Whom to Trust and When

by Harish Gupta, National Editor, Lokmat Group

Restraint surely has a “bottom line”, as the Chinese government spokesman reminded India. And that too after seven weeks of persistent effort by India to end, through negotiations, the standoff with the Chinese military in the Doklam plateau, a stone’s throw from the point where the boundaries of Sikkim, Tibet and Bhutan meet. India sent National Security Advisor Ajit Doval to Beijing to talk the matter over, but he came back empty-handed as China would not relent until hell freezes over.

China’s is typical bully’s logic. It questions India’s right to send troops, through a third country, Bhutan, into Doklam. But the ownership of the area is contested between Bhutan and China; it is anything but trespass by India to China’s territory. Further, the Indian action was in response to China constructing metal road that could bring artillery and tanks close to the thin land mass, the ‘chicken’s neck’, that connects the Indian plains with the eight north-eastern states. In 1962, when China and India went to war, the Chinese targeted that very spot as it moved its troops across Nathu La in Sikkim. Imagine how will China respond if India builds a string of missile bases that threaten the security of Tibet, or beyond?

While China says India must move back “with no strings”, and raises the pitch of its megaphone diplomacy, India’s policy-makers are in a double bind. On one hand, China is a goliath with GDP (in PPP terms) nearly three times that of India, and four times the southern neighbour’s military budget. On the other hand, India is saddled with a rather chaotic democracy in which the opposition turns even a foreign aggression into an opportunity to find fault with the government. China’s one-party rule doesn’t entertain the liability of gaining public support for its war efforts. In China, such leader’s accountability, if at all, may lie behind the closed doors at the forthcoming national congress of the communist party of China. There, President Xi Jinping’s return as chief of the party for another term is taken as given.  

The Indian opposition criticism of the Modi administration’s handling of the Doklam standoff has three layers, all of which have supposedly originated from the Congress. At one level, it cribs about Modi’s public displeasure with Beijing about President Xi’s One Belt One Road (OBOR) policy by not attending a widely attended meeting of the OBOR invitees earlier this year (Bhutan, India’s friend, was the other absentee). At another level, the opposition brushes aside the government version of the standoff. Congress vice president Rahul Gandhi dramatized his personal spite for Modi when he stayed away from an External Affairs Ministry briefing of the opposition leaders but had a well-publicised meeting with the Chinese envoy in India, as though he were hearing the truth from the horse’s mouth. Moreover, the opposition would put down the Modi government’s foreign policy per se and present the imbroglio in the north-east Himalayas as part of a general policy dislocation.

External Affairs Minister Sushma Swaraj, in a robust speech in the Rajya Sabha last week, addressed most of these issues with clarity. She rightly expressed her dismay at some opposition politicians in India—a Congress member in this case—questioning India abstaining from the OBOR summit. “The OBOR link to Gwadar port in Baluchistan goes through Pakistan-occupied Kashmir (POK), which India considers as an integral part of our country. How does an Indian political party expect us to attend the OBOR summit?” Swaraj crafted a credible defence of Modi’s foreign policy—“for most of its terms, India under the Congress had Russia as ally and the US as enemy but, under Modi, both Russia and the US are friends”—and went all out against Rahul for his offensive gesture.

However, the opposition efforts to pin down Modi on the China issue can lead to a self-goal as public opinion generally turns red hot on patriotism during military confrontations with foreign countries, as it was evident in the 1962 war with China, the 1971 Bangladesh war with Pakistan or the 1999 Kargil war. Unless India gets a bloody nose in a decisive war with China, there is little chance of Modi’s popularity hurtling down (it happened to Jawaharlal Nehru after the 1962 defeat but there was plenty of public support during the war). Besides, much water has flown down the Brahmaputra between 1962 and 2017; there may still be a huge mismatch between the military prowess of the two countries but both have increased their power to wreak havoc on each other. That has minimised the chances of a full-scale war.

Still, there is little chance of India being able to clinch a deal with China anytime soon for peaceful resolution of the existing, and future, problems. Future, because China is known for shifting goal posts to cause unexpected problems. Like it is doing in South China Sea by rewriting history to lay claims on newer islands dotting it, or in twisting past agreements along the 4,000-km border with India and Bhutan. Beijing does not accept the McMahon line as it was an “imperialist legacy” but now swears by the 1890 Calcutta treaty between British India and China under the Quing government because it allows the country’s present rulers to move troops close to the Indian border.

China is in a hurry to establish its hegemony across Asia and fill up as much of the power vacuum caused by the US lowering its global profile. For India, it is a long-term diplomatic challenge. It is not a diplomatic chin wag for aspiring political amateurs to pompously show off their legacy connections.

Steak and Dhokla

by Harish Gupta, National Editor, Lokmat Group

Defying gravity, when Donald Trump made his way to the White House last year, it was generally seen as a mostly local catastrophe whereas the US foreign policy, it was hoped, is too big to fail, resting on the long pillow of seemingly unshakable global business and defence ties. But Trump is a new persona amidst foreigners in Washington.

