BE BOLD, NOT JUST A BALANCER

India needs a credible response for China, especially for the Indian Ocean region, where it must remain the big power. American support can help significantly in this regard. India just needs to be confident enough to leverage that in its favour

Earlier this month, when Defence Minister Manohar Parrikar and US Defence Secretary Ashton Carter agreed in principle to sign a logistics support agreement intended to enhance military ties, many in India wondered if the pact would push the country into an unnecessarily tight embrace with the United States.

More importantly, they worried that an increasingly assertive China would not tolerate such alliances. In this context, many presumed that the high-level interactions between Indian and Chinese officials, incidentally scheduled for right after Carter’s visit, would be designed to make nice with Beijing. However, this was far from the case.

Soon after Secretary Carter’s visit to India, Parrikar went on his maiden trip to China while External Affairs Minister Sushma Swaraj met with her Chinese counterpart in Moscow. National Security Advisor Ajit Doval was also in Beijing for the 19th round of India-China boundary talks. With none of them did the Chinese harp on about the logistics agreement.

Only the state-run Global Times ran an opinion piece to coincide with Parrikar’s visit. It noted that while “traditional distrust” between India and the United States was one of the reasons why the LSA was yet to be signed, India, in the game of superpowers, “would like to continue to be the most beautiful woman wooed by all men.” This was only a tad bit stronger than the Chinese Foreign Ministry spokesperson’s anodyne comments after the LSA was announced the week before.

Beijing’s decision to underplay the pact is interesting, because, even if in a limited sense, the LSA does have a bearing on Chinese strategic calculations. Officially known as the Logistics Exchange Memorandum of Agreement, the pact will institutionalise India-US military activities, particularly between the navies. It won’t add much to the existing range of activities (such as berthing, re-fueling, and servicing at each other’s bases), but will serve to put these on auto-pilot instead. It will also put in place a system to settle payments collectively instead of individually. This will certainly help the US Navy, which plans to deploy 60 per cent of its surface ship in the Indo-Pacific in the near future.

For India, the big benefits, almost entirely in the form of technology, will come more from the other ‘foundational agreements’ — Communications and Information Security Memorandum of Agreement and Basic Exchange and Cooperation Agreement for Geospatial Intelligence — as and when (and if) they are signed. This technology will be especially key, experts argue, for the Indian Navy to maintain an asymmetric advantage over the Chinese, at least in the Indian Ocean.

So, why isn’t China raising a hue and cry over this? For two reasons: First, it’s still early days. CISMOA is still being discussed while BECA is yet to jump the sovereignty hoop and make it to the negotiating table. More importantly, LEMOA has been finalised but not signed. Second, the very expectation that China will go ballistic (and perhaps retaliate with aggressive posturing along the Line of Actual Control, much of which is disputed) is overblown. Consider this: A tiny nation like Sri Lanka, where China has made multi-million dollar investments, has signed the LSA with the United States without so much as a pipsqueak from Beijing. Meanwhile, India has gained nothing by pussyfooting around an increasingly belligerent Beijing in recent years. China has only upped the ante with repeated transgressions along the border.

The regime in New Delhi understands this, and thus the Modi Government is trying to face China with a more confident and self-assured avatar (though it does falter often). This explains why one of the biggest issues on the Indian agenda in Beijing (and Moscow) this past week was Jaish-e-Mohammed chief Masood Azhar. In order to shield its all-weather friend Pakistan, China blocked India’s efforts at the United Nations to tag Azhar (who is one of the ISI’s posterboys for its anti-India project ) as a terrorist, and India is rightly raising a stink over it. The issue was highlighted repeatedly by all three Indian officials — Parrikar, Doval, and Swaraj.

At the same time, India also gave a visa to a prominent Uighur activist who China considers a terrorist, to attend a conference in Dharamsala. However, after this was widely reported in the media, and China expressed its displeasure on the issue, the visa was cancelled. It is not clear if this was directly due to Chinese pressure or if it was a bureacratic bungle or even a pre-planned move designed to put China on the spot. Either way, cancelling the visa after it had been issued made the Government look bad — and was a reminder that this is going to be a bumpy ride.

Still, those worrying that such measures would derail the India-China bilateral should note that both countries have now agreed to set up a hotline at the level of Director-General Military Operations and establish at least one more border meeting point. Sure, these are small confidence-building measures, but the border question was not going to be resolved overnight anyway.

That said, a note of caution for India is in order as well. If New Delhi wants to play the great game, it needs to look at the larger picture and think big. Did it make sense to invest so much precious diplomatic bandwidth in China on Masood Azhar, important as it may be to pursue the case against him? After all, in India’s larger fight against terrorism emanating out of Pakistan, UN sanctions will be more symbolic than substantial. 26/11 mastermind Hafiz Saeed’s case is proof.

Instead, India needs to focus on the large-scale military reforms underway in China. President and now Commander-in-Chief Xi Jinping is preparing his men not only for the next war but also to bolster the country’s aggressive economic forays abroad, through its ambitious One Belt, One Road project. Notably, an addendum of sorts to this project, the China Pakistan Economic Corridor which will connect Gwadar with Xinjiang, is planned to cut through parts of Kashmir that Pakistan currently occupies.

