Gwadar

Chabahar is a real deal for India

For its commercial and political implications, the Chabahar Port deal with Iran marks the finest achievement yet of Narendra Modi’s global engagements.

The commercial implications are obvious—India was hemmed in by Pakistan’s intransigence to refuse direct trade between India and Afghanistan and China’s One Belt One Road (OBOR) vision had the potential to clamp manacles on India’s ankles.

In one stroke, India has freed itself from the curfew and it could now entertain visions of trade and infrastructure links with Middle East and Central Asia and still further with Russia and Europe.

Let’s take up the bare details before we look at the wider implications and how Pakistan, China and United States, the other key players in the region, would react to it—Afghanistan, as we know from the history of Hindu Kush in the colonial times, is a prized land. So far it was its geographical location but now is the promise of immense mineral wealth which, according to Geological Survey of United States, could be worth as much as $1 trillion, due to its iron, copper, cobalt, gold and lithium potential.

Afghanistan, unfortunately, has always attracted predators who couldn’t care less about the welfare of Afghan people; who could go to any length to destabilize it in order to retain a degree of control over the cursed land. United States, on one pretext or another, stays put in the name of eliminating terrorism while, as everybody knows, promoting the same in cohort with Saudi Arabia, and not long ago, Pakistan.

The birth of modern terrorism occurred in the wake of Soviet Union’s departure from Afghanistan as United States planted mujahideens, with Pakistan and Saudi Arabia providing men, resources and ground support. The country was soon in chaos, split between war lords of one camp or other, and the lure of illicit heroin trade, which by a conservative estimate is second only to oil and gas in volume, has kept them involved. They aren’t going to leave the country in our lifetimes.

Afghanistan thus has every reason to distrust Pakistan—after all its bête noire Osama bin Laden and Mullah Mohammad Omar were traced there—and by inference United States. It sure receives significant infrastructural aid from China but so tied are the fortunes of the Middle Kingdom with Pakistan that Kabul can’t ignore the political implications.

India has diligently nurtured its ties with Afghanistan. Since 2001, it has provided Afghanistan with $2 billion development assistance. In December last year, Modi inaugurated Afghan parliament built on India’s aid of 90 million dollars. It has contributed $300 million on Salma dam and hydroelectric power plant at Herat which Modi is expected to inaugurate next month. In 2009, India had built a 217-km highway costing $100 million that links Zaranj with Delaram, located on Afghanistan-Iran border. From there, the local road connects to Chabahar.

India has always worried over its energy supply, most of which emanates from the Middle East. It receives 57 percent of its crude oil from the Middle East which would only increase manifolds in the coming years.  Saudi Arabia is its biggest supplier but knowing the close equation between the Arab kingdom and Pakistan, India has always been keen to get Iran on its side. The latter, for this very reason—after all the Middle East conundrum is largely a tussle between Sunni Saudi Arabia and Shia Iran for dominance in Muslim world—seeks a natural affinity with India. Both nations have close cultural and historical ties. Persian was the official language of the Mughal Empire in the 16th century.

Chabahar is located on the Gulf of Oman, just 80km away from Gwadar which is the cornerstone of China’s pivot to Pakistan. Chabahar is just 299km east of world’s most critical passageway for oil tankers, the Strait of Hormuz.

Iran urgently wants this port to work as 85 percent of its seaborne traffic is managed by its Bandar Abbas port in the Strait of Hormuz. However, this port can only handle 100,000-metric ton ships. Large ships first offload at the Jebel Ali port in the United Arab Emirates en route to Iran. In contrast, Chabhar is a deep-water port and could process large ships. Chabahar would also allow both India and Iran to access large parts of Africa, Asia, Arabia and Australasia.

India has so far committed $500 million on the Chabahar project. It’s also assisting the 500-km rail link between Chabahar-Zahedan-Zaranj. The free trade zone of Chabahar could also encourage investment by its industries in urea, smelter and aluminium etc. In 2012, India had already used the port to transport a 100,000 metric ton shipment of wheat to Afghanistan.

