassador to China, C V Ranganathan, and his co-author, Vinod C Khanna, wrote in 2000 in following terms: “[India’s first Prime Minister Jawaharlal] Nehru’s ‘philosophic acquiescence’ (to quote the American ambassador in Delhi) in China’s ‘liberation’ of Tibet was followed by de jure acceptance of Tibet being a part of the People’s Republic of China in the famous 1954 Sino-Indian agreement, better remembered for the enunciation of the Five Principles of Peaceful Coexistence in its preamble”.10 With India initially accepting Tibet’s status as China’s possession way back in 1954 itself and with New Delhi reaffirming this in a resounding manner in 2003, the issue of the political future of Tibetans is not a critical factor in the Sino-Indian state-to-state dialogue. Emerging as a new dynamic in this Sino-Indian equation since 2003 is the perception, especially in India, about China’s rapid and continuing ‘militarisation’ of Tibet. In this sense, Tibet, rather than the Tibetans, has begun to influence the border-related dynamics of China-India relations. Unsurprisingly, an immediate result is the BDCA, which forbids attempts by both China and India to acquire “unilateral [military] superiority”.

‘No Unilateral Superiority’ What does this reciprocal pledge to eschew “unilateral [military] superiority” will, or can, mean in this post-2003 diplomatic-military context on the Sino-Indian front? As this is written, there are no authoritative interpretations of this reciprocal pledge. However, it is easy to discern what this might mean for both sides. In this context, one of the premises is that India, despite the limits of its economy which is considerably weaker than China’s, may still 10

C.V. Ranganathan and Vinod C. Khanna, INDIA AND CHINA The Way Ahead After “Mao’s India War”, Har-Anand Publications Pvt Ltd, New Delhi, 2000, p. 27 (Note: Roderick Macfarquhar had used the expression, Mao’s India War, in The Origins of Cultural Revolution in China, Vol. 3, Oxford University Press, 1997, p. 308) 5

begin a major military build-up along or near the LAC in a bid to surprise China. The corelated premise is that the Chinese, too, can seek “unilateral military superiority” either by flexing their superior economic muscle or by simply responding massively to India’s real or suspected moves along or near the LAC. In the event, this could lead to a Sino-Indian arms race along or near the LAC. It is to prevent such scenarios from happening that the BDCA forbids attempts at “unilateral superiority”. Significantly, these pledges of non-aggressive intentions, including the commitment to eschew unilateral military superiority, apply to the entire gamut of China-India relationship and not just their deployments near or along the LAC. Coming into play, in this broader spectrum, will be the defence-and-security-related equations involving China and Russia, at one level, as also India-Russia and India-US equations, at other levels. At the same time, it stands to reason that the latest BDCA, being a bilateral China-India agreement relating only to their border areas, cannot bind either Russia or the US in their respective defence-related equations with either New Delhi or Beijing. The evolving China-India military paradigm is certainly not confined to the LAC or the possible settlement of their basic border dispute in course of time through the mechanism of their Special Representatives or through some other forum. China’s growing access to Russia’s post-Soviet military knowhow is of particular interest to India, which still counts on the post-Soviet Kremlin as a time-tested friend in the defence domain. At another level, China has clearly taken note of the recent US-India Joint Declaration on Defence Cooperation, issued in Washington on 27 September 2013. The Declaration places New Delhi in a potentially unique category, in which India, without being a military ally of the US, can collaborate with it in co-research, co-development, and co-production of state-of-theart high-tech weapon-systems.11

Unique ‘Strategic Stability’ China and India are also aware of each other’s indigenous capabilities in the competitive military domain. In fact, a unique factor of ‘strategic stability’ permeates the Sino-Indian defence equation – an aspect that can arguably and paradoxically lead to an intense competition between the two sides in the conventional military sphere and along the LAC in their disputed border areas. Should this happen, it will be a case of conventional fallout from strategic or non-conventional stability in the military field. Yao Yunzhu, a Major General and a Senior Researcher at the Academy of Military Sciences in China, emphasises this unique factor of ‘strategic stability’ in Sino-Indian relations, in the following manner: “[The] mutual acceptance of NFU [No-First-Use] doctrine minimises the role of nuclear weapons in the national security strategies of both countries [China and India] and in their bilateral relations. This NFU-based strategic stability is much more reliable than 11

‘U.S.-India Joint Declaration on Defense Cooperation ‘, http://www.whitehouse.gov/the-pressoffice/2013/09/27/us-india-joint-declaration-defense-cooperation 6

one based on asymmetric deterrence and mutual vulnerability”.12 The asymmetry and China’s ‘vulnerability’ are features of the Sino-US nuclear-arsenal imbalance. China and India, too, cannot ignore the requirement of keeping their nuclear arsenals in a state-of-the-art condition to the extent possible. However, that should not cause undue concern to each other in this framework of Sino-Indian ‘strategic stability’. In this line of reasonable thinking, the conventional military sphere will have a greater salience for both India and China in their bilateral equation. It is of course true that reasonable thinking does not always guide nations. Nonetheless and on balance, the latest Sino-Indian Border Defence Cooperation Agreement is a positive step forward. The BDCA is based on a recognition of “the importance of materialising the spirit” of the border-related Sino-Indian agreements of 1993, 1996, 2005, and 2012. It is evident, therefore, that the primary basis for the BDCA is the recognition that all the earlier border-related agreements were being observed in the breach of their “spirit” if not also in the breach of their ‘letter’. Inevitably, the fine print of the BDCA is replete with procedural aspects of ensuring peace and tranquillity along the LAC. These procedural matters are too numerous to be mentioned in detail in this analysis. Details of procedure cover a graduated scale of periodic meetings – beginning at the level of LAC-deployed troops. At the high echelons of military and civilmilitary officials, regular dialogue between the both sides is envisioned. Also covered under the BDCA are some non-military affairs such as the consequences of natural disasters along the LAC as well as social courtesies among the LAC-deployed troops of the two countries. Particular mention must be made of Article IV of the BDCA which outlines the possibilities of enhancing confidence between India and China. These possibilities include (1) the establishment of functional “sites in all sectors” along the LAC for meetings between the border personnel of the two countries, and (2) the facilitation of telephone contacts between the two sides at the LAC and other levels. Furthermore, it has been agreed that “the two sides may also consider establishing a Hotline between the military headquarters of the two countries” to ensure peace and tranquillity along the LAC and for overall stability in SinoIndian relations.