India needs a credible response for China (and no, this isn’t a polite way of pushing for a confrontational approach), especially for the Indian Ocean region where it must remain the big power. American support can help significantly in this regard. India just needs to be confident enough to leverage that in its favour.

(A shorter version of this article was previously published on the Stimson Centre’s South Asian Voices platform)

INDIA-US: A WIN-WIN PARTNERSHIP

A strong defence relationship with the US is in India’s interest especially as it seeks to reiterate its position in the Indian Ocean region. Ideologically-motivated opposition mostly from the Left must be countered with a dose of realpolitik

US Secretary of Defense Ashton Carter’s three-day trip to India ended on Wednesday with both countries announcing progress in some technology-sharing programmes but falling short on some key issues such as the joint development of a Indian aircraft carrier and the signing of at least one of the three so-called ‘foundational documents’ necessary to enhance bilateral defence cooperation. This, in a sense, encapsulates the state of the India-US defence relationship: While huge strides have been made, particularly in this decade, a lot more needs to be done to realise its full potential. In some cases, the bottlenecks are technical or bureaucratic and need time to be resolved. But in most others, the hold-up stems from political or ideological reasons. This is particularly the case for the three foundational documents, which the US says will help strengthen bilateral defence cooperation but which India has resisted for more than a decade.

After 10 years of debate and discussion, only one of these, the Logistics Supply Agreement, has now been finalised, according to Defence Minister Manohar Parrikar. And even that agreement is yet to be signed and no firm commitments have been made, although it has been reported that the officials may sign on the dotted line any time within a few weeks to a few months. This has already generated a colourful array of headlines on how the US military will now use Indian bases, not to mention the slew of think pieces that came out in the run up to Carter’s visit, chiding the Modi Government for falling into America’s embrace, discarding Delhi’s long held principles of non-alignment, and putting India on a dangerous collision course with old friends like Russia and powerful adversaries like China. One may even be forgiven for assuming that the agreement is some sort of a path-breaking initiative that will change the India-US dynamic. Yet, the agreement is actually a standard document that the US has signed with some 80 countries including its Nato partners as well as Bangladesh and Sri Lanka.

Basically, it allows both parties to easily berth and re-fuel at each other’s bases without having to pay for these services every time. Such an arrangement is particularly convenient during joint military exercises (which the US and India have quite often), large multi-national operations such as the search for MH370, and also during multi-national humanitarian relief operations.

The last one, in fact, is a big consideration. In recent years, Humanitarian Assistance and Disaster Relief has become an important element for the Indian military and is a wonderful tool for this country’s power projection in the Indian Ocean region. The 2004 tsunami relief operation  during which India deployed 32 naval ships, seven aircraft and 20 helicopters over five rescue, relief and reconstruction missions that extended not only to its own affected States but also to Maldives (Operation Castor), Sri Lanka (Operation Rainbow), and Indonesia (Operation Gambhir) was the turning point. After the tsunami, India bolstered its HADR capabilities by acquiring a landing platform dock, INS Jalashwa, from the US in 2007. 

In between, in 2006, the Indian Navy launched Operation Sukoon to evacuate Indian, Sri Lankan and Nepalese citizens from Lebanon. In 2008, INS Rana and INS Kirpan were sent with aid to Myanmar after the devastating Cyclone Nargis. This was followed by Operation Safe Homecoming in Libya in 2011. INS Mysore, INS Aditya and INS Jalashwa brought thousands of Indians from Benghazi and Tripoli to Alexandria in Egypt from where they were flow back home by Air India. In 2013, when Typhoon Haiyan flattened large parts of the Philippines, the Indian Navy sent out a war ship with relief material. And then, of course, when Malaysian Airlines Flight MH370 disappeared, both the Indian Navy and the Air Force participated in the global hunt. Last year, both were also involved in the evacuation of Indian nationals from Yemen (Operation Rahat), not to mention Indian assistance to the Maldives during the Male water crisis.

Now, some media reports have portrayed the LSA as a first of its kind arrangement, while the Opposition is already whipping up images of American soldiers overrunning Indian bases. The Left’s criticism doesn’t even deserve to be entertained because it is a template response to all things America. From the Congress, former Defence Minister AK Antony, who did precious little to ensure the military’s war preparedness, has now labeled the agreement as “anti-national”. This is absurd. American sailors and airmen already dock at Indian ports and access Indian resources. The agreement will only institutionalise such cooperation and put most of it on auto-pilot.

This also has raised concerns in some quarters: If America goes to war (especially against a country that is friendly with India), then India will be obligated to support its war-time efforts. In response, Defence Minister Parrikar has assured that the LSA has been tweaked the new pact is called the Logistics Exchange Memorandum of Agreement  so that Indian autonomy is not comprised. Also, it is worthwhile to recall that during the 1991 Gulf War, India had allowed US planes on their way to Iraq to refuel at Bombay’s Safar airport and others. And this was a generation before India and the US were to forge the defining partnership of the 21st century.

