S. Jaishankar

As prepaid media doubles down on RCEP, they of course won’t listen to Jaishankar

(This is a reprint from NewsBred).

I have long been suspicious of edits which are passionately pushed in the best of English. Much like that bank clerk who is pushing a scheme when you enter the branch. Those pesky calls for your car insurance, those greetings on WhatsApp from land sharks who have the best view in town just for you. The best of them are those who sell their cause to you as if it was your own.

So it is with RCEP (Regional Comprehensive Economic Partnership). I have been noticing in Times of India and Indian Express—Left-Liberals of varying shades—how India’s policy-makers are being lampooned for not signing on. I looked at Mint where economists snack. No different.

The readers are told that India itself flagged off the race nine years ago and has now stopped just short of the finishing line. That how dumb of Modi’s India to cite custom duties on manufacturing when it could benefit from the emerging global supply chain in the times of Coronavirus. That its fears on agriculture and dairy sectors are unfounded since those have been factored in for next 20 years.

And then look at India’s manners. The RCEP nations in a separate document are almost begging us to join the bloc. That China has pledged to import $22 trillion of goods and services over the next decade for its 1.4 billion people. Imagine the market it would offer us. Even China’s “enemies” like Japan and Australia are part of the deal.  Is India so dumb it can’t see that RCEP is 30 per cent of global economy and a world population of 2.2 billion people? It is also implicit that India would stay out of Trans Pacific Partnership (TPP) which is sure to be revived by the US president-elect Joe Biden. Is this “Atmanirbhar Bharat”?

Economists call it protectionism. World is “free and fair”. India is insular. All Modi seeks is win in elections on the turbo-engine of “self-reliant nationalism.” And to hell with how our beloved PV Narasimha Rao and the John Stuart Mill by his side, called Manmohan Singh, took us out of choppy waters of 90s.

Why India is being so stupid? Because it has found out that all those free trades were no help all these years. And how it could be when your manufacturing base is so abysmal? How did those imports help our employment? And how we are supposed to compete when our hands are tied, legs shackled by the mantra of “free trade” even as somebody like China could abnormally subsidize its products and industries?

How come these grave economists never mention that 66 per cent of India’s GDP results from the services sector and the RCEP is heavily loaded against it in favour of merchandizing trade? What significant stuff are we supposed to sell? Are we wrong to assume that it’s a “trojan horse” set up by a Chinese club called RCEP? And that all it would bring is increased import bill and a few million more added to our unemployed?

I would let somebody as erudite as our foreign minister S Jaishankar hold the stage at this moment. Over to him:

“Those calling for increased openness and efficiency are not presenting the full picture (sic). That it’s equally a world of non-tariff barriers of subsidies and state capitalism (reference to China).

“In the name of openness, we allowed subsidized products and unfair advantages from abroad to prevail. And all this while this was justified by the mantra of an open and globalized economy.

“It was quite extraordinary that an economy as attractive as India was allowed the framework to be set by others.

“Past agreements resulted in de-industrialization of some sectors…the choice (for us) was to double down on an approach whose damaging consequences were apparent or to have the courage to think through the problem for ourselves. We chose the latter.

“It will decide if we become an industrial power with what we decide today.

“It is far from turning our back to the world. In fact, it is to enter the global arena with cards to play—not just to provide a market for others.”

Messrs economists, any rejoinder? Silence. Any thoughts why those nations calling for “free and fair trade”, having fattened themselves on protectionism are denying the same diet to India? That others probably want India as a counterweight to China? Silence.

So anyone for Atmanirbhar Bharat? Hands down.

 

 

It’s in China’s interest to keep India in good humour and here’s why

(This is a reprint from NewsBred).

We could all look at clues emanating from a two-hour meeting between India’s foreign minister S. Jaishankar with Wang Yi, his Chinese counterpart, in Moscow on Thursday. Or trust the redoubtable Russian foreign minister Sergey Lavrov to have hefted his weight in making them shake hands. But frankly, it’s in China’s interests to keep India in good humour.