Facing ‘Flash’ Situations Three kinds of potentially explosive situations have been identified and addressed. These relate to potential flash-points, in a qualitative and not territorial sense, “in [geographical] areas where there is no common understanding of the Line of Actual Control in the IndiaChina border areas”. Article VI provides that the two sides “shall not follow or tail patrols of the other side”. This is a simple way of avoiding potential confrontation that could arise from the gamesmanship of shadowing ‘the other side’ in tense situations. Article VII authorises 12

Lora Saalman (Editor & Translator) , The China-India Nuclear Crossroads, Carnegie-Tsinghua Center for Global Policy, Carnegie Endowment for International Peace, Washington, 2012, p. 71 7

each country to seek from the other side clarifications regarding its apparently dubious activities. Above all, Article VIII prescribes a way of defusing eyeball-to-eyeball confrontations in geographical areas where the two countries do not share a common understanding of the LAC alignment. In such situations, it has been agreed that “both sides shall exercise maximum self-restraint, refrain from any provocative actions, not use force or threaten to use force against the other side, treat each other with courtesy and prevent exchange of fire or armed conflict”. Such an agreed list of do’s and don’ts is either a mark of civilised confidencebuilding or a sign of hoping for a measure of best practices for peace-building or indeed a mix of these two aspects. When Beijing first proposed, on 4 March, a border defence cooperation agreement, some quarters in India saw the Chinese initiative as a ploy to consolidate the status quo along the LAC in a manner best suited to China. The Indian resistance was based on a particularly dim view of China that has persisted in some quarters since the 1962 Sino-Indian border war. And, with a bloodless but tense Sino-Indian military standoff in April-May 2013 taking several weeks to defuse, such resistance gained strength, even as India gave a counter-draft of BDCA to China on 10 May. Subsequently, with India and China reaching an agreement on 6 July for “an early conclusion of negotiations” for the BDCA, it became evident that New Delhi had by then become confident of negotiating a fair deal.13 This assessment was corroborated by India’s Ambassador to China, S Jaishankar, in his answers at a media briefing, on the BDCA, in Beijing on 23 October. He was asked whether the BDCA, as now signed, would affect India’s rights to beef up its infrastructure, including military infrastructure, near or along the LAC. Emphasising that India would face “no” restrictions as a result of the BDCA, Mr Jaishankar said: “... there is recognition that the situation on the border is asymmetrical, that what is there on their side is different from what is there on our side. So, each side in a sense will approach its security in its own way”. 14 It is too early to judge whether such an autonomous search for security will give India and China a sense of equality and, therefore, a common purpose in upholding their new Border Defence Cooperation Agreement.

.....

ISAS Insights No. 221 – 14 August 2013: The Changing Moods on the Sino-Indian Front, by P S Suryanarayana Ministry of External Affairs, Government of India, http://www.mea.gov.in/mediabriefings.htm?dtl/22381/Transcript+of+Media+Briefin...

ISAS Insights No. 234 – 28 November 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Threat of Indian Mujahideen: The Long View Shanthie Mariet D'Souza and Bibhu Prasad Routray1

Abstract The explosions in Patna in India on 27 October 2013, targeting a political rally, once again brought the Indian Mujahideen into media focus. Far from being a localised group trying to exploit local grievances, the Indian Mujahideen is fast emerging as both a formidable group within India and also an example for terrorist formations elsewhere.

Introduction The origin and growth of the Indian Mujahideen (IM) have been linked to a host of issues including communal riots, perceived alienation among the Muslims, and even India’s diplomatic relations with Israel. Some organisations and personalities have, on the other hand, termed it a mere conception of the intelligence agencies and an imagination of the media. Such speculations and presumptions notwithstanding, the evolution of the IM and its growth dynamics continue to be baffling. In the context of 18 episodes of explosions in 14 Indian cities since 2005, which 1

Dr Shanthie Mariet D’Souza is Research Fellow at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. She can be contacted at isassmd@nus.edu.sg. Dr Bibhu Prasad Routray is a Security Analyst/Consultant based in Singapore. He served as Deputy Director in the National Security Council Secretariat, Government of India, New Delhi. He can be contacted at bibhuroutray@gmail.com. Opinions expressed in this paper, based on research by the authors, do not necessarily reflect the views of ISAS.

accounted for hundreds of deaths, and despite the arrests and capture of several cadres, the group’s violent campaign appears interminable and its capacities seem unassailable. The success of the IM could inspire terrorist outfits elsewhere to emulate, revitalise and challenge the state in a unique way.

Home-Grown and Expanding The IM’s aims and objectives, loosely defined as 'a war on a Hindu India on behalf of the persecuted Muslims' have constantly shifted. The first-ever ‘manifesto’ of the group released in 2007, after the bombings of court complexes in Lucknow, Varanasi and Faizabad, claimed that the blasts were intended to “punish local lawyers" who had attacked suspects held for an abortive kidnap plot by the terrorist group Jaish-e-Mohammad (JeM). Two other ‘manifestos’, released after the 2008 blasts in Delhi and the 2010 explosions in Varanasi, faulted “the Supreme Court, the high courts, the lower courts and all the commissions” for failing the Muslims in India. The focus on the judiciary has since shifted and in fact has become more mysterious, with the outfit discontinuing the practice of mailing its ‘manifesto’ following each attack, compelling the state agencies to depend upon the interrogation of arrested cadres to unravel the intentions behind the explosions. As per such interrogation reports, the explosions in Pune in the state of Maharashtra in August 2012 were intended to avenge the killing of its imprisoned cadre Qateel Siddique by his cell mates. Blasts targeting the Buddhist shrine in Bodhgaya in the state of Bihar in July 2013 were said to have been in response to the attacks on the Rohingyas in Myanmar. The 27 October 2013 explosions in Patna, Bihar were reportedly carried out to protest against the communal riots in Muzaffarnagar in the neighbouring state of Uttar Pradesh. The recovery of a large amount of explosives at Ranchi in the state of Jharkhand on 4 November2 demonstrated the outfit's plan of maintaining the momentum in its violent campaign. Similarly, the recovery of other documents has further pointed to the possibility of the IM carrying out more violent attacks on Buddhist shrines, on foreign tourists, and public installations in the state of Chhattisgarh.3 The choice of such a wide array of unconnected objectives underscores the fact that, instead of remaining a purely ideology-based organisation with both local as well as global aspirations, the IM could be willing to carry out attacks by invoking almost any cause that might suit its convenience. Believed to be controlled by external forces and to nurture the aspiration of making common

"Nine live bombs recovered in Ranchi", Times Now, 4 November 2013, http://www.timesnow.tv/Nine-livebombs-recovered-in-Ranchi/articleshow/4440756.cms. Accessed on 5 November 2013.

Gyan Prakash, "Patna bombers had planned to target Rajgir, Nalanda", Times of India, 13 November 2013, http://timesofindia.indiatimes.com/india/Patna-bombers-had-planned-to-target-RajgirNalanda/articleshow/25664998.cms. Accessed on 14 November 2013.

cause with the Al Qaeda4, the IM's image could be transcending way beyond the metaphors of a traditional outfit that was triggering explosions only on behalf of the ‘wronged Indian Muslims’. Largely defined as an indigenous or home-grown terror organisation within India, the IM leadership does not appear to be averse to the idea of transforming the outfit into a pan-Islamist terrorist formation in the long run.

