As one writes, a phase of the events in the Galwan valley near the Line of Actual Control (LAC) has come to an end. Inputs from government, media and private commentators, have provided a perspective of the events preceding the incidents of 15/16 June and thereafter till the current day. For the world, the occasion has provided the opportunity yet again to witness the fighting spirit and junior leadership of all ranks of the Indian Army, who despite being outnumbered, were able to inflict far greater casualties on their adversaries, in inhospitable terrain under fading light conditions. The sacrifices of the men of 16 BIHAR, 3 PUNJAB, 3 Medium Regiment, and individual personnel from 81 Field Regiment, Corps of Signals and the Army Medical Corps have added lustre to the reputation of the Indian military. Their deeds shall remain enshrined in the memory of a grateful nation. At this watershed moment, we salute them.
China is contesting control over settled areas (Galwan), exploiting laid down rules and norms of border management by resorting to use of primitive weapons instead of firearms, and pushing the envelope on the ground in attempting to increase areas under control such as at Hot Springs and Pangong Tso – all actions just short of war.
One theory gaining currency in attempting to understand China’s recent behaviour, pertains to its unhappiness over what it perceives as alteration of the status quo on the LAC by designating Ladakh as a Union Territory – resulting in active collusion with Pakistan which shares Beijing’s sentiments on this issue, amongst others. However, there is no doubt that the strategy applied by China in East Ladakh comes straight out of its manual on Grey Zone Warfare. It is contesting control over settled areas (Galwan), exploiting laid down rules and norms of border management by resorting to use of primitive weapons instead of firearms, and pushing the envelope on the ground in attempting to increase areas under control such as at Hot Springs and Pangong Tso – all actions just short of war.
While the situation on the Pangong Tso awaits resolution, what is amply clear is that the era of explaining away patrol clashes on the LAC to the Indian public, in terms of ‘varying perceptions held by both sides’, is past. By its perfidious actions in East Ladakh this year, China has shredded in letter and spirit the border agreements built up over the last three decades. The recent incidents have brought greater clarity to the public mind, with a consensus that China’s salami slicing tactics cannot be tolerated any further. Indian soldiers see the LAC as a line marked on the map. Commanders are clear that the areas up to that line are to be either physically occupied or patrolled at will from bases in the vicinity, supplemented by other forms of surveillance. As per media reports, the Government has over the weekend ‘revised the Rules of Engagement’, giving ‘a free hand to the Army’ to deal with occurrences of this nature. By implication, in future if patrols cannot resolve their face offs peacefully, there will be no resorting to hand to hand scuffles with primitive weapons – unsuccessful efforts at border management will give way to border defence, through resort to tactical military operations.
As per media reports, the Government has over the weekend ‘revised the Rules of Engagement’, giving ‘a free hand to the Army’ to deal with occurrences of this nature. By implication, in future if patrols cannot resolve their face offs peacefully, there will be no resorting to hand to hand scuffles with primitive weapons – unsuccessful efforts at border management will give way to border defence, through resort to tactical military operations.
Response to this new paradigm places another set of challenges before the Indian Army. Prior to May 2020, Galwan was not in the category of disputed areas, as understood in LAC parlance. Neither had any Chinese activity been sensed in the preceding years. While construction of the DSDBO road could be the trigger, the fact that an area where the LAC had lain undisturbed since 1962 could become the scene of such a violent action, warrants scrutiny of PLA intent across the board. Previous assumptions with respect to the PLAs likely areas of interest across the entire Northern border, therefore, certainly warrants a relook. Conclusions drawn would mandate contingency planning and consequent tasking at strategic, operational and tactical levels. Such plans doubtless exist. However, it is obvious that their scope, timelines, and imperatives for successful implementation will need review in conjunction with the other services.
Outcomes of such reviews would inevitably renew the focus on capability building and in the middle term, might even alter priorities for the same. Substantial enhancements in the areas of surveillance, tactical and strategic air mobility and real time communication links continue to retain their importance. Induction of greater varieties of kinetic non-contact weapon systems, complemented by force multipliers such as cyber warriors and special forces too remain on top of the list. Also, the continued ceasefire violations on the Line of Control to the West, and the relentless tempo of counter terrorist operations in the Valley during this period smack of collusion and tell a tale which defence planners must take note of. Developing the desired capability will be predicated on guaranteed funding and fast track procedures. It is heartening to peruse reports in the Economic Times of 22 June that the Government has granted emergency financial powers up to Rs 500 crore per procurement project to each service for buying weapons and ammunition. Even if new projects cannot be initiated immediately because of fund constraints imposed by the Covid-19 pandemic and otherwise, it is time for stalled ones like the Mountain Strike Corps to be quickly completed. The example of the PLA which has almost completed its reorganisation for fighting wars of the future and tested the response of its field force during the Covid-19 pandemic, must be taken note of.
Thanks to the Galwan episode, the vital aspect of border infrastructure has gained nationwide attention. There is perceptive increase in the pace of development over the last few years. The sequence and methodology however are dictated essentially by two factors – availability of resources (funds and specialist equipment) and the need for calibrating messages implicit in such actions to China. Despite Covid-19 constraints, the current crisis mandates that funds currently earmarked for infrastructure development continue to flow so that development progresses, albeit at a slower pace. As regards messaging to China, we have reached a watershed moment. As high level military talks continue and spell out the Indian position on the ground to the Chinese, creating an ‘all of nation approach’ for tackling China becomes necessary.
Galwan incident has ensured that the negative perception of China worldwide is now shared by almost all sections of Indian society. This bitterness is fuelled by the sheer brutality of the Chinese military and duplicity of the Chinese government, bringing back memories of 1962 for many who have only heard of that era. It is driven further by a realisation of the scale of India’s dependence on China, be it in the import of manufactured goods of all hues, or technology, and the consequent harm to Indian interests and livelihoods. Awareness has spread amongst Indians that China’s constant working against India’s interests in world fora, be it in vetoing expansion of the permanent membership of the Security Council for ‘technical reasons’, blocking its membership in the Nuclear Suppliers Group or introducing discussions on Kashmir are all part of its plan to obstruct India’s progress to its rightful place in the comity of nations. In attempting to correct an unequal economic relationship, ensuring that India retains its position in the region and preventing erosion of its influence in South Asia and beyond, all elements of the Indian state have their tasks cut out. It becomes imperative now to prepare a different toolkit with a wider range of options (including those not envisaged earlier) to manage India-China relations. Such options now require to be coordinated at all levels of the government and intimated to stakeholders including industry and other influencers for implementation. This coordination is long overdue. Resetting the economic relationship will not be easy. However, announcement of a practical time bound and holistic road map which has been thought through with all stakeholders would be a beginning.
Galwan incident has ensured that the negative perception of China worldwide is now shared by almost all sections of Indian society.
To supplement the proposed policy outlined above, articulation of a holistic Strategic Narrative vis-a-vis China becomes necessary. Such a narrative would pertain to as many aspects as possible – bilateral issues (including border management), local and regional matters, so that consistent, coherent and long term views are voiced, keeping in mind the national interest. information operations would be a subset of such a narrative, and briefings organised as frequently as possible would be useful force multipliers. It might be necessary for the concerned sections in the newly formed Department of Military Affairs and the Department of Defence to coordinate these aspects. India must also actively consider the possibilities that other forms of conflict, including hybrid warfare, are necessary to exploit and invest in the same. Here too, employment of such methodologies by China is an example. China has been refining its doctrine of ‘Unrestricted Warfare’ since the early 90s. The effects are there to see in South China Sea and elsewhere. It is executing certain aspects of this strategy against India on the Northern borders.