According to the JV plans, India will develop two berths in Chabahar, one to handle container traffic and the other a multi-purpose cargo terminal. The MoU includes the sea-land access route to Afghanistan. India has plans to build a road-railroad network from Chabahar to Milak in Iran which in turn would link up the Indian-built 223-km Zaranj-Delaram road in Afghanistan.

India has also allayed worries on Iran’s part over its pending $6.5 billion payment. It has begun the process of payment in Euros, as requested by Turkey’s Halkbank. A cash-strapped Iran urgently needs investment and repayment of dues.

It’s a win-win all situation for all three nations. Both India and Iran are surrounded by hostile powers; both need avenues to grow. Afghanistan would finally be able to access the Indian Ocean.

Don’t expect United States to sit and watch this alignment of India-Afghanistan-Iran to take shape. Already we hear of encroachment of Islamic State (IS) in Afghanistan. US could again find a reason to impose sanctions on Iran. India too remains handicapped by its financial and regulatory hurdles.

But such is the opportunity in front of India, Afghanistan and Iran that one expects Chabahar Port to be a reality soon enough. There sure would be hurdles and interventions, but the three must stand together for their own good.

India-China Cold War is bad news for BRICS

The Indo-US agreement on sharing military logistics to counter China’s assertiveness in Indian Ocean could have wider ramifications.  The two can use each other’s land, air and naval bases for supplies and repair. A piece on the essentials of this conflict:

India and China have been engaged in a Cold War since the beginning of 2015.

New Delhi feels a certain hegemony over Indian Ocean. China, which views it as vital to its survival as a trade route, won’t let it happen. The trade deficit between the two doesn’t help the cause.  Both are wary of each other. It’s a real bad news for the future of BRICS and Shanghai Cooperation Organisation (SCO)—much to the delight of western powers.

India has made a few moves in recent past which shows its anxiety. Modi visited Seychelles, Mauritius and Sri Lanka in March last year but ignored China-friendly Maldives as an apparent snub. Also a conference of “Indian Ocean: Renewing the Maritime Trade and Civilisational Linkages” was held in Bhubaneswar.  India wants its own Cotton Route to challenge China’s New Silk Road.  The Grand Prize of East Africa doesn’t lessen their friction.

China has its own “String of Pearls” strategy. The Gwadar port in Pakistan; naval bases in Myanmar, intelligence facility in Bay of Bengal, a canal-in-construct across the Kra Isthmus in Thailand, a military tie-up with Cambodia and building military bases in the South China Sea. The “String of Pearls” is meant to secure the sea lanes from the Middle East to the South China Sea for its energy and security concerns.

With the Strait of Malacca enabling almost 80 percent of passage to China’s energy needs, it has looked to build its naval power at choke points along the sea routes from the Persian Gulf to the South China Sea.

A look at the two Asian powers’ position vis-à-vis critical nations/islands strewn across the Indian Ocean:

Myanmar

This Southeast Asian state was close to China for two decades. But in 2012, it began a “pro-democratization” process—most likely under US pressure—and is now seen close to India. The two together plan to extend Myanmar-Thailand Highway into a trilateral deal.

India’s “Cotton Road” strategy is meant to counter China’s One Belt, One Road (OBOR) plan. India wishes to integrate with its ASEAN counterparts and block china from dominating these states.

Sri Lanka

In a surprise result last year, the pro-China leadership in Sri Lanka, under Rajapksa was ousted and pro-India Sirisena came to power. The first thing Sirisena did was to suspend China’s $1.4 billion investment in port infrastructure.

With Sri Lanka back under India’s influence, for the moment, the link between Maldives and Myanmar for China has been “cut,” so to speak.

Pakistan

Pakistan has decisively moved into China’s arms and there’s no going back on it. The $46 billion Pakistan-China Economic Corridor is well and truly underway. From an Indian perspective, it’s a bad news.