Shadowy Network The IM inherited a band of highly radicalised individuals from the Students Islamic Movement of India (SIMI), the proscribed Islamist outfit, which served as a contact group and service provider for Pakistan-based outfits like the Lashkar-e-Toiba (LeT), Harkat-ul-Jihad-al Islami (HuJI) and JeM. Along with these outfits, SIMI was involved in a spate of attacks in India's urban centres. Towards the late-1990s and early-2000, however, SIMI underwent a vertical split, with a hyper-radical group separating from the parent organisation and forming the IM. Since then, meticulous planning combined with external support from its sponsors in Pakistan has shaped the IM into a formidable group. Its success as a terror group rests primarily on the secrecy surrounding its operations. Information on the process of recruitment of cadres, assembly of weapons, funding pattern and internal sharing of vital information largely remain in the realm of unknown. In fact, its organisational fluidity and operational secrecy have turned out to be its greatest strength. Since its first attack in 2005, the outfit has managed to carefully create a highly fluid structure, capable of withstanding losses resulting from arrests of its cadres and pressures from the state agencies, and to continue with its bombing campaigns. While its top leadership is believed to be based outside the country, the middle-level and low-rank functionaries are primarily based in India, dispersed throughout the country and operating as ‘shadowy networks’ of small modules. A belief in the ideology of the group binds the modules together, whereas knowledge and operational plans to orchestrate attacks remain module-specific and localised. As a result, full knowledge of the group's operational dynamics and overall strategy is not available with a single module. The possibility that the IM could have undergone multiple splits itself, with each faction reporting to various leaders based in India and outside, has further complicated an understanding of the organisation's changing character and mode of operation. The adoption of an amorphous decentralised structure and modus operandi contributes to the outfit's success and prevents an outflow of complete information in case a cadre falls into the hands of the state agencies. This explains the reason why so little is known about the operational aspects of the outfit, even after the arrest of hundreds of its cadres involved in the previous episodes of explosions. One important addition to this long list of arrests was Yasin Bhatkal, a 4

Neeraj Chauhan, "Indian Mujahideen would be under al-Qaida: Riyaz told Yasin", Times of India, 3 November 2013,http://articles.timesofindia.indiatimes.com/2013-11-03/india/43627820_1_riyaz-yasin-bhatkal-afghantaliban. Accessed on 5 November 2013.

senior leader of the outfit who was picked up from a village on the Indo-Nepal border in August 2013.5 Each such arrest has led to revelations of interesting bits of information about the cadres' personal history within the organisation but almost nothing about the organisation's future targets and activities. Not surprisingly, the arrest of Yasin Bhatkal did not yield much indication about the explosions in Patna, which were to occur less than two months after his arrest. The IM tasks its modules to function as focal points of contact for recruitment drives. Educated, computer- and tech-savvy youths are the usual targets. However, young men who do not fall into the broad description of tech-savvy have also been recruited to be used to plant explosives, function as couriers and to assist in logistics. As the Patna blasts revealed, the haste in using the newly-recruited cadres in planting explosives has contributed to failures in the organisation's plans. In recent times, a young woman, students preparing for competitive examinations, shopand hotel-owners, and even a former retired police officer have come under the scanner of the intelligence outfits for being active cadres of the outfit. Yet, the neutralisation of the IM’s fully expendable cadres is not expected to impact the outfit in a significant manner. The IM has used locally-procured materials to manufacture improvised explosive devices (IEDs), a tactic which not only makes the manufacturing process cost-effective but averts the danger of interception. At the same time, the IM also has worked to create depots of centrallymanufactured IEDs, to be supplied to individual modules when required.6 The outfit retains the services of few explosives experts, which include a couple of Pakistani citizens. Over the years, some Indian cadres have also been trained in assembling the IEDs, although their level of perfection may not have reached the highest levels. Some of the IEDs used in Patna and Pune failed to explode because of manufacturing faults. In spite of some recent operational failures, the IM remains an extremely tricky outfit to neutralise. Indian official assessments of the IM's strength have varied significantly. In 2011, based on the interrogation of an IM cadre, Danish Riyaz, the agencies concluded that the arrests of a large number of cadres have severely dented the group’s operational capabilities and badly affected its recruitment- and fund-raising drives. Recent official assessments, however, portray the picture of the IM as not just regaining its strength within India, but having spread into Pakistan as well as Afghanistan.7

Rahi Gaikwad, "IM founder Yasin Bhatkal arrested", The Hindu, 30 August 2013, http://www.thehindu.com/news/national/im-founder-yasin-bhatkal-arrested/article5070960.ece. Accessed on 5 November 2013.

Neeraj Chauhan, "90 ‘ready-to-use’ IEDs found at Indian Mujahideen hideouts in Mangalore, Hyderabad", Times of India, 16 September 2013, http://articles.timesofindia.indiatimes.com/2013-09-16/india/42113155_1_yasinbhatkal-ieds-ammonium-nitrate. Accessed on 5 November 2013. Rahul Tripathi, "Indian Mujahideen has grown stronger, spread to Pakistan and Afghanistan", Indian Express, 17 October 2013, http://www.indianexpress.com/news/indian-mujahideen-has-grown-stronger-spread-to-pakistanand-afghanistan/1183524/. Accessed on 5 November 2013.

Lessons Learnt for Southeast Asia The success of the IM could indeed provide important pointers to the possible recovery of some of the groups in Southeast Asia from their current state of weakness and to how they might be able to recalibrate their strategies. The IM's unique personalised recruitment campaign, operational dynamics, localised mode of operations, harnessing of local grievances and global issues for eliciting support, and seamless switching between prominent cities and lesser-known locations for its bombing campaigns, could impart lessons to radical Islamists in countries like Indonesia, Thailand and the Philippines. Within the operating environments and constraints imposed upon their activities by the state agencies in Southeast Asia, these groups can attempt to seek a turn-around in their anti-state campaigns by using the IM model. While the IM's linkages with the Al Qaeda still belong to realm of speculation, the Southeast Asian groups, especially those belonging to Indonesia and the Philippines, already have a head-start in this regard, which could make them even more lethal. On the other hand, the three key problems affecting the Indian response to the IM's violent campaign have several lessons for the counter-terror practitioners in the region. First, the presence of external support and Indiaâ&#x20AC;&#x2122;s sense of non-cooperation from Pakistan, where the top leadership of the IM is based, are critical elements for the survival of the top echelons of the outfit's leadership. Second, the lack of coordination between the centre and the states (provinces) in India inhibits the framing of a unified and effective counter-terrorism response. And third, knowledge gap regarding the changing character of the group prevents a fair assessment of its strength and effective responses to thwart future attacks. Accordingly, the preparedness among the Southeast Asian countries to deal with any such evolving threat from the local groups would be critically linked not just to inter-state cooperation and intelligence-sharing, but also to the capacity to collect ground-level and operational intelligence regarding terrorist recruitment, dynamics and plans to take advantage of local grievances. Apart from expecting the directly-affected countries to share intelligence with their unaffected neighbours, the latter have an obligation to work closely with and, to an extent, show solidarity by offering resources and expertise to the less-resourceful countries so that they could effectively deal with the threat . .....

ISAS Insights No. 235 – 3 December 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

Afghan National Security Force: Upcoming Challenges and Implications for South Asia Jayant Singh1

Introduction The ongoing drawdown of American troops in Afghanistan foreshadows the culmination of what has been the longest US military engagement since Vietnam. This ‘retrograde’ process, which is due for completion towards the end of 2014, will ultimately see the US spend anywhere between US$ 4 trillion and US$ 6 trillion on conflicts in Afghanistan and Iraq, with a major portion of this sum still pending payment.2 In an era of budget cuts, sequesters, debtceiling and government shutdowns, these conflicts have added US$ 2 trillion to the United States’ national debt and burdened the nation with long-term financial obligations.3 Given the high cost of engagement, the US and its coalition partners would want to protect their legacy in Afghanistan and safeguard it from reversal following the drawdown in 2014. The Afghan National Security Force (ANSF) remains critical to this endeavour and has been principally tasked with maintaining stability in the country after the transition. Yet questions abound over the capacity of the ANSF to carry out its mandate. The current plan to reduce the ANSF numbers by approximately 35 per cent from 2017 onwards reveals ominous portents 1

Mr Jayant Singh is Research Assistant at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isasjs@nus.edu.sg. Opinions expressed in this paper, on the basis of research by the author, do not necessarily reflect the views of ISAS. See Linda J. Bilmes, “The Financial Legacy of Iraq and Afghanistan: How Wartime Spending Decisions Will Constrain Future National Security Budgets”, Harvard Kennedy School, (March, 2013). Ibid.