Managing relations with China is destined to remain the major preoccupation for Indian strategic thinkers in coming years. Tensions along the LAC are but one manifestation of this problem. Both nations are hostage to geography. China’s behaviour over the last decade has influenced Indian foreign and military policies like no other, causing India to take decisions that were not in the realms of possibility earlier. Articulating a holistic China strategy through an all of government approach within the overall ambit of a National Security Strategy to ensure that India achieves its rightful place, has never been so important.
Image Credit: ASPI:The Strategist – Nathan Ruser
Tag: China
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What After The Galwan Incident?
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Daulet Beg Oldi: Operating from the World’s Highest Airfield
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Daulet Beg Oldi (DBO) is a historic campsite in Ladakh on an ancient trade route connecting Ladakh to the Tarim Basin. It is named after Sultan Said Khan (Daulet Beg), who died here on his return journey after the invasion of Ladakh and Kashmir. DBO is strategically significant as it is close to the Siachen Glacier, the Karakoram Pass, and China’s Xinjiang-Karakoram highway. The Chip Chap river flows just to the south of DBO from east to west. It has an airstrip at an altitude of 5064 meters (16,614 ft), the world’s highest airstrip. India activated DBO as a military base and Advanced Landing Ground (ALG) following the border dispute with the PRC in the late 1950s. The IAF activated DBO airfield in 1962 and it became a crucial ALG since then. DBO continued to be in use till 1966. The airfield was damaged following an earthquake in 1966, which put a stop to its further use. The IAF maintains many of the forward posts and villages in the himalayan regions through airdrops using a string of ALGs. Following increased belligerence from China, DBO was reactivated in 2008. The completion of the Darbuk-Shyok-DBO road added immense logistical strength to the Indian military in the region. Since 2013, China has intensified its probing incursions in this region. The recent clash in the Galwan valley is a high point of increasing tensions along the borders.
Operations from the DBO have been a huge challenge, given its high altitude, mountainous terrain, and loose soil conditions. Group Captain A G Bewoor VM (Retd), an air force veteran with immense transport flying experience, describes the challenges overcome by the IAF in activating the DBO through first landings spaced out by 46 years.
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China’s support to Syria: In Conflict and Redevelopment
China is looking to ramp up relations with Syria both as part of its strategic Belt and Road Initiative (BRI) but also to take advantage of the multi-billion dollar reconstruction effort that is expected to materialise following the gradual winding down of the war.
Syria is an ancient civilisation and also an important part of the ancient silk route, with cities such as Palmyra, Aleppo and Damascus playing an important role in trade and travel between the East and the West. While the discovery of a maritime route between Europe and Asia has to some extent diminished its importance in this regard, Syria is still strategically important. China is looking to ramp up relations with Syria both as part of its strategic Belt and Road Initiative (BRI) but also to take advantage of the multi-billion dollar reconstruction effort that is expected to materialise following the gradual winding down of the war.
China’s non-interference policy is an integral aspect of its involvement and role in the Middle East. During the course of the Syrian war, China has consistently supported the Bashar Al Assad government on the diplomatic front – through the exercise of the veto power against the resolutions introduced in the United Nations Security Council either condemning the Syrian government, calling for ceasefire or for imposing sanctions on suspected war criminals. While negotiating the renewal of border crossings for aid, China agreed on the need for humanitarian assistance but emphasised on state sovereignty. China’s policy of non-interference has served it well in strengthening bilateral relations and advancing its interests.
One of the reasons for the diplomatic support extended by China to the Syrian government is also the involvement of the Uighur fighters in the Syrian conflict which has greatly bothered China. While it has never got directly involved militarily in the Syrian conflict there are unconfirmed media reports which suggested that China was sharing military intelligence with the Syrian government and also sent its military advisors to Syria to help it in its fight against the rebels. In this sense, it saw Syria as a key player in its fight against religious extremism thereby preventing its export to its own volatile Xinjiang province.
With the Syrian conflict slowly winding down and Bashar Al Assad’s hold on Syria greatly strengthened more than at any other time since the beginning of the civil war, China is ramping up its diplomatic efforts in Syria using trade as an important policy tool to ramp up the relations between the two great civilisations.
Based on Chinese government’s invitation Syria has participated in the second BRI summit held in Beijing in April 2019. Previously in 2018, China held a Trade Fair on Syrian reconstruction projects which was attended by nearly one thousand Chinese companies and which saw investment proposals of nearly USD two billion. The collapse of most of the industry in Syria due to the war has also resulted in a significant increase of cost-effective Chinese imports into Syria ranging from toys to car parts and industrial machinery and equipment.
China is also leveraging its economic strength fully by using aid as a foreign policy tool. In 2019, Xinhua reported on the that an economic cooperation agreement was signed between Syria’s Planning and International Cooperation Commission (PICC) and the Chinese embassy in Damascus. As part of this agreement, a donation will be set aside to fund a series of humanitarian projects as agreed upon by both sides.
The collapse of most of the industry in Syria due to the war has also resulted in a significant increase of cost-effective Chinese imports into Syria ranging from toys to car parts and industrial machinery and equipment.
China is expected to be a key player in the international reconstruction and development effort that is expected to take place in Syria due to its strong bilateral ties with not only Syria but also its alignment with Russian and Iranian position on Syria , these two players being the major supporters of Bashar Al Assad’s government in the civil war. While Russia and Iran are surely expected to carve out a large part of the reconstruction contracts between themselves, their capacity to make the huge investments in these projects, estimated to be worth anywhere between USD 200 million to USD 1 trillion is doubtful. This creates the ripe opportunity for China to enter the reconstruction business effort either by themselves or, as is more likely, in partnership with Russian and Iranian governments or businesses.
Beyond the business opportunities provided by the potential reconstruction of Syria, China is also strategically interested in Syria. China was always interested in securing access to the Ports of Tartus and Latakia on Syria’s Mediterranean coast. Such an access is expected to complement Beijing’s interests in the Greek port Piraeus (COSCO shipping, the Chinese state-owned shipping and logistics services supplier company in the Port authority) and the Israeli port of Haifa, in securing a trade route to Europe. In alignment with these strategic interests, Chinese companies’ area also exploring the possibility of upgrading the deep seaport of Tripoli, Lebanon to allow it to accommodate larger vessels and also the possibility of building a railroad that would connect Beirut and Tripoli in Lebanon to Homs and Aleppo in Syria.
Beyond the business opportunities provided by the potential reconstruction of Syria, China is also strategically interested in Syria. China was always interested in securing access to the Ports of Tartus and Latakia on Syria’s Mediterranean coast.
Chinese investments into and trade ties with Syria however, risk the attraction of US sanctions on Syria. The arrest of Meng Wanzhou, Chief Financial Officer of Huawei, , in Canada, based on a request by the United States highlights the extent of these risks. “The Caesar Syria Civilian Protection Act”, also known as “The Caesar Act”, a United States legislation that sanctions the Syrian government, including Syrian president Bashar al-Assad, for war crimes against the Syrian population, parts of which are now incorporated in the “National Defense Authorization Act for Fiscal Year 2020” greatly tightened the sanctions environment against the Syrian government and a number of its industries potentially impacting the Chinese investments and trade ties. While China has called for an end to sanctions stating they were “inhuman,” they have been wary of being targeted by sanctions and further straining their relations with the US. However, it is unlikely that the sanctions would have a significant effect on China given the size of China’s economy and its ability to circumvent sanctions while dealing with Iran and North Korea. China, as part of its ‘mask diplomacy,’ is increasingly providing aid to the Syrian government in their efforts against Covid-19. This serves the dual purpose of strengthening China-Syria relations and strengthening China’s narrative of Covid-19.
