The Peninsula Foundation

Category: Geopolitics & Geo-economics

  • Poverty, Inequality, and Marginalisation as Forms of Structural Violence in Pre-Conflict Syria

    Poverty, Inequality, and Marginalisation as Forms of Structural Violence in Pre-Conflict Syria

    The injustice and inequality built into the structural institutions of the Syrian society can be referred to, what has been called as the ‘structural violence’, by the well-known Norwegian sociologist, Johan Galtung.  

    The ongoing civil war in Syria that has resulted in large-scale loss of lives, and forced displacement of millions across the region, is being seen as one of the bloodiest conflicts of this century. While countries continue to witness the horrors of visible atrocities and war crimes, the underlying layers of structural and cultural violence continue to buttress the egregious brutality which is often more direct, and physical.

     

    Although the war is often seen as a result of the outburst of pro-democracy protests in 2011, a close examination of the country’s socio-economic structures would enable one to get a detailed insight into the underlying layers of frustration caused due to large-scale poverty, inequality, and marginalisation. One would also find that the relatively peaceful structure, which existed before the protests of 2011, was held intact largely due to the existence of single-party dominance, where one actor (Hafez al-Assad, and later Bashar al-Assad) held all power and authority, while those existing in lower ranks of society continued to lack resources, as well as opportunities to challenge the dominant power.

    The Syrian economic crisis has existed long before the commencement of the civil war.

    The injustice and inequality built into the structural institutions of the Syrian society can be referred to, what has been called as the ‘structural violence’, by the well-known Norwegian sociologist, Johan Galtung.  The violence, here, is reflective of a position “higher up or lower down in a hierarchy of exploitation-repression-alienation”, where the parties involved are determined either to keep the hierarchy intact or to completely obliterate it. In the case of Syria, the deprivation of the most basic and non-negotiable needs, which threatened the citizens’ need for survival, has been the primary cause for aggression to come into existence. The factors that, thus, led to the conflict in Syria can be seen rooted in years of repression, poverty, and lack of representative institutions, which manifested in the form of protests, or the Arab Spring of 2011.

    The Syrian economic crisis has existed long before the commencement of the civil war. Since the beginning of the economic crisis, Syria’s institutional structures have failed to meet the rising needs and rights of its population. In the 1980s, the country was trapped in a downward spiral of a fiscal crisis, as a result of large-scale drought, and due to both, domestic and external factors. The crisis led to high food deficit, and an increase in the cost of living, leading to a rise in patronage networks which provided small circles of elites with profitable businesses. These networks became increasingly popular in real estate and land management, leaving out large sectors of Syria underdeveloped.

    While the country witnessed a decreasing overall debt and a noticeable rise in the GDP in the 2000s, large sections of the population were excluded from benefitting from these growth rates due to differences in wage rates and declining job opportunities. Increasing inequality was reflected in a paper published by the UNDP, which claimed that 65.6% of all labour in Syria belonged to the informal sector in 2010, with Aleppo and Idlib ranking first with over 75% of their workforce belonging to the informal sector. Further, the four years of drought between 2006 and 2011, and the consequent failed economic policies led to a significant decline in the agricultural sector’s output, forcing 2 million to 3 million Syrians into abject poverty.

    Additionally, the oil revenues fell from more than 14% of GDP in the early 2000s to about 4% in 2010 due to depleting reserves. According to a report, overall poverty in Syria in 2007 impacted 33.6% of the population, of which 12.3% were estimated to be living under extreme poverty. Noting the degree of inequality in Syria in 1997, the report found out that the lower 20% of the population had a share of only 8% in expenditure, while the richest 20% of the population share about 41% of the expenditure. The degree of inequality further decreased in 2004. Moreover, the widely disputed region of North-Eastern Syria witnessed highest levels of inequality in 2007, in addition to deprivation of living standards, and worst levels of illiteracy, and access to safe water, just four years before the outbreak of the civil war. The unequal access to resources was also starkly reflected in the housing situation of the country before the war, where over 40% of the population lived under informal housing conditions, – through squatting, or on lands obtained without legal contracts.

    In addition to the economic crisis, Syrians have been the victims of decades-long political repression, in the form of restrictions on freedom of expression, torture, and enforced disappearances. The political institutions have historically been unstable, with three military coups taking place in 1949 alone, followed by one more in 1954, in addition to the Ba’athist-led coups of 1963 and 1966. The Syrian security forces (Mukhabarat) are known to have detained citizens without proper warrants even before 2010, many of whom have reportedly been tortured in prisons. In their attempts to keep the hierarchy of power relations intact, the centralised institutions are known to clamp down on any public demonstrations, with frequent arrests and employment of state violence.

    The conflict which started with citizens demanding their basic needs and rights has been sustained over the years by the involvement of foreign states, and increased state brutality which has been responded to by an increasingly similar, if not equal, force by the rebellion groups.