Coming back to the agreements, the second in line is the Communication and Information Security Memorandum of Agreement which will essentially improve interoperability between the two militaries. This will be a big plus during joint military operations which, again, is not necessarily a reference to war but includes anti-piracy efforts as well. Moreover, CISMOA will pave the way for Indian access to US defence high-tech. For example, had India signed the CISMOA earlier, its Boeing P-8I Poseidon multi-mission maritime aircraft (which was used to hunt for MH370) would have come equipped with the most advanced communication equipment. Now, it is true that India has been able to make the platform work well with indigenously developed hardware, but that’s hardly a reason to be deprived of the best technology in the market. CISMOA critics argue that agreement would expose sensitive Indian communications to the Americans. This is both defeatist, as clauses are built into the agreement to protect such information, as well somewhat silly: If the US, back in 1998, could hack into the Israeli Air Force system, one of the most advanced defence systems in the world, then it doesn’t need a bilateral agreement to get inside Indian systems.

The third agreement is the Basic Exchange and Cooperation Agreement which will improve ease of access to geospatial data such as satellite images, maps and charts. This is possibly the most contentious as it supposedly involves ‘sovereignty issues’ (for example, ground sensors). Yet, the benefits of this agreement are manifold especially in multi-nation operations as well as in civilian operations. Now, India is also developing its own geo-satellite system called the Indian Regional Navigation Satellite System. However, this isn’t fully operational yet and will only have limited coverage. 

In the final tally, India needn’t sign America’s template documents; instead, as it has done with the LSA, it should work with the US (which is also open to addressing Indian concerns) and find the middle path that best suits its interests. But as mentioned earlier, the problem isn’t technical but political  Will China be upset? Will Russia complain? Maybe they will but if Sri Lanka can sign the LSA and still be wooed by Beijing, and Russia sell helicopters to Pakistan because India has been buying hardware from the US and Israel, then there is no reason why India can’t sign an agreement that strengthens its military ties with the US while still maintaining its ties with other powers. Ultimately, all nations work in their own self-interest. India should too.

(This article was published in The Pioneer on April 14, 2016)

BEING PIVOT IN NUCLEAR SECURITY

India has an opportunity to take on a global leadership role against the spread of nuclear weapons. For that, it has to be more transparent about its own nuclear security and safety, especially as nuclear power becomes a bigger part of the country’s energy basket

The fourth Nuclear Security Summit comes at an important time in India’s own nuclear history and diplomacy. At one level, India, now no longer a nuclear pariah state, is seeking to integrate itself into the global non-proliferation architecture. It is seeking memberships to four of the main global nuclear clubs  the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group and the Wassenaar Arrangement — as well hoping to play a more prominent role in nuclear diplomacy. India’s has already streamlined its export control lists so that they are more or less in sync with the lists maintained by the global technology control regimes. However, there are political issues that need to be addressed before India can accede to these clubs.

At another level, India is now looking to leverage nuclear power in a big way to fuel its domestic needs in a sustainable manner. Currently, nuclear is just a small segment in India’s energy basket  just 4.8 GW of the total installed power generation capacity of 240 GW. The plan is to increase those figures to 60GW of 1200GW by 2035. That still won’t be even 10 per cent of the total basket but it will be an important element nonetheless. It is against this backdrop that India’s role at the NSS must be seen.

To be held on March 31 and April 1 in Washington, DC this is the fourth and in all probability the final in a series of summits that aimed to secure nuclear weapons, fissile material, and nuclear facilities so that terrorists couldn’t use them to wreak havoc. The NSS was US President Barack Obama’s initiative, which built on his predecessor’s legacy.  After 9/11, the Bush Administration brought out two important nuclear security pacts  a 2005 amendment to the Convention on Physical Protection of Nuclear Material which requires states to physically protect nuclear materials on their territory, and the International Convention for the Suppression of Nuclear Terrorism which facilitates judicial actions related to nuclear terrorism.

In 2009, President Obama while speaking in Prague, said that nuclear terrorism was “the most immediate and extreme threat to global security” and announced “a new international effort to secure all vulnerable nuclear material around the world within four years.” In 2010, the first NSS was organised. Forty-seven nations, including India, and three international organisations participated. This was followed by another summit in 2012 in Seoul, and a third one in 2014 in The Hague. Except for the 2014 conference, India was represented by its Prime Minister at all others — an indication of the importance that New Delhi attaches to the NSS.

An interesting aspect of the NSS was that of the ‘house gift diplomacy’ wherein participants themselves bring to the table political commitments or national pledges on specific issues such as nuclear forensics or nuclear smuggling, instead of everybody having to sign on one master document. Since the Seoul summit, groups of participants have also come together with a bundle of pledges, making for some ‘gift basket diplomacy’.

At the first NSS in 2010, for example, India’s promised a Global Centre for Nuclear Energy Partnership. This Centre is being set up in Bahadurgarh, Haryana, and is expected to begin operations from April 2017, though it has already been doing off-campus programmes and workshops since 2011. In December 2010, India also placed in a safeguarded facility its enriched uranium-based fuel used in the Apsara reactor. The reactor no longer uses Highly Enriched Uranium. In 2012, India made a voluntary contribution of a million dollars to the Nuclear Security Fund. However, India has not just joined any of the ‘gift baskets’ though it may reportedly join at least three this year.