for the future of Afghan stability.4 This planned reduction of force levels from 352,000 to 228,500 troops – according to US and its NATO (North Atlantic Treaty Organization) partners – is part of a carefully designed roadmap to convert the ANSF into a “sustainable” force. It is conceivable, however, that the motives behind this restructuring are driven by the economic imperatives of a reduced budget (from US$6 billion to US$4.1 billion) and, contrary to claims, are in discord with the anticipated security conditions. To argue that an ISAF (International Security Assistance Force) drawdown of approximately 65,000 troops followed by a further 120,000 troop reduction in the ANSF, albeit in a phased manner, will not negatively affect the prevailing and potential security environment seems improbable when already the latter’s ability to preserve stability seems tenuous. The projected reduction in the ANSF numbers is contingent on the international coalition cutting annual funding to US$ 4.1 billion from US$ 6 billion and seems especially harsh when one considers that in 2012, the US spent US$ 4.1 billion on combat operations in Afghanistan every 12 days. What might seem like a negligible figure for the US and its allies qualifies as the majority of funding for the ANSF and could endanger the US-NATO vision of enduring stability in Afghanistan. Even this figure of US$ 4.1 billion in funding is under the scanner: According to a US Government Accountability Office (GAO) report, there is a difference of US$ 600 million between donor-pledges and the stated amount of funding.5 Furthermore, it is unclear whether Afghanistan’s beleaguered economy can gainfully absorb 120,000 discharged armed personnel. 6 A 2012 International Labour Organization (ILO) report on ‘the State of Employment in Afghanistan’ cites unemployment at 7.1 per cent and adds that there are 823,000 unemployed Afghans. The ILO report further stresses that over 90 per cent of those currently employed are considered vulnerable to unemployment. An addition of 120,000 to the labour force will place undue stress on the economy and compel many to find jobs outside the jurisdiction of the state.

Indian Discomfiture In the short term, the ANSF is facing shortages in capacity ‘enablers’. As US and coalition forces begin handing over responsibility, Afghan forces are being increasingly tested in combat operations. This has exposed a variety of shortcomings in logistics, casualty evacuation, counter-improvised explosive device, surface fires, engineer and explosive ordnance, and aviation.7 Cognisant of these gaps, Afghan forces have been in the market for military hardware; yet there remains a scarcity of suppliers willing to offer arms to 4

Special Inspector General for Afghanistan Reconstruction Audit 13-18. Available at: http://www.sigar.mil/pdf/audits/SIGAR-Audit-13-18.pdf United States Government Accountability Office (GOA) Report to Congressional Addresses, “Afghanistan: Key Oversight Issues” (February, 2013). Available at: http://www.gao.gov/assets/660/652075.pdf Hearing before the Committee on Armed Services (June, 2012). Available at: http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg75146/html/CHRG-112hhrg75146.htm Written posture statement of General Joseph F. Dunford on the situation in Afghanistan before the Senate Armed Services Committee (16 April 2013). Available at: http://www.armed-services.senate.gov/statemnt/2013/04%20April/Dunford_04-16-13.pdf

Afghanistan. Afghan President Hamid Karzai’s visit to India in May 2013 generated significant media attention owing to the ‘wish list’ of military hardware that he brought with him. 8 According to reports circulating in the Indian media, the list of military hardware contained orders for 105 millimeter artillery, An.32 medium-lift aircraft, bridge-laying equipment, trucks and helicopter gunships. With US$ 2 billion in development aid (India is the sixth largest donor) and approximately 100 companies having invested in Afghanistan since 2001, it is fair to say that New Delhi is an important stakeholder in the region. 9 Indeed, the Strategic Partnership Agreement signed between India and Afghanistan in October 2011 laid emphasis on enhanced security and defence cooperation and signalled that India’s interest in the region was not transitory. Yet despite what India’s Ministry of External Affairs calls an “abiding commitment to peace, stability and prosperity in Afghanistan”, the issue of sharing military equipment failed to progress during President Karzai’s visit; clearly in this instance the shadow of Pakistan looms large in India’s engagement with Afghanistan. The issue of military supplies was once again taken up by the Afghans during Vice-President Karimi Khalili’s visit to India in August 2013 – indicating the exigent nature of the matter. But this time New Delhi was ready with an explanation; according to sources, due to end user agreements from suppliers, the Indian government was constrained in its ability to supply arms to Afghanistan.10 Furthermore, India’s own military modernisation programme means that supplies must first be directed towards its own armed forces. Whether these are justifiable explanations or merely convenient excuses would depend largely upon the nature of arms sanctions that Afghanistan faces. The relevant UN Security Council Resolution 1390 (2002) is a counter-terrorism measure and applies to the sale or transfer of military equipment to any and all entities affiliated to the Taliban and Al Qaeda.11 Given that India would be supplying directly to the Afghan government and not to any armed faction, it is unclear whether New Delhi would be in danger of violating the arms embargo or any other end-user agreement. India’s rationale is cast into further doubt in light of its attempts to export indigenously developed military hardware to other countries. It is well documented that the Afghan Air Force faces critical gaps in capacity and that the newly self-reliant ANSF has been taking heavy casualties in the absence of ISAF air support or medical evacuation capabilities. India’s indigenously developed Dhruv Advanced Light Helicopter (ALH), identified as a flagship defence export item and sold to eight other countries, would be a major force-enabler for the ASNF; yet it remains absent from ASNF’s inventory. As the Afghan endgame draws nearer India will find it increasingly harder to reconcile its concerns regarding the future of Afghan stability with its reluctance to support the ANSF in a more

There is some debate whether the ‘wish list’ was a not so-veiled signal to the Pakistani government following border clashes, as opposed to a request to achieve ASNF aspirations. But there is a case for post hoc, ergo propter hoc, particularly because this wish list is not the first of its kind. “Economic links between India and Afghanistan” (paper presented at the Delhi Investment Summit on Afghanistan, New Delhi, 28 June 2012). Available at: http://dsafghan.in/pdf/India-Afghanistan.pdf. Shubhajit Roy, ‘India Cites Hurdles in Supplying Arms to Afghanistan’, Indian Express, 26 August 2013. Available at: http://www.indianexpress.com/news/india-cites-hurdles-in-supplying-arms-toafghanistan/1160069/ United Nations Security Council Resolution 1390 (2002). Accessed on: 25 October 2013. Available at: http://www.sipri.org/databases/embargoes/un_arms_embargoes/afghanistan/1390

proactive and unconditional manner. In the meantime, the ANSF is falling victim to larger geopolitical concerns.