    Years of conflict have exacerbated the economic crisis, pushing both the state and its citizens, into chaos, with more than 80 per cent of the Syrian population living below the poverty line, with an unemployment rate of at least 55 per cent in 2018. With most of the business networks now being controlled by the selected few elites, the population at large continues to suffer the brunt of both structural, and direct violence.

    The conflict which started with citizens demanding their basic needs and rights has been sustained over the years by the involvement of foreign states, and increased state brutality which has been responded to by an increasingly similar, if not equal, force by the rebellion groups. The country, now, witnesses itself entangled in a cycle of conflict, where the war has led to steep economic deterioration, political repression, and physical violence, which in turn has led to further widespread cataclysm.

    Image Credit: Photo – Aleppo-Syria destruction in 2019 and  Syria Map – Adobe Stock

  • The Catalysing Effect of Covid-19 on the Changing World Order

    The Catalysing Effect of Covid-19 on the Changing World Order

    Contrary to the realist belief, international states co-exist in a world order of hierarchy rather than anarchy. Ikenberry presents this hierarchical world order and the cyclical rise and fall of hegemonic powers. Early 20th century witnessed the shift from Pax-Britannica to Pax-Americana that was complete by 1945, from which point the US defended its position during the Cold War with the erstwhile USSR. It exercised its hegemonic influence even more aggressively after the Cold War. However, US dominance of the world order has been diminishing owing to the Trump administration’s isolationist approach to foreign policy, and the increasing influence of China in world politics. This article examines the catalysing effect of Covid-19 and the rise of China on the current World Order.

    Trump’s policy of disregarding multilateralism and imposing its unilateralism on the world has catalysed into an involuntary retreat, protectionism, and isolationism for the USA with dire consequences for its foreign policy effectiveness.

    Trump’s policy of disregarding multilateralism and imposing its unilateralism on the world has catalysed into an involuntary retreat, protectionism, and isolationism for the USA with dire consequences for its foreign policy effectiveness. The net result is that the world is witnessing an abdication of leadership by America in a world disrupted by the Covid-19 pandemic. A clear pattern of isolationism can be seen in various actions of the Trump Administration since it’s assumption of the Office. In 2017, the US withdrew from the Paris Agreement, in 2018 it unilaterally reneged from the JCPOA, re-imposed sanctions on Iran and threatened sanctions on allies who supported Iran. In 2019, it withdrew troops from Syria, which led to subsequent Turkish incursion on Rojava Kurds, and in early 2020 it negotiated with the Taliban to enable withdrawal of US troops from Afghanistan. With the onset of Covid19 global pandemic, the Trump administration has accused the WHO of protecting China. In a unilateral action not endorsed by its allies, USA first stopped its funding for WHO and then terminated its relationship with the UN institution. This comes as a blow to multilateralism since the US was WHO’s largest donor, contributing about $440 million yearly. In addition to this, the US has failed to provide the lead in the global response to tackle the virus despite its initiatives in the past pandemics such as H1N1, Ebola and the Zika virus. The US was absent from the WHO initiative – Global Coronavirus Response Summit (before its withdrawal from the association). In addition, the US has been unable to provide external aid to combat the virus due to domestic shortages, which explains its restraint to guide an international response in the absence of a coherent domestic plan of action. Thus, the coronavirus pandemic has acted as a catalyst in increasing the pace of US isolationism from world politics.

    China has turned the tide on its previous missteps in containing the virus by publicising its governance model as the most effective way to combat the pandemic.

    Meanwhile, the pandemic has established firmly China’s rise in the international stage. Though China is facing backlash for suppressing details about the virus, it is battling to overcome this criticism by providing international aid and stepping up to lead a global response using Beijing’s success as a template to overcome the novel virus. China has contributed significantly to the global response by providing materials such as ventilators, respirators, masks, protective suits and test kits to Italy, Iran, Serbia, and the whole of Africa. Grabbing its opportunities to lead international responses, China hosted Euro-Asia conference, participated in the Global Coronavirus Summit where it pledged an emergency funding of $20 million to WHO, and pledged $ 2 billion to the WHO (equalling its annual budget) to be disbursed over the next two years, thus contrasting sharply with the US behaviour of withdrawing from the WHO. China has turned the tide on its previous missteps in containing the virus by publicising its governance model as the most effective way to combat the pandemic. It continues to highlight the inadequacies and shortfalls in healthcare systems of the western world as against the success of its governance model, Beijing Consensus, and variations of it in East Asia. It is clear that China has seized the Covid-19 pandemic as a huge opportunity to establish its global leadership.