Overall, the NSS process has produced mixed results  bringing some tangible deliverables to the table but still falling short of its larger goal. Among its achievements, the NSS lists the following: Removal and/or disposition of over 3.2 metric tonnes of vulnerable HEU and plutonium material; completely removing HEU from 12 countries; verified shutdown or successful conversion to low enriched uranium fuel use of 24 HEU research reactors and isotope production facilities in 15 countries including India; completion of physical security upgrades at 32 buildings storing weapons-usable fissile materials; and installation of radiation detection equipment at 328 international border crossings, airports, and seaports. 

An important deliverable, or gift basket rather, was the Strengthening Nuclear Security Implementation Initiative that was signed at 2014 summit by two-thirds of the participants, who pledged to meet follow the Atomic Energy Agency’s security recommendations and accept regular reviews of their nuclear security arrangements. Notably, India didn’t sign the initiative but that same year, it ratified an Additional Protocol with the International Atomic Energy Agency which had been in the works for five years. This Additional Protocol  which will surely be highlighted by Prime Minister Narendra Modi in Washington this year  covers 20 facilities that include the Nuclear Fuel Complex in Hyderabad, the Tarapur atomic power plant, the Rajasthan Atomic Power Station, the Kakrapar Atomic Power Station, and both units of the Kudankulam power plant.

At the NSS this year, the focus will  understandably be on the big picture: The  deliberations haven’t produced a treaty and many of the commitments are vague with much wriggle room. There are also many areas like cyber threats to nuclear security that remain unresolved. Still, there is no doubt that the NSS process gave high-level political momentum to the issue of nuclear security.

Now, the question is: How to take the process forward? Five institutions are expected to take up the task — The IAEA; the Global Initiative to Counter Nuclear Terrorism (a group focused on exercising existing capabilities and sharing best practices); the UN (specifically a committee that enforces UNSC resolutions calling on states to prevent terrorists from gaining access to weapons of mass destruction); the international law enforcement organisation Interpol; and the G8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction (a funding group). 

Additionally, a Nuclear Security Contact Group comprising of the Sherpas -- the senior officials who developed the summit outcomes and prepped their leaders -- will also be formed. They’ll ensure that past promises are effectively implemented. India will be in this group, which will also be open to those countries that weren’t part of NSS process.

India has an opportunity to take on a leadership role at this stage. However, for that, it has to be more transparent about its own nuclear security and safety. This is not to suggest that the security situation here is bad (although some international experts are of that opinion) but that the Government should allow for more transparency  not just to boost international confidence but also to allay concerns at home, especially now that nuclear power will be a bigger part of India’s energy basket.

 The shutdown at the Kakrapar Atomic Power Station in Surat, after the heavy water used to cool the nuclear reactor leaked, earlier this month, highlights the urgency of the situation. Indeed, in 2012, the Central Information Commission had directed the Nuclear Power Corporation of India Limited to release two reports on the safety assessment systems at the Kudankulam nuclear power plant. The nuclear operator responded with a court order staying the CIC’s directive and arguing that making the report public would hurt strategic interests. This was odd given that, after 2011 Fukushima accident, the Atomic Energy Regulatory Board had already uploaded on its website a comprehensive report on the safety of our reactors.

(This article was published in The Pioneer on March 31, 2016)

NEW POLITICAL ORDER IN NAYPIDAW

Htin Kyaw is the first civilian to become President of Myanmar since 1962. But his office will be undercut by his party chief, who said that she will rule above the President, and by the continued presence of the military in the legislative and executive wings of Government

Four months after the National League for Democracy won the parliamentary election and several weeks since the new Parliament, comprised mostly of civilian lawmakers brought to power through free and fair election, was sworn in, Myanmar finally has a new President: U Htin Kyaw. He is a confidant of NLD chief and Myanmar’s icon of democracy Aung San Suu Kyi who, ideally, should have occupied the top post but couldn’t because of a constitutional clause that prohibits those with foreign nationals in their immediate family from the presidential palace. Suu Kyi’s two sons are British citizens as was her late husband. Several rounds of negotiations, including three between Suu Kyi and Commander-in-Chief Senior General Min Aung Hlaing in recent weeks, to either amend the Constitution or at least find a way around it, failed to bear fruit. It is still possible that a compromise may be worked out later in the term for Suu Kyi to become President but for now, all that’s in the realm of speculation.

This brings us back to Htin Kyaw who will be sworn into office on April 1. The 69-year-old hasn’t held any major public office and is a little known political figure. However, he has been close to Suu Kyi for many years — the two even went to grade school together. An economist by training, Htin Kyaw also studied computer programming in England and then served as a bureaucrat for some years. He quit his Government job in the early 1990s and then committed himself to party work. In the past three decades, he has worked closely with Suu Kyi, advising her on party and policy matters, particularly on foreign affairs. He also heads the Daw Khi Kyi Foundation, a charitable organisation run by the NLD and named after Suu Kyi’s mother. 