The Demilitarisation Conundrum The labyrinth of rules and regulations affecting the transfer of military equipment to foreign governments, as highlighted by the Indians, is already disturbing the ‘retrograde’ process. Citing “complicated rules governing equipment donations to other countries” and the inability to transport all military equipment back home, Washington has taken the extraordinary decision to scrap US$ 7 billion worth of military hardware. 12 The situation remains far different from Iraq where the US could rely on easy access to sea ports, hospitable terrain and proximity to other US military bases in the region for transportation. This reality has massively increased costs and made it prohibitively expensive to transport equipment back to the US, leaving the government with few alternatives but to scrap a portion of the equipment. The US has wide-ranging concerns about leaving equipment behind in Afghanistan and they are linked to US presidential directives on conventional arms transfer policies; these directives are then regulated through the Export Administration Act (EAA), the Arms Export Control Act (AECA), and the International Emergency Economic Powers Act (IEEPA) amongst others. In part, the issue revolves around ensuring accountability so that the equipment does not fall into the wrong hands and contribute to terrorism or stoke internecine warfare in Afghanistan. Export control laws are also invariably tied to economic competitiveness wherein the US Government cannot compromise the commercial operations of its own defence contractors. Limits on transfer of equipment might also be placed in case of host nation’s inability to repair or refurbish equipment; in such cases, absent a contract for sustainment with a US firm, the Pentagon is unable to leave equipment behind. Thus constrained, the Department of Defense (DOD) must return the military equipment to its own inventory, transfer to another country or demilitarise.13 The last option involves removing critical features from a piece of equipment so that it may not be used for its original purpose; in other words, scrapping. The DOD has identified 20 per cent of its equipment in Afghanistan which is too expensive to ‘reset’ and therefore must be scrapped. Faced with such a harsh reality, the ANSF will be feeling especially hard done by. Their misfortune is compounded by the fact that the disposal effort includes over 2,000 MineResistant Ambush Protected Vehicles (MRAPs). 14 These are armoured vehicles which are primarily designed to protect against Improvised Explosive Device (IED) attacks and were 12

13 14

Ernesto Londono, ‘Scrapping Equipment Key to Afghan Drawdown’, Washington Post, 19 June 2013. Available at: http://articles.washingtonpost.com/2013-06-19/world/40067061_1_afghanistan-war-mineresistant-ambush-protected-kandahar-airfield. DOD Manual 4160.28, vol. 1, Defense Demilitarization: Program Administration (7 June, 2011). Ernesto Londono, ‘Scrapping Equipment Key to Afghan Drawdown’, Washington Post, 19 June 2013. Available at: http://articles.washingtonpost.com/2013-06-19/world/40067061_1_afghanistan-war-mineresistant-ambush-protected-kandahar-airfield

pressed into service in 2008 to replace unarmoured ‘humvees’. It is widely acknowledged that the ANSF is plagued with a limited number of explosive ordnance disposal (EOD) teams, which makes them an easy prey for IED attacks; with 4,100 casualties in 2012, IEDs are the leading cause of injuries and fatalities in the ANSF. 15 However, this grim situation could be turned around if ANSF capabilities were to be augmented with MRAPs. Yet they are destined for demilitarisation. In an interesting development, the US Army recently placed a US$ 113.4 million follow-on order for 135 Mobile Strike Force Vehicles (MSFVs) for the Afghan National Army, taking the total to 634 MSFVs on contract order. 16 Given that MSFVs are based on the M1117 armoured security vehicle, which is a type of MRAP, the destruction of 2,000 MRAPs raises certain questions and leads back to the economic premise of protecting the commercial interests of defence contractors.

Pakistan’s ‘Proxy’ Threat It is a troublesome fact that the ANSF’s fortunes – and indeed those of Afghanistan – are inextricably linked to happenings across the border. Pakistan’s tacit support for the Haqqani Network and the Afghan Taliban has ensured that the situation remains highly volatile along the Durand Line and in southeast Afghanistan, where the ANSF’s influence is severely diminished. An aggressive withdrawal strategy, coupled with increased activity by Pakistansupported ‘proxies’, could overwhelm the ANSF and end the military stalemate.17 For the Pakistani establishment, engagement with Afghanistan is dominated by the overriding fear of India’s expanding influence in the region and concern over the resurgence of ‘Pashtunistan’. And as long as Islamabad does not recalibrate its strategic calculus in support of Afghan stability there is always going to be a sanctuary for Afghan insurgents within Pakistani territory, making it extremely difficult for Kabul to eradicate the insurgent threat completely. Pakistan’s own domestic insurgency should serve as a cautionary tale; its indefinite fielding and backing of ‘proxies’ in Afghanistan may eventually come to an end, in which case Pakistan will be in better position if it hasn’t already nurtured the Haqqani Network into a position of strength.

Afghan Stability: Key Considerations The current situation is a far cry from past ANSF aspirations; at one point, the ANSF was touted as the “lynchpin” of the US and NATO strategy for a successful outcome post-2014.18 Today, the realisation that a political settlement is the most likely option means that the ANSF star is on the wane. However, even though a successful battlefield outcome remains 15

DOD Report to Congress on ‘Progress Toward Security and Stability in Afghanistan’, (July, 2013). Available at: http://www.defense.gov/pubs/Section_1230_Report_July_2013.pdf 16 ‘Mobile Strike Force Vehicle (MSFV), Afghanistan’, army-technology.com. Accessed on 22 October 2013. Available at: http://www.army-technology.com/projects/mobile-strike-force-vehicle-msfv/. 17 See Joint Subcommittee Hearing: ‘After the Withdrawal: The Way Forward in Afghanistan and Pakistan (Part II)’. Available at: https://foreignaffairs.house.gov/hearing/subcommittee-hearing-after-withdrawalway-forward-afghanistan-and-pakistan-part-ii. 18 Vanda Felbab-Brown, ‘Aspirations and Ambivalence: Strategies and Reality of Counterinsurgency and State Building in Afghanistan’, Brookings Institution, 2013.

improbable, the ANSF still has an important role to play in the future stability of Afghanistan. Policy makers must consider certain key issues going forward. First, Washington and Kabul can successfully leverage the ANSF to gain a favourable political settlement. The belief that the US and its allies will depart the region, come 2014, will give the Afghan Taliban a certain confidence going into negotiations. Here a resilient ANSF will create uncertainty within the ranks of the Afghan Taliban and test their resolve and at the same time reduce their room to manoeuvre during negotiations; it will also validate the pragmatists within the Taliban. Secondly, Pakistan must consider that stability in Afghanistan means stability for Pakistan. Active or even passive sabotage of Afghan stability through proxies could lead to a crisis- slide in Afghanistan post-2014. Such a scenario will strengthen the insurgent network in southwest Asia and could also lead to a refugee crisis in Pakistan similar to that in the 1990s. This would have dangerous implications for a Pakistan already wrestling with its own domestic insurgency. Finally, India must expand its diplomacy with Pakistan and encourage the latter to positively engage with its Afghan neighbour. A new political regime in Islamabad and change of guard at the helm of the Pakistani military mean that New Delhi has a rare opportunity to effect a change in Pakistanâ&#x20AC;&#x2122;s thinking vis-Ă -vis India and Afghanistan. The situation would benefit from a containment of issues; in the past, progress in certain areas has not been forthcoming because both countries have linked issues together. A policy of fashioning solutions in single domains would improve Indo-Pak engagement on Afghanistan and create an environment where cooperation is not restrained by a host of other issues where India and Pakistan do not see eye-to-eye.

As the timeline for withdrawal steadily progresses, the ANSF must endeavour to augment its capacity and gain the trust of the population â&#x20AC;&#x201C; or else the vacuum created by the departure of US and NATO troops will result in fissures and fractures and encourage the revival of the old warring factions. It is clear that as the situation evolves it will have wide-ranging consequences not just for Afghanistan but rather for much of South Asia. Those involved must shed their zero-sum mentality and adopt a more inclusive approach towards stabilising Afghanistan and the wider South Asian region.