    Taking advantage of the global disarray due to the pandemic, China has taken strong actions to deflect global criticism of its initial handling of the virus. Two prominent examples of this being, European Union watering down the report on Covid19 disinformation owing to pressure from Beijing, and the passing of the controversial Hong Kong security law. While the US has taken initiative in cracking down on China by repealing the special privileges to Hong Kong, other countries were cautious in retaliating against China significantly and limited their actions to sympathetic support for pro-democracy protestors. The exception to this was Britain, which offered UK citizenship to British National Overseas Passport holders in Hong Kong, despite seriously offending China. Despite the global backlash against Chinese diplomacy in the form of generous aids, international actors have expressed limited concerns through action against Chinese domination. This is due to the circumstantial mismatch in global balancing against China’s rise. The US uses unilateral actions and ‘expects’ its allies to follow, while its allies despite their serious concern over China’s rise, remain vary of following in the American footsteps. This is because US allies treat coronavirus as an immediate threat as opposed to China’s rise. The US being a status quo power is more threatened by China’s rise since it posits as a revisionist state. However, in view of China’s proactive efforts in leading global contributions to battle the coronavirus, US allies remain tolerant of China’s dominance.

    The passive and fractured response to China’s aggressive exploitation of the pandemic to establish its global leadership is a concern for India. The recent setting up of Chinese military camps in Indian controlled territory of Ladakh is a manifestation of China’s complex strategy. India has, true to its traditional policy, opted out of involving the United Statesin the ‘bilateral issue. However, it would be beneficial to be united in balancing against China’s rise. While it is necessary to work together to utilise Global Supply Chains (GSC) during the pandemic to battle the coronavirus pandemic, it is equally important to look at global balancing against China to ensure its compliance to rules-based world order. Since China’s power is derived from its economic strength, balancing strategy against China should focus on trade and economy. Chinese foreign policy depicts a pattern of economic coercion to reward or punish its counterparts. This can be tackled through concerted global action. India is, as one of the largest producer of pharmaceuticals, playing a crucial role in global efforts to fight the pandemic by providing Hydroxychloroquine globally. However, given that most raw materials are sourced from China, balancing against China requires a favourable movement of GSC diversification. US-China trade war has, encouraged companies to move production out of China and into Asian countries such as Vietnam and Taiwan. As a result of the coronavirus crisis and the global backlash, companies look to further diversify their resources and supply chains. India and other Asian countries could benefit from this if they adapt their policies suitably.

    Global backlash against China’s handling of the virus in Wuhan is still a challenge for China’s geopolitical strategy. Its foreign policy is seen more as displaying aggressive and coercive approach than persuasive diplomacy.

    It is difficult to estimate whether China would aspire for hegemonic leadership. Global backlash against China’s handling of the virus in Wuhan is still a challenge for China’s geopolitical strategy. Its foreign policy is seen more as displaying aggressive and coercive approach than persuasive diplomacy. Given the current volatile scenario most countries have, in the absence of US leadership, increased their dependence on China as it is now the largest provider of aid. While all this tips the scale in China’s favour, it’s hegemonic ambitions can be countered through trade strategies as its weakness stems from the fact that it is a hugely export driven economy. Global diversification of supply chains would reduce the world’s increasing dependency on Chinese manufacture and products. The world will need to be cautious as the pandemic has provided China an opportunity to tighten its grip on the global economy as the world’s workshop and technology provider. Here on, international efforts to bandwagon or balance will become a decisive factor in determining China’s rise to apex position in the world order.

     

  • POST COVID 19: RE-IMAGINING THE NEW WORLD ORDER

    POST COVID 19: RE-IMAGINING THE NEW WORLD ORDER

    As the world grapples, rather unsuccessfully so far, with its worst pandemic in a century, COVID 19, it would be an understatement that the world, as mankind has known for decades, will ever be the same again! The Coronavirus is not just a medical emergency which has afflicted the entire world, already caused over 125,000  fatalities and  with its rampage  continuing alarmingly,   the socio-economic-political consequences for the world, in the near future, are likely to be as horrendous as the employment of a weapon of mass destruction(WMD).

    Post COVID 19, whenever that period dawns, what the new world order or disorder would be is agitating the minds of governments and analysts the world over. Though it is rather premature today to crystal-gaze as to when the world can rejoice that COVID 19 is now part of history, it is equally imperative for governments and global institutions, the world over, to frankly analyse the ramifications of  the aftermath of such an apocalyptic event. It will be better to be prepared for the after-results now than be found ill-prepared as the world was when this pandemic struck in full surprise and ferocity.

    The onslaught of this coronavirus was indeed a Black Swan event and hence it found the world, including the most powerful nation on the earth, US and most of the technologically advanced nations, like in Europe, grossly under-prepared – a fact that will puzzle future historians. For the uninitiated, a Black Swan event is a metaphor for an unpredictable event that is beyond what is normally expected of a grave situation and is characterized by both extreme rarity and equally severity in occurrence. Events like the Black Death plague which had engulfed the world 600 years back and took a toll of 25 million lives, the Spanish Flu a hundred years back which took millions of lives, the atom bomb attacks on Hiroshima and Nagasaki in Japan by the US Air Force at the near- end of World War II  or the 9/11 terrorist attack on the Twin Towers in the US could be categorized  as Black Swan events.