To conclude, China has been a staunch supporter of the incumbent Syrian government of Bashar Al Assad during the almost decade long Syrian civil war and is set to reap the benefits from the post-war Syrian reconstruction effort in conjunction with the Russians and the Iranians to advance its interests.
Image: Middle East Institute
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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
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Taiwan Elections 2020: Emphasising Taiwan’s Democracy, Nationalism and Sovereignty
Taiwan’s first female President, Tsai Ing-Wen of the pro-democratic DPP Party won a landslide victory for second term in the national elections held in January. China condemns Tsai’s victory by reiterating its “one country, two systems model.
Election Results: Voice for Democracy and SovereigntyTaiwan’s president, Tsai Ing-wen won re-election on January 11rth by a historic landslide, a decisive result widely seen as a rebuke to Beijing’s efforts to integrate Taiwan into the ‘one-China’ concept. The DPP (Democratic Progressive Party), rode on Tsai’s popularity and maintained control of the Legislative Yuan, the country’s parliament. DPP has consistently taken a very ‘Taiwan nationalistic’ approach and has been a strong opponent of Beijing’s ‘one-China policy’ and the so-called ‘1992-consensus’. This landslide victory and a second term gives Tsai the power to uphold Taiwan’s commitment to democracy. Taiwanese voted to reject China’s “one country, two systems model” while still maintaining support for Tsai’s stand on the “1992 consensus”, which would dictate the Cross-Strait ties based on “peace, parity, democracy and dialogue”.
On winning the elections, President Tsai remarked – China must ‘face reality’ of Taiwan’s independence and called on China to ‘review’ it’s current policy toward the de facto nation that Beijing claims is part of its territory.
China refuses to acknowledge the victory of pro-democratic forces and maintains that this development would not alter its “one-China” principle. China’s Foreign Ministry stated that “regardless of what happens in Taiwan, the basic facts won’t change: there is only one China in the world and Taiwan is part of China.”
In the voting week, Xi Jinping ushered in a range of measures “to further promote economic and cultural exchanges and cooperation between the two sides of the Taiwan Strait”. Despite these positive announcements, he sent a Chinese aircraft carrier to sail through the Straits to intimidate, should Tsai’s victory initiate a declaration of independence.
The Chinese army also conducted a naval and air force drill on 9-10 February in a threatening attempt to which Washington responded with the US Air Force sending two surveillance planes as an expression of solidarity with Taiwan.
Election results and impact on KMT
In the aftermath of the astounding defeat in January, the opposition KMT has been forced to re-examine its policies and priorities. The party elected Mr Johnny Chiang, a 48-year old lawyer, as its president in March first week. Chiang represents the younger generation who are more focused on separate Taiwan identity, reflecting DPP’s resonance across the young voters. KMT has some serious issues to resolve if it wants to remain relevant in Taiwan. It is constrained by its linkage to the inconvenient history of Taiwan and a support base that is seen as focused on benefitting from cross-Strait engagement, and in some cases, unique access to the CCP through party-to-party ties. The main internal issue is the party’s cross-Strait policy with China, whether 1992 consensus will endure as the foundation for official mechanisms. Chiang is seen as one who will most likely ‘discard’ the 1992 consensus arguing that the consensus has lost its utility and undergone ‘distortion’ when linked with the ‘one country, two systems’ model used in Hong Kong.
Background: 1992 Consensus – discarded by rising Taiwanese identity?
Taiwan was ruled for more than three decades by the nationalist army, the Kuomintang (KMT),which fled to the island in 1949 after being defeated by the Chinese Communist Party (CCP) and created a rival government, the Republic of China, better known as today’s Taiwan. It has since transformed into a multiparty democracy, under a government and political system, completely separate from China’s. KMT’s position stems from the legacy of the Chinese civil war with the CCP, which is a complicated history of KMT and CCP vying to represent ‘one China’ as the ‘Republic of China’ by KMT and the ‘People’s Republic of China’ by CCP. KMT, in view of this history, is seen as the most pro-mainland of Taiwan’s two major political parties. In contrast, the DPP has always maintained much tougher stance with Beijing. It has played a prominent role in democratisation of Taiwan and places greater emphasis on uniqueness of Taiwanese identity and a history of more than 100 years that is separate from that of China’s. From the late 1980s when democratisation of Taiwan began, more and more Taiwanese are embracing a Taiwanese consciousness and favouring independence even though maintaining status quo still remains the majority priority for the moment. Majority of the youth, and 60-70% of Taiwanese are fiercely conscious of their Taiwanese identity, and view Taiwan as an independent and sovereign nation-state. This also means that the idea and legacy of nationalist party’s ROC is seen as impractical, in consonance with geopolitical realities.
The 1992 Consensus, seen as having enabled the growth of Taipei-Beijing cooperation, revolves around the issue of ‘one-China’ interpretation – ‘that there is only one China and that Taipei and Beijing agree to disagree on which government is its legitimate representative’ has been the foundation of cross-Strait relations. It was curated by the KMT and the PRC wherein in principle they agree that there is “One China”. However, the contentious terminology “One China” can be interpreted by either side having accorded its own meaning. The CCP believes “one China” is the “People’s Republic of China,” while Taiwan believes “one China” should mean the ROC established in 1912 and hitherto exists.
The KMT government in 2008-16, led by Ma Ying-jeou used the so-called 1992 Consensus to strengthen economic, trade and cultural relations between Taiwan and PRC. It led to rapid development of economic links and integration with PRC while political issues were kept away. Trade, indirect investment, and travel via Hong Kong grew steadily. By 2014, over 40% of Taiwan’s trade was with the mainland, and some 80% of its foreign direct investment (FDI) went to China; Taiwan businesses operated more than one hundred thousand businesses on the mainland. Taiwan-China two ay trade in 2019 was USD 244.35 billion. The trade balance has, consistently been in Taiwan’s favour.
KMT’s strategy, under Ma’s leadership, focused on reviving Chinese nationalism and was aimed at anchoring Taiwan in the Chinese nation, bridging the gap with PRC, opposing Taiwan independence, favouring reconciliation and eventually unification between the two sides of the Straits. By 2012-13 this approach gave rise to suspicions amongst the Taiwanese about Ma’s rapprochement policy. Paradoxically it strengthened the predominance of Taiwanese identity, which is stronger amongst the youth. This resulted in KMT’s internal fractures in 2012-13, its loss in local elections of 2014, the turbulence of the Sunflower revolution of 2014, and its huge loss to DPP in the presidential elections of 2016.
The ideological battle between the Democratic Progressive Party(DPP) and the Kuomintang (KMT) has persisted since 2016 (when Tsai became President) and the DPP refused to recognise the “1992 consensus”. In 2000, Tsai as the minister of Mainland Affairs Council (MAC) said, “The so-called ‘one China, differing interpretations’ is only a usage by our side to describe the process of the meeting. It is a way of description that the new government can accept, but it does not mean that we have accepted Beijing’s ‘one-China, two models principle.’