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ISAS Insights No. 236 – 12 December 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India’s State Elections: A BJP Sweep and New Politics of Urban India Robin Jeffrey and Ronojoy Sen1

The results of four state elections, announced on 8 December 2013, emphasise demographic and social changes that are affecting India more rapidly and profoundly than at any time since independence in 1947. They also foretell very deep problems for the Congress Party which leads India’s coalition government and which must go to the polls before May next year. It’s only in the small Northeast state of Mizoram, where the results were announced on December 9, that the Congress managed its sole victory. The Congress lost heavily in the states of Rajasthan, the National Capital Territory of Delhi and Madhya Pradesh. It also lost in the sparsely populated, resource-rich state of Chhattisgarh, noted for its large indigenous (or “tribal”) population and a troublesome Maoist-inspired insurgency, though the contest was closer there. The winner in all four states was the Bharatiya Janata Party (BJP), though it fell short of an outright majority in Delhi.

Professor Robin Jeffrey is Visiting Research Professor at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore (NUS). He can be contacted at isasrbj@nus.edu.sg and robin.jeffrey514@gmail.com. Dr Ronojoy Sen is Senior Research Fellow at ISAS and the Asia Research Institute (ARI) at NUS. He can be contacted at isasrs@nus.edu.sg. Opinions expressed in this paper, based on research by the authors, do not necessarily reflect the views of ISAS.

The Delhi Surprise These results were not entirely a surprise but the margin of the defeat of the Congress in Rajasthan, Madhya Pradesh and Delhi was. The real story of the set of elections was the stunning performance of the new Aam Aadmi Party (AAP) (the Common Man’s Party) in Delhi where it won 28 of the 70 seats and won nearly 30 per cent of the votes, emerging as the main opposition. The AAP’s performance was capped by a thumping victory of over 25,000 votes for its Indian Institute of Technology-trained, former revenue service officer leader, Arvind Kejriwal, over Delhi’s three-time Chief Minister Sheila Dikshit. A re-election in Delhi is now a distinct possibility with the BJP not having the numbers to form a government and the AAP adamant that it won’t tie up with either the Congress or the BJP. The Congress defeats were predicted. Of greater long-term significance was the voter turnout of well over 70 per cent of the electorate in three states. Even in cynical, bourgeois Delhi, where turnouts are usually low, there was a remarkably high turnout of 67 per cent. Only 58 per cent of Delhi voters went to the polls at the previous elections in 2008. The higher turnouts result from more efficient, computer-driven administration, the coming to maturity of India’s “demographic dividend,” growing urbanisation and the ready communication capacity that most Indians now have. While everybody was talking about the popular disgust with corruption and traditional parties, many seemed to have underestimated the innovative campaign methods of AAP which reached out to voters through an army of volunteers, many of them students and professionals. It also raised funds from ordinary citizens, many of whom contributed money from outside India. Yet another mistake made by many analysts was dismissing the AAP as a party that would attract only middle class voters. In fact, it won votes in middle class colonies as well as the poorer slums and resettlement colonies. Such was the strength of the AAP brand that candidates lacking any political experience, such as an unemployed youth, an unknown cricket coach and a bodybuilder, won seats. But whether the AAP experiment can be replicated in other parts of urban India remains to be seen. In the coming general elections, however, it is unlikely AAP will have the organisational muscle to spread outside of Delhi.

The Changes in India AAP benefitted from the changes that have occurred in India over the past decade or so. India has made progress in networking computers and putting them to work at administrative tasks. Electoral rolls have been cleaned up. Where once the same person might have appeared on the roll under two or three variations of his or her name, all at the same address, computer-based electoral lists now allow such anomalies to be quickly detected and investigated. Where ten years ago, for example, a constituency of 100,000 might have had 10,000 duplicate names or mistaken identities, these lists now can be verified and 90,000 genuine voters identified. By this method alone “voter turnout” improves. (65 voters out of 90 is 72 per cent; 65 voters out of 100 is 65 per cent). This more switched-on India makes for more efficient administration in some areas of life and leads to more demanding citizens. People ask: if some of a citizen’s questions are capable of quick resolution, why not others? And the country is urbanising fast. In the 2001-2011 decade, it added more urban people (91 million) than rural people (90 million). Today, India is close to one-third urban and growing rapidly. India is also younger and more literate than it is has ever been. The much talked-about “demographic dividend” – a vast cohort of people in their most productive years – means that close to 15 per cent of voters are estimated to be in the 18-23-year-old bracket. Most of them too are literate. Though primary schools in many states may be woeful, India’s literacy rate now is more than 75 per cent. Voting for the first time, this young cohort brings energy, curiosity and willingness to go to the polling booths; perhaps too they bring a spark of idealism. In Chhattisgarh, Rajasthan and Madhya Pradesh, overall literacy increased by close to 40 per cent in the decade prior to 2011. Literacy among women in Chhattisgarh and Madhya Pradesh is 60 per cent, and even in Rajasthan more than half of women are literate. More women tend to vote than men. Literacy is one reason for higher female turnouts. So are deeply felt grievances about lack of personal safety and of basic amenities like clean water and effective toilets. Many women are also connected to wider networks than ever before. The cheap mobile means that even poor women may have access to a phone. Such ease of communication is a blessing and a curse for politicians. It means that a candidate can be in ready touch with most voters. Once upon a time, in many constituencies local big shots told underlings how to vote. Now, however, as urbanisation burgeons, voters are more independent, and supporters have to be identified as individuals and encouraged to go to the polls.

Voting is not compulsory and is first-past-the-post: whoever gets more votes than the next-best candidate wins. Connecting with your supporters and chivvying them to vote are crucial aspects of effective campaigning. There is another important aspect. Voters can cast their ballots only at the polling station nearest to their registered address. A polling station serves fewer than 1,000 people. Madhya Pradesh, for example, had 54,000 polling stations for this election – close to 250 polling stations in every constituency. Canny candidates realise that they need a “booth captain” for every polling station, a motivated supporter who knows the local voters and can persuade those who are sympathetic to come to the polls. Mobile phones enable such networks to be created and coordinated, though they do not guarantee motivated workers at the business end of the phone.

Looking Ahead to 2014 The dispiriting result for the Congress in the four big state elections reflects some of these social and demographic changes. A more urban and atomised, yet networked, electorate has greater expectations of governments, more opportunity to learn about scandals and better access to alternative possibilities. It also shows that the Congress lacks credible state-level leaders who can draw votes. Many believe that the late induction of leaders such as Jyotiraditya Scindia in Madhya Pradesh hurt the Congress’ chances. A party in power at the state level is likely to have a political machine – those “booth captains” mentioned earlier – to deploy in support of candidates for the national parliament when the time comes. That means a better system for getting its message to voters and for inducing sympathisers to vote. This could mean an advantage for BJP for the national elections which will be held by May 2014. After these state elections, the Congress is in power in the southern states of Kerala, Karnataka and Andhra Pradesh, Maharashtra in the west, Haryana in the north, and Assam, the only state in the Northeast with a sizeable number of seats. The hold in Kerala is slender, and Andhra Pradesh is in turmoil over a proposed division into two states. Haryana sends only 10 members to the national parliament. The BJP, on the other hand, will be comfortably in power in Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand, Gujarat and Goa. Regional parties rule Tamil Nadu, Odisha, 4

Bihar, Uttar Pradesh, Punjab, West Bengal and Jammu and Kashmir. The smaller states in the Northeast have hardly any seats in parliament to make a big difference. Momentum is with the BJP going into the national polls. But it must be noted that the results in the four states (leaving aside tiny Mizoram) might not be a good predictor for the national elections since they account for only 13 per cent of the seats in the lower house of Parliament. Moreover, besides Delhi, the fight in the three other states was a direct contest between the BJP and Congress whereas in most of the bigger states the contests will be multi-cornered with strong regional parties. The BJP is already pinning its success in the state elections on the sustained campaigning by their prime ministerial candidate Narendra Modi. It is of course difficult to ascertain precisely what impact Modi had on voters. While the BJP victories in the four states were expected due to a combination of strong chief ministers and voter exasperation with the Congress, the BJP leaders are pointing to the huge margin of victory in three states as a sign of Modi’s magic. On the other hand, the strong AAP performance in Delhi showed that the BJP will find it difficult in states where it does not have credible local leaders. The BJP cannot bank only on the Modi factor. If, as seems likely, the BJP emerges as the largest single party after next year’s general elections, it will have to depend on alliances with regional parties to form government. The decisions of those parties, some of whom are wary of Modi, will hold the key to the formation of India’s next national government.