As the two troops square up within a punch’s distance in Ladakh, where even a guttural breath could spark off World War III, analysts have a meltdown that India could be facing a multi-pronged war on its borders, none more so than on its eastern, northern and western ones from two heavily nuclear-armed enemies—China and Pakistan. Most are failing to connect the dots that it’s China which presently is more encircled and it’s India which is the centrepiece in the coordinated move.

Agreed, India hosting the QUAD (Quadrilateral Security Dialogue) later this year doesn’t sound menacing at first glance. But the enormity of the moment won’t be lost on pros who know that India now has military logistical agreement with all three other members of the grouping: the United States, Australia and Japan. The one with the US (LEMOA) has been operational since 2016. The one with Australia was signed in June. Now, on Thursday, India and Japan, riding on the visible warmth between Indian prime minister Narendra Modi and his outgoing Japanese counterpart Shinzo Abe, have inked a similar military logistical deal. Who said nothing moved during the Corona?

Even as I write this, French defence minister Florence Parly would’ve left Indian shores after overseeing the official induction of 5 Rafale jets in the Indian Air Force in Ambala on Thursday. Don’t go by the innocent press releases marking the moment. In geopolitical and military sense, it carried a grave message for Beijing.

Quietly in the background, India and France have grown akin to blood brothers. It hasn’t happened overnight. As soon as the Cold War ended last century, India and France had signed a “strategic partnership.” Everyone talks of 36 Rafale jets but it isn’t much in public domain that Indian navy has already commissioned 2 of 6 Scorpene submarines being build in our own Malegaon dockyards. The third one is undergoing sea trials. India had signed a military logistics pact with France in 2018 itself. France was one of the few countries which had backed India’s decision to nuclear-test in 1998.

And this is all because like other members of QUAD, France too needs India badly for its considerable stakes in the Indian Ocean. The two countries could sign a secure communications agreement too which would allow the two navies to share maritime domain awareness. Even before Parly arrived in India, the two countries, along with Australia, had held their a trilateral foreign-secretary level dialogue on Wednesday. Surely, India-France are welcoming the likeminded in fold.

The domino effect of this all must not be lost on observers. LEMOA with the US has extended Indian navy’s reach in southwestern Indian Ocean due to French bases in Reunion island near Madagascar and Djibouti on the Horn of Africa. The logistical arrangement with Australia has bolstered Indian warships in southern Indian Ocean and the western Pacific.

There are two other logistical pacts—besides the US, Australia, Japan and France—which India has firmly secured under its belt. One is with South Korea, the other one is with Singapore. Now Indian officials are openly touting two more in near future—with the UK and Russia, the latter one possibly by the end of this year itself. Yes, Russia—you have heard it right.

And now comes something which completely has rattled the command of the Chinese Communist Party (CCP). India, Japan and Australia have launched a “Resilient Supply Chain Initiative” amongst themselves. In simpler terms, it means the three countries are looking for alternatives to China in terms of relocating industries and supply chains in Indo-Pacific.

Japan, which has considerable industrial presence in China, unlike India or Australia, is even incentivizing its companies to relocate to, say India and Bangladesh. It has taken badly the recent moves by China to intensify dispute in East China Sea. Australia is badly stung by the trade spats with China. The repatriation of Australian journalists by Beijing hasn’t helped matters. India of course has a war at door.

In essence, there is an attempt to disengage supply chains in strategic areas such as telecommunications, pharmaceuticals, automobiles, semiconductors etc from China. This has potential to fundamentally alter the geographical shape of cross-border industrial network in the region. It would hurt China where it hurts most.

India and China could point fingers at each other, and not just Finger 3 or 4, for the downturn of ties between two of world’s most populous nations. China could claim that it has had enough of India’s “running with the hare and hunting with the hound” attitude. India could do likewise. After all, China backs Pakistan both on its terrorism and hostility in Kashmir. But these are no better than academic discourse. The truth is India has moved firmly on its Act East Policy. And China has to look after its back. Like Doklam, this face-off ftoo is likely to end with a loss of face for the Dragon.

 

 

 

NAM adrift as helmsman India has better views on horizon

(This is a reprint from NewsBred).

Non-Aligned Movement (NAM) with 120-member countries is second only to the United Nations (UN) in size yet its’ two-day 18th Summit in Baku, Azerbaijan on Friday would be lucky to find front-page mention in your newspaper.