Though DPP lost the local elections in 2018 to the pro-China Kuomintang party (KMT), and had no hopes of winning the presidential 2020 elections, Tsai has been trying to replace the Chinese identity with the Taiwanese identity by promising people that the Taiwanese sovereignty will be protected. By articulating “maintenance of status quo”, she indicates that she may not actually pursue outright independence in order to maintain a peaceful environment that helps growth and development; in effect allowing PRC to see it as a support for “One China” in principle and being open to cross-Strait dialogue. But she makes it clear to rest of the world – “we don’t have a need to declare ourselves an independent state. We are an independent country already and we call ourselves the Republic of China, Taiwan.”
Diversifying Economic and Trade Strategies
During her presidency in 2016, she had initiated “new south-bound policy (NSP)” to strengthen relations with selected countries in South and South-East Asia and gain entry into regional blocs. As the US unveiled its Indo-Pacific strategy of Free and Open Indo-Pacific (FOIP), Taiwan saw great benefits in dove-tailing it’s NSP strategy into the Indo-Pacific. The NSP has made notable gains in the first term, and Tsai’s re-election offers great opportunity to diversify the gains in the second term. The Chinese have been aggressively countering this strategy by compelling nations to switch allegiance to China. This had resulted in Taiwan having only close to 16 diplomatic allies which include small nations like Belize and Naru. Despite this, major nations have come around the issue to strengthen ties with Taiwan through economic and cultural centres. Nevertheless, the ‘New South-bound Partnership’ strategy is a conscious effort by Taiwan to reduce its economic dependency on the mainland. Taiwan has aggressively pursued economic partnerships with countries like India, and has encouraged investments by Taiwanese companies. Its investments in South-East Asia has more than doubled in this period.
China has also been accused of meddling with local Taiwanese elections in 2018, according to Wang William Liqiang, a self-identified Chinese spy presently seeking political asylum in Australia. As a counter-strategy and to prevent foreign influence in the country’s elections, Taiwan’s legislature passed the anti-infiltration act on 31 December 2019, which criminalises external meddling. According to MAC Chief Chen Ming-tong, “[the act] aims to counter infiltration”. He added that it acts “as a corrective measure to ensure normal cross-Strait exchanges and reduce politically-motivated infiltration and intervention by Beijing. The Act prevents hostile external powers from engaging, through local collaborators, in illegal lobbying and election campaigning, disrupting rallies and assemblies, and making political donations.”
Rising anti-Chinese sentiment has gained momentum due to the recent protests in Hongkong. Young voters have been deeply influenced by this and are supporting Tsai. This is supplanted by the economic slowdown which affected Taiwan and has divided the Taiwanese voters—those who support the Economic Cooperation Framework Agreement (ECFA) with China and those who don’t.
Taiwan had also altered its economic policy since the election of DPP in 2016, wherein industrial restructuring has resulted in a large businesses (heavy industries) moving to China in order to reduce the labour cost. This has led to an increase in trade and investment in China. However, the catch is that since both governments don’t recognise each other, the Taiwanese companies are exposed to high risk and no dispute settlement is prevalent currently nor is it guided by international norms. China continues to be Taiwan’s largest trading partner, accounting for nearly 30% of the island’s total trade. However, Taiwan’s investment into the mainland has been declining over the last five years, and so also mainland’s investment in Taiwan.
The Future
The ‘one-China policy’ is a zero-sum game between the PRC and the ROC. China has always reiterated that only by accepting China’s authoritarian rule can the Taiwanese people attain prosperity and peace. From the beginning of 2005, the “carrots and sticks” policy has been predominant in the Cross-Strait relations. Since China’s policy has backfired, she is capable of adopting coercive measures—economic crippling, isolation by cutting off diplomatic allies, direct invasion or meddling with internal politics. If Beijing decides to use force, it could spiral into a regional conflict inviting Taiwan’s allies and heavy economic repercussions.
China’s isolation strategy with respect to Taiwan is a constant challenge, which influences majority of the Taiwanese to maintain status quo in current environment. Status quo can mean different things to different people. Chinese president Xi’s aggressive articulation in 2019 of ‘one-China policy’ with respect to Taiwan and the events in Hong Kong has triggered a massive nationalistic fervour in support of democracy and Taiwan identity amongst the younger population.
China has repeatedly said that it will bring Taiwan under its authority by any means necessary, including force. Analysts believe Xi Jinping aims to achieve that by 2049, the deadline for the country to achieve its ‘great rejuvenation’. Beijing’s refusal of renouncing the possible use of force for unification is reflected in the continued military build-up on the Fujian coast. By 2014, PLA had over 1500 ballistic and cruise missiles targeting Taiwan, ten times more than in 2000, and more accurate and destructive than in 2000.
Chinese state media have downplayed President Tsai’s election, but there is no doubt that China considers it as a major setback to its reunification efforts. The election has resulted in a cooling off period for cross-Strait relations, and the global ‘Corona Virus pandemic’ has only added to put this off any priority for some time.
Only time will tell if Taiwan and China manage to engage in dialogue and come to a consensus regarding their irreconcilable differences. As democracy and pro-democratic forces continue to strengthen and sustain Taiwanese identity and nationalism, Taiwan’s functioning as a sovereign independent state is stronger than ever, while Beijing’s strategy of geo-economic boxing-in Taiwan into accepting its ‘one-China’ policy looks less probable. On the other hand, giving legitimacy to Tsai’s government will be a tricky call for many countries as they have to walk a tight rope in order not to rupture relations with China. How different nations recognise and engage with the new Taiwanese government will definitely be a contributing factor in determining Taiwan’s future.
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High expectations during Vietnam’s Chairmanship of the ASEAN
Vietnam assumed ‘2020 Chairmanship of the ASEAN’ in November 2019 from Thailand in accordance with Article 31 of the ASEAN Charter under which the Chairmanship rotates annually. Hanoi announced the theme for its Chairmanship as ‘Cohesive and Responsive’, in which ‘Cohesive reflects the need to enhance ASEAN unity and solidarity, economic integration, ASEAN awareness and identity, and work toward a “people-centered” community’ and ‘Responsive underlines the importance of promoting ASEAN pro-activeness, creativity and capacity in response to opportunities and challenges brought about by rapid changes in regional and global landscape’.
Soon after taking over the 2020 Chairmanship, Vietnam was confronted with a ‘black swan’ event i.e. COVID-19. It delivered admirably by taking bold measures to control the spread of the virus in the country and announced that the ASEAN Coordinating Council (ACC) will compile a report on the COVID-19 to be submitted to ASEAN leaders at the 36th ASEAN Summit scheduled in Vietnam in April.
Vietnam’s Deputy Foreign Minister Nguyen Quoc Dung, who is the Secretary-General of the 2020 ASEAN National Committee, has identified five key priorities for his country’s Chairmanship Year and it is not surprising to see reference to Hanoi’s commitment to ‘regional peace and stability amid strategic complexities’. Boundary and associated disputes including illegal occupation, reclamation and weaponization of islands and features in South China Sea are central to ASEAN, and as a corollary a major issue for Vietnam’s 2020 Chairmanship. There is now evidence of a push back against Beijing’s intimidation. This is evident from the forceful statements and credible operational initiatives in South China Sea by the claimant states against China which has deployed law enforcement and paramilitary vessels.