Table 1: National Capital Territory of Delhi, State Elections, 2003, 2008 and 2013 and National Elections, 2004 and 2009 2003 State 2004 2008 2009 Lok 2013 State Lok State Sabha Sabha Total seats 70 7 70 7 70 Won by BJP 20 1 23 0 32 Won by Congress 47 6 43 7 8 Aam Aadmi Party 28 Voter turnout 53% 47% 58% 52% 67%

Table 2: Rajasthan State Elections, 2003, 2008 and 2013 and National Elections, 2004 and 2009 2003 State 2004 2008 2009 Lok 2013 State Lok State Sabha Sabha Total seats 200 25 200 25 200 Won by BJP 120 21 78 4 162 Won by Congress 56 4 96 20 21 Voter turnout 67% 50% 66% 49% 75% 5

Table 3: Chhattisgarh State Elections, 2003, 2008 and 2013 and National Elections, 2004 and 2009 2003 State 2004 2008 2009 Lok 2013 State Lok State Sabha Sabha Total seats 90 11 90 11 90 Won by BJP 50 10 50 10 49 Won by Congress 37 1 38 1 39 Voter turnout 71% 52% 71% 58% 77%

Table 4: Madhya Pradesh State Elections, 2003, 2008 and 2013 and National Elections, 2004 and 2009 2003 State 2004 2008 2009 Lok 2013 State Lok State Sabha Sabha Total seats 230 29 230 29 230 Won by BJP 173 25 143 16 165 Won by Congress 38 4 71 12 58 Voter turnout 67% 48% 70% 51% 73%

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ISAS Insights No. 237 – 12 December 2013 469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: isassec@nus.edu.sg Website: www.isas.nus.edu.sg

India and China: Marking Paths on the Space Highways P S Suryanarayana1 Abstract India’s ongoing mission to Mars and China’s project of placing a rover on the Moon’s surface by mid-December 2013 have raised speculation about an emerging space race between these two Asian neighbours. In reality, the space programmes of the two increasingly science-savvy countries have had different trajectories. However, both New Delhi and Beijing have often spoken against militarisation of space and sought to harness space-related applications for economic or social development at home. These commonalities may influence not only the discourse but also the actions of these two countries in the longer term, depending on the future course of global politics.

Beyond Earth’s Zone of Influence Mars Orbiter Spacecraft, India’s latest and most ambitious high-tech mascot, “has traversed beyond the Sphere of Influence of Earth”2 at about 1:14 hrs Indian Standard Time (IST) on 4

Mr P S Suryanarayana is Editor (Current Affairs) at the Institute of South Asian Studies (ISAS), an autonomous research institute at the National University of Singapore. He can be contacted at isaspss@nus.edu.sg. Opinions expressed in this paper, based on research by the author, do not necessarily reflect the views of ISAS.

December 2013. Earth’s Sphere of Influence has a radius of about 925,000 km. The announcement about the Orbiter’s great escape, bordering on a proclamation by the Indian Space Research Organisation (ISRO), is matched by an equally significant message which the Beijing Aerospace Control Center purveyed on 6 December. It was disclosed that “China’s Chang’e-3 probe entered a circular lunar orbit at 5:53 p.m. Friday Beijing Time, after about 112 hours on an Earth-Moon transfer orbit”. 3 As this is written, China’s first Moon-rover is programmed for deployment on the lunar surface after an anticipated soft-landing there by the Change’e-3 spacecraft in mid-December. The rover is being carried by the Change’e-3 spacecraft. While Chang’e-3 skyrocketed from Xichang Satellite Center in Southwest China on 2 December, the Mars Orbiter was hurled into space from Sriharikota in India’s Andhra Pradesh state on 5 November. The flight paths of these two spacecraft make for some interesting extra-terrestrial delight. The Moon-bound Chang’e-3 was launched at 1:30 a.m. on 2 December Beijing Time. 4 Almost 18 hours later real-time, at 17:00 hrs IST on the same day, the Mars Orbiter “crossed the distance to Moon’s orbit around Earth”.5 This meant that India’s Mars-bound orbiter had steered clear of the Moon several days before China’s latest lunar spacecraft approached Earth’s natural satellite. Moreover, ISRO had successfully completed in the early hours of 1 December itself “the critical manoeuvre to place India’s Mars Orbiter Spacecraft in the Mars Transfer Trajectory”. Annotating this in some earthy language, ISRO said “the spacecraft is now on a course to encounter Mars after a journey of about 10 months around the Sun” 6 from December 2013.

4 5 6

Indian Space Research Organisation, Latest Updates on Mars Orbiter Mission, http://www.isro.org/mars/updates.aspx; accessed on 9 December 2013. Xinhua (China’s state news agency), Chang’e-3 enters lunar orbit, http://news.xinhuanet.com/english/china/2013-12/06/c_132947629.htm; accessed on 9 December 2013. Ibid. Source is the same as that cited in N.2 above. Indian Space Research Organisation, Mars Orbiter Spacecraft Successfully placed in Mars Transfer Trajectory, http://www.isro.org/pressrelease/contents/PrintConfirmation.aspx?ReleasedDate=Dece...; accessed on 9 December 2013.

Politics of Space Frontier At first glance, these scientific snippets may seem like a holiday-season pastime in taking note of some space trivia. But that certainly is not true. It is no longer just a hypothesis in international politics that space-faring powers will be able to determine the future global orders on Planet Earth (maybe, in the distant-term) in much the same way as sea-faring countries had fashioned and reshaped world orders in the past. The relevant reason is not far to seek. The militarisation of space – not only the extra-terrestrial deployment of weapons but also the placement of dual-use scientific facilities in outer space – is already a hotly debated issue in today’s international relations. Surely, maritime control, which had given countries greater access to the material and human resources on Planet Earth in the past, will continue to be absolutely important today and into the future. However, space has clearly emerged as the really new frontier for this kind of access. In novel ways now, countries can either vie or cooperate for potential access to the uncharted resources of the worlds beyond Earth. Besides the cosmic science of this kind, space can also serve as a platform for positioning what may be described as military-eyes in the sky for the purposes of international affairs on Planet Earth. Relevant to and significant in the present context of transparently scientific forays into space by both India and China are their relentless pledges against using their extraterrestrial reach and capabilities for military purposes. Equally illuminating is the fact that these pledges relating to space are as important to the global peace discourse as the stated policies of both Beijing and New Delhi that they would not be the first to use nuclear weapons to settle disputes with states and non-state actors. On paper, it is possible to argue that India and China can aspire for a robust bilateral relationship based on their shared commitment to these two principles – the no-first-use of nuclear weapons and non-militarisation of space. However, certain reservations and realities come in the way. China’s reservations and reluctance to accept India as a de jure nuclear-weapon-state, under the prevailing international law known as the Nuclear Non-Proliferation Treaty, preclude substantive policy coordination by the two countries in this field. Another factor hampering Sino-Indian coordination in the nuclear as also space domains is the absence of a globallycrafted and credible system of verification of national pledges of no-first-use and extraterrestrial non-militarisation.