Notably, though Htin Kyaw himself may not have been a prominent figure until his presidential nomination, he definitely has political pedigree and is, of course, part of the NLD inner circle. His father, Min Thu Win, was a literary giant in Myanmar as well as a member of the NLD. In 1990, he was elected to Parliament but resigned eight years later. Htin Kyaw’s wife Su Su Lwin is also a Member of Parliament from the NLD and is on the Foreign Affairs committee. Her father, U Lwin, was one of the founding members of the NLD, working alongside Suu Kyi’s father and Burmese independence hero Major General Aung San. A decorated soldier, he had served as Minister of Finance, Deputy Prime Minister and Member of the State Council before resigning from Government in 1980.

Htin Kyaw is the first civilian to hold the post of President of Myanmar since 1962 but his position will still be undercut by two factors: First, his party chief’s statement, incidentally to an Indian news outlet late last year, that she will rule from above the President; and second, the continued presence of the military in both the legislative and executive wings of the Government. In the first case, there is no telling how the working relationship between the Htin Kyaw and Suu Kyi will play out in matters of day-to-day governance — and whether this arrangement may cause unnecessary friction or even factionalism in the days to come. In the second case, the military can be expected to hold onto its core interests but if the trends that we have seen since 2010 hold strong, then there should also be a continued, even if slow, devolution of power from the military to civilian authorities.

Currently, representatives appointed by the Tatmadaw (military) hold 25 per cent of the seats in Parliament which are not open for election. The Tatmadaw also retains direct control of the Ministries of Defence, Home and Border Affairs. Importantly, it also controls the powerful National Defence and Security Council. The 11-member body that comprises the President, the two Vice Presidents, the Speakers of the two Houses of Parliament, the Ministers for Defence, Home, Border Affairs and Foreign Affairs, the Commander-in-Chief and the Deputy Commander-in-Chief, is dominated by the military and has expansive powers including calling of diplomatic ties and declaring an emergency. It will be interesting to see if Suu Kyi secures a seat on this council, possibly through the Foreign Minister’s chair.

Additionally, the Tatmadaw also has one of its own in the Office of the Vice President as well. In Myanmar’s political system, both Houses of Parliament nominate one presidential candidate each while the military nominates a third. The nominee with the highest number of votes becomes President while the next two candidates become First and Second Vice President respectively.

In this case, Htin Kyaw, nominated by Lower House of Parliament, won 360 of the 652 votes while the Tatmadaw’s candidate, General Myint Swe, came second with 213 votes, while Upper House candidate (also nominated by the NLD) Henry Van Theo came in third with 79 votes. Van Theo is an ethnic Chin and a Christian and his candidacy adds the much needed minority representation to the executive. However,  Gen Myint Swe, who will serve as First Vice President, may be a possible trouble-spot. He is considered to be a military hardliner and has an unfavourable reputation. Even though NLD leaders didn’t oppose his nomination in public, it is believed that in private they were dismayed. The General led the crackdown on pro-democracy students and monks in 2007 which hasn’t been forgotten and neither has his inability to deliver good governance as the Chief Minister of Yangon gone unnoticed.

In short, the Tatmadaw will retain considerable executive powers, and the success of Myanmar’s first civilian Government in 50 years will depend on its close cooperation with the military. For example, if the Government has to secure a lasting peace with the various armed ethnic groups, it will need the support of the military. Similarly, if the military is in a position where it can at least share credit for economic and political reforms, it will be more willing to the support those reforms. In other words, this current arrangement, though a compromise, is not necessarily a bad thing. In the very least, it factors in the socio-political realities of Myanmar, where the military is an all-pervading force with deeply-entrenched interests that will not go away overnight. This may not make for a picture perfect new democracy but in the long term might prove to be a more stable and resilient model for political transition.

(This article was published in oped section of The Pioneer on March 17, 2016)

BREAKTHROUGHS ON THE BORDER

Small-scale border trade, which is different from the industry-scale bilateral trade, contributes only a fraction to the overall economic relationship between nations. But it does have a significant impact at the people-to-people level, as the India-Bangladesh haats show

Generally, political freedom better economic opportunities. However, there are rare cases when newly independent regions find themselves worse off because of the red lines on their maps. This is what happened to India’s North-East in 1947. On the one hand the country gained independence from British rule and awoke to “life and freedom”, to use the words of India’s first Prime Minister; but on the other hand, partition and the consequent establishment of East Pakistan, which was liberated in 1971 to become modern-day Bangladesh, meant that a large part of the new nation found itself cut-off from the ‘mainland’, almost overnight.

The erstwhile Kingdom of Tripuri, for example, received a particularly raw deal. That part of the ancient kingdom which was directly under the British Crown, became East Pakistan (and is now Bangladesh) in 1947, while the rest of it, the autonomous Princely State, joined the Union of India in 1949. Consequently, Tripura, as we know it today, is land-locked on three sides by Bangladesh while the other North-Eastern States are left with a tenuous geographical connect to the rest of the country, through the ‘chicken’s neck’.