    Prior to ascertaining through the prism of uncertainty the contours of the “new normal” or the “next normal”, it will be in order to study what all went grievously wrong in the globe’s response to the pandemic. Firstly and, unquestionably, was the emerging superpower China’s total disdain for the fallout of the coronavirus. Reliable reports in the western media point out that as early as 17 Nov 2019, the virus was detected in the Wuhan laboratory in China’s Hubei province. It was attributed to the major animal market of Wuhan which sells dead bats, dogs, cats, fish, seafoods and many other forms of animal produce for the Chinese palate. Once the virus started spreading uncontrollably, it was only on 31 Dec 2019 that China cared to inform the WHO regards the spread of an “abnormal pneumonia”.

    From the beginning of Jan 2020, the pandemic rapidly spread its tentacles to the US and most nations of Europe with devastating effect. Amazingly and regrettably, the US and most nations were rather sluggish in their response mechanisms to combat this dreadful virus. No stringent lockdowns or social/physical distancing or curbs on travel or congregations was enforced—- the tragic results were for all to see with medical systems collapsing and no drugs/vaccines available, no hospital beds or ambulances, as  required, available. It was only that by end Feb/ mid-March some emergency measures were enforced—much too late though. The world expects all fellow nations to share critical information with each other in the event of such emergencies as such viruses do not recognize any international borders.

    In India too, there is a view that we may have been a bit late in enforcing lockdowns and other stringent measures. Nevertheless, PM Narendra Modi’s much awaited 21 days lockdown announced on 24 March (and its subsequent extension till 03 May 2020), though necessary, could have been better implemented with some advance planning. Though the centre and state bureaucracy did step up subsequently to resolve the teething problems, especially of migrant labour, many helpful interventions from well-meaning NGOs, gurdwaras, temples, the public and others, the humanitarian problems have been overcome to a large extent. Overall, the nation’s response, cutting across religious lines, to this medical emergency has been encouraging and embellished with humanitarianism.

    The other major fall-out of the COVID 19 pandemic will, in all certainty, be the catastrophic economic costs the world will have to bear. The IMF has stated that the current crisis is the most horrible in a century and will be likely worse than the “Great Depression” (1929-1939). It visualizes the global GDP to shrink by a whopping 3 percent though it forecasts that next year could witness an improvement. As observed all over the world, stock markets have tumbled to abysmally low levels, production facilities come to virtual shutdowns, staff laid off, air and rail travel shut, supply chains both international and intra-nation disrupted etc. In addition, oil prices have had a dangerously steep decline throwing the world trade and economy out of gear. The US with its financial muscle ultimately, despite being financially badly mauled, is expected to slowly bounce back. President Donald Trump, now in his crucial re-election year, may take some out-of-the box fiscal initiatives to bring the US economy back on track. The ongoing trade war between China and the US may witness contours of a rivalry not witnessed so far. Anyway, China needs to be globally chastised for its unethical practices.

    It will be a natural fall-out for most nations now to take a fresh look at their trade relations with China. Japan has already announced a US $ 2.2 billion package for their industrialists to pull out of China. Others like Taiwan may do so too. Some of the industries moving out of China may prefer to re-locate to India and here is a good chance for India to welcome them here and give a fillip to India’s currently near-stagnant “Make in India” programmes. However, the Indian establishment will have to shed its hollow big talk, traditional lethargic attitudes and genuinely encourage foreign investments into India. India’s private industry is modern, robust, and skilful enough to work together with foreign collaborators.

    The world now must rise and strengthen global institutions like the UN and its various agencies to combat global challenges. No country, however powerful, can exist as an island as witnessed now. Nations like China, notwithstanding its deep pockets, must be cautioned not to disturb the economic equilibrium of the world, most of which is reeking with poverty and under-development. China’s intransigent attitude not even allowing a discussion on the pandemic at the United Nations Security Council last fortnight is unacceptable to the world.

    In the coming years, it is certain that owing to the gruesome after-effects of COVID 19, nations, both the powerful and the poor, are going to take far more seriously their public health preparedness and emergency standard operating procedures. Medical infrastructures, rightly so, demand far greater thought, planning and investments than hithertofore.