In this context there are expectations from Vietnam to vigorously pursue and make substantive contributions towards keeping the South China Sea less turbulent and more peaceful, and address issues that threaten regional peace and security. It would also be Hanoi’s endeavor to prevent any confrontation and further escalation in disputes in the South China Sea. However, this may not be the case as a number of incidents in the South China Sea over resources i.e. fishing and offshore energy exploration have begun rather very early in Vietnam’s ‘2020 Chairmanship of the ASEAN’.
First is about Indonesia and China. The former does not claim any island or features in the Spratly Islands and therefore does not have any dispute in South China Sea; but presence of Chinese coast guard vessel escorting Chinese fishermen to fish in Natuna, part of Indonesian waters, which China claims to be the traditional fishing ground, prompted political and military response from Jakarta. There was also a standoff between China and Vietnam in the Vanguard Bank involving 50 Vietnamese and 40 Chinese vessels over the operations of the drilling rig Hakuryu 5 operated by Russia’s Rosneft in Vietnam’s oil and gas Block 06-01.
Another three-way standoff over oil and gas operations is playing out between China and Malaysia in which the state-owned Petronas is exploring on the extended continental shelf of a ‘Malaysian oil and gas block in the area for which Hanoi and Kuala Lumpur had submitted a joint claim’. China has resorted to intimidation similar to the Vanguard Bank between China and Vietnam.
At another level, United States military response in support of Taiwan after Chinese military airplanes flew across the Taiwan Straits and the Bashi Channel is noteworthy. Likewise, US’ support has been forthcoming for Vietnam against China and could trigger enhanced defence and security cooperation between the two sides as also create new opportunities for Hanoi to inform Beijing about its confidence to deal with China on the South China Sea issue at its own terms.
However, the Philippines would be a different challenge for Vietnam after President Rodrigo Duterte announced annulment of the Visiting Forces Agreement (VFA) notwithstanding the fact that the US has been the most important ally of the Philippines in countering China’s expansive claims in the disputed Philippines Sea. It is useful to mention that Philippines is critical for US’ Indo-Pacific strategy of a free and open oceans.
Second is the about the Code of Conduct (CoC), an upgraded document of the earlier Declaration on the Conduct of Parties in the SCS (DOC), which is under negotiation between China and ASEAN member states and is expected to be adopted in 2021.Vietnam must concentrate on the CoC. The onus will be on Vietnam to not only build consensus among the ASEAN , Hanoi will have to work hard to put in place a workable COC which can then be taken forward by Brunei Darussalam who would assume the ‘2021 Chairmanship of the ASEAN’.
Third is about the contestation between the US and China over freedom of navigation operation (FONOP). During the last three years, the US forces have routinely conducted FONOP which Washington claims to be in accordance with international law and that its military will fly, sail, and operate wherever international law permits. Chinese reaction and response to the FONOP has been at the political, diplomatic and strategic levels. It has exercised coercion at sea through dangerous maneuvers and more recently a PLA Navy destroyer fired a military grade laser at a US P-8 surveillance aircraft.
ASEAN Chairmanship is a challenging position and attracts high expectations from the member countries. The position entails building upon the work done by the previous Chair as also pursue new regional issues that are always as challenging as the earlier ones. Besides, there are anticipations by regional and other global players to not only follow up the ongoing challenges but address new questions that confront the ASEAN. More often than not, the ASEAN countries have delivered and received appreciation from the international community.
By all counts Vietnam’s chairmanship of the ASEAN can be expected to be both challenging and rewarding. Hanoi is expected to live up to the expectations on the responsibilities enshrined in the ASEAN charter and deliver to the peoples of the ASEAN as also build upon the themes and priorities set by previous Chairmanship. Vietnam will also be under pressure to adopt a tougher line against China on the South China Sea issue in view of the recent spats between China and other claimant states. But Vietnamese leaders are known for their maturity and diplomatic skills and would play a pragmatic role to manage tensions in the region.
Image Credit: Vietnam Economic Times
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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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China’s Climate Diplomacy and Energy Security
Sakshi Venkateswaran July 14, 2019/Analysis
In the last two years, China has become the leading destination for energy investment. A significant portion of this investment lies in the renewable energy sector of China that has undergone rapid development, accounting for about 45% of global investment(126.6 billion) in 2017. The country overtook Germany in the production of solar panels and solar energy generation in 2014 and in 2015 China’s production of wind energy accounted for one third of global wind energy capacity and needless to say, China has always dominated the market in the production of hydro energy. This has led to widespread speculation of the country being a “renewable energy superpower” following a report by the Global Commission on the Geopolitics of Energy. It has also taken active steps to combat climate change in the form of revamping its energy policies. However, these positive shifts are not without issues. China still remains a net importer of coal and highest emitter of greenhouse gases. This article attempts to understand China’s climate change diplomacy against the backdrop of its energy security concerns and if there is any truth to China becoming a renewable energy superpower.
The 2018 UN Intergovernmental Panel on Climate Change (IPCC) report highlighted that there was only 12 years to control global warming temperatures to 1.5 °Cfollowing which even a half degree rise would prove catastrophic in the form of unprecedented floods, droughts and millions being pushed towards poverty. Even maintaining the 1.5 °C would require a complete overhaul in the energy, transportation, infrastructure and industrial sectors and global carbon emissions would need to reach net zero by 2050. The Paris Climate Accord was instrumentalized with the intention of capping carbon emissions and containing global warming temperatures below 2 °C. Since the Paris Agreement in 2015, perceptions toward climate change has seen massive shifts following extreme weather patterns in several countries. For one, the US has been strong in their intention to withdraw from the Paris Agreement while several others have taken steps to address climate change by decisive shifts in environmental and energy policies. Chief among them has been China’s actions to counter the climate crisis by investing in renewable energy.
With a population of more than 1.4 billion and a boom in growth since the 2000s, China has been experiencing rising living standards and industrialization. As a consequence, China’s energy consumption has seen a surge as well. Historically, China’s major sources of energy have been its vast domestic coal reserves and imports of crude oil and natural gas from Russia and Middle East. This has resulted in China competing with the US for the position of being the largest emitter of carbon dioxide. In acknowledgment of this, the Chinese have been the first to invest billions in renewable energy.
China’s Energy Landscape
China’s investment in renewable energy began as early as 1949 with the construction of the world’s largest hydroelectric plant, the Three Gorges Dam over the Yangtze River. The reason the Chinese shifted towards hydroelectric energy was the rising dependency on imports and harmful effects to the environment due to the usage of coal. Prior to the Sino-Soviet split in 1960, China had been importing close to 50% of its oil from the Soviet Union. However, a combination of losing the Soviet’s support, economic collapse and a shift from being a net exporter of oil to being a net importer in 1993 accelerated China’s desire for energy self-sufficiency. Since the 2000s the country’s oil and natural gas imports from Russia and Middle East have exhibited a dramatic increase. In 2016 China’s imports of crude oil reached a record high of 68%while natural gas imports hit 33% in 2017.
Concern regarding the emission of greenhouse gases and inefficient use of coal for power generation prompted a shift in the subsequent energy policies that China released. The Chinese established several economic and technological policies to promote energy conservation. An energy saving branch consisting of a three-tier system was set up within the central and local governments and enterprises in the 1980s. Under the 1988 Energy Conservation Law numerous policies were implemented beginning with the ‘Energy Conservation Propaganda Week’ in an attempt to increase energy efficiency and energy conservation. The government also began providing loans and tax incentives to entrepreneurs who developed small hydropower and wind power plants.