The economical implications of these changes have been devastating. The new lines disrupted the old business patterns and nearly destroyed the region’s commercial eco-systems. Road links from the North-East, which passed through East Pakistan, were severed; the Assam Railway segment was cut-off from Indian Railways; Bengal’s jute industry was decapitated; the loss of Chittagong port meant that Indian tea and timber industries had to take a circuitous route to the Calcutta port.

It is only when one understands the scale of disruption that was inflicted during partition can one appreciate the importance of border haats that are being set up on the Indian-Bangladesh border (such haats also exist on the India’s border with Bhutan, Myanmar, Nepal, China and Pakistan). Defined by the Government of India as over-land trade by way of exchange of commodities from a bilaterally agreed list by people living along both sides of the international border, this arrangement is different from the large-scale trade that happens through land, air or sea ports, requiring customs clearances etc. Border trade happens on a much smaller scale and contributes only a fraction to the overall bilateral trade.

However, it does have a significant impact at the people-to-people level. There are two reasons for this: First, border areas are almost always also remote areas, and residents (be they buyers or sellers) do not have easy access to commercial centres in the heartlands. Hence, border haats are seen as a good alternative. Second, the socio-cultural ties of cross-border residents also provide an impetus for greater economic engagement. Border trade encourages familiarity and trust between communities. Notably, much of the border trade happens through the barter system  without mutual understanding and good faith, this system would not have worked. Also, it has been noticed that as border trade improves, border smuggling usually diminishes as well.

Border haats between India and Bangladesh were common before 1971, when locals exchanged surpluses at their weekly haats. These traditional markets, however, were shut down during the War of Liberation. After the war ended and Bangladesh became a sovereign nation, there was an attempt to restart the trade  in fact, a trade agreement was in the works in 1972 which specifically provided for trading opportunity to people living within 16 kms on either side of the border. to dispose off their goods which were mutually agreed upon. However, the pact wasn’t formalised due to apprehensions from Bangladesh. And when a trade agreement was eventually signed, it did not include border haats.

More than four decades later, the situation has changed dramatically and border haats are back with a bang (especially with regard to Bangladesh, and to some extent, Myanmar). These haats usually open once a week and nationals from both countries living within a four to five kilometer radius can trade locally produced goods and crops. Currencies of both countries are accepted and no taxes are imposed on the sale of designated items which mostly include crops, spices, minor forest products, fish, dairy and poultry products and cottage industry items.

Currently, there are four functional India-Bangladesh haats  Two were set up in 2012 on the Meghalaya-Bangladesh border at Kalaichar (India)-Baliamari (Bangladesh) and Balat (India)-Dalora (Bangladesh). The other two were set up last year in Tripura: The first was in January 2015 at Sabroom in the Southern Tripura district on the Indian side and Feni district on the Bangladeshi side. Then in June 2015, Prime Ministers Narendra Modi and Sheikh Hasina inaugurated via a video link, the Kamala Sagar border haat, located 35km south of Agartala.

At least four other border haats are being planned in Tripura alone  at Kamalpur in Dhalai district, Dharmanagar in North Tripura district and in the subdivisional towns of Khowai and Kailasahar. Overall, India aims to set up 70 markets in the north-eastern States, along its 4,096km border with Bangladesh, which includes a 1,116km riverine boundary.

Of course, border haats alone will not be enough. Political stability (in the Indian States and the neighbouring country) will be key and so will infrastructure development. Thankfully, there is good news on both accounts. While India-Bangladesh ties have become strong and robust, the Modi Administration has prioritised infrastructure development, particularly communication and transport facilities, in the North East. In fact, it was only early last month that the Union Ministry of Development of North Eastern Region sanctioned Rs580 crore for the construction of a railway corridor connecting India’s Agartala with Bangladesh’s Akhaura. The project has been in the works since 2010 and should be completed by 2017. Overall, while there has been significant progress, there is still a whole lot more than needs to be done before the full potential of border trade can be leveraged in a manner that benefits not only border residents but also neighbouring countries and the region at large.

(This article was published in the oped section of The Pioneer. A shorter version of this article was earlier published in India Perspectives magazine)

WHY THE OIL DEAL IS NO BIG DEAL

To tackle the supply glut in the oil market, producers need to cut, not cap, their current production. This is not happening even in a best case scenario wherein Iran and Iraq fall in line with Saudi Arabia, Russia, Qatar and Venezuela, and everybody commits to a global deal

On Tuesday, Saudi Arabia and Russia, along with Qatar and Venezuela, decided to freeze their oil production at January 2016 levels, so as to stabilise oil prices, which have plunged in the past two year because of a supply glut. From a high of $115 per barrel in 2014, prices were down to $27 per barrel this January, and if the markets continue to be so awash in oil, it is possible that the prices would go down to $20 a barrel.

The impact of this price drop on oil-producing and exporting countries, which depend heavily on petrodollars to fuel their economy, needs no explanation. Indeed, the situation had become so dire that even resource-rich Saudi Arabia was feeling the pinch. This forms the backdrop to Tuesday’s deal.