    It is well on the cards that even the militarily powerful nations will look into the various nuances of biological warfare. It is now clear to the entire world that a virus can prove to be far more lethal than many megatons of explosives and modern weaponry. According to many western journalists, China may deny its botched-up bio warfare experiment, but it is a matter of time when the bitter truth will unravel. India as a signatory of the Geneva Convention of 1972 (effective since mid-1975) to eschew production and experimentation of  WMDs including bio weapons should not only  use its moral authority to make nations be sincere adherents of existing UN protocols  but, importantly, for its own safety put into place  adequate defensive mechanisms to thwart such challenges. The lessons to be drawn from COVID 19 must be taken seriously. In addition, the UN must draw up contingency plans to prevent, contain and manage and ultimately defeat such likely challenges in the future. It will have to be a synthesis of health, economic, political, and even military measures.

    The new world order, in all likelihood, will be drastically differing, more sobering, additionally fiscally prudent, and conservative and with nations becoming isolationist and inward looking. China’s image and its economy will certainly take a sound beating. Though the pandemic is world-wide and global problems, unquestionably, require global solutions, yet in the coming years we may witness the rise of hyper-nationalism and authoritarianism in most nations including democracies. Nevertheless, as India strives to do its bit to get its economy back on track and takes various prophylactic measures for the future, it must do its bit to strengthen global institutions.

    This article was published earlier in ‘USI – Strategic Perspectives‘. Views expressed are the author’s own.

    Image credit: Tehran Times

     

  • China Tightening its grip on Indian Ocean

    China Tightening its grip on Indian Ocean

    Category : International Affairs/China

    Title : China Tightening its grip on Indian Ocean

    Author : G Parthasarathy 10-02-2020

    In comparison to India, China has moved ahead to strengthen its maritime ties with countries across the Indian Ocean. With the expansion of its submarine fleet and commissioning of its aircraft carriers and fifth generation aircraft, China has augmented its naval strength significantly. Ambassador G Parthasarathy looks at China’s expanding profile in the Indian Ocean and India’s response.

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  • Tectonic shift in US’ Attitude

    Tectonic shift in US’ Attitude

    Category : International Affairs/ USA-Iran

    Title : Tectonic Shift in US attitude

    Author : Deepak Sinha 18-01-2020

    The targeted execution of a serving Iranian General and war hero, Qasem Soleimani, while on an official visit to Iraq raises serious questions of sovereignty, morality, ethical conduct and can never be justified in any civilised society. It is a blatant act of aggression in clear violation of international law and a war crime, made even more heinous because neither America nor Iran is at war with each other. Deepak Sinha comments on American motives and likely impact of this assassination.

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  • Strategic Autonomy and the Looming Oil Crisis

    Strategic Autonomy and the Looming Oil Crisis

    Kamal Davar                                                                                             May 31, 2019/Commentary

    The new Modi government will have to speedily contend with a serious foreign policy challenge on its hands.

    That this ordeal comes in the wake of some underplayed serious economy problems currently facing the nation will compound the problems for India which imports over 80 per cent of its burgeoning oil needs.

    Thus, if the looming crisis in the Persian Gulf between an arrogant US and an equally defiant Iran does not get resolved peacefully, ominous ramifications await the region, the world and all those nations which import crude oil from Iran.

    The genesis of the current crisis between the US and Iran has its roots in the Joint Comprehensive Plan Of Action (JCPOA) which was agreed upon by Iran and six western nations in 2015, led by the US, to curb Iran’s nuclear programme, which boils down to deterring Iran from developing nuclear weapons. But in May 2018, the US, under its mercurial President Donald Trump, chose to renege on this treaty as Trump felt that this was the “worst deal ever negotiated.”

    It is also a fact that Iran did not violate any norms of the law as regards this agreement.

    Meanwhile, the US allowed some nations, including India, which import oil from Iran a six-month waiver, which ended on May 2, 2019. As a consequence of the US action, oil prices the world over have jacked and soon its adverse effects will be felt in India as inflation will hit the already strained Indian economy. Over a 10 per cent hike in global oil prices has already taken place in the last one month and a crippling escalation in oil prices ahead is well on the cards.

    Notwithstanding any US pressure on India, the unalterable fact of Iran’s strategic significance to India in the region remains beyond question. India imported 24 million metric tonnes of crude from Iran in the 2018-19. India was Iran’s second largest buyer of crude last year, while Tehran was the third largest supplier to India after Iraq and Saudi Arabia (11 per cent of a total of India’s oil imports).

    Additionally, Iranian crude comes with a longer credit period and cheaper freight owing to Iran’s geographical proximity to India and, thus, Iranian oil remains the best option for India in more ways than one.

    Higher oil prices also make the Indian rupee weaker, making imports to India costlier. Importantly, that Iran-India collaboration in the development in the vital Chabahar Port in Iran will give India vital ingress to Afghanistan and the Central Asian Republics cannot be understated.

    Meanwhile, the US has rushed the formidable USS Abraham Lincoln carrier-borne Task Force to the Persian Gulf region and undertaken certain prophylactic steps in case war breaks out.