Indian prime minister Narendra Modi would give it a miss again, like he did in Venezuela in 2016, and so would heads of a whole lot of other nations even though Hassan Rouhani (Iran), Sheikh Hasina (Bangladesh) and KP Sharma Oli (Nepal) as notable exceptions are making rounds in press releases.

It’s unlikely, anyway, that Baku would see more heads of states than eight viewed in Venezuela, down incidentally from 35 witnessed in a still previous edition in Iran in 2012. The NAM doesn’t have a formal constitution or a permanent secretariat, only a coordinating office adjacent to the UN in New York, and a formal media communiqué is all they have to declare to an indifferent world.

It wasn’t so when the world was freeing itself from colonialism in the aftermath of World War II in 1945, and few charismatic world leaders– Pt. Jawaharlal Nehru (India), Sukarno (Indonesia), Gemel Abdel Nasser (Egypt) and Josep Broz Tito (Yugoslavia)—rallied the new nations under the banner of the NAM to keep an equidistance from the two superpowers, United States and the Soviet Union. It was a Third World-grouping which didn’t lean either way in the dangerous nuclear-race of Cold War era.

The grouping ensured the vestiges of colonialism didn’t linger on long in Africa, Asia and the Caribbean through their activism in UN General Assembly which declared de-colonization as its main objective in 1960. They brought their weight to bear on the 1963 Partial Test Ban Treaty and later helped the superpowers to formulate the Nuclear Non-Proliferation Treaty.

 

 

But the Cold War ended in 1989, the Soviet Union was no more soon, the Warsaw Pact was dissolved and apartheid in South Africa was dismantled. The NAM still defined its role through the prism of Third World nationalism. Western hegemony was still the elephant in the room.

All of it has changed with the rise of China: What was an ideological war has today become one for economics and geography. Many of the NAM members are economic basket cases of the West. As many as 40 of Africa’s 55 states, along with the African Union, have signed Memoranda of Understanding (MoU) with Beijing in its Belt and Road Initiative (BRI) to build their ports and airports, highways and railways. Over 50 NAM countries figure prominently in the index of failed states.

You thus have a situation where support for Iran’s nuclear programme is voiced in the NAM’s summit but the same nations back economic-sanctions resolutions in the UN Security Council against Tehran. A host of Arab countries bristle with anger against Israel in the NAM conferences but lap up profitable military and economic ties with the Jewish country once outside the boardroom. From conservative Colombia to Leftist Venezuela; from pro-West Malaysia to socialist Cuba, all have hosted NAM conferences.

India which skillfully used Soviet Union to secure their veto in the UN Security Council on Goa and Jammu & Kashmir  in the 50s and 60s and used the Western economic assistance to bail themselves out of a food crisis don’t see much value in NAM these days. S. Jaishankar, present foreign minister, had no qualm in declaring in Venezuela Summit that blocs and alliances are less relevant in international order, and the world is moving towards a “loosely arranged order.”

Still, India has embedded itself in nimble regional networks such as SAARC and BIMSTEC, multilaterial ties with ASEAN; is a respected dialogue partner of the European Union and a special invitee to the G-8 summits. It has a trilateral grouping with Russia and China; holds a quadrilateral security dialogue (QUAD) with the United States, Japan and Australia.  There is then BRICS and SCO.  It is thus easy to see why India is losing steam on the NAM.

In an ideal world, NAM could be an immense balancing bloc to lower the heat in the South China Sea. Lesser states in Asia-Pacific would pay a heavy price if US and China up the ante of their animosity. The NAM could restrain US and Russia; help China and India lower their suspicion of each other.  There are still dime-a-dozen limited wars being fought around the world and the NAM, if it wants, could still be heard in the UN.

Unfortunately, the leaders of the NAM in its pomp, India, Egypt, Indonesia and Yugoslavia, bear little resemblance to the era of 50s.  For good or worse, they have moved on. Without a credible helmsman, the NAM is nothing but a talking shop.

 

Mr Imran Khan, this is why you can’t do much on Kashmir

(This is a reprint from NewsBred).

Pakistan is unlikely to keep up with its hostile words or action on Kashmir if the Financial Action Task Force (FATF) meet in Paris on October 13-18 goes as planned.