Even the 13th Five Year Plan by the Energy Bureau of China revealed its plans to restrict coal to 58%of its energy mix by 2020 as opposed to previous levels of more than 60%. The country’s shift to renewable energy has garnered itself the title of being the world’s renewable energy superpower”; a title that has increasingly found its way into academic and policy circles.
China’s Climate Diplomacy
Climate change or rather, the climate crisis has metaphorically lit a fire under the member states signed on to the Paris Agreement to combat the greatest threat posed to mankind. Germany has rallied several EU member states to achieve “climate neutrality” by 2050 with net zero carbon emissions. Amidst mounting public pressure and weekly climate protests by students (Fridays for Future), several governments have convened in Bonnin Germany from June 17th to 27th of this year for a climate summit to address the carbon emissions. China has been proactive in that regard; having already shifted to electric vehicles and invested in technologies of carbon capture and storage among other initiatives. China’s share of electricity generation from renewable energy accounted for 26.4%in 2017. The country has also made large investments in the power sector in Africa, specifically for electricity generation in the last 20 years. They contributed up to 30% of capacities of which 56%of the total capacity comprised of renewable sources in 2016.
Given these numbers regarding renewable energy and its position on climate change, it might be reasonable to speculate that China’s behavior in the international system — its dispute over the South China Sea (SCS) with the Southeast Asian countries, challenging the established status quo of the US as a superpower, the Belt and Road Initiative (BRI) and increasing energy diversification in Russia, Central Asia, Latin America and Africa — is an attempt at addressing its current energy insecurity.
China claims the entirety of the SCS on the basis of historicity, what they refer to as the nine dash line; a claim that is contested by several countries in Southeast Asia. According to reports by the World Bank the SCS has proven reserves of natural gas and oil. China’s rising energy security concerns over the Malacca Strait, Strait of Lombok, Sunda and Ombai Weitar and the Persian Gulf compound its behavior regarding the SCS as more than 50% of China’s trade travels these waters. Another issue that arises is US’s presence and influence it wields in the region.
In the last 10 years China’s imports of crude oil from the Middle East has been on the decline. Russia, Angola, Brazil and Venezuela have increasingly taken up a major portion in China’s energy mix (14%, 12%, 5.1% and 4% respectively). The influence that the US wields in the Middle East and the general instability pose a very credible threat to China’s imports. Recently, with the US unilaterally leaving the Iran nuclear deal and the return of sanctions on the country, any state continuing to trade with Iran has been under economic fire from the US (China, India, Turkey etc.). In such a scenario China’s focus on renewable energy would prove an alternative as well as a challenge to the US’s power in the international system.
Addressing the climate crisis has been on the agenda of energy policies of several countries. That China has taken a massive step towards that end impacts US’s credibility on that front. The Trump administration has made their position on climate change explicitly clear with their decision to withdraw from the Paris Climate Accord. China’s renewable energy generation will damage US’s optics. Barring this, investment in renewable energy could have an effect on the economies of oil rich countries in the Middle East. China’s ambitions to challenge the existing global order by strengthening their military and economy depend upon its strategies to combat their energy insecurity. Hence, the strategic value in investing in renewable energy.
However, China’s energy shifts do not come without its own set of logistical issues. In spite of leading most of the world in the production of wind, solar and hydro energy, the percent of these in domestic electricity generation remains low. Only 19.2%, 3.8% and 1.2% of hydro, wind and solar power was utilized for domestic electricity generation in spite of a net installed capacity of 344 GW, 148.6 GW and 77.5 GW respectively in 2016. Though there has been incremental rises in these numbers, China still has a long way to go before attaining energy self-sufficiency. China still relies on heavy imports of coal from its neighbours such as Australia, Mongolia, Indonesia and Russia. The country’s usage of coal rose by 1% in 2018 though its share in the energy mix decreased to 59%, a 1.4% decrease from 2017.
Conclusion
The blame and burden for finding a solution to the climate crisis cannot solely rest on the shoulders of developing economies contrary to frequent statements made by the US President who blames Russia, China and India for climate change while ignoring the US’s emission of greenhouse gases. The bottom line is that the US and most of the West had almost 200 years to industrialize and develop their economies. Countries such as India and China have only experienced industrialization and a developing economy in the last 50 or so years. In such a situation, the scale to measure with whom the blame for climate change lays is skewed. Specifically in the case of China, a burgeoning population drove the need for rapid growth. Therefore, it is still a commendable fact that China has been environmentally conscious in the development of its economy. It remains one of the few countries on track to meet the Paris Climate Agreement targets for carbon emissions.
All this aside, it is rather premature to refer to China as a “renewable energy superpower” at this point in time. The numbers regarding the use of renewables in domestic electricity generation do not paint a picture of a country poised to change its energy dependency from fossil fuels to renewable energy. China’s goal of becoming a global superpower by 2049 does not just include powering up economically and militarily. Even a developed economy implies growth across the entire country and not just in certain provinces, as is the present situation in China. But it is increasingly becoming evident that any country that reaches their target to combat climate change along with being an economic and military powerhouse stand to become a global influencer and dictate the terms of the international system. If recent developments are any indication, China needs to continue its sustained efforts at decarbonization to attain the influence and recognition it seeks from the international community.
Sakshi Venkateswaran is a Research Intern at The Peninsula Foundation.
Image by Skeeze from Pixabay.
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Venezuela’s Collapsing Economy: Victim of Geopolitical Games
Manjari Balu and M Matheswaran June 23, 2019/Analysis
The collapse of Latin America’s oil-rich country, Venezuela, epitomises the probable debacle of a socialist regime while the geopolitical strategies espouse the power struggle at the cost of the economy. After the death of Hugo Chavez in 2013, Nicolas Maduro, the hand-picked successor of Chavez took overthe office to preserve the “petrostate” status of Venezuela. USA, backed by Brazil, Canada and many other countries, have recognized the opposition led by Juan Guaido as the interim president and have questioned the legitimacy of the Maduro government. Venezuela’seconomy depends to the extent of 95 per cent on oil exports and the dwindling oil prices in 2014 deepened the latent crisis, an inevitable consequence for a socialist government with illiberal economic agendas. Chavizmo rose to fame with a brand of Bolivarian revolution that promised to reduce poverty and deter the US in interfering in the country’s functioning.
Economic Collapse: Paradox of Largest Oil Reserves and Economic Mismanagement
Venezuela is a prime example of what economic mismanagement, impractical socialist measures, and corruption can do to a country that is wealthy with natural resources. At 300, 878 million barrels of proven oil reserves, Venezuela has the largest amount of proven oil reserves in the world. The country’s economy is largely tied to its oil wealth and was one of the richest in Latin America until a few years ago. Economic collapse has led to a huge humanitarian crisisunseen in the country’s modern history. IMF has predicted that Venezuela’s inflation rate will reach 10 million per cent in 2019, becoming one of the worst cases of hyperinflation in modern history.
TheTransformation Index that evaluates the political and economic transformation of a country, has ranked Venezuela 110 out of 129 nations with a score of 3.27 out of 10. In addition to criticizing the poor state of the economy, it also reported that the state-sanctioned crime rates have spiralled. The current catastrophic economic crisis and political chaos is the result of a pervasive economic mismanagement and an economy rooted in a single commodity, petroleum.