    The Iranians, too, have mounted some small-range anti-ship missiles on their warships. Iranian President Hassan Rouhani recently said that his nation is facing acute pressure from international sanctions, dubbing it a “war unprecedented in the history of the Islamic revolution.”

    The US has also branded Iran’s elite Revolutionary Guards as a foreign terrorist organisation. A war of words has broken out, with President Trump declaring that if “Iran wants to fight, that will be the official end of Iran. Never threaten the United States again.”

    Replying back sternly, Iranian Foreign Minister Javad Zarif retorted that Iranians have stood tall for millennia against aggression and that “economic terrorism and genocidal taunts won’t end Iran.” He added that “never threaten an Iranian. Try respect it works.”

    Importantly, even US allies have steered away from of taking any partisan positions with either the US or Iran. Meanwhile, oil-producing nations like Saudi Arabia, Kuwait, Mexico and the US itself have been requested to step up their oil production to cater for Iranian oil shortfalls.

    How this oil crisis will shape up to meet global demands is anyone’s guess.

    It is a strategist’s nightmare in conjuring up a scenario concerning the ramifications of a war between Iran and the US. The Persian Gulf is easily one of the world’s critically significant strategic waterways through which one-third of the world’s oil is transported.

    In the event of a war, Iran will definitely close the vital Straits of Hormuz for commercial shipping purposes, throwing the region’s economy out of shape — an eventuality which, hopefully, should not ever take place.

    Preoccupied with its General Election, India, as a major regional player, has so far not reached out to its strategic partner, the US, to impress upon it to defuse the crisis.

    Recently, the Iranian Foreign Minister made a trip to India to explain their position to India on the current standoff.

    India, however, need not succumb to any US pressures or take sides. India has an adequate financial standing and moral stature to play a peacemaker’s role. India must conscientiously follow the time-honoured policy of zealously guarding its strategic autonomy. Respect for India from nations even adversarial to each other — as in earlier decades — will follow automatically and some of India’s economic tribulations will also get simultaneously addressed.

    Let the new government in New Delhi bear in mind Iran’s more than significant strategic value for India in the region.

    The author, Lt Gen Kamal davar is a former DGDIA and is visiting Distinguished fellow at TPF. 

    This article was earlier published in The Tribune.

  • Belt & Road: What are China’s Real Intentions?

    Belt & Road: What are China’s Real Intentions?

    Mohan Guruswamy                                                                                         May 22, 2019/Analysis

    Almost two years after China hosted a well-attended and hugely-touted conference to promote its One Belt, One Road (OBOR) initiative, it held the second summit last month. It is apparent the grand design outlined at the first summit hasn’t quite shaped up as intended. Questions were asked about its real intentions, economic benefits and usurious tendencies.

    The Chinese have begun backtracking a bit. Already, Malaysia has renegotiated the terms of the rail project with a much-reduced outlay, lower interest rates and increased local participation. It may be mentioned that the original deal was signed by paying the disgraced former Malaysian PM Najib Razak a sizeable bribe. Even Pakistan, Beijing’s so-called “all-weather” friend and ally, has begun questioning the terms of the China-Pakistan Economic Corridor (CPEC) after deriving lessons from what happened to Sri Lanka when the birds came home to roost at Hambantota.

    The second edition of the Belt and Road Initiative Summit got under way in Beijing on Thursday last week. It seems that India’s opposition to it might have also been addressed somewhat when the BRI map showing routes rather curiously shows the whole of Jammu and Kashmir and Arunachal Pradesh as part of India. Is this a signal, or just artistic licence? The map even portrayed India as a part of BRI, despite India having boycotted the summit for the second time.

    Typically, many Indian commentators have started seeing meaning in it. Maps be damned, we can see meaning in BRI only when the norms and terms conform to accepted international norms, such as those of lending agencies like the World Bank.

    The BRI is seen as China’s big play to seek world domination. Both the fears and the optimism are unfounded. The BRI is a project meant to very simply get out the Chinese reserves invested in Western banks into investments where these will fetch a much higher rate of return; and to take up the slack from the huge overcapacity problem that plagues the Chinese economy.

    Speaking at the first BRI (then OBOR) conference, President Xi Jinping had announced that Beijing would advance 380 billion yuan ($55 billion) to support it. This was a far cry from the huge figures, sometimes as high as $750 billion to $1 trillion, that were bandied about. Exaggerating the size of the lollipop is an integral aspect of China’s economic diplomacy.

    While economists are generally sceptical about China’s goals and intentions, strategists — mostly the garden-variety Indian military types — have endowed this project with sinister overtones. I was on a television show when a prominent “security analyst” and the anchor raised the issue of the so-called “string of pearls”. To them it seemed that every port or airport where a Chinese company is the contractor had a military purpose. Most of these folks have not progressed beyond Mahan and Mackinder, whose theories were fashioned in a much earlier era when coaling and oil refuelling points were very critical.

