Suhasini Haidar |
By accepting an invitation to join the Japan-proposed, U.S.-endorsed plan for a “Quadrilateral” grouping including Australia to provide alternative debt financing for countries in the Indo-Pacific, India has taken a significant turn in its policy for the subcontinent. Explaining the need to invite other countries to what India has always fiercely guarded as its own turf.
Foreign Secretary S. Jaishankar was remarkably candid. “Our neighbours also feel more secure if there is another party in the room,” he said recently, giving examples of working with the U.S. on transmission lines in Nepal or with Japan on a liquefied natural gas pipeline in Sri Lanka. His words contain a tacit admission: that having India in the room is no longer comforting enough for our neighbors.
The Quad pivot?
As Prime Minister Narendra Modi heads to the East Asia summit in the Philippines next week, where the first ‘Quad’ meeting is likely to be held, it is necessary that India analyse the impact of this admission on all our relations. It would also serve as a useful exercise to understand why India has conceded it requires “other parties” in the neighbourhood, even as it seeks to counter the influence of China and its Belt and Road Initiative.
Mr. Modi, who began his pitch for his “neighborhood first” plan by inviting the neighbours to his swearing-in ceremony in 2014.
One reason is that as a growing economy with ambitious domestic targets, India’s own needs often clash with those of its neighbours. More connectivity will eventually mean more competition, whether it is for trade, water resources, or energy. Take, for example, the case of Bhutan, which is working, with India’s assistance, on its own goal of producing 10,000 MW of hydropower by 2020.
Even as Indian and Chinese troops were facing off at Doklam on land claimed by Bhutan, a very different sort of tension was claiming the attention of the government in Thimphu. The first indicator came on May 8, when in his budget speech at the National Assembly, the Bhutanese Finance Minister warned that the external debt is about 110% of GDP, of which a staggering 80.1% of GDP (or 155 billion Nu, or $2.34 billion) is made up by hydropower debt mainly to India.
In April, the International Monetary Fund’s world economic outlook had already put Bhutan at the top of South Asia in terms of the highest debt per capita, second only to Japan in all of Asia for indebtedness.
India’s counter to China’s persistent demand for a diplomatic mission in Thimphu.
The budget figures attracted much criticism for the Bhutanese government, and opposition taunts that Bhutan could become the “Greece of South Asia” forced Prime Minister Tshering Tobgay to appoint a three-member committee. In a government order he said that said the negative media, public perception and “absence of strategy” could even affect the “larger and more important relationship between Bhutan and India.”
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Among the committee’s findings were that Bhutan’s external hydropower debt financed by India at 9-10% rates was piling up, with the first interest and principal payments expected in 2018, and construction delays, mainly due to Indian construction issues, were taking the debt up higher. Above all, despite several pleas to the Ministries of External Affairs and Power, the Cross Border Trade of Electricity (CBTE) guidelines issued by India had not been revised, which put severe restrictions on Bhutanese companies selling power, and on allowing them access to the power exchange with Bangladesh.
India has also been ambivalent on tackling political issues in its region, often trapped between the more interventionist approach of the U.S.
In the Power Ministry’s reckoning, relations with Bhutan took a backseat to the fact that India already has a power surplus, and its new renewable energy targets come from solar and wind energy, not hydropower. Moreover, given falling prices for energy all around, India could not sustain the Bhutanese demand that power tariffs be revised upwards. Eventually, it wasn’t until early October that Mr. Jaishankar visited Thimphu and subsequently the visit last week of King Jigme Khesar Namgyel Wangchuck began to address the problem that has been brewing for more than a year.
History of forgetting
Another problem is what one diplomat in the region calls ‘India’s big game hunting attitude’: “India chases its neighbours to cooperate on various projects and courts us assiduously, but once they have ‘bagged the game’, it forgets about us. As a result, crises grow until they can no longer be ignored, and the hunt begins again.” Over the past decade, since the defeat of the LTTE, India passed up offers to build the port in Hambantota, Colombo, and Kankesanthurai, despite Sri Lanka’s pressing need for infrastructure.
S. Jaishankar said“Our neighbours also feel more secure if there is another party in the room,”
At the time, given India’s crucial support in defeating the LTTE, Sri Lanka was considered “in the bag”. With the U.S. and other Western countries also taking strident positions over human rights issues and the reconciliation process, Chinese companies stepped in and won these projects, for which Sri Lanka recklessly took loans from China’s Exim bank.
New Delhi has changed its position on Hambantota several times, going from initial apathy, to the disapproval of the Chinese interest, to scoffing at the viability of the project, to open alarm at the possibility of any Chinese PLA-Navy installation in Sri Lanka’s southern tip. Finally this year, upturning everything it has said, the government decided to bid for the Mattala Rajapaksa International Airport at Hambantota, a $205 million investment for the empty facility that sees an average of two flights a day.
Even as a ‘listening post’, it is an expensive proposition, with some officials now suggesting a flight training school at Mattala to defray the cost. India is also hoping to win the bid to develop Trincomalee port with several projects. Clearly India is moving in now to build a counter to China in the neighbourhood, but it may be too little, too late and a little too expensive
India has also been ambivalent on tackling political issues in its region, often trapped between the more interventionist approach of the U.S., which has openly championed concerns over ‘democratic values’ and human rights in Sri Lanka, Maldives and Bangladesh, and the approach of China, which is to turn a blind eye to all but business and strategic interests. In Nepal, India lost out to China when it allowed a five-month-long blockade at the border, calling for a more inclusive constitution to be implemented by Kathmandu — but in the case of Myanmar, it lost precious ground in Bangladesh when Mr. Modi refused to mention the Rohingya refugee situation during a visit to Nay Pyi Taw. In both cases, India reversed its stand, adding to the sense that it is unsure of its next steps when dealing with neighbours on political issues.
Finally, it is important to note that while the government’s new plan to involve the U.S. and Japan in development projects in South Asia will yield the necessary finances, it will come at the cost of India’s leverage in its own backyard. India’s counter to China’s persistent demand for a diplomatic mission in Thimphu, for example, could be to help the U.S. set up a parallel mission there — but once those floodgates open, they will be hard to shut.In Sri Lanka, the U.S. and Japan will now partner in India’s efforts to counter China’s influence, but whereas India objected to Chinese naval presence in the Indian Ocean, it will not be able to object to an increase in U.S. naval warships and Japanese presence there.
The negative media, public perception and “absence of strategy” could even affect the “larger and more important relationship between Bhutan and India.”
Writing about Myanmar in a new book, India Turns East: International Engagement and US-China Rivalry, the former French diplomat Frédéric Grare says the emergence of new players in the U.S., Europe and Japan has only increased multiple regional rivalries in the region.“This does partly benefit India, who is no longer isolated vis-à-vis Beijing,” he concludes. “But New Delhi’s political profile has consequently diminished.”
Mr Modi, who began his pitch for his “neighbourhood first” plan by inviting the neighbours to his swearing-in ceremony in 2014, must look before he leaps while inviting other powers, howsoever well-meaning, into the neighbourhood.
Suhasini Haidar is the Deputy Resident and Diplomatic Affairs Editor at The Hindu. She tweets:@suhasinih. The article was originally published in The Hindu and is being republished with permission. The views are those of the author and do not necessarily reflect Global Village Spaces’s editorial policy.