Already in the “grey list” of the FATF, Pakistan could lose up to $10 billion and be economically devastated if it is “blacklisted” by the influential global body which primarily deals with countries that promote money laundering, drugs and terrorism and are a threat to global system.

Pakistan surely would need to tone done its rhetoric or any misadventure it might have planned on Kashmir, the focal point of Pakistan’s policy for decades, let its treated as a leper in international monetary system.

Pakistan needs three members of the 37-member FATF to avoid being blacklisted and its Prime Minister Imran Khan last week sought out the heads of Malaysia and Turkey to canvass support. China, which heads FATF, in any case is an all-weather friend. These three countries were the reason Pakistan avoided being “blacklisted” in June this year. The trio are likely to come again to Pakistan’s rescue in Paris.  

Pakistan though is unlikely to slip out of the “grey list” as it would require the support of 15 of 37 members of FATF which is too uphill a task. The United Nations General Assembly session last month saw it being isolated on the world stage with no significant world power, but for China, coming to Pakistan’s support.

The pressure is mounting by the hour on Pakistan as Asia-Pacific Joint Group (APJG), a FATF sub-group, held a review meeting with Pakistani officials in Bangkok in August on the issues of anti-money laundering and combating financing of terrorism (AML/CFT) regimes. It found Pakistan to be in violation of as many as 21 of the 27-point action plan and placed it in the Enhanced Follow Up list. Of the 40 technical compliance parameters, Pakistan was non-compliant on 30 parameters. And, of the 11 efectiveness parameters, Pakstan was adjudged as “low” on 10. These finding would surely have a huge bearing on Pakistan’s fate in the FATF meeting in Paris in less than a fortnight’s time.

India, meanwhile, is on an overdrive to ensure that Pakistan is unable to escape the “noose” of FATF. The trio of prime minister Narendra Modi, foreign minister S. Jaishankar and national security advisor Ajit Doval have spent last few weeks in canvassing support from as many as 24 of the 37 members of the FATF.

While Modi sought out Belgium, France, US, UK, Italy, New Zealand and South Africa among others in the UN, Jaishankar held parleys with his counterparts from Australia, Brazil, Canada, China, Germany, Italy, Netherlands, Singapore, Turkey and Japan in New York. He also looked for support from the two regional organizations of the FATF, the Gulf Governing Council (GCC) and the European Commission (EC). Doval meanwhile is in Saudi Arabia mustering support from the oil kingdom which has shunned Pakistan in favour of India in recent months.

If Pakistan is “blacklisted” it could virtually be an outcast in the international financial system. Its banking system would be crippled and be it imports or exports, remittances or access to international lending order, would all be overwhelmed. It would have trouble securing loans as foreign financial institutions would be wary of dealing with Pakistan lest they fall foul of international violations on the issues of money laundering, drugs and terrorism. Foreign investors won’t be enamoured either.

It’s not the first time Pakistan finds itself in the “grey list” of FATF. It was first put under watch in 2008 and later between 2012-2015. Apparently, the deterrence hasn’t s worked. As India has pointed out, Pakistan is home to 130 UN-designated terrorists and 25 terrorists listed by the UN.

Pakistan though is not the only country in the “grey list” of FATF. The other countries in the last are Ethiopia, Serbia, Sri Lanka, Trinidad and Tobago, Tunisia and Yemen.

Presently only two countries are in the “blacklist” of FATF—Iran and North Korea. Pakistan is close to joining the unenvied group of international order. If Pakistan is able to avoid being blacklisted, it would be a damning reflection on its benefactors–China, Malaysia and Turkey—as they would be seen in support of terrorism.

Pakistan, truth to tell, is today seen a breeding ground for terrorists and has done little to curb them. There has been no demonstrable action or persecution of globally-designated terrorists or terror networks. Its law enforcement agencies are yet to even begin investigating terror groups like Da’ish, Al-Qaeda, Jamaat-ud Dawa, Falah-e-Insaniat Foundation, Lashkar-e-Taiba, Haqqani Network or persons who are affiliated with Taliban.  Terrorists such as Masood Azhar and Hafiz Saeed operate with impunity and protection from the state of Pakistan.