    The “string of pearls” is a bogus idea. It was cooked up by consultants working for a company called Booz Allen Hamilton, which was linked to the US department of defence and the Central Intelligence Agency, and was given a lot of traction by some well-known Indian “strategic thinkers”. I was once at a conference where Adm. Dennis Blair, a former US Navy chief and later President Barack Obama’s Director of National Intelligence, was asked about it. He called it a “stupid notion”, and said no one who has run a large navy or held a responsible position in a navy will ever say an oceanside blockade is possible. He explicitly and loudly said to Indian strategists who harped on the “string of pearls” that no navy could encircle a country with just a few ports.

    The question that we need to ponder over a bit is how long will these “ports” survive after any outbreak of hostilities? The Indian Air Force and the Indian Navy have enough airpower at hand to sort them out, and our Navy can effectively blockade hostile ports in the neighbourhood. It may be noted that the IAF has operationalised an airbase in Thanjavur and will fly SU30 MKIs from there. The Navy deploys MiG-29K fighters as well as P-8i Poseidon maritime surveillance and attack aircraft, and has a formidable fleet of combat vessels. We have not been exactly sleeping or need to be overly worried. The same Sri Lanka that once hosted a Chinese Jinn class nuclear submarine ostensibly on a goodwill mission last year turned away a conventional submarine of the PLA Nany wanting to pick up supplies.

    Now to the economics of BRI. There is a reality most of our commentators do not see or understand. By 2013, China had accumulated foreign exchange reserves of about $3.5 trillion. The capital it claims it is prepared to subscribe for the NDB, AIIB and Silk Road Fund would amount to only around seven per cent of its total foreign exchange reserves invested in Western banks. As these China-promoted institutions will provide infrastructure lending rather than grants, the return on capital from these investments could be significantly higher than the returns China gets from its foreign exchange reserves now invested in low-yielding US government bonds. It’s very simple. China needs to get value for its money and also help its demand-starved industries. They have found a typically Chinese solution to it, and are making a virtue out of a necessity.

    Look at it from another angle. The US dollar is also steadily depreciating in the long term against other major currencies. With no interest and with depreciation factored in China’s huge reserves, accumulated by extracting surpluses in its sweatshops, are steadily shrinking in value. The question which Beijing seeks to grapple is this. One way is to put these funds to work in investment-starved countries in Africa and Asia and assures themselves of returns for a long time to come. In some, the birds have come home to roost quite early. The grandiose Hambantota port project in Sri Lanka, which once had the same bunch of Indian “strategic thinkers” in a tizzy, hosts no ships and doesn’t earn very much. China is now pressuring Sri Lanka to service the debt and is seeking to extract some more in lieu of that. Much of the Hambantota investment has been recouped by China via material and labour supplied to complete the project. That’s why one prominent European commentator then called OBOR “One Belt, One Road and One Trap”.

    Like Sri Lanka, some other intended beneficiaries have now begun to ask questions about the utility and intentions of OBOR. Pakistan’s Dawn newspaper has said: “But the main thrust of the plan actually lies in agriculture, contrary to the image of CPEC as a massive industrial and transport undertaking, involving power plants and highways. The plan acquires its greatest specificity, and lays out the largest number of projects and plans for their facilitation, in agriculture.” It then questions the benefits that will arise from linking mostly dry and barren Xinjiang, and in particular the predominantly Turkestani Muslim Kashgar prefecture with its restive four million people, to an increasingly water-starved and already much troubled Pakistan. Once when a Pakistani interlocutor at a Track-2 session asked me what then would be the economic gains to Pakistan, I replied they could sell tea and samosas to the traffic!

    Much is being made about the overland link between China and Europe by rail and road links. Most commentators seem to miss that the Trans-Siberian Railway line from Vladivostok to Moscow is almost a hundred years old. Its capacity can be beefed up. Yet overland freight costs will always be much more expensive than sea freight costs. Business is about cutting costs and taking the least expensive option. No one with common sense will prefer to shift by land what can be shipped. Others make much of the so-called Malacca dilemma. The Arctic route is now opening up, and the real Malacca dilemma soon will be the rapid decrease in freighters through it. There is always the option of a canal for freighters across the Kra Isthmus, a project that will bring China and Japan much closer to India.

    Mohan Guruswamy is a Trustee and a Distinguished Fellow of TPF. He is a prolific commentator on economic and security issues, and specialises on China.

    This article was published earlier in Deccan Chronicle.