Inflation was 1,30,000 per cent in 2018 and the economy has contractedby 22.5 per cent, indicating the dire status of the economy. The economic future of the country continues to be bleak and the debate has converged to the geopolitical relevance of the issue. Data on money supply is a key element to understand the inflation rates in an economy and Venezuela has refused to publish money supply data in the past years. A recent data suggests that 12 trillion BsF (Bolivares Fuertes) were printed exposing the economic ruination.
Initial denial by the Venezuelan government about the crisis never let aid flow in, recent acceptance of humanitarian aidhas tripled the aid budget. With poor socio-economic indicators as a major challenge, Venezuela is further saddled with huge external debt as a problem to be solved by the new dispensation, be it Maduro led government or any other successor. Currently, Venezuela’s external debt stands at 150 per cent of the total GDP.
American Sanctions, Food Imports, and Falling Aid
Few consider the problem to be homegrown in Venezuelaand many blame the US for artificially creating the hyperinflation. The US justified the economic sanctions to bring down Maduro regime and accused him to have caused upheavals since 2014 and the controversies besieging election manipulation by Maduro’s party substantiate the allegation. Political funding for a coup against the regime change in Venezuela was extensively promoted by the Bush administration. The protraction of political interest led to imposition of anti-democratic sanctions, and reiterates the hegemonic strategy that the US continues to pursue.
The recent economic sanctions imposed on the state-owned oil company, Petroleos de Venezuela SA (PdVSA) by the US has exacerbated Venezuela’s problems in its oil production- the output is expected to fall by 33 per cent in 2019. Investigation of Venezuela’s oil production before and after the economic sanctions suggests the production has been on downtrend even before the sanctions.
Private investments and productivity in agriculture dropped alarmingly as the socialist government led by Chavez nationalized agribusiness and industries and encouraged food imports. Seventy per cent of the food requirements were met by imports. According to the United States Department of Agriculture, Venezuela is one of the potential markets for the US to export agricultural produce, and accounted for 21 per cent of total agricultural imports of Venezuela. However, as the economy collapsed, over-dependence on imports for food began to tell. In 2016, food imports fell by 72 per cent and reports state that people have lost an average of 8.6 kgs of weight due to food scarcity.
China’s Extractive Relationship with Venezuela
Majority of the loans are from China and Russia and their servicing or repayments are tied with its oil revenue. It is estimated that Venezuela owes around 13.5 billion USD to China as of 2019. Under Chavez leadership, China and Venezuela laid a financial foundation by crafting “China-Venezuela Joint fund” known as the FCCV. The central bank of China alone loaned 42.5 billion US dollars from 2007-2012 to Venezuela. The compounded bilateral interest incentivized China to support even when the Venezuelan economy faltered in 2014. China further escalated its commercial interest byloaning a sum of $4 billion as cash for oil deal paying little attention to the projected contraction in the Venezuelan economy. In the year 2017, Maduro announced ambitious planning to spend 70 percent of the total budget on social schemes to address food scarcity. While the quixotic socialist paradigm was impressive during Chavez’s tenure the public soon realized the huge dent made in the economy by imprudent social spending.
The defensive lending strategy adopted by China post Maduro’s electoral victory shifted the focus of investments to oil and oil-related infrastructure. Although China’s recent intervention in Venezuela’s domestic affairs is evident from the endorsement for Maduro, oil supply has always been its priority over political rivalry in Venezuela. As China became more sceptical about Venezuela’s ability to repay the loans because of low oil production and the adverse impact of US sanctions, its capital flow to Venezuela shrunk. Maduro had viewed relations with China to be based on ideological common ground, but China was focused on leveraging its abundant resources, which, in turn, contributed to the crippling of the economy of Venezuela. This asymmetric relationship between Venezuela and China thwarted expectations of Maduro to acquire more credit from China.
For China, endorsing Maduro is not an option as far as its economic interest is concerned; increasing rebellion of Venezuelan people portends a threat to the Maduro government that could bring in democracy in Venezuela, which could make it a potential defaulter of past debts. The Chinese government is considered culpable for Venezuela’s crisis by many American policymakers, and are accused to have followedthe “debt trap diplomacy”. The investment strategy in Venezuela resembles the Angola model- Chinese government extends credit tied with oil. However, in the case of Venezuela, China is bearing the cost of overestimating the performance of Venezuelan economy.
Russia’s All-Weather Ties
As we see a pragmatic China becaming more cautious about the failing economy of Venezuela, Russia’s interest and the relationship go beyond just the commercial narrative. Russia ties with Venezuela are deep-rooted since the time of Chavez, and it has continued to bolster the failing Venezuelan apparatus for clear geopolitical reasons. Vladimir Putin has invested strongly on Russia’s international image and prestige, especially while rebuilding Russia post the Yeltsin years. The first credit line of arms relations between Russia and Venezuelawas signed in 2006. Although the export of military equipment to Venezuela have reduced drastically by nearly 96 per cent in the past few years, Venezuela has been the largest buyer of Russian arms in the Western Hemisphere with a total estimate of $4 billion during Chavez years. Russia has made consistent efforts to support Maduro by deploying military presence in Caracas even as Venezuela’s economy took a downturn.
Chavez and Putin deepened their political ties on common grounds of supporting a multipolar world order, and Chavez expected tangible benefits for Venezuela out of this agreement. Oil deals between both the countries advanced asRussia’s largest crude oil producer, Rosneft, partnered with PdVSA for several projects. Rosneft holds 40 percent shares and plays an instrumental role in pivoting Russia’s foreign policy through sound investments in the West. Venezuela agreed to commit 49.9 percent of its share in Citgo, American subsidiary company in exchange for credit from Rosneft. Russian emphasis on the “strategic” importance of the alliance with Venezuela reveals Russia’s intention to strengthen its geopolitical presence in USA’s backyard. Putin’s domestic political image has become sharper with his strategic take on Venezuela.
However, sanctions on Venezuela has severely restricted the ability of Rosneft to borrow or invest, thus escalating tensions between Russia and the US. Much like in Syria, Putin has sent a strong signal to the US by deploying a small contingent of Russian military personnel in Venezuela.
Pawn on the Chessboard of Great Power Politics
Venezuela has become the strategic battlegroundfor geopolitical struggle between the USA, Russia, and China. Collapse of the Venezuelan economy does not augur well for China in the long-term. However, China will look to strengthen its ties with Venezuela through economic support as its energy needs have a critical link with Venezuela. USA’s ‘Manroe Doctrine’ and its ‘Roosevelt Corollary’ has fiercely opposed any external powers’ strategic presence in the Western Hemisphere. This policy has led the USA to be an interventionist in Latin American countriessince the 1960s. Not much has changed since then. Chavez’s Venezuela has been a major opponent of US hegemony Putin’s Russia is looking to strengthen its presence in South America, and support to Venezuela forms the lynchpin of this strategy. While international community looks for peaceful resolution of the rapidly deteriorating situation in Venezuela, geopolitical competition of external players has ensured power tussle continues in Venezuela. Political Victory of either Maduro or opposition would represent the triumph of their Global supporters, Russia or the USA. The socialist seed sown by Hugo Chavez is haunting Venezuela with a dented economy and a crisis in leadership. The “Petrostate” desperately needs economic reforms and international support to rebuild its economy. Structural reforms to remove the bottlenecks of growth in the post-crisis period and opportune investments in potential areas would rescue Venezuela in the following years.