Till recently, in the French presidential election this month, he seemed championing populist right-wing leader Marine Le Pen as “strongest on borders, and she’s the strongest on what’s been going on in France”. After rolethe liberal pro-EU candidate Emmanuel Macron soundly beat her, Trump did a somersault as he told Macron: “You are my guy.” With other European leaders, he was downright caddish. In his recent trip across the pond, he called Germans “bad” because they sell “just too many cars” in America. At a NATO meet photo-op, he shoved the leader of Montenegro, a small Balkan nation, who happened to be at the centre, to occupy his place.

Before flying into Europe, Trump was in Riyadh where he became a picture of cordiality, starting his interactions with a traditional all-male swordplay, and promising a bonanza of aid for arms to fend against “radical Islamist terrorism”. What he forgot was that it was his host that was the engine powering jihadism based on the tenets of Wahhabism, and Saudi nationals constituted most of the fighters of both Al Qaeda and Islamic State. In the process, attention got deflected from the significant fact that the Saudi priority being to mount attacks on all non-Sunni nations, notably Iran, Trump’s promised aid has the potential to derail Teheran from the path of non-nuclearization. Tehran had earlier agreed to tread after patient persuasions from the Western powers. However, Trump, in stark contrast to his inexplicable show of magnanimity in Riyadh, was all petulance in Europe as he reminded his NATO colleagues that what mattered most (to him) was the regularity of their payments into the alliance’s coffers. NATO was born in the early years of the Cold War as a bulwark of the Western democracies against the communist USSR under its totalitarian leader Stalin. It is obvious that Trump, with hitherto unstated Russian affinity that he and his family members reportedly cherish, is finding NATO’s very idea to be flawed from his perspective from the beginning.

In fact, the Trump presidency has got deeply mired in the Russian muddle. FBI, America’s top investigative agency, which was given the task of investigating possible links between Trump’s campaign team and entities in Russia, has now got its chief fired by the President. Yet there is no sign of the agency closing the investigation. On the other hand, it has zeroed in on Trump’s son-in-law and White House senior advisor Jared Kushner, apparently to investigate the extent and nature of his alleged interactions with Russians. It has been reported that, a month after Trump’s election, Kushner discussed with some Russians a project to set up a secret line of communication with Moscow.

Also under the scanner are the extensive business dealings that officials close to Trump had with Russian proxies in Ukraine. It is the Russian military intervention in Ukraine that brought a new urgency into NATO. After all, Ukraine is the most pro-West of the ex-Soviet satellite nations which former US President Barack Obama fully appreciated. It was Trump’s predecessors who made his country share the concern of Europe and the cost of containing Russian president Putin’s fury. In his election campaign, Trump turned it into his ammunition as he presented the European powers as parasites that were leeching on America for their security. On the other hand, he presented Russia as a victim. Strangely, this fanciful narrative not only went unchallenged in the American public space but created a lot of interest in within the Putin administration to install  “our man” in White House. This is an idea that might make the remains of Stalin turn in its grave. Trump’s deeply troubled five months’ presidency, and the continuance of governmental and congressional probes into his affairs, have got Washington shrouded in an uncertainty not seen till the end of the Nixon years.

All this is bad news for Prime Minister Narendra Modi, who has visited 57 countries since assuming office, but whose foreign policy turns on the pivot of America. A Modi visit to the US towards the end of next month is on the anvil. But the problem is, India is not prominently placed in Trump’s attention span and priorities. In his recent speech in Riyadh, he mentioned India, among others, as a victim of terrorism. But, unlike his predecessor, he lacks a world view, not to speak of a civilizational compass. India in his mind may be lost in a landmass which seem to be distant.

It is not that Trump’s mind-space is limited to the Trump Towers in America. He has a dealmaker’s shrewd understanding of who’re the ones that matter, and is careful to set the chocolate cake moment with Chinese president Xi Jinping at his Florida club Mar-a-Lago, or play golf with Japanese prime minister Shinzo Abe, and beam at his Saudi hosts when served his favourite all-American fare, well-done steak and ketchup.

He is a Conservative elite and will remain so, impeachment or no impeachment. Personality wise, he is so far removed the liberal Obama that Modi must rewrite his manual of self-projection—the “my friend Bahrahak” types—with care. And food is an issue; committed steak-lovers may hold dhokla-eaters as the ET.

The real problem is, Trump’s dealings with people are purely transactional. If India is jointly pounded by Pakistan and China, he is unlikely to promptly act, at least that’s the impression one gets. Secondly, Trump in unpredictable. And that’s why the coming US visit is Modi’s litmus test.

All BRICS no mortar

by Harish Gupta, National Editor, Lokmat Group

If the eighth summit in Goa of BRICS—the geography-defying grouping of Brazil, Russia, India, China and South Africa—ended Sunday on a subdued note, it was because of the presence-in-absence of a non-member, Pakistan. The summit, inarguably, was timed rather awkwardly. The mind-space of India, host for the event, was preoccupied with the western neighbour ever since the attack by Pakistan-based terrorists on an Indian army brigade headquarters at Uri in Kashmir, leading to the death of 19 security personnel. It led India to make unanimity on "terror" its continuous refrain through the summit.