  • China grows, and grows

    China grows, and grows

    G Parthasarathy                                                                                       Apr 11, 2019/Commentary

    One of the most remarkable developments in recent decades has been the rise of China, spearheaded since 1978 by the visionary leadership and economic reforms of Deng Xiaoping. China registered the highest rate of economic growth in history, growing at an average rate of 9.5% annually, for over three decades. This followed the earlier rise of Japan between 1950 and 1989, with an average growth rate of 6.7%. Deng transformed a country crippled by centralised planning and state control of industries into a more decentralised economy, with increasing involvement of private initiative. This era saw market reforms leading to a surge in exports, with China emerging as the largest exporter in the world. China’s private sector today controls around 80% of its industry and virtually the entire agricultural sector. State farms today employ barely 1% of agricultural labour. There are 658 billionaires in China, which is ruled by a ‘Communist’ party, as against 584 in the US, ruled by Trump’s right-wing Republican Party.

    President Xi Jinping has emerged as China’s unquestioned leader, seeking to match Xiaoping. Among Xi’s ‘mantras’ to achieve his ambitions is the now famous Belt and Road (OBOR) project, involving the use of Chinese construction companies, which have huge surplus capacities. These companies did a stupendous job in China over the past three decades and have surplus capacity, including labour and machinery, arising from the relatively small number of projects yet to be undertaken. The Belt and Road Initiative is not only involved in building roads and bridges, but also railways, ports, dams, power stations and other infrastructure across 68 countries, spanning Asia, Africa and Europe. Estimates of total investments envisaged for these projects vary from $1 trillion to $1.3 trillion. The primary focus is on the Eurasian landmass.

    The main source of concern in India, however, pertains to Chinese projects across the Indian Ocean. While the OBOR focuses primarily on the construction of roads, bridges, electrical power projects and dams, the terms for such assistance are opaque. Relatively small attention is paid to developing indigenous skills and capacities for operations and maintenance. The terms of interest and repayment are far less generous than the vastly concessional assistance provided by institutions like World Bank and Asian Development Bank, or bilaterally by countries like Japan and Germany. The net result of this ‘generosity’ is that a number of developing countries, beguiled by Chinese protestations of altruistic assistance, soon find themselves handing over substantial tracts of territory and natural resources to the Chinese, with little development of indigenous expertise.

    India’s western Indian Ocean neighbourhood remains a primary source of concern about Chinese intentions. Using its aid as leverage, China has secured its first military base in the East African Port of Djibouti. China has, in turn, undertaken work on port facilities, construction of two airports and a rail line from Djibouti across landlocked Ethiopia. In neighbouring Kenya, China’s involvement in the strategic port of Mombasa and construction of a rail line, linking the port to the capital Nairobi, have also raised eyebrows internationally. There are growing apprehensions in Kenya that it would soon be unable to repay and be forced to make ‘concessions’ on the management and use of the port. China is the largest lender to Kenya, with debt liabilities reportedly amounting to about $42 billion.

    Reckless spending by the government of former President Abdulla Yameen in the Maldives has resulted in the country acquiring a debt of $3 billion on account of the usual Chinese infrastructure mix of roads, bridges, airports and housing. The newly elected government of President Ibrahim Solih has been more circumspect about such projects. Sri Lanka, too, when unable to repay its debts, was forced to concede substantial control of the Hambantota Port, with a 99-year lease to China. It was also compelled to allow Chinese N-submarines to berth in Colombo.

    Pakistan and Myanmar are inevitably going to experience similar dilemmas. The $62 billion CPEC involves road, rail, mining, port, power sector and agricultural projects, under conditions not known even to parliamentary committees and the country’s Central Bank. With its foreign exchange reserves dwindling and its pleas for an IMF bailout dependent on the goodwill of the US and its allies, Pakistan is faced with very difficult choices on economic management and its backing for groups like the Taliban and the JeM.

    Apart from developing and virtually taking over the Gwadar Port, China is set to build up Pakistan’s navy with the supply of four ‘most advanced’ warships and eight submarines by 2028. At the same time, an isolated Myanmar faces virtual Chinese blackmail to accept Beijing’s ‘aid’ to build a highly unpopular and ecologically dangerous hydroelectric project in the face of strong public protest. This will be part of a Chinese economic corridor linking its Yunnan province with Myanmar’s Kyaukpyu Port.

    The OBOR project has multiple aims. India cannot, however, overlook the fact that it is geared to establish Chinese domination of vital lanes of communication and oil supplies in the Indian Ocean. Responding to India’s concerns voiced over two decades ago, a Chinese admiral arrogantly remarked: ‘The Indian Ocean is not India’s Ocean.’ China’s designs have serious implications for the maritime security of not only India, but also several partner states, ranging from the US and Japan to Indonesia, Malaysia, Vietnam and South Korea.

    Ambassador G Parthasarathy is a former High Commissioner of India in Pakistan, and is a Distinguished Fellow and Trustee of TPF. Views expressed are the author’s own.

    This article was earlier published in The Tribune.

    Photo by zhang kaiyv from Pexels.