Manjari Balu is a Research Analyst at ‘The Peninsula Foundation’.
Air Marshal M Matheswaran (retd) is the President of TPF.
Image Credit: BBC News
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After Balakot: India-Pak ties and nuclear bombast
Mohan Guruswamy Apr 19, 2019/Commentary
We know that in the aftermath of the Balakot airstrikes, India and Pakistan went into some form of nuclear readiness. The Indian Navy quietly announced last week that all its crucial assets, including the nuclear missile-launching INS Arihant, were deployed in the Arabian Sea. Unlike the United States and the erstwhile Soviet Union (now Russia), which had several stages of nuclear readiness to signal intent and gravity, India and Pakistan have no such signalling language. So, when it comes, it comes.
Politicians on both sides of the border are prone to loose talk and nuclear sabre-rattling is part of their lexicon. But this is not without some reason and purpose. Even though there is little risk of a nuclear world war any longer, because of their awesome power and potential to inflict sudden and massive violence on large populations, nuclear weapons inspire tremendous and often irrational fear, however infinitesimal the probabilities of their use. When both adversaries have nuclear weapons, you have a balance of terror.
As a matter of fact, in the prevailing international situation, any war involving even conventional forces cannot remain a local affair for long, to be sorted out by just the two adversaries. Where there is even the smallest risk of an escalation to nuclear conflict, that intervention could be quite quick. This is what the Pakistanis are counting on.
But since nuclear weapons cannot be used, their only utility lies in the mere threat of their use. In nuclear theology, this has come to be known as “the utility in non-use”. From time to time declared and undeclared nuclear powers have tried to use nuclear weapons in this manner. The Pakistanis are only travelling down a well-trod path. Each time the Pakistanis threaten us with nuclear war, what they are in fact doing is semaphoring to the rest of the world, particularly those of the West, that have taken it upon themselves to supervise the international regime, to intervene.
In the early days of the Yom Kippur war of 1973, an incident occurred which tells a great deal about how the game of nuclear diplomacy is played. The sudden and successful attack by Egyptian troops under the command of Gen. Saaduddin Shazli not only put the Egyptians back on the Sinai Peninsula but also unveiled a new generation of Soviet weapons and tactics to match. At the northern end of Israel, a Syrian armored attack under Gen. Mustafa Tlas was threatening to push the surprised Israelis down the slopes of the Golan Heights. In just the first three days of the conflict, the highly regarded Israeli Air Force lost over 40 fighter aircraft and a huge number of tanks to the new generation of Soviet anti-aircraft and anti-tank missiles. The panicked Israelis turned to the United States for assistance but found Washington quite reluctant. Both President Richard Nixon and his national security adviser Henry Kissinger till then were of the opinion that a degree of battlefield reverses was needed to get an increasingly intransigent Israel to the conference table. Caught, in a manner of speaking, between the devil and the deep sea, the Israelis then played their nuclear card.
American surveillance satellites and high-flying reconnaissance aircraft suddenly began to pick up unusually heightened activity around the Israeli nuclear facility at Dimona near the Negev desert. Israeli defence minister Moshe Dayan, while imploring Dr Kissinger to start the airlift of urgently-needed weapons and military technical assistance, told him about how desperate their situation actually was and had already hinted that Israel might have to resort to nuclear weapons to halt the Arab armies. The alarmed Americans sent a SR-71 Blackbird reconnaissance aircraft fitted with special sensors to detect nuclear material over Dimona. The SR-71’s sensors picked up the signature of nuclear material on a bomb conveyor apparently loading an Israeli fighter-bomber. Whether the nuclear flare registered was from an actual nuclear weapon or radioactive material in a container to simulate a weapon will never be known.
To the advantage of Israel, the Americans read this as preparations for an imminent nuclear attack. Would the Soviets sit quietly when their allies were subjected to a nuclear attack — would have been their immediate thought? Was this going to be the beginning of World War III? Within minutes, President Nixon was on the line to Prime Minister Golda Meir, telling her that a massive US airlift bearing much-needed weapons and military advisers was ordered and that the supply would begin within hours.
In early 1952, as the Chinese poured in troops into Korea to grind to a halt the advance of the American-led UN forces, a highly placed US diplomat in Geneva conveyed through Indian diplomat K.M. Pannikar a warning to China that the United States will use nuclear weapons on it unless it agreed to talks immediately. China soon afterwards agreed to hold talks, which soon resulted in the armistice that holds till today.
Others have done this somewhat differently. During the 1982 Falklands War, the British quietly deployed the nuclear submarine HMS Conqueror, armed with nuclear missiles, off the Argentine coast. As the fighting raged and the Argentines scored some naval victories by sinking the destroyer HMS Sheffield and the converted Harrier jet carrier Atlantic Conveyor, the Royal Navy revealed the presence of its nuclear submarine. The presence of the Conqueror with nuclear weapons was to tell its somewhat lukewarm ally, the United States, that if the war went badly for it Britain would be forced to use even nuclear weapons. It was therefore in America’s interest to not only using its enormous clout with the Argentines to end its occupation of the Falkland Islands but to also assist Britain. Soon after this the US tilted fully in favour of the British by giving it critical intelligence and political support.
In 1992, then US President George H.W. Bush conveyed to Saddam Hussein that a poison gas attack on Israel using its Scud missiles would invite a nuclear strike upon it. The Iraqis fired several Scuds on Israel, but none with poison gas. After the war, UN inspectors scouring Iraq for weapons capable of mass destruction detected huge quantities of poison gas in ready to use explosive triggered canisters. Obviously, the threat had worked.
Clearly, the threat of the first use of nuclear weapons, if provoked beyond a point, could be often as effective as nuclear deterrence. In recent times, to give credence to its irrationality, Pakistan has deployed or claims to have deployed tactical nuclear weapons to some of its formations. Since a tactical nuclear weapon has a much smaller destructive power, its use is considered somewhat more likely and hence more credible than a strategic nuclear weapon. A strategic weapon is a city or area-buster, whereas a tactical weapon is said to have only a battlefield application. But India’s response to this is that whatever the weapon, and wherever it is used, if it is used it will invite a full-scale retaliation. Many analysts think this is not credible, and India needs a flexible policy that will allow it to also match escalation up the ladder.
But the frequent Pakistani outbursts that nuclear war can happen here if the Kashmir situation boils over is an addition to the known nuclear semaphoring practices. Here the Pakistanis are using the Western abhorrence of nuclear war to influence Indian policy. They are not threatening India, because that is not credible, more so since India has a far bigger nuclear arsenal. They are in fact threatening the world that the balance of terror might be breached, and inviting it to intervene. Whatever the nature of this intervention, it is deemed to be in its favour. We saw this happen in 2008 when within minutes of the 26/11 Mumbai attacks Presidents and Prime Ministers from all over began calling our Prime Minister calling for restraint. We have a somewhat ironical situation here. A cruel and ruthless military presiding over a notoriously lawless and corrupt nation is pleading for Kashmir’s supposed right to self-determination and is blackmailing the world to come to its assistance.
The author is a Trustee and Distinguished Fellow of ‘The Peninsula Foundation’. He is a prolific commentator on economic, political, and security issues. The views expressed are his own.
This article was published earlier in Deccan Chronicle.
Photo Credit: PTI