Bangladesh

In order to counter China-Pakistan alliance, Indian prime minister Narendra Modi went to Bangladesh and paved way for resolving the 40-year old border disagreement. It can also have a vital impact on India’s control of its northeast region.  India can also now directly use Bangladesh’s ports, instead of relying on vulnerable Siliguri Corridor. Till Modi visited Bangladesh, the latter had been cuddling up to China.

Nepal

Nepal has been a clear loss to India.  New Delhi reacted badly to Nepal’s new federative constitution, as did the pro-India Madhesi ethnic group that occupies the Terai border. Subsequent riots and Indian trucks refusing to cross the border into Nepal worsened the situation. Kathmandu sees the hand of New Delhi in this unrest.

China moved in swiftly, providing 1.3 million litres of petrol and signing a deal to fill in Nepal’s demand in the face of India’s monopoly. In one swift action, Nepal has pivoted itself on China’s axis. China surely eyes the control of strategic Karnali and Koshi rivers that sustains 200 million Indians who live at the southern border.

Maldives

The ouster of former head Nauseed and his Maldivian Democratic Party is a big blow to India’s plans for this little island nation. The current president Yameen is well-disposed towards China which gives it a proxy control on this island chain. There have been multiple attempts on Yameen’s life and India has found itself drawn into the scandal.

India thumbs nose at China

This is a reprint from Newsbred.

In the first part of this series, we looked at Japan and India raising hackles against China in East and South China Sea. In this second and concluding part, we look at reasons for India’s militaristic posturing and its’ likely fallout.

 

One and a half years into his premiership, Modi seems swamped by issues which certainly are not of his making but would need at least 10 years of his helmsman-ship.

In an impatient country, rogue opposition parties stall him at every step and scoundrels in media bay for his blood every morning. Modi knows immediate issues could sail or nail him, given how they turn out.

Modi’s most pressing concerns—which probably are true of any other country—is improving jobs, infrastructure and Human Development Index (HDI) to go with a secure neighbourhood.

Creating jobs is a millstone around his neck.  India needs 12 million jobs for its youth every year—that is more than the population of a Greece or Hungary. The infrastructure “deficit” is estimated to be over $750 billion—that’s more than twice the size of Singapore’s economy. The HDI ratings are 135 out of 187 nations, conveying a yawning shortfall in areas such as education, health or gender inequality. Agriculture and rural-urban divide is monstrous. Intended legal or economic reforms are hacked by butchers occupying opposition benches in the parliament.

Modi’s best hope in this has been to seek a huge foreign investment.  He chiefly has sought out US, Japan and China in this quest. United States has been quick on the cue. There is now a five-fold increase in India-US trade. US supports India’s bid for a United Nation’s Security Council (UNSC) seat. Joint production of weapons and weapon systems has been agreed upon.

US’ interests are evident. It wants India as a frontline state in its bid for strategic naval dominance in Pacific and Indian Ocean. Pakistan’s National Security Advisor Sartaj Aziz pulled no punches when he declared in September that “America is preparing India to reduce the influence of China in the region.” Japan, as we’ve found out, has been quick to do the bidding on US’ behalf for India.

China, on the other hand, has an indifference bordering on contempt. Chinese President Xi Jinping came with much fanfare to India last year but offered only 20 billion dollars of Chinese investment over five years—that too was a quantum jump on existing Chinese investment of only $500 million in India. It’ ‘investment even in Myanmar totals $14.2 billion.  Before Xi could even settle down in Beijing on return, China’s incursions in India’s northeast borders had left a bitter taste in its hosts’ mouth.

In June this year, India was stunned when China vetoed an Indian attempt to pressure Pakistan into keep the alleged 26/11 Mumbai attacks mastermind, Zakiur Rehman Lakhvi of Lashkar-e-Taiba (LeT), into jail. This wasn’t the first time though. China had thrice before blocked efforts to designate Jammat-ud-Dawa (JuD) as a terrorist organization. It was LeT which had attacked the Indian consulate in Herat, Afghanistan last year on the eve of Modi’s inauguration. It’s also worth remembering that China was critical in arming Pakistan with nuclear weapons’ knowhow.