Extra-Terrestrial S&T Capabilities In these circumstances, the latest space forays by India and China are not near-Earth missions that could have easily raised suspicion about their real nature and scope as to whether they are indeed military-projects-in-disguise for either the present or the future. Viewed in this perspective, it is possible to see these missions as science-and-technology projects which might eventually demonstrate the extraterrestrial capabilities of China or India or in fact both. In India’s Mars mission, the spacecraft will orbit the Red Planet without soft-landing on it or ‘crashing’ onto the planetary surface in a programmed fashion. The mission has been projected as a pure-science project. And, this has hardly been disputed by any of the other ‘stakeholder’-countries and entities on Earth. China’s objectives, as spelt out by its official news agency in a commentary on the country’s latest lunar mission, are as follows: “China’s space exploration does not aim at competition [with other countries]. The country is open in its lunar program and willing to cooperate with other nations. China hopes to explore and use space for more resources to promote human development. Crucial technologies [for space exploration], however, cannot be bought. China should rely on itself to build an innovative country. ... [In fact] Reaching for the Moon has been a long cherished wish for the Chinese nation since ancient times. The [latest] lunar probe mission therefore carries the space dreams of the Chinese nation and its people. This deep aspiration, which pursues peaceful use of space to benefit humankind, will not only serve China’s own population but also contribute to space exploration for the human race”.7 The new “Chinese dream”, often articulated interchangeably with “China’s Dream”, is a gigantic national rejuvenation project enunciated by the relatively-new Chinese President, Xi Jinping, as an attainable aspiration. In this context, speculation is agog in some international media and other circles that India has entered into a space race with China. Also bandied about is the fact that India’s Mars mission is very much on course as this is written while China’s parallel but earlier Mars mission, in some collaboration with Russia, had failed.

Xinhua (China’s state news agency), Commentary: Lunar probe boosts “Chinese dream”, http://news.xinhuanet.com/english/china/2013-12/02/c_132935597.htm; accessed on 9 December 2013.

Different Trajectories into Space Objectively, India and China have had different trajectories into space, though, with the same general aim. The idea has been one of harnessing the extra-terrestrial regions for the wellbeing and security of the citizens of China and India, as the case might be, in an evolving global ambience of gradual international cooperation. Directly relevant to this context are some of the expert opinions on these issues. Writing on Beijing’s “long march into space”, Michael Sheehan, citing several sources, weaves the story of China’s start on these lines: “China, like India, began to construct a programme very early on in the space age. ... In some ways, the motivations of China’s space programme are similar to those of India, but in others they differ markedly. ... In 1956 [Chinese leader] Mao Zedong launched a programme to develop China’s scientific base and the space programme has its origins in this development. Following the dramatic launch of [the Soviet Union’s] Sputnik in 1957, Mao declared that ‘we also want to make artificial satellites’. ... Initially the Chinese space programme benefited from the support of the Soviet Union. ... Ironically, the Chinese [missile and space] programme also benefited from unintended American support during this period [i.e. the McCarthy era in the USA]. Two of the leading figures in the subsequent Chinese rocket programme, Chien Wei-Chang and Chien Hsue-Shen, returned [to China] from the California Institute of Technology in 1947 and 1955 respectively, as a result of anti-communist pressure brought against them during the McCarthy era in the USA. ... The Chinese space programme has had strong ties to the military from its inception, when it was placed under the Fifth Academy of the Ministry of Defence”.8 There is also considerable focus on the launch of China’s civilian space programme in 1960 and the emergence of “techno-nationalism” in the country. Michael Sheehan narrates how China’s first successful satellite, Dong Fang Hong, or ‘The East is Red’, broadcast a revolutionary song by the same name during the entire orbital duration of 26 days. Gradually, with Deng Xiaoping’s political ascendance, a linkage between China’s economic and social priorities, at one level, and the Chinese space programme, at another, has been established since the late-1970s.9

Michael Sheehan, The International Politics of Space, Routledge, London and New York, 2007, pp. 158160. Ibid; pp. 161-162.

Making dramatic progress since then, China has even sent taikonauts (astronauts) into space. Describing the China National Space Administration’s White Paper of 2006 as “a broadgauged space program”, 10 Sinologist David Shambaugh cites the country’s focus on exploration of the Moon for a variety of scientific purposes.

No Mission-for-Mission Space Race Now There is no hard empirical evidence to argue that India and China are now engaged in a mission-for-mission space race. United States President Barack Obama had, during his visit to New Delhi in November 2010, praised India for its lunar mission, Chandrayaan-1. In a brief fact sheet on ISRO’s international cooperation, the Indian space agency states: “ISRO’s maiden mission to Moon, the Chandrayaan-1, has been an exemplary example of international cooperation with its international payloads. [The mission] has also earned several national and international laurels and was instrumental in the ISRO-NASA joint discovery of water molecules on the Moon surface, unattained by any of the previous missions of such nature”.11 The economic dimension of India’s space programme is generally recognised internationally. Writing on New Delhi’s sense of “security through space”, Michael Sheehan is of the view that “India’s space programme is in some ways the most cost-effective and successful space programme in the world”. 12 Amplifying this as a success story, he writes that “the technological feats achieved by the Indian Space Research Organisation (ISRO) are dramatic achievements for a developing country that at the end of the Cold War was still one of the poorest in the world. Even more impressive than that, however, is the consistent way in which India has sought to use space as a crucial mechanism for lifting India’s people out of poverty through education and social and economic programmes”.13 Obviously, there is a debate in India over how far the country could go in pursuit of pure scientific research in space without at least some spin-off in the form of tangible economic or social benefits for the people and a sense of national security. Interesting indeed, in this context, is Michael Sheehan’s conclusion about India: “it is unlikely that the new pursuit of 10 11

12 13

David Shambaugh, China Goes Global The Partial Power, Oxford University Press, 2013, p. 296. Indian Space Research Organisation, International Cooperation, http://www.isro.org/scripts/interna tionalcooperations.aspx; accessed on 9 December 2013. Michael Sheehan, The International Politics of Space, Routledge, London and New York, 2007. P. 142. Ibid.

prestige through the space programme will come to dominate it at the expense of the development rationale [in India]”. In his overall view, New Delhi’s relatively new “scientific and prestige goals”, when seen in the context of the country’s long-standing “development and military rationales”, have now brought India’s space programme into line with “the rationales typical of the other major space powers”.14 India’s ongoing Mars Orbiter Mission can be finally judged only in 2014, perhaps, towards the end of the coming year. The cost-benefit quotient of this mission will be known in terms of the scientific spin-off, rather than any immediate economic or social or security benefits to the people of India. In this sense, India’s first Mars mission is somewhat similar to China’s ongoing Moon mission with a huge scientific dimension.

.....

Ibid; p. 157