BRICS is a grouping focused on cooperation in trade, but two developments have lately got it derailed. First, the rise of China has changed the dynamic of trade. By 2013, China had grabbed a fifth of all manufacturing export worldwide, compared to only two per cent in 1991. In the first decade of this millennium, when BRICS got going, there was hope that China could be the engine to drive a trading bloc forward. But such optimism has now given way to the fear of being swamped by Chinese imports. 

The other problem relates to the changing dynamic of strategic power. Of the five-nation group, the three leading military powers—Russia, China and India—have their individual strategic objectives. Russia under President Vladimir Putin is bent upon regaining the respect it commanded in the Cold War era as a formidable war machine. It is a growth trajectory that expectedly leaves the US uptight. It responded by extending NATO, the five-decades-old anti-Soviet strategic alliance, to Ukraine at Russia's doorstep. Russia has hit back in a complex bag of stratagem, from helping Syrian president Bashar al Assad, whom America regards as foe, to reportedly interfering with the US presidential elections by using its agents to hack the computers of the Democratic Party. The rapidly declining US-Russia relations have put India in a double bind as it needs both. The US is its life-line to technology, foreign capital and remittances whereas Russia is not only its sole supplier of basic military hardware but its only dependable 'big daddy' to extend help at international forums. The escalating conflict between the Cold War gladiators has left even the Western powers in a dilemma, not to speak of India, Brazil or South Africa.

Besides, China has Pakistan as it strategic partner, its "iron brother". To China, Pakistan is a trusted interlocutor to the Islamic world, and a useful guide to the US security establishment due to Pakistan's close links with the American army for decades. Unleashing Pakistan on India, or at least egging it on, is also China's way of acting tough on India without dirtying its own hand. This Chinese tactic has become rather obvious in its dogged Chinese persistence to protect Masood Azhar, the chief of Jaish-e-Mohammed. The JeM is a terror group reportedly responsible for the Uri attack as well as the 2001 attack on Indian Parliament. Its due to China that JeM couldn't be declared by the UN as a terrorist group. It points at the possibility of a substantial Chinese stake in the terror factory that Pakistan has nurtured.

In 2006, when BRIC (South Africa was yet to join) took shape, it was visualized as a club of large and fast-growing economies. But they have slowed down since then. South Africa, which came on board in 2010, grew at only 1% in 2015. Brazil is in its worst recession in the past 80 years. Russia is grappling with a slew of sanctions. The drop in oil and gas prices has combined with the global downturn in consumption of manufactured goods, Russia's forte, to make its condition worse. On the other hand, triggered by a wage spiral, China's slowdown is a drag on global growth. India's PPP GDP is 40% of China. It is growing reasonably fast but not fast enough to catch up with China in the foreseeable future. Besides, rather than giving India access to its market, it is demanding unhindered entry into the Indian market.

The BRICS talks reflected an uneasy and troubled relations between China and India and, in the process, turning the summit into an exchange of litany on terror. It is no wonder that, for India, the only concrete outcome is a costly shopping list from Russia of missile systems, stealth frigates, fighters and helicopters.

Significantly, the BRICS summit in Goa coincides with a meeting of the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), an avowedly economic partnership of seven nations: India, Nepal, Bhutan, Bangladesh, Myanmar, Thailand and Sri Lanka. The BIMSTEC outreach wants to keep away from big power rivalries, though there are temptations galore. Chinese president Xi Jinping’s next destination, after Goa, is Dhaka where he has a 24 billion dollar loan-and-aid package to offer. It is unlikely that China’s heart is melting for Bangladesh. China was on the aide of Pakistan in the 1971 Bangladesh war. It recognized Bangladesh as late as 1977, two years after the assassination of Sheikh Mujibur Rahman, architect of the new nation. Besides, most gifts from China prove costly to the recipient as they involve a cluster of Chinese private investments that are based in inflated revenue expectations. Failure to repay such debt become sovereign liability. It has happened with Chinese-financed Hambantota port in Sri Lanka which has negligible revenue but high cost.

BRIC is the brain wave of an executive in Goldman Sachas, an American bank, who used the acronym in 2001 to hype up the emerging economies. It is now a platform for power play of two ambitious global powers, Russia and China. It is BIMSTEC, on the other hand, which has the beginner’s simplicity. All it’s passionate about is a road from India to Myanmar and Thailand.

The Panama shock

by Harish Gupta, National Editor, Lokmat Group

The "Panama Papers" calls into question some of our basic ideas about how money is earned, saved, invested and spent. The belief so far is that the world is guided by rules, and, if there are deviations, they must be exceptions. Non-disclosure of funds held in clandestine accounts abroad, when revealed, can be explosive. So was it in the last decade when Lehman Brothers, the US bank, was found falsely claiming that its books were in the pink of health by having "sold" its sub-prime housing debts, known as "toxic" debts, to offshore companies in Cayman Island, a tax haven. As its lie was detected, it came clattering down, and the worldwide recession of 2008 began.