China’s support to Pakistan indeed has been extraordinary. It’s commitment to invest $46 billion in the construction of the China-Pakistan Economic Corridor (CPEC), to connect Kashgar in Xinjiang to Gwadar port on the Arabian Sea, is staggering. It’s the largest investment project ever in one country, bigger than even the US Marshall Plan after World War II.

If it bears to fruition, the CPEC with its power projects, fibre optic links, roads and energy supplies will transform Pakistan’s economy. Pakistan has even created a special division of 10,000 in its army for the defence of the project as it runs through the troublesome Balochistan province. A part of this project runs through the Pakistan Occupied Kashmir (PoK), much to India’s annoyance.

Sure, Pakistan is important to China. It doesn’t want the terrorist trouble to spill into its Tibet and Xinjiang province. Pakistan also is its staunch ally in the Islamic world. Above all, Pakistan sits at the intersection of South Asia, Central Asia and Middle East.

Thus India, on its own part, feels encircled. China has extended its reach in the Indian Ocean through Sri Lanka and Maldives. Gwadar is said to be a pearl in its crown though there is a misnomer here which must be spelt out in full.

Pakistan purchased the small town of Gwadar from Oman in 1958. However, work on its port began only in 2002. Its need arose as repeatedly Pakistan found its naval and strategic options limited in conflicts with Indian Navy who were quick to blockade Karachi. Gwadar happens to be less than 500 km from Karachi and thus an ideal alternative.  At Pakistan’s request, China provided US $198 million for the first phase which was completed in 2006. Thereafter, China took little initiative in completing its remaining two phases.

Gwadar’s importance clearly is being overplayed by the analysts. First, for it to be an effective port, China would need to built thousands of kilometers of roads in Pakistan. So is true of thousands of kilometers of gas and oil pipelines; and railway tracks to justify the investment in Gwadar.

Besides Gwadar isn’t the only option for China in Indian Ocean. It has Hambantota port in Sri Lanka and a container port in Chittagong in Bangaldesh. China has built roads, dams and pipelines in Myanmar, not to say developed port in Kyaukpyu. China’s oil ships from the Middle East and Africa will cross the Bay of Bengal and unload at these ports.

Still, India has sulked at China’s indifference. In China’s latest white paper on defense, India doesn’t figure at all.  India’s insecurity has been further heightened by China’s astonishing military build-up.

Border is another issue. India wants to clarify the Line of Actual Control (LAC). India’s navy has counted 22 “encounters” with Chinese submarines in Indian Ocean in a span of 12 months. China’s defense budget has shown a three and a half fold increase in just last decade. Its’ air force is twice the size of India.

According to a news report, Beijing needs only two days to mobilize on the Chinese-Indian border while New Delhi, hampered by its crippling transport infrastructure would need at least a week to do so. China, if it wants, could place 450,000 troops in a jiffy at the border, three times to what India could manage.

Chinese navy warships have been spotted on long deployments just off India’s coasts. India’s present chief of navy staff, Admiral Robin Dhowan couldn’t help but publicly say that India is “minutely monitoring” Chinese maritime movements.

Sure, India has caused distrust of its own. It hosts Dalai Lama which is a sensitive subject for China. If India wants to stir up things for China in Tibet, the latter wouldn’t mind using Pakistan for the same end. India also views China as a major opponent in seeking oil and other resources from Africa. Last month Modi hosted a summit of African government leaders in India’s capital.

Given India’s needs, it certainly doesn’t want to be leashed in its own region by China’s tactics. It’s association with Japan would certainly make China a little more sensitive to its anxiety. In the real-politic sense too, India has been clever to make the most of differences between Japan and China.

The only concern, and it’s a real one, is if US or Japan go too far in needling China in East or South China Sea. If gloves are off, India would be required to fulfill its obligation or the promised investments would go up in smoke. Modi’s best bet is it won’t happen in next three years and by that time he would have secured his re-election.