The deal is the first in 15 years between members of the Organisation of the Petroleum Exporting Countries and a country that is not part of the cartel. The deal also gains significance because the two countries leading this agreement, Russia and Saudi Arabia, are generally not on the same geo-political plane. In fact, for months, they have been competing with each other in the oil market. While Riyadh has recently stepped into Moscow’s turf and sold oil to eastern Europe, Russia has jumped Saudi Arabia in oil exports to China. Outside the oil market, the two nations are also on opposite sides in the Syrian civil war.

However, while on paper the deal seems like a major development, on the ground, it may not be that big a deal after all. There are two reasons for this.

Missing Pieces: The deal does not include Iran and Iraq — yet. These are the other major oil producers in the world, and without their cooperation, the supply side of the oil price mechanism cannot be controlled. Indeed, the activation of the deal itself is pegged to the assumption that the other players will fall in line.

Iran: Having just been freed from Western sanctions (following an agreement with the P5+1 powers on its nuclear programme) which previously curtailed its oil exports, Iran, the Opec’s the fifth-largest producer, is now looking to leverage its proverbial black gold so as to resuscitate its economy. In the words of Iran’s Opec envoy Mehdi Asali, it is, therefore, “illogical” to expect the country to freeze production.

Indeed, oil production has already been boosted, and by the end of Iranian calendar year (March 20), it is expected that production will reach a record high of 5,00,000 barrels a day. On Monday, Iran sent off its first Europe-bound crude cargo in four years. And over the next 48 hours, it exported more than 7.1 million crude barrels, setting a new record, according to the Managing Director of Iranian Oil Terminals.

Still, on Wednesday, Opec president Mohammed bin Saleh al-Sada, who is also the Qatari Minister of Industry and Energy, met with Iranian Oil Minister Bijan Zanganeh to discuss a freeze by Tehran. They were joined by the Venezuelan Oil Minister and the Iraqi Oil Minister. While Iran did not commit to a freeze, it still took a positive stance on the issue. “The decision ... to stabilise the market and prices for the benefit of producers and consumers, is supported by us,” Mr Zanganeh told the official news agency after the meeting.

This means that while Iran may have publicly dismissed the idea of a production freeze for now, it may eventually still agree to some sort of a special capping arrangement. This will be for two reasons — First, Iran too is adversely affected by the  low prices, and second, it will only be able to increase production overnight to a certain level; beyond that, it will require large-scale, long-term investment, forcing its production abilities to plateau in the meantime. Hence, if the other producers make a good enough offer to Iran at the point, Iran is expected to at least consider it in all seriousness.

Iraq: In the popular imagination, Iraq may have been written off as besieged by the Islamic State terror group, but on the ground, it has made some significant recoveries and simultaneously also ramped up oil production. In January, Iraq’s output was a record 4.35 million barrels a day, and the International Energy Agency estimates that this figure may still increase. Sure, there are doubts about transporting the oil out of the country but even then, Iraq remains a major player. For now, Iraq is amenable to the deal and can be expected to officially join in, if the others also commit to a cap or a cut.

Inadequate measures: The second reason why the deal isn’t going to be a gamechanger is that even in a best case scenario, with Iran and Iraq on board, it is unlikely to change the oil price trajectory in a significant manner. This is  because the deal proposes a cap, not a  cut, in current production levels. In other words, even if the deal is implemented, the market will still have a over-supply of oil.

In this context, it in interesting to note that most Opec countries, such as Russia and Venezuela, are already pumping record high levels of oil. They are stretched to the maximum, and would have had to slow down even without a deal.

And then there is America’s shale oil factor: To understand the US’s role, one needs to go back a few steps. Historically, the OPEC cartel has managed to keep a strangle-hold on oil prices because demand far outstripped supply. The shale oil boom in the US, however, threatened to change that dynamic. Opec responded by striking at the one major weak point in the shale story: The relatively high-cost of production. The oil cartel pumped up production and deliberately depressed oil prices, hoping that American shale would become unprofitable in comparison.

While the shale industry did feel the pressure, the impact wasn’t as intense as Opec had calculated especially as shale prices continued on a downward path. Any let up at this point in the Opec’s efforts to keep oil prices low will give US shale companies just the breather they are looking for to get back into business.

Past experiences: A third problem with any Opec deal is cheating. In general, Opec members are not particularly transparent with their production figures and this leads to mistrust within the group. Non-Opec members are no better either. The last time there was a global deal of this sort — in 2001, when Saudi Arabia convinced Mexico, Norway and Russia to commit to production cuts — Russia went back on its word and, in fact, raised exports.

This oped was published in The Pioneer on February 18, 2016

IN NAYPYIDAW, DEMOCRACY DAWNS

Last week, Myanmar took one of its most definitive steps towards democracy: It swore in a Parliament comprised mostly of civilian lawmakers, brought to power through a largely free and fair election. However, the new Government still faces many challenges

Ruled by the military junta for five decades, and under a semi-military Government that secured its mandate though a rigged election for the last five years, Myanmar last week took one of its most definitive steps towards becoming a functional democracy: It swore in a new Parliament comprised mostly of civilian lawmakers brought to power through a largely free and fair election. In the 664-seat legislature, political icon and Nobel laureate Aung San Suu Kyi’s party, the National League for Democracy, which won a landslide victory in the parliamentary election held last year on November 8, has 390 members, while the military-backed Union Solidarity and Development Party, which was previously in charge, has only 42.

However, this does not mean that the military has been marginalised in Parliament since Army-appointed representatives still hold 25 per cent of the seats that were not open for election. But even factoring in this block of unelected members, it is noteworthy that the NLD still has a clear 50 per cent majority in Parliament.

The much-awaited big decision now is: Who will be the next President? NLD chief Suu Kyi is barred from taking the top job, as her sons hold British passports and the Constitution of Myanmar prohibits those with foreign nationals in their immediate family from the Presidency. This clause was specifically inserted to keep Ms Suu Kyi out of the presidential palace and it is possible that in due course of time, the Constitution will be amended.

But for now, there is no clarity on who will be the next leader. Ms Suu Kyi, who has long expressed her desire to be President, is holding back channel talks with the military and The New York Times has reported that the NLD may be offering the Chief Minister’s post in three key States to the USDP. But it’s difficult to tell how these talks are progressing. If the talks fail at least for the time being (keeping the option open for Ms Suu Kyi to take over the presidency later in the term), the focus will be on a proxy President: Ms Suu Kyi has no clear deputy in the party but more importantly, she has already said that irrespective of who wears the President’s tag, it is she who will be the leader of any NLD Government.

Either way, the new Government faces many challenges. First is Government formation. Having been in opposition for so many years, NLD members have no experience in national governance or institutional reform. This will make it enormously difficult for the new Government to guide the country through this crucial period of transition and deliver meaningful change and progress. The public, of course, has high expectations and it will be a huge setback to the democratic process if the Government fails to deliver, and at the end of the next five years, there is much public resentment.

Second, the NLD will have to carefully manage its relations with the military, which remains a powerful force. Ms Suu Kyi has done this with aplomb in recent years. She has a good working relationship with outgoing President Thein Sein  an important factor in the steady democratic transition of the past five years. Remember, when the parliamentary election was held in 2010, Ms Suu Kyi’s NLD, having been unlawfully denied the opportunity to form the Government even after having won the election in 1990, had boycotted. However, since 2012, after election laws were reformed, the NLD participated in several by-elections, all of which it won.

So, to that end, the NLD is off to a safe start. However, one mustn’t undermine the challenges ahead. For one, the possibility of a proxy President will add another variable to the mix and there is no telling how that it will affect the carefully-set equation between the NLD and the old military establishment. Moreover, the military is expected to keep the key portfolios of Defence, Home and Border Operations. This will further complicate matters of day-to-day governance and can easily become a source of friction. It could even lead to a full confrontation that may undermine Myanmar’s democratic transition especially since the military still has emergency powers.

Outside politics, the big issue for the new Government is fructifying the peace process with the ethnic armed groups. The Thein Sein Government made major progress in this regard last year when it signed a peace deal with the ethnic armed groups. However, fighting has continued despite the agreement to cease fire and violent clashes in Shan and Kachin States are threatening to undermine the peace process. This could lead to large-scale economic turbulence that Myanmar is hardly prepared to deal with. 

Also, the situation in Rakhine State, where most Muslim Rohingya are disenfranchised, remains volatile. At home, any decision of the NLD Government on this issue will be viewed through a nationalist lens but outside Myanmar, it will be seen as test of character for the peace laureate-politician. Notably, Ms Suu Kyi has maintained a studied silence on the Rohingya issue which hasn’t gone unnoticed in the international community.

Another long term challenge before the new Government will be dealing with China. Myanmar was close to becoming a Chinese satellite state when the junta decided to the reverse course. This has led to some cooling of ties between China and Myanmar but the latter is still deeply entrenched and unlikely to back away without a fight.

Ms Suu Kyi and the NLD will need deft diplomatic skills to shepherd Myanmar’s ongoing re-engagement with the West, without rocking the boat with a more assertive China that is presumable concerned about its interests being harmed. For this geo-political re-orientation to succeed, the Western countries must also understand that while do have a significant role to play in bringing positive change in Myanmar, and the new Government will, of course, dip into the large reservoir of support and goodwill but everybody needs to be cognizant of domestic and regional sensitivities.

This is also where India comes into play. Myanmar stands at the crossroads of India’s Neighbourhood First and Act East policies; and it is crucial to the development of India’s own North-Eastern States as well as its relations with South East Asia. However, India is still only a minor player in Myanmar despite its longstanding historical and civilisational ties. Though New Delhi has been pragmatic enough to do business with the junta since the 1990s, this has been far below potential. Meanwhile, other regional powers such as Singapore and Thailand, not to mention China, have soared ahead.

India has a lot of catching up to do but a good place to start will be accelerating the transport connectivity projects that are already in the pipeline. At the top of the list is the Rs2,904-crore Kaladan project, which includes a 225km-waterway on the Kaladan River from Sittwe Port to Kaletwa and from there, a 62km-roadway from Kaletwa to the India-Myanmar border. The India-Myanmar-Thailand highway and the Bangladesh-China-India-Myanmar Economic Corridor are the two other important projects that require immediate attention.

This article was published in The Pioneer on